The Bubble is Over, You Can All Go Home Now
This article reports that the median price of homes in the Shore area grew 7.3% in the third quarter. A few experts offer an explanation for the apparent rise in the median price. Anecdotally, and from keeping track of a few homes, I think house prices on a same-house basis are about 10% lower compared to this time last year.
What also needs to be pointed out is that many homebuilders reported record sales in the third quarter of 2006. Although the sales levels might have set new records, the homebuilders gross margins collapsed by between 200 and 500 basis points. This was because although the builders kept list prices at high levels, they also added incentives, such as appliances, mortgage buydowns, and pools, that increased costs. In short, they sold more house for the same amount of money.
Given the use of incentives by new home builders, I would not be surprised if the higher median number didn't also include the increased use of incentives, (ie. cash rebates, pre-paid taxes etc.) on existing homes, which unfortunately are not netted out of the gross sales number.
BY DAVID P. WILLIS
BUSINESS WRITER
The median sale price for an existing home in the region that encompasses Monmouth, Ocean, Middlesex and Somerset counties was $415,100, up from $386,900 in the same quarter last year, according to the association. In the second
quarter, the median sales price had fallen 0.1 percent to $393,600.
The median means that half the homes in the area sold for more and half for less.
"The fact that it is up rather than down is at least some sort of hint that the area is not suffering greatly, at least yet, from any major price pressures,'' said Joel Naroff, chief economist at Commerce Bank. "That is not to say that I don't think it might happen.''
Full article...
posted by Little_Silvered at 3:40 PM
18 Comments:
You can't always believe what you read in the paper......
Kara Homes’ president advises home seekers to purchase soon
Posted by the Asbury Park Press
on 03/26/06
Responding to the indecision that many buyers are experiencing because of negative news about the real estate industry, Zudi Karagjozi, the president of Kara Homes, emphatically advised, “The time to buy is now."
I don't know about Monmouth County, but in Ocean County where I live,asking prices are down about 10% from what selling prices were in the summer of 2005. There are many houses for sale in my neighborhood and nothing has sold for the past six months. There are two houses nearby which have been drastically reduced. One of them is priced about $80,000 less than what a very similar house sold for last year-and that house still has not sold.
well In spring lake homes are selling briskly as they are in Manasquan ....looks like a great 2007 comming up !
Do you think linda just may be a realtor?
In my brick neighborhood a house went on the market 6 months ago for 599,900.
Then it was lowered to 579,900,
then 549,900, then 529,900, now it
is priced at 499,900 and still no buyers.
but i here in spring lake, the houses are selling "briskly" ;)
You can always tell when a realtor is posting because they always use too many exclamation marks!
As someone who does a considerable amount of writing, I find that using more than one exclamation mark over a five year period is too many. As you can see, I just hit my quota until 2011.
!!!!!!!!!!!!!!!!!!!! There, I've used a lifetime supply!
I don't know about you guys, but I am watching the housing market crack like a hawk. And I smell blood in the water with sellers.
to Anonymous, don't get to carried away with blood in the water ,we all know what happened to the shark in JAWS.However be advised if you want bargains in shore property now is the time to be picking them up.When buyers finally wake up to the fact homeowners are not lowering prices(unless they must sell)they will have missed the market already.
When I started this blog in the Spring of 2005, Realtors would often say that real estate prices, whether at the Shore or elsewhere, never go down. Now that prices are down, Realtors are predicting that prices will go up again in the Spring of 2007.
If Realtor predictions have been consistently wrong over the past 18 months, why should anyone pay any credence to the current predictions for future price appreciation?
This is an excerpt from an e-mail sent to me by a shore realtor. We're waiting for "bargain" prices in Avalon.
"Recent sales in Avalon and Stone Harbor have outpaced 2005! October was the best month in 17 months. This is positive news for the real estate market and should provide a bit of confidence for those considering a purchase.
There are excellent values available today and while sales have picked up, selection remains outstanding! Read the article below to see what the experts are saying about the housing market."
Thank you nj coast for once again posting recent sales information. It is so easy for agents and sellers to make statements about how well the market is doing without any facts to back themselves up.
Wow! 2 sales in Oct.and 1 Nov.+74 on the market. I notice quite a gap between LP and SP. Looks like sellers are negotiating there. Doesn't sound like Linda is talking about Spring Lake, NJ.
It is simply ridiculous to pretend that all is well. This is merely the beginning of a phase that will take years to run full circle. Any realtor looking at this slide with starry-eyed optimism re: 2007 is delusional.
You're forgetting that this is the jersey shore- things are different here. While the real estate market goes cold and prices drop steeply in the rest of the country, prices here will go UP, UP, UP - no matter what happens. In a short while, there will not be a house in any area of the shore for less than $10 million. LOL
Their (realtors) last desperate hope is to start pumping up the market with bullshxt about how great things are. I know people trying to sell at the shore and they can't get anything close to asking price. They are losing money rapidly and those with cash on the sidelines aren't stupid enough to bail them out, despite what crap Linda and Sally spew on this blog.
I wouldn't be surprised if market pumpers Linda, Peter and Sally are the same person.
There is a stalemate at mid market with large inventory of approx 500k properties.
Properties at the 1mm level are selling only if they discount 20% and give incentives (especially new construction).
Low end condo crap and fixer uppers are sitting because the buyers know that they may be able to buy the mid-level ones at the same price soon.
While the shore won't drop as much as the fringe overbuilt areas, the increasing inventory will push prices lower. The prices at the shore will follow the general market - differenlt, but will follow.
At the moment there seems to be a bit more supply than demand in the market but it is really tough to really see until March-June. Last spring the heightened spring market never came. Iventories grew a bit and buyers (mostly builders and flippers) disappeared, leaving only those who need a house to live in. Interest rates spiked to close to 7% around the same time. Year over year some towns are up (Fair Haven and Red Bank up about 7%) and some are down (Colts Neck down 10%) I think the areas that went down are the ones that went up at a faster rate in 2005. Anyway, sellers know the deal, realtors know the deal and buyers definitely know the deal, so asking prices are better, houses on the market are in better shape to show and rates have dropped to 6.25% or so. Also gas prices are down substantially and the stock market seems to be fairly strong. With all this said prices still seem high to me compared to 5 years ago. My guess is that buyers will pick up slightly, which will drop inventory slightly which will help to even the market and we will have an even market with 0-5% appreciation for the next two year or so. Which is good for the market to take a breather. The only unfortunate souls are those who put little or nothing down and need to get out, I suspect they will be reaching for their ankles over the next year.
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