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Press release from Hudson & Marshall:
Auction of 231 Foreclosed Homes in Ohio and Pennsylvania Creates Buyer’s Market
Home sales are skidding into decline putting hungry buyers on the fast track to find a treasure trove of bargains at private foreclosure auctions. Foreclosed properties owned by lenders, known as real-estate owned (REO) can often be purchased at significant discounts because lenders want to sell the properties quickly to reduce carrying costs.
Hudson & Marshall, America’s largest auction firm of foreclosed properties, will auction 231 foreclosed homes throughout Ohio and Pennsylvania for national lenders on March 5th – 10th. Valued from $5000-over $250,000, the homes come guaranteed with title insurance.
“Real estate auctions are appealing to more people because it is a swift approach to buying a home. We connect motivated buyers with motivated sellers in a relaxed setting to dispose of property without drawn out negotiations or contingencies that delay closings,” commented Dave Webb, principal, Hudson & Marshall. “Sales occur on a specific day and time in a competitive bidding environment, which allows a home’s true value to emerge, creating a great business opportunity for everyone,” added Webb.
From Bloomberg:
Lehman Swap Burns New Jersey Residents With $201 Million Loss
Every month, when Anthony Smith of Trenton, New Jersey, pays his Public Service Gas & Electric Co. bill, part of the money covers a $201.3 million loss from a bet the utility made with Lehman Brothers Holdings Inc.
“I just look at the fees and say, `Damn, I don’t even know what that is,”’ Smith, 31, said of the charges listed in the fine print on the back of his monthly statement.
PSE&G’s 2 million customers pay extra because executives of the Newark-based utility and state regulators left them on the hook for a gamble that backfired eight years ago. The so-called forward interest-rate swap involved a promise to exchange interest payments with Lehman as the power company prepared to sell $2.5 billion of bonds.
…
The costs of the bet were little noticed in the state. Joseph J. Seneca, a professor at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy and chairman of the New Jersey Council of Economic Advisors, wasn’t aware of it. Nor was Michael Crew, a professor of finance and economics at Rutgers who is director of the university’s Center for Research in Regulated Industries.
I just bot a piece of property at the shore. many deals are offered. go do likewise gents.
From Bloomberg:
ResMae’s Collapse May Signal More Subprime Lender Bankruptcies
ResMae Mortgage Corp. may be on the cutting edge of a trend in the U.S. subprime-loan industry. It’s bankrupt and selling assets for pennies on the dollar.
ResMae, which made home loans to people with bad credit, will be auctioned off next week. The opening bid, by Credit Suisse Group, is $19.1 million, less than half the size of an offer received by ResMae before it went bankrupt Feb. 13.
More than 100 other lenders will go out of business this year, said Doug Duncan, chief economist of the Mortgage Bankers Association in Washington. Many will be subprime lenders, victims of loans to borderline borrowers last year.
“Loans in 2006 will be the worst we have ever seen in the business,” said Matthew Howlett, an analyst who covers the subprime market in New York for Fox-Pitt, Kelton Ltd., an investment bank. “The underwriting quality was disastrous.”
From MarketWatch:
Impac Mortgage Holdings swings to net loss
Impac Mortgage Holdings Inc. said that it swung to a net loss of $54.2 million, or 71 cents a share. Last year, the company posted a profit of $21.6 million, or 28 cents a share. Interest income edged down to $329.1 million, from $340.7 million, while interest expense rose to $334.4 million, from $326.2 million. “Although we are disappointed by our earnings performance in 2006, our results are to some extent indicative of market conditions, as well as strategies implemented early in the year to reduce originations and our exposure to inferior credit quality mortgages, ” it said. The company expects some growth in balance sheet with potential improvement to adjusted net interest margins in 2007.
Impac Mortgage Holdings, Inc. Reports Net (Loss) Earnings of $(66.3) Million for 2006 Compared to $270.3 Million for 2005
Estimated Taxable Income Was $79.5 Million for 2006 Compared to $142.9 Million for 2005
http://www.marketwatch.com/news/story/impac-mortgage-holdings-inc-reports/story.aspx?guid=%7BC671F273%2D3723%2D4152%2D8B1B%2D56C7AA1CDE64%7D&dist=TQP_Mod_pressN
Additionally, net earnings decreased by $29.5 million as a result of a lower of cost or market charge primarily related to loans repurchased during the second and fourth quarters of 2006.
jb,
you delete my repeat post (#6).
From Bloomberg:
Lowe’s Earnings Fall as Decline in U.S. Home Sales Cuts Demand
Lowe’s Cos., the world’s second- largest home-improvement retailer, said fourth-quarter profit declined 12 percent as fewer home sales in the U.S. cut demand for paint and lumber.
Net income fell to $613 million, or 40 cents a share, from $693 million, or 43 cents, a year earlier. Sales in the quarter ended Feb. 2 dropped to $10.4 billion from $10.8 billion, Mooresville, North Carolina-based Lowe’s said in a statement sent by PR Newswire.
Chief Executive Robert Niblock cut his revenue forecast four times last year as U.S. home sales dropped at the fastest pace in 15 years. Bigger rival Home Depot Inc. says it has lost market share, while some analysts credited Lowe’s with better customer service and newer stores.
“Lowe’s, and the home-improvement industry, are in the middle of a tough macro environment and it could be weak for a couple of more quarters,” Craig Nedbalski, who helps manage $21.5 billion in assets at Cincinnati-based Fifth Third Asset Management, said yesterday.
I’ve been looking at homes in North Jersey the last few weeks. It’s amazing how many homes have had price reductions of 10% or back in November and still can’t sell. The bubble is deflating rapidly.
I’ve been looking at homes in North Jersey the last few weeks. It’s amazing how many homes have had price reductions of 10% or back in November and still can’t sell. The bubble is deflating rapidly.
From Prudent Bear:
Subprime Titanic Hits Iceberg: Wall Street Abandons Ship”
Does anyone know homme much homes fell in North Jersey during the last downturn in the late 80-s early 90’s? I know townhouses and condos fell 40% or more, but how much did single family houses go down?
We’re tempted to make a real lowball offer on a house that we like (25%) off list in Madison/Chatham area that’s been on the market and vacant since the summer. Just wondering if that’s enough or should we wait till winter and have many more homes to choose from. It’s mazing how many homes for sale there are February. Spring is going to be amazing.
The friends of mine who bought a house without selling there existing one, just dropped there price from 285k to 269,900 within one month
Lowe’s, foreclosures,ResMae, Impac, Prudent Bear, NJbear, etc…..
Is this site biased to negative news??? It’s 8:05 and already we have a weeks worth of negative news. Very depressing. I need a bull to cheer me up.
[12],
In the ballpark of 20-25%, late 80’s-early 90’s.
When does it end?? Interest rate swaps for municipalities??
http://www.bloomberg.com/apps/news?pid=20601039&sid=ae9ArosF.pgo&refer=home
Housing summit scheduled for today in Newark
Authorities from around the state will gather at the New Jersey Affordable Housing Summit at Metropolitan Baptist Church in Newark today discuss ways to fight those deep cuts proposed in federal housing subsidies.
“New Jersey’s Housing Authorities are on the front lines in the effort to give everyone in New Jersey a home and an opportunity to build a better life. However, some people in Washington want to reduce the federal government’s role in helping people build a new, better life,” said U.S. Sen. Frank Lautenberg (D-N.J.) a featured speaker at today’s summit.
Lautenberg, a member of the Senate appropriations subcommittee, will discuss his plans for the continued funding of the HOPE VI program to build affordable housing and to restore federal housing funding. Previous summits have been held in Pennsylvania, New York and Ohio. Today’s summit is from 8 a.m. to 12:30 p.m. Metropolitan Baptist Church is located at 149 Springfield Ave. in Newark
http://blog.nj.com/ledgerupdates/2007/02/housing_summit_scheduled_for_t.html
Positive news (at least for NJ employees of Alcatel)? The AlcaLu lawsuit against Microsoft. Perhaps they’ve stumbled upon a hugely profitable business model (SCO-style for those who followed that). There are still plenty of big fish to sue for infringement.
Perhaps the Bell/Lu jobs in NJ are safe after all?
jb
He’s hitting the road for low-cost housing
HILLSDALE — Jonathan Kallin, 23, of Hillsdale plans to pedal 4,000 miles across the country this summer to raise money and awareness for affordable housing.
He is one of 30 students from varying backgrounds who are participating in Bike & Build, a non-profit that supports affordable housing efforts nationwide. As they cycle from coast to coast, they will stop to help build housing in poverty-stricken areas.
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk2NSZmZ2JlbDdmN3ZxZWVFRXl5NzA4MTgxNCZ5cmlyeTdmNzE3Zjd2cWVlRUV5eTQ=
The Freedom Tower and the new Mack-Cali/Wyndham HQ in Parsippany are both fantastic news for the commercial construction biz.
Lowe’s earnings fall due to housing slump
Nation’s No. 2 home improvement chain says profit fell 11.5 percent
http://www.msnbc.msn.com/id/17295263/
The Mooresville, N.C.-based retailer said it earned $613 million, or 40 cents a share, for the three months ended Feb. 2, down from $693 million, or 43 cents a share, a year earlier.
Revenue fell to $10.4 billion from $10.8 billion a year earlier.
lucent is finished in NJ, its just
a matter of time.
The French will rule, and russo will
roll over and move on to seek other
opportunties.(code word for see the exit.)
New from CA
http://www.simivalleyacorn.com/news/2007/0223/Front_Page/004.html
Home prices up, home prices down: It’s hard to know where the housing market is headed in today’s economic climate. But the experts agree on one thing: Residential real estate isn’t the safe haven it used to be.
Guest speakers at the conference said psychological factors were as much to blame for the slumping housing market as the economy.
“A guy sees his neighbor’s house sell and he automatically wants 10 percent more,” said Robert Kleinhenz, deputy chief economist for the California Association of Realtors.
“We came off a stellar peak in ’04-’05, yet we’re still on a level that’s among the best of all time,” Kleinhenz said. “By no means are we looking for a market that’s headed for the tank. . . . We’ve got a number of hopeful signs going forward.”
Kleinhenz said the gap between buyer and seller expectations began to close late last year. “Buyers began to realize that there was no fire sale out there. If they wanted value they were going to have to pay for it.”
