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Hoboken, what comps do you, and they, have to support your relative prices? What you, or they, individually think the house is worth is meaningless unless supported by sold comps. That's what will tell the true story.
You know as well as I do that comps are all over the place at the minute. As an agent I have access to all MLS data. There are some astounding price drops happening, but they are happening over time, so the sales price ends up being fairly close to the last list price - just miles from the initial price. As I said, comps are all over the place. I could justify its current list price, or the price we offered which are $200,000 apart based on comps from the last year. Depends which position I was trying to argue.
I have also stated before that I would only buy if I were paying BELOW current comps. Not a popular view, I am aware. But one that makes an awful lot of financial sense for a buyer in this market. In this market I want a hedge against further drops. If I don't get one, we'll keep renting. Simple as that.
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Originally Posted by futurecruiser
How on earth could you possible know this? Do you know the sellers?
No, but I do know agents from the office of their listing agent rather well. The people from the second house are very high maintanence, have lived in their house 26 years and think that the upgrades that they did when they moved in are still current and adding value. In this they are incorrect.
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Originally Posted by TexasHorseLady
I think everybody (and by that I mean buyers and sellers both) need to learn to ignore what was paid for the house a set period of time ago and look at the comps (what comparable houses are actually selling for in the last 3 to 6 months, depending on your area), and a lot of the confusions and "should sell for"s would disappear. .
Agree in some respects, disagree in others. The price the owners of the second house we like paid 20 + years ago is irrelevant. The price people paid in 2006 could be very relevant, unless they bought a foreclosure or done significant upgrades. When I mentioned the state of the market, the agent said that this particular area hasn't dropped. I disagree with that for a start, but while it hasn't dropped I have no idea how it has managed to GAIN $200,000 in that time either.
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Originally Posted by London Girl
The economic situation is way worse than it was a year ago and there's no sign it's going to get better - only worse - how much worse nobody really knows.
And as NatasNJ pointed out: foreclosures DO affect non-foreclosure prices. And there are plenty more coming.
Agree with both of these points.
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Originally Posted by Bill Keegan
What makes you think there are so many more coming in NJ? At least in my part of NJ, there really aren't expected to be that many more. In fact, there were 34% FEWER forclusures in NJ during Q4 of '08 than there were in Q3. .
Well for one New York is starting to feel the heat, and that trickles over to NJ. The job loss figures coming out regularly are staggering. Plus they are saying that the second wave of mortgage defaults on Alt A loans are coming up. Property taxes are high in NJ as is the average home price. All this is a concern.
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Originally Posted by Roselvr
Where are you looking?
If either of the 2 are that good some New Yorker will come in and buy it.
We are looking in Philadelphia. Center City. You may be right - but the second house has been on the market for a year, and at this price since July. Anyone who comes in and pays within 10% of that price is setting themselves up unless they pay cash and don't mind it being worth a lot less than they paid for it IMHO.I think it would probably sell at 20% off the current list price if the sellers made a big price reduction NOW. The longer they wait, the less they will get. They've chased the market down from day 1. We would be willing to pay between 25 - 30% off the current list price.
On house 1 (that we made the offer on), you may be right. It's in a killer location, and someone may be willing to pay over the odds for that.
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Originally Posted by LynnKK
It would have been nice to read all the way through this thread...and actually derive some good information .....not the case.
Well where are your nuggets of good information then??
I believe that this approach is analytical. You state that it is the wrong reason, but you do not explain why. Judgement and greed are moral issues, and I am trying to stick to the issue of "value over time."
A lot of people who ask that question do NOT ask from an analytical standpoint, but are worried that a Seller may profit. That concern is often based on greed or envy. I see it too often to deny it.
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Originally Posted by rubber_factory
If we limit the scope of analysis to "motivated buyers, and what they should offer to get a deal moving," then sure, I agree.
But to the individual who sees homebuying as one investment vehicle among many, the original question still stands unanswered.
The value of the property is dependent on a great many factors and the Sellers' original investment is nearly irrelevant to fixing a reasonable comparable market value.
Why does it matter if a Seller profits, when the subsequent Buyer also profits?
If I pay $200,000 for a property two years after the Seller paid $150,000, and I am able to resell in two years for $230,000, does the Sellers' purchase price reduce my $30,000 gross profit? I think not.
But, knowing the debt against the property gives a Buyer much more information regarding the Sellers' ability to sell than knowing the last sale price does.
If that Seller paid $150,000 and refinanced for $210,000, can he sell to me and close for $200,000? Or $180,000? It is material fact if it is a short sale, and the value of knowing that debt level easily trumps the value of knowing the Seller's original purchase price amount.
Properties that are leveraged far above the Sellers' original investments are all around us, and are one significant contributing factor in the foreclosure debacle.
"Option ARM' comes to mind immediately.
What's wrong with the houses under $200k there?
Curious. I haven't looked at pics or anything.
$200k and under in Collingswood/Haddon Twp area gets you one of two things. A twin or rowhome type place or a single Family home that basically is uninhabitable. There has been a few minor exceptions to that but for the most part that is DEAD on.
I am not a 1st time homebuyer. And we are looking for something that we can really settle into long term. I really don't want to have to buy again in a few years or even 20 years. I want this house to be 'the' house or a house that we can make our ideal house over the next couple years. So location is very important to us this go around.
If we were willing we could probably find that house fairly quickly in Cherry Hill or Mt. Laurel. But we want to be very close to PATCO. So willing to wait it out a tad longer searching for the right house.
