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Newark-Union, NJ-PA region: median price down to 315 from 342 in Q4 2008, or down about 13% year on year. Affordability is up at 49% -- which suggests that affordability is reaching parity with historical norms.
I'm in danger of becoming (cautiously) bullish on this part of the market.
New York-White Plains-Wayne, NY-NJ region saw a big drop in price (a drop to 418 from 455 in a quarter!), but there are still a few more drops to go before it returns to sanity.
Nassau-Suffolk down to 375 from 391 last quarter (or 420 Q1 2008), gradually returning to reality.
Quick overview of the counties included here:
Nassau-Suffolk, NY Metropolitan Division
Nassau County
Suffolk County
New York-White Plains-Wayne, NY-NJ Metropolitan Division
uh oh, elflord did you just say you are turning bullish on the ny metro re market?
Specifically Newark-Union, NJ-PA. The other two still have some way to go.
The HOI numbers are based on a fairly sound methodology (unlike the NAR affordability numbers).
If the assumptions behind the model are representative of the behavior of buyers (that is, if the buyers use similar affordability criteria to that used in the model, when considering how much to allocate to housing costs), then the equilibrium state should be close to 50%.
I'll face that danger when the job market stop imploding around here.
Prices could overshoot downward for sure -- but if you're looking at this in terms of long term valuation indicators, here is one, the first one seen here for for quite a while, that says that we're getting close to historical norms.
In terms of market timing, the CS futures market predicts that the index (an indicator of nominal prices) bottoms out some time in 2010 (mid to late)
But affordability could bottom out earlier than then. I don't think rates will keep coming down -- even if credit eases, federal borrowing will (already is) put(ting) a floor on long term interest rates.
True. My concern is that this area is going to see a fundamental decline in household income, as the Wall Street / hedge fund gravy train rolls to a stop, with the attendant decrease in the trickle-down wealth. And falling household incomes will be a further drag on house prices and the affordability index.
But time will tell. Depending on the outcome of the next election, I'm considering pulling up stakes. The tax situation in NJ has me very concerned.
True. My concern is that this area is going to see a fundamental decline in household income, as the Wall Street / hedge fund gravy train rolls to a stop, with the attendant decrease in the trickle-down wealth. And falling household incomes will be a further drag on house prices and the affordability index.
But time will tell. Depending on the outcome of the next election, I'm considering pulling up stakes. The tax situation in NJ has me very concerned.
+1
coming from out of state (Virginia), New Jersey's taxes and overall structure totally confuses me. The only thing I can see is that it will always be going up and the state is getting dangerously unsustainable. Not to mention the strain on pension funds that will be coming down the line in the next 10-20 years.
Hm. Are you sure about historic norms when you have record low interest rates? If interest rates go up, which they have to in the next few years if the dollar is to survive as a currency, affordability will get worse commensurately. I think the very low interest rates at the moment are causing misleading signals in affordability indexes. It's hard to reconcile "affordability at historic norms" with "interest rates at record lows".
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