The recent barrage of awful news from Wall Street has sent a current of barely concealed panic through anyone involved in the housing market.  Things were bad enough; now, the possibility of a double-dip recession has buyers and sellers alike wondering what will happen next.

Baristanet surveyed local realtors to find out what they were seeing out there.  Do buyers seem more reluctant than ever to take the plunge? Are sellers feeling stuck in their homes for the foreseeable future? Here’s what they had to say:

Roberta Baldwin, The New Keller Williams NJ Metro Group, Montclair:  Sellers with homes on the market that aren’t selling take it very personally, but it’s our job to remind them that they are part of a larger phenomenon. We are in an uncertain economic environment that is not likely to end soon and is bigger than all of us.

Three years ago, some said the recessionary jag would be over by now. How long can homeowners hold onto properties they can’t afford? It’s brutal to tell people their homes are worth so much less than before, but if you show them that it’s cheaper to sell now, rather than pay five more years of property taxes and home maintenance, they often see the big picture.

For buyers, broader regional, national and world events strongly influence consumer confidence. Those who are buying are those who need to buy, because of marriage, a baby coming, a job relocation, retirement, etc.

Vanessa Pollock, Keller Williams, Maplewood:  It is difficult to differentiate between what is Wall Street turmoil and your run-of-the-mill August slow season; we shall see what kind of fall market we have!

In my recent conversations with sellers, nothing was mentioned specific to the financial crisis. I tell sellers the one thing they can control in this market is to make sure their house shows beautifully. 

If I were to describe the current market in two words, I would say exciting and challenging.

Carol Greenberg, Towne Realty Group, Short Hills:  Three words to describe the current real estate market: challenging, surprising and changing. 

Mark Slade, Keller Williams, Maplewood:, Sellers on the market are increasingly frustrated and anxious, and are seeing less activity then they want.  The extra anxiety of Wall Street and the lowered debt ratings are adding to it. There are some buyers that, even with the incredibly low mortgage rates, will now hold off on buying a home until there are certain the market has stabilized. 

For sellers that still have a good amount of equity to extract from a sale and have a strong need to move, they benefit from the lower rates.

A third of the homes in the area continue to sell for last asking price or greater. The challenge is dealing with homes that are not in tip-top shape and aren’t staged effectively; these homes are paying a far greater price to bring a sale to close.

Lina Panza, Keller Williams NJ Metro Group, Montclair:  Although I think in the long run it will be a blip, in the short run it undermines consumer confidence.  Some buyers who were just beginning to dip their toes in the Montclair real estate waters may stand on the side until calmer seas prevail.

The market recovery will be slow and long. Sellers with changes in circumstance (a growing family, a retirement, a divorce) will be undeterred because they need to get on with their lives.  If they feel “stuck” and are considering “waiting it out” they need to be prepared to wait many years for a full turn around.

People get nervous when they feel that they have no control, but all sellers can control the “micromarket” of their own home sale by pricing properly. The current market is unpredictable and extremely price-sensitive, and even the slightest whiff of overpricing will doom a house to months on the market.

Barbara Lawrence, Keller Williams, Maplewood:  I think when sellers understand that the immediate ramifications of what happened last week will cause interest rates to go down in the short run, they will either list sooner or get more aggressive on their pricing now.  Long-term effects will no doubt cause a rise in mortgage rates, which may or may not create more reluctance in sellers to sell now or hold off.

Robin Seidon, Keller Williams NJ Metro Group, Montclair: The uncertainty of the past few days has to be affecting everyone’s confidence – but there’s never been a better time to buy. Interest rates are low and seem to be staying there, and home prices are lower than they’ve been in a very long time.

People who don’t have to sell are staying put more often than not, and smart realtors are reluctant to take overpriced listings from sellers who are testing the market.  If you have to sell, face the market reality and price your house right the first time.  Sellers that want to wait until this is over may have a very long wait. Jeffrey Otteau doesn’t see 2005-06 home prices again before 2018 or after.

Tina Erway, Coldwell Banker, Maplewood:  I personally have not seen a lot of changes because of the recent Wall Street uncertainty. 

I am working with several buyers waiting to close and I had an offer on one of my listings just three days ago.  I did an Open House this past Sunday and had a nice turnout – there were more people than before. 

Maybe buying a home to live in with your family for the next seven to ten years is a better bet than the stock market.

