From the Asbury Park Press:
Rutgers economist sees troubled N.J. economy
Rutgers University planning expert James W. Hughes added his voice Wednesday to a growing chorus of business and political leaders who are offering bleak predictions for next year’s state economy.
During his annual economic review and forecast before the Hunterdon County Chamber of Commerce, Hughes told a gathering of about 30 business leaders at Copper Hill Country Club that a continuing decline in national job growth and gross domestic product will be the overwhelming force that shapes New Jersey’s economy in 2007.
Hughes, the dean of Rutgers University’s Edward J. Bloustein School of Planning and Public Policy, said continually increasing interest rates and soaring energy costs have “greatly curbed consumer spending and the housing locomotive.”
But Hughes stopped short of calling the economic downturn a recession, predicting that New Jersey’s “enormously potent leading-edge economy” based on highly skilled jobs will save the state from a nose dive.
Hughes said New Jersey is in the middle of the slowest and weakest economic expansion in the post-World War II era, citing recent studies that have ranked the Garden State 44th in private-sector job growth. Hughes added that although New Jersey typically adds about 77,000 jobs a year, the state gained just 40,000 jobs in 2004 and 2005.
Hughes said New Jersey is expected to produce 20,000 additional jobs this year.
The lack of job growth has affected state business leaders, who are less confident in New Jersey’s economy than they have been in more than a decade, according to recent survey results.
From the Express Times:
The year 2007 should prove to be “far from stellar,” a leading New Jersey economic analyst said Wednesday.
James W. Hughes said the state should be able to withstand downturns and escape a recession — “unless housing really tanks.”
…
From 2003 until November 2006, the nation gained 6.2 million jobs, said Hughes. However, job growth has slowed for much of the last two years, with a drop to 1.6 million so far this year, about a half-million drop from the previous year.In New Jersey, job expansion went from 40,000 per year in 2004 and 2005 to a projected 20,000 this year — a “major deceleration,” according to Hughes — with the state falling to 44th nationwide.
The nation’s Gross Domestic Product went from 5.6 percent during the first quarter of 2006 to 2.2 percent in the third quarter, said Hughes, who is also dean of Rutgers University’s School of Planning and Public Policy.
Additionally, housing prices have been dipping, leading the National Association of Realtors to predict a “bottoming out” in mid-2007, according to Hughes. He projected it would more likely occur about one year later.
Rutgers selects a Mexico City firm for a do
over. Very nice. I guess NJ does not have
any firms who could do this job.
Intersting opinion piece in WSJ yesterday about exchange rates and how bad it is for the dollar to depreciate. Maybe this will quiet some of you rambling unsupported nonsense about how the dollar should devalue.
http://shrinkalink.com/5463
jayb,
I think McKinnon hits it on the head with this paragraph:
The U.S. current account deficit simply reflects the excess of expenditures in the U.S. relative to income, or, equivalently, the amount by which America’s moderate level of investment exceeds its very low saving rate — both by households and the federal government. So the first order of business in correcting the trade deficit is to reduce the structural fiscal deficit of the U.S. and possibly run with surpluses. The second order of business is to provide incentives — possibly tax incentives — for American households to increase their saving. Both require major changes in U.S. public finances and should be phased in gradually but very deliberately.
jb
From Inman:
OFHEO: Fannie, Freddie must follow guidelines for nontraditional loans
Federal regulators who oversee the financial health of government-sponsored mortgage repurchasers Fannie Mae and Freddie Mac say they must follow new guidelines for nontraditional loans.
The guidelines, published in September, direct federally chartered banks to use stricter underwriting standards and fully disclose to borrowers the risks such loans carry.
James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said Fannie and Freddie have until Feb. 28 to report back to OFHEO on their progress in developing policies, consumer credit quality standards and capital provisions in line with the guidelines.
“OFHEO supports what the banking regulators have issued, and we have taken steps to ensure that Fannie Mae and Freddie Mac incorporate the principles of that guidance into their risk management and business practices,” Lockhart said. “This will enhance the overall level of underwriting standards, risk management practices and consumer protection in the mortgage market.”
