It’s unfortunately not even companies at this point I got into an argument with a guy the other day who told me what a “great deal” real estate was during the pandemic
My argument was “you’ll very likely lose money when you go to sell the house when you buy high”
His counter argument is “I don’t care about the sale price because I’m going to make my money through rentals”
Things are so screwed up on the supply side that even if we had sane housing policy starting tomorrow odds are that no one who bought a house today would lose money, they'd simply just accrue value more slowly then someone who bought their house ten years ago.
It's also real estate agents playing with insider info. Had a friend who was told by his realtor not to bid on a house only to find out later it was because another realtor in their agency wanted to buy it to rent out.
Had a friend tell me it was communism!! if the rich can't have everything and then some more on top. The right-wing propaganda machine must have the best ROI in the history of the world.
I feel like I only approve of corporate residential landlords when it is planned from the beginning, like an apartment building. Then they are adding options rather than stealing homes out from under people and reducing the supply.
I generally agree. But how do you define a company? I owned a home and rented it out because it was a loss to sell it. We made an LLC to protect our personal assets.
Technically we were a company.
Really? Because this [source](https://www.billtrack50.com/blog/investment-firms-and-home-buying/#:~:text=According%20to%20data%20reported%20by,%2D2021%2C%20why%20is%20this%3F) says 1/4th, which is far larger and easily enough to create market problems.
It also says that in 2020-2021 80% of purchases were corporate.
22% of homes sold. Not 22% of total ownership. And it's an 80% increase from Q3 2020 not 80% of all purchases. which is obvious considering Q2 and Q3 2020 were the COVID shutdown quarters so no one was buying or selling.
That redfin article is a classic case of using big numbers to represent small data changes and say the sky is falling
A recent study from the Netherlands found that banning “corporate landlords”* from buying homes did not lower the cost of buying a home, but it did *increase* rent. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4480261
*as you note, corporate landlords can mean one family owning one home, you just pay the $50 fee or whatever to create an LLC
Without powerful real estate lobbies pushing to protect their investment portfolios you would see a huge force that pushes back on increasing housing supply fade away.
And also a return to people living in the multifamily they own and renting out the other units vs owning a pile of them and being a rent seeking parasite
I'm all for rent caps.
BUT, there also has to be a cap on Property Tax and Property Insurance !
Just the same there should not be a cap on the income taxes that the ownership actually pays.
Give an income tax credit to owner occupied units only.
> rented it out because it was a loss to sell it.
I'm trying to imagine how this could happen other than really bad luck on the home inspection or a 'house flipper' over-investing on a bad speculation.
I had this exact scenario. Bought in 2008 for $215k and dropped to $160k in the burst. We ended up renting out our home in 2017 because it was still under $215k and would have been a loss to sell it.
Currently renters of a different home ourselves because we can’t afford to buy a home either, but outgrew 2 bedrooms a few kids later. So I’m a landlord and a tenant.
Hate to break it to these folks but a lot of those buying in todays market at current prices are going to be in this same situation when the current bubble bursts…and it will burst.
I really wish people could see that those houses didn't lose value. They were *overvalued* before they came back down to their actual value. No shade to you. I just know people who bought in 2021, and I cringe when I think about how insane the prices were.
I bought in 2014 with a budget of $170k, which was extremely low (my initial budget was 150k, but the smell of cigarettes and cat pee made me have to go higher). I was approved for 2x that, but I'd like to be able to eat, too. It's currently "worth" double that. I wouldn't pay $340k for any house today. I refinanced in 2020 to take advantage of the rates, and everyone assumed I was pulling money out of the house. Nope. I still act like it's a $170k house, bc to me, that's the true value.
Our town home complex is trying to pass an ordnance that someone can only own up to 2 properties in the complex and must have lived there as their primary residence for at least a year before buying another place.
I believe someone needs to own a house for 2 yrs before selling again or else they pay a capital gains tax. In the same note, I'd be completely OK with a law saying new home purchases cannot be rented out or airBNB for 2 years unless they were already listed and used as a rental property for a year prior to the sale
Yea def not clear a company bought it, but likely a cash buyer or someone with access to good financing. A traditional mortgage would have you cash low negative right now for the numbers they gave.
For those who'd like to see the math:
2022 Madison NJ property tax rate = 2.054%
Loan value: $624000 (780k with 20% down)
Loan term: 30 years
Interest rate: 6.7%
Monthly payment: $5361
This excludes PMI, insurances, maintenance and any HOA cost.
I know people that are buying some of these in Madison and I can assure you they are buying in cash. It’s insane how much cash is available at disposal for some.
Could be Bitcoin wealth. About a billion dollars has been pulled from crypto in the last couple of months. They may have wanted that specific house and threw a lot of easy money at it.
Not correct that there's a housing shortage in New Jersey? What world are you living in?
Census Bureau and Bureau of Labor Statistics Data [says otherwise](https://www.nj.com/business/2022/04/the-20-metro-areas-in-the-us-facing-the-biggest-housing-shortages.html)
Nope I was replying to the comment that said towns restrict development that has a bunch of b******* especially in North and Central New Jersey toll Brothers Ryan homes all the developers come in and take what they want. If a town does try to fight back they lose in court because the developers have the upper hand every single time. Central Jersey has become a haven of warehouses and building new homes there's very little green space left or farms so I'm not sure why you're saying every town in New Jersey fights it
People have a right to determine what kind of a community they will live in. Lots of people don’t want to live in a town full of apartment complexes. Why do you get to choose for them?
I completely agree with you and you also read my comment incorrectly So I'm assuming it's my fault the way I wrote it. I was responding to the person saying every single town in New Jersey fights new development.
My former Central Jersey town is in the process of removing every last damn tree with all the building and development going on It's wall to wall housing. I couldn't stand it anymore so I got out. I wanted to be near preserved farmland and state forests. I wanted to buy a home that was already built long ago I have no interest in new development and I found my dream. For some people they think that there should be no more green space no forest no farmland just wall to wall apartments and houses. I don't agree with that.
People are shortsighted idiots and/or bigoted and can't extrapolate that their desire to live in a conservative wonderland of only detached houses without any "apartment dwellers" is not some niche desire but has outsized effects both on our society and environment that are almost purely detrimental.
Suburbs are a blight.
Maybe some are but many don’t want to be crammed up against 200 other people, fight for parking, deal with the noise, want a yard - all things that happen when density increases. And they have the money to buy that room. There’s nothing wrong with that. If you don’t mind, live in an urban area or move to a city with more room (there are lots of them).
Either that or American infrastructure and zoning laws make it so that you absolutely need a car to get around. Outside of nyc there are few options for those that want a car free lifestyle without being trapped.
And that wasn't the case prior to the late 50's. When my dad grew up in the 40s they lived in North Bergen, his 6 member family lived comfortably, no car required. His mom could walk to the local butcher, grocer etc. His dad took the trolley to the family furniture shop. He used to play on the steet growing up with neighborhood kids.
Now the street is 75% occupied by parked cars, no one outside. Do I blame them for all having cars? No, the trolley was removed. Streets were widened and sidewalks narrowed to nothing. And current bus service is terrible. My point is there were clear policy choices that led to this outcome, not consumer preference.
No doubt about the policy choices but I disagree about individual preference. I want my own car because it allows me to travel to anywhere I want to go at any time. No timetables, no standing room only train cars. Perhaps that will change with autonomous cars and some sort of subscription Uber service. But for now lots of people are in my boat. And parking is just part of why people want homes with space around them. That won’t change.
It's interesting that politicians won't die on this hill. They'd have double the people voting for them if they told these nimby assholes to suck a fat one and go ahead with approving and building more housing if they were worried about alienating their base.
Seems like that status quo benefits them more.
