OT: Why the real estate market is not in a bubble: Q1 2023 update video added to OP

[KK1827]

I have actually seen some softness in August and September. More inventory has come on market, which is good for buyers. IMO as rates drop, more seller will list and I feel like the market will balance out a bit.

New Brunswick alone we got 2-3 months of inventory dumped onto the market in August and also September. I have seen some softness in other towns as well...plus it's heading into fall which is when things start to slow down a bit. JMO.

Essex county burbs have remained absolutely insane. Most stuff thats halfway decent going for 6-figures above asking in first week. Insane

 

[RUskoolie]

Essex county burbs have remained absolutely insane. Most stuff thats halfway decent going for 6-figures above asking in first week. Insane

I don't doubt it but I think part of that is realtors being lazy and not doing their homework. I helped a client buy in Montclair this year. Any other realtor would have told them to pay 100k over ask. I told them 15k and we got the property and before we closed, the exact same build closed on the same block for 130k higher than our bid.

Now I say that and I just made another client bid 50k over on a house in Basking Ridge and we won, but that's the 4th hottest town in America so it makes sense.

 

[Knight Shift]

I don't doubt it but I think part of that is realtors being lazy and not doing their homework. I helped a client buy in Montclair this year. Any other realtor would have told them to pay 100k over ask. I told them 15k and we got the property and before we closed, the exact same build closed on the same block for 130k higher than our bid.

Now I say that and I just made another client bid 50k over on a house in Basking Ridge and we won, but that's the 4th hottest town in America so it makes sense.

This is a good example of value a good realtor brings to a client.

 

[Plum Street]

This is a good example of value a good realtor brings to a client.

Also, a good example of a bad realtor on the seller’s side. Maybe should have held out for a buyer that had a realtor that didn’t do their homework

 

[Knight Shift]

Also, a good example of a bad realtor on the seller’s side. Maybe should have held out for a buyer that had a realtor that didn’t do their homework

Depends. Maybe @RUskoolie 's buyers were no trouble buyers- waived inspection, cash, etc. We have done many deals that way because we did not want to deal with a mortgage hassle, inspections and the ancillary BS. A lot of sellers will jump on offers like that and not hold out for the "what if" buyer to come along. Every situation is different. We also would communicate that we would be totally flexible on a closing date for the seller, and give them time to do what they needed to do on their end.

 

[KK1827]

I don't doubt it but I think part of that is realtors being lazy and not doing their homework. I helped a client buy in Montclair this year. Any other realtor would have told them to pay 100k over ask. I told them 15k and we got the property and before we closed, the exact same build closed on the same block for 130k higher than our bid.

Now I say that and I just made another client bid 50k over on a house in Basking Ridge and we won, but that's the 4th hottest town in America so it makes sense.

That's odd to be able to get something only $15K above ask in Montclair. In a multiple bid situation in montclair, $15K over asking probably wins less than 1% of the time imo

 

[Plum Street]

Depends. Maybe @RUskoolie 's buyers were no trouble buyers- waived inspection, cash, etc. We have done many deals that way because we did not want to deal with a mortgage hassle, inspections and the ancillary BS. A lot of sellers will jump on offers like that and not hold out for the "what if" buyer to come along. Every situation is different. We also would communicate that we would be totally flexible on a closing date for the seller, and give them time to do what they needed to do on their end.

I mean maybe . You would have to ask @RUskoolie the specifics . All he posted was that some realtors don’t do their homework, but he does.
Maybe schiano’s academic support team just teaches how to do homework real well … :)

 

[RUskoolie]

That's odd to be able to get something only $15K above ask in Montclair. In a multiple bid situation in montclair, $15K over asking probably wins less than 1% of the time imo

I read the Art of the Deal and the listing agent clearly didn't. I don't think my clients even understood how much money I made them. DM me and I will show you the address

 

[tom1944]

We just sold a home in Edison for $40,000 over asking. Home was very dated but in a good area.

 

[e5fdny]

In before…. _______ 😉

 

[mildone]

In before…. _______ 😉

Oooooh, what an excellent pun using a Mad Libs, fill in the blank, statement to make a politically-themed humorous reference about mad Libs. Very well done.

And, since I love filling in the blanks, much respect to @RUskoolie for, despite reading the book, succeeding in doing a great job for his clients. 😉

 

[e5fdny]

Oooooh, what an excellent pun using a Mad Libs, fill in the blank, statement to make a politically-themed humorous reference about mad Libs. Very well done.

And, since I love filling in the blanks, much respect to @RUskoolie for, despite reading the book, succeeding in doing a great job for his clients. 😉

Nah, wasn’t that.

It’s a real estate thread.

 

[mildone]

Nah, wasn’t that.

It’s a real estate thread.

But of course.

 

[RUDeac]

I live in Maryland and have been monitoring a new construction community in a very good neighborhood. The starting price has been lowered by 3% since last month. The number of listings went up for sure.

 

[KK1827]

I live in Maryland and have been monitoring a new construction community in a very good neighborhood. The starting price has been lowered by 3% since last month. The number of listings went up for sure.

Builders live in a different world. Some are buying rates down to as low as 2.99%. Crazy

 

[tom1944]

nm

 

[AreYouNUTS]

Holy crap 77 pages??!!