Rutgers selects a Mexico City firm for a do
over. Very nice. I guess NJ does not have
any firms who could do this job.
It is all comes down to NJ being very expensive state – it is expensive to live here, to do duisness here so firm in Mexico probably offered 3x lower prices. Are you that patriotic – to pay 3x to support Made in NJ???
It was good buisness desision on theri side, and one more proof that NJ current living expenses are unsustainable. Sarting with housing and ending with all services/food/transportation…
A little off topic;
“We have had the genuine feeling that some American friends are not only having limited knowledge of, but harboring much misunderstanding about, the reality in China,” Wu said in a statement released by the Chinese government. “This is not conducive to the sound development of our bilateral relations.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aXbUYCfP5c8I&refer=home
al,
its a sad state of affairs when the football
coach at rutgers is the highest paid state
employee. enought said.
From the WSJ:
Housing, Auto Slumps May Defy
Usual Role as Recession Harbingers
New home construction is plummeting. Car sales are weakening. Investors have driven long-term interest rates well below the short-term rates set by the Federal Reserve. All these factors are present today, and all have been precursors of past recessions.
But the U.S. central bank and much of Wall Street are now betting that the old rules don’t apply, and that a recession next year, while possible, is unlikely.
“This time will be different,” Ed Leamer, who heads the forecasting center at the University of California at Los Angeles’s Anderson School of Management, predicts in a report. “This time the problems in housing will stay in housing.” It’s a prediction, he admits, that “keeps us up at night.”
Many Fed officials and private economists believe home builders and auto makers are curbing production to trim excess inventories as a temporary response to a drop-off in demand that was unsustainable — not because climbing interest rates are eroding affordability. If the optimists are right, the industries’ troubles wouldn’t be signs of broader forces tipping the entire economy into recession. Meanwhile, U.S. exports are benefiting from strong growth among U.S. trading partners, especially in Europe.
…
Dean Baker, a co-director of the Center for Economic and Policy Research, a Washington think tank, said the rise in housing prices was unprecedented. Optimists are “missing the full impact of the housing downturn. They think it’s mostly, if not entirely, completed, and I think we’ve just seen the beginning.” He predicted that the economy would enter recession next year, probably contracting in the first and second quarters.
Mr. Baker said housing has boosted the economy not just through construction, but by enabling consumers to borrow against their rising home values. That effect is now waning. Homeowners extracted $113.5 billion of the equity in their homes via mortgage refinancing and other means in the third quarter, according to estimates by Fed economist James Kennedy. That is down by half from a year earlier, and the lowest since the fourth quarter of 2003. His estimates are based on research conducted with former Fed Chairman Alan Greenspan. Their report isn’t an official publication of the Fed, which released the data yesterday.
“its a sad state of affairs when the football
coach at rutgers is the highest paid state
employee. enought said.”
pesche,
He is the only state employee who has had a stellar year. [not endorsing his pay]
IMHO….that entire article is missing the whole “emotional” effect that housing has on people. Just as when making bids on a house, I think you subconsciously become attached to the house. then you let “emotions” come into it…”you have to have that house”, “I’m going to miss on this boom”, “I’m tired on getting losing bids”, etc….
The wealth or maybe better said, the false appearance or feeling of wealth a lot of people have when they own. As long as my house is appreciating, I have am wealthier “on paper”. Therefore I make more money I will spend more money. Now I said “on paper”…through the use of refis (the other ATM machine) we have turned it into real money. With declining home values, that option is no longer available. So I’m no longer looking to get a new car, go out to eat every weekend, go to the strip club and spend $500, etc. Its very different this time around for sure, we don’t even have savings to tap into! Think about how many people started making little adjustments when the price of gas was near $3.
http://www.connectlive.com/events/ots1206/
Special note to panel 1 and 2
NO SPRING REBOUND–HOUSING MASSACRE COMING TO HOOD NEAR YOU.
we have an increasingly bifurcated economy in this area of the world. if you are at the top, the economy looks very good. your compensation for work is likely increasing rapidly and you are doing very well with investment income too.
