Next year is the key. Real estate historically moves in 5-10 year cycles. If the market goes into free fall in the first 6 months next year, I would not expect a quick recovery.

Even if the Fed cuts rates early next year. Prices were very inelastic as on the way up - people have been calling for a crash since close to 2000. It's very unlikely that they will bounce right back if the trend continues down for the first 6 months next year.

An important factor in the downtown market were the investors who are now out of the market chasing stocks instead of bricks and mortar.

I think the main thing that Downtown Jersey City has going forward is that all the new units make Jersey City seem MUCH SAFER and this should bring prices in-line with Hoboken and much of Brooklyn and Queens.

That is the main thing that has been keeping prices and rents very low in the past. Saftey is key to Downtown and I think it will soon feel as safe as Hoboken and the best parts of Brooklyn and Queens. Downtown Jersey City will balance with these places price wise and although some of these areas may fall I think Jersey City will rise to equal to them.

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And what exactly do you need, RabbitX2??

Never mind, no need to explain ...

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not scorned, no fury. She is a ho and she doesnt have what a rabbit needs.

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Ah, the fury of a Rabbit scorned.

While the prices are more normal now I do wonder how this huge influx of apartments/condos and new developments will change prices - In the Waldo area for example there are currently a few units for resale. Even though these units maybe less expensive then up coming properties they are not getting the attention/price points What happens in 1.5 years when there are 8 condo buildings all with 2 blocks of each other competing for buyers??

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Jennymayla is a ho and doesn't have the right plumbing in my books.

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Zen garage passed a long time ago Justy - yoou should get out more

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First Jennymayla cheats on RabbitRabbit with ErinMaiden. Now PhillyGirl is suspiciously chatting up JSalt after having been spotted flirting with jcpeace. This place is getting like 90210.

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You need to post up, here: http://jclist.com/modules/newbb/viewt ... pic_id=6709&forum=6&type=

Wow! Thanks. I don't think anyone on this site has ever just said, "good point" to me.

You might be my new fave . . .

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That makes perfect sense. It's a very good point.

From looking at what seem to be comparables in real estate office windows and in the JC Reporter, I am fairly certain that if I sold my condo today I would lose a good chunk of money. That is, I think it would sell for a noticable amount less than I paid for it.

That being said, I bought last June at the absolute peak, and I am not worried that in another year or two things will shake out. I suspect that the constant addition of the luxury building condos are propping up the average sale price. That is, our housing stock is getting ever fancier and thus more expensive, rather than the market value on the existing places actually increasing. Make sense?

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Sellers are definitely cutting their asking prices a lot, but it could be that the current, reduced asking prices are still a little higher than the October 2005 selling prices.

Example: say a condo was advertused fir $457,000 in September 2005 and sold for $500,000 in October 2005. Maybe a would-be seller set the asking price at $550,000 in June 2005 and now has lowered the price to $505,000.

So, the seller might have cut the asking price, AND that price might still be higher than either the year-ago asking price or the year-ago sale price.

But another consideration is that time is money.

Suppose a condo could sell for about $500,000 and the owner could then put the money in a very safe vehicle (such as a bank CD) and earn about $25,000 a year (about $2,000 a month) in interest.

Then, even if the owner has already paid off the mortgage and owns the condo outright, every month of delay in selling the unit cuts the owner's total take by about $2,000. So, if the owner sticks to the $500,000 price but takes 6 months longer than expected to sell the condo, then, really, once you factor in the lost interest earnings, the owner is only getting about $475,000.

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While I do expect prices to drop, what the above means is debatable. Sellers pulling back from fantasy prices to reality might not be considered an actual drop, unlike someone being unable to sell for at least what they bought for. Only when people start losing money on the flip will the oxygen masks fall and you know there's real trouble ahead.

The fantasy prices, especially at the high end, are what fueled the bubble. Sellers would set a crazy high price and get it from someone taking an interest only 3 year fixed loan, then everyone else would take that as their benchmark, buyer & sellers alike. I remember reading last year about hyperluxury properties being marked down from like $20m to $10m. That wasn't real money lost, just a wake up from a dream.

