Earlier this week, three Americans were awarded the Nobel prize for economics. According to the article I read about them in The Washington Post, their work has helped unify the theories behind asset pricing. Although I’m not a numbers geek, one of the winners has spent years studying housing markets, so I was very interested to learn about his work.
Robert Shiller, a professor at Yale, predicted that excessive optimism about future housing prices would drive present housing prices up way beyond traditional assessments relative to rental rates. This is exactly what happened in much of the U.S. during the mid-2000s. He also predicted that these irrational housing markets would be followed by a period of unusually low returns, or, to put it in lay terms, the housing bubble would burst. Again, he was correct.
With the nationwide housing bubble gone, and prices in Montclair and Glen Ridge quickly on the rise, it won’t be long before we see evidence of Shiller’s theory again. Because homes in the best suburbs of New York City will always be sought after, buyers are feeling confident about competing in multiple offer scenarios. This is what Shiller calls ”irrational exuberance”– the belief that prices will continue to rise indefinitely, so the house can later be sold for even more money. Have we reached this point yet? -I don’t know but in the last couple of weeks, several homes have sold in multiple bids – some with as many as 7 or 8 offers. I wonder what Robert Shiller would have to say about that.
Good news for prospective buyers looking for homes in Glen Ridge: I have a new listing for a great house at a great price. 8 Hathaway Place is a very pretty four-bedroom Colonial in the north end of town. This home has all the charming architectural details one would expect from a home built in 1920, but it also has modern conveniences such as central air-conditioning, an open floor plan and a finished rec room in the basement. Hathaway Place is a not a through street so this house offers a low-traffic location. It is available for $499,000.
8 Hathaway Place is also ideally located for commuters: it is walking distance to both bus and train service to New York City. The town of Glen Ridge boasts an excellent school district; New Jersey Monthly last year ranked its high school 12th overall out of 328 public high schools surveyed. The town is also known for its charming gas lamps on every street corner. So if a lovely home at a reasonable price in a charming town with great schools appeals to you, don’t hesitate to get in touch with me. I’d love to show it to you or join me at our open house Sunday 10/13 from 2 to 4pm.
Earlier this week, I came across an intriguing headline in The New York Times: “Young Americans Lead Trend to Less Driving.” As aNew Jersey Realtorwhose home-buying clients tend to be New Yorkers looking for urban convenience along with leafy yards and good schools, I’ve been a witness to this phenomenon locally. Apparently it’s happening nationwide as well.
According to Phineas Baxandall, the author of a report mentioned in the article, “Millennials (those born in the 1980s or ’90s) aren’t driving cars”. This is a major change from past generations, when teenagers everywhere saw a drivers license as a symbol of independence. A drop in the number of licenses issued nationwide is partly the result of a weak economy (fewer jobs to drive to, a desire to save on gas), but also the result of increased environmental awareness and improved mass transit options nationwide. On the other end of the age spectrum, Baby Boomers are “aging out of the daily work force and need to commute less,” according John Schwartz, the author of the article.
I believe that the trend toward increased use of buses, trains and feet (for walking and biking) will continue. And whether you are a Millennial, a Boomer, or somewhere in between, please don’t hesitate to get in touch with me. I’d love to show you homes in New Jersey communities such as Montclair, Glen Ridge and Maplewood that are already less car-dependent.