 

49 replies on “From Bad to Worse? Realtors Assess the Market”

  1. Lordy, it got hot and gaseous all of a sudden.

    “Maybe buying a home to live in with your family for the next seven to ten years is a better bet than the stock market.”

    I don’t think anyone is (literally) buying that anymore.

  2. These realtors make me laugh. They helped the market get highly and ridiculously inflated. Now they are making excuses.

  4. All big ticket items are WAY down, i.e. New Cars & New Trucks, and Cruises.

    Used car sales are slightly UP The economy is horrific. Stores are for rent, in MILLBURN. I do not ever remember witnessing that !

    I just read that the present occupant of the White House wants to pass a law that if a home goes into forclosure, regardless of town it is located in, can be rented, on a month-to-month basis. Wathch out, Montclair, Glen Ridge, South Orange, Maplewood and Livingston.

  5. (there is NO truth to Obama-is-a-Socialist meme)

    Correct, and in addition, using that kind of shorthand (He’s a SOCIALIST!) makes you look kind of dumb.

    Fannie and Freddie Mae was transferred to goverment receivership while George Bush was still President in September 2008.

    Renting these houses out makes more sense than letting them stay vacant, doesn’t it? Regardless of Sandy’s “there goes the neighborhood” implication.

  6. The homes don’t need to be rented, they need to be torn down.

    Anybody try to get a refinance lately, it’s a bummer.

  7. “Renting these houses out makes more sense than letting them stay vacant, doesn’t it?”

    It makes no sense. They should be sold at market value.

    What really makes no sense is how we came to own these houses in the first place. The government is not a bank or property speculator.

  8. “They should be sold at market value.”

    That would work well if there were buyers for the majority of these homes – the majority of them are not in upscale suburbs of NYC. If they sit vacant for too long they become even more problematic as nature starts to take over. And entire neighborhoods become blighted if there are enough empty homes. It’s far better for the “owners”, Fannie and Freddie, rent them. It will keep some neighborhoods from completely destabilizing and it’ll at least generate some revenue. It’ll also mean fewer homes on the market.

  9. Renting these places out will not help the luxury apartment market planned for Bloomfield Center.

    In my corner of heaven near EO, there are foreclosed places that are boarded up. Some are stripped of metal content. They’re nowhere near ready to be rented.

    Supply and demand works in this case. Less housing inventory, the sooner prices stabilize.

  10. Bloomfield Luxury apartments are a scam. They said they already sold 70% of the units…. to who??? They have no advertisement to sell them!

  12. The problem is, no one wants to actually sell foreclosed homes at market value. Market value is what the market will bear–it’s essentially the price at which someone will purchase the asset. In the case of foreclosed homes sitting on the market, that is typically well below what the home was last sold for, what it is appraised (and taxed at), and/or what is still due and owing on the mortgage. Instead, they hold the homes, hoping the market will improve. Whether that is ultimately the right or wrong move is still TBD, but pretty much by definition, whenever you have an asset going unsold for a long time, it’s because the seller wants more than buyers will pay–hence it’s not being offered at market value.

  13. lives – in some places market value is nothing. go to detroit. or central california. or indiana.

  15. Federal Govt. and Obama has failed in their attempt at job creation so they pressure the private sector to create jobs in an adversarial business atmosphere. Once again using class warfare , ‘it’s time they did their fair share”, ‘if only they didn’t sit on their money and created jobs”

    So now the Govt has once again failed. This time meddling in the real estate business which they helped destroyed through manipulation and forcing banks to give bad loans and now once again they want the 50% of the people that actually pay taxes in this country to bail them out again and stick these people back in homes on someone elses dime.

    Companies / industries that pulled this stuff in the private sector wouldn’t have a single investor, the Fed Govt though, makes you do it by force.

    Its not the ‘rich’s ‘ job to take care you. Have a little pride.

  16. Bebopgun, some municipalities have ordinances against boarded up homes.
    If the owners — banks, absentee owners, etc. — get enough fines they might get motivated to do something. I’m not sure about East Orange, but Bloomfield might. You should check with your local deity.

  17. JG, just give up. Don’t you realize that anything that this government does, even if it makes sense, is wrong? Or even better “IS SOCIALIST! DERP!”

    “it’ll at least generate some revenue. ”

    You guys said that about GM. Remember?

    If you had planned to sell some stock but then the market went down, what would you do? Before you answer, make sure you read the WSJ link you posted so you know to say the opposite of what the government is doing.