Hard to believe this article - Just go to any open house (even new construction - Waldo Lofts, Washington commons, A Condos) and see how much the prices have dropped. One unit i had an interest in WALDO lofts was dropped $100K

The statistic COULD be misleading - if sales are way down, the median sale price could still be up, especially if the higher end homes are selling more easily than the mid-level and lower-end stuff.

Just purely annecdotally, from checking Craigslist ads from time to time, I got the impression that JSQ, Heights, and other neighborhood prices were coming down a lot more than downtown, but I could be wrong.

Prices seem to hold steady in downtown, the question is wether or not they sell. I tend to think that they don't. Inventory is very high at the moment, and when the several thousand units from grove pointe and the like come on line it will be even worse.

Overall, however, this mught not be such a bad thing. I would like more folks of my socio-economic level to have the ability to buy here, and perhaps keep some of our more sanely priced shopping options in existence. I'd hate it if every store front morphed into Zen Garage.

Regardless, the slowdown will likely be ancient history in 5 years or so. More people immigrate tot he New York area every year, and they ain't making any more land.

there must be some realtors on this site - does this match with your experience downtown on properties that actually sold?

Housing prices still surging in Jersey's cities
While suburban markets cool, urban centers, led by AC, sizzle

Star-Ledger Staff Oct 29, 2006 BY ROBERT GEBELOFF

As the real estate market softens in New Jersey -- with sale prices flattening in a number of popular suburban towns -- one segment continues to boom: the state's 30 cities.

The median sale price for a home or condominium in urban communities rose 18 percent in the first six months of 2006, compared with a relatively modest 8 percent jump in the suburbs, according to a Star-Ledger analysis of home sales.

And while sales volume was down throughout the state, New Jersey's cities are claiming an increasing share of the action: 1 in 5 sales now, compared with 1 in 7 at the beginning of the decade, the analysis found.

Turnarounds continued in Newark and Jersey City, but the urban leader of late has been Atlantic City, where after years of being overlooked as a residential market, the median sales price jumped 25 percent in 2004, 29 percent in 2005 and 41 percent this year.

"We've become a different city, baby!" said Bevan Farber, who has sold condominiums at the Ocean Club on Atlantic City's boardwalk for two decades. "You'll have to forgive me for being excited. I've been here 21 years and nobody ever called me up to ask me about the prices going higher."

Another stark example could be found along Route 78. As recently as 2003, buyers paid almost a third more for homes in pastoral Hunterdon County than in densely populated Hudson. Now the price gap -- $385,000 versus $382,000 -- is just 1 percent.

Median prices actually fell in 33 mostly suburban towns that had enough sales volume to produce significant data, the analysis found, though prices are still up more than 90 percent since 2000 in half of those communities.

Glen Ridge in suburban Essex County, for example, saw prices drop by 1 percent this year to $505,000, after double-digit increases in four of the previous five years. East Brunswick was down a percentage point, though it's still up 109 percent since 2000.

Economists warn that the overall slowdown in price growth shown in the analysis -- 10 percent growth statewide this year through June compared with 15 percent in 2005 -- has in the last three months begun to turn into an all-out price slide.

"When I was going around last fall and winter making predictions, the concern I always had was suburban tract houses," said Joel Naroff, an economic adviser based in suburban Philadelphia. "Those houses are clearly getting priced out of the reach of the people who would normally live in those places."

Urban communities fared better in the past year in part because prices in cities are generally still lower than in the suburbs.

Naroff said many of New Jersey's cities are influenced by special situations: Jersey City has become home to many affluent Wall Streeters while Passaic has a growing middle-class Orthodox Jewish community.

In Newark, the state's largest city, prices jumped 20 percent for the second consecutive year. In Camden, the state's poorest city, the median price had risen only $4,500 between 2000 and 2005, to $43,500. This year, the median was up $14,500.

