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Richard
Citizen
Username: Rikky
Post Number: 10
Registered: 7-2005
| | Posted on Friday, August 12, 2005 - 4:59 pm: | 
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I looked at these units not too long ago. They're on the small side and basically I think overpriced. There are 4 one bedrooms, 2 three bedrooms and the rest two bedrooms. I was surprised to see one of the three bedrooms sell for the other day for $489,000. Wow! They're only 1700 square feet and really not that spacious. The developer told me with SOPAC going in and some other unverified upgrades in town these units will increase 25% in the next few years. Does that mean this unit will be worth $611k? I doubt it.
I wanted to share because I'm trying to get a sense of who would be paying such prices, especially with all the talk of a potential housing bubble. The Mews complex seems a much better deal even though a bit older.
Thoughts?
http://listings.gsmls.com/SearchDetail/Scripts/PrtBuyFul/PrtBuyFul.asp?prp=Mls&M lsNumList=2091120
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Tom Reingold
Supporter
Username: Noglider
Post Number: 9073
Registered: 1-2003
| | Posted on Friday, August 12, 2005 - 5:25 pm: |
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I can't possibly predict future prices, but I'll say that the developer has an interest in predicting big appreciation in values. Don't listen to him. See if you can compare similar places, and bear in mind that predicting the future is dicey, whether it's prices, weather, or life and death.
Also, I believe condos don't usually appreciate as quickly as freestanding houses.
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Just The Aunt
Supporter
Username: Auntof13
Post Number: 2116
Registered: 1-2004
| | Posted on Friday, August 12, 2005 - 5:33 pm: |
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I would never pay that kind of money to live there. The only advantage I see living there is easy access to the train. For that much money I'd buy a house a and get someome to div me to the station. |
cmontyburns
Citizen
Username: Cmontyburns
Post Number: 1165
Registered: 12-2003
| | Posted on Friday, August 12, 2005 - 5:50 pm: |
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You can still get a decent 3-4 bedroom house in town for $489K. |
Vertifly
Citizen
Username: Vertifly
Post Number: 63
Registered: 7-2005
| | Posted on Wednesday, August 17, 2005 - 9:10 pm: |
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I looked at these condo's and seriously considered purchasing. Worth it?..Aunt is right, it's all about the train in that spot. They probably won't see that kind of gain (25%) for a while unless some major development occurs - this beyond what is already being constructed (i.e SOPAC). Real estate prices will probably be stagnant for a while (that is just my own feeling).
There was also a place in Millburn, just off the Maplewood border too, for about the same $490ish. Key there was you're getting the Jitney (sp?) to the train. Ugggh to THAT!!! Decisions decisions.
Tom, what makes you say that about condo's appreciating more slowly? It would be difficult to think of a case where this is true. In fact, just the opposite may be the case.
Now-a-days, it would be pressing to find a "deal" anywhere. Bubble-bubble-bubble. Have you found anything comparible? |
Richard
Citizen
Username: Rikky
Post Number: 16
Registered: 7-2005
| | Posted on Wednesday, August 17, 2005 - 11:26 pm: |
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There's a sucker born every minute. Or you can use the greater fools theory to understand why people are buying in that complex. I don't want to offend anyone that might buy there, but I think someone should go into it with eyes wide open. That is, what is the odds of a former rental complex (and it looks it no matter what they've done) selling a 3-bedroom unit of 1700 square feet with 2 of the 3 bedrooms closet size (10x10) going to sell for more than $500k anytime soon? Please. No how, no way. I find it absolutely amazing that people would even consider buying there for those prices. If they lowered them 20% now maybe it's something to consider.
I agree with others that if you're going to spend that kind of change, get yourself a single family home in town. There are always options to getting to the train if need be. I'll be tracking those properties closely over the next several years. Even now housing price appreciation is slowing down. Over in the Mews complex a 2-bedroom has been sitting for 3 weeks cause the price asked by the seller is just too high. Another 2-bedroom that was $90k cheaper sold the first few days. No one wants to buy at the top. Speaking of which, has anyone seen what the prices at The Top complex are going for? More insanity. |
Vertifly
Citizen
Username: Vertifly
Post Number: 66
Registered: 7-2005
| | Posted on Wednesday, August 17, 2005 - 11:38 pm: |
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What is The Top complex? |
Pizzaz
Supporter
Username: Pizzaz
Post Number: 2267
Registered: 11-2001
| | Posted on Thursday, August 18, 2005 - 12:06 am: |
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I wonder if games are played with units to be sold. Sell one unit for an unusually high price and maybe others will follow. The amount paid is excessive.
