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James: Can't you pull numbers of AVG sale by year in say Morristown for 1998 and each year since? Wouldn't that show if a bubble existed or not? I think it would be rather easy to show the AVG % increase in a given area using MLS Trend or something. This way you could at least have numbers out there to show if a bubble exists (or argue over what % increase over that given span consititues a bubble)
ALSO. I bought my house in SJ Westmont in 2002 for $118k. Sold 4 years later 2006 for $217k. That is a 85% increase in roughly 55 months.
And I had multiple offers in and could have probably gotten closer to 90% increase if I wasn't in rush to sell. So that is OVER a 20% increase from 2002 to 2006. Is that not a bubble? Those are NUMBERS I can show proof of and are 4-5x the historical norms of housing appreciation.
I have done that and posted them. In another thread.
Tahiti, I really don't care where you live, The main point was your statment that prices had fallen in Harding NJ 25% because your realtor friend told you so. I really could care less where you live so I am not going to go hunting through your posts.
I have done that and posted them. In another thread.
Can you summarize them for me? Or respond to the numbers I provided in my area of South Jersey and give me your opinion if those numbers are fair or reasonable appreciation? And this was in 2002. The market started growing FAST around 1999 or 2000. Where My house would have sold for $80k or so probably. So in 7 years roughly a 200% increase in price.
The other guy who wrote the book was more than a little harsh, and not completly on the mark. He talked about his 3 friends, not sure if he is giving real or hypothetical examples, but there is no townhome/condo/or single family home on the market currently in Morristown priced between $375,100 and $379,900 there have not been any townhome/condo/single family home sales in Morristown for the last year at any price between 376K and $379,500 so I am guessing his example was made up.
The first example of the buying prices from 1998-2000 were exact (ok well not EXACT - 200k was approx. $199,400 - but you get the drift. The other time periods I stated were examples of average pricing trends.
I have no clue what you quoted me on - "but there is no townhome/condo/or single family home on the market currently in Morristown priced between $375,100 and $379,900 there have not been any townhome/condo/single family home sales in Morristown for the last year at any price between 376K and $379,500"
But I'll put your foot in your mouth for you with some REAL examples:
Townhomes CURRENTLY FOR SALE in Morristown - a very quick search I did, if you want I'll get you some more:
WOW, I guess my estimates in the 300-400's were a little too low. Maybe the bubble is bigger then I thought!
Again you are proving yourself wrong time and time again. Thankfully some of the lurkers who are browsing these threads are getting a lesson and learning some knowledge about how this market really is.
I am just curious, do you own a home now or are you renting? Have you owned before or always been a renter?
renting in Jersey City journal square. Always rented -- I haven't had enough income to be in the market for buying until recently, but I'm not buying in this market.
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I am sure people will poo poo that but it has been true for at least 100 years and will continue to be true over time. The government has made sure through it's tax laws that over time compaired to renting you will always come out ahead vs renting the equivalent home.
I understand this line of argument -- basically, if someone gets into the market, buys a 200k house and pays off all but 110k, and the house goes up to 400k, then they end up with 290k of equity -- a 200k capital gain plus the 90k in amortization. So they can get a loan for 210k and buy a 500k place.
But that argument depends on rapidly increasing housing prices.
Eventually, as Oakman points out (and hence my "Charles Ponzi is dead") subject line in another post, first time buyers are priced out of the market, and the bubble bursts.
In the current environment, accumulating home equity doesn't work quite as well -- the good neighborhoods have high property taxes. For the price of heating and property taxes, I could rent.
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As to price declines over the next 12 months, I really cannot predict as real estate performance is so local. For example 2006 is the accepted peak, and since them one of the towns I work in, Madison is down about 6% median price from the peak, and about 9% average price. Maplewood and Summit had similar numbers. Now people on this board are tying to say 25% from here.
I partly agree with you -- I think it will vary. Modest housing in upscale neighborhoods is probably going to be more resistant to drops. A small house in Summit will stay expensive. But I don't think everything can stay at its current price.
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No, I believe that the towns I work, which are not as dependent on wall street as places like Jersey City, & Hoboken, & ... will probably tread water to being somewhat down, depending on the price range of the homes you look at, for the first 6 months of 2009, then I think prices will be flat to slightly up.
Where do you get these numbers from ? My sense from all valuation indicators available is that for the most part, prices are in for a big drop.
James: Can't you pull numbers of AVG sale by year in say Morristown for 1998 and each year since? Wouldn't that show if a bubble existed or not? I think it would be rather easy to show the AVG % increase in a given area using MLS Trend or something. This way you could at least have numbers out there to show if a bubble exists (or argue over what % increase over that given span consititues a bubble)
ALSO. I bought my house in SJ Westmont in 2002 for $118k. Sold 4 years later 2006 for $217k. That is a 85% increase in roughly 55 months.
And I had multiple offers in and could have probably gotten closer to 90% increase if I wasn't in rush to sell. So that is OVER a 20% increase from 2002 to 2006. Is that not a bubble? Those are NUMBERS I can show proof of and are 4-5x the historical norms of housing appreciation.
Here's what I wrote at the end of my other "book" post.
edit: For those who want the "bigger" picture of this BUBBLE, please go to the nj.com website and the section "by the numbers" New Jersey by the Numbers - NJ.com
Click where it says - "Home Sales" then choose "Sales In Your Town". Pick whatever town you want, it will show you a graph and sales data from 2000-2007. Almost every town I looked at showed a 110-200+% INCREASE.
Now tell me there was no bubble.
Everyone go there and look up your town. It will show you the median sales for the first 6 months from 2000-2007. Report back here and tell me if there was a "bubble" or not. Let's see the real estate professionals argue factual data.
If that is what you think perhaps some basic economics classes would be a good move for you.
What I described is life. You make the investments (Time, Money, Sweat), build up your own worth and you can afford more than the lazy who don't make the investments, those who spend their life renting, depending on others to provide their home to them, those who will not take a chance on life. Life is a risk, choose to avoid risk all together and are you really living a life worth while?
You're lumping a whole lot of unrelated things together here.
Investing is not the same thing as buying a house.
Work ethic is not the same thing as risk preference.
Renting is neither lazy, nor is it unduly risk averse. Whether or not it makes economic sense depends in part on price/rent based valuation numbers. These numbers are currently well above historical norms.
I have done that and posted them. In another thread.
Tahiti, I really don't care where you live, The main point was your statment that prices had fallen in Harding NJ 25% because your realtor friend told you so. I really could care less where you live so I am not going to go hunting through your posts.
I NEVER SAID HARDING FELL 25% BECAUSE MY REALTOR FRIEND SAID SO. Please tell me where I did.
Here's what I wrote at the end of my other "book" post.
edit: For those who want the "bigger" picture of this BUBBLE, please go to the nj.com website and the section "by the numbers" New Jersey by the Numbers - NJ.com
Click where it says - "Home Sales" then choose "Sales In Your Town". Pick whatever town you want, it will show you a graph and sales data from 2000-2007. Almost every town I looked at showed a 110-200+% INCREASE.
Now tell me there was no bubble.
Everyone go there and look up your town. It will show you the median sales for the first 6 months from 2000-2007. Report back here and tell me if there was a "bubble" or not. Let's see the real estate professionals argue factual data.
That should be "real estate professional" (singular). James is the only one in this thread arguing there was no bubble in NJ. The others are notably absent.
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