Newark Star Ledger Writes About the Bubble

The Star Ledger has an extensive article about the p/e ratios of houses in North Jersey. Needless to say, ratios are pretty high compared to only a few years ago. And yes, I know that the Newark Star Legder dropped the "Newark" from its name years ago.

"# Nationally, the residential real estate market's P/E is 17, well above the historic norm of 11.

# In the Newark metropolitan region -- a five-county span that includes Essex, Union, Morris, Warren and Sussex -- the residential real estate market's P/E topped 18.4 -- compared with just less than 11 five years ago.

During this same time frame, home prices have risen 13.3 percent, while rental rates have only increased 1.4 percent, according to Zandi.

# In the Middlesex-Somerset-Hunterdon area, the P/E is 19.1, compared with 11.6 five years ago. Here, home prices have climbed 15.2 percent during the past five years, while rental rates have only inched up 2.3 percent."