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taam
Citizen
Username: Taam
Post Number: 17
Registered: 1-2006
| | Posted on Sunday, January 22, 2006 - 10:43 pm: | 
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is the m/so boom over in regards to the housing market? did it start right after the midtown direct started? - if so, did it keep it's momentum going, for the most part, since then? do you think it'll keep going or start to sink? (i'm not planning on moving, by the way. - just way way too curious.) |
Phil
Supporter
Username: Barleyrooty
Post Number: 1003
Registered: 5-2001
| | Posted on Monday, January 23, 2006 - 7:14 am: |
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No-one has a crystal ball, but the consensus prediction amongst experts is a slow decline in house prices across the country over the next 2-5 years.
My take is that it's about equally likely that house prices continue to rise, fall or stay the same. I realize that this isn't exactly helpful, except to point out that someone who tells you that one of these three scenarios "can't happen" isn't correct. They all can.
I would say it was highly unlikely that we continue to see 20% rises per year at this point
I don't know that much about real estate in detail, but my job for the past 12 years has been making investments based on the movements of all global markets and economies.
This opinion is worth the paper it's printed on.
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tom
Citizen
Username: Tom
Post Number: 4251
Registered: 5-2001
| | Posted on Monday, January 23, 2006 - 11:21 am: |
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bear in mind taam that the boom was not limited to Maplewood, not by a long shot. Skyrocketing prices are seen in all the big metro areas across the country. Whatever influence the midtown direct had is just frosting on the cake. |
AlleyGater
Citizen
Username: Alleygater
Post Number: 1105
Registered: 10-2004
| | Posted on Monday, January 23, 2006 - 12:04 pm: |
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Everything I have read states that there will be a slow decline in the housing market across the country in general over the next few years but that certain areas will stay stronger than others. The point of the article was that the East Coast and major cities across the countries are probably going to be fine, will still have growth but not the kinds of gains that we saw over the last few years. |
jeffl
Supporter
Username: Jeffl
Post Number: 1537
Registered: 8-2001
| | Posted on Monday, January 23, 2006 - 12:36 pm: |
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And the Farmer's Almanac predicts a harsh winter.
Isn't it all a crap shoot or do you think economic predictions are more accurate? |
argon_smythe
Citizen
Username: Argon_smythe
Post Number: 732
Registered: 5-2001
| | Posted on Monday, January 23, 2006 - 1:18 pm: |
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Housing prices in the northeast are generally highly overvalued relative to the rest of the country. This is about the only factual thing you can say about them, and it is not predictive.
As salary demands rise in the northeast, companies will seek lower cost labor elsewhere. Now this starts to get predictive. An ensuing decline in the job market here could directly drive a strong decline in quantity and quality of buyers. As we all know, those buyers -- not some appraiser -- are what determine the market.
Since the housing market is already highly overvalued, it has farther to fall. You go out a ways into, say, the Poconos, their valuations are not as overstated and therefore the effect may be diminished. However since many people living there endure hellish and expensive commutes to the city, they are still very dependent upon its job market.
Well anyway I hear the housing stock in India is improving day by day. And those low low prices at the local box stores can't be beat!
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Flik Chik
Citizen
Username: Flikchik
Post Number: 170
Registered: 3-2004
| | Posted on Monday, January 23, 2006 - 1:31 pm: |
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But the question is...
When is a good time to BUY?? |
argon_smythe
Citizen
Username: Argon_smythe
Post Number: 733
Registered: 5-2001
| | Posted on Monday, January 23, 2006 - 4:46 pm: |
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To which the answer is, and always will be: "It depends!"
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Carrie Avery
Citizen
Username: Carrie33
Post Number: 1290
Registered: 1-2005
| | Posted on Tuesday, January 24, 2006 - 7:06 pm: |
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When is a good time to buy? When the money you spend won't put a damper on your time to play. |
taam
Citizen
Username: Taam
Post Number: 25
Registered: 1-2006
| | Posted on Tuesday, January 24, 2006 - 10:44 pm: |
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can't someone just tell me we made a good investment & mplwd is going to keep on going? (i'm accepting lies at this point!)
and again, not planning on moving, just always suffer from anxiety about crapola like this! |
LilLB
Citizen
Username: Lillb
Post Number: 1206
Registered: 10-2002
| | Posted on Wednesday, January 25, 2006 - 8:31 am: |
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Oh - in that case taam....you DEFINITELY made the right decision. No doubt about it. In fact, I think you got in at the perfect time.
