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I can't . The Raritan Valley line doesn't go directly to NYC Penn Station Since I have to transfer to a subway within NYC which will add another 20 mins, I need to cut out the travel time within NJ.
I am sorry to hear that you have friends who lost their job. I know life can often turn around out for the worse and I am in one of those industries. That's one of the key reasons why I have started my research early and aiming for a more moderate range of house.
You just helped to answer your own concerns regarding North Edison's home prices. I don't know what kind of research you have done but if you actually do any real research you will realize that you'd be hard pressed to find any homes with easy commute into NYC with good schools that will be more affordable than North Edison. To pull your kind of salary I would assume you have to some level of intelligence. Maybe you should use it and actually do some real research before posting your ill informed conclusions.
what if I lose my job in the next down turn ... what if there is double dip recession ...
You have gotta be kiddin' me. On your salary, you should have enough money saved up for an emergency to live a decent true middle-class life for the next several years.
What happens to the family making 30K combined who lose their jobs in the next recession? They most likely lose their modest apartment and wonder how they're going to pay for food for their kids.
You, on the other hand OP, even if you lost your job tomorrow, should still easily be able to buy a house and provide plenty of food for your family. Perhaps you'd no longer be able to buy that 25-room mansion, but you could still get a nice house.
I don't like to flame other people, OP, unless I'm really pushed to it, but I have to tell you, your apparent sense of entitlement has truly floored me. (Quite a feat, given some of the people we have posting on this board. ) Your posts seem to imply that you think a 450K-750K per year salary is average. It is far from it. You are extremely fortunate to be making such a generous salary. That kind of money allows you options that the vast majority of people could never even dream of. Sorry, but you are not going to get any sympathy from me.
I can't . The Raritan Valley line doesn't go directly to NYC Penn Station Since I have to transfer to a subway within NYC which will add another 20 mins, I need to cut out the travel time within NJ.
I am sorry to hear that you have friends who lost their job. I know life can often turn around out for the worse and I am in one of those industries. That's one of the key reasons why I have started my research early and aiming for a more moderate range of house.
What exactly do you do for a profession? I'm curious to know what kind of person who makes this kind of money decides to settle on a 300k property in Edison. I think you're full of crap.
From my limited experience, and the good-school-district thing notwithstanding, I really think the houses in North Edison are still too overpriced and they should fall by another 15%-25%. The current houses at $650K range felt like I really shouldn't pay more than $500K for them.
You're right, prices still have some way to fall.
Be thankful that you're in a position where you can afford a decent rental in the suburbs and still sock away a nice pile of change into savings while you wait for prices to come to earth,
Now at my current pay, I kind of would make $400K in a tough year (e.g. say in 2008) and $750K in a good year (e.g. say in 2009) including bonus. Hence, I think I can easily aim for houses somewhere around $800K-$1M, but I hate spending money on things that I don't need (e.g. do I really need a $800K house if I only have one daughter? and keeping the salary level aside, I can't think why I would like to spend more than $650K on a house ...).
I still cant figure out why this paragraph and the posting of your salary is important or necessary to the rest of your post. You could have made the same post without this paragraph and you would have gotten informative responses without the scorn. Maybe it's a cultural thing, but Americans usually find it distasteful when one announces their salary in normal conversation. Especially when it is several standard deviations above the mean. It seems like you are gloating.
That being said, houses are worth whatever people are willing to pay for them. As others have pointed out, the market is self correcting. If people are still paying those prices for houses in that neighborhood, the prices wont come down. Also, if one of my neighbors got higher offers than I thought the houses were worth, I would be elated too. It wouldn't matter to me what color skin the would-be buyers have.
Perhaps I look at it too simplistically, but this would seem to be a self correcting problem. If houses are trully priced too high, people would choose other areas to buy in. This would almost certainly have to impact house prices in a negative way. The only way this wouldn't be true is if no one needed to sell their house and they could afford to leave them on the market at inflated prices never selling.
You're looking at it too simplistically
Prices are too high across the board. They stay high because of a combination of loss aversion psychology (unwillingness to sell at a perceived loss) or due to leverage (some sellers might not be able to sell if they wanted to because they're underwater).
In the stock market, this wouldn't matter -- short sellers can step in and borrow shares and sell them at a price that reflects demand.
In the housing market (indeed also in some commodity markets where you can get a genuine supply crunch) what happens is that you move left along the demand curve -- that is, you still get fewer sales to compensate for higher prices. The people who have to buy in these markets end up as bag holders.
That's why we're seeing sales numbers at a record low -- it's a direct consequence of the fact that prices are high across the board with respect to historical norms.
The treasury and fed can use some trickery to fix borrowing costs so that the mortgage payments aren't too far above historic norms even though the sticker prices are high. The problem with this is that if everyone believes that prices are too high (and therefore likely to fall), they might not want to buy even if they can afford the payments.
That being said, houses are worth whatever people are willing to pay for them.
Are you familiar with a demand curve ? Basically, the higher the price, the lower the quantity sold. At the moment, sales are at record lows. What does that tell you about prices ?
Are you familiar with a demand curve ? Basically, the higher the price, the lower the quantity sold. At the moment, sales are at record lows. What does that tell you about prices ?
So you don't think houses are worth what someone is willing to pay for them?
Are you familiar with a demand curve ? Basically, the higher the price, the lower the quantity sold. At the moment, sales are at record lows. What does that tell you about prices ?
Your statistics do not apply to individual houses or neighborhoods. Sure demand is low nationwide and statewide for houses but that is a generalization. The bottom line is that a house is worth what someone is willing to pay for it. I watch Edison listings religiously and I have seen all summer that all of the 1 million dollar houses that are reasonably priced have been sold. Certain neighborhoods are desirable for various reasons and prices in those neighborhoods are going to remain stable. I won't argue that prices all around will continue to decline as the economy continues to suffer but ares that are desirable are not going to decline at the same rate.
Your statistics do not apply to individual houses or neighborhoods. Sure demand is low nationwide and statewide for houses but that is a generalization. The bottom line is that a house is worth what someone is willing to pay for it. I watch Edison listings religiously and I have seen all summer that all of the 1 million dollar houses that are reasonably priced have been sold. Certain neighborhoods are desirable for various reasons and prices in those neighborhoods are going to remain stable. I won't argue that prices all around will continue to decline as the economy continues to suffer but ares that are desirable are not going to decline at the same rate.
This pretty much sums up what I was going to say in my response Elflord. You can make "general rule" statements, but it really comes down to locality. Prices in Greenwich Village are going to fall, maintain, or rise differently than prices in Greenwich Connecticut. Both places have some of the highest priced real estate in the world, but they are not going to follow the same rules to a tee. One can speculate which way prices are going, but in the end, a house is worth whatever someone is willing to pay for it at any given time.
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. The Raritan Valley line doesn't go directly to NYC Penn Station Since I have to transfer to a subway within NYC which will add another 20 mins, I need to cut out the travel time within NJ. 