If you are middle or lower class, however, your wages are stagnant at best and you are likely forced to borrow in greater and greater amounts to maintain your standard of living. You are unable to create investment income because you can’t even pay off your debt, let alone save.
Seems to me that there is mounting resentment regarding this trend that is playing itself out politcally in many ways (illegal immigration debate, tax policy, pension reform, etc).
Economic growth should not just benefit the upper class. People at the top need to remember this because to the extent that the perception that this is the case mounts, the public tends to become suspicious of capitalism in general.
Wells Fargo CEO says prices are down much more than is being reported (from Bloomberg):
“It’s pretty ugly at the moment,” Kovacevich said. Home prices are “really down much more” than recent economic reports suggest, he said, citing the company’s internal data.
http://tinyurl.com/ul4mb
“its a sad state of affairs when the football
coach at rutgers is the highest paid state
employee. enought said.”
He is one of the few state employees who can actually say they generated a dime in revenue. If you look at his salary in terms of the income he has generated through ticket sales, television contracts and merchandizing, it puts thing into perspective.
I would rather pay Coach Shiano his big salary for actually doing something positive than some government worker making $100k sitting around all day counting down the seconds until 4:00 p.m.
“Seems to me that there is mounting resentment regarding this trend that is playing itself out politcally in many ways (illegal immigration debate, tax policy, pension reform, etc).
Economic growth should not just benefit the upper class. People at the top need to remember this because to the extent that the perception that this is the case mounts, the public tends to become suspicious of capitalism in general. ”
Can you hear the people sing, singing the songs of angry men? Maybe the return of Les Mis to Broadway is timely.
Heavy power and wealth at the top has never played out well for any country….
PS – Richard, PLEASE do not start about the Wall St. bonuses. It’s pointless and has been proven to be practically a non-factor…even so, did you think that most of those guys already own, so if they are buying a different house, they are simply selling an old one – demand/supply doesn’t change?
What this country needs is a new invention or an idea that will have similar impact on the economy that computers had from 50’s-now. That is a sure way to save this country otherwise, who knows. Military tech transformed for public use is one way to stir growth and maybe revolutionize our economy. Tats just one thought.
you can sell the american public anything.
just keep repeating the wrong message.
that’s how stupid we have become.
NJGal,
Thank you for nipping the WSJ bonus theory in the bud. You’d think everybody on Wall Street was homeless from listening to realtors and they’ve never picked up a newspaper and seen that the RE market is dropping. I guess in desperate times they cling to anything that will bring some hope. I have a friend who just moved from Philly to NYC who had to back out of house in Maplewood because she couldn’t find a buyer for her place in Philly. She rents now and waits.
As ’07 realty clouds gather, so do silver linings
http://www.msnbc.msn.com/id/16172774/
“I have a friend who just moved from Philly to NYC who had to back out of house in Maplewood because she couldn’t find a buyer for her place in Philly. She rents now and waits.”
Philly is a funny place – lots of family there. I love it and would move there, but things got out of hand and the market just died.
Consensus opinion on the economy heading into a downturn is always for a soft landing and quick turnaround. When was the last time consensus opinion predicted a hard landing? The consensus opinion after the dot.com bubble burst was that the economy would shrug it off. So far consensus opinion has been too positive on housing. A year ago, it was just supposed to be a “return to normal”.
njgal, i know for a FACT 4 wall streeters buying their first houses right now with their bonus, so don’t tell me anything has been proven to any satisfaction. take off your rose colored glasses and look at what is really happening out there. $16.5 billion in compensation for one wall street bank is a lot of cash that will benefit the local area.
The question that needs to be asked about Schiano’s salary is an interesting one.
He has a very unique spot as a government employee in that he may be the only one whose performance can be judged on a profit/loss balance sheet. Sort of, at least.
If Rutgers football wins, and sells enough tickets, hot dogs, merchandise, etc. the team could theoretically make money. How the accounting is done would of course be at the heart of that.
The hard truth is that few, if any, college football teams operate in the black with any consistency. Maybe Notre Dame, maybe USC and a couple of others. The sport is insanely expensive and the coach’s salary really isn’t that significant. Witness Alabama’s $6M per year offer to Nick Saban.