The Top complex is a co-op(?) on South Orange Avenue, heading up the hill, before the Reservation on the left. Although on South Orange Avenue, it is in Maplewood. |
Phenixrising
Citizen
Username: Phenixrising
Post Number: 980
Registered: 9-2004
| | Posted on Thursday, August 18, 2005 - 7:55 am: |
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Vertifly,
I agree with the others. You should seriously search around before buying into this complex. This Spring a house in my neighborhood was going for $429,000. I believe a 3 bedroom 2 1/2 baths finished basement, backyard and you can STILL walk to the SO station.
BTW the house was fully renovated. Wasn't a huge house but this is a sample of other possibilities. |
kevin
Supporter
Username: Kevin
Post Number: 511
Registered: 2-2002
| | Posted on Thursday, August 18, 2005 - 8:49 am: |
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The Top on South Orange Ave is actually considered Maplewood. Do you realize that one owner there is paying just over $40,000 a year in taxes there?
They must have some pad....I wonder how much they get hit for monthly maintenance?
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mjc
Citizen
Username: Mjc
Post Number: 761
Registered: 10-2004
| | Posted on Thursday, August 18, 2005 - 10:08 am: |
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Just to be devil's advocate: not everyone wants a house with the accompanying work and expenses (well-documented on MOL); gasoline and heating fuel prices are going up, who knows how far; and apparently parking in SO can be a nuisance (again citing MOL). I'm not saying these places are "worth" $500K, but market value is whatever the market will pay. With convenience and presumably lower ongoing maintenance and utility expenses than a house, some could consider it a desirable property.
Historical note: In 1975 or '80 in L.A., my mom's apartment building converted, and we (most of us) thought paying the introductory price of $40,000 for a not-new 2 br apartment was nuts, but within a year the prices had more than doubled. So who knows? |
kevin
Supporter
Username: Kevin
Post Number: 512
Registered: 2-2002
| | Posted on Thursday, August 18, 2005 - 10:51 am: |
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I'd have to agree with some of your comments MJC. Some would rather pay a monthly maintenance fee to have everything taken care of rather than doing it themselves or lining up services to do the work. This is also one reason why some people are eternal renters. |
Old and Gray
Citizen
Username: Pastmyprime
Post Number: 191
Registered: 2-2005
| | Posted on Thursday, August 18, 2005 - 12:03 pm: |
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I doubt anyone is paying 40000 in taxes for a condo...maybe the total tax for the entire building is that amount. but that seems a bit exagerated. |
mrosner
Citizen
Username: Mrosner
Post Number: 2178
Registered: 4-2002
| | Posted on Thursday, August 18, 2005 - 12:30 pm: |
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O & G, some of the taxes at the TOP are up there near if not higher than $40,000. They have sold for over $1,000,000. Just one condo.
MJC: You have it exactly right - market value is whatever someone will pay. And I think you are exactly on target that not everyone wants (or needs) a house. |
Richard
Citizen
Username: Rikky
Post Number: 18
Registered: 7-2005
| | Posted on Thursday, August 18, 2005 - 6:30 pm: |
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my point wasn't about the choice between a condo and a house. it's the comparable price of both. this is unprecedented. the wall street journal just did an article trying to understand this new phenomenon. is it demographics, changing nuclear family structures, not wanting to deal with upkeep of a property? or is it just a real estate bubble? probably both. |
Vertifly
Citizen
Username: Vertifly
Post Number: 67
Registered: 7-2005
| | Posted on Thursday, August 18, 2005 - 10:11 pm: |
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"...You should seriously search around before buying into this complex. This Spring a house in my neighborhood was going for $429,000."
It is just hard to agree with a lot of the opinions about cost of homes in this area. I have been a real estate investor for a while (albeit, not in the South Orange area). The value of homes, statewide, has increased 118% in the past 3 years. Chances are if you are complaining about going rates of homes, then that just means it is difficult for you to afford it.
Here is a question... Would you have paid 210K for a condominium one block from the train 3 years ago? My guess would be that your answer is YES.
