Let’s Hear Some Stories - Part 4
Continuing the same post from last month, I would like to hear stories and anecdotes over this weekend about the state of the real estate market here at the Jersey Shore.
posted by Little_Silvered at 6:44 PM
45 Comments:
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Tons of open house signs and balloons in front of shore homes - no sign of buyers. I pass through Lavallette to Spring Lake daily. I think was a "town yard sale" people are more interested in. I have no time to stop at the Open House nor any desire, because I know the asking prices are insane.
was down in belmar today. man, so,so many homes for sale. i did not stop into any open houses but will soon. also, i took the train down and along the way on many train stops are adds for real estate. there is one for long branch about a "luxury rental." anyway, i have never seen so many homes for sale in belmar.
Posted in a 7 Eleven at Red Bank is an ad for a 1 bedroom condo with garage. It is in a 50's era red brick apartment building. The taxes are 2800 as of 2004 and the condo association fees are 266 per month. The asking price is 234K. I saw this condo in rental ads over the last 3 months. The owners were asking 1500 a month. I guess they couldn't rent it and now it is for sale. The real problem for them is that one can get a 3br apt in the same area or a 2BR closer to downtown for 1500 a month. Why would anyone buy this 1BR condo when the assoc fees and interest payments (10% down)are greater than the rent for a much larger apt? This is not including taxes! One would have to be a firm believer that this condo will appreciate in the near-mid term to consider buying.
Where I am in Middletown, I'm still seeing outrageous asking prices although it does seem that houses are sitting for a while. We are renting a house and talking with the owners about purchasing. They really believe that the market has never been better and the longer they hold the more money they will make.
I drove around Rumson and Little Silver over the weekend I did see a lot of signs with UNDER CONTRACT on them, but there were still a lot of homes for sale .sales seem to be going OK in these towns however steep the prices may be
I posted this same comment once before - but worth repeating here. I used the "request info" button on the Diane Turton Realtor website to get information regarding a specific home. I told them what town, streets, house stats and price range I was interested in. Based on MLS listing in the town my price range is reasonable. I can't get anyone from Diane Turton realtors to even call me back - so here I sit...a sizable down payment sitting in a money market waiting for he right shore house and nobody interested in selling me a house...well at least nobody from Diane Turton...but maybe they just can't be bothered with the under $1 million dollar market. I think it is the REALTORS as much as the buyers that need to get the mind shift that something has changed and buyers need to start being shown some respect. Needless to say Diane Turton is out as a buyers agent in my mind so they don't even need to bother calling me back now.
anon10:13
you may try posting over at http://nnjbubble.blogspot.com/
There is a realtor, rymingrealtor, who posts there regularly who seems legit and not out to take every penny you have.
Even if you are interested in a territory she doesn't cover, she may be able to refer someone...
Just a suggestion, sense Diane Turton doesn't seem to be responding...
JM
5 houses for sale on my street in South Jersey. 4 have been for sale for more than one year. I have a brother and a sister that have had houses listed in PA for over 6 months. There really has not been any activity on either place.
Are you the same "sally" who could "point to 6 $3million+ homes that just sold in RUMSON" but never quite got around to it?
sally-o ...you still didn't answer the question? Are you in the RE business, maybe a realtor...?
jj
Another weekend at the shore. Lots of open houses, no traffic. A few more ridiculously high priced houses out just waiting for some moron to come along and pay too much. Go to the beach, don't bother looking at these houses, unless you are bored and want a good laugh.
Real Estate Investors watchout for this!!!
US homeowners see mortgage rates topping 8 pct
Fri Jun 2, 2006 3:24 PM ET
I am sitting in front of the computer this morning trying NOT to do work. I needed something to keep me busy so I ran a few calcs on trusty EXCEL.
Median HH income for Monmouth CO. is approx $85,366 (best guess from multiple sources and calcs)
Traditional front end ratio on mortgage 28%. This is the max you are to pay on a mortgage in relation to your gross income per year.
