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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.
LOL! The freaking name of the link is "NEW JERSEY'S HOUSING BOOM" - not 'housing bust', not "housing average appreciation", but "housing BOOM".
[quote=PD517;7237776]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.
Thanks for the site. I checked my town and it went up 137% in 6 years. Very valid point, based on this drastic rise I do see prices dropping. I was one of the move up guys but I can see the point that if people buy today at inflated prices it will be difficult down the road to move up unless you get a terrific deal now.
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.
Thanks for the site. I checked my town and it went up 137% in 6 years. Very valid point, based on this drastic rise I do see prices dropping. I was one of the move up guys but I can see the point that if people buy today at inflated prices it will be difficult down the road to move up unless you get a terrific deal now.
Right off the bat I see a big potential issue with this report. I looked at my home town. Morris Twp. and they are showing 84 home sales in the first 6 months of 2007. First question, the MLS shows 164 homes sold during the first 6 months of 2007, why is this report 80 homes sales short? Second question, why are they using only the first 6 months of a given year? is there something extra special about those first 6 months?
I looked at the report for like 1 minute and could see problems? I bet there are others?
Average selling prices and other stats can be misleading... and if not examined correctly can give false results. In order to remove any specific markets from this discussion and look at stats, let look at car sales.
Assume in
2006 the average selling price of a GM car was $40,000
2007 the average selling price of a GM car was $45,000
2008 the average selling price of a GM car was $38,000
This can mean one of two things... either GM is lowering their prices OR people are buying more low-end cars then high end cars. If Cadillac sales are off by 15% and Chevy sales are up by 5%, this can lower the average without GM lowering prices on any of their vehicles.
In real estate, you have to look at comparable sales over the years, not the average price.
In any town, the average may only be down 5% in the past two years... but the selling price of a similar 4 br, 2 bth colonial in a similar location may be down 15%.
Average selling prices and other stats can be misleading... and if not examined correctly can give false results. In order to remove any specific markets from this discussion and look at stats, let look at car sales.
Assume in
2006 the average selling price of a GM car was $40,000
2007 the average selling price of a GM car was $45,000
2008 the average selling price of a GM car was $38,000
This can mean one of two things... either GM is lowering their prices OR people are buying more low-end cars then high end cars. If Cadillac sales are off by 15% and Chevy sales are up by 5%, this can lower the average without GM lowering prices on any of their vehicles.
In real estate, you have to look at comparable sales over the years, not the average price.
In any town, the average may only be down 5% in the past two years... but the selling price of a similar 4 br, 2 bth colonial in a similar location may be down 15%.
That is true, though given your example, the average size of a home that is actually selling happens to be falling. So Morristown for example, Lots of 1 and 2 bedroom condos have been selling over the last year. Fewer 4 bedroom 2.1 bath homes selling. It has a big effect on the average and median price. My own experence has mirrored this, 70% of the buyers I have sold homes to have been buying 2 bedroom condos and they have been first time home buyers as well. I am sure someone will through out there some smart remark about down-payments and such, but my experence has been that they are putting down 20%.
The numbers in this nj.com article have some issues that have me questioning the validity of it. Leaving out almost 50% of the home sales could have a huge impact.
That is true, though given your example, the average size of a home that is actually selling happens to be falling. So Morristown for example, Lots of 1 and 2 bedroom condos have been selling over the last year. Fewer 4 bedroom 2.1 bath homes selling. It has a big effect on the average and median price. My own experence has mirrored this, 70% of the buyers I have sold homes to have been buying 2 bedroom condos and they have been first time home buyers as well. I am sure someone will through out there some smart remark about down-payments and such, but my experence has been that they are putting down 20%.
The numbers in this nj.com article have some issues that have me questioning the validity of it. Leaving out almost 50% of the home sales could have a huge impact.
I gave one house as a real example of the market. 2002-2006 with a 85%+ appreciation. That doesn't happen if the market didn't support it. Hence you can claim validation of those numbers on NJ.com but it doesn't mask that house values have increased DRAMATICALLY IN NJ between 2002-2006. Where I would say most towns saw their value double in that time period of 4 years.