But could they afford it?
Kleinhenz said only 22 percent of Ventura County residents can afford to buy the medianpriced home. In Los Angeles County the affordability rate remains at just 18 percent.
“The California and national housing sector downturns are not yet over,” Roth said. While both economies will decelerate in the first half of 2007, he does expect a “pick up” in 2008.
“The real estate bubble has effectively burst as sales have collapsed and price appreciation has subsided,” Schniepp’s forecast said.
I wonder why Bubble is no longer unspoken word.
Tim Says:
February 23rd, 2007 at 8:04 am
The friends of mine who bought a house without selling there existing one, just dropped there price from 285k to 269,900 within one month
Why would anybody do this???
You are in trouble if you can not afford to mortgages and even if you can – what is the point of carrying two mortgages??
TO BC Bob:
BC Bob Says:
February 23rd, 2007 at 8:07 am
Lowe’s, foreclosures,ResMae, Impac, Prudent Bear, NJbear, etc…..
Is this site biased to negative news??? It’s 8:05 and already we have a weeks worth of negative news. Very depressing. I need a bull to cheer me up.
I agree – we are looking at some houses in Central Jersey and I believe we are finding some priced almost correctly. But with all tye negative news It is very scary to buy right now even at 20% off – what if we need to sell in 3 years due to job loss/move??
(Unfortunatelly I am not a NJ state/govermental employee who is 100% confident that his job will be here in 5 years.
In private companies you just never know…)
It seems that 2-3 years from now it wil be a mess…
SO Even If I buy something fairly low priced – lets say at 20% off and housing market really collapses – I might be in deep trouble.
It is funny how the human brain works: 2 years ago I had no desire or ability to buy because of ridiculous prices.
Now Prices are coming down – I am afraid to buy because they might come down more in the next few years….
“The French will rule”
pesche,
Churchill liked his martini’s extra,extra dry. He would bypass the vermouth and bow to France instead.
heard a classic stretch beyond your means story yesterday. friend of my brothers who is in $25k of credit card debt and was going to pay most of it off in a year before looking to buy real estate has been ‘convinced otherwise’ by his friends, co-workers and a couple of RE agents. seems there’s this up and coming area outside Seattle that you have to get in on before the public realizes it and you get priced out. so instead of paying off most debt he’s going to take out the maximum approved loan amount (which is always too much) of $350k, 100% financed and buy today.
here’s absurdity #1. RE agent says in 1 year when the assessed value goes up he can take the $25k in debt and roll it into a second 30-year piggyback mortgage and viola you just saved $600 a month in interest payments.
absurdity #2. tells my brother he has $1200 left over after paying mortgage and taxes. says everyone he knows who bought the last couple of years has $500 or less a month so he feels good about being more conservative.
this people is stupidity in any market.
Al [24],
My depression is a result of reading your post yesterday regarding inflation and M3. I don’t have time now to respond, will later.
Well Potential of inflation run off is the main factor which pushes me towards buying…
However Japaneese scenarion is also plausable.
(I’d take controlled run-up of inflation over 30 years deflation pattern anytime)
Controlled being the key here. Anyways – I am gone untill tonight.
Good news, 850 jobs saved. Bad news, we’ve got to pay $3 to $4 million to do it.
New Jersey business briefs
Assembly voted 77-1 in favor of legislation Thursday to give Marcal Paper Mills an energy tax break.
The exemption from the state’s energy sales tax would save the paper recycler and manufacturer from $3 million to $4 million a year, according to bill sponsor Assemblywoman Nellie Pou, D-Paterson.
The Elmwood Park-based Marcal filed for bankruptcy protection on Nov. 30, blaming its problems on a $10 million — 40 percent — increase in energy costs. Bill supporters say the state should help keep the manufacturer open and save the company’s 850 jobs.
At the supermarket a few days ago, I overheard two young workers (probably in their early 20’s) talking about buying a car. One of them mentioned: “I want to spend about $600 a month”
From the Chicago Tribune:
Canceled contracts masked glut of homes, economist says
Housing analyst David Seiders told Chicago-area builders Thursday that the federal estimate of 3.5 million homes for sale at the end of 2006 is “grossly understated.”
“There is a big inventory overhang out there, and it’s bigger than anybody understands,” he said.
In an annual forecast on the local industry in Addison, Seiders, chief economist of the National Association of Home Builders, cited the high level of sales contract cancellations in 2006. It created a snag in the recordkeeping, so many homes marked as sales in government data ended up back on the market too late to be counted as inventory, he said.
“Cancellation rates more than doubled between the end of 2005 and the end of 2006, meaning that net sales for the year nationally may be down 65 percent.”
But Seiders was not all gloom, saying the market is probably at the year’s low spot right now. He expects slight improvement at midyear.
no inflation??
Cost of a oat bar in our vending machine just went up by 30%.
The weight probably dropped by an ounce too. But most people just don’t notice that.
jb
AlcaLU is in the lawsuit biz for sure.. Hot off the wire at MarketWatch:
Alcatel-Lucent could sue other firms, analysts say
Alcatel-Lucent’s landmark victory against Microsoft Corp. over the right to use the popular MP3 format for digital music potentially paves the way for the gear-maker to seek compensation from a flurry of other companies, analysts said on Friday.
Microsoft on Thursday was ordered to pay more than $1.5 billion to Alcatel-Lucent after a federal court in California ruled that the software giant infringed two Alcatel-Lucent patents in using the MP3 format for playing digital music on its Windows Media Player device.
…
If the ruling stands, Apple and hundreds of other companies that make products that play MP3 files, including portable players, computers and software, could also face demands to pay royalties to Alcatel.
…
Richard Windsor, a London-based analyst with Nomura, said the ruling “paves the way for Alcatel-Lucent to seek cash from other companies.”
I just read that Jan sales in the area I’m looking in were 1/2 of last year. There is new inventory every single day as well. difficult to extrapolate much from 1 month, but I’d be curious of the impressions of the agents on the board regarding the early 2007 season
I mentioned SCO earlier, but this seems more similar to Unisys/IBM GIF/LZW.
jb
Indianapolis Remains Nation’s Most Affordable Housing Market
Also maintaining its previous standing on the HOI was Los Angeles-Long Beach-Glendale, Calif., which was the nation’s least-affordable major housing market for a ninth consecutive quarter. There, just 2 percent of new and existing homes sold during the fourth quarter were affordable to those earning the area’s median family income of $56,200. The median sales price of all homes sold in the area during the period was $525,000.
Other major metros at the bottom of the housing affordability chart included Santa Ana-Anaheim-Irvine, Calif.; San Diego-Carlsbad-San Marcos, Calif.; New York-White Plains-Wayne, N.Y.-N.J.; and Modesto, Calif., in that order.
http://www.nahb.org/news_details.aspx?sectionID=148&newsID=4113
I just read that Jan sales in the area I’m looking in were 1/2 of last year.
Be careful if you are looking at data that covers a small area. I’ve found town-level data in this area to be incredibly volatile on a month-to-month basis. This volatility makes even year-over-year comparisons misleading.
jb
BC Bob, maybe this will cheer you up –
how are your international funds doing?
A call for statewide reform
Officials look to recalculate property tax equation
RPA illustrated a new proposal, Jersey Homes, Jersey Jobs, Jersey Future, which offers economic incentives to municipalities to foster housing and economic growth based on good planning and local control.
According to George Hawkins, executive director for New Jersey Future, this proposal is based on a concept first applied in Massachusetts as a way to create more housing for workers, families, young professionals and the elderly. To date, more than 35 municipalities in Massachusetts have chosen to be a part of the program.
Connecticut and New York are considering adopting similar plans to address housing shortages in their states.
Mr. Hawkins said he recognized the municipalities’ frustrations and hoped N.J. Future would be able to address the majority of the concerns. One of the bigger concerns for many municipalities is that, according to the presentation, many municipalities avoid planning for homes for families, especially those that are low-income. The reason for this, the presentation showed, is because the median property tax bill of $5,352 doesn’t cover the average cost of educating one child, which, according to the school report card for 2005-06, is $13,169.
In Washington, the average cost per pupil is lower than that average at $11, 852.
“No one who can qualify for affordable housing can afford the property taxes there,” said Mayor Fried. “Property taxes have gone up about 78 percent in the last six years. This is an amazing time and it’s not going to stop.”
According to Mr. Hawkins, N.J. Future’s legislative and financial plan responds to these issues by suggesting that the state help pay the costs for a municipality to plan family housing in a concentrated area. Then, after the housing is built, the state would subsidize the net dollar-for-dollar increase in school costs.
Mr. Hawkins added that so far in New Jersey, only Washington Township and Chesterfield are doing smart growth. In order for his program to work, he said, he needs to have dozens more participate. He also suggested that the plan institute a pilot program around Washington Township or the transit villages.
While the proposal calls for looking at property tax reform based on localized, targeted areas, William Dressel, executive director of the N.J. League of Municipalities, which represents all of the state’s 566 municipalities, said the effort should be based on a broader scale.
“This really has been an exercise in stress management,” said Mr. Dressel. “The people in the State House have not been able to deal with this problem. We need broad-based reform. Selective reform is a tool, but I think it’s sort of a cop-out.”
This meeting was the third in a series of forums to discuss the latest proposal for the property tax reform, focusing on the land use implications. The free forums, with a lunch provided, are open to the public, but members of the public wishing to attend should make reservations with the RPA at (732) 828-9945 or e-mail scorchado@rpa.org.
http://www.zwire.com/site/news.cfm?newsid=17883842&BRD=1091&PAG=461&dept_id=425686&rfi=6
I am really tired of Towns blaming family with Kids for stopping any development. I like the idea that Florida adopted recently, Abolish property taxes, increase Sales Tax. Then the comparison of property tax to eduction cost will become invalid.
Anyone for Grass Root campaign – Abolish Propery Taxes
Inventory, Inventory, Inventory. That’s all I keep hearing. Yet, each new listing I see has a price tag of delusional proportions. I’ll say it again: people have become brain-washed. A POS split or cape should not sell for 500K with 10K in taxes.
Drive just over the border into PA and you’ve got a new Center Hall Colonial for 325K with 4K in taxes. We’ve become de-sensitized. The lobotomy has been implemented.