Anyway....got a Hoboken 1BR coming to market with a PRIVATE rooftop deck (sick views). Building also has a pool and elevator but NOT your new-fangled "amenity-filled" building. . Great location.

HMU for more info if you know anyone who might be interested!!!

 

[noble106]

Homes are bought with debt taken on by owners. When debt becomes easier to obtain, more people can buy homes with money they don't currently have. When it gets harder to borrow money, then the amount people are willing to spend on a home decreases because they have less money. When people have less money, they won't be able to spend as much on a home because they aren't able to get the money in the first place. So the money was never really there all along to buy the house.

I'm not saying the bubble will "pop." I'm just saying, the housing market is absolutely in a bubble from an economic perspective. Anyone trying to tell you otherwise does not have your best interest in mind.

 

[KK1827]

Homes are bought with debt taken on by owners. When debt becomes easier to obtain, more people can buy homes with money they don't currently have. When it gets harder to borrow money, then the amount people are willing to spend on a home decreases because they have less money. When people have less money, they won't be able to spend as much on a home because they aren't able to get the money in the first place. So the money was never really there all along to buy the house.

I'm not saying the bubble will "pop." I'm just saying, the housing market is absolutely in a bubble from an economic perspective. Anyone trying to tell you otherwise does not have your best interest in mind.

consider this thread is a civil one. Explain the following

1) define “bubble”

2) your position on why the housing market is in a “bubble”

 

[Joey Bags]

Bubbles imply speculative asset inflation, the current housing market price trends are due to market fundamentals (supply/demand)

 

[jtung230]

Bubbles imply speculative asset inflation, the current housing market price trends are due to market fundamentals (supply/demand)

Every housing market prices are due to supply and demand. The bubble is a reflection on unsustainable demand.

 

[KK1827]

Every housing market prices are due to supply and demand. The bubble is a reflection on unsustainable demand.

Demand is quite literally at an all time low FYI. Lowest record annualized home sales on history in 2024 adjusted for population.

 

[jtung230]

Demand is quite literally at an all time low FYI. Lowest record annualized home sales on history in 2024 adjusted for population.

Never said demand was high. I don’t expect it to be at these prices. Affordability rate is super low. Gift money transaction are all gone now.

 

[KK1827]

Never said demand was high. I don’t expect it to be at these prices. Affordability rate is super low. Gift money transaction are all gone now.

I thought you called it a bubble and said due to unsustainable demand

 

[jtung230]

I thought you called it a bubble and said due to unsustainable demand

No, I was explaining what causes the bubble.

 

[Section124]

Serious question. As the boomers start to die off, with there be a glut of housing or will it just help to meet demand? Or is that an opportunity for the market to correct itself?

 

[NotInRHouse]

Serious question. As the boomers start to die off, with there be a glut of housing or will it just help to meet demand? Or is that an opportunity for the market to correct itself?

Assuming they have children they are going to inherit it. And then won't they either live there or sell it for a profit?

I think the only way to actually cool the demand is to build more homes...there just are not enough right now.

 

[Jimpeg]

article is from 2023...but illustrates shortage...


https://www.cnn.com/2023/03/08/homes/housing-shortage/index.html

 

[Section124]

Assuming they have children they are going to inherit it. And then won't they either live there or sell it for a profit?

I think the only way to actually cool the demand is to build more homes...there just are not enough right now.

But does the younger generation want large suburban homes? I have been reading the answer is no. Seems like some market sizes could be impacted.

 

[tom1944]

I had heard or read (I forgot which) that some 55 and over communities are being opened up to all ages- or at least a certain percentage of the community will be made available.

 

[NotInRHouse]

But does the younger generation want large suburban homes? I have been reading the answer is no. Seems like some market sizes could be impacted.

Depends.

APP released an article recently that NJ has the most wealthy millennials other than MA and WA.

Inevitably some of them (especially those with kids, which to be fair is less than prior generations) will want to be in the suburbs.

There is absolutely wild demand in the part of JC zoned for the good elementary school in Exchange Place. But even in Hoboken my understanding is a lot of people move for kindergarten.

I think there's going to be strong demand (and you will see this on Zillow) for walkable towns with good schools. Red Bank, Montclair, Morristown, surrounding towns. I would still consider those suburbs. And the increasing childless cohort is going to drive demand in Hudson County and Asbury, Long Branch, some shore areas without the schools.

But the demand is such that even if you peruse some really far out suburbs- like deep into Ocean County- the prices are still very high.

The boomers holding on and millennials coming into cash without building more homes is going to keep the prices high.

I think it would be practical at some point for the state or maybe a town with a lot of land to partner with some builders and build some new areas off the beaten path geared to walkability and work from home. Because as of now, the YIMBY people are mostly in cities where demand is quite high and a lot of suburbs are still resistant to building homes.

People say...."my kid will never afford to live here" but then oppose building in their town.

 

[beaced]

It's not the inflation that will get you, it's the collapse that follows.

Like falling off the roof of a 30 story bldg?Its not the fall that gets you.It is the Sudden Stop

 

[RU205]

Bump. Not to discuss specific politics but based on election results do you foresee any change to the housing market?