Price Lowered on Rumson House Again
This house in Rumson is now listed on the MLS for $835,000. It was recently priced at $875,000 and before that $899,000, which was down from $940,000 back on May 5th. MLS ID#: 10038427
posted by Little_Silvered at 9:39 PM
8 Comments:
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IMHO the bubble hasn't begun to burst until a house sells for less than what it was purchased for. I've been watching a house in West Allenhurst. It was bought in 2003 for $885,000 put on the market in the spring of 2005 for $1,400,000- now is reduced to $1,150,000. The owner could still make a profit although not the windfall that they imagined. Panic will not set in until people actually start LOSING money.
Hey look, I'm no rocket scientist or big time real estate investor but I saw this coming years ago. I talked my wife into selling our house in Oceanport in July 2005 and we bought down south. I have no idea what my house in OP is worth today but there is no way its worth what we sold it for ($839,000.00). I wipe my brow everytime I think about it and thank God I had the guts to jump out before the bottom fell out. Prices were so far off base, I knew that when I couldn't afford to buy my own house it was time to take the money and run. Now its low taxes, no mortgage and warm sunshine for us. Timing is everything.
HOW'S THE MARKET..WHEN WILL IT COME BACK?
These are questions that I hear every day. My answer is - "good". The reason that my answer is not total doom and gloom, as you might hear from others, is because I can put it into perspective and look at the facts. Rather than be drawn in by the hysteria of the press.
The media would have us believe that there are foreclosures looming of epic proportions. If that is the case, then the market will be great for investors with cash. I have been in real estate for a long time. I remember the late 80's. There was much higher unemployment, and the interest rates were at 10%. This is not the case right now. Realty Trak is the most widely reported foreclosure source, and many of the pre-foreclosures that they report are really only those that have missed some payments. Not every borrower goes down the preverbal tubes after missing some payments. Also, Realty Trak has apparently stated that their reporting can be as much as 60% off.
Turning to the sheriff sale report and the actual foreclosures, it appears that NJ has much fewer foreclosure reported than other states. It would appear that we are seeing less than 10 per month in any one county. Counties like Monmouth will probably see even less than many others. The sheriff sale website shows properties sometimes three and four times. This is normal -- given to change in dates at the court, postponements etc. However, it is my understanding that the press uses the total number, which means that the same property is counted more than once. That would certainly increase the numbers to show a much larger amount than it really is.
The result of this reporting by the press is that is can create inertia and people freeze waiting for the sky to fall. The truth is that the market remains robust. The top of the market was early 2005, and prices have gradually corrected since then. They ALWAYS do. Otherwise the market would run out of buyers. It normally corrects until buyers can afford again.
Interestingly enough, if buyers wait -- it seems to me that they are missing out on a great opportunity.
We all agree that real estate goes up in value over the long term. It has been a wild ride the last few years when we could make so much money for a short term investment. Buying a house then selling provided good returns for many lucky sellers. The "flippers" investors that bought homes in need of a fix up, made money. I myself invested and made money with a few real estate flips.
However, we all know that nothing can beat real estate as a long term investment it will go up, come down and go up again. Using Rumson as an example the median closed price in 1997 was $450,000 in 2000 it was $815,000 and in 2006 the average closed price was $1,435,000. Today that number is $1.426,000. Not too shabby for an investment that provided you with a roof over your family's head.
The opportunity now is that there are some properties that are well priced and the interest rates are super. If you wait for it to come down further you may very well miss the current interest rate. For every 1% of interest is 9% spending power. Or for every 1% increase 9% less house. Much smarter people than I predict that this correction will last three to five years. In which case, we are already 2.5 years into it. That means that any savings by waiting may very well be eaten up by an interest rate increase. It also means that your life was put on hold. By either staying in a home longer than you wanted, waiting to trade up, or renting and paying someone else's mortgage.
When will the correction be over - I wish I knew? To some extent is does not matter. If you are selling a home and buying another, everything is relative. If you sell your house for say 5% less than you could have sold it for a year ago, then you can buy for 5% less. It is the spread between homes that matters, and if you can finance that spread with cheap mortgage money.
What about the sub-prime crisis you ask? Lenders did make a mistake by forgetting the natural cycle of real estate, and lending money to some less than stellar candidates. In many cases, individuals with less than great credit, for 100% financing and with only stated income. Doesn't sound like a great idea to me. Not every borrower made the mistake of borrowing using interest only loans or ARMs without planning for the end of that party. In the last few years, I have bought properties which I still own, taking advantage of interest only for a year, and an ARM or two. They were great tools and I used them wisely. My point is that not every borrower is going to end up in the poor house.
OK, enough said about the foreclosure situation - Lets look at the actual market. You will be surprised to hear that homes in the first half of 2007 are selling in as little as 16 days on average if they are priced correctly. Over $1 million it is only 32 days. What is correct pricing? It is not "giving your house away", which as you can imagine is a phrase I hear a lot. It is merely pricing for the current market and not a ‘Mission Impossible’ price from 2004.
Sellers that want to sell need to price on the last closed comps. Not list at the "pack" price, which very well mean they will be on the market a long time and by definition sell for less. To sell for the most amount of money, they need to list correctly. They will sell faster and for more than their competitors. Pricing right will net the higher amount.
I was interviewed earlier in the year by The Breeze radio about the market, to listen to my live interview on The Breeze radio click here. http://www.resourcesrealestate.com/radio
Monmouth County:
Year to date comparisons to 2006 same time period show that compared to last year we are down in actual single family homes sold by only 6.8% overall. In some price points there is actually a slight increase.
Some towns show an INCREASE in single family homes sold.
Rumson shows an increase of
14.5%
Fair Haven shows an increase of 5.3%
Monmouth Beach shows a whopping 21.1% increase in homes sold.
Last time I ran my company production we were up 7%, compared to other offices. Very few were up and many were down, some as much as 40%. When change hits the real estate market it is even more important to work with a professional realtor. Career realtors understand the market and have proven strategies that work for a changing market.
It is also the time when poor performance realtors and agencies close up shop. As witnessed by the recent demise of several. This is no time for amateurs or weekend warriors.
I am very proud to announce that we were chosen by Close Up TV News and the news segment is being aired on October 25th and November 27th at 7am on the following channels:
Check on your TV where IONTV is located it should be one of the following
Comcast channel 6
Verizon channel 31
Hope you will watch. To request copies of the show call us at 732-212-0440 or email info@resourcesrealestate.com
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Carolynn Ozar-Diakon
Broker/Owner
RESOURCES Real Estate
www.resourcesrealestate.com
carolynn@resourcesrealestate.com
Here's a good list of foreclosures.
I will give this info to my friends in Rumon to see the house. Thanks for the post.
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Good post. I never thought of it that way. Thanks for this entry.
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