A CHC in Northen Jersey should be 500K, not 800K. People have lost their focus. Even 20% down on 800K has left you with a payment of $5000 a month in mortgage/taxes/insurance with a 30 yr. fixed. Pathetic. It’s disgusting and there are still enough lemmings to go along with it.
We disect LIBOR’s, MBS’s, subprimes, spreads, yields and the absolute bottom line continues to be “price”. Nothing more, nothing less.
We should be revolting.
That’s “dissect” – I hate typo’s.
“A CHC in Northen Jersey should be 500K, not 800K”
Gary,
It’s just going to take a few years.
RentLOrd,
Thank you for that positive post. However, I got out of all International funds in Jan.. Only long metals,mining stocks,grains and US multinationals.
BC Bob: Nice move.
Historically March – June resulted in heavy increases in inventory. I’m sure we should expect the same this year. On top of that we are starting from a much higher base than we were last year. Wonder if we’ll be setting new inventory highs?
I got out of all International funds in Jan..
Tell me more.
jb
#15 Thank you BC Bob.
#41 These prices are revolting. I looked at some houses in the 500k range and they are pretty much either disgusting, or well maintained but tiny capes with no storage space. I have seen some beautiful old colonials from 1900 for around 480-500k. In essex county. They’ve been on the market for 8 months, 1 was reduced 10% and still hasn’t sold.
Gary #41: and I really think if we are all patient, and I know it is hard, very hard, the pricing mechanism will adjust accordingly.
In other words homes will become affordable again.
Please make sure you swallow your coffee (or any other beverage you might be drinking) before you open these links..
http://php.app.com/njeducators/details.php?recordID=139217
http://php.app.com/njeducators/details.php?recordID=136763
I’m really on a soap box the last few days, guys. I guess it’s the “Jersey City” in me. :)
I understand what you all are saying but it just seems to me that we shouldn’t have to “sacrifice” because of the stupidity of others if most of us have been prudent and have the means to put 20% or better down.
And still, even after the 20% down, you’re looking at a paying insane monthly payments for a POS.
JB, [46]
Who knows,they can run up another 50%. That’s OK. I just took it off the table.
JB: My coffee suddenly turned cold !!!
Few years ago, my wife wanted to be Elementary school teacher, and was thinking of going to school to get masters. Not knowing enough, we thought, those jobs probably don’t pay much and are too much stress, so she decided to do something else. Now that my elder one is going through 1st grade, and I see the numbers you posted, I feel, she should have chosen the teaching career !!!
jb #49 – lemme be the first to say
W T F !!!
Thanks for the warning@!
UGH!! TYPOS!!
One of them mentioned: “I want to spend about $600 a month”
Aside from being a backwards way of viewing a purchase, “$600 a month” is what, about a $50,000 vehicle? At 20 years old?
JB [49],
I’ve decided, when I grow up I will become a teacher.
BC,
“However, I got out of all International funds in Jan.. ”
good move :)
regarding post 49…
HOW????
Our Company’s R@D Vice President with PhD, MBA and 30+ years of experience makes less… for 12 month or work.
One of them mentioned: “I want to spend about $600 a month”
I was recently a Toyota dealership buying a car for my wife. The person sitting at the desk next to my wife and I was negotiating with the dealer. The price of the car was never mentioned. They just negotiated monthly payments. The actual conversation…
dealer “I can put you in this car today for $595 per month”
buyer “ I’m not spending more than $550.”
dealer “With your credit $550 is going to be tough. I can do $575 if you can get a family member to cosign the loan”
JB #49, WTF?
2005 Salary: $239,107
Employment type: 10 months
Primary job: Kindergarten/Pre-First Teacher
njrebear,
Why don’t you like international funds? I made a killing last year. Since our Fed is unwilling to fight inflation, I figure its a decent option to hedge against a falling $.
All good things, however, must come to an end. I’m just wondering when is the right time to cash my chips in.
http://php.app.com/njeducators/details.php?recordID=138877
… you forgot this one.
There has to be something more to the story. I looked up my friends who teach and their salaries are all reasonable for their experience and roles. Although one could argue that providing early education to 20 little ones as a kindergarten teacher merits the pay, I doubt Ms. Allen with her 8 years of experience and 10 months of work is earning $239,107. Just cause its on the internet don’t make it true.
I am going to follow-up with my sources on the Commission to find out how that could possibly be.
I’m really sick and tired of CEO’s blaming external factors for their company’s poor performance.
Chief Executive Robert Niblock cut his revenue forecast four times last year as U.S. home sales dropped at the fastest pace in 15 years. Bigger rival Home Depot Inc. says it has lost market share, while some analysts credited Lowe’s with better customer service and newer stores.
If you were a good CEO, you would make your company ADAPT to changes around you. Stop blaming things for your companies inability to generate a profit.
-R
james how do these people make such salaries being teachers? that seems excessive even by tenured overpaid teacher perspective.
just tried calling mendham township school superintendant to verify one of the salaries.
They are on winter break and won’t be back in the office til the 26th.
I find it hard to believe. My FIL is a chemistry teacher with his master’s and close to 30 yrs in. He doesn’t even approach this amount. I showed him and he said it must be a typo.
Will try to verify this. If all else fails email it to the superintendant and get it clarified.
JB are those postings a joke? The salary ones?
My eyes hurt, my brain has not caught up yet.
February 23rd, 2007 at 10:17 am
“However, I got out of all International funds in Jan.. ”
grim: disclaimer language….please
my response: ? – think correlation, if your alternatives are going to perform well, then you need to have strength in international markets
superintend -e- nt
sorry. spell check was off.
please direct all investing questions to dream/index…………
Don’t buyer look at recent Comps !!!
I was looking at recent sales in my town, and came across this one sale. 29 Whitehead Road, in Bridgewater, NJ sold for $538,000. Since I live very close by, I know the area pretty well.
Just going through sales on same street, I could see, 49 Whitehead Rd, Sep 06 for $497,500. The houses on this street are exactly same, not even a minor difference.
Now why would someone through 40K just like that.
I am beginning to suspect, Sellers are more closer to knowing the market then Buyers. I think state should make it mandatory for Buyers to go through RE 101 course !!! Also wondering, should RE Agent at least show buyer recent Comps, before making an offer ?
I can only hope that post #49 is not true…
tried Closter…. can’t get a live human there either…. :(
SG, what is the sale date on 29 Whitehead
#73,
Came in today’s newspaper,
http://www.c-n.com/apps/pbcs.dll/article?AID=/20070223/NEWS05/702230332/1006/NEWS01
#49…
Ok, now I understand why NYC teachers who make, on average, over $65,000 a year for 10 months work complain about being underpaid compared to suburban school districts pay.
That’s incredible. I’m going to start working on my MA in Education, right now.
JM
JB 49: You made that UP! Go do some spreadsheets and stop with the fantasy about marrying a kindergarten teacher so you can stay home and clean fish tanks.
(Reposted from the comments section of http://www.calculatedrisk.com)
“But while the bubble seems not to be a major concern, there is a growing game of chicken between buyers and sellers. In the past, searches for “homes for sale” have outnumbered “homes for rent” by nearly 3 to 1. As of last week that margin was cut nearly in half as online domicile searchers indicated their willingness to at least explore renting pending a drop in home prices.”
http://www.time.com/time/business/article/0,8599,1592751,00.html
SG, looks like the owners bought for 235k in 1998.. hmmmm sold for 538k in 06.. for a POS condoshack.
#41
I prefer not to think in terms of price because price is loaded with purchasing power, in/deflation, etc. I prefer to think in terms of work-year. When we say a crap cod is worth $200k, $400K, or $800k, aren’t we really saying that a crap cod is only worth X years of my life?
Person A who makes $100k a year may believe a crap cod is only worth 10 year of his life and cost $300k. Person B who makes $200k a year willing to devote 10 year of his life may well “overpay” for a $500k crap cod.
I wonder, how many middle-class work-year do we think a place is worth? For me, this is what I think in terms of owning.
Condo: 6-8 years.
SFH: 10-12 years.
MultiFamily/Brownstone: 20 years+.
What’s the perception around here?
here’s $27 million referendum my school district is proposing:
http://www.boontonreferendum.com
The schools really are old and in bad shape, but I’m not sure the people here understand penny-wise pound foolish, so it will be a struggle.
Picking out the three teachers in the state who make over $200k a year and labeling all teachers overpaid is a little bit like finding two buyers who bought houses in Westfield for less than 2005 comps and saying the bubble has burst and prices are back to normal affordable levels. A few data points does not a trend make.
Take the time to sort through the salaried teachers in the $40k-$60k range and you will see plenty with Masters and years of experience. I am of the opinion that while teachers benefits and pensions are undeserved, the salaries for the most part are appropriate. Unfortunately, low paying jobs like starting teachers salaries attract a certain kind of person who sees the long term benefit of job protection with tenure and a nice fat pension and health plan. Its not ideal but the teacher who puts in extra time helping students are creating cutting edge lesson plans that address all learning styles is not going to be rewarded with a $50k bonus come year end, so, why bother.
Let’s not turn this into a teacher bashing session because I really don’t trust the data source on the salaries Jim posted. Let’s stick to the important topics, like union-bashing.
#18, 34, 38.
On a separate note, the patent suit business doesn’t require employees, just a shell of a company+lawyers.
I envision Aluc-Lu to file paper against 20-30 company from Apple to Sony and settle with most(the 1.5B warchest will sustain the mercenaries for years to come).
Check out this guy, he is trying to make the largest RE wiki.
http://www.inmanwiki.com/Real-Estate/Main_Page
BC (14)-
The gilded bull has arrived!
Chin up, mate!
The information on this site is provided for discussion purposes only. Under no circumstances does this information constitute a recommendation to buy or sell securities, assets, or otherwise.
SG (17)-
Any meeting to discuss RE/affordable housing creation in Sharpe James’ bailiwick is ridiculous on its face.
SG (19)-
At least the kid will lose weight and get in shape.
Bost:
here ya’ go
http://en.wikipedia.org/wiki/Image:Charging_Bull_at_Bowling_Green_060621.jpg
Jb,
Thanks for ruining a perfectly good Friday!