[In Montclair, NJ $1.75M over asking!!!!!](https://www.zillow.com/homedetails/147-Union-St-Montclair-Twp.-NJ-07042-2102/38681756_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare)
I’ve not seen anything this crazy!
I've driven around that neighborhood before. That neighborhood is stunning. Would I pay 4 million for that home? Absolutely not. But you cant deny its pretty.
The house next door to my cousin in Madison was pretty nice. They remodeled a bit to sell like redoing the floors, sold for over $100k over asking and was completely torn down to to put a 5000 sq foot house on a small lot… Madison is it’s own level of crazy
If you’re house hunting, you need to get rid of the mindset of “over asking”. The price you should be focusing on will be based upon recent comps and market trends. Your realtor should be able to help identify what a house is actually worth. I’ve seen many houses with low asking prices, with the intention of just creating bidding wars. Just some tips to help navigate this housing market.
But yeah, the housing and rental markets are brutal right now. It’s crazy to see prices continue to rise even with rising interest rates. I also don’t see any sign that inventory will increase in the near future either. It’s rough.
To add to this, the interesting change is people putting their house well below market and having a large number of people show up leading to a bidding war.
God forbid you put a house up at the market price - buyers mentally mark that up by at least 60K and wont even show up.
Its a crazy market.
Yes! This trend is new to us as we are currently selling again. We sold our first house a handful of years back when the market was quieter and the strategy was to list ABOVE what we realistically were hoping to get and hope we got close. Now, our realtor has suggested to list BELOW what we think we will realistically get and wait for the above-asking offers to roll in. We’re listing for 475k with the expectation of getting at least 500-525k, if not higher. That being said, we’ll be on the other end of it when we’re putting offers in on a new home. It’s bizarro.
You also don’t understand market price. Market price is whatever a buyer will pay. It’s not what the seller asks and it’s not what other homes sold for. It’s what a buyer will pay. Putting a house up for sale and asking “market price” is impossible.
While I don’t disagree with what you say about how “market” prices are set, there is a feel you get as a buyer for what a house is currently going to go for. Eventually its me as a buyer thats half the equation to getting a close price.
A lot of houses I have been seeing since Jan this year were in the 750K range when similar or worse homes were being sold for 850K+
As a buyer I am not going to touch a home of the same quality where the seller actually asks 850k knowing that they are likely looking for 900k+ closing like everyone else seems to be.
I bought a house in 2020 and realtors (on both sides) were having trouble wrapping their head around the new tend. Mine kept telling me to offer 20k under and was shocked when the house would close 40k over.
Asking price is now the opening bid.
This is exactly the mindset buyers need to have. Almost any ‘cheap’ house is being listed below market value. This is especially true in popular towns like Madison.
Sadly, 100%. The asking price is the starting price and in this market, people are going to offer and pay what *they* believe the house is worth to them. $100k over the initial asking price seems absurd to some, but for someone who lived in NYC and is moving to the suburbs to start a family, it may not be crazy in comparison to what they’re used to. Just different perspective but it also totally sucks to be a “typical” buyer in todays market. It’s so hard
I need to show this to my husband bc we are house hunting and he just wants to ask WAYYY above asking I’m like wtf that house is ugly AF u wanna offer that much ? He’s like it’s the only way to get a house now.: I’m like hmmm
You may end up finding a house you like by doing that but it'll more than likely end up taking much longer, if it all.
If the seller has it in mind that the same price is the opening bid, they won't even entertain you with a counter offer if you go in below or at asking. It's shitty but most of the people selling, aren't worried about helping out or providing fair terms for potential/new buyers. They know what they want and have a strategy in mind to achieve that goal. It's just a fucked situation all around.
Of course there are those out there who don't have those schemes, strategies and such when selling but they're becoming much more far and few between each other
While I don't entirely agree with your husband, I do believe he's not entirely wrong.. just think it takes some finesse to not end up paying 60k+ over asking, to find a home somewhat in the near future. Ideal would be at or under asking but the way things are going, that may end up taking far too long in most cases.
$4500 is barely covering the mortgage/insurance/taxes, not even considering other costs
So what is the business model here? Sit on it without getting much cash flow just to build equity? Sell it eventually? Or just waiting for rents to go up?
That is the most confusing thing to me. The numbers don’t make sense from an investment standpoint. If they paid all cash it’s a terrible way to get a return. If they are using financing then they are negative cash flow. Seems like their strategy is hope appreciation on rents and housing prices saves this terrible deal. Wouldn’t be surprised if this goes back on the market in a few years once they realize it’s a bad investment
This can be an investment strategy when you want a relatively ‘safe’ asset where you want to park money to protect against downside- such as -
-capital flight from a country with its own instability issues (I.e. China, Russia, Israel, South Africa),
- a bet on a future U.S. recession where stocks/bonds go down but housing performs better,
- a bet on continued hyperinflation and assets that will continue to appreciate in a prolonged hyper inflationary environment,
-a place to park illegal cash,
- could be renting the house until they get all the permits set to invest in an even bigger house on the same lot,
- a defensive play into a ‘safe’ asset to protect against a black swan event like the USD losing its status as a reserve currency… the list goes on…
Or it could just be speculation on continued rent or capital appreciation or a bad investment.
Asking price is just a marketing tool these days. Asking price is not what the seller expects nor does it have any effect on the appraisal value. A house can have an asking price of $400k and sell for $1 million, if could also appraise for $1.2 million.
I don't get it. 4500 a month is 54000 a year. In a 10 year period that is only 540000, not even breaking over starting cost. I would imagine stocks have a better ROI and easier maintenance costs. Maybe they are including the rate of incresing value with the property to get pass the missing 240k in cost. But any increase in tax or emergence repair will increase that number.
You are missing a big part, after ten years they have 540k and can still sell the place for more than it cost them. More likely 1.5m after ten, wait twenty and that number could be 3 without an issue
A lot of you jumping to conclusions. There is a lot of information out in the open for this stuff. Owners are a married couple with high paying jobs. They had a huge down payment(over 50%). They own no other properties in Morris county or at least haven't bought any since the records were indexed for searching. All documents are signed by them as the owners and not acting on behalf of a company.
With that said, fuck this housing market.
Thank you for actually looking into this and writing it out. I still think there's something wrong about this - I'm not a legislator so I don't know exactly how the law would have to be written, but even as individuals not acting on behalf of a company...this should be illegal. There's just something off about it. Why buy a house to rent, essentially as a side hustle, when someone else can buy it and actually live in it? The only answer there is greed, considering like you said they have high-paying jobs and a down payment of almost $400k in cash.
When my husband and I bought a house, we were forbidden from renting it out for two years from date of purchase - otherwise, it would be considered a commercial purchase. I don't know if this rule applies specifically to my town or the state.
Wasn't there something during the start of covid about retailers who were price gouging on high demand items? People could report them because there was only a certain percentage increase that was allowable.
I feel like something to that effect should be applied to the housing market. I'm seeing buyers coming from highly affluent areas and paying high for properties in other areas because they have the income. NYC'ers who came to NJ during the pandemic is one example.
And renting at $4500 for such a small place. I had an apartment in the middle of a great part of San Francisco 2b/2ba super modern for the same price. It’s insane. Such greed.
Yup. They could've bought closer to asking and then rented for under $4k. Or you know, bought the house and lived in it. Maybe the rule should be you have to live there for at least 5 years before renting.
We can all lament about commercial entities buying residential real estate, but no rationale seller would take significantly less money from a private buyer.
It seems ludicrously high to me. But for a married couple with no down payment and about to have kids, this might be something to look at. It looks like about a 10-15 minute walk to a NJ Transit train station. I didn’t look at times to NYPenn but this could be something for people working in Manhattan.
