Thursday, September 29, 2005

PRICE REDUCED - That Rumson House Again

This house in Rumson is now listed on the MLS for $799,000. As of August 5th it was listed for $835,000. Prior to August 5th it was listed at $875,000 and before that $899,000, which was down from $940,000 back on May 5th when we first started tracking it.

The asking price of this house has been reduced $141,000 since May 5th, which reflects a 15% decline. As they say on the street, "annualize that".



Click here to see the listing.

If the URL changes, use MLS ID#: 10038427

I'm Waiting for the Asbury Park Press to Call Me

This blog has existed from about mid-April, and since April I have read and posted links to tons of articles about the real estate bubble. The major papers, including the NY Times, The Wall Street Journal and the Washington Post have done a great job of keeping the public informed about the bubbles in their local markets and on a national scale. In addition to the major papers, there have been a lot of good articles from small local papers that comment on and describe the real estate market in their own little corner of the country.

Unfortunately though, I haven't seen any meaningful articles about local real estate conditions at the Jersey Shore in the Asbury Park Press. Moreover, judging from the article below, bubble bloggers seem to be getting attention from their local media. Maybe some one at the Asbury Park Press could look into the state of the housing market at the Shore before the bubble bursts. (If anyone knows of any APP articles that discuss the Shore real estate bubble, I would like to see them.)


"For Rich Toscano, the most surreal moment in his tenure as housing-bubble blogger came when a Money magazine reporter called to discuss the San Diego market.

Rich Toscano tracks the housing market on his Web site, Professor Piggington's Econo-Almanac for the Landed Poor. He thinks San Diego home prices are poised to fall.
"He said, 'I just got off the phone with (Nobel Prize-winning economist) Milton Friedman. He wasn't too helpful. Now I'm calling you,' " Toscano recalled.

Toscano, a renter in University Heights, wasn't quoted in the Money article. Neither was Friedman. But the fact that he was interviewed highlights how blogs – short for Web logs – have been gaining a voice in the housing-bubble debate."

More...

Wednesday, September 28, 2005

A New Poll is Up

See the sidebar and vote.

2945 Listings in the Eastern Monmouth MLS

Each Wednesday we check the Multiple Listing Service for eastern Monmouth County. The count this week is 2945, which is up from 2921 last week and 2909 the week before.

Over about the past four weeks the number of houses for sale seems to be increasing almost daily according to the local MLS. As most of you have been reading on the other blogs, this trend in Monmouth County over greater inventory seems to be part of a broader regional and national trend.

Tuesday, September 27, 2005

Big Drop in New Home Sales

Housing bears were ecstatic today after the Commerce department reported a 9.9% decline in the number of New house sales for the month of August. In addition the months supply of inventory increase from 4.1 in July to 4.7 in August. New house sales were even worse in the North East part of the country with sales down 22% year-over-year.

Snip…

“The Commerce Department reported that new home sales declined by 9.9 percent last month to a seasonally adjusted annual rate 1.24 million units. Even with the slowdown in sales, the sales price rose by 2.5 percent from July's level to $220,300.

The bigger-than-expected drop in new home sales could be an indication that the nation's red-hot housing market is beginning to slow, but reports so far are mixed. On Monday, the National Association of Realtors said that sales of previously owned homes rose by 2 percent in August to 7.29 million units, the second-highest level on record.”

Continue…

Greenspan Speaks Again

A lot of people have accused Greenspan of being a day late and a dollar short, or of causing the current bubble in the first place. Regardless of what Greenspan did or did not do in the past, he is now clearly trying to talk some sense into the credit market and the housing market.


["History cautions that extended periods of low concern about credit risk have invariably been followed by reversal, with an attendant fall in the prices of risky assets," Greenspan told an economics conference in Chicago via satellite.]


More

Central Jersey Anecdote

Someone that I know who lives in the Mendham part of New Jersey and is trying to sell their single family house said that the market has taken a real dive in the past two to three weeks. He said that in his area, houses in the $500 thousand to $1 million range are not seeing any interest and that motivated sellers are already reducing prices by $40k to $60k.

Looking at the new home sales data that came out today and hearing various stories like the one above, I think we are starting to see the first meaningful evidence that house prices might have already peaked sometime this past summer.