If we decide to stay in NJ, my wife is going to pursue teaching. Salary aside, we could save a ton of money by putting the family on her health insurance and not having to pay for day care over the summer.
If we are going to make it here, we need to put our hand in the cookie jar too. I already pay for it in my taxes, I might as well get a piece of the pie.
Al (24)-
The classic LOD conundrum! Prices down…still can’t pull the trigger, because you can’t confidently call the bottom…now other segments of the economy starting to roll over.
Paralysis by analysis.
Clotpoll Says:
February 23rd, 2007 at 11:22 am
SG (17)-Any meeting to discuss RE/affordable housing creation in Sharpe James’ bailiwick is ridiculous on its face.
Lee Harvey:
We got this queued up for the weekend….it looks to be a blast
http://www.netflix.com/MovieDisplay?movieid=70044385&trkid=90529
RentinginNJ
>> If we are going to make it here, we need to
>> put our hand in the cookie jar too.
well done!
Grim (34)-
Not very promising. Look at Rambus and Qualcomm, two other famous tech companies that have turned into “litigation factories”.
Resorting to plaintiff litigation as a revenue stream is a short-term (and losing) play. I think it’s tantamount to an admission that the company doing the suing has run out of creative smack. Lucent jettisoned all its best minds years ago; all that’s left are bean-counters and factotums. All over but the crying now.
Would love to hear Pat Russo butcher the French language, though. Anybody seen anything on YouTube with her in it?
figure out what to do with all that extra time & money. Home all summer?
all you get….
http://youtube.com/watch?v=iIUPItnMOSQ
Skep (37)-
In my little corner of the world, Q1/07 has been an @rgy of selling since 1/1. Super busy.
However, only the well-priced stuff is catching a bid. Anything offered at stupid prices is shot on first sight.
The feeling on the seller side of the table is one of panic, not confidence. These sales are happening because there’s a growing feeling that any house left unsold when the traditional season hits is dead meat.
Chi [88],
Gave him a tap this morning.
Clot [84],
I may take Al’s advice and move to Denver. First stop, Home Depot, get me a pitchfork and a shovel. Head to them hills.
please direct all investing questions to dream/index…………
I went to a Whole Foods and Wild Oats store in Princeton for the first time in my life last weekend. I hated the experience so much that I liquidated my entire brokerage account, leveraged up and shorted both stocks on Tuesday morning.
It’s good that I don’t dish out investing advice for a living.
100 comments and it’s not even noon…
BC (100)-
Denver? Take along a book on how to cook meth. It’s the only growth industry there. Seems to pay more than other kinds of rocks, too.
I’m there 1-2 times a year…company HQ.
Dream: I never go in those stores because I get a skeeved feeling thinking about it.
Like maybe if I go in there, they’ll brainwash me. I’ll end up as the health nut at work – the one at the sink in the office lunchroom everyday, making fresh endive salad with weird seeds and berries.
Clotpoll Says:
February 23rd, 2007 at 12:04 pm
BC (100)-
Denver? Take along a book on how to cook meth. It’s the only growth industry there. Seems to pay more than other kinds of rocks, too.
I’m there 1-2 times a year…company HQ.
I just hate Clotpoll bashing everything but NJ!!!!
Denver is a great town, not more, not less drug use than in NJ. Less corruption and people are nicer. Denver’s big negative – job market.
“Denver’s big negative – job market”
Al,
I’d bees digging in dem hills. Clot may not be far behind.
We just got our new tax bill and apart from feeling nauseous I am a little confused on how the taxes are figured. We live in a townhouse community with basically 2 different models. Looking at the assessed value online of our house and various neighbors, our house is assessed for less than many of them but our tax bill is the highest. How is that possible? What am I missing?
Pat (103)-
You just described the CEO of Whole Foods.
Al (104)-
Gotta call ’em like I see ’em. Denver is a pretty town, and I like all of CO. I look forward to going there; it’s cheaper than a weekend at the Borgata, for chrissakes.
However, CO home inspectors offer “meth house detection” as one of their services, and CO is one of a handful of states with “meth house” RE statutes. That’s indicative of something, eh?
BTW, does the recipe for cooking meth have to be altered in a high-altitude environment?
NO I am serious -look up Clotpoll’s posts about southern states, west and north states…
Nothing is good – everywhere else but NJ suck… I guess if you move out of NJ you will not buy a house in NJ, less job for realtor ®…
However, CO home inspectors offer “meth house detection” as one of their services, and CO is one of a handful of states with “meth house” RE statutes. That’s indicative of something, eh?
Last week I saw a special about people in NJ buying their 4th home, gutting it, equipping it with lights and growing 1,800 pot plants/house….
the only reason authorities finally caught them – unusually high electric bill….
Does this mean NJ is Pot-capital of the US???
BTW, does the recipe for cooking meth have to be altered in a high-altitude environment? – no comment here… I will not give advice …
Why are you asking? Is that what Bob reefer’s to in post 105 :) ??
BC Bob Says:
February 23rd, 2007 at 12:21 pm
“Denver’s big negative – job market”
Al,
I’d bees digging in dem hills. Clot may not be far behind.
???
I realized that the ‘Forum’ section od this site does not attract high traffic and am therefore reposting my inquiry here:
Does anyone have information/knowledge of Cambridge Crossings in Clifton and Cambridge Heights in Nutley?
How prices of these townhomes have been impacted in the last year or so, are they still over-priced, how’s the commute to NYC during peak hours (sellers and realtors claim its approx 25-30 mins), is the development managed and maintained well, any complaints related to construction etc. that have surfaced (or been suppressed)? Most important – should I be thinking of buying here?!
“I just hate Clotpoll bashing everything but NJ!!!!”
Al,
You’re right. If it’s not NJ, he lifts up his chin and see clouds, he looks down and he sees do-do. You would think every now and then he could be the equivalent of Larry Crude-Low [cnbc]. Come on Clot, be a little positive.
I have nothing against Whole Foods, but I don’t particularly care for the other customers.
I stopped into Whole Foods to pick up some tuna and steak one afternoon. Walked through, picked up what I needed, and proceeded to the check out. There was a little bit of a back-up, but nothing out of the ordinary for a super market. Once I made it up to the conveyor I picked up one of the separator bars, and put it down. I proceeded to take the blood red steaks from my cart and place them on the conveyor.
The guy in front of me turns back and looks at what I put down (I’m sure this was inadvertent).
He proceeds to push his food further along the conveyor, as to get it away from my dead and butchered animals, and then gives me this look of disgust and horror.
At this point, we moved forward a little bit and there was someone behind me. So, in order to make some extra room on the conveyor, I grabbed another separator bar (I was being nice to the person behind me, another meatitarian), and I pushed my items right up against his.
Priceless
jb
JB,
Additionally, I would have pointed to my canine incisors to make the point.
Drat. #114 moderated. A most vigorous riposte to BC and Al.
Gotta love Realty Times – I cannot believe they print this schlock (well, actually I can, but it still annoys me). Apparently there are still some idiots out there willing to buy into the “buy now or you’ll be priced out forever!” school of thought.
http://tinyurl.com/2zd4md
Additionally, I would have pointed to my canine incisors to make the point.
For just one second I considered a Gene Simmons impression.
jb
J.B.
Maybe the issue was not the meat. Maybe the guy thought you were pushing him ahead and you were going to sneak your cart up and block the area in front of the card swiper while he was bagging at the end.
That’s a cardinal sin where I live.
I like Whole Foods, they have good quality meat and veggie. Always fresh but we pay a little more.
I go to the Whole Foods in Madison once a week. I don’t there are l lot of hippie health nuts there.
Primarily people want better service and higher quality product.
Not everyone
goes to Bloomingdales is worse that people shop at JC Penny
Or
leases a BMW is worse that people buy certified pre-owned Toyotas.
It is just preference/choice in life.
CC
For the record – CO is the meth capital of the United States, and it’s representatives of Gen Y are all the sons and daughters of the Cali hippies who burned out and moved to the great outdoors. The most people I ever seen with crispy brains other than the pHd’s who squat in People’s Park in Berkeley.
Gotta love Realty Times – I cannot believe they print this schlock (well, actually I can, but it still annoys me). Apparently there are still some idiots out there willing to buy into the “buy now or you’ll be priced out forever!” school of thought.
http://tinyurl.com/2zd4md
He just wants people to buy his book, sounds like a Lereah-wannabe.
Let’s see his great “scare tactics”:
However, the effect on the overall market will be the same, shrinking inventory means buyers won’t have as much leverage as they did just a few months ago.
o0o0oo0o, as far as I know, buyers have most of the leverage right now.
Are we really at the bottom? David Lereah, NAR’s chief economist, thinks so: “This information confirms 2006 was the year of contraction, and hopefully the fourth quarter was the bottom of this current business cycle,” he said in an online press release. “Home sales are leveling at historically high levels and examination of data within the quarter shows home prices stabilizing toward the end. When we get the figures for this spring, I expect to see a discernible improvement.”
o0o0o. Mr Lereah says home prices are now at a HISTORICAL HIGH level. Just last year, Mr. Lereah was telling people to buy because rates were at a HISTORICAL low level. What did home prices do last year? They FELL. In my mind, Mr. Lereah is just plain HYSTERICAL.
I don’t see how the last “downfall” could signal the bottom. How can you tell if you’re at the bottom? You can’t. You won’t know the bottom until it has passed, plain and simple. Wait until you see an uptick (and not a seasonal one, that wild card they always seem to throw in) before you call the bottom. Sports bettors have better predictions then this guy does.
Once you see the prices edging up — if you’ve been waiting — get off the fence and buy. For sellers, price right today so you can sell it quickly and move into that move-up house before you’re priced-out of your dream home.
BUY BUY BUY! GO BUY NOW! $1,000,000 WON’T BUY ANYTHING IN A FEW YEARS!
That’s all of my rants for now. In my mind, he forgot one important topic in that article: FORECLOSURES
#114 Clot: This is the Peoples Republic Of NJ, or the DRNJ (Democratic Republic of NJ) have not decide which one I like best yet.
And yes many of nto most people in the state are clueless, even those whom one might expect better of.
Do not question, pay your outrageoud property taxes, spend money whether you have it or not.
Do not question your local officials or school board members, and just vote yes when instructed.