  18. “The problem is, no one wants to actually sell foreclosed homes at market value. ”

    Which is why the government should never have gotten involved in backing and guaranteeing mortgage securities.

    The bubble has to pop before we can fix this and move on.

  20. Our wonderful federal government suspended mark to market which allows banks to value their mortgaged real estate holdings at the price in which the home was last sold. They need not write down the ‘market’ value of these holdings on their balance sheets unless the home is officially foreclosed upon. Nor are their reserves required to be even close to what they should be. Our banks are still insolvent. There are a ton of distressed homeowners out there that the banks refuse to kick out. This glut of preforeclosures will continue to make it impossible for homes to reach true market value for a long long time. The suspension of mark to market was probably worse than the Wall Street bailouts at a magnitude of ten to one as homes are the only real asset that most members of the middle class hold. When your 600K home goes down in value to 400K, the fact that you paid $100 to help out Goldman Sachs and their buddies (who created this mess) means so little when compared to the 200K loss you took on your home.

  21. “forcing banks to give bad loans”.
    oh not that lie again. most of these loans were made by crooks who gave money to anyone who could sign their name because they knew they were going to bundle them and sell them. this is not the same as loans made in low income communities that required proper documentation and specific salary requirements.

  22. Federal Govt. and Obama has failed in their attempt at job creation so they pressure the private sector to create jobs in an adversarial business atmosphere. Once again using class warfare , ‘it’s time they did their fair share”, ‘if only they didn’t sit on their money and created jobs”

    Oh brother. First of all, I thought it wasn’t the government’s job to create jobs? That was left to “job creators,” where ever they’ve been for the last 10 years.

    Also, your paragraph ignores the fact that corporate profits are at an all time high.

    So now the Govt has once again failed. This time meddling in the real estate business which they helped destroyed through manipulation and forcing banks to give bad loans and now once again they want the 50% of the people that actually pay taxes in this country to bail them out again and stick these people back in homes on someone elses dime.

    And the financial companies who sold the CDOs are completely blameless? What about the ratings companies who said everything was fine and dandy?

    And you didn’t answer my post from the last thread. 50% don’t pay taxes because they don’t make enough money. The middle and lower classes have been losing ground for 30 years, and yet somehow the republicans have you pitying the poor rich people. Look up the levels of income disparity in this country, and let me know what you find.

  23. Oh, Mike.

    The stock is at 30 and 54 is the break even point. Hope never dies! Keep the faith!

  24. “most of these loans were made by crooks who gave money to anyone who could sign their name because they knew they were going to bundle them and sell them. ”

    And how did they know the could sell them? Because Freddie Mac and Fannie Mae would buy it all!

    Doh!

  25. The stock is at 30 and 54 is the break even point. Hope never dies! Keep the faith!

    What’s the deadline for selling the stock?

  26. Herb, you write as if you don’t believe “the government” is influenced by the private sector.

    The bailouts, Dodd-Frank, etc had the approval if not outright sponsorship of industry.

  27. “What’s the deadline for selling the stock?”

    It’s $24 today. How long do YOU think it will take to DOUBLE so we can break even?

    Their cars are crap. I’d say get out now while you can still get 25-30.

  28. ‘lso, your paragraph ignores the fact that corporate profits are at an all time high.’

    …….. so?

  29. “Bloomfield Luxury apartments are a scam. They said they already sold 70% of the units…. to who??? They have no advertisement to sell them!”

    I agree Jimmy. They are also using data regarding traffic patterns and train usage based on statistics from other mysterious past projects….not based on the 70% of tenants and their actual needs. It is all BS.

  30. There were crooks on both sides of the transaction. A broker who pushed through a loan he knew a person or family couldn’t afford, so he could get his commission, is a crook. A bank which makes bad loans, bundles them, and sells them as AAA securities knowing they aren’t (note: the bank certainly didn’t want to hold them!) is a crook. But so is a homeowner who falsifies or exaggerates income or assets, or downplays debt, in order to take out a loan he or she can’t possibly service. Remember: homeowners had to sign multiple disclosure and financing forms to get loans. If something was hinky about the financial disclosures, the homeowner was not innocent. And homeowners who did not falsify information but still took out unsupportable loans counting on ever-increasing values may not be crooks, but they still share blame for this sorry mess and don’t deserve any sympathy. The ones who do deserve sympathy are the ones who did everything right, but then lost the ability to meet their obligations through no fault of their own, such as un- or underemployment.