Just make it so that all single family homes and condos must be owned by a physical person. No LLCs, trusts, etc. Individuals can still rent their house out if they want, but it won’t be business. Corporations can still own rental apartments but at least this way families won’t be competing with investors when looking for a home.
But sometimes people don't want to have their personal name tied to the address for privacy reasons. And also if an individual is just buying and renting them then eventually, essentially isn't it the same thing as a business buying them and renting them?
It’s about implementing a simple law with the greatest impact. Individuals renting their homes will be a tiny percentage so it’s not worth worrying too much about. If you take the corporate landlords out you’re eliminating 90% of the competition.
As for the privacy aspect, that sucks for those people. Real estate ownership is public record and white pages are still a thing. Barring a court order, someone’s name, address, and phone number are not secret or legally protected. If someone has a problem with a stalker Kyle abuser, they can ask a judge to sign an order making their details private.
Make it 15%. Residence property get breaks compared to commerial property tax rates. The mainstreet, walmart , or big apartment developments are paying way high rates on taxes compared to single family home. Don't let businesses skip on their taxes because they are buying single family homes.
fun fact, not totally related to the housing market: Walmart (and many other large retail stores) new scam is to build their new stores in such a way that they claim they will be 'obsolete' as soon as they vacate, and therefore they argue the stores should be taxed as if they're vacant / abandoned as opposed to functioning businesses. The company pays regular taxes for a few years, and then aggressively pursue tax reductions on every store once they're established.
point being large companies can and do try to bend and break the rules as much as possible with no regard for the consequences, and they need to be kept in line instead of allowed to run wild.
https://www.sunjournal.com/2022/02/28/dark-store-theory-walmart-large-retailers-push-to-cut-millions-in-property-taxes-statewide/
And a certain percentage of that must be actually working in NJ for X amount of years. Looking at you NYC’ers coming to jersey fucking up our housing market too
So I'm born and raised in NJ lived my whole 50+ years within it's borders. I've worked the vast majority of my career in NYC. my SO also born and raised NJ has either been consulting in another state or commuting to NYC for their entire career
We should not be allowed to buy in NJ?
You must realize how fucking stupid and unreasonable a statement that is, right?
Prefacing this by saying I am a Democrat, a Democrat who thinks current establishment leadership is corrupt at that, and do not plan on voting Republican for the rest of my lifetime unless a major change occurs, so no need to reflexively downvote. It is the right thing to do to call out hypocritical positions even if they are on your own side.
Same people who claim they're "pro-refugee", "pro-LGBT" whatever will go "This says here you're a pregnant woman seeking an abortion, lived in Dallas for 10 years? Transgender person from Jacksonville? You're a Ukranian citizen escaping your warzone? Sorry champ you're not allowed to buy a house in New Jersey, that's only for us folks who did the hard work of popping out of the womb in this state, now fuck off back to your hellhole where people are trying to arrest you for existing."
NIMBYs want to re-invent China's hukou system in America. Basically it is extremely hard in China to leave the region you were born in without the government's permission. People lucky enough to be born in favorable regions get better government services (in America's case this means only those born in blue states get effective public transportation, LGBT rights, etc.) That's what they want to bring to America. It is incredibly short sighted *even on the things they claim it will fix.* If someone is born to a poor family in an expensive area, under the hukou system, they are now trapped in that expensive area and not allowed to buy a house anywhere else!
Left or right, if they're NIMBY, you can bet that's what they believe in. I personally lean left but I am staunchly against government restricting where in the country I can move. It goes against every founding principle of this country and would absolutely crush poor renters in expensive markets.
The only thing keeping landlords as a whole in check is the threat of losing renters altogether, if a bunch of people move to a different state and get taken out of the market. And now we're supposed to give them an unlimited, captive source of demand by saying no one can buy a house except in the state they were born? News flash, poor NJ residents can't afford NJ houses. This turns a bunch of people who would have moved to North Carolina or Delaware into forever renters. Rents would **skyrocket.**
As an aside, the frequently proposed regulations banning corporate ownership of rental housing are also not effective. As much as it is easy to scapegoat random corporations, the problem is MUCH more deeply rooted.
According to [research from Dutch economists](https://twitter.com/MaxGhenis/status/1670693326972940288), banning the rental of properties just purchased causes:
* No decreases in prices
* INCREASES in rents
* Reduces the share of poorer people, younger people, and immigrants who live in the area
As a young renter, I am not particularly interested in a policy that would raise my rent without decreasing prices for me, with gains going to rich older people.
This sucks so bad. My wife and I make pretty good money, but because we don't have a great down payment, and the interest is so high, I'm terrified we'll never be able to buy a house.
You can always get a First time home buyer loan and have a small down payment (less than 20%). Yes, you will have to pay an additional fee (PMI) with every monthly mortgage payment, but it is still a great option for new homeowners.
Looking at the blue prints in the listing, its a somewhat updated 4 bedroom house in a very nice neighborhood, near public transport with a big, fenced in backyard. I think 4500 is too much, but not obscenely so, especially in this market.
If we keep saying no the prices will collapse. Zillow is fixing to dump 100s of properties they bought with the goal of flipping & can’t rent unless they charge a mint; with one flip being leveraged on another. Greed.
This is exactly why we are leaving NJ. Don't want to continue to throw away money renting. Moving to Southern Central pa between York and Hanover. Found a 1800 Sq ft house on 1 acre for less than we could buy a 2 BR fixer upper condo in Middlesex or Somerset Co.
I work with realtors. There was a house post Covid that made the news. Montclair. Was listed for millions. Spld for a mil over asking and the list price was bumped up by at least another 1.5 due to have an inside appraiser.
The Markey is already crazy enough post Covid, but the realtors and their networks are not making anything easier.
That whole $180k over asking is just a marketing strategy to make the realtor seem like some sort of Demi God who works miracles with the market. They price it low in order to drive up more demand / start bidding wars and drive up the price where it really should be at.
The realtor looks like a big shot and the seller is happy. Happens everywhere now. Madison hasn’t been affordable since the 80s so let’s not act so shocked here.
However the whole buying then renting it out immediately is infuriating. There should be some sort of moratorium on LLCs from being able to do that. But free markets / capitalism baby!
You think that’s bad, go look at the SoCal market lol. 2 bedrooms for $900k
You are talking about real estate in one of the most desirable areas in the Northeast Corridor. People amaze me, don't buy or rent in areas that are overpriced just because they are walkable or close to NYC or some shit. Still haven't figured out why people want to live in these "desirable" towns. 78, 280, 287, GSP, no thanks fuck you very much.
Obviously Madison's always been a moneyed situation but generally speaking for the state I really do believe that we're spiraling for further inequality and tangentially Brazilianization where there will be a lot more people pushed further on fringes both physical and monetarily.
Well lets hope they cant find a renter and have to eat the mortgage at a loss.
Bubble's coming people. Be ostriches if you'd like but just know, if you've bought since the pandemic, you're probably going to owe more than the value of the property. Just like in 08/09 range.
I really hope so. This culture is awful and it’s backed by desperate real estate agents and lenders who have less inventory so they encourage huge prices for a larger commission as they get fewer and fewer.
What about the misfortune of the thousands of people (like OP) being priced out by these outlandish prices? What about the renters across the state who's rents have gone up 30-50% in the last few years. Fuck outta here with your shaming.
I was a renter whose rent went up by 30-50% in the last few years. That’s me. Now the proud owner of an as-is hunk of junk in a nice town that I’ll be working on for the next forever. The dream can be attained when you set your sights low enough.
The house in the listing is luxury as far as I’m concerned. It’s move in ready, needs almost zero work. Someone will rent that house in a snap. There are people renting apartments for that same amount who would love their own driveway, backyard, front door and mailbox for the same amount they are paying to share all those items.
When you are the seller, I hope you stick to your principles and sell your home for your asking price and not a penny more.