To do otherwise would be unpatriotic.
Richie (121)-
One small point of contention; right now, 60-70% of buyers don’t have any leverage, either. They can’t sell their current homes.
The buyers with nothing to sell…well, that’s another story.
This is the Peoples Republic Of NJ, or the DRNJ (Democratic Republic of NJ) have not decide which one I like best yet.
I’m partial to Democratic Peoples Republic of NJ (DPRNJ) myself.
Do not question your local officials or school board members, and just vote yes when instructed. To do otherwise would be unpatriotic.
Vote yes or your property values will go down and your kids will be bussed to school in Newark.
http://www.myfirstcap.com/
Thank you for choosing First Capital Mortgage. Currently First Capital is not accepting any new mortgage loans for submission.
If you have a loan already in process please fax all your conditions to (916) 914-2070 or you can email them to info@myfirstcap.com.
If you do not know the status of your loan please call (916) 391-4800 and dial extension 142 or 155.
Thank you for calling First Capital Mortgage
>>
Source CR
Union Pacific lays off staff, citing slower economy
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070223:MTFH88753_2007-02-23_00-57-20_N22131824&type=comktNews&rpc=44
Union Pacific Corp. (UNP.N: Quote, Profile , Research), the No. 1 U.S. railroad, said on Thursday it has laid off 124 rail workers and placed 455 more on part-time work, citing slowdowns in the U.S. housing market and other sectors.
“There may be more (layoffs), but we don’t expect them to be widespread,” Kathryn Blackwell, Union Pacific’s assistant vice president for corporate communications, told Reuters.
All of the major U.S. railroads have said over the past few months that they have been seeing a slowdown in freight volumes related to the construction business, plus some softness in industrial freight volumes and shipments of cars made by General Motors Corp
>>
Is housing still 6% of total GDP?
CNBC had their economist Steve Leesman talking about housing. His outlook was negative. He gave following 3 main reasons.
1. Delinquency: He pulled up a chart, that was surprising. He said not-only Sub-prime delinquencies have gone up, but even prime ones are going at much higher clip. This is new one, so far people were bashing sub-prime and not the prime loans.
2. Foreclosures: As well know, these have been going up significantly in 2007.
3. Hidden Inventory: According to him, Cancellations at Home Builder are somehow not getting accounted into reported Inventory. Also, he believes large number of unsold homes from 2006, are waiting to come back into the market, if there is some sign of life in the market.
According to him, it will be at least 09, before all these factors are accounted for.
But first, Seiders (NAHB chief economist) makes some negative statements:
Housing analyst David Seiders told Chicago-area builders Thursday that the federal estimate of 3.5 million homes for sale at the end of 2006 is “grossly understated.”
“There is a big inventory overhang out there, and it’s bigger than anybody understands,” he said.
In an annual forecast on the local industry in Addison, Seiders, chief economist of the National Association of Home Builders, cited the high level of sales contract cancellations in 2006. It created a snag in the recordkeeping, so many homes marked as sales in government data ended up back on the market too late to be counted as inventory, he said.
“Cancellation rates more than doubled between the end of 2005 and the end of 2006, meaning that net sales for the year nationally may be down 65 percent.”
http://www.chicagotribune.com/business/chi-0702230167feb23,0,5178193.story?coll=chi-business-hed
The ponzi money is drying..oh well grubbers better get that second job after all.
hehehehehhee
Richie, my favorite part of that article was the love of Lereah – I simply cannot take any article that uses him as their sole source of information seriously. He’s a shill, and anyone who doesn’t see that deserves no respect.
SPRING 2007 HOUSING MASSACRE COMING TO A HOOD NEAR YOU.
READ MY LIPS IT’S GOING TO GET WORSE…YES BELIEVE IT OR NOT AT YOUR OWN LOSS.
2008 IS GOING TO BE MISERABLE.
PHONEY MONEY IS DRYING UP. NO MAAS. KABUTZ….
BOOOOOOOOOOOOOOOOYAAAAAAAAAAAAAA
Bob
#124 Democratic Peoples Republic of Nj, might be a little clunky.
I like the Democratic Republi of NJ, becasue you can call it the DRNJ for short, just like the old East Germany was the GDR, it is kind of catchy.
But then again I do like the People, becasue we are told that all that is being doen in our state is for the people.
Yes all of our kids will eb bussed to Newark, or one of my other favorites if you do not vote yes, we will become just like (insert other town here)
I dared question a 24 million bond referendum that was passed in my town.i asked once the structure was built, what the impact would be on the operating budget once constructed.
One of the politburo (school board) members toled me that we do not know what that impact will be, and belive it or not also said, and we are not going to talk about it.
No one else on tge politburo disagreed.
Now the addition is 1/2 way completed, and people are finally waking up and starting to voice concern.
well its a little late now comrades.
Can you feel the papapapa PANIC building?
TOTAL CAPITULATION COME MAY.
IT IS GRINDING LOWER. FOLLOW YOUR DREAM AND WATCH YOUR HOME EQUITY GO POOOOOOOOOOFFFFFFFFFF!
Hi – I’ve been a lurker for a while and have a question. I 100% agree that it is a stupid time to buy and that prices are going down and will not go up for a while…BUT…I have been watching sales prices in “choice” towns like Chatham, Millburn, Westfield, Summit and have seen only stablilization in these areas at best. Given that a RE crash would possibly cause NYCers to spill into these towns, is it possible that they are in some way inoculated against a significant downturn? I’m finding it hard to believe that a 1M CHC in a nice nabe in Short Hills is going to suddenly sell for 650K in a few years, but maybe I am naive?
the school referendum in Town Of Boonton proposes to consolidate the schools to save money, but in order to do that they have to build an addition on to the oldest school. The school board will supposedly then try to lease or sell the unused school to offset future budgets. That’s where the risk lies in this decision. Does that seem like a dicey proposition, to hedge your bets on future sale of assets?
#41 Gary:
Great Point. I was going to post something similar. I look at some listings and it seems like people assume that 500K is the minimum one can ask for a house in NNJ no matter how terrible it is. 500K is a lot of money for many people, I don’t think our state has the income to support a minimum 500k price for a house. This thing is coming down.
#59 RentinginNJ:
Reminds me of a co-worker who took a five year loan on a new car as it was *cheaper* than a 3 year loan. He only cared about the monthly payment and not the total cost.
Greatest craigslist posting for Hoboken I’ve seen…anyone who buys this should have their head examined…
http://tinyurl.com/yopkao
“Sale is contingent upon seller’s closing estimated to be mid June.”
I hereby acknowledge that I am the worst kind of condo flipper ever….once I finish paying the 550 cost of this condo (if I am, indeed, able to get such a mortgage), please pay me 669K for the privilege of owning this.
I’d like to believe the seller is talking about closing on a house or something, but considering that this building isn’t even finished yet…
#137 Anti- Trump 500k is a lot of money for MOST people. That is what has been so insidious abou this bubble, it has totally devalued peoples view of monwy and value etc.
When you hear people talking abut how 500k is a ggod deal, and it does nto matter becasue it will be worth 600k next year, how could you call it anything lese but madness. this was a real life conversation I had with somebody a couple of years ago, with a combined family income of 65K!
Although now I must admit he does not talk about real estate any more; for this particular person i do nto have the heart to throw it back in his face;he got caught up int he mania, and made a poor decesion.
Beans Says:
….Given that a RE crash would possibly cause NYCers to spill into these towns, is it possible that they are in some way inoculated against a significant downturn? I’m finding it hard to believe that a 1M CHC in a nice nabe in Short Hills is going to suddenly sell for 650K in a few years, but maybe I am naive?
It all depends on the NYC Metro economy and more importantly the price of condos in NYC. You are referring to prime Midtown Direct towns here.
I am renting in one of these towns. I can tell you that not everyone here is a bond trader or M&A attorney. People in these towns probably make more $ than people in other NNJ towns because they work in NYC (finance, legal, advertising) and they are willing to pay more for convenient commute. However I am not sure they are unlimited amount of income to spend on RE.
It is a myth that that most households in these towns have income over 400k and they can afford 1 million starter homes.
However I agree with your observation that listing prices in these towns are 0-10% off their peak. And some of them do go under-contract.
NYC Condos are still close to their 05 peak, therefore these houses seem reasonable to these new buyers.
Plus people here think these houses have more value because of midtown direct train.
Just my own observations.
CC
#135 Bean You may be seeing stabalization, but that is what you see in many areas before prices fall, and fall they will.
As far as NY’ers, I am utterly exhausted with this, but to keep it short, you should stop focusing on the role Ny’ers will paly in how the Nj amrket plays out;they are only a very small part of the equation.
Wells Fargo – Credit Quality Report
February 2007
On a quarter-over-quarter basis, residential loans saw the biggest increase in delinquency rates in Q3 following
the rise in mortgage rates and the slowing of home price growth in Q2. Credit
After peaking on July 20, mortgage rates fell until December 7 as the housing market slumped and the economy
hit a soft patch (chart 1). However, amid signs of a quickly rebounding economy, mortgage rates have trended
higher over the last couple of months. As the Fed Funds rate continued to climb over the past couple years,
short-term mortgage rates, such as ARMs, rose in lock-step, while longer-term mortgage rates rose at a slower
pace. Even though this has led to a further narrowing of the spread between the 30-year mortgage rate and the
Fed Funds rate (chart 2), we do not expect this spread to significantly revert toward the mean any time soon.
Thanks to falling oil prices and improved productivity, inflation is moderating, making U.S. fixed income
securities such as the 10-year Treasury note, to which mortgage rates are closely linked, more attractive to
investors. This has kept Treasury yields and mortgage rates low on a historical basis, and with Fed Chairman
Ben Bernanke gaining credibility as an inflation fighter, we believe these trends will continue in 2007.
Mortgage delinquency rates rose across the board in the third quarter (chart 3), as did foreclosure rates (chart 4).
Thus it is clear that rising mortgage rates during 1H06 have started to take their toll on borrowers. With a wave
of exotic mortgages resetting in 2007 to higher rates, delinquencies and foreclosures are expected to rise further.
https://www.wellsfargo.com/downloads/pdf/com/research/credit_quality/cqfeb07.pdf
#140 bergenbubbleburst:
I know a couple who bought a 600K split last year. They have a combined gross income of about 130K. His whole after tax salary was going into their house payments, and they were just getting by on her after tax salary. Now they have two kids and the financial stress is really getting to them.