Monday, September 26, 2005

Emigrant Savings Bank is Paying 4%

Emigrant Savings Bank is paying 4% interest. Just last week they were only paying 3.50%. Banks like Emigrant are going to suck deposits out of big mortgage underwriters like Washington Mutual, Bank of America, Wachovia, Indy Mac and others. These banks will then be forced to raise their own deposit rates, which in turn necessitates that mortgage rates also be raised in order for the banks to be able to turn a meaningful profit.

New Century Financial Conference Call

New Century Financial, which is a mortgage REIT and the second largest sub-prime lender after Ameriquest, held a conference call on Friday the 23rd following its announcement that results for the year would be weaker than originally expected. The company’s main business involves underwriting or originating residential mortgages and then selling them into the secondary mortgage market. The company enjoyed high origination volumes in the month of August and it looked like the third quarter would be relatively solid. However, the company said that prices for mortgages fell substantially in the secondary market in September, and as a result, its margins are expected to contract in the fourth quarter to between 30 and 50 basis points from earlier estimates of between 80 and 100 basis points. In other words, the price that New Century is able to sell mortgages at declined in the past few weeks. In turn, the company said that the lower prices reflect concerns by mortgage buyers (Asset Backed Bond Funds) that 1.) too much supply already exists. 2.) the quality of the newer mortgages might be less than ideal.

In order to try to improve its margins, New Century is going to increase the rate it charges borrowers. The company beleives that this could reduce loan volumes by 30% from the record high levels of August. For the housing market, this is not a good sign if you are a bull as the higher interest rates will undoubtedly cause prospective home buyers to reduce their bids to what is affordable.




A replay of the call will be available until this Friday. The replay number is (888) 286-8010 or (617) 801-6888 and the passcode is 13365441.

Sunday, September 25, 2005

Government Distorts Coastal Real Estate Market

This article describes how the federal government encourages people top build in coastal areas that are prone to flood. Morevover, the federal government then bails out home owners who were too dense to build some where less flood prone. This is a problem up and down the the Jersey Shore, as far as I'm concerned, and in other parts of the country as well.


Snip...

"In 2003, approximately 153 million people lived in U.S. coastal counties, an increase of 33 million people since 1980. By 2008, 7 million more will probably have moved there, too.

As a result of this success, beach developers tend to be disproportionately wealthy and politically influential, and therefore unusually good at fighting zoning laws and grabbing subsidies. Even after Hurricane Andrew forced Florida to establish stricter building codes, the owners of hot Florida Panhandle real estate managed to get a raft of exemptions for their region.

One North Carolina beach community, Emerald Isle, has collected millions of dollars in state and federal money to combat erosion — even though some 80 percent of Emerald Isle's new artificial beach is privately owned and inaccessible to the public, which paid for it."


More...

Slowdown is Coming

"A month ago, Janel O'Malley helped a client buy a house for $101,000 less than it was listed for.

That kind of deal, the Realtor for Coldwell Banker Carriage House Realty said, has been practically unheard of in Fredericksburg's spicy-hot housing market. But now, it's happening more frequently.

Realtors say sellers shouldn't panic. But houses are staying on the market longer, fewer sales are happening each month and property is not appreciating as fast as it was."

Full article...

Friday, September 23, 2005

This is What a Flat Yield Curve Does to Banks

New Century Financial Corp., which is a REIT that provides mortgages, warned today that quarterly results would be lower than earlier expectations. This is what the company said in its press release.


["Recent trends in interest rates, coupled with concerns over housing prices, energy costs and other inflationary pressures, have caused a significant deterioration in the secondary market for loans, causing our projected operating margins to fall to unanticipated levels," said Robert K. Cole, chairman and chief executive, in a statement.

"Given the current operating environment, we also believe it is necessary to continue raising our rates in order to improve margins," Cole added. "In addition, we are adjusting our product mix and implementing ongoing cost-cutting initiatives."]



Company Description

Founded in 1995 and headquartered in Irvine, California, New Century Financial Corporation is a real estate investment trust (REIT) and one of the nation’s premier full-service mortgage finance companies, providing first and second mortgage products to borrowers nationwide through our operating subsidiaries New Century Mortgage Corporation® and Home123 Corporation®. We offer a broad range of mortgage products designed to meet the needs of all borrowers.