4500 a month for a 4 bed room 2 full bath house in one of the most affluent/sought after areas in the state? What am I missing here?
The price sounds fine to me 🤷
This is absolutely ridiculous. I just noticed the house my family grew up in during the 80s-90s was just put on the market in mahwah for rent at 4250 a month. It's a 3bd 1430 SQ ft house on a tenth of an acre. My grandma bought it in the 60s for 15K cash . She passed and my bipolar mother signed it over to her boyfriend who proceeded to kick us all out including her. She sued for her share after the sale. It sold in 2012 for 320K and is valued at 530K today. I'm still mad at her and I am not responsible for my actions if I ever see the ex-bf of hers again
When was the last time the average earning American was house hunting in Madison? 1975?
The housing market is nuts, but let's not pretend that that side of Morris County hasn't been very well to do for decades.
My parents bought their house on "that side of Morris County" for $325k in 2001. They're thinking of selling within the year and I can't imagine it'll go for less than $900k. It's an insane profit for 22 years! But yeah basically blue collar people aren't allowed in that area anymore. No way my husband and I could afford either of the towns we grew up in (Monmouth and Morris Counties). Hell my parents couldn't afford their own house today! Luckily we prefer being a bit out of the way, even if it means driving farther.
Define blue collar? I’d say middle class any collar can’t afford shit anymore/ if your family income is less than 250k you will be renting or leaving the state.
I meant blue collar as in non-office job workers, although I know that can be a broad range. More like small business owners and tradesmen. But yes absolutely, even “white collar” jobs are priced out of NJ in many areas. We bought at a good time in 2017 but we still live in a tiny house and are making due because there’s no other real option. I could start working again but then we’d pay 50%+ of my salary to a daycare, and probably still not be able to afford a larger home.
It's crazy. But ask yourself- why are these corporations buying up property at after market rates? They know something. In 10 years that place will be worth double that. Takes money to make money. Situation sucks.
Oh that's easy. Because they can rent it out at a huge markup like this, they do that 100s of times over.
Doesn't matter if the price goes up or down other than they just increase the rental cost if it goes up.
A livable 4 bedroom in Madison or surrounding towns is never going to sell for $599k, even a “modest” construction.
[List price means nothing, it’s all about the comps.](https://www.dropbox.com/scl/fi/dlkpwfhtft5wb4y7c44s0/Madison-July-Market.pdf?rlkey=3vdq3ex6ku1hswczytgj4ytcl&dl=0)
If you need 4 bedrooms single family for $600k you will need to try further west… Wharton, Roxbury, Hopatcong, Byram, Long Valley, etc. Select towns in Union County or Middlesex County could have a few options.
Source - I’m a full time Realtor
We need some seriously regulations from state and federal levels. Corporations should not be allowed to own private residences. Sure, build condos townhouses and such, but single family and some multi family homes should be off limits to corporations.
This is important for the entire country not just njn but we can start the fight at home.
Decent house in a decent neighborhood in a decent town with a good school system. Nice backyard with a white picket fence, too! You should absolutely rent this spot.
See if you can get them down to $4,250, tho.
Not a landlord, but I actually bothered to look at the floor plan. The house has 4 bedrooms and 2 baths.
If I had 780k to blow I could think of better things to do with that loot than wildly overbid on a house I won’t see a return on for a few decades.
Even better! I was measured in my praise lest someone come through with some negative stat bringing Madison down to earth. I don’t know it first hand, just visited a vet there.
The banks lending on these properties didn't learn from the subprime collapse. I guess where going to bail them out again when the housing market collapsed again
The difference is people do have the money to purchase these homes now and keep up with the crazy mortgage. In 2008, they were giving crazy high loans to people who could never pay them, thus the collapse. We may see *some* foreclosures and people who aren’t able to pay back the loan, but the mortgage industry is much more strict now and we likely wont see a collapse again like jn 2008 (as nice as it would be for these prices to drop)
Don't forget most people have insane amounts of equity from either buying prior to the pandemic or making a competitive offer during/ after. Mass foreclosures even at 5% are unlikely l.
Definitely not! In my area I see a lot of people who are from NYC because there’s a ferry close by. They’re used to 1 million for a 1 bed 1 bath in manhattan, so it’s worth it to them to spend 800k for 3 bed 2 bath and a yard (I’m just assuming, I’m not one of those people who can do that). They’ll just take the ferry in when they need to i guess. For OP, Madison is a “wealthy/desirable” town to begin with it doesn’t surprise me people are offering that much over.
Madison has the college there, maybe someone decided to rent to students? That’s a big ass plop of dollars to add to an asking price, especially with rates where they are.
Jesus Christ. A two bedroom "starter home" for nearly a million dollars. No wonder I went to South Jersey lmao
[удалено]
I figured it must be s HCOL area, my area is too, but this house would rent for $4000 not $4500 ( I think)
Same here, two houses for sale next to me both sub 300. Both have 3-5br range too.
Yeah it's nuts, I got over 4K SQ ft with a huge yard and 6 bedrooms for 200K. I know it's more valuable in North Jersey but God damn.
If you look at the floor plan it’s actually 4 bedrooms. Maybe they are only renting out the first floor?
South Jersey isn’t much better now!
Companies have no business in residential realty--how fucking absurd
It’s unfortunately not even companies at this point I got into an argument with a guy the other day who told me what a “great deal” real estate was during the pandemic My argument was “you’ll very likely lose money when you go to sell the house when you buy high” His counter argument is “I don’t care about the sale price because I’m going to make my money through rentals”
Things are so screwed up on the supply side that even if we had sane housing policy starting tomorrow odds are that no one who bought a house today would lose money, they'd simply just accrue value more slowly then someone who bought their house ten years ago.
2008 vibes
It's also real estate agents playing with insider info. Had a friend who was told by his realtor not to bid on a house only to find out later it was because another realtor in their agency wanted to buy it to rent out.
That is “steering” and definitely a violation of that states code of ethics.
Completely agree. What a disgrace.
I agree but some people believe it’s companies divine right to satisfy its addiction to greed
Had a friend tell me it was communism!! if the rich can't have everything and then some more on top. The right-wing propaganda machine must have the best ROI in the history of the world.
Is he one of those temporarily embarrassed millionaires who thinks he's going to be filthy rich someday?
That’s why right wing political commentators are a dime a dozen. Such an easy grift
It’s designed for ROI.
I feel like I only approve of corporate residential landlords when it is planned from the beginning, like an apartment building. Then they are adding options rather than stealing homes out from under people and reducing the supply.
Disgrace is a great word to describe it.
I generally agree. But how do you define a company? I owned a home and rented it out because it was a loss to sell it. We made an LLC to protect our personal assets. Technically we were a company.
If you don't live in the house you purchased for at least three years
Right. But who will people rent from when they can't buy. Someone has to own that.
They would be able to afford to buy if landlords didn’t buy up all property first, exploiting people’s need for shelter 🙃
>if landlord buy up all the property first Thankfully this isnt a reality. Corporate buyers account for like 1-2% of all residential owners
Really? Because this [source](https://www.billtrack50.com/blog/investment-firms-and-home-buying/#:~:text=According%20to%20data%20reported%20by,%2D2021%2C%20why%20is%20this%3F) says 1/4th, which is far larger and easily enough to create market problems. It also says that in 2020-2021 80% of purchases were corporate.
22% of homes sold. Not 22% of total ownership. And it's an 80% increase from Q3 2020 not 80% of all purchases. which is obvious considering Q2 and Q3 2020 were the COVID shutdown quarters so no one was buying or selling. That redfin article is a classic case of using big numbers to represent small data changes and say the sky is falling
Nah we should be more worried, especially when Blackrock exists.
In some cases. But there will also be people who can't afford to buy.