Average interest rate for 30 yr fixed right now is approx 6.5%.
Under traditional standards, the max mortgage amount for the median borrower is $312134.74.
The median home price in Monmouth (best guess once again) is around $470000.
This means the median borrower buying the median home needs a down payment of approx $158000 which is roughly 33.6% of the purchase price.
Each 1% change in the front end ratio allowed by lenders (easier lending standards) allows for approx. 3.57% more in purchasing power.
Based on the fact that the anecdotal evidence points to minimal down payments on recent home purchases I believe that the front end ratio has been raised to approx. 35-36% on average.
This information cuts both ways because as banks tighten lending standards in response to a softening housing market,failure to appraise, rising default rates and Fed jawboning, each point of change decreases purchasing power by the equivalent amount.
The combination of this phenomenon and the fact that on average a 1% rise in mortgage interest rates on a 30 year fixed decreases purchasing power by approx. 7.5% will cause a significant contraction in median income buyers ability to purchase the median priced home.
In response to this, either median income must increase at a rate equivalent to the decrease in purchasing power or the median home price must drop.
The contraction of lending standards from 35-36% back toward historical norm of 28-31% alone should reduce prices by roughly 21%.
Additionally, a further increase of 1 to 2% in mortgage interest rate in the next 2-3 years should reduce prices by another 7.5 to 15%.
These two synergistic actions will probably occur slowly and incomes will probably rise by 3 to 4 % per year.
Based on these factors, I believe the Monmouth median home price will drop by approximately 25-30% over the next 2 to 3 years to roughly $329000-352500.
This prediction bars any major slowdown in the US economy or major currency crisis the could force wage growth down or interest rates higher. Either scenario would cause a greater drop in median home price.
I would venture back into the RE market for purchase of a home to live in at that price level. As for buying to invest or rent out I'll leave those calcs for another Saturday.
Ray
Some anecdotal stories from Highlands/Navesink...
Here in Highlands, directly across the street from Bahr's Realty, a 2 Bed/1 Bath was listed for 349,900 around March (MLS10082025). The grass from the lawn actually grew so high you could barely see the sign. A couple weeks back, the price was dropped to 324,900 The grass was cut to reveal a new listing agent (same realty). Now the house next door just went on sale, also by Bahrs. I'm tempted to call the office because the listing claims waterview. I drive past that house everyday and there's no f'n way you can see water from there unless it’s raining.
Next story:
An acquaintance of mine who lives in Navesink, bought a townhouse last June at the perhaps the peak of the market for 390,000. They plan to move out of state but are in no particular rush. About a month or so ago they listed their place for 500,000. Their realtor begged them to drop the price. They've dropped it twice since but is still at 480,000. No offers to date.
More anecdotal info:
Drive north on Branch Ave in Little Silver, between 7-11 and White Road, and you'll find six, count 'em, six homes for sale, all within about 1/3 of a mile stretch.
Cletus
I know exactly the houses you are talking about. I think that in the dead of winter, with no leaves on the trees, you might be able to see the bay if you stand on the chimney. That's your waterview.
Navesink seems to have lots of inventory in the Red Store area. Ther is also a house that backs up against Hartshorne that I like because of its location. It has benn listed for over a year and the owner has not lowered the price since last September.
Branch is a nice busy road too. Good luck selling those.
I see a house sold in just 3 day on branch ave across the street fron the L S CLEANERS....if you price a house right it will sell....fast I believe the price was 479,000
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You Know You're from New Jersey When...
You've been seriously injured at Action Park. (Amusement park)
You know that the only people who call it "Joisey" are from New York (usually The Bronx) or Texas.
You don't think of citrus when people mention "The Oranges." (Names of several Jersey towns)
You know that it's called "Great Adventure, " not "Six Flags." (Amusement park)
You've ordered a hard roll with butter for breakfast.
You've known the way to Seaside Heights since you were seven. (Jersey Shore town)
You've eaten at a diner, when you were stoned or drunk, at 3 am.