Sand for LBI

The government is going to spend $500 thousand to dump more sand on the beach in LBI. I always thought dumping sand to protect private property is a stupid idea. No one is forcing these people in Harvey Cedars to live 200 yards from the ocean. I think that if you want to build a house on the beach then you should probably pay for the replenishment yourself.

Snip...

["We've lived in Harvey Cedars for 22 years, and in that time we've seen the beach come and go," said Lillian Neiblum of E. 86th Street. "I've seen times when the dunes have been turned into steep cliffs by the waves.

"There's no question this needs to be done," she said. "Flooding is a concern both at the north and south ends."]

Full article

No Money Down

[SACRAMENTO, Calif. -- Until recently Michelle Hupton figured you had to have money in the bank to buy a house.

Then a mortgage broker got Hupton and her fianci financing with nothing down and interest-only payments for two years. The couple, who together earn about $100,000 as restaurant managers, wound up with a $385,000 ranch-style house in Folsom, Calif. _ a city of 60,000 about 25 miles east of Sacramento _ and an appreciation for the new housing economics.

"It felt kind of weird buying it because in our bank accounts we didn't have any reserves," said Hupton, 34. "We definitely would never have been able to afford it without 100 percent financing."]

More...

Thursday, September 22, 2005

Market Update from Realty Times

Realty Times is a website that accepts and publishes "market condition" updates from real estate brokers from around the country. It is only updated occasionally and I rarely check it out. However, since this update about Middletown NJ was relatively recent, I thought I would post part of it here. Like I said, these market condition updates are from brokers, so they are probably not completely free of bias.

"Last summer your neighbors put their house on the market and had so many buyers that they were on the winning side of a bidding war. Now you are trying to sell your home and there's just no action."

More...

Inventory Up All Over

It seems like inventory is up all over across the country. People have been posting MLS data on the various blogs and it is clear that the number of houses for sale is on the increase. I wonder if some of the increase is seasonal, but I suspect not. Assuming that the summer is the "slow" season for listing houses, then presumably the spring would have been busier. This does not seem to be the case, at least at the shore, since the MLS numbers over the summer were higher than the amounts in the spring.

Wednesday, September 21, 2005

2921 Listings this Week

There are 2921 listings on the MLS for eastern Monmouth County as of today. Last week the count was 2909.

New North Jersey Real Estate Blog

Here is a new North Jersey Real Estate Blog. Some of the inventory numbers being posted to the blog seem to indicate sales are slowing in North Jersey. I wonder how many people in Bergen county own houses at the Shore, too.

Tuesday, September 20, 2005

Flat Yield Curves Kill

The Fed bumped interest rates up 25 basis points today. Although most analysts expected the increase, there was a slight chance the fed might have kept rates where they were because of hurricane Katrina.

Related to the move by the Fed today, the NY Times ran a story about the effect that higher short term interest rates have on the earnings of banks. In short, when short term interest rates approach long term interest rates, banks can’t make any money.


Snip…

“Unfortunately, that concept has now run up against a fundamental of the banking business: borrow cheap and lend high. This year, the gap between short-term and long-term interest rates has narrowed, leaving little room for retail-focused banks like Commerce to profit that way.

As a result, the highflying shares of Commerce fell to earth last week after the bank warned that earnings would not meet Wall Street expectations for the rest of the year. The stock, which closed yesterday at $31.16, is down 7.7 percent from the closing price before its Sept. 12 warning.”

More…

Property Grunt

The property grunt is a realtor in NYC with a blog. He usually comments on the NYC market and has remarked two weeks in a row about the lack of traffic at his open houses. The grunt is a good writer and its probably worth the time to check out his blog to see how the real estate market is in Manhattan. I think that if prices decline in Manhattan, then they inevitably have to fall at the Shore since I believe many Shore house buyers are either buying vacation houses down here or are apartment owners with kids looking for more room.


Snip…

“Turnout at the Grunt’s open houses has been lower than turn out at a Pro FEMA rally in New Orleans. Ok. That was bad. But you get my drift.