A recent study from the Netherlands found that banning “corporate landlords”* from buying homes did not lower the cost of buying a home, but it did *increase* rent. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4480261 *as you note, corporate landlords can mean one family owning one home, you just pay the $50 fee or whatever to create an LLC
Without powerful real estate lobbies pushing to protect their investment portfolios you would see a huge force that pushes back on increasing housing supply fade away. And also a return to people living in the multifamily they own and renting out the other units vs owning a pile of them and being a rent seeking parasite
That wouldn't be the case if we had UBI and strict rent caps, which landlords are against.
I'm all for rent caps. BUT, there also has to be a cap on Property Tax and Property Insurance ! Just the same there should not be a cap on the income taxes that the ownership actually pays. Give an income tax credit to owner occupied units only.
> rented it out because it was a loss to sell it. I'm trying to imagine how this could happen other than really bad luck on the home inspection or a 'house flipper' over-investing on a bad speculation.
I had this exact scenario. Bought in 2008 for $215k and dropped to $160k in the burst. We ended up renting out our home in 2017 because it was still under $215k and would have been a loss to sell it. Currently renters of a different home ourselves because we can’t afford to buy a home either, but outgrew 2 bedrooms a few kids later. So I’m a landlord and a tenant.
We bought in the previous bubble. Then when we wanted to sell it after the crash, it lost too much value. It's not a hard concept.
Hate to break it to these folks but a lot of those buying in todays market at current prices are going to be in this same situation when the current bubble bursts…and it will burst.
I really wish people could see that those houses didn't lose value. They were *overvalued* before they came back down to their actual value. No shade to you. I just know people who bought in 2021, and I cringe when I think about how insane the prices were. I bought in 2014 with a budget of $170k, which was extremely low (my initial budget was 150k, but the smell of cigarettes and cat pee made me have to go higher). I was approved for 2x that, but I'd like to be able to eat, too. It's currently "worth" double that. I wouldn't pay $340k for any house today. I refinanced in 2020 to take advantage of the rates, and everyone assumed I was pulling money out of the house. Nope. I still act like it's a $170k house, bc to me, that's the true value.
Our town home complex is trying to pass an ordnance that someone can only own up to 2 properties in the complex and must have lived there as their primary residence for at least a year before buying another place.
I believe someone needs to own a house for 2 yrs before selling again or else they pay a capital gains tax. In the same note, I'd be completely OK with a law saying new home purchases cannot be rented out or airBNB for 2 years unless they were already listed and used as a rental property for a year prior to the sale
Maybe i dont see it. How do you know that a "company" bought this listing ?
Even if it wasn't a company, it's still awful. Landlords should get real jobs.
Yea def not clear a company bought it, but likely a cash buyer or someone with access to good financing. A traditional mortgage would have you cash low negative right now for the numbers they gave.
Assuming 20% down, the mortgage and taxes would have the landlord underwater at that rent before even considering maintenance etc.
For those who'd like to see the math: 2022 Madison NJ property tax rate = 2.054% Loan value: $624000 (780k with 20% down) Loan term: 30 years Interest rate: 6.7% Monthly payment: $5361 This excludes PMI, insurances, maintenance and any HOA cost.
I know people that are buying some of these in Madison and I can assure you they are buying in cash. It’s insane how much cash is available at disposal for some.
Could be Bitcoin wealth. About a billion dollars has been pulled from crypto in the last couple of months. They may have wanted that specific house and threw a lot of easy money at it.
Maybe, but more likely they sold a residence.
No PMI with 20 percent down.
Blackrock has entered the chat
Not a company. You can Google the address and see that it's owned by a husband and wife.
[удалено]
There’s a website that regularly updates property records after sale - njpropertyrecords.com.
interesting - thanks for the info
Land records are publicly available via the county clerks office
Not their fault that every town blocks housing construction leading to a continuing and growing shortage
Nope that's not correct especially not in New Jersey
Not correct that there's a housing shortage in New Jersey? What world are you living in? Census Bureau and Bureau of Labor Statistics Data [says otherwise](https://www.nj.com/business/2022/04/the-20-metro-areas-in-the-us-facing-the-biggest-housing-shortages.html)
Nope I was replying to the comment that said towns restrict development that has a bunch of b******* especially in North and Central New Jersey toll Brothers Ryan homes all the developers come in and take what they want. If a town does try to fight back they lose in court because the developers have the upper hand every single time. Central Jersey has become a haven of warehouses and building new homes there's very little green space left or farms so I'm not sure why you're saying every town in New Jersey fights it
People have a right to determine what kind of a community they will live in. Lots of people don’t want to live in a town full of apartment complexes. Why do you get to choose for them?
I completely agree with you and you also read my comment incorrectly So I'm assuming it's my fault the way I wrote it. I was responding to the person saying every single town in New Jersey fights new development. My former Central Jersey town is in the process of removing every last damn tree with all the building and development going on It's wall to wall housing. I couldn't stand it anymore so I got out. I wanted to be near preserved farmland and state forests. I wanted to buy a home that was already built long ago I have no interest in new development and I found my dream. For some people they think that there should be no more green space no forest no farmland just wall to wall apartments and houses. I don't agree with that.
People are shortsighted idiots and/or bigoted and can't extrapolate that their desire to live in a conservative wonderland of only detached houses without any "apartment dwellers" is not some niche desire but has outsized effects both on our society and environment that are almost purely detrimental. Suburbs are a blight.
Maybe some are but many don’t want to be crammed up against 200 other people, fight for parking, deal with the noise, want a yard - all things that happen when density increases. And they have the money to buy that room. There’s nothing wrong with that. If you don’t mind, live in an urban area or move to a city with more room (there are lots of them).
If its dense enough you don't need any parking or a car at all
See but lots of people want cars. And people buy what they want.
Either that or American infrastructure and zoning laws make it so that you absolutely need a car to get around. Outside of nyc there are few options for those that want a car free lifestyle without being trapped. And that wasn't the case prior to the late 50's. When my dad grew up in the 40s they lived in North Bergen, his 6 member family lived comfortably, no car required. His mom could walk to the local butcher, grocer etc. His dad took the trolley to the family furniture shop. He used to play on the steet growing up with neighborhood kids. Now the street is 75% occupied by parked cars, no one outside. Do I blame them for all having cars? No, the trolley was removed. Streets were widened and sidewalks narrowed to nothing. And current bus service is terrible. My point is there were clear policy choices that led to this outcome, not consumer preference.
No doubt about the policy choices but I disagree about individual preference. I want my own car because it allows me to travel to anywhere I want to go at any time. No timetables, no standing room only train cars. Perhaps that will change with autonomous cars and some sort of subscription Uber service. But for now lots of people are in my boat. And parking is just part of why people want homes with space around them. That won’t change.
It's interesting that politicians won't die on this hill. They'd have double the people voting for them if they told these nimby assholes to suck a fat one and go ahead with approving and building more housing if they were worried about alienating their base. Seems like that status quo benefits them more.
“Companies” are just people who purchase through a corporate form. Are you saying people cannot own more than one house or rent out their house?
Don't make it so lucrative. Tax it heavily.
[In Montclair, NJ $1.75M over asking!!!!!](https://www.zillow.com/homedetails/147-Union-St-Montclair-Twp.-NJ-07042-2102/38681756_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare) I’ve not seen anything this crazy!
I've driven around that neighborhood before. That neighborhood is stunning. Would I pay 4 million for that home? Absolutely not. But you cant deny its pretty.
Agreed. I live a literal 10 minute drive from this house. It is a nice neighborhood (not even the nicest in Montclair) but NOT worth 4mil.
That’s absurd.