  31. lives, you are correct there were lots of crooks.

    But what enabled them? The fact that there was a ready “market” in the form of the US government which did not care one bit about the fundamentals.

    How do you prevent this happening? The crooks or the fools need to LOSE THEIR SHIRTS, period. Banks will make better choices if they risk bankruptcy with bad choices.

  32. …….. so?

    Well, to start, how is it an “adversarial business atmosphere” when corporations are making record profits?

  34. “Double-dip recession? Not in this auto boom”, Lindsay Chapell, AUTOMOTIVE NEWS 8 August 2011

  35. “Anybody try to get a refinance lately, it’s a bummer….”

    Just curious : Rates are still low – what else are you seeing?

  38. If you have plenty of equity, you can get a 15 year under 4%. A 30 year refi could be 4.25% given a good LTV. However, for folks like me who bought recently and have seen their home values drop hard, it’s hard to get a deal done.

    Getting comps can be tough, too. The only sales in our area recently have been short sales and some assessors use that as representative of the market. Sucks but it’s happening.

  39. “POSTED BY herbeverschmel | AUGUST 10, 2011 @ 3:01 PM
    So now the Govt has once again failed. This time meddling in the real estate business …..”

    Herb, I wasn’t here in Baristaville at 3:01. Were you referring to this?

    https://www.youtube.com/watch?v=QYvtvcBKgI

    (or were you referring to VA loans?)

  42. I’m signing off on my new mortgage refinance tomorrow at 9am. Was offered 4% no cost on a 20-year two days ago. I will seek another 1/8th minimum before I sign.

  43. Wow, I thought the headline was referring to the air head in the Oval Office. I feel bad for all of the Democrats on this site who must be crushed by the absence of leadership and compassion shown by our current President. Our country is in an economic crisis and our men are dying in senseless wars that he turns his back to and the American people are looking for leadership. Instead we have a President who shrinks in the face of crisis and his only response is to blame Bush. Hey, Mr President, it’s been over 2 yrs please stand up and show the leadership our Country is sadly lacking. A liberal writer in the Star Ledger wrote that we have a law professor in the office who is afraid to hurt anyone’s feelings but what we need is a President who will stand up for what he believes in and is ready to lead.

  44. 1st observation… you can’t advertise to sell that which is not being sold. The Bloomfield Redevelopment is planning rentals, which is due to the exact discussion about the headline. Buyers are far and few between; real estate is not the choice investment of those with means. Also, if you a first time buyer, or a buyer with less than stellar credit, mortgages are hard to come by.

    2nd observation… I don’t understand how one man can create all the jobs necessary to quantify that we have recovered. It is in our (the consumer’s) hand. Supply drives demand – simplest terms of business. If we (the American Consumer) insist on bargain prices – HAVE YOU SEEN THE NEW WALMART COMMERCIAL: WE WILL MATCH ANY PRICE – YOU DON’T EVEN HAVE TO BRING AN AD IN – WE WILL KNOW WHICH ONE YOU WANT US TO MATCH…. then we will have to settle for the manufacturer’s cost savings measures, including mass production somewhere other than here. Cheap product means you are giving jobs overseas. I support Global Economy – but we are in dire straits. The children of today do not even know what it is like to manufacture things. They only know how to replace items, with an upgraded model – before the life of the older model is out. These companies are laughing all the way to the bank – in their home country.

  45. Despite the shortcomings you play up, Iceman, I’d say it’s a better situation than a McCain/Palin oval office.

    By now, the stress of the job would have probably put McCain in the hospital, and the mayor of Wasilla would be tossing out red meat to her fans while turning us into a banana republic.

    I wish President Obama strength, and let’s you and I hope that he leads our nation as best he can.

  46. Stu, can you lend me some of your equity? 4%…dang.

    Refi’s are working for those with equity or if one can’t make payments for whatever reason and the bank is forced to do a refi or outright principal reduction.

    It’s like I can see the candy in the candy store but the sweet stuff remains out of reach.

  47. I have to agree with both iceman and spiro.After 8 excruciating years of Bush, I voted for Obama (Hilary in the primaries) and am totally dissatisfied with his leadership qualities. And yet, I shiver at the thought of Palin as vice president. As far as I can see, both parties lack leadership.

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