The analysis was based on home sales reported to the state, which monitors real estate values for administrative purposes. The state database contains all home sales, including newly built and existing homes, that officials deem to be made on the open market -- intrafamily transactions are excluded.

The data include all sales through June 30 of this year, so the analysis was based on comparing the first six months of 2006 to the same period in prior years.

NEW CASINO, NEW POPULARITY
Atlantic City prices began increasing in the summer of 2003, just as the $1.1 billion Borgata Hotel Casino & Spa was opening. The casino breathed new life into the city, in part because it showed the gaming industry was committed to expanding and in part because the Borgata markets itself to a younger clientele.

"Atlantic City has not had a single high-rise building brought onto the market in the past 20 years," said Tom Scannapieco, a developer who has been involved in numerous building projects in the city. "There is not an oversupply of condos. That's why you're seeing tremendous appreciation."

For the residential real estate market, there was also the matter of simple economics. The more prices ballooned in other Shore towns, the more Atlantic City looked like a bargain.

"Our prices were much lower than in surrounding communities," said Kevin Corcoran of Kevin Corcoran Real Estate. "People who wouldn't before consider buying something here are considering it now."

While prices have gone up, some are quick to point out that the transformation of Atlantic City has mostly benefited outsiders -- not full-time residents.

Developers used government subsidies to clear run-down housing in the northern inlet section. But even though the newly built housing is attractive and increasingly popular with buyers, the area still doesn't feel like a homey city neighborhood, said historian Bryant Simon.

"It's eerie and quiet," said Simon, a Temple University professor and author of "Boardwalk of Dreams: Atlantic City and the Fate of Urban America in 2004." "There are some pretty big houses that look nice, built in the new urban design style. But there's nobody outside."

But others say the changes are a major success. Tom Carver, who runs the Casino Reinvestment Development Authority -- the state agency that oversees the investment of fees collected from the gaming industry -- estimates more than $10 billion will be spent on commercial ventures in the city over the next few years, and that will further bolster the residential market.

"The value of land has increased dramatically, and so the ability to develop and sell in Atlantic City has also increased," he said.

A DIFFERENT DYNAMIC
To economists like Naroff, suburban real estate now resembles a pyramid scheme.

Suburban homeowners looking to move up and New Yorkers looking to move in get a premium on their home, and are able to afford higher prices in more affluent towns. But as these homeowners begin having trouble selling their own houses, demand for the ritzier communities also begins to fall.

"It's the kind of situation where if you can't sell your own house, you can't buy the next house up," he said.

But in places like Atlantic City, where prices are low and most of the buyers are shopping for second homes, that problem doesn't apply.

Tarron Weir, a Jersey City resident, doesn't care much for the casinos. In fact, he was considering spending $1.2 million for a luxury townhouse in Jersey City's riverfront Port Liberte development but changed his plans when he realized he could buy a house on the beach in Atlantic City for less than half that price.

"It's pretty reasonable compared to other Shore homes," he said. "From my master bedroom, I can see the ocean."

The house is part of Oceanside II, a residential development in the northern inlet section that was seeded by the state development agency, but has taken off on its own.

The agency sold one oceanfront lot to a developer for $189,000. Now the lot has a new 12-room beach house on it -- and a price tag of $1.7 million.

State records show the highest individual sale through June 30 was the $1.3 million a penthouse apartment went for in the Ocean Club last year. Farber said another penthouse went for slightly more in September.

Diane Tooshi, who recently bought a unit in the Bella -- a boardwalk condominium complex --for $470,000 said she intentionally avoided an ocean view. Instead, her apartment looks out over the glimmering lights of the Marina district and, in the distance, the Borgata.

"The ocean is the ocean is the ocean," explained Tooshi, a school psychologist from Manalapan who grew up in Bayonne. "If you're going to buy in Atlantic City, you want the city atmosphere. It's like with New York -- the skyline is what the city's about, not the Hudson River."

Robert Gebeloff may be reached at rgebeloff@starledger.com or (973) 392-1753.