Actually, I remember feeling like such a complete sucker when we bought our house. I just felt like we overpaid and got caught up in our desire to buy a house that we weren't wise about how much the house was really worth. Well, that was about 5 years ago and houses similar to ours around us are going for about $100 - $150K over what we paid for our house and from what I can tell our house is in better shape than most around us because we did a lot of fixing up.
Maplewood is thriving and the Midtown Direct train insures (at least in my mind) that even if things slow a little for a while, buying here will be a good investment. |
Shanabana
Citizen
Username: Shanabana
Post Number: 139
Registered: 10-2005
| | Posted on Wednesday, January 25, 2006 - 3:38 pm: |
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it won't fall here, just slow down, inch up, or worst case, level out for a while. this place is a gem, and NJ is totally developed, unlike most of the country. |
taam
Citizen
Username: Taam
Post Number: 28
Registered: 1-2006
| | Posted on Wednesday, January 25, 2006 - 3:41 pm: |
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ahh, just what my ears needed to hear. shanabana, are you a realtor? if not, maybe you should think about it! good work! - and thanks! |
AlleyGater
Citizen
Username: Alleygater
Post Number: 1137
Registered: 10-2004
| | Posted on Wednesday, January 25, 2006 - 3:48 pm: |
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My wife and I reappraised our home after less than a year and we made a pretty sizable profit. Having said that the market has definitely softened now (another year later), so our profit might not be AS SIZABLE anymore but the appraisal definitely put our minds at ease about the concerns your having. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2285
Registered: 10-2001
| | Posted on Wednesday, January 25, 2006 - 4:11 pm: |
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taam - when we bought our house in 1999 we had narrowed it down to two houses. One was being sold by the owner the other through a broker. I have a good friend who's mom happened to be a realtor so we consulted her and asked what a fair offering price would be on each home. She told us that 10% below listing price was a good place to start. So we made our offer to the owner and he was insulted. Told us to come back when we were serious. Both houses were roughly the same price - within 5K. We took our papers and went to the other house and made the same offer. They countered and we settled on the final price.
That was in June of '99. Our offer was accepted July 4th weekend and we closed in September. In late July we saw that the first house was still for sale, now with a broker at almost 25K less than what they were asking. They ultimately sold the house for less than we offered and likely had to pay the commission on it. When we saw what the house ultimately sold for we were crushed. We thought that we had overpaid for our house. Then we started noticing that many other houses in and around our neighborhood were going for less than what we paid and we started to panic.
Fast forward to the following spring and the prices rebounded. Now we sit back and laugh at how silly we were. I think its foolish to assume that things will be as great as they were over the past six years but I don't think its unreasonable to assume that prices will continue to move up (albeit more slowly) or stabilize. As others have said this is a nice community and its close to the city. Based on what I saw it was one of the last towns to really take off after the midtown direct as there were still bargains to be had as of 1999/2000.
Sit back and relax - especially if you don't plan on moving. |
Tom Reingold
Supporter
Username: Noglider
Post Number: 12083
Registered: 1-2003
| | Posted on Wednesday, January 25, 2006 - 11:18 pm: |
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If you bought your house to live in it and you'll be able to afford it, it was a good decision. If you bought it and part of your plan is to make money on it and if losing money on it ruins our plans, you made a bad decision. In other words, don't buy a house primarily as a financial investment.
I didn't "get it" with home ownership for a long, long time, so I pissed my money away for years. Then when I wanted a home, I didn't have a downpayment, and worse, I realized I had given up opportunities to build equity. And buying "now" seemed so much worse than buying previously. But then I realized that buying now is a heck of a lot better than buying later, because the sooner I bought, the sooner I'd be building equity. But that's financial talk. I now live in a house that I partially own. It's my first, and the pride and joy is still sinking in, after almost three years.
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Tom Reingold
Supporter
Username: Noglider
Post Number: 12084
Registered: 1-2003
| | Posted on Wednesday, January 25, 2006 - 11:19 pm: |
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January 2, 2006
Op-Ed Columnist
No Bubble Trouble?
By PAUL KRUGMAN
In spite of record home prices, housing in most of America remains surprisingly affordable, thanks to low interest rates. That fact may seem to say that there's no housing bubble. But it doesn't. To see why, we need to brush up on our economic geography and economic history.