Whenever you park, there's a Camaro within three spots of you.
You remember that the "Two Guys" were from Harrison. (Name of defunct discount department store chain)
You know that the state isn't one big oil refinery.
At least three people in your family still love Bruce Springsteen, and you know what town Jon Bon Jovi is from.
You know what a "Jug Handle" is. (Traffic turn-around for U turns)
You know that a WaWa is a convenience store.
You know that the state does have real farmland.
You know that there are no "beaches" in New Jersey - there's "The Shore, " and you know that the road to the shore is "The Parkway" not "The Garden State Highway."
You know that "Piney" isn't referring to a tree. (Someone from far south central Jersey)
Even your school cafeteria made good Italian subs, and, you call it a "sub" not a "submarine sandwich" or worse yet, a "hoagy" or a "hero."
You remember the song from the Palisades Park commercials. (An extinct amusement park. Remember the Rockn Roll song about it?)
You know how to properly negotiate a Circle. (A Traffic Circle)
You know that the last question people from other states ask is always has to do with your driving. (They always think we’re the worst, but we KNOW they really are, especially NYC or Philly!)
You know that "Acme" is an actual store, not just a Warner Bros creation. (A Supermarket)
You know that this is the only "New..." state that doesn't require "New" to identify it (like, try ...Mexico, ..York, ...Hampshire (doesn't work, does it?).
You know how to translate this conversation: "Jeet yet?" "No, Jew?" (Did you eat yet? No you?)
You only go to New York City for day trips, and you only call it "The City."
You know that a "White Castle" is the name of BOTH a fast food chain AND a fast food sandwich.
You consider a corned beef sandwich with lettuce and mayo a sacrilege.
In the 80's you wore your hair REALLY high.
You don't think "What exit" (do you live near?) is very funny. (We don’t all live off the Turnpike)
You know that the real first "strip shopping center" in the country is Route 22.
You know that people from 609 area code are "a little different." (South Jersey Area Code)
You know that no respectable New Jerseyan goes to Princeton - that's for out-of-staters.
The Jets-Giants game has started fights at your school or local bar.
You live within 20 minutes of at least three different malls.
You can see the Manhattan skyline from some part of your town.
You refer to all highways and interstates by their numbers.
Every year, you had at least one kid in your class named Tony.
You know where every "clip" shown in the Sopranos opening credits is.
You've gotten on the wrong highway trying to get out of Willowbrook Mall.
You've eaten a Boardwalk cheesesteak with vinegar fries.
You have a favorite Atlantic City casino.
You love Italian Hot Dogs and real Lemon Ice.
You know where “Down Neck, the Berg, Peterstown, North End, Elmora, and Bayway” are and what’s different about each of um.
You start planning for Memorial Day weekend in February and start down the Parkway sometime in April.
You always “make it louder”, you never “turn it up”.
You think to get on any beach cost money and you need a beach pass.
And finally...
You've never pumped your own gas. (There’s actually a state law against it)
Some of these posts are from June. Also, some of the spam is recent. Sorry about the spam.
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Love your site and thanks for compiling the useful information in one spot. My wife was at an Open House in Wall (near Sea Girt, MLS ID#: 10083401) a few weeks ago. The agent insisted it was priced to move or some such nonsense (750K). We just received a friendly postcard informing us that the move isn't happening. It's now 695K. We're in Fairway Mews in Spring Lake Heights and we'll probably just sit tight and see where this leads. You're blog has been really helpful in developing a plan for the future.
Thanks kindly
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Just returned from Long Beach Island. Thirty percent of the Island is for sale. One spec house had stopped construction and was left unfinished. The correction has started. When you see three bedroom cape cods in the $350,000 range, reality will have returned to the market.
The real estate bulls are like the nasdaq junkies in 1999. They don't want to hear reality. "You're negative!", they'd say. And then the boom was over. The real estate bubble is going to end the same way, but the damage is going to be far worse than the stock market bubble.
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