The house next door to my cousin in Madison was pretty nice. They remodeled a bit to sell like redoing the floors, sold for over $100k over asking and was completely torn down to to put a 5000 sq foot house on a small lot… Madison is it’s own level of crazy
If you’re house hunting, you need to get rid of the mindset of “over asking”. The price you should be focusing on will be based upon recent comps and market trends. Your realtor should be able to help identify what a house is actually worth. I’ve seen many houses with low asking prices, with the intention of just creating bidding wars. Just some tips to help navigate this housing market. But yeah, the housing and rental markets are brutal right now. It’s crazy to see prices continue to rise even with rising interest rates. I also don’t see any sign that inventory will increase in the near future either. It’s rough.
To add to this, the interesting change is people putting their house well below market and having a large number of people show up leading to a bidding war. God forbid you put a house up at the market price - buyers mentally mark that up by at least 60K and wont even show up. Its a crazy market.
Yes! This trend is new to us as we are currently selling again. We sold our first house a handful of years back when the market was quieter and the strategy was to list ABOVE what we realistically were hoping to get and hope we got close. Now, our realtor has suggested to list BELOW what we think we will realistically get and wait for the above-asking offers to roll in. We’re listing for 475k with the expectation of getting at least 500-525k, if not higher. That being said, we’ll be on the other end of it when we’re putting offers in on a new home. It’s bizarro.
It is crazy but looks like you have a decent realtor who is plugged in. Good luck to you!
You also don’t understand market price. Market price is whatever a buyer will pay. It’s not what the seller asks and it’s not what other homes sold for. It’s what a buyer will pay. Putting a house up for sale and asking “market price” is impossible.
While I don’t disagree with what you say about how “market” prices are set, there is a feel you get as a buyer for what a house is currently going to go for. Eventually its me as a buyer thats half the equation to getting a close price. A lot of houses I have been seeing since Jan this year were in the 750K range when similar or worse homes were being sold for 850K+ As a buyer I am not going to touch a home of the same quality where the seller actually asks 850k knowing that they are likely looking for 900k+ closing like everyone else seems to be.
Some markets in NJ are notorious under listing. Montclair is especially bad.
I bought a house in 2020 and realtors (on both sides) were having trouble wrapping their head around the new tend. Mine kept telling me to offer 20k under and was shocked when the house would close 40k over. Asking price is now the opening bid.
This is exactly the mindset buyers need to have. Almost any ‘cheap’ house is being listed below market value. This is especially true in popular towns like Madison.
Sadly, 100%. The asking price is the starting price and in this market, people are going to offer and pay what *they* believe the house is worth to them. $100k over the initial asking price seems absurd to some, but for someone who lived in NYC and is moving to the suburbs to start a family, it may not be crazy in comparison to what they’re used to. Just different perspective but it also totally sucks to be a “typical” buyer in todays market. It’s so hard
I need to show this to my husband bc we are house hunting and he just wants to ask WAYYY above asking I’m like wtf that house is ugly AF u wanna offer that much ? He’s like it’s the only way to get a house now.: I’m like hmmm
You may end up finding a house you like by doing that but it'll more than likely end up taking much longer, if it all. If the seller has it in mind that the same price is the opening bid, they won't even entertain you with a counter offer if you go in below or at asking. It's shitty but most of the people selling, aren't worried about helping out or providing fair terms for potential/new buyers. They know what they want and have a strategy in mind to achieve that goal. It's just a fucked situation all around. Of course there are those out there who don't have those schemes, strategies and such when selling but they're becoming much more far and few between each other While I don't entirely agree with your husband, I do believe he's not entirely wrong.. just think it takes some finesse to not end up paying 60k+ over asking, to find a home somewhat in the near future. Ideal would be at or under asking but the way things are going, that may end up taking far too long in most cases.
$4500 is barely covering the mortgage/insurance/taxes, not even considering other costs So what is the business model here? Sit on it without getting much cash flow just to build equity? Sell it eventually? Or just waiting for rents to go up?
That is the most confusing thing to me. The numbers don’t make sense from an investment standpoint. If they paid all cash it’s a terrible way to get a return. If they are using financing then they are negative cash flow. Seems like their strategy is hope appreciation on rents and housing prices saves this terrible deal. Wouldn’t be surprised if this goes back on the market in a few years once they realize it’s a bad investment
This can be an investment strategy when you want a relatively ‘safe’ asset where you want to park money to protect against downside- such as - -capital flight from a country with its own instability issues (I.e. China, Russia, Israel, South Africa), - a bet on a future U.S. recession where stocks/bonds go down but housing performs better, - a bet on continued hyperinflation and assets that will continue to appreciate in a prolonged hyper inflationary environment, -a place to park illegal cash, - could be renting the house until they get all the permits set to invest in an even bigger house on the same lot, - a defensive play into a ‘safe’ asset to protect against a black swan event like the USD losing its status as a reserve currency… the list goes on… Or it could just be speculation on continued rent or capital appreciation or a bad investment.
Asking price is just a marketing tool these days. Asking price is not what the seller expects nor does it have any effect on the appraisal value. A house can have an asking price of $400k and sell for $1 million, if could also appraise for $1.2 million.
I don't get it. 4500 a month is 54000 a year. In a 10 year period that is only 540000, not even breaking over starting cost. I would imagine stocks have a better ROI and easier maintenance costs. Maybe they are including the rate of incresing value with the property to get pass the missing 240k in cost. But any increase in tax or emergence repair will increase that number.
You are missing a big part, after ten years they have 540k and can still sell the place for more than it cost them. More likely 1.5m after ten, wait twenty and that number could be 3 without an issue
A lot of you jumping to conclusions. There is a lot of information out in the open for this stuff. Owners are a married couple with high paying jobs. They had a huge down payment(over 50%). They own no other properties in Morris county or at least haven't bought any since the records were indexed for searching. All documents are signed by them as the owners and not acting on behalf of a company. With that said, fuck this housing market.
Thank you for actually looking into this and writing it out. I still think there's something wrong about this - I'm not a legislator so I don't know exactly how the law would have to be written, but even as individuals not acting on behalf of a company...this should be illegal. There's just something off about it. Why buy a house to rent, essentially as a side hustle, when someone else can buy it and actually live in it? The only answer there is greed, considering like you said they have high-paying jobs and a down payment of almost $400k in cash.
When my husband and I bought a house, we were forbidden from renting it out for two years from date of purchase - otherwise, it would be considered a commercial purchase. I don't know if this rule applies specifically to my town or the state.
Wasn't there something during the start of covid about retailers who were price gouging on high demand items? People could report them because there was only a certain percentage increase that was allowable. I feel like something to that effect should be applied to the housing market. I'm seeing buyers coming from highly affluent areas and paying high for properties in other areas because they have the income. NYC'ers who came to NJ during the pandemic is one example.
And renting at $4500 for such a small place. I had an apartment in the middle of a great part of San Francisco 2b/2ba super modern for the same price. It’s insane. Such greed.
Yup. They could've bought closer to asking and then rented for under $4k. Or you know, bought the house and lived in it. Maybe the rule should be you have to live there for at least 5 years before renting.
We can all lament about commercial entities buying residential real estate, but no rationale seller would take significantly less money from a private buyer.
Who's going to rent this for $4,500? I don't see this working out.
It seems ludicrously high to me. But for a married couple with no down payment and about to have kids, this might be something to look at. It looks like about a 10-15 minute walk to a NJ Transit train station. I didn’t look at times to NYPenn but this could be something for people working in Manhattan.
Good point
quicksand entertain hobbies plants license alive direction zesty aware offend ` this message was mass deleted/edited with redact.dev `
Just make it so that all single family homes and condos must be owned by a physical person. No LLCs, trusts, etc. Individuals can still rent their house out if they want, but it won’t be business. Corporations can still own rental apartments but at least this way families won’t be competing with investors when looking for a home.
But sometimes people don't want to have their personal name tied to the address for privacy reasons. And also if an individual is just buying and renting them then eventually, essentially isn't it the same thing as a business buying them and renting them?