It would be interesting to know who are the posters, on here, who have been SERIOUSLY looking to purchase over say....the past 6-months. It isn't exactly a free-for-all out there. It is a hard sellers market. The hardest in decades. Bidding wars are out of control and even ridiculous. Everyone selling has both hands out and smiling right in your face. Very few comfortable places are selling for under 500k. At 400k around in South Orange...you get a fixer upper "opportunity". yah...ok. This is a bubble people. And every swinging YaHo0 out there is milking it for every penny - (this goes for real estate agents, developers, sellers, etc.).
Advice: if you are thinking of selling and moving within the next 3 years...do it now before the interest rates go up any further - and don't forget to smile. 
A clean 1 bedroom condo on the Jersey side (near Manhattan) is going for about 650,000. It takes just as long to get into the city from there as in South Orange. I looked at a 700 square foot on the upper west side and even put a bid on it. The bidding kept going after me but didn't stop until 750K. That is over $1000 per square foot. Hello!!!
Tiny colonial homes (that are way old) in Maplewood and Millburn (next to a roaring train) that are 1700 sqr feet are going for about 520k. You wanna take a Jitney everyday? That would stink IMHO.
Sorry about the emotion here. It is really down to the wire cause I hate sharing a room - especially around here. Given my research...these condo's are starting to look sweet. And regardless of my unrest, this is an unbias opinion because my research tells a straight financial tale..as always. About 450k may not be a bargain for a condo - but it is a bargain for a condo that is 35 minutes to 34th Street center city.
Before serious consideration of South Orange, I checked out Manhattan, north Jersey, Hoboken, and even parts of Brooklyn. My real estate research is comprehensive because if anyone hates to lose a buck...that's me (don't get me wrong - i ain't no cheapo..just frugal). South Orange is going to happen because of its convenience; not because of SOPAC, or your cute little cafe's, art galleries, and street gatherings, but because of the train. Give it 7 more years. Conveniently speeking, it is an unbloomed flower. Just water it a little, put it in the sun, and wait.
Anyway, that is just the market now. Either you pay or you stay. Best to all. 
If my plan goes well, you all will hate me by Christmas. MWWWAaaahahahahahaaaaa!!! 
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Richard
Citizen
Username: Rikky
Post Number: 19
Registered: 7-2005
| | Posted on Friday, August 19, 2005 - 1:36 pm: |
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Vertify, good synposis of your thoughts and experiences. I seriously looked for the past 18 months so I've seen the market change. I also have people who are brokers who keep me plugged in and send MLS listings for areas like Maplewood, South Orange, Millburn, Summit, Montclair and a few others.
It WAS heavily a sellers market, but the last 60-90 days things have changed. Prices asked by sellers are beyond what people are willing to pay. Seeing alot of price reductions and properties sitting longer. Turning point? Who knows?
Your decision to buy in that complex is your own. We all need to make our own decisions based upon particular circumstances. What worries me about today are the bubble-like conditions we're experiencing nationwide, particularly on the coasts. Every town has an excuse as to why they're bubble immune. South Orange has the train, not building anymore land, etc. etc. Food for thought.
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Vertifly
Citizen
Username: Vertifly
Post Number: 68
Registered: 7-2005
| | Posted on Sunday, August 21, 2005 - 7:35 pm: |
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"It WAS heavily a sellers market..."
Difficult to agree with that still, Richard.
It is good that you have been following the market closely, but are you aware that...
In any market where a buyer is bidding to purchase a commodity or stock, the power is in the sellers hands. Rarely does the seller take a hit in this kind of situation. Think about an auction...the preclusion is that you are there to buy something.
Prices rising above what people are willing to pay has little affect on signifying a buyers market. Some...but little. It can denote the beginning of the end. In other words, the song has stopped playing and people are still dancing. However, interests rates have a more strong affect on when people purchase and when they hold. Because of the talk of rates going up...buyers will keep purchasing until about 7% or 7.25%. Then it becomes a serious concern.
"We all need to make our own decisions based upon particular circumstances."
True. Regardless, based on my research, the prices seem fair. Thanks for the food.
ps. Bubble immune...of course, no one is. That is a relative term and must be weighed and determined by only one person you. Use the force, trust your feelings, get a psychic, flip a coin, or better yet...do some research. 
