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Old 09-16-2008, 08:40 AM
 
Location: NJ
12,284 posts, read 33,044,845 times
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Quote:
Originally Posted by HobokenGuy View Post
...and oil is down to 91. OPEC is silently sh**ting themselves right now. Oil production can be cut, but it won't stop the free fall.
holy crap! good previous post, BTW. hang on, it's going to be a bumpy ride.
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Old 09-16-2008, 09:11 AM
 
505 posts, read 1,620,808 times
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Quote:
Originally Posted by HobokenGuy View Post
I am going to be brave here and predict that the average home value might fall 30-40% to get us out of this mess.
I think you might be right, however I think those big losses are going very regionalized on the far out, surburban areas that James alluded to.

I think we are going to start to see a retraction of our lifestyles to return to a more urban, densly populated state. I envision public transportation and proximity to consumer staples like grocery stores, restaurants, shops, etc. as skyrocketing on the list of things that people are looking for in a home.

I think what we are seeing is the inevitable downfall that follows a particular go-go era. The 20's were a go-go, the 80's were extremely active and lets now face facts the 00's was also a period of extreme growth. The market needs to correct for that. Now we aren't heading for the Great Depression II, I am not saying that. What I am saying is that there needs to be a readjustment which takes into account multiple factors associated with this marketplace. This time around it will probably be a combination of high oil prices, cost of living and real estate which might combine to cause people to live smaller, and "closer" than they have before. Our growth over the past 50, 60 years have all been based on cheap oil, and in particular, the last 15 years have been based on easy credit. Both of those things are gone, and rather suddenly might I add, which has created the void we are now in.
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Old 09-16-2008, 09:21 AM
 
Location: Weehawken, NJ
2,179 posts, read 6,260,662 times
Reputation: 1165
Quote:
Originally Posted by tallguylehigh View Post
I think you might be right, however I think those big losses are going very regionalized on the far out, surburban areas that James alluded to.

I think we are going to start to see a retraction of our lifestyles to return to a more urban, densly populated state. I envision public transportation and proximity to consumer staples like grocery stores, restaurants, shops, etc. as skyrocketing on the list of things that people are looking for in a home.

I think what we are seeing is the inevitable downfall that follows a particular go-go era. The 20's were a go-go, the 80's were extremely active and lets now face facts the 00's was also a period of extreme growth. The market needs to correct for that. Now we aren't heading for the Great Depression II, I am not saying that. What I am saying is that there needs to be a readjustment which takes into account multiple factors associated with this marketplace. This time around it will probably be a combination of high oil prices, cost of living and real estate which might combine to cause people to live smaller, and "closer" than they have before. Our growth over the past 50, 60 years have all been based on cheap oil, and in particular, the last 15 years have been based on easy credit. Both of those things are gone, and rather suddenly might I add, which has created the void we are now in.
Good post but I have to disagree with you on this.

Over the past several years, the urban areas in NJ (Hoboken, JC, etc...) were for the most part being grown due to foreign buyers (Asian, Indian subcontinent, and Eurpoean), the trust fund kids, and Wall Streeters.

The tremendous growth was due to the weak dollar and it was a steal for these buyers, but with the dollar strengthening, Wall Street shedding weight faster than Oprah on a crack binge, and astronomical rents, people are in a panic and not going to keep sinking their money into these places.

In reality, would you spend 550K for a 1 bed in downtown JC with taxes being 11K/year? Those numbers are insane.
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Old 09-16-2008, 09:27 AM
 
505 posts, read 1,620,808 times
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Quote:
Originally Posted by HobokenGuy View Post
Good post but I have to disagree with you on this.

Over the past several years, the urban areas in NJ (Hoboken, JC, etc...) were for the most part being grown due to foreign buyers (Asian, Indian subcontinent, and Eurpoean), the trust fund kids, and Wall Streeters.

The tremendous growth was due to the weak dollar and it was a steal for these buyers, but with the dollar strengthening, Wall Street shedding weight faster than Oprah on a crack binge, and astronomical rents, people are in a panic and not going to keep sinking their money into these places.