Losing at a big-time program costs multiples of the salary Saban was offered.
Look at college football, how many private schools have a big-time program? How many private schools are looking to start one?
here’s one house in westfield that someone i know just purchased and is in attorney review. it was listed for $650k a couple of months ago then fell out of contract now back on the market for $669.9k but he doesn’t care since he got a fat bonus and is paying close to $650k anyways. wall street money will have an impact on some towns more than others.
MLS #2350684
“njgal, i know for a FACT 4 wall streeters buying their first houses right now with their bonus”
….and I also know hundreds that will also; only after capitulation occurs and there is blood on the street.
Adding…
The numbers are what make getting into a big bowl so important. Rutgers loss at WV meant the difference between a $1M bowl and a $14M bowl. I know the Big East has some sort of revenue sharing of bowl money in place, but unless its split exactly evenly, the payoff difference is huge.
Also, that’s why it’s important for conferences to get as many teams into bowl games as possible.
Notre Dame, the only major independent team in the country, probably relies on making a BCS bowl to be in the black.
you should also consider the degree to which a winning football team spurs alumni donations. I am sure that is a huge factor at Notre Dame
“and I also know hundreds that will also; only after capitulation occurs and there is blood on the street.”
agreed.
of all of the folks that got huge bonuses and lets understand that it was not tens of thousands of employees that received whopper bonuses, how many will want to buy, today, in north jersey, in the same county, in a particular town. I dont know that you can single out this tiny demographic into bolstering up sales for a given town.
Hedge fund client – promoted, just found out last week $1.6M bonus on top of $200K salary – not bad work if you can get it
he’s not even one of the top guys at his firm
Hedge fund client? or employee?
Richard Goldman Sachs whose jaw dropping number were released yesterday, has less than 5000 employess in their U.S. offices. The big,big bucks will go to the top,top people. Will it have an effect on some trophy houses in some towns, I am sure. But do not be too sure that these people will pay any thing, believe me they are all savvy, and if they see price declines, they will take advantage of them.
They have more employees over seas then they do state side.
I ask how many already have houses, and summer houses, and mountian houses etc.
To think that Wall St bonuse are going to save crappy 500k caoes in any old town in north Jersey, is wishful thinking.
i ahve said it repeatedly, the impact of Wall St on housing prices for NJ,is way over stated by many.
i said impact of wall street money will vary depending on town. the nyc good commuting towns will see more impact than say a morris plains. RE is very localized due to this fact and others. from another angle if you read the news stories NYC is expecting a nice boost from wall street success as they’ve seen it in the past via tax revenues and spending. i’m sure they know a little of what they’re talking about. by the way i never said wall street money was going to save the housing market, whatever save means.
Read up RE pimps.
Some housing bubble reports from Wall Street and Washington. CNN Money, “Washington Mutual’s chief executive said that he expects 2007 to be another tough year for the U.S. mortgage industry, which faces overcapacity and unsustainably low margins. Kerry Killinger, CEO of the largest U.S. savings and loan, acknowledged that a sweeping correction in U.S. housing prices would lead to higher delinquencies and loan losses.”
“‘In our guidance we’ve assumed that the mortgage industry would be about as tough next year as this year,’ Killinger said, adding that he would not be surprised to see ‘multiple years’ of housing prices lagging inflation and other asset classes.”
Some housing bubble reports from Wall Street and Washington. CNN Money, “Washington Mutual’s chief executive said that he expects 2007 to be another tough year for the U.S. mortgage industry, which faces overcapacity and unsustainably low margins. Kerry Killinger, CEO of the largest U.S. savings and loan, acknowledged that a sweeping correction in U.S. housing prices would lead to higher delinquencies and loan losses.”
“‘In our guidance we’ve assumed that the mortgage industry would be about as tough next year as this year,’ Killinger said, adding that he would not be surprised to see ‘multiple years’ of housing prices lagging inflation and other asset classes.”
I just lost out on a house because a Wall Streeter was willing to pay asking. It’s in a great commuter town.