While I have been waiting for the trickle of buyers I have been pondering the reasons for today’s atrocious results. One could argue that it was due to the traffic created by the Mexican Day parade but I have to disagree. As I have stated before in my previous experiences that I have seen people come through all types of weather and parades to come to open houses. Besides, everyone loves Mexicans. They make the best soap operas.”

More…

The Stars Align

Snip...

["All the stars are aligned [for a fizzling down of the housing market] but we've had many times in the past [that] this had happened, so we'll have to see real confirmation in the data," Shapiro says.

Mortgage applications, he says, will continue to provide real-time readings of demand.

In the week ended Sept. 9, the Mortgage Bankers Association said applications for new-home loans and refinancing fell 1.4%, after rising 6.8% the previous week, as long-term rates rose.]

More...

Monday, September 19, 2005

Open House Sunday

On Sunday, before the Jets game, I went to two open houses in Monmouth County to try to get a feeling of what the market is like. My first stop was in Avon. When I walked into the house, which was about three blocks from the ocean, the realtor immediately told me that the house was way over-priced. She was right. The owner was asking about $1.2 million but the realtor suggested it was probably worth closer to $900k. I don’t think in a normal market it would be worth $700k and about the only thing the house had going for it was its proximity to the ocean.

The realtor, who was very helpful, said that that the market is still strong “despite the bubble” and that appropriately priced houses are still moving.

The second house I went to go look at was a three bedroom dump in Fair Haven. On a street with three other houses for sale that were essentially the same size, the owner of this house decided to ask for $600k plus. Amazingly though, and just like in Avon, the realtor showing this house quickly added that the house was over priced and that similar properties are selling for closer to $400k. Moreover, the house easily need $50k worth of work, if not more. The realtor, again, was very helpful but also tried to argue that there is no housing bubble.

In general, it seems that both realtors believe that the market is still strong in Monmouth County if the price is right. Interestingly though, both houses I saw were priced wrong and I’m not quite sure what to make of that. Both realtors though did try to interest me in other properties so maybe having an open house is just a way of drumming up new business for these realtors, though not necessarily to sell that particular house.

Sunday, September 18, 2005

What a Deal - You Can't Lose

"This market area is exceptionally good for investors and residents alike. We've been seeing increases of 30-50% PER YEAR and don't expect it to slow for the next 10 years."

See the full post...

Abury Park Press Housing "Crisis" Editorial

The Asbury Park Press has an editorial today about the lack of affordable housing in NJ. The paper offers a few solutions that would probably be found to be unconstitutional if enacted or at least ineffective. I don't think the Asbury Park Press understands that people sometimes have to rent or should rent and that they don't have a right to a single family home.


Snip...

"The coalition hopes to make an additional 100,000 affordable housing units available by 2015. That's a modest goal, well below the need — estimated at anywhere from 450,000 to 1 million units — and only slightly higher than the state's official target of 75,000 units in the next nine years.

The median price of a single-family home in central Jersey was $394,100 in the second quarter of this year — up 22.8 percent from a year earlier, according to the National Association of Realtors. That's more than double the median price of $188,200 just five years ago, and nearly double today's national median of $208,500. Growing numbers of people — including a large swath of the middle class — can't afford those prices.

The coalition wants to increase funding for the state rental subsidy program, change Council on Affordable Housing regulations to increase affordable housing obligations, and create a statewide "support system" to help residents guard against foreclosures and assist them with refinancing and home repairs. The coalition is working on a more detailed plan it will present to the next governor and Legislature."

Friday, September 16, 2005

Are Open Houses a Sign of Desperation?

Another anecdote.

Someone that I know is selling their house in North Jersey. She asked her realtor about running an open house this weekend and the realtor said that having an open house would be percieved as a desperate move.

Given the number of open house signs that I have been seeing since about July, I think I would have to agree with the realtor. Until just recently, I never really noticed those open house signs, but now they seem to be everywhere and I can't help but think to myself, when I do see them, that the property is having problems attracting interest.

Anecdote About Queens NY

I had a conversation today with a co-worker who has been looking to buy a house in Queens since probably about 2003. Obviously, the guy has missed alot of opportunties to get in at a lower price than what is out there today, but he does follow the market in Queens pretty closely.

