Recap 2011 and what to expect for our housing market in 2012
Why didn’t the Realtors sound the alarm when homes sales tanked 40% from 2005 to 2007
If home sales were at a stabilized pace for several years would Realtors still push price reductions? I would like to think not.
So why are Realtors still pushing price reductions when Bergen County single family and multi-family home sales, have held at steady pace since 2008?Someone has to stand up for buyers, sellers and homeowners
The New Norm
I hate to burst a Realtors fantasy that “everything will soon be back to the old normal”…because that’s not happening for years. In fact, the most brilliant and unbiased minds out there (NO NOT the National Assoc of Realtors…NAR) are saying that the market will most likely remain at current levels into the next decade.
Wishful thinking, Realtor propaganda, record low interest rates, price reductions, or anything else out there isn’t going to dramatically alter the volume of home sales in Bergen County for a really long time. So we need to get used to this New Norm
But that’s not a bad thing
A stabilized market, and more importantly stabilized prices, doesn’t require the incredible sales volume that we witnessed during the boom years.
Other than a Realtors need to create more sales (commissions), we actually have a consistent, vibrant and healthy housing market:
- Prices need not decline any further to keep the same level of sales…because there’s no proof that all those price reductions have created more sales.
- Equally important lower, prices and historically low interest rates hasn’t brought more buyers into the market
The volume of home sales has been consistent for 4 years.
- The Bergen Co. housing market first crashed in 2006 with a 20% decline in single-family homes sales. The same time frame and declines also holds true for the multi-family market
- Home sales have been steady for a 4 year period starting in 2008
- The average sales price since decreased by 18% since 2006
Again, we have to get used to the fact that we are not going back to an insane sales pace that we weer all so psyched about…for many reasons:
Realtors believe that chopping prices creates more sales, but there’s NO proof of that. Let’s face it…people want to live in our communities. THE DEMAND IS HIGH
Demographics have dramatically changed…the demographics for past buyers are nothing like today’s buyers:
- Now it’s predominately first time buyers and a move down buyers, where potential first time buyers are renting in urban inner city areas, rather than choosing the suburbs.
- Move down buyers can’t sell their expensive homes because move up buyers are scarce…not because they don’t want to, but because they don’t want the burden that comes with owning a large expensive home.
- The younger generation is waiting longer to get married, and even longer to get married…so fewer homes are needed.
- The only exception for creating more sales is divorce. For every divorce two homes are needed. Will there be a frenzy of Realtors pushing their friends to get divorced?
- young buyers don’t want to be burdened with high taxes. And many people want to move out of Bergen County, and NJ as well because of such incredibly high property taxes.
- people even with great credit have a hard time getting a mortgage, and that’s not going to change anytime soon
Lack of new and affordable homes
- Buyers don’t want to be burdened with unanticipated costly repairs, and most towns in Bergen County make it almost impossible to buy or build affordibly
The table and chart above shows details Bergen County home sales since the start of the decade.
Nowhere other than on Eatingrealestate.com will you find this information published online. All the information is provided to the members of the Realtor njmls, but no one analyzes in depth it like we do
es year in 2004 the number of homes sold in Bergen County declined by 41%
Equilibrium is an important factor to stabilizing the housing market, and that’s exactly what we have here. Though the overall sales are down slightly in 2011 they’re pretty much on par with the yearly numbers since 2008. For those who want to see sales equal to the peak years, there’s no signs anywhere that this will happen…other than listening to the Realtor propaganda machine, who quote statistics that have no relationship to our community.
In conclusion…selling homes is not all about price, or chopping your price…and the proof is in the numbers. Since the market crashed (Realtors still insist it happened in 2008) we have seen a steady number of homes sales, even with their all out assault to lower prices even further thinking that-that will spur more sales. Their approach to cutting home values to create sales has confused buyers and has hurt every homeowner in Bergen County, and this has to stop before they destroy our home values even further just to create commissions
The fact remains that there are a limited number of buyers in the marketplace, and nothing can be done to create more buyers…they don’t exist. Everyone needs to face the truth that fewer homes will be sold compared to the boom years and those that do sell will take longer to sell, until consumers are confident in the economy, and that their money won’t be spent on a losing proposition.
If you don’t agree, prove me wrong.
Note: Though I only briefly touched on the multi-family market, I’ll hit it on a future post. The condo market has been clobbered and it may get even worse. But there’s a bright side to maybe wait out the bad market…rentals.
Why Realtors should stop pushing price cuts in Tenafly, because it’s the hottest market around.
You heard it here first.
Tenafly is now a sellers market!!
Which also means it’s a hot buyers market.