Rich
ONLY TRUST YOUR OWN COMMON SENSE…
DO YOU REALLY THINK THAT THE BIGGEST CREDIT BUBBLE IN HISTORY WILL END IN 12 MONTHS?
THIS IS EXACTLY WHAT IT IS…A CREDIT BUBBLE
IT IS STARTING TO IMPLODE AT THE LOWER END OF THE RISK LEVEL.
Rich In NNJ Says:
December 14th, 2006 at 1:40 pm
I just lost out on a house because a Wall Streeter was willing to pay asking. It’s in a great commuter town.
Rich
LUCKY YOU!
‘multiple years’ of housing prices lagging inflation and other asset classes.”
Bob approves this message..coming from an Industry insider.
WHERE’S MY ANNOYED CLONE!
BOOOOOOOOOYAAAAAAAA
Bob
WHERE’S MY ANNOYED CLONE!
BOOOOOOOOOYAAAAAAAA
Bob
The Washington Post. “About 16 times as many of these high-cost loans, known as subprime loans, are past due as in 1998, when the industry began tracking subprime statistics as part of its quarterly delinquency analysis.”
“About 223,000 households with subprime loans lost their homes to foreclosure in the third quarter of 2006, and about 725,000 had missed payments, according to the quarterly survey from the MBA.”
“About 12 1/2 percent of all subprime loans were delinquent in the third quarter, up from 11.7 percent in the second quarter, the Washington-based bankers association reported. ‘It’s almost certain that the number of delinquent subprime loans is higher than it has ever been,’ said Duncan.”
KABOOOOOOOOOOOM!!!!!!!!!!!
Mint: Don’t melt money
Government threatens prison for violators; at current prices the metal value of the coins may exceed their face values.
December 14 2006: 11:53 AM EST
NEW YORK (CNNMoney.com) — The U.S. Mint has implemented a law against melting down pennies and nickels which, at current metal prices, could be worth more as metal than as currency.
http://tinyurl.com/yxnzxe
Inflation anyone?
TSUNAMI WAVE 2 IS ON THE HORIZEN.
CAN YOU SEE IT?
When it becomes visible to ALL it is to LATE!
remember this……….
Housing Massacre Spring 2007 coming to a hood near you.
lots of experience predicting this.
wanna bet against…go ahead.
BOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
2 cent profit on the nickel…yeah, baby! Where’s my smelting pot and that stack of charcoal?
Greed arrogance and fraud run wild at the pinnacle of any market bubble…. watch and learn for future.
The Miami Herald reports from Florida. “Coral Gables lawyer Brian Bieber is intimately acquainted with mortgage fraud, having represented people accused of the crime. But earlier this year, he was stunned when a broker instructed his own mother, a Broward County schoolteacher, to create phony evidence of a second job to get a mortgage for a Hallandale Beach condo.”
“‘That mortgage broker actually suggested to my mother that she obtain a false letter of employment from me and my law firm,’ Bieber said. ‘The broker went so far as to give her the explicit amount my mother needed to be earning per week and asked my mother to ask me to generate at least four pay stubs.’”
“Bieber called the North Miami broker, who he wouldn’t name, himself. ‘I confronted him and told him he could wind up getting indicted. He said, ‘Everybody does it.’”
” as Keynes once pointed out, a banker’s job is not to avoid risk, but to make sure that if he’s making a mistake he’s making the same mistake as everyone else, so that he’s positioned to go down with everyone else and not stand out.”
‘Everybody does it.’
jb
“njgal, i know for a FACT 4 wall streeters buying their first houses right now with their bonus, so don’t tell me anything has been proven to any satisfaction. take off your rose colored glasses and look at what is really happening out there. $16.5 billion in compensation for one wall street bank is a lot of cash that will benefit the local area.”
That’s 4 people. I didn’t realize 4 was enough to absorb all of the excess inventory in NY, NJ and CT. I am not the one wearing rose colored glasses – I realize it’s a lot of money, but for those 4, there are another 4 not buying. Wall St. bonuses have been shown to be a myth – they cause a SLIGHT increase in NYC prices, but do NOTHING for sales and inventory. Zip. Zero. Anyone have that link? Was it Jonathan Miller? Or was it a NY Observer article?