In any event, he says that the market for houses in the $500k to $700k range has definately softened in some of the nicer neighborhoods over the past two months. In general, he believes houses are sitting longer on the market and that sellers are refusing to move their asking prices lower in any meaningful way.

Thursday, September 15, 2005

Making Money as House Prices Fall

Forbes article about profiting from the housing crash.

"As this economic recovery and bull market mature, risks and imbalances are increasing…and one of the most threatening is the growing U.S. real estate bubble.

While the Fed has raised short-term interest rates ten times, long-term bond yields and mortgage rates today remain accommodative by historical standards, with the 30-year fixed-rate mortgage near 40-year lows. This sector has become irresistible to many investors--not just speculators, but also those seeking higher yields in Real Estate Investment Trusts--as "safe" way to enjoy a piece of the action."

More...

Wednesday, September 14, 2005

2909 Listings this Week

Last week the number of listings for eastern Monmouth County was 2853. The jump from 2853 to 2909 is an increase 1.96%. This is the biggest weekly increase since I started tracking the listings a few months ago.

Tuesday, September 13, 2005

A Jersey Shore Example from 1986

This is an excerpt from an MSN article. The article is mostly about how not to lose money investing in real estate, but offers a specific example that includes a disparaging description of the Jersey Shore. His example seems pretty dated since the days of infected needles on the beach was almost 20 years ago.

Snip...

"The tenant leaves

You can also get hurt on real-estate investments in good neighborhoods. Another client built a new rental property on the Jersey shore. He looked forward to full summer rentals that would cover his expenses for the rest of the year.

Unfortunately, in his first rental year, drug needles were found washing up on New Jersey beaches and stories of HIV infections from contaminated needles were grabbing headlines. A tenant my client thought he had signed up for two months disappeared, and it was too late in the season to find a replacement.

Financially, my client got clobbered. Without the summer cash flow, he couldn’t meet the mortgage payments. He sold out for more than the property had cost him, but he had to pay transfer costs. So, on a cash-flow basis, he was substantially out of pocket.

The good news was that this client didn’t have to pay any taxes. The bad news is why: He'd lost his shirt."

Full article..

That Rumson House is Still For Sale

This house in Rumson is still for sale. It has been listed since at least May and the price has been dropped from $940k to $835k.

Here is the MLS listing.

The Long Island Market

I think the housing market on Long Island is similar to New Jersey. Like New Jersey, Long Island has lots of people that commute to NYC everyday. In addition, like the Shore, it has lots of vacation homes.

Snip...

"Yet, in a possible sign of a slowdown, the increase in home prices has been more moderate than in recent years. In August 2004, the median home price Islandwide had jumped 13.3 percent from the same period of the year before.

And, according to the MLS report, inventory went up to 20,485 in August, a 23.7 percent increase compared with the same period last year.

Given these figures, some believe a dip in home prices is on the horizon."

Monday, September 12, 2005

Eminent Domain Abuse, Long Branch

A few states (Texas being the most recent I believe) have passed new laws recently that severely restrict the state's ability to seize private property in the name of progress.

I hope the same types of tough laws are passed in NJ as well, however, I think bribes paid by developers are an important source of revenue for many NJ politicians, and as a result, I doubt we get eminent domain restriction laws anytime soon.

"LONG BRANCH — The likely redeveloper of Beachfront North, Phase II, where a citizens group formed two years ago to fight the project, has negotiated with a third of the 35 property owners to purchase the land.

And officials said two of the 12 property owners have accepted the developer's offer to exchange a condominium in the new development for their properties. That offer, as well as all aspects of the redevelopment, have been widely criticized by members of the Marine Terrace Ocean Terrace Seaview Avenue Alliance, or MTOTSA, which plans to challenge the government's right to take the properties by eminent domain, should negotiations fail."

Continue...

More Advice

Snip...

"Price Bubble is a Local Matter
The key thing you should know is that the pace and direction of real estate prices is a local matter — and little if anything reported about national trends is likely to apply to your local situation. It is important to know how to spot which way your local market is headed before buying or selling to avoid paying too much or getting too little from your equity.

