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I haven't looked closely at the Bergen County market, but in the markets where I'm looking, some of these "starter homes" under 400 are listing at 2005 prices, and went for well under 200 pre-bubble.
Show me a specific GSMLS listing no of a place you're talking about and I can dig up something relevant.
I haven't looked closely at the Bergen County market, but in the markets where I'm looking, some of these "starter homes" under 400 are listing at 2005 prices, and went for well under 200 pre-bubble.
Show me a specific GSMLS listing no of a place you're talking about and I can dig up something relevant.
Elford, there's no way these starter houses went for under 200K in 2004 in Bergen County. Think more like 325-350.
Most of them didn't even go for under 200K a DECADE or twelve years ago (especially in the decent towns). I remember looking at the listings sometime around 1998 (just for kicks) and I remember getting excited when I found a house in Westwood listed for just under $200,000 at the time. (Like I said, it was just for fun, but I remember specifically looking at the listings at that time and I remember how this house caught my eye because it was the only decent looking house in a decent town that I saw for under $200,000.)
But is sure was better then than it is now, even after the so-called "pop".
Elford, there's no way these starter houses went for under 200K in 2004 in Bergen County. Think more like 325-350.
Most of them didn't even go for under 200K a DECADE or twelve years ago (especially in the decent towns). I remember looking at the listings
I did write "pre-bubble". 2004 is not what I had in mind when I wrote that.
There are 12 places in Westwood currently under 400k listed on trulia. Here are the ones where I could get previous sale prices. Asking prices below are all consistent with bubble appreciation (that is, the prices are consistent with the median level of appreciation from purchase to the 2005 peak) Less than 400k is not really a deal, and 2 of the 3 listings for which I could find a previous price were listed at 2005 (peak) price levels. That explains why sales are slow.
MLS 2935744 : 375k, sold in 1998 for 170k 2.2x 1998 median price, 2005 median is 2.2x median 1998 price
MLS 2933571 : 399k, sold in 2004 for 352k, 1.13x 2004 price, 2005 median price is 1.13x 2004 median price
MLS 2913499 : 399k, sold in 1997 for 190k This is roughly a 2008 price.
And here are the median sales prices: (year, count, median price, median sq foot, median $/sq foot)
I did write "pre-bubble". 2004 is not what I had in mind when I wrote that.
There are 12 places in Westwood currently under 400k listed on trulia. Here are the ones where I could get previous sale prices. Asking prices below are all consistent with bubble appreciation (that is, the prices are consistent with the median level of appreciation from purchase to the 2005 peak) Less than 400k is not really a deal, and 2 of the 3 listings for which I could find a previous price were listed at 2005 (peak) price levels. That explains why sales are slow.
MLS 2935744 : 375k, sold in 1998 for 170k 2.2x 1998 median price, 2005 median is 2.2x median 1998 price
MLS 2933571 : 399k, sold in 2004 for 352k, 1.13x 2004 price, 2005 median price is 1.13x 2004 median price
MLS 2913499 : 399k, sold in 1997 for 190k This is roughly a 2008 price.
And here are the median sales prices: (year, count, median price, median sq foot, median $/sq foot)
OK, thanks for the clarification. Your post helps to support the notion that prices should drop further. In the past 11-12 years, house prices in this region have more than doubled. Salaries in this area during that same time period have gone up maybe 30-35%. How can people continue to pay these prices for houses, especially after figuring constantly rising high taxes?
OK, thanks for the clarification. Your post helps to support the notion that prices should drop further. In the past 11-12 years, house prices in this region have more than doubled. Salaries in this area during that same time period have gone up maybe 30-35%. How can people continue to pay these prices for houses, especially after figuring constantly rising high taxes?