Why aren’t Wall Streeters spending their bonuses on Florida or Vegas condos? From what I’ve heard anecdotally, it’s much more of a buyers market in those regions, especially considering the dramatic oversupply of condos. Why not a trendy NYC apartment? Perhaps a mansion in Westchester or a beach house in the Hamptons?
I’m just not sure why the underlying assumption here is that the first thing a wall streeter wants to do with her bonus is buy a house in New Jersey.
jb
Richard, by the way, your friend should be embarrassed to have paid 650 for that house.
It just proves to me that just because you make a lot of money or work on Wall St. doesn’t mean you have the ability to find a good deal or make a smart financial decision in your personal life.
“I’m just not sure why the underlying assumption here is that the first thing a wall streeter wants to do with her bonus is buy a house in New Jersey.”
I think it’s because everyone in the general NYC area wants to think of Wall St. bonus babies as their economic knights in shining armor – if Wall St. is good, so are they. But Wall St. cannot support 3 states and all of the commuter towns in those states, as well as NYC and its boroughs. Logically speaking they can’t, but people ignore logic when it comes to how they want to see things.
Spelunker Says:
December 14th, 2006 at 1:24 pm
Hedge fund client? or employee?
Lunk: a client of my firm who is an employee of a hedge fund
Guys:
I know what you are saying [re: Wall Street], but also don’t just deny that it will filter into the market. As always, the effect will be limited, focused, clear and dramatic.
I would treat lowballing for something great as akin to eBay. You can bid, but just remember that someone is waiting out there to pounce. I know that when I use eBay, I am a serial blindsider. I swoop in with 30 seconds left and take something. Treat this market the same way. There are people out there with no time, no life, and little inclination to negotiate. They will take what they want, and you would do well to stay out of their way. Just remember that there are only a finite amount of them, so ultimately you will get what what you want.
Don’t be the Kansas City Royals and sign Gil Meche to a $55M contract because the deep pocketed Cubs wanted him. Just walk away, and find something else.
this just in from my town high school rumor mill.
Apparently the state legislature is voting today to establish a pilot program, starting with Union County, to consolidate school districts. Our entire Board of Education will be laid off within 7 – 9 mos. The superintendant sent a town-wide email yesterday urging parents to contact their representatives and voice their (assumed) opposition.
I wasn’t contacted and don’t know whether any of this is for real. Just passing on unsubstantiated rumor–what’s a blog for?–to any of you of who might be ready to plunk down your deposit on one of the premium Union County school districts. Now Plainfield schools will have the same curriculum and standards as Westfield. LOL.
Anything to this? Seems like they moved awful fast with little press.
CF … A CLOSET SNIPER????
Mr. Niceguy? How can you possibly sleep at night, thinking about all those poor bidders. Bidders who were probably buying items to donate to charity?
BTW, a true sniper does it with 7 seconds remaining.
From MarketWatch:
U.S. Dec. Empire State index edges lower
Manufacturing activity in the New York area slipped in December, the New York Federal Reserve Bank said Thursday. The bank’s Empire State Manufacturing index fell to 23.1 in December from 26.7 in November. The decrease was not as large as expected. Economists were forecasting the index to fall sharply to 18.0. New orders rose to 25.1 in December from 22.4 in November. Shipments were little changed. The prices paid index fell to its lowest level of the year. The unfilled orders index also fell sharply. The inventories index dropped into negative territory. The index was released by mistake, the New York Fed said. The index had been scheduled to be released Friday at 8:30 a.m. Eastern.
Saw a cream puff house in a primo location — quiet, mint houses all around, culdesac, and priced correctly for this market.
Lots of lookers, had trouble parking.
Based on the price, they no doubt expected a bidding war. A week later, still no offers.
Buyers are wise to the Ponzi Scheme.
As for Wall Street bonuses, only a fool pays $10 for a pack of gum. Greedy Grubbers had better get ready for the Spring Inventory Glut – lots of disappointment on the way.