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Richard
Citizen
Username: Rikky
Post Number: 24
Registered: 7-2005
| | Posted on Sunday, August 21, 2005 - 10:50 pm: |
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interest rates have only had a partial effect on the housing run-up. looked at all those funky financing options we have today? take your pick. 1% interest teaser rates, negative amortization, option-ARMs. they all constitue non-traditional loans and as such have allowed people to buy property they never would've afforded even 5 years ago. these mortgage products expose the borrower to far more economic movements than in the past. this is a new phenomenon. also note these new products aren't recession tested. we will have a recesion, question is when? that's what scares me.
still in the end, if you can afford the payments, you can ride out anything. the question is when you may be forced to sell.
i'll see you on this board in the coming months. lets see how things shake out. in a year from now i expect prices in that complex to be flat to down 10% from today. that's alot of money to be gambling on, hence why i wouldn't buy. we shall see! |
Vertifly
Citizen
Username: Vertifly
Post Number: 72
Registered: 7-2005
| | Posted on Sunday, August 21, 2005 - 11:31 pm: |
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ooh, 10% might be a punch in the stomach...say it isn't so...
Crazy financing options are part of that milking thing. These are entrapment methods used by secondary lenders to squeeze extra cash out of people who have difficulty affording purchases during a hot time. Buying into these options rarely saves any money in the long run.
Regardless of that, these methods are peripheral - meaning, they are the results of what is happening with the economy, not catalysts in some way. What makes you say that "interest rates have only had a partial effect on the housing run-up"? That statement seems baseless. Interest rates directly affect things like cost. That is a fundamental fact in market economy and housing is a market.
Free Lesson A:
1) Stock market goes south, 2) Greenspan adjusts interest rates so Americans keep spending, 3) America starts mortgages more, 4) Housing prices go up due to demand.
This also applies vice-versa when the interest rates go back up - but it will not have as much of an influential affect on the stock market. Some, but not great.
What can I say?...I read, calculate, and regurgitate.
The options you are referring to are inapplicable and the points you are making are soft. It is time for me to say, I'll see you on the forums in the future too.  10%, lets hope not...ouchy. |
Richard
Citizen
Username: Rikky
Post Number: 25
Registered: 7-2005
| | Posted on Monday, August 22, 2005 - 3:40 pm: |
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Vertifly, take a look at the London real estate market to get a taste of what's to come in the USA. They're about 6-12 months ahead of our cycle. They raised rates, housing stalled, still stalled, now they're trying to cut rates. Still stalled. Bankruptcies up, housing prices going down, etc. etc. If the rates go negative maybe, but that could put the euro under assault.
The Fed doesn't have the muscle it used to. They can't talk up long rates, so we're probably looking at an inverted curve next year, and that isn't good for banks (who borrow short and loan long).
You also need to look at money supply. This is heavily influenced by rates, but not entirely. M2 and M3 are at steep growth rates. When this slows down, look out. Mortgage debt is up to $11 trillion from just $7 trillion 5 years ago. That's just astounding to me. On top of it, $2-$4 trillion is adjustable. Yikes.
Now for my free lesson ;)
We're in a credit cycle, plain and simple. The excess credit must be purged before we can begin anew. Since you like to read, let me recommend some sites I think are educational. Tell me what you think. I call them the doom and gloom sites, but there are a # of smart folks there.
I'm still sticking with 10% decline ;)
http://calculatedrisk.blogspot.com/
http://thehousingbubble2.blogspot.com/
http://www.financialsense.com/ |
Vertifly
Citizen
Username: Vertifly
Post Number: 74
Registered: 7-2005
| | Posted on Monday, August 22, 2005 - 7:18 pm: |
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Richard, the info you have been posting on this thread has been opinionated. Some of it is inaccurate.
Today, the developers of the Church Street places are saying that the highest condominium in that complex is $459k, not $489. Was this an intentional exaggeration or do you think that the price has been lowered 30k within the past 10 days? Maybe this is about the depreciation you mentioned would be happening.
If so, then that's great. It has already depreciated 9%. Then I may be only risking 1%. That feels much better. 
Can someone please help me understand what Richard is trying to say in that last post?
"Credit cycle"...ummmm, yeah; the economy is cyclic - always will be. You asked what I think of the web sites you've listed. These are journals, blogs, and other opinions from ambiguous writers. 1st rule of research is to go to a reputible source. It would be difficult to seriously consider the information from a blog site or journal page.