For some of us who have owned houses before and cashed in, the urge to get in isn’t that great. Cause we have dealt with the responsibility of home ownership. For first time home buyers, it is a very emotional decision and it is understandable that they stress about it. I probably would have started to get desperate now, if I didn’t own before. All I can say is patience and financial prudence will be rewarded.
NJGal,
That Craigslist post MUST be fictitious as that price appears to be below the magical $500 a square foot figure that the Kannekt Klowns say is a line that can never be crossed for new construction in Hoboken. Could it be a brand new day???
More info on Delinquency Rates for Sub-prime & Prime Loans
Mortgage delinquency rates rose across the board in the third quarter (chart 3), as did foreclosure rates (chart 4). Thus it is clear that rising mortgage rates during 1H06 have started to take their toll on borrowers. With a wave of exotic mortgages resetting in 2007 to higher rates, selinquencies and foreclosures are expected to rise further.
http://www.wachoviasec.com/wachoviasec/WSICommentary/fixedincomeweekly.pdf
The one problem I see on this site is some of you folks want to go straight from renting to a 5 beroom CHC in a blue ribbon school system. C’mon people. Ever heard of a starter home? Our parents did it. I did it. I’ve been in my current home for ten years, and only now am I looking at ‘moving up’. Why can’t you?
Hehehe Says:
February 23rd, 2007 at 2:47 pm
NJGal,
That Craigslist post MUST be fictitious as that price appears to be below the magical $500 a square foot figure that the Kannekt Klowns say is a line that can never be crossed for new construction in Hoboken. Could it be a brand new day???
NJGal & hehehe,
It is a deceptive listing.
The listing locations says: 700 Grove Street Hoboken, Jersey City.
The links for Google and Yahoo maps say: 700 Grove Street Jersey City, Jersey City.
It is Jersey city not Hoboken.
CC
Anti [144]
I endorse.
SG #146-
I’m guessing this was a typo, but I think we may have a new realty term
‘selinquencies’
Definition: trying to sell it before you go delinquent.
JM
You are correct, 700 Grove is literally right on the JC/Hoboken border, but perhaps the listing is a sign of things to come, HEHEHEHEHEHE:)
Hehehe and chaotic:
CC, 700 Grove is “technically” JC, but as Hehehe knows, it’s essentially in Hoboken. But it has lower prices because technically it’s JC. So while I agree it’s deceptive, it’s not quite as deceptive as it could be.
But I don’t think it’s fake. Because I think that a lot of real estate agents in Hoboken are the flippers in pre-con buildings in Hoboken, and I think a lot of them are, well, stupid (I have seen some of their assinine postings on kannekt). I just don’t know why you would outright admit your flipperness, unless you were trying to advertise a great deal, that you were selling below developer pre-con prices or something.
AntiTrump,
I am absolutely agast at the percentage of people who have zero insight when it comes to money management, investing, the power of compounding and allocation. Clueless!! Not even a whiff!! I talk to friends and they think getting involved as an Amway distributor is the way to go.
Jersey4Life Says:
February 23rd, 2007 at 2:49 pm
The one problem I see on this site is some of you folks want to go straight from renting to a 5 beroom CHC in a blue ribbon school system. C’mon people. Ever heard of a starter home? Our parents did it. I did it. I’ve been in my current home for ten years, and only now am I looking at ‘moving up’. Why can’t you?
4life,
How much do you think a starter home i buy today will sell for in 10 years???
Most starter homes are about 500-600k. With 10-20% down and traditonal 30y fixed, I probably will need to make 130k-180k. How many household do have in NNJ have 130k-180k?
And if it is ok for you to disclose. How much did you pay for your starter home 10years ago. And how much can you sell it for today???
With the sale of your 10year owned starter home, can you afford a 5 beroom CHC in a blue ribbon school system????
CC
NJGAL,
No doubt Kannekt is the domain of flippers and RE agents. I just don’t get the moderators deal with removing anything negative about the Hoboken RE market. There’s not even that much RE advertising on that website. Unless he/she is flipping themselves. Which wouldn’t surprise me. That or Toll Brothers secretly owns the thing.
#147 J4L:
Here’s a guess:
1) These days graduate school of some sort is expected, which adds years and loans;
2) For those who finished grad school during the bubble, even starter homes were out of reach, so they start saving;
3) They marry and start a family while saving and renting; because trying to time family planning with the housing bubble is a bit tricky;
4)They have 2-3 children by the time they have enough money for a house, and a starter home is no longer practical.
-Beans
Jersey4life,
How often do folks go to a fancy restaurant and eat a burger?
When there are cheaper (or comparable) McMansions available why will people go for older ‘starter’ splits or other smaller houses?
I am not saying this is good.. McMansions have (generalizing again) shoddy construction.
There were no McMansions in our parents times. Good or bad, Builders have permanently priced out (most) older starter homes.
ok, I screwed up the burger analogy.. but you get my point.. right? ;-)
I suspect that Jersey4Life, like most people who bought homes before this bubble started, has no idea how much starter houses currently cost.
If he does, perhaps he can enlighten us as to whether he would be able to afford to buy his house today if he was just starting out
Let’s break it down, shall we?
A Center Hall Colonial in a so-called “desirable” town will cost you $5000/month in PITI with 20% down and a 30 yr. fixed. That’s affordable, right? You’ll need at least $160,000 just to put down on an $800,000 house. Don’t forget closing costs, that’s extra.
Then you’ll have to buy paint, supplies, fixtures, an appliance or two, a faucet, some furniture and landscaping because it’ll be a sad, dated looking house but at least you got it at a “bargain”.
Oh, and don’t forget gas, electric, cable, phone, food, school tuition, commuting costs and car insurance.
(Insert weasly voice here)
Hey, people have told me that North Jersey is very competative and that if you can’t afford to live here, then you’re just a wannabe and maybe you should move out of state.
BTW, do you know what a new furnace goes for these days? :o
Re post #135
Beans,
It really seems that when people first start to recognize a problematic situation (say a real estate crash) they always see it happening to someone else, never them.
The good people of Chatham, and many other communities, are no doubt certain that “it can’t happen here,” and they are right, that is they are right until it does happen there.
It does seem sort of fantastical that prices could plummet, but somehow it didn’t seem so crazy when they were were rising by 25% per year for the last three years.
Maybe houses in Chatham go to $650K and maybe they don’t, but it just doesn’t seem too farfetched to me that it couldn’t happen.
I’m down in Monmouth County and just about everyone I know tells me a big price drop isn’t in the cards. I’ve been watching asking prices since last July and they have drifted down a bit, but not too much. At the same time of course the number of houses being sold has dropped like a stone.
If the spring selling is gangbusters (and that’s the only way) then prices are going to hold, but if sales don’t pick up… watch out.
Maybe you should sit down and have a talk with Booyaa Bob, I see he’s back in town.
I agree that the top towns are somewhat more insulated than the rest. As prices decline, buyers that would’ve bought in second tier towns will go for the top tier. It’s a constant pattern in every RE downturn that the more marginal an area is, the harder it gets hit
that said, this is not the same as saying that top areas are immune from price declines
“Ever heard of a starter home?”
[147],
Starter home?? That’s so Ward Cleaver.
Went out of style with 20% down and fixed rate financing. In conjunction with this, what about the peer pressure that many on this site allude to?? Also,who would want to park their $600 a month leased car in a driveway of a starter home??
BC Bob, disclaimers aside – can you tell me why you invested in grains (#47)?
I am living in a “starter home” 2 bedroom, 1.5 baths 1900’s colonial. Paid 350k for it..but hey, it is in Prestigious Bergen County. I am glad I bought it when I did, because if I waited any longer, the house would appreciate to about 500k (and when it does, I will upgrade to a McMansion)
I am the financial jeanous!
that should be #43. sowwy
Can someone give me the details behind MLS #706951 in Old Bridge. Its built in 05′ and I think I’ve seen it on the market since last fall.
#161 Lindsey: That is what I have been saying for the last 3 years, if it is perfectly reasonable for prices to rise 25% a year for 3 or 4 years, why can’t they drop by 25%?
It really is a simple as that, no need to talk about prices sticky on the way down, its not sticky,but rather foolishness on the part of sellers.
If you owned a home for x amount of years, and you saw other homes selling for x amount in a very short time, then hey the market was great for a seller at that time.
If you now decide to sell, and you put you house on at that same price or higher (whcih many have done), and it is not selling, than the market has changed it is as simple as that.
No need to talk about emotions, or sellers not giving the house away, or sellers being insulted by so called low ball offers.
Were sellers during the bubble worried that buyers might be insulted by theri asking prices? No, this is the price if you want to buy, it was as simple as that.
People who are selling now on the way down will just have to learn what buyers learned who purchased over the last 3 4 or years had to learn on the way up.
The sellers who do not have to sell can simply take their hoems off the market. The sellers who want to or have to sell, will have to lower their prices.
I think we will see a very clear picture of this in this coming Spring market. Last Spring the denial stage, this Spring the reality stage.
#165 tbw Prestigious Bergen county, just minutes away for NYC. While you are at, throw in award winning Blue Ribbon Schools, and you can add another 100K.
“#161 Lindsey: That is what I have been saying for the last 3 years, if it is perfectly reasonable for prices to rise 25% a year for 3 or 4 years, why can’t they drop by 25%?”
bbb,
More than reasonable. IMO, 30-40% off 2005 highs. Again, slow as Hideki Irabu [I rob you]covering first base.
Published: February 21, 2007 in Knowledge@Wharton
Good Balanced Article.
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1664
Many subprime borrowers are paying 10% to 12%, compared to 6% to 8% on standard, or “prime,” loans, and delinquencies are rising.
Jack M. Guttentag, emeritus finance professor at Wharton. He expects home prices to fluctuate aimlessly for two to three years without a major decline.
Another factor was work by academics and lenders who found that people with low credit scores were not as risky as previously thought. In the 1980s and 1990s, lenders “began to learn how to trade off one risk factor against another risk factor,” Guttentag says. “A bunch of guys realized there was a lot of money to be made for delivering loans to a category of buyers who had never qualified for loans. They found that they could charge very high rates to cover their risk and make large profits.”
