Upper Saddle River homes sales have lagged the market. The boom years created a large inventory of new high priced homes. These homes are dropping in price and pushing down on the inventory below them. This leave little distinction in home prices between a 4500 sq ft to a 8000 sq ft new home.
I have written about this phenomena before. It is when homes are provide far above the neighborhood normalized ceiling price for a community. The normal market purchasers become lock out of the market and the market doesn't attract enough buyers at these expanded size and scope of development.
Markets have their mix and it can expand and contract, but it can not over run itself. Builders tryed to create their our market. This is fool hearty and not a business like approach to the business. I seen this happening and closed my last new house in Upper Saddle River in February of 2006. It was 5507 sq ft. and sold for $1,850,000. This was then literally 50% of the upper sale prices to happen. When I started the house in the Spring of 2005 I thought I would be in the 80 percentile of the market. The new formed builders had different ideas. Bigger, better, more glitz, and more money!
The most inportant thing a builder/developer must do is know their market. They must know what the demographics can carry. I have made this mistake only once. It was due to a sold deal going in cause me to start a house larger in particular market than I would normally. The sold deal died and I had approved site plan and permits for a house. It was like hitting your thumb with a hammer, you know your going to hit it, but you can't stop your swing.
There is more to success over a long period of time than just luck. Luck is good, knowing your business is vital!
Richard
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I think it is rare quality for a builder to be SO in tune with their market! I particularly love the hammer analogy since I have this "recessive hammer gene" and can't seem to hit the target to save my life. Much better on the computer or pushing paperwork ;)
Renee:
I agree, new builders workmore on emotion, greed, glory, desire and luck. Being a market technical analysis for myself, along with Elliott Wave for 27 years, I stay ahead of the curve. I am not fooled by extreme psychology. The emotions of greed and fear must be under control. Yes I am basically confident but I am very peering and don't let my hopes guide my analysis.
Owning a REMAX office and selling along with analyzing the markets around the country, applying psychological barometers surely help in calling the markets. You must walk in your own direction ahead of the crowd or at least away from the crowd. Remember, when every one agrees, get off the ship fast. There is no glory in going down with the ship here. You must not follow the crowd, even if you feel left out. Misery loves company, so does happiness. People love to laugh together and do many things just to be part of what is going on. Most everything is basic psychology. However, business works reverse of social behavior. Extraordinary change and endeavors make big things happen not making another same old, same old.
This winter and early spring I was calling for volume to pick up, while everyone felt it would get worst. As I was saying it, the statistics later showed that it was in fact was picking up.
(a little lenthy) :)
Best
Richard
This looks like my electrocardiogram when I look at my earnings lately...
Great post. You are correct! Knowing the facts is always more important!
Richard - Loved the quote that ended the blog post about "Luck being good but knowing your business is vital" ! So true ! Great points made here. Hope all is well with you and you are enjoying the summer so far... and not working too much !
Richard as usual nice work compling the Real Estate statistics for Upper Saddle River!
Where have you gone my friend? =)
Wishing you good luck this summer, sounds like an interesting market in the Saddle River area.