In reality, would you spend 550K for a 1 bed in downtown JC with taxes being 11K/year? Those numbers are insane.
That is true- I was thinking more of the bedroom communities rather than the Hobokens. Places like Essex, Berge, Union and some parts of Morris may see interest of people wanting to move back East.
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Old 09-16-2008, 09:32 AM
 
Location: Weehawken, NJ
2,179 posts, read 6,260,662 times
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Quote:
Originally Posted by tallguylehigh View Post
That is true- I was thinking more of the bedroom communities rather than the Hobokens. Places like Essex, Berge, Union and some parts of Morris may see interest of people wanting to move back East.
True, but taxes, and less house for the money will keep a lot of those people on the sidelines for a while.

For the average person, I think they would never consider leaving their home in (for example) Pompton Plains to move to Nutley or Rutherford. They'd rather wait it out than move to a more urban of a setting where taxes are just as high and they get half the house for the money.
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Old 09-16-2008, 09:46 AM
 
Location: Stewartsville, NJ
7,577 posts, read 21,014,950 times
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Quote:
Originally Posted by HobokenGuy View Post
True, but taxes, and less house for the money will keep a lot of those people on the sidelines for a while.

For the average person, I think they would never consider leaving their home in (for example) Pompton Plains to move to Nutley or Rutherford. They'd rather wait it out than move to a more urban of a setting where taxes are just as high and they get half the house for the money.
I think the opposite would happen..people cashing out on their million dollar cap cods in urban areas to buy McMansions in the suburbs! Especially if improvements are made to mass transit out this way.
I don't think we are headed for a depression.. I think we are at the tail end of the recession and not bailing out companies like lehmans is just part of "cleaning house"... getting rid of all the garbage - bad seeds. I believe things will begin to improve over the next few months and will stabilize by the end of the 1st quarter of 2009.
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Old 09-16-2008, 09:46 AM
 
Location: Weehawken, NJ
2,179 posts, read 6,260,662 times
Reputation: 1165
AIG is not getting the rescue package it needs as of right now.

Greenberg needs to step back in to save his own company. Goes to show you that if you want something done right, you have to do it yourself. The guy lost billions since Wednesday.
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Old 09-16-2008, 09:48 AM
 
Location: Weehawken, NJ
2,179 posts, read 6,260,662 times
Reputation: 1165
Quote:
Originally Posted by wileynj View Post
I think the opposite would happen..people cashing out on their million dollar cap cods in urban areas to buy McMansions in the suburbs! Especially if improvements are made to mass transit out this way.
I don't think we are headed for a depression.. I think we are at the tail end of the recession and not bailing out companies like lehmans is just part of "cleaning house"... getting rid of all the garbage - bad seeds. I believe things will begin to improve over the next few months and will stabilize by the end of the 1st quarter of 2009.
I agree with you, but finding buyers is going to be a huge feat right now. Lots of people are upside down in their house right now, and over leveraged to the nines.
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Old 09-16-2008, 09:56 AM
 
Location: Exit 14C
1,555 posts, read 3,855,063 times
Reputation: 396
Quote:
Originally Posted by HobokenGuy View Post
I'm still curious to know how NJ will weather this meltdown. Lots of commuters are tied to these firms, and I bet a lot of them will have to move away to find work.
Can I keep my fingers crossed that it will finally start to move our real estate market out of the "completely absurd" range? It's probably too much to keep my fingers crossed for that with respect to New York City, but hell, I should be able to afford a place in Newark at least.
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Old 09-16-2008, 09:58 AM
 
Location: New Jersey/Florida
5,644 posts, read 11,229,556 times
Reputation: 3934
Quote:
Originally Posted by HobokenGuy View Post
AIG is not getting the rescue package it needs as of right now.

Greenberg needs to step back in to save his own company. Goes to show you that if you want something done right, you have to do it yourself. The guy lost billions since Wednesday.
No I just heard the fed is coming to the rescue.
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