For many renters, the obstacle to home ownership was not the size of the monthly payment, but the need for a down payment of 10% to 20% of a home’s cost.
I find irony here. For the most people on this board, I have heard, Down payment is not the issue, it is the monthly payments due to high prices.
To get mortgage brokers to push these profitable loans, lenders typically offer commissions equal to about 3% of the loan, compared to 1% for a prime loan, Guttentag says. “A lot of brokers just specialize in subprime loans.”
Whoa !!! 3% just for making the loan. I think we all have been fed up with 6% RE commissions, but this is even better. You don’t even have to show the house and get out of the house. Just lay in your pajamas and make money. To top it up, you are said to be helping the people who can’t afford traditional loan.
Four out of five subprime loans carry floating interest rates that, after the first year or two, change every 12 months as short-term interest rates fluctuate. Because of the Fed hikes, homeowners who received these loans in 2005 are now finding their monthly payments rising by 30% to 50%, leading many to fall behind in payments. “None of this would be an issue now if we did not have 17 straight increases in rates,” Thomas says.
#154 chatoic Over 70% of homeowners in prestigious BErgen county make 100k or LESS a year, so today most of the homewoners in BC, would not be able to afford Bergen county, and that makes absolutely no sense.
most people in passaic and essex cant
afford their homes either.
if they had to they could not buy it
today. taxes are to high.
screwed again.
oh my goodness, housing stocks down
along with the subprimes.
ugh.
#171 SG Perhaps Mr. jack need to take anoterh look at his articel as the eub-prime is starting to blow up, and now possibly moving into the higher categories.
There was a reason there were standards fro qualifying for a mtg, because it is a serois committment.
Innovation is great in many respects, but many times the old ways are still the best way because they work.
#170 BC Bob, that is OK, I will wait. In the meantime I am going to committ to that new car this weekend, and a few pints. (maybe more than few)
“NJGAL,
No doubt Kannekt is the domain of flippers and RE agents. I just don’t get the moderators deal with removing anything negative about the Hoboken RE market. There’s not even that much RE advertising on that website. Unless he/she is flipping themselves. Which wouldn’t surprise me. That or Toll Brothers secretly owns the thing. ”
I don’t understand the motivation myself, but I do think that if there is any revenue to who runs that site, it comes from real estate advertising and/or someone in Hoboken with a monetary interest. And I do think that perhaps the moderator has an interest in propping up prices in Hoboken for whatever reason. I barely read it anymore -it’s all drivel and I feel bad for any newcomers who go there with legit questions and concerns, because they’ll never get both sides of the issue.
>>I’m finding it hard to believe that a 1M CHC in a nice nabe in Short Hills is going to suddenly sell for 650K in a few years, but maybe I am naive
no chance. i can see it going down to the high $800’s in a bloodbath situation, but that’s about it. it’s a ‘top town’ and they tend to be more insulated than the fringes due to the money that wants to land there.
SG (171),
It seems the commission has to be returned if the borrower can find better financing in 90 days[?]. Tanta on CR posted a comment on how loan officers were driving each other to bankruptcy by writing even more risky loans to ‘bribe’ customers. If an officer wrote a loan and spent the commission within 90 days and if a “premium recapture” or “early payoff penalty” happens, then the officer would be in deep trouble.
>>Over 70% of homeowners in prestigious BErgen county make 100k or LESS a year, so today most of the homewoners in BC, would not be able to afford Bergen county, and that makes absolutely no sense.
it doesn’t on the surface, but those 70% don’t have to worry about affording their house today since they already own it and are ‘in the game’. it’s those wishing to own that get the short end. i think in the end we’ll get some concessions from the buyers and sellers and a price point will be set that will change over time depending on macroeconomic factors, etc. are we there yet? hard to say but i don’t think so. i think we need another 6-9 months of price and inventory data before calling a trend.
bergenbubbleburst: I feel the real cause seems to be following,
In the 1990s, Congress and the Clinton administration pushed policies to encourage wider home ownership, which today is at the highest level in U.S. history, nearly 69% of households. “A regulatory climate developed — which still exists today — that favored these loans,”
I think Regulators did not envision a scenario where due to Recession, Interest rate would go down so much, causing RE boom and sub-prime making it a bubble.
I find it very hard to believe that if Sub-prime was intended to increase home-ownership in low-income group, then why Regulators did not put a cap on loan limits and some checks for confirming incomes.
Some guy in Washington mess up, all US Citizens pay with their wallet.
RentLord [164],
Only if you promise not to listen to me. Of course all disclaimers apply. By the way, you would have a better shot listening to the NAR than me.
Two reasons[corn];
1)Strictly technical. It traded in a tight range for 2 years, building a strong base, basically 2.00-2.50. I went with the breakout[confirmed by huge volume]
2) Fundamentals. Followed the commercials [farmers]. When they would normally be selling,[hedging] they were actually buying. Why??
That was then, around 6 mos ago.
I wouldn’t recommend playing this unless you watch it constantly, know the markets inside out,
understand spreads, hedging, all technical indicators and can tolerate big swings in equity.
Worry about the return of your money rather than the return on your money.
njrebear: The cases you mention are rare.
I was always wondering, how come mortgage brokers are flying high. I did not understand mortgage business then, but was definitely wondering, how come these guys are living and spending so lavishly.
“and a few pints. (maybe more than few)”
bbb,
Good idea. After all, I don’t have any honey do items on the home maitenance list.
Thanks BCBob – and no I am not going near commodities… yet.
#184 BC Bob, neither do I BC, and I am going to buy a car that I actually own, although I make take a look at Toyota’s 0% financing for a short period.And the pints of course will be paid for in cash. Have a good weekend.
Those teacher salaries are mistakes. There is no way a teacher makes more then a district superintendant would. Even with 20 hours of overtime a week, it’s not going to happen.
Does anyone know anything about townhouses in Springfield called Troy Village or something along those lines?
To paraphrase Golda Meir, there will only be peace between buyers and sellers when the sellers learn to love the notion of 90 cents today more than they love the idea of one dollar tomorrow.
Face it, there aren’t going to be 30% price drops. Just a slow, boring wait as prices drop modestly while inflation eats away at the ask.
Spring is near so those vacant homeowners won’t have to pay to keep the pipes warm much longer. They will pay another year of taxes and wait for those Springtime buyers. They really don’t care about all the wonderful things they could have done with $550,000 in 2006, they just keep thinking about all the wonderful fun they will have with $600,000 in 2008.
and No, I am not in the drug buisness.
SAS
SAS,
Sorry for getting off topic.
“U.S. stocks dropped for a third day, pushing the Dow Jones Industrial Average to its worst weekly decline since August, as concern mounted that more Americans will default on home loans”
“The consensus has been it’s going to be contained. Now people are questioning that,” said Bill Strazzullo, the Boston- based chief market strategist at Bell Curve Trading. “It’s going to start with the weakest credit and work its way up.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aa02EqjZLSWY&refer=home
My 02 cents to those looking to buy:
In my opinion, Real-Estate will not correct over-night like stocks without a major catalyst. What we will see is a prolonged down town with a 5 – 10 % YOY real decline until fundamentals catch up. Those who bought or buy this year have/will fare much better than those who bought in peak in 2005. I strongly believe that those who buy next year will do better than those who buy this year. It’s up to you if you want to fold or play another round.
Again, old news and off topic;
“ResMae Mortgage Corp. may be on the cutting edge of a trend in the U.S. subprime-loan industry. It’s bankrupt and selling assets for pennies on the dollar.”
“Shares of home lenders tumbled today, partly on investor concerns that Wall Street firms and large banks might pull the credit lines that smaller mortgage lenders depend on to fund loans, said Bose George, a mortgage-industry analyst at Keefe Bruyette Woods in New York.”
“Losing access to these “warehouse lines” might force them to shut down or file for bankruptcy, he said.”
“A lot of investors are asking, are any of these companies going to unravel to zero?” George said. “If they keep losing money, it could become a real risk.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKIzk2ZzqqI8&refer=home
Anti-Trump: ia m not sure ho much of a cataylst we need, look ahwt is happening now, and all is supposedly well.
I belive that any body who bought from mid-03 through 05, wwill haev over paid. The bubble did reach its peak in 05, but it was a bubble before that date as well.
I do belive we will see a clearer picture this Sprting than last (reality stage), and that yes this year will be better to buy than last, but the bettwer deals are ahead in 08/09, which really in the scheme of things is not that far off.
Even after 08/09, i belive real estate will at best be flat for a few more years after that.
Any upsurge again (if ever) is years away.
#189 I think you are wrong Seneca, I think there will be at least 25% price drops, and as BC Bob says probably more.
There are not that many people wwho can continue to pay 2 mtgs and prop taxes indefinitely, the smarter ones will wake up, and this thing will play out accordingly, not quickly, but quicker than you think. There simply will be no buyers in Spring of 08 for 600K.
The party is over, the sellers of course and as is true in many things are the last to know, but they will.
Here you go……………..
http://tinyurl.com/3chm5d
#193 bergenbubbleburst Says:
It wouldn’t’ surprise me if it happened sooner. I think this spring season will be a sign of things to come.
If you must know, I bought my starter home for $240K ten years ago, but I was also making $40K a year. I live ten minutes away from NY and work there. I will be looking to move soon, but you are right, my household income is close to $200K.
rats are a big problem here in NYC.
I do think this KFC is getting the brunt or singled out
SAS
Jersey4Life Says: “If you must know, I bought my starter home for $240K ten years ago”
Just curious, which town did you buy in?
Challenge for the experts here. How do you rate the following influences on the bubble, scale least 1 to most 10:
information technology;
loose credit in all it’s forms;
Taxpayer Relief Act of 1997 and home sales exclusion;
Reality TV’s evangelization of home ownership
I’m sure you will think of others.
Sorry for bringing this up again. Need to know best, quality/price for 36-42 in. LCD TV. Resolution/contrast/inputs??
Have to get ready for march madness.
Thanks!!
BC Bob;
Hubby is a huge fan of the Sharp Aquos. Check ebay.
BC
Make sure you get the HDMI input, otherwise it’s a lot different experience.
Go Tigers!