Here are some tips on how to take the temperature of your local real estate market:

Check Housing Market Activity:
How many homes have sold last month compared to the month before? If the pace of sales is slowing for two to four consecutives months, this could be a leading indicator of a slow down in the local market. Records of homes sold is available with local land records that are maintained. A local realtor with access to the Multiple Listing Service can also provide this information. "

More...

Sunday, September 11, 2005

Jersey Shore Invention

This is the coolest beach chair I've ever seen.

Waiting on the Sidelines

This post is from Curbed.com. It is a summary from a reader to the site why they are not buying in Manhattan yet. As I have said before, I believe NYC and Jersey Shore prices are probably closely correlated. A drop in NYC apartment prices should help bring down Shore prices over the long term.


Snip...

"In the meanwhile I am renting while generally keeping apprised of the market and saving money. As you know, there are many in the real estate industry making the claim that the so-called bubble will never burst. Although I personally believe this is wishful thinking, it�s worth noting that no one (as far as I can tell) is making the claim that NYC real estate will continue to outperform alternative forms of investment (e.g., stock market etc.). This is really the only metric that counts when it comes to the buy now or buy later argument."

Full Article

Meanwhile, in Wisconsin

Wisconsin isn't exactly the Jersey Shore, but this article is interesting anyway.

[If you're looking for a pricey Dane County home, or even something more in the middle, the local housing market is swinging to your favor.

With more and more homes streaming into an increasingly competitive market, owners are being forced to keep for-sale signs up a little longer and hold down prices, Realtors say.

"The overall marketplace today compared to a year ago, there's much more inventory," said Bob Weber, president of First Weber Group. "It's gone from an incredible sellers' market to more of a balanced market, maybe even leaning toward a buyers' market because they have choices."]

Being a Landlord

Lots of people are playing the real estate game by becoming landlords. According to this NY Times article, its not that easy being a landlord.

"THOUSANDS of fledgling landlords are scooping up small multiple-unit dwellings throughout the New York area - pristine two-families in the Rockaways, for instance, or vintage buildings along Manhattan side streets or in Brooklyn's brownstone enclaves - but some of them do not quite know what they are getting into.

Being a landlord means dealing with multiple challenges: choosing the right tenants, planning for a panoply of legal, financial and maintenance obligations, navigating the bureaucratic maze and understanding that for the small landlord there are no economies of scale - no discount on the low-volume fuel bill; top dollar to the tradesman called in because there is no plumber on staff; in fact, probably, no staff. So just who does take out the garbage?"

More... (registration required)

Saturday, September 10, 2005

The Shore Was Expensive This Year

Paying $3,000 a week or more for a summer house at the shore seems pretty steep as the article implies.

Now that the rental season is over I wonder if all those "investors" that over paid earlier this year will be able to make their mortgage payments until next June, with no rental income.

Think about it. If you bought a Jersey shore rental property in the spring, and you rented it out all summer, you probably had little or no cash drain and therefore felt no cash drain pain. Now that the season is over and the rent checks are not coming in, the pain might get pretty severe in a few months.


Snip...

[Observers seemed to settle on this theory: Businesses that thrive on people making day trips from northern New Jersey, New York and Pennsylvania couldn't have asked for better conditions. Businesses that needed people to stay overnight were hurt by the rising cost of rentals that in some places reached more than $3,000 a week.

"With those kinds of prices, you can get on a plane and go to the Caribbean," Commerce Bancorp economist Joel Naroff said. "And you don't have to bring linens."]

More...

The House Owns You

Snip..

["Once you own a house, in essence the house owns you," said Goggin, a native Californian who worked for software firms in the San Francisco Bay Area for six years before changing careers. He earned a masters degree in information and computer science from the University of California at Irvine in 2002.

America is obsessed with home ownership, with home sales topping 7 million in 2004, continuing the longest real estate boom cycle the industry can remember. But amidst the frenzy to buy and sell and talk about what was bought and sold, not everyone is signing up to be a homeowner. Some people have decided not to buy homes because they enjoy the mobility and freedom that comes with not being tied to a home or a mortgage. Others have sought alternative housing due to being priced out, or left out.]

Full article....

Thursday, September 08, 2005

Hovnanian Down Today

Homebuilder Hovnanian, which is based in Red Bank, saw it share price slide today to the amazement of its CEO. Wall Street is looking for any reason to sell home building stocks and penalized the company because it missed the average EPS estimate by 2 cents.