Indeed dubious.
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Richard
Citizen
Username: Rikky
Post Number: 26
Registered: 7-2005
| | Posted on Tuesday, August 23, 2005 - 1:28 pm: |
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go to my original post in this thread and look in the lower left corner. there's a part called SP: $489,000. that's the selling price. MLS doesn't lie, though maybe the developer does. you should be a bit more thorough before trying to back into your opinion.
your grasp of structured finance and securitization appears limited. that's my assumption from your simplistic responses to my attempt at dialogue. my mistake, i thought you had more knowledge of these things.
reputable source? who would that be? every source is capable of biasing information to meet their stated goals, including you.
good luck with your condo purchase. IMO the top of this bubble thus far appears to be june. decline in existing sales and increase in inventory 2.5%+. the downside risk purchasing real estate now appears higher than your upside. that's just my biased, unreputed opinion.
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kevin
Supporter
Username: Kevin
Post Number: 515
Registered: 2-2002
| | Posted on Tuesday, August 23, 2005 - 5:00 pm: |
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Richard,
While I agree with some of your other statements about real estate, I have to disagree with your statement about there being an increase in inventory. What are your figures based on?
I just re-read a thread in the Millburn section where I posted on July 11th that there were 103 houses listed for sale in the Millburn/Short Hills MLS. I wish that I had posted the figures for Maplewood/South Orange as well.
As of today, there are 90 houses listed for sale in the Millburn/Short Hills MLS. This represents about 12.5% less inventory since last month.
I do not have sales figures, so I cannot comment. |
Vertifly
Citizen
Username: Vertifly
Post Number: 89
Registered: 7-2005
| | Posted on Tuesday, August 23, 2005 - 5:23 pm: |
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It would be unnecessary to make a defense against these accusations. Responses in an open forum are inclined to be simplistic until we decide, mutually, to have an all-out debate about the state of the economy and "structured finance" (as you called it). Would you care to exhange emails regarding our individual experience and educated opinions about the current state and future of markets? That would be fine. Let me know.
Your arguement two posts above is cryptic and lacks an informative foundation. Take a look at it from an outside perspective. The statements and facts within them are seemingly irrelavent and unsupported.
Let me quote...
"They raised rates, housing stalled, still stalled, now they're trying to cut rates. Still stalled. Bankruptcies up, housing prices going down, etc. etc. If the rates go negative maybe, but that could put the euro under assault."
A) Housing stalled - what's that? "Still stalled."...Is that a sentence?...please communicate further. I just find it difficult to materialize your statement.
B) "Brankruptcies up"...You surely mean either 'Bankruptcies are up' or 'Bankruptcy is up'...Right? Well, why is bankruptcy up? What makes you say that? And can you back this up with a source or evidence?
C) Ok well, for the sake of arguement bankruptcies are up, housing prices go down, but what is "etc. etc."? Please indulge us. What is the direct predictable outcome of this?
D) "...rates go negative"...Has this EVER happened before? Are you referring to interest rates? Interest rates from lending institutions have never been negative. That is clearly saying that, at some point since currency has existed on the planet, that a lending institution has paid the loanee to borrow money. Ummm, Richard, do I have to explain how this works or can you feel me on this one?
E) Ok, let's just say that interest rates go negative {vertifly cringes  }...why would that affect the Euro?...not saying that it won't but it would be to your benefit to explain this a little further.
You are basing my lack of knowledge on generalization rather than being uneducated. The information I present is undesputed and the basic foundation of our economic stability in the country. And, if you understood that, this argument would be more valuable to our time.
It is clear that you are incapable of an informative debate. Free lesson (2): In an arguement, educate your opponent before you educate him why they are wrong. "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." - Sun Tzu.
Your accusation is that my "grasp of structured finance and securitization is limited." However, you said yourself that you have made only an "attempt at dialogue", but there is little indication of a successful completion of any diaglogue or arguement. Attempting rarely implies success. In other words, it doesn't seem like your points have been made. However, as paraphrazed as they were, my points are complete (and it fits into a forum-post sized answer (and some overhead storage bins too)).
My theory(ies) and statements thus far stand strong and you can continue to wonder along a groundless path. |
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