Three ways:
(1) manipulation of the market: this takes many forms,
foreclosure prevention programs, which basically allow home owners to sit on the housing stock indefinitely and dictate the price.
pushing down borrowing rates. This takes a number of forms: the fed sets the short term borrowing rate, but they have also been actively pushing long term interest rates down (via treasury bond purchases) and credit spreads (through taking mortgage related products onto the balance sheet). Programs like FHA also artifically lower cost of credit.
The 8000 tax credit which uses leverage to potentially prop up prices by 40k or more. Without first time buyers, you just have current home owners selling to each other which isn't enough demand to keep the market afloat. So having choked supply, they need some kind of demand-side intervention, and this is it.
(2) High income buyers moving into middle class neighborhoods: basically, people whose incomes would previously have placed them in upscale neighborhoods are buying houses in middle class neighborhoods, or scraping into the condo market or the bottom of the housing inventory in upper-middle class neighborhoods.
(3) People who bought before the bubble are just trading one house for another. These people never at any stage paid the 2005 price. If they paid X for a house, it can go up to 2X, but they can sell their first house and buy another one that costs 2X.
(1) manipulation of the market: this takes many forms,
foreclosure prevention programs, which basically allow home owners to sit on the housing stock indefinitely and dictate the price.
pushing down borrowing rates. This takes a number of forms: the fed sets the short term borrowing rate, but they have also been actively pushing long term interest rates down (via treasury bond purchases) and credit spreads (through taking mortgage related products onto the balance sheet). Programs like FHA also artifically lower cost of credit.
The 8000 tax credit which uses leverage to potentially prop up prices by 40k or more. Without first time buyers, you just have current home owners selling to each other which isn't enough demand to keep the market afloat. So having choked supply, they need some kind of demand-side intervention, and this is it.
(2) High income buyers moving into middle class neighborhoods: basically, people whose incomes would previously have placed them in upscale neighborhoods are buying houses in middle class neighborhoods, or scraping into the condo market or the bottom of the housing inventory in upper-middle class neighborhoods.
(3) People who bought before the bubble are just trading one house for another. These people never at any stage paid the 2005 price. If they paid X for a house, it can go up to 2X, but they can sell their first house and buy another one that costs 2X.
Points 1 and 3 are good points. But as far as #2 is concerned, wouldn't those high income buyers push up median HHI figures higher than the average? That hasn't happened in most towns in this area. OK, it did happen in Glen Rock somewhat during the 90s (Glen Rock was always an upper-middle-class town, but it was closer to Paramus than Ridgewood on the demographics scale. Now, it's pretty much mini Ridgewood.) I think it's happening in Midland Park too, on a smaller scale. But in most towns in Bergen County, median HHI increases over the past 12 years or so have stayed in that 30-35% range.
Points 1 and 3 are good points. But as far as #2 is concerned, wouldn't those high income buyers push up median HHI figures higher than the average?
It wouldn't do so by a very large margin. There aren't very many of these high income people, so sales numbers slow to a trickle. (that should be point 4 perhaps -- for the most part, sales just stop because most people can't afford the high prices)
To put this another way, if you get rid of the 50th percentile, and replace them with an equally large group of people who are in the top quartile, then the median income is now what was previously the 51st percentile.
That's barely going to make a blip on the median number (from 50th to 51st percentile is going to be a fraction of a standard deviation, it will be invisible once you add in change due to other factors like inflation/growth). Where you'll see large shifts is in the top of the distribution (e.g. percentage of households earning 150k+ will increase substantially, so would the mean household income)
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But in most towns in Bergen County, median HHI increases over the past 12 years or so have stayed in that 30-35% range.
I'm specifically referring to post-bubble. During the bubble, people couldn't afford them but bought anyway. Post-bubble, you'll get a very small number of sales, and they will be buyers in the upper end of the income range purchasing the lower end of the inventory.
Thnaks for the info...it seems theres really no escape from the crushing taxes in the tri-state area. Its funny I can afford to buy but don't really like the idea of shelling out 10k a year in taxes...over 30 years thats at least 300k and thats assuming they never go up. Lol.
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