BC Bob Says:
February 23rd, 2007 at 5:22 pm
Sorry for bringing this up again. Need to know best, quality/price for 36-42 in. LCD TV. Resolution/contrast/inputs??
BcB,
The more expensive it is the better.
Have a good weekend.
CC
BC, just chant these keywords to the store:
“1080p”
“HDMI”
“plasma”
42inches are the most popular, so you may get the best deals in that dimensions
One more comment on that desperate 700 Grove flipper. Not only is 700 Grove technically in Jersey City, it’s literally 20 feet away from the Hoboken rail line! Every NJT train that comes in/out of Hoboken passes by that thing. In addition, there are TERRACES that overlook the train tracks! It’s also a good 15 minute walk to the PATH… a worthless condo building if you ask me.
I can’t imagine why anyone would pay more than $200k for one of those condos (in the current market, that is).
link
I was visiting a friend’s townhouse (he is renting) that is 8 months old. The place is already falling apart with the shoddy construction.
We actually looked at the new townhouses in that community a few months back and decided against buying due to the usual price too high, etc story.
Are people who are buying some of these new cookie-cutter places getting shortchanged with regard to quality? Are there any lemon laws out there to protect them? Am curious……. what if I buy a new $400K townhouse and have to buy $100K into repairs coz it was built like a POS.
profuscious/lostinny/chaoticchild/RentL0rd.
Thanks for the input.
Pro- Tigers. Memphis??
Rent- Just for my knowledge. Why Plasma over LCD?
Thanks Again.
sg (182)
In my opinion, lavish spending by Mortgage Brokers and House ATMers is a thing of the past. That segment of the market has experienced quite a bit of lay offs over the past month and a half.
bc,
soemthing about lcd emissions being bad for your eyes. also plasma screen life is supposed to be longer.
Plasma screen life does not last as long as LCD. The tubes in the plasmas may have to be replaced in as little as 5 years.
What is CHC?
lostinny,
http://en.wikipedia.org/wiki/Plasma_screen
it says 27 years at 6hrs/day. 60K hrs is standard across prime manufacturers.
lostiny,
of course if you buy a gateway or something the lifetime is less than half.
CHC = Center Hall Colonial (It is what everyone wants nowaday)
CC
njbear
The article said that lifetime is estimated-not absolute. If you want to quote wikipedia, I have one too:
http://en.wikipedia.org/wiki/LCD_TV
Note that it says “For a long time it was widely believed that LCD technology was suited only to smaller sized flat-panel televisions, and could not compete with plasma technology at sizes of 40″ or larger. At the time, plasma held the edge in cost and performance. This belief has been undermined by the announcements of seventh-generation panels by major manufacturers such as Samsung, Sony, LG-Philips LCD, Westinghouse Digital, and Sharp Corporation”.
Hybrid vehicles were also thought to have better mileage then we are now discovering they have.
It’s your dime. Spend it how you like.
BC
Memphis Tigers? I wish I could be so lucky….
Here’s a hint: 74-54
tomorrow, it’s BC’s turn for some payback, 1:00 pm
lostinny,
my reply was in response to your statement that plasma have a lower life span.
“It’s your dime. Spend it how you like.”
lostinny,
No, It’s mine. Maybe I should just buy a house. Then it will be free.
Pro [217],
Oh 74-54. I know it well. I went against my team and took the Tiger Paws giving 6-1/2. That was the first game we played after our enforcer was dismissed.
Njbear
I understand that. Just because it’s in wikipedia doesn’t make it true- that’s all I’m saying.
Bob
Sure, and please let me know how long it lasts. :)
lostinny,
I’m probably spending more time on this than most home buyers do evaluating financing.
Bob
My husband’s worked in electronics and cable for many years. If you want to ask him a few things, get my email from James and drop me a note.
Here’s another delusional wacko who thinks they found a lottery ticket –> MLS #2646428
$637,500 for a two bedroom cape that yet again, claims the attic as two additional bedrooms. At least dormer the friggin’ thing before you make a fool of yourself.
No I have the winning lottery ticket! It’s the mega millions sitting right here on the desk.
lostinny,
Thanks!!
lostinny,
Power to you. And if you win, still refuse to pay the asking price on that dream home. :)
#194
bergenbubble
“#189 I think you are wrong Seneca, I think there will be at least 25% price drops, and as BC Bob says probably more.”
I hope you are right, believe me I do. Where I am looking, every 10th house is already for sale, I can’t imagine half the town is planning to move come spring so I am not sure about the onslaught of inventory. And if sellers have already waited one year, why not wait another.
The few, and I do mean few, houses that are selling, they still fetch 2005 peak price plus. Go figure.
I heard Lehman is laying off their subprime bankers. Did anyone hear anything??
Gary, I promise you, I would literally have to fall over in the kitchen and the bathroom to get full asking price- and that would require mind reading.
BC
at this point the tigers are a sure bet….to lose by at least six. The last time they’ve one an away game after one day rest was 1986, so place your bets accordingly.
For all the pessimists….
NYTimes is claiming that NJ market is going up.
http://www.nytimes.com/2007/02/25/realestate/25njzo.html?ref=realestate
Was it me, or was that movie “Babel” awful?
Becaused I thought it stunk.
Now, “Little Miss Sunshine”, thats a funny movie.
But then again, lame….who watches and cares about Oscars… yawn..lame.
SAS
“NYTimes is claiming that NJ market is going up”
Yeah, and the NYT also claimed that all the Superbowl ads were violent, and blamed it on the war in Iraq.
I stepped on a nail the other day and yelled “F*ck”. Must of been because of the Iraq war that made me react in such a way.
SAS
I smell a rat…
“When Renters Reach the Breaking Point”
http://www.nytimes.com/2007/02/25/realestate/25cov.html?ref=realestate
SAS
After reading the NYTimes article I looked at Hoboken inventory and it’s up, way up. So you’re right they’re full of it. The reason builders have dropped incentives is because they’re loosing money and they have to stop somewhere.
I think the articles are not full of $hit. However, it is not apparent that this is the FALSE BOTTOM, then you have not been paying attention………this article will look like a joke a year from now…..
most important…..
WHAT IS THIS?
Derek Says:
February 23rd, 2007 at 8:09 pm
I heard Lehman is laying off their subprime bankers. Did anyone hear anything??
sorry…IF “it is not apparent “
I miss living in Manhattan more then I can express. But I could never justify paying that much in rent, ever. And not for those horror story filled places.
plasma vs lcd:
technology aside, I would prefer plasma because it’s more main-stream (for tvs).
there are whole websites dedicated to the pros and cons between the two.. and you’ll probably be sick of it all by the time you finish your analysis.
my 2c.
Go with a plasma.
I have 2. One in bedroom, one in the family room.
I think they are great. Especially for sports.
I have heard this talk they may “burn out in 5 years”.
My reply to that, what the hell..let it burn out, then just go get yourself a newer and better set.
;)
SAS
I hope you are right, believe me I do. Where I am looking, every 10th house is already for sale, I can’t imagine half the town is planning to move come spring so I am not sure about the onslaught of inventory. And if sellers have already waited one year, why not wait another.
very true there will not be too much inventory coming up ont the market untill subprime crunch – ARMs default – that will not happen untill next year…
The few, and I do mean few, houses that are selling, they still fetch 2005 peak price plus. Go figure.
Not true for central jersey – prices are about 10% off peak level – no enough to buy but thay are going down. Not asking prices, selling prices
Can’t wait to hear from Clot, KL and any other Realtor who wants to chime in on this one…
I just called the listing agent on a house I want to look at. The guy called me back saying he could show me the house. When I told him I was already working with a broker, he said, “then why isn’t your agent calling to make an appointment?” I said I am capable of dialing the phone myself and that I would surely be calling my Realtor to let him know when we go see the house.
The guy tells me how he’s one of the “good” real estate agents and he just wouldn’t want to show me the house and “do the work” only for my Realtor to come in and take the sale.
So I say, fine, I am going to call my agent and have him set something up.
Two minutes later, I get a call from the listing agent. He says he can show me the house and that if I work with him, he will negotiate for me better than if I was using an agent from another firm. Since it’s his listing, he can really talk to the sellers and convince them to negotiate.
Sounds scumalicious, no?
I don’t see any real advantage in not calling the agent who has been working with me for a few months. While he hasn’t done anything special, he has sent me listing info when I requested it and such. Also, I have been told before on this blog that the selling agent can’t also represent the buyers, that someone would have to be “assigned” to rep me. Finally, I think Clot and maybe others have said that it is unlikely that the sellers agent is going to reduce his fee by much, if at all, to make the sellers feel like they are getting more of a deal.
THIS is the exact kind of nonsense that makes me want to puke. Just let me see the friggin house and all the parasite agents can take their cut for taking 20 minutes out of their busy Sunday.
I guess the one redeeming thing will be the look on the sellers agents face when we put in an offer 20% below the asking price. By my calcs, thats would be the most its worth compared to 2005 peak prices, yes peak!
# profuscious Says:
February 23rd, 2007 at 5:17 pm
Challenge for the experts here. How do you rate the following influences on the bubble, scale least 1 to most 10:
information technology;
loose credit in all it’s forms;
Taxpayer Relief Act of 1997 and home sales exclusion;
Reality TV’s evangelization of home ownership
I’m sure you will think of others.
Information technology – makes bubbles develp and deflate faster, but no effect on magnitude. – so may be 1.
loose credit in all it’s forms = 10
Taxpayer Relief Act of 1997 and home sales exclusion = 5
Reality TV’s evangelization of home ownership = 8
Lack of savings for retirement by most baby boomers = 4
Govermental dollar weakening policy = 2
lack of job creation in any other sector besides housing and finance related to housing = 7
NASDAQ crush and subsequent replacement of investments into Tech sector by investments into RE = 4
BC,
Having been in the video biz for 25 yrs and high-def production & system design since 2000, I personally prefer LCD. Plasma can burn-in from high contrast graphics leaving permanent ghosts, and they consume much more power than LCD. Even better though would be a DLP projector on a screen. HDTV makes huge projected images look beautiful and movie like, which was never possible with standard def.
Jay
February 25, 2007
When Renters Reach the Breaking Point
By CHRISTINE HAUGHNEY
WHETHER they preferred apartments uