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From everything that I have read there is still a 12-18 month period where all of the sub-prime loans that are out have to mature/default. The majority of these people, even with decent credit, will not be able to get out of these loans. Add these two factors and you will see a decline in prices for at least the next 18-24 months...at least 5%, some economists say that it could be in the 8% range.
Most of the realtors that I know are trying to keep an optimistic view on all of this, and they have to, it is their career to sell real estate and to promote it. There is a huge inventory of homes for sale, good luck in your decision.
i agree with fisch, but I also think the market is going vary depending on *where* in the state you are. more desirable areas won't be as hard hit as some of the more outlying. areas with tons new construction within the past 2 years are going to be worse off than a more established town.
i can only speak for my local market, but i'm seeing property listings still way out of whack - these are homes sold/built within the last 2-3 years and sellers for some reason feeling "entitled" to make a killing. my old home (sold in '99) is on the market right now for $100K more than the owner paid in 2004. it just ain't happenin'! i also see some very reasonable listings as well, and these are homes that were purchased before the bubble.
but on a macro level, i personally see prices dropping - how much will depend on where you are. honestly, i'm shocked at how high burlington county prices are, that was always the *way* affordable alternative in NJ - not anymore. my gut tells me that's got a further drop than other areas of the state but really, what the hell do I know, my crystal ball's in for repair.
You got it Tahiti - I'm in Burlington County - Chesterfield. I have an older home (55 yrs) but Contractors are building like crazy. The difference between what they are building and my house is that I have 1/2 acre...these big houses 2500+sq ft are on .17! I owe 300K, and the new houses are being sold for 450+. And there are a lot of them...even townhouses are selling for 350+.
There's a report out there that analyzes all of the metro areas of the country and assigns them to risk categories from 1 to 5, based on the likelihood of prices being lower in 2 years than they are now. Most of NJ is sitting in category 5, which means that there's a 0-10% chance that prices may be lower in 2 years. Somerset, Middlesex, Monmouth and Ocean Counties are showing in category 3, which has a 20-40% chance of prices being lower in 2 years, and for some reason, the lower tip of NJ is showing a 60-100% chance of lower prices in 2 years. Of course, this is one report- I'm sure there's plenty of other theories out there.
the market is going vary depending on *where* in the state you are.
agree 100%.
people forget we have open space preservation... and despite rising taxes/costs, the population of NJ continues to grow.
at some point, something has to give.
the law of supply / demand.
I remember vividly, everyone thinking the real estate crash of '87 - '91 would never be overcome... but by '99 it was boom-time again.
as others have said, it's cyclical, and real estate is a winning investment over the long-term.
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