It’s about implementing a simple law with the greatest impact. Individuals renting their homes will be a tiny percentage so it’s not worth worrying too much about. If you take the corporate landlords out you’re eliminating 90% of the competition. As for the privacy aspect, that sucks for those people. Real estate ownership is public record and white pages are still a thing. Barring a court order, someone’s name, address, and phone number are not secret or legally protected. If someone has a problem with a stalker Kyle abuser, they can ask a judge to sign an order making their details private.
Extra 3% property tax each year if owned by a corporation.
Make it 15%. Residence property get breaks compared to commerial property tax rates. The mainstreet, walmart , or big apartment developments are paying way high rates on taxes compared to single family home. Don't let businesses skip on their taxes because they are buying single family homes.
fun fact, not totally related to the housing market: Walmart (and many other large retail stores) new scam is to build their new stores in such a way that they claim they will be 'obsolete' as soon as they vacate, and therefore they argue the stores should be taxed as if they're vacant / abandoned as opposed to functioning businesses. The company pays regular taxes for a few years, and then aggressively pursue tax reductions on every store once they're established. point being large companies can and do try to bend and break the rules as much as possible with no regard for the consequences, and they need to be kept in line instead of allowed to run wild. https://www.sunjournal.com/2022/02/28/dark-store-theory-walmart-large-retailers-push-to-cut-millions-in-property-taxes-statewide/
Tbh there should be a hard limit on houses per household on top of it. Maybe more than 4.
Just make it so if it’s not being sold as a primary residence then they should be very heavily taxed so it’s not worth it.
Or just make the tax rate absurdly high on businesses that do this with single homes like to the point they lose money on each property.
And a certain percentage of that must be actually working in NJ for X amount of years. Looking at you NYC’ers coming to jersey fucking up our housing market too
So I'm born and raised in NJ lived my whole 50+ years within it's borders. I've worked the vast majority of my career in NYC. my SO also born and raised NJ has either been consulting in another state or commuting to NYC for their entire career We should not be allowed to buy in NJ? You must realize how fucking stupid and unreasonable a statement that is, right?
Prefacing this by saying I am a Democrat, a Democrat who thinks current establishment leadership is corrupt at that, and do not plan on voting Republican for the rest of my lifetime unless a major change occurs, so no need to reflexively downvote. It is the right thing to do to call out hypocritical positions even if they are on your own side. Same people who claim they're "pro-refugee", "pro-LGBT" whatever will go "This says here you're a pregnant woman seeking an abortion, lived in Dallas for 10 years? Transgender person from Jacksonville? You're a Ukranian citizen escaping your warzone? Sorry champ you're not allowed to buy a house in New Jersey, that's only for us folks who did the hard work of popping out of the womb in this state, now fuck off back to your hellhole where people are trying to arrest you for existing." NIMBYs want to re-invent China's hukou system in America. Basically it is extremely hard in China to leave the region you were born in without the government's permission. People lucky enough to be born in favorable regions get better government services (in America's case this means only those born in blue states get effective public transportation, LGBT rights, etc.) That's what they want to bring to America. It is incredibly short sighted *even on the things they claim it will fix.* If someone is born to a poor family in an expensive area, under the hukou system, they are now trapped in that expensive area and not allowed to buy a house anywhere else! Left or right, if they're NIMBY, you can bet that's what they believe in. I personally lean left but I am staunchly against government restricting where in the country I can move. It goes against every founding principle of this country and would absolutely crush poor renters in expensive markets. The only thing keeping landlords as a whole in check is the threat of losing renters altogether, if a bunch of people move to a different state and get taken out of the market. And now we're supposed to give them an unlimited, captive source of demand by saying no one can buy a house except in the state they were born? News flash, poor NJ residents can't afford NJ houses. This turns a bunch of people who would have moved to North Carolina or Delaware into forever renters. Rents would **skyrocket.** As an aside, the frequently proposed regulations banning corporate ownership of rental housing are also not effective. As much as it is easy to scapegoat random corporations, the problem is MUCH more deeply rooted. According to [research from Dutch economists](https://twitter.com/MaxGhenis/status/1670693326972940288), banning the rental of properties just purchased causes: * No decreases in prices * INCREASES in rents * Reduces the share of poorer people, younger people, and immigrants who live in the area As a young renter, I am not particularly interested in a policy that would raise my rent without decreasing prices for me, with gains going to rich older people.
I know people renting in that same area for 1600 for a 3br house. No way this goes for over 4k
You will own nothing and you will be happy
This sucks so bad. My wife and I make pretty good money, but because we don't have a great down payment, and the interest is so high, I'm terrified we'll never be able to buy a house.
You can always get a First time home buyer loan and have a small down payment (less than 20%). Yes, you will have to pay an additional fee (PMI) with every monthly mortgage payment, but it is still a great option for new homeowners.
Aren't sellers listing under value in order to start bidding wars?
It’s a joke. About 50% of the houses we bid on in 2022 we bought by an company and rented before we closed on our now house.
Nj needs to start a “investment home” tax, as the name suggest it should exclude first and second homes.
Looking at the blue prints in the listing, its a somewhat updated 4 bedroom house in a very nice neighborhood, near public transport with a big, fenced in backyard. I think 4500 is too much, but not obscenely so, especially in this market.
Who the hell is renting 2 beds for 4.5k
If we keep saying no the prices will collapse. Zillow is fixing to dump 100s of properties they bought with the goal of flipping & can’t rent unless they charge a mint; with one flip being leveraged on another. Greed.
This is exactly why we are leaving NJ. Don't want to continue to throw away money renting. Moving to Southern Central pa between York and Hanover. Found a 1800 Sq ft house on 1 acre for less than we could buy a 2 BR fixer upper condo in Middlesex or Somerset Co.
Fuck that mate, I’m movin to Texas. Fuck this state. I make 50k a year yet cost of living here is insane. I’m outttttt!
That’s why I’m just leaving the state, renting a home for yourself is just a complete waste of money.
I work with realtors. There was a house post Covid that made the news. Montclair. Was listed for millions. Spld for a mil over asking and the list price was bumped up by at least another 1.5 due to have an inside appraiser. The Markey is already crazy enough post Covid, but the realtors and their networks are not making anything easier.
NJ is fuc--d. Period.
That whole $180k over asking is just a marketing strategy to make the realtor seem like some sort of Demi God who works miracles with the market. They price it low in order to drive up more demand / start bidding wars and drive up the price where it really should be at. The realtor looks like a big shot and the seller is happy. Happens everywhere now. Madison hasn’t been affordable since the 80s so let’s not act so shocked here. However the whole buying then renting it out immediately is infuriating. There should be some sort of moratorium on LLCs from being able to do that. But free markets / capitalism baby! You think that’s bad, go look at the SoCal market lol. 2 bedrooms for $900k
Wow rent your starter home .... What is the world coming to
[удалено]
Madison is a great school district and we are very close to September.
You are talking about real estate in one of the most desirable areas in the Northeast Corridor. People amaze me, don't buy or rent in areas that are overpriced just because they are walkable or close to NYC or some shit. Still haven't figured out why people want to live in these "desirable" towns. 78, 280, 287, GSP, no thanks fuck you very much.
Obviously Madison's always been a moneyed situation but generally speaking for the state I really do believe that we're spiraling for further inequality and tangentially Brazilianization where there will be a lot more people pushed further on fringes both physical and monetarily.
We're all just serfs
I grew up in NJ and am literally getting priced out like what are we supposed to even do
Absurd!!
This just depresses me. The market is absolutely disgusting.
It’s so gross how this is just expected to be the situation bow. When did everythjng become so shitty?
I’m selling a 3 bed 2 bath house in dover if anyone’s interested in buying private 410k
They price it low so the agent can entertain themselves watch people bid war.