Interestingly, and I'll have to look this up myself, on the Yahoo Hovnanian message board, some one posted that Kara Homes is advertising steep discounts in the Asbury Park Press. Did anyone else see this?

For the record, Kara Homes is a builder of luxury type homes with a few projects at the Shore, including the old Trade Winds site in Sea Bright.

The Extra High End in NYC

This article from The Economist describes the ultra luxury real estate market in New York City. Given the sharp increase in NYC condo and co-op prices it's not hard to imagine that real estate in the suburbs, including the Jersey Shore, would also experience sharp gains. I'm sure that plenty of people with cash to throw around have been buying in both places. Also, anyone that bought a reasonably priced two bedroom condo in NYC in the 90's probably could take profits and buy a much larger single family place in Jersey, and would want to, especially if they have kids.


[Ms Lenz credits the current boom to a mood swing among the rich after the attacks on the World Trade Centre four years ago this week. The market sagged briefly along with the rest of the local economy, she says, but then came roaring back, especially at the top end, when people with money decided that they should enjoy life while it lasted, and that if New York could survive 9/11, it could survive anything.

Another big change in the market, says Ms Lenz, has been the arrival of the “hedge-fund guys”. Fifteen years ago she was selling to doctors and lawyers as well as bankers, most of them wanting an eight-room apartment for life somewhere on the Upper East Side. Now, along with international investors and a few celebrities, her biggest customers are hedge-fund managers and other Wall Street lions who expect to change properties after two or three years like other people change cars. She tells of one hedge-fund manager, 33 years old, who bought a $24m apartment in an hour, explaining that he had “just bought a $19m painting at Christie's, and he was not going to put it up on a $2m wall”. The potential buyers for the Park Avenue penthouse include another “hedge-fund guy” she says, and a “royal-family-type person”.]

Wednesday, September 07, 2005

Manhattan Days on Market Chart

This chart displays Days on Market and Listing Discount for properties in Manhattan. If you get a chance, look at the other charts and graphs on the site, they are all pretty interesting.

2853 Listings in the Eastern Monmouth MLS

Last week the count was 2864

Outlook from Bill Gross

Stay away from real estate.

Snip...

"That means a focus on high-quality investments with anticipation for an eventual Fed easing at some point in 2006. I believe that 4% will cap this Fed Chairman’s last bear market tightening and that his successor will quickly be confronted with the necessity to lower rates once again. A bullish orientation towards the front-end of the curve therefore should begin to dominate bond strategies, combined with an avoidance of anything that carries those low-risk premiums that Greenspan finally diagnosed."

Full article...

Tuesday, September 06, 2005

New and Existing Home Sales

Snip...

"Recent housing data show an interesting twist. For the first time, the median price of new homes is below that of existing homes. In short, new homes are getting cheaper and more are being sold, while existing homes are getting more expensive and less are being sold vs. the recent past.

The Commerce Department reported sales of newly constructed homes rose 6.5% in July and 27.7% from a year earlier. But the median sales price dropped to $203,800, the lowest level since December 2003, from $219,500 in June."

Full article.

Rumson Teardowns

Over the weekend I had the opportunity to tour two different parts of the Shore. On Sunday morning I drove through Rumson and on Monday I was down near Tuckerton.

The part of Rumson that I drove through on Sunday was the “blue-collar” section of town, which is the area roughly bordered by Bingham Road to the west, Ridge Road to the south, the Navesink River to the north and maybe Avenue of the Two Rivers to the East. In general, this area used to be one of the more affordable sections of Rumson since the lots are smaller relative to the estate type properties in the other parts of town. I once heard this area referred to as “the village” but I doubt it’s as blue collar as it once was.

In any event, there seemed to be a decent amount of houses for sales, but not necessarily an extraordinary amount. What I did notice though were a lot of new construction on old lots. It seemed that this part of town had quite a few “tear downs” and “build ups” with some still in process.

On Rumson Road, which has more estate type properties, I noticed a large ranch style house that would probably retail for about $1.5 million or more, up for lease. It seemed like an odd kind of property that one would try to rent out, but as I have said before on this blog, I am seeing more single family houses up for rent these days than in past years. I believe that that the increase in single family rentals in towns like Rumson, Little Silver and Fair Haven reflect the possibility that investors (or speculators) might be more involved in buying these types of properties.