I gave one house as a real example of the market. 2002-2006 with a 85%+ appreciation. That doesn't happen if the market didn't support it. Hence you can claim validation of those numbers on NJ.com but it doesn't mask that house values have increased DRAMATICALLY IN NJ between 2002-2006. Where I would say most towns saw their value double in that time period of 4 years.
Yes, that is fine. I understand what you are saying.
Do you understand how statistics can be made to say what you want them to say as well?
You quoted my questioning of the NJ.com article, I strongly wonder what they left out in those 80 home sales they did not account for in the only year I even looked at, 2007. Was it manipulation? Was it an error? though it would seem like a big error to me.
You and everyone on this forum would be whipping me to death for any such error that you could find, if I made one like that.
ok, looked up more
NJ.com says 97 sales in Morristown in first 6 months of 2007, GSMLS says 84.
NJ.com says 76 sales in Madison in first 6 months of 2007, GSMLS says 87
NJ.com says 118 sales in Summit in first 6 months of 2007, GSMLS says 141
NJ.com says 119 sales in Millburn in first 6 months of 2007, GSMLS says 157
NJ.com says 180 sales in Maplewood in first 6 month of 2007, GSMLS says 151
I don't know where NJ.com got their information, but I am guessing they just slapped it together for their story. How many more errors are in this article and did they put the kind of thought and work into it that Moody's was putting into their studies????
Last edited by JamesBoyer; 01-30-2009 at 12:38 PM..
1.) Do you think NJ real estate values bubbled between 2000-2006?
2.) Do you think most NJ real estate jumped up 100% or more in value between 2000-2006?
3.) Do you think CURRENT prices are justified?
4.) Do you think the prices in the NJ area will drop in the next 12 months? And if so by what % on avg?
1.) Do you think NJ real estate values bubbled between 2000-2006?
2.) Do you think most NJ real estate jumped up 100% or more in value between 2000-2006?
3.) Do you think CURRENT prices are justified?
4.) Do you think the prices in the NJ area will drop in the next 12 months? And if so by what % on avg?
I think as a real estate bubble has been explained and show to me, New Jersey did not have a Real Estate Bubble. A real estate bubble is much more than just price appreciation. It is the motives behind it, It is they types of buyers behind it. Your recognized real estate bubbles are in Florida, Arizona, Nevada, and Southern and Central Califonia. Think about what all those places had in common in the time period from 2002-2006. The typical buyer there looked way different from what the typical buyer looked like here in New Jersey.
As to how much NJ Real Estate went up during that time period, I think you would have to look lots more closely at the numbers, just as it is unfair to say that home prices have fallen substantially in a given town if in 2006 a good share of what was selling was 4+ bedroom 3+ bath McMansions, and then in 2008 a big chunk of what was selling was 2 bedroom 2 bath condos. Big difference in what those two segments of the market are worth.
Current prices are only justified on a case by case basis just like in any market.
I think that prices are currently falling anywhere from 0% to 1/2% a month depending on the town and the price segment. I believe it is more likely that the declines will be over in most towns by June of 09, than for them to continue into 2010.
I pointed out the errors in the study because the numbers looked very odd. I make it my business to know what is going on in the markets I specialize in. It would be hard to know what a good deal was if I did not. There are lots of Realtors out there like the one Tahiti asked about Harding who will shoot from the hip and don't really know. At least in my mind those are the Realtors to avoid. They really don't know a good deal when they see it.
I have faith in America, I believe that by June there will be clear signs that the economy is turning, that the major job losses will be mostly done, and that some of the people who are forced out of possitions will create new businesses that ultimately make this country stronger and better off.
With every storm comes a rainbow, and a new beginning.
What has a real estate bubble been explained and shown to you?
Cause if you compare the past 8 years there has been price increases WELL above historic norms.
Is that not a bubble? Or are you saying since prices haven't dropped back down at the same record pace that it is not techincally a bubble? (Cause there has been several reasons that prices have not dropped quicker due to government regulation)
And I think you are putting WAY too much weight on the "types of houses" being sold skewing the numbers.
No slams on you for being positive and thinking that we this country will get through this and be better off on the other end. I think we all HOPE that is the case and the sooner the better no doubt. Not sure how that is really related to the NJ bubble aspect discussion but ok.
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I was one of the move up guys but I can see the point that if people buy today at inflated prices it will be difficult down the road to move up unless you get a terrific deal now.