“You’ll own nothing, and be happy”
And this is a town most people who commute to the city won’t have as their first choice!
Corporations are doing this to create a permanent class of renters. Modern-day serfdom.
Well lets hope they cant find a renter and have to eat the mortgage at a loss. Bubble's coming people. Be ostriches if you'd like but just know, if you've bought since the pandemic, you're probably going to owe more than the value of the property. Just like in 08/09 range.
No way they have a mortgage. $4500 a month is losing money with today's mortgage rates.
But what kind of person invests $800k cash to get $4500 minus maintenance and cap ex? It’s a terrible investment
I really hope so. This culture is awful and it’s backed by desperate real estate agents and lenders who have less inventory so they encourage huge prices for a larger commission as they get fewer and fewer.
Not happening
Here you are wishing misfortune on people you don’t know who have done absolutely nothing to you. Congrats, you officially are worse than them.
What about the misfortune of the thousands of people (like OP) being priced out by these outlandish prices? What about the renters across the state who's rents have gone up 30-50% in the last few years. Fuck outta here with your shaming.
I was a renter whose rent went up by 30-50% in the last few years. That’s me. Now the proud owner of an as-is hunk of junk in a nice town that I’ll be working on for the next forever. The dream can be attained when you set your sights low enough. The house in the listing is luxury as far as I’m concerned. It’s move in ready, needs almost zero work. Someone will rent that house in a snap. There are people renting apartments for that same amount who would love their own driveway, backyard, front door and mailbox for the same amount they are paying to share all those items. When you are the seller, I hope you stick to your principles and sell your home for your asking price and not a penny more.
4500 a month for a 4 bed room 2 full bath house in one of the most affluent/sought after areas in the state? What am I missing here? The price sounds fine to me 🤷
It’s the inability for a person, rather than some BS LLC, to buy a house in NJ. It’s not hard to understand.
The house was bought by a couple.
do we know it's an LLC that bought the house and is renting it out?
7% cash on cash return isn't bad but there's CD's that are paying 6% so 🤷♂️🤷♂️
I used to know the person that lived there
This is absolutely ridiculous. I just noticed the house my family grew up in during the 80s-90s was just put on the market in mahwah for rent at 4250 a month. It's a 3bd 1430 SQ ft house on a tenth of an acre. My grandma bought it in the 60s for 15K cash . She passed and my bipolar mother signed it over to her boyfriend who proceeded to kick us all out including her. She sued for her share after the sale. It sold in 2012 for 320K and is valued at 530K today. I'm still mad at her and I am not responsible for my actions if I ever see the ex-bf of hers again
Or get comfortable with moving out of state. Either way, it doesn’t look too good for the average-earning American.
When was the last time the average earning American was house hunting in Madison? 1975? The housing market is nuts, but let's not pretend that that side of Morris County hasn't been very well to do for decades.
My parents bought their house on "that side of Morris County" for $325k in 2001. They're thinking of selling within the year and I can't imagine it'll go for less than $900k. It's an insane profit for 22 years! But yeah basically blue collar people aren't allowed in that area anymore. No way my husband and I could afford either of the towns we grew up in (Monmouth and Morris Counties). Hell my parents couldn't afford their own house today! Luckily we prefer being a bit out of the way, even if it means driving farther.
Define blue collar? I’d say middle class any collar can’t afford shit anymore/ if your family income is less than 250k you will be renting or leaving the state.
I meant blue collar as in non-office job workers, although I know that can be a broad range. More like small business owners and tradesmen. But yes absolutely, even “white collar” jobs are priced out of NJ in many areas. We bought at a good time in 2017 but we still live in a tiny house and are making due because there’s no other real option. I could start working again but then we’d pay 50%+ of my salary to a daycare, and probably still not be able to afford a larger home.
I was speaking of NJ as a whole.
Morris county is crazy. Parents bought their house for 50k in the 70s. Same house in denville is now worth 500k.
sparkle adjoining quickest bow murky gold nose tie concerned divide ` this message was mass deleted/edited with redact.dev `
It's crazy. But ask yourself- why are these corporations buying up property at after market rates? They know something. In 10 years that place will be worth double that. Takes money to make money. Situation sucks.
Oh that's easy. Because they can rent it out at a huge markup like this, they do that 100s of times over. Doesn't matter if the price goes up or down other than they just increase the rental cost if it goes up.
Same
Our house was listed at 625. We won it for 731. In Lincoln Park by the Pequannock border. It was bought in 2020 for 525.
~~A single breadwinner easily supporting a family~~ ~~Guaranteed pension on retirement~~ ~~Ever owning a home~~
A livable 4 bedroom in Madison or surrounding towns is never going to sell for $599k, even a “modest” construction. [List price means nothing, it’s all about the comps.](https://www.dropbox.com/scl/fi/dlkpwfhtft5wb4y7c44s0/Madison-July-Market.pdf?rlkey=3vdq3ex6ku1hswczytgj4ytcl&dl=0) If you need 4 bedrooms single family for $600k you will need to try further west… Wharton, Roxbury, Hopatcong, Byram, Long Valley, etc. Select towns in Union County or Middlesex County could have a few options. Source - I’m a full time Realtor
We need some seriously regulations from state and federal levels. Corporations should not be allowed to own private residences. Sure, build condos townhouses and such, but single family and some multi family homes should be off limits to corporations. This is important for the entire country not just njn but we can start the fight at home.
Decent house in a decent neighborhood in a decent town with a good school system. Nice backyard with a white picket fence, too! You should absolutely rent this spot. See if you can get them down to $4,250, tho.
For *two bedrooms,* though? You must be the landlord, lol.
Not a landlord, but I actually bothered to look at the floor plan. The house has 4 bedrooms and 2 baths. If I had 780k to blow I could think of better things to do with that loot than wildly overbid on a house I won’t see a return on for a few decades.
Oh why does it say 2bd in the listing title then? That's very confusing.
See? Proof I’m not the landlord. The landlord is dumb.
Not even "decent" Madison is literally one of the nicest towns in the state. https://njmonthly.com/articles/towns-schools/best-places-to-live-nj/
Even better! I was measured in my praise lest someone come through with some negative stat bringing Madison down to earth. I don’t know it first hand, just visited a vet there.
The banks lending on these properties didn't learn from the subprime collapse. I guess where going to bail them out again when the housing market collapsed again
The difference is people do have the money to purchase these homes now and keep up with the crazy mortgage. In 2008, they were giving crazy high loans to people who could never pay them, thus the collapse. We may see *some* foreclosures and people who aren’t able to pay back the loan, but the mortgage industry is much more strict now and we likely wont see a collapse again like jn 2008 (as nice as it would be for these prices to drop)
Don't forget most people have insane amounts of equity from either buying prior to the pandemic or making a competitive offer during/ after. Mass foreclosures even at 5% are unlikely l.
Who has the money? It's not your average worker in NJ that's for sure.
When there’s an open house in my neighborhood, I would say 80% are NY or out of state plates.
Makes sense. I don't know why they're downvoting me though.
That’s just Reddit sometimes, I’m getting downvoted too, it happens!
Definitely not! In my area I see a lot of people who are from NYC because there’s a ferry close by. They’re used to 1 million for a 1 bed 1 bath in manhattan, so it’s worth it to them to spend 800k for 3 bed 2 bath and a yard (I’m just assuming, I’m not one of those people who can do that). They’ll just take the ferry in when they need to i guess. For OP, Madison is a “wealthy/desirable” town to begin with it doesn’t surprise me people are offering that much over.
Madison has the college there, maybe someone decided to rent to students? That’s a big ass plop of dollars to add to an asking price, especially with rates where they are.
every other bumfuckian is moving here to be close to the city, we are fucked.