“Sellers Have Learned They Must Seek A Lower Price”
The Record reports from New Jersey. “John and Susan Scerbo put their five-bedroom Ramsey house on the market more than a year ago, expecting to sell within a few months. But the house is still for sale, even after the couple cut the asking price from $695,000 to $649,000.”
“‘We got caught in a tough market,’ said John Scerbo. ‘Buyers are slow to act, and there’s enough inventory out there that they can take their time looking.’”
“‘A lot happened during the boom, and we have some paying back to do yet,’ said economst David Seiders.”
“(Brokers) Karl Kern in Wyckoff and Mark DeLuca in Teaneck both say prices in the Bergen County area dropped about 5 percent in 2006. Both said another drop of 3 percent or so is possible in ‘07. ‘Inventory is still very high, and inventory puts a whammy on prices,’ said Kern.”
“Tough as the softer prices may be on sellers, they come as welcome news for buyers. ‘You can drive a pretty good bargain,’ said Bob Walters, chief economist for Quicken Loans.”
“Walters predicts that prices will remain soft for 2007 and 2008. Kern has a similar view. ‘I think it’s the nature of the cycle of real estate that we’re not going to have a boom again for a long time,’ Kern said.”
“The housing slowdown has also had a big impact in the new-construction market, where activity is at the lowest level since mid-2000. Reflecting builders’ wary mood is Hovnanian Enterprises Inc. of Red Bank, the state’s largest home builder, which was forced to cut prices in many of its communities in 2006.”
“Hovnanian recently dropped plans for two North Jersey projects: a 372-unit development in Mount Olive and a 288-unit development in West Milford. In all, it walked away from $141 million in land deposits company-wide in the fourth fiscal quarter.”
“The company has been forced to scale back construction in the face of a wave of cancellations by prospective buyers, many of whom can’t sell their current homes.”
“Ara K. Hovnanian, the company’s chief executive, said until contracts pick up, ‘we are continuing to manage assuming that current conditions remain with us for the foreseeable future.’”
The New York Daily News. “The number of city foreclosures jumped 18% in the last half of 2006, with as many as 100 homes going on the block each week in both Brooklyn and Queens, according to Crain’s New York Business.”
“‘The last time I saw it this bad was in the early 1990s,’ Jessica David, president of Profiles Publications.”
“‘The [lending] industry is exploiting customers’ ignorance and seizing the opportunities offered by the skyrocketing real estate market,’ said Sarah Gerecke, chief executive of Neighborhood Housing Services of New York City.”
“Staten Island homeowner Leone John said she worried that the $280,000 home she bought in 2004 was more than she could manage. But a two-year freeze on the interest persuaded her to take the plunge. Now her payments have jumped 30%. That hike, along with other unanticipated expenses, has put her behind in her payments.”
The New Haven Register from Connecticut. “Both buyers and sellers are getting an early jump on the spring housing market. ‘The demand is there,’ said (broker) John Cuozzo in Hamden., and sellers have learned that, in order to sell, they must seek a lower price than they likely would have fetched last spring. ‘The asking prices seem to be more realistic; 2006’s expectations were rather grandiose.’”
“The market has returned to more normal levels, meaning buyers should see smaller price tags attached to homes this year, said Donald Klepper-Smith, chief economist at DataCore Partners in New Haven. ‘They’re going to be down from the lofty levels of 2006,’ he said. ‘It’s unrealistic to expect that housing market to go on forever. What we have now is a normal correction in the cycle.’”
“Donald Williams of New Haven plans to put his two-family home on the market in the spring so he can buy a smaller home in the area. He expects it to sell relatively quickly at his $210,000 asking price.”
“‘I think it’s worth more,’ he said, but he plans to ask that price in order to sell as quickly as possible. Williams also said he will spend the coming weeks doing yard work and making other improvements to the property in order to help it sell.”
“On average, homes in Greater New Haven are spending about 120 days on the market, a trend that is likely to continue through the spring, said Paul Gradwell, president of the Greater New Haven Association of Realtors. And as sellers are getting more realistic with their asking prices, he said, buyers are taking notice and stand to benefit throughout the spring. ‘They’re being more selective,’ he said.”
staten island is a dump. wife knows someone that bought there around 2003 and the home has had virtually no appreciation. the commute anywhere is horrible, there is a garbage dump, they want to build a nascar track. stay away.