Let's start with the good news. A report in last week's Times summarized the results of a study by Moody's Economy.com, a research company, comparing the cost of home ownership with family incomes.
The study found that for the nation as a whole, the cost of owning the median home is still only 23.7 percent of median family income, which is higher than a few years ago but well below the peak of more than 30 percent reached in the early 1980's.
Now for the economic geography. Last summer I suggested that when discussing housing, we should think of America as two countries, Flatland and the Zoned Zone.
In Flatland, there's plenty of room to build houses, so house prices mainly reflect the cost of construction. As a result, Flatland is pretty much immune to housing bubbles. And in Flatland, houses have, if anything, become easier to afford since 2000 because of falling interest rates.
In the Zoned Zone, by contrast, buildable lots are scarce, and house prices mainly reflect the price of these lots rather than the cost of construction. As a result, house prices in the Zoned Zone are much less tied down by economic fundamentals than prices in Flatland.
By my rough estimate, slightly under 30 percent of Americans live in the Zoned Zone, which comprises most of the Northeast Corridor, coastal Florida, much of the West Coast and a few other locations. So Economy.com's results on affordability aren't surprising: most families live in Flatland, and haven't seen a big rise in the cost of home ownership.
But because Zoned Zone homes are much more expensive than Flatland homes, the Zone looms much larger in the housing story than its share of the population might suggest. By my estimate, more than half of the total market value of homes in the United States lies in the Zoned Zone.
And because home prices have risen much more rapidly in the Zone than in the rest of the country, the Zoned Zone accounts for the great bulk of the surge in housing market value over the last five years.
So if we want to ask whether housing values make sense, data on the median house nationwide are irrelevant. We need to focus on houses in the Zoned Zone. And there the numbers are anything but reassuring.
In the Zoned Zone, the story that rising home prices have been offset by falling interest rates is all wrong: prices have risen so much that housing has become much less affordable. According to Economy.com, the cost of owning a home in the New York metropolitan area went from 25 percent of median income in 2000 to 38 percent today. In Miami, the numbers were 21 percent and 42 percent, respectively; in Los Angeles, 31 percent and 55 percent.
Even so, the current cost of owning a home in the Zoned Zone isn't entirely unprecedented. Roughly similar percentages of median family income were needed to afford houses in the early 1980's.
But that's hardly a comforting comparison, which is where the economic history comes in. You see, the unaffordability of housing in the early 1980's led to an epic collapse in the housing industry. Housing starts fell from more than 2 million in 1978 to only 1.06 million in 1982. And the housing implosion was one of the main factors in the worst economic slump since the Great Depression, which brought the unemployment rate to a peak of 10.8 percent at the end of 1982.
It's also worth noting that the reason housing was so expensive in 1981 and 1982 was that mortgage interest rates were extremely high. That made recovery easy, because all it took to make housing affordable again was for interest rates to return to normal levels.
This time, with interest rates already low by historical standards, restoring affordability will require a big fall in housing prices.
So here's the bottom line: yes, northern Virginia, there is a housing bubble. (Northern Virginia, not Virginia as a whole. Only the Washington suburbs are in the Zoned Zone.) Part of the rise in housing values since 2000 was justified given the fall in interest rates, but at this point the overall market value of housing has lost touch with economic reality. And there's a nasty correction ahead.
Copyright 2006 The New York Times Company
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Tom Reingold
Supporter
Username: Noglider
Post Number: 12085
Registered: 1-2003
| | Posted on Wednesday, January 25, 2006 - 11:21 pm: |
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My hunch is that places that have many things going for them will fare better than the rest. South Orange and Maplewood have the train, are near a major city, are attractive, have great people living in it, have a lot to do, have good schools, and so on and so on. If one of these attributes isn't important to you, others are. So if values go down in some places, they may level out here. Or maybe they'll decline but less steeply than in other places.
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Shanabana
Citizen
Username: Shanabana
Post Number: 146
Registered: 10-2005
| | Posted on Thursday, January 26, 2006 - 8:08 pm: |
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Yes, when people talk about the bubble bursting, they are considering everywhere. We're 35 minutes from Penn Station, and that's closer than I was in Brooklyn. If you stay, it'll pay, for sure. But it's like most good things, you've gotta wait a while.
And, no, I'm not a realtor. |
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