Route 9, Tuckerton

On the way back from visiting Smithville* (GSP Exit 48) on Monday, I decided to take the scenic route back to Monmouth County by driving on route 9 instead of the Parkway. I’ve never been interested in owning any property in that part of the state, because it is too far south for me, but you can see that plenty of people are apparently interested. Just outside of Tuckerton, while driving north on route 9, you would have been hard pressed not to run over a house for sale sign if you happened to run off the road.

(*If you are ever in desperate need of a zany lawn ornament, a decorative door stop made of yarn, or a Christmas ornament in August, or anything else that is entirely unnecessary, then you can probably pick it up in one of the many knick-knack crap-attack stores in “historic” Smithville NJ.)

Monday, September 05, 2005

We Missed Something

What I missed, and so did everyon else, apparently.


Snip...

"So what did everybody miss? Namely, one small detail that tells more about the housing market than most statistics ... and very possibly is the first crack in this enormous real estate bubble. Get this:

The median price of a home fell in July by a whopping 7.2%.

Go...

Trouble from a Slowdown

Maybe.


WASHINGTON (AP) -- The nation's red-hot housing market may finally be nearing its peak, meaning the end of double-digit annual percentage price gains for homeowners and potential trouble for more recent purchasers who stretched to buy.

That's the assessment of economists, who concede they have been forecasting a cooldown in housing for some time only to be confounded as sales and prices continued to boom.

Sales have certainly been sizzling this year, putting the country on track for a fifth straight year of record purchases of new and existing homes.

Continue...

Thursday, September 01, 2005

"Sparks Fly on E-Street..." and Washington Street

This guy has some amusing commentary about the Shore and decides to stay in Hoboken for the Labor day weekend. Maybe the article will convince some Hobokenites that are thinking of moving to the Shore to stay put.

"Aside from the risk of shark attack or getting sand in hard to reach places, there isn't much down there that I can't get right here within walking distance of my apartment. Simply throw The Wild, The Innocent, & The E-Street Shuffle in the CD player and then take a little walk around town.

"Well what about the boardwalk?"

Just take a stroll along Hoboken's waterfront. You may not get the waves, but you get the same brackish bouquet and hear the occasional seagull. Of course, instead of grifting carnies trying to hustle you out of your money with rigged amusements, you just get the homeless shaking cups in your face barking for money, but it's essentially the same gimmick, without the elaborate skeet-ball trailer."

Continue...

Tourists in Spring Lake

This picture here from the Asbury Park Press shows tourist ogling real estate in Spring Lake.

Pending Home Sales Down 1%

WASHINGTON, Sept. 1 /U.S. Newswire/ -- Pending home sales declined slightly but remain historically high, according to the National Association of Realtors(r).

The Pending Home Sales Index (see note), based on data collected for July, slipped 1.0 percent to a reading of 125.1, but is 3.5 percent higher than July 2004.

The index, a leading indicator for the housing sector, is based on pending sales of existing homes. A sale is pending when the contract has been signed but the transaction has not closed; pending home sales typically close within one or two months of signing.

More...

NJ Has the Highest Median Income in the US

New Jersey also seems to have the highest expenses in United States. I feel like New Jersey is the "nickel and dime" state. It seems like I'm always paying some kind of state surcharge on my already expensive car insurance, or I'm paying for parking in Red Bank so that I can have dinner at a nice restuarant that probably already pays a ton of property taxes to the town. I also got hit for $7,000 this year in real estate transfer fees when I sold some property. That also seemed pretty excessive.


"New Jersey residents are digging ever deeper into their paychecks to cover the cost of housing.

Almost four in 10 New Jersey mortgage holders last year spent at least 30 percent of their income on housing, according to census data released Tuesday. That's up from roughly three in 10 in 2000.

While New Jersey's median income is the highest in the nation, rising from roughly $54,300 in 2000 to $61,359 last year, housing prices have risen much faster. The median price of a one- to four-family home (condos included) in New Jersey rose from $165,000 in 2000 to $259,900 in the first half of 2004."

Full article