Home Prices in Cranbury

[Guest]

Many home owners in Cranbury are listing their houses as if we are not in a recession. Don't they realize that the home values have gone down significantly in the last few months? Many are looking at the township assessed value from 2 years ago and thinking that their house is still worth the same amount. Many homes have been listed at very unrealistic prices. It doesn't look like there are many home sales in the past few months. I keep seeing the same houses listed for a very very long time. Am I the only one that feels this way?

[Guest]

It depends on how disparate the home owners want to sell it fast.

It's a buyer's market. If you really like a home, make an offer. You may be surprised.

[Guest]

It depends. If you're looking for a 25-30% decrease it's not realistic. I had my house appraised twice in the last two years by separate appraisers. My house was appraised within 5,000 and the reports were independent.

I can't say it's an overall issue.

[Guest]

[Guest]

That's inaccurate. A credible appraiser's report is a solid indication of market value because it considers most recent sales and comps. Yes, there are bad appraisers like any industry, but a good appraiser's report is a solid indication of market value. Now, whether the home sells for that price is a different story. However, it is a fair indication of value.

[Guest]

[Guest]

Remind me NOT to have my kids ask you about Santa!

[Guest]

[Guest]

Part of the problem is that in the stock and housing run-ups of the ‘90’s and this decade people started routinely tracking the hypothetical value of their stocks and homes as if it were a tangible value that they already “earned” when of course this was never true. People started to closely watching the sales of their neighbors and doing math in their heads about what their home, which they almost always perceive as better or more special than those of their neighbors, was worth X, then thinking about that X as if it were money in a bank account that they could draw on if they ever needed it, whether by sale or an equity loan. And they started counting their hypothetical home value in their net worth, which any expert would tell you never to do.

So of course when prices start to come down, with that psychology in play, they now interpret any loss in value as if someone has taken money out of their piggy bank. If someone bought 10 years ago for $400,000 and could sell today for $650,000, the correct and historical way to look at it is that they made a profit of $250,000. But in the twisted logic of those who played the “fantasy” housing market as if they were earning dividends on their hypothetical home value along the way, they look at the $650,000 against the market peak of $900,000 and convince themselves that they are selling for a $250,000 loss.

That’s simply not true and never was. People who sold at the peak or in the run-up often made a tidy profit, but that profit only existed for those who sold then. It had absolutely no relevance to the home values or net worth of those who didn’t. It was never their money, never “earned,” never real. Of course banks, with the complicity aid of the appraisal industry (as well as the mortgage brokers, title cos and other benefitting parties), played on this national psychosis readily, encouraging people to think this way and offering equity loans and lines of credit that fed on the illusion that the home value increases really was “good as cash” money in the bank.

So here we are and some people are having trouble accepting that reality. Of course they had no problem quickly embracing it as the home bubble floated up in defiance of natural market gravity, but that one-way psychology is typical of the species so what can you do. Those who need to sell will and will eventually adapt to the true market reality, whatever it is. Those who don’t need to sell and have their eyes open won’t right now. And those who want but don’t need to sell and did the fantasy math will put their houses up at unrealistic prices and contribute to New Jersey’s 11.7 months glut of stalled inventory, doing token reductions at the begging / behest of their brokers and likely eventually withdrawing from the market, bitter and shocked that people expect them to sell at a “loss” that’s really a substantial profit.

[Guest]

It is my experience in NJ that home assessment firms are mostly referred to the home buyer by some real-estate firm, and are obliged in a way to inflate the appraisal and get more work from these real-estate firms. So indeed they are incented to inflate the housing prices to make more money for the real-estate firms that refer them in the first place, a catch22 for the buyer – So buyer beware.

I have found, if an independent consultant assesses a house “REALISTICALLY” and it happens to be lower then the real-estate firm like Coldwell Banker wanted, it would black ball the agent and not give them any additional business. I personally have experienced this (in Cranbury by Coldwell Banker (CB) myself). An agent gave a "REALISTIC" report on a house for me, was then blackballed by CB from future work in my area of Cranbury. And another assessment from a different agent assessment was way high and the agency kept using him in Cranbury area.

So any new home buyers, please be careful and use your Lawyers assessment firm (instead of your realtors). They will recommend someone that will assess any house much higher then it should be, that has been my person experience here in Cranbury NJ. This is a tip from an educated consumer, use your lawyers firm period.

[Guest]

I am happy that some sellers have decided to keep their prices up. If they are not in a rush to sell, why should they compromise on price? Plus, their prices help hold up the prices of other houses in town.

[Guest]

[Guest]

[Guest]

The funny thing I notice is that when people complain of prices being inflated they are doing so usually because they are looking to buy.

A seller won't complain because they want the money.

An owner won't complain because they aren't moving and if their neighbor's home in a down market sells for 1 million then it does help them. Similarly, if that home sold for 300,000 it hurts them.

A buyer benefits from posting and pushing for lower prices.

Not that homes are over or under priced, all it takes is one buyer. However, typically the first two groups don't care or do have interest in higher selling prices.

[Guest]

[Guest]

Gee. That $1.8 million listing on Petty Road sure makes the other listings on Petty seem like bargains.

Seems like your theories start to break down in situations where there is such a short list of comparable inventory.

Your comments remind me of an agent I interviewed. Had I listened to her, I would have listed my house for 20 percent less than I sold it for.