Some panicky sellers are putting properties on the market in December, trying to avoid the 2007 Spring Inventory Glut. No takers.
The way prices are dropping, it’s like having three salaries: income + interest income + ‘negative equity’ for Greedy Grubbers.
>>Richard, by the way, your friend should be embarrassed to have paid 650 for that house
according to you. there’s a butt for every chair, if you don’t like the chair don’t sit in it.
quote from message #4:
“James Lockhart, director of the Office of Federal Housing Enterprise Oversight, said Fannie and Freddie have until Feb. 28 to report back to OFHEO on their progress in developing policies, consumer credit quality standards and capital provisions in line with the guidelines.”
… just in time for the Spring selling season!
“‘In California, I saw a billboard that said, ‘Own the home you want, not the one you can afford,’ says Thomas DiMercurio, a Denver real estate broker who specializes in bank-held foreclosures. ‘That was so silly.’”
whom do u think sponsored this billboard?
description: hint– slimey? Manipulative?
chicagofinance Says:
December 14th, 2006 at 3:33 pm
Guys:
I know what you are saying [re: Wall Street], but also don’t just deny that it will filter into the market. As always, the effect will be limited, focused, clear and dramatic.
I would treat lowballing for something great as akin to eBay. You can bid, but just remember that someone is waiting out there to pounce. I know that when I use eBay, I am a serial blindsider. I swoop in with 30 seconds left and take something. Treat this market the same way. There are people out there with no time, no life, and little inclination to negotiate. They will take what they want, and you would do well to stay out of their way. Just remember that there are only a finite amount of them, so ultimately you will get what what you want.
Don’t be the Kansas City Royals and sign Gil Meche to a $55M contract because the deep pocketed Cubs wanted him. Just walk away, and find something else.
Bob approves this message!!!!!
BOOOOOOOOOYAAAAAAAAA
Bob
a bit off topic:
but this show that rents are also no longer in line with wages. This is especially true in NYC. I used to shell out close to 3500 till I ended up buying. Now I shell out 4000 a month for a mortgage/taxes.
Rent increases trump workers’ income growth
Rents for two-bedroom homes have climbed sharply in past seven years, putting affordable housing further out of reach for many low- and median-wage workers.
NEW YORK (CNNMoney.com) — The cost of affordable rental housing has risen 28 percent in the past seven years, far outpacing the wages of those who need it most, according to a new report released Tuesday
http://money.cnn.com/2006/12/12/news/economy/rental_costs/index.htm?postversion=2006121212
NEW YORK (CNNMoney.com) — The cost of affordable rental housing has risen 28 percent in the past seven years
28% /= 100%
this is funny
http://bubblemeter.blogspot.com/2006/12/nars-new-president-pat-vredevoogd.html
“‘Absolutely, the bubble has popped,’ said economist Christopher Thornberg. ‘When a real estate bubble pops, it’s a slow-motion train wreck. Things don’t happen overnight.’”
jb,
in case you decide to start your own video collection on real estate, you can share it with the masses here:
http://www.vodpod.com
Save the arguments about whether wall-street will re-inflate the RE bubble for another two months. Bonus will start getting paid out from January and we will know for sure by march if it has had an impact on the RE Market.
Most of the top dogs in my firm already own really nice places in manhattan or in the top NJ towns. sure they may decide to move up to the 5 Mil place from the 2 Mill place, but the 700K cruddy cape will still be there next spring.
My take on it is that, wall street bonuses will have a limited effect on the some premium towns, but don’t expect it to stop the slow motion train wreck.
My personal experience w/Wall Street bonus babies is that their limited number of purchases are done by Feb. 1. Every once in a while, I work with one of these guys. They move fast, pull the trigger and it’s over. They buy housing the way they buy securities.
There aren’t enough of them to be a blip on the market. Total non-factor…
Theer has been an uptick in the past few weeks in Bergen County.. I don’t know who is buying.. But I can tell you it has surprised me..
RMB: is it an uptick in actual house sales closing, or is it simply listing being witdrawn rigth befor Christmas?
Closing and UC.. I have only see 2 fall out of contract..