Yep . What is the cheapest new construction detached single family dwelling one could buy today in this market in middle class NJ? 550k -650k? I am not sure . Probably 2500 square feet ??
20 % drop ?
www.yahoo.com
The Fed's own economists are warning of a 19.5% housing correction and more rate hikes could set off a 'domino effect'
Insider's Phil Rosen breaks down the latest Dallas Fed report that warns of a potential steep slide in US home prices.
So the collapse is happening?20 % drop ?
The Fed's own economists are warning of a 19.5% housing correction and more rate hikes could set off a 'domino effect'
Insider's Phil Rosen breaks down the latest Dallas Fed report that warns of a potential steep slide in US home prices.
Housing market: After months of decline, single-family construction rose in February
Compared to February 2022, home building is down 18%, with single-family housing down 32%. Meanwhile, apartment construction was up 14% year-over-year.
www.usatoday.com
Not in NJ. Other places that saw ridiculous 100-200% increases from 2017 to 2022 will collapse, skewing the national data.
First, I thoroughly have enjoyed this thread for it's comedic value and actual insights. I am glad it never got out of hand and shut down.
I was with a friend in Tulsa to watch the NCAA wrestling championships and he is a mortgage guy in Monmouth. His phone rang for the four days we were there with new purchases and refinancing clients. His opinion is that the local market is not going down based upon his experience. FWIW.
I was with a friend in Tulsa to watch the NCAA wrestling championships and he is a mortgage guy in Monmouth. His phone rang for the four days we were there with new purchases and refinancing clients. His opinion is that the local market is not going down based upon his experience. FWIW.
I get the new purchases, but who is doing a refi at higher rates?
lots of people financed with ARMS which now impacts affordability in a big way.
Just locked a rate on an investment property refi jumbo loan 7.25% on an ARM. (BARF)
On our brokerage side we added 5 new listings this month and 2 buy side deals. Demand is strong. Much stronger than I expected with rates where they are and so far the buyers I am seeing are strong buyers. Saw some cash in the winter as well.
On our brokerage side we added 5 new listings this month and 2 buy side deals. Demand is strong. Much stronger than I expected with rates where they are and so far the buyers I am seeing are strong buyers. Saw some cash in the winter as well.
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anon_0k9zlfz6lz9oy
Guest
Buyer demand is bonkers here in north jersey too. Extremely little supply and significantly more demand than there is supply. Everything multiple bids.
Due to where rates are, when I made this thread in June 2022, I thought 0-3% yoy appreciation June-22 to June-23 under the assumption rates would hover around 5.75% or so. Looks like it’ll be closer to 0% to -3% (nationwide average) which frankly is alot higher than the people I took arrows from when I made this thread
Down the shore the market is still booming Lots of demand and little inventory
I still can’t wrap my head around where all the money comes from. Are people tapping their investment accounts to make these purchases?
Right? Add in the fact that probably 75% of the homes are people's second homes. The rule of thumb in Ocean City where I live is the more expensive the home, the less it gets used too.
What are you going to do on your syndicated deals out of curiosity? I imagine rates are 7-8% so a refi would probably suck and I believe it's affecting cap rates all over the places (obviously it varies).
When trickle down is more like an occasional drip or just a moist patch in the ceiling, the 💰 is sitting in someone's pocket. So they buy another shore house.
That's the only way housing inflation really cools off. It's slowed down but unless people lose their job and have to puke out of their mortgage it's not going to be a massive sell off in housing. Just soft markets in spots.
But when it comes to second homes in the Northeast it’s gotta be more than trickle-down. I’m of the opinion that it’s the result of people either living above their means or simply prioritizing second houses and fancy cars over fully funding 401K, 529s, etc. Which may explain why the median 401K balance is so pathetic and credit debt is rising. Personally, I’ve overfunded my 401K for the last 20 years and diverted a lot of money into investments - not to mention lived below my means and have close to zero debt. I’m pretty sure I’m not the norm so when my kids see people in my town (Morris County) driving around in Lambos I tell them it’s likely smoke and mirrors.
I think that data is wrong. More and more people are using these homes as primary.
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anon_0k9zlfz6lz9oy
Guest
Just hold. I wish I had a more complicated answer haha but just let them cash flow
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anon_0k9zlfz6lz9oy
Guest
Ive been looking down the shore (mantoloking area) and prices are absurd. If anything they seem to be continuing to move higher
My 31 year old buddy just bought a 1.5 million dollar vacation home down the shore. To put things in perspective, this guy pulled off the most absurd wealth generation shtick I’ve ever seen. Back at RU in September 2010 he was a big world of warcraft player. He wrote an AI macro that would essentially control a player’s account and progress through the game, accumulating skill, credit, etc. he would just let it run in the background on his computer 24/7. it was such a popular game he was able to sell the account for 6k online. He took 3k and used it for college expenses, he invested the other 3k in bitcoin which he was convinced would become a substitute for the USD. In September 2010.
Its not "data" its an estimate on what I see as I drive around town. And yes, more people are living here year round since they can work from home but its more older people who don't have kids in school and they arent necessarily selling their primary homes.
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anon_0k9zlfz6lz9oy
Guest
I was there when he showed me all of the blockchain and crypto theory back in 2010. I was like you are completely full of shit, this is a waste of 3k lol. I don’t ask about personal finance questions so no idea what he walked away with but pretty sure he started unwinding his positions in 2013. If he held until today I think he’s be worth north of 500 million LOL.
Do you have 5 year balloons or anything more aggressive? I know you like to sell these things 2 or 3 years after acquiring. Shit ton of CMBS coming due in the next 2-3 years.
It.never.makes.sense.
Just buy rentals elsewhere, rent where ever and whenever you want at the NJ shore. People buy NJ shore property like you swim in gold coins.
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anon_0k9zlfz6lz9oy
Guest
Yes, 5 year balloons. We were only selling in 2-3 years because we were hitting 5 year targeted returns within a year in the silly market. Our 5 years balloon have 45 months, 49 months and 54 months left
Seems like @kyk1827 was right so far , at least in jersey. It’s still a sellers market . No inventory. What does the spring hold in NJ?
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anon_0k9zlfz6lz9oy
Guest
Spring has been insane in the early going. No real signs of a wave of inventory coming to market either. NJ is very insulated
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anon_0k9zlfz6lz9oy
Guest
Disagree. Fed isnt zero’d in on housing exclusively. Rates will move with the 10 year treasury. With rent growth falling that will impact oer in the coming months which is disinflationary for inflation.
I am curious to see what happens with spreads though. Theyre way out of whack right now. Based on historical spreads, 30 year fixed rate mortgages should be roughly 5.15% right now. Theyre about 6.43%. On the large multi-family side, we just got quotes 5.4% at 1.18 dcr. But even that spread is a little wider than usually. My lender from berkadia thinks we get a 4 handle on that sometime in q4
Credit spread will stay wide. Housing is a great leading indicator and it moves the dial. Rentals will get hit first before SFM.
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anon_0k9zlfz6lz9oy
Guest
Rentals have already been hit. Oer is just lagged. Housing went into a recession in June-22
Agreed that MF cap rates are about 20 to 25% wider. But housing prices are still going up but at a slower place.
I think it's great evidence that the media and some others can't wish a recession onto the country.
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