I don't expect Collingswood area prices to plummet either. But to go another 10%+ is surely possible and probably very likely.
Fair enough. And I also want to mention that I understand, which is what I meant by some areas always being more expensive than others. My best friend from college took a job in Braintree, MA back in 1995. He was paid $30,000 a yr. $30k back then seemd like a pretty great salary for a fresh out of college grad. and much higher than other offers he recieved in other parts of the county. Anyway, he and his sweetheart married right after graduation, and moved to Boston. They ended up renting a 1bd., 1 bth in Quincy, MA for $850/mo (yes, that much 23+ years ago!). They then had their first daughter in 1986 and her bedroom was literally a walk-in closet across from the only bedroom. It was a rehabbed attic apt. Needless to say, Boston was always out of wack, they probably would have taken much longer to "buy a home" had they stayed there, but instead moved back to IL in 89 and have prospered since then. Reasons vary and are not important or what most would seem to care about on this forum, but another example, anyway. Boston is a great place, beautiful part of the country and will probably always be more expensive, like NY. Reasons are many. But I also will argue that salaries are, overall, higher as well. Checks and balances. Cost of living must always be considered before making a move of any kind, and looking at cost of housing is key info.
Yes, wages here are higher compared to other regions in the country but it still doesn't match up. In IL, 70k/yr is probably good money but here, forget it. Not only do we get nailed with cost of housing, tolls are a big problem. I took a ride from the town where I made an offer, to Cambridge, where I work. $6 in tolls one way! For pete's sake. That's almost a $100/mo. It peeves me to no end. And it's not like I can just move anywhere. I'm in biotech so I need to be where biotech is flourising, which is Boston/Cambridge. OTOH, just today I saw another boat load of reductions. A home I visted over the weekend that had a huge oil spill in the basement was reduced to 239,000 from 262,000. So, that's pretty good, not that I would buy the death trap lol.
Stalemate is a perfect word to describe the market in NJ right now. When a house comes up on the market priced reasonable then it sells in my area usually within a few days. Yet there are a ton of houses that are priced high and still sitting there.
There was one house (nice house but didn't work layout wise for us) that was initially listed in 08108 for $379k. Well 15 months or so later they were down to $299k. Well they just CLOSED at $255k.
So when I see this how can one NOT lowball (assuming the listing price is out of line which 95% of them are)?
Now I think this house was probably worth in todays market $270k or so. But talk about being in denial at the beginning.
And I have seen hundred of listings DROP off market since the summer because they were not selling and it is obvious they were not willing to drop their price to sell.
My mom is in Toms River, NJ. She's trying to sell her home. There are sooo many homes for sale in that town. When I go to realtor.com to look for her house, I search through pages and pages of homes between 250-300k.
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I am very interested in the Spring to see what happens. Will the current stagnet listings, + the previous summer unsold listings, + new listings, +people have to sell listings, + people who are testing the market listings, + more probable foreclosures, + short sales in general will mean for the buyers?
Hopefully it will mean affordable housing. I don't need to granite, hardwood, or even appliances (craigslist has plenty of used appliances available). I'm hoping for a 200k home that isn't disgusting in a decent neighborhood. *fingers crossed*
Cause if you price a place reasonable today your house will sell quickly. I have even seen some houses sell for WAY above anything I would ever imagine they sell for but not many. So it will be interesting to say the least.[/quote]
Quote:
Originally Posted by TexasHorseLady
I think everybody (and by that I mean buyers and sellers both) need to learn to ignore what was paid for the house a set period of time ago and look at the comps (what comparable houses are actually selling for in the last 3 to 6 months, depending on your area), and a lot of the confusions and "should sell for"s would disappear.
As others have stated, they're all over the place. Comps don't seen to be a good guide these days. And ignoring foreclosures is hard to do when more than half of the homes listed (that I come across) are SS or forclosures.
Many reasons why the glut of homes will not drop in a short amount of time:
1. Excessive inventory
2. Overpriced compared to historicals
3. Lack of qualified buyers
4. Tougher to get a mortgage than anytime in recent history
5. Psychologically, buyers are not going to jump in at this time. they are worried about losing their job. NJ unemployment skyrocketed to 7.1% last month.
It will be ugly in NJ and all over the country for the forseeable future....only solution is let the populus markets get at least back to historicals....possibly might overshoot the bottom, but the faster we get there the better...all these gimmicks (ie Homebuyers credit) are just delaying getting to the bottom...
Many reasons why the glut of homes will not drop in a short amount of time:
1. Excessive inventory
2. Overpriced compared to historicals
3. Lack of qualified buyers
4. Tougher to get a mortgage than anytime in recent history
5. Psychologically, buyers are not going to jump in at this time. they are worried about losing their job. NJ unemployment skyrocketed to 7.1% last month.
It will be ugly in NJ and all over the country for the forseeable future....only solution is let the populus markets get at least back to historicals....possibly might overshoot the bottom, but the faster we get there the better...all these gimmicks (ie Homebuyers credit) are just delaying getting to the bottom...
Agreed.
The more interference the longer it will take the market to correct.
The more interference the longer it will take the market to correct.
And it won't be a "V" shaped recovery.
Nowhere will be unscathed.
Many in the business (ie Builders/NAR/Realtors), or who have financial interests don't talk about bumping around the bottom or "overshooting" the bottom for obvious reasons.
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