The dump is closed. Staten Island is not bad, but the point about the commute is right. Although it is part of NYC, southern Staten Island is much farther away from Midtown that many suburbs.
In the 1980s boom, builders started putting up 13 foot wide rowhouses there. You heard me right. The middle bedroom had a skylight that leaked.
The legal minimum is 18, but they used a zoning loophole to say they actually built a series of 26-foot-wide two-family homes, just with the two units side by side rather than one over the other.
After the market crashed in 1987, completely finished developments of these lay unsold for years. No one would buy them if they weren’t in a deperate mania. Eventually, they were just torn down and replaced with detached houses or real rowhouses. Their value had fallen to the value of the lot they sat on.
i seen them they look like manufactored houses for workers that were unloaded by a truck. took my road test in staten island recently and failed
i know someone that suffers daily on the BQE. Once in a while I drive to Pennsylvania for work and it’s fun going west on the BQE at 65mph and watch the traffic east away from staten island move along at 5mph or less
The best scenarios are millionaries living in frugally cheap homes. Don’t even bother with 200k homes. They live in a 100k house undetected by society never having to work for the rest of their lives.
There’s really not much to say.. This has been the slowest month in my lifetime as an appraiser.. 15 years now… I am heading down to Florida mid week to see another appraiser who is semi-retired.. Those ARM’s did a number on the economy. I still think you can short all the sub-prime lenders FMT, RDN, DB,CFC there going South like me..
And LEND.
Well, I sure hope you (a) banked everything you could and (b) figured out a backup career. You’ll need both.
Open a Carnival?
You are a true soldier who KNOWS the depth and width of this fiasco. Hang in there and hopefully something good will turn up for you. It will take time for the boom to unwind - leaving ruined lives all the way down. It always comes down to the Income to Debt ratio. Folks can fool themselves for awhile - but the bill ALWAYS comes due.
“Hovnanian walked away from $141 million in land deposits company-wide in the fourth fiscal quarter.”
Next time some RE functionary tells you that we are at the bottom and while prices may be soft, they will soon make a big comeback, quote them this. Ask them to explain why a successful company would literally walk away from $150,000,000 if they thought that things were going to turn around soon?
Money talks. The rest is all b*llshit.
I have also read the justification that they would take these write-downs so that they can buy the land back again later at a much lower price. It’s going to have to come down a lot for them to recoup $150 mil. Even if it’s true, what does that say about land (and home values) between now and then?
From Florida:
http://www.sptimes.com/2007/02/12/Business/Around_the_Bay__Real_.shtml
Re/Max Advantage Realty, once a dominant real estate agency in Pasco County, abruptly shut down Tuesday. Nearly 25 affected agents did not learn of the decision until Tuesday morning. At least some were notified by e-mail from a representative of company owner Donald Hachenberger. There was no explanation for the closing. Rick Miller, who said he represented the owner, would only say Tuesday that the closing “was just a business decision.” In its heyday, Re/Max Advantage Realty, in the U.S. 19 strip with Carrabba’s Italian Grill, had more than 60 agents in the area. “When they first started in this market, they were the cat’s meow,” recalled Robert Memoli, a past president of the West Pasco Board of Realtors.
Assuming the article is correct that Don Hackenberger owns the office, he is also the owner of the franchise rights for all of Re/Max in Florida and South Carolina. He has been collecting a monthly flat fee ($100 or so) from every Re/Max agent in both states for 15 years or more. Some of that goes to Re/Max Int’l, but at least half stays with the state owner. Business must really suck in Pasco County if they would close an office with 25 agents paying over $1000 per month as desk rent.
“Business must really suck in Pasco County if they would close an office with 25 agents paying over $1000 per month as desk rent.”
Pasco was toast a long time ago, due to the sinkhole problem. My insurance agent told me that Pasco has something like 75% (could be more, I’ve heard 90%) of all the sinkhole claims in Florida. Anywhere west of 41 in Pasco is really toast. I like East Pasco, in the Dade City area, but that’s about it. Pasco was overbuilt like crazy and the developers brazenly built on land over existing sinkholes.
To think that most of the agents in business will need to move on.
0.9% of GNP went to commissions at the peak.
The normal bottom is 0.3% of GNP going to realtor ™ commissions.
Its going to be tough to feed those alligators.
The offices in one building for the largest Realtor ™ in this area closed too. However, they occupy multiple buildings. But giving up multiple floors has to say something…
Got popcorn?
Neil
Sounds to me like they are closing to try and prevent any litigation matters. HEAD FOR THE HILLS. THEM LAWYERS” IS COMIN’!
Makes you wonder what THAT office has been doing.
HEY…. WHERE I MY NEW HOME????????
All i see here in NYC is tons and tons of luxury, luxury, luxury homes and apartmets?
What a glut of luxury, and nothing left over for me The NON-LUXURY NYC DJ!
dont you know everyone in nyc is making over 200k and a 800k starter apt. in williamsburgh brooklyn is your path to success.
no bubble here all is well
and dba i agree about staten island, there is a reason it is called the forgotten borough
We used to call Staten Island the “land of the lost” ala the 70’s kids TV show
(What a glut of luxury, and nothing left over for me The NON-LUXURY NYC)
After the bust, they’ll have to sell some of the “luxury” to people like you, at a price you can afford, since there will not be enough people richer than you to buy it all.
Don’t worry, DJ. A lot of places will soon be going into funk-closure.
funk-closure -
“Get tha funk outta mah face, get..tha..funk..outta mah face” -
Somebody give me a beat!
How’s this PillyGal: Gimme that beat boys and free my soul; I wanna get lost in the rock and roll and drift away …
Dobie Gray…very nice
I have to be brief, I’m on hold. Don’t worry aNYCdj, during the last downturn in NYC my roommate and I rented a 2 story 1800 sq ft 2 br pad in a prime building on Hudson in the W village. Rent was $2,000. It was very luxed up. The kitichen, dinning, and living room were larger than those in most suburban houses. Many of the lux condos will soon be reasonable rentals. Never listen to people winning that they are only building luxury condos. You want the market to be flooded with these and later all their owners will be fighting each other to rent to you. It happened to me the last go round.
Didn’t you hear? They are changing the poem on the Statue of Liberty. It used to say “”Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore,
Send these, the homeless, tempest-tossed to me,
I lift my lamp beside the golden door!”
It will now read, “Give me your bankers and hedge fund managers, huddled in their lowly rentals yearning to break free into a luxurious lifestyle condo, the wretched offspring of baby boomers, fleeing the suburbs, send these (but not anyone making below 200K a year), and I will lift my lamp so they can find their way to the next open house!”
wrong on both
dropped about 5 percent in 2006. Both said another drop of 3 percent or so is possible in ‘07.
try 12% for 06 and ??????? for 07
why is everyone still lying about 06 ?
Its so BAD here in Queens, i would much rather have a plain Vanilla apartment, and a parking/storage space, then any phony Luxury upgrades
Some of the older apartment buildings (some turned condo) in Sunnyside and Woodside had underground parking spaces for the tenants, but they are very plain brick buildings built 20-30 years ago..
I agree it’s going to be very bad here when lots of people HAVE to sell.(might take longer then we expect)…. And there are no buyers at the luxury price, but tons of us at the non-luxury price.
” And there are no buyers at the luxury price, but tons of us at the non-luxury price.”
Exactly right. Seems like all the developers want to sell to the “lugzhurry” market, whatever that is (I guess what they mean are those who can afford to pay ridiculous prices for a few lousy upgrades).
The FAA has offered me a job in Queens out at JFK but until the prices come down to where normal people can afford them, I won’t be leaving South Texas.
Only good news there is you could live way out in Suffolk a short walk from the LIRR & drive from the LIRR, and take the train and the Airtrain to work. Looks like prices will crash further out first, and farther.
I meant drive to the beach
maybe a year or three and you can become a new yorker heh.
It can’t happen here? I had the wife of a friend who has wisely sat on the side, renting a very expensive apartment on Park Avenue, tell me that prices wont go down as there is so much European $$ available to buy NYC apartments. He’s a derivatives genius, smartly been waiting on the side for 3 years now. She is a trophy wife who was $100K in credit card debt until she married him. I told her you were not in NYC in the 80’s, and reminded her the Japanese have plenty of $ too. Look at the history of Japanese real estate.
It will take a Wall Street recession to bust the NYC bubble, but it will happen. Actually, a dirty bomb in Midtown would also do the trick, instantly depreciating NYC real estate. Imagine a financial version of the disaster series “It Could Happen Tomorrow: NYC Real Estate Crash”.
This is the season the perfect storm finally hits. Price depreciation + resetting interest rates + unaffordable mortgages + swelling inventory + desperate sellers = the big pop. Even in the NYC area.
(I had the wife of a friend who has wisely sat on the side, renting a very expensive apartment on Park Avenue, tell me that prices wont go down as there is so much European $$ available to buy NYC apartments.)
She meant Manhattan apartments, not NYC apartments. And they are buying in the surging number of new buildings, not existing.
“But the house is still for sale, even after the couple cut the asking price from $695,000 to $649,000.”
Can someone explain to me why NJ has such high prices? I mean, I’ve seen little cape cods in the middle of the state listed for $500,000…! I know being close to NY helps, but still…
“Can someone explain to me why NJ has such high prices?”
It’s a mystery to me, too. There are parts of NJ that are lovely and parts that stink to high heaven. Anyone know how much the Pine Barrens have shrunk due to new development?
not sure if development is allowed in Pine Barrens…anyway builders are afraid to work there since that’s where The Jersey Devil lives.
time to move to NJ was back in 1999 or 2000 when you could get a nice home in one of the nice towns 20 minutes from manhattan within walking distance of the train station.
the usuall explanation from itulip. people move closer to work and then as it gets too expensive they move farther and farther out just to escape from the city. at some point they will come back because it’s now way more expensive living in the NYC suburbs than in NYC itself.
I think the new industry cheerleader buzzword of the year is “normal” - prices are now back to “normal”, the small drop we experienced over the past year is “normal” and won’t continue, the “normal” and long term trend is that real estate appreciates at significantly higher than inflation…
The only thing that will shoot down these claims of normalcy is the numbers, just show them the price adjusted against inflation graph depicting the near doubling of prices between 2000 and 2005 as compared to at most 20% above the mean at any other time since the 1800s, show them the foreclosure rates and inventory levels, show them the numbers of interest only and option ARMS with payments to hit a cliff… I would just love for someone in the MSM to challenge some of these people who say this is normal to explain these factors and point to historical precedent… Every time I read someone saying this is “normal” without any supporting data and without addressing the fundamentals, it’s like fingernails on a blackboard…
“In all, it walked away from $141 million in land deposits company-wide in the fourth fiscal quarter.”
These deposits should have increased the assessed value of the land so what does that mean to the land holder who collected a tidy sum and still owns the land? And the strapped homeowner who is renting out rooms, does the renter declare the residence on his tax form so it gets cross referenced to the homeowner who is probably not reporting the income?
I’m waiting to buy in Riverdale. I’ve been watching the market here for a while and the sellers seem to think they’re immune to any downturn in market. quite a few homes I’m following have kept the same asking price for over a year. Simple 3 bedrooms for over a million.
I’m waiting to buy in Riverdale. I’ve been watching the market here for a while and the sellers seem to think they’re immune to any downturn in market. quite a few homes I’m following have kept the same asking price for over a year. Simple 3 bedrooms for over a million.
“‘We got caught in a tough market,’ said John Scerbo. ‘Buyers are slow to act, and there’s enough inventory out there that they can take their time looking.’”
No, John. That would be SELLERS (you!) being slow to act, not buyers. According to your logic, my 2 1/2 year old is “slow” because she can’t diagram a sentence and doesn’t know how to drive a car with a stick shift.
OT, I have to get this out. A neighbor of mine vanished over the weeked. Not a word. He had been trying to sell the home for over six months and not one offer. House is empty and for sale sign still out front. San Diego.
Can you say: Foreclosed Midnight Rider
Well, I’ve got to run to keep from hiding
And I’m bound to keep on riding
And I’ve got one more silver dollar
But I’m not gonna let them catch me, no
Not gonna let ‘em catch the midnight rider
And I don’t own the clothes I’m wearing
And the road goes on forever
And I’ve got one more silver dollar
But I’m not gonna let them catch me, no
Not gonna let ‘em catch the midnight rider
And I’ve gone by the point of caring
Some old bed I’ll soon be sharing
And I’ve got one more silver dollar
But I’m not gonna let ‘em catch me, no
Not gonna let them catch the midnight rider
But I’m not gonna let ‘em catch me, no
Not gonna let them catch the midnight rider
But I’m not gonna let ‘em catch me, no
Not gonna let them catch the midnight rider
But I’m not gonna let ‘em catch me, no
Not gonna let them catch the midnight rider
his defaulted mortgage must have been from da bank of Vinny down the street
I’d rather keep my money in Coast is Toast bank than deal with Vinny down the street (Vinny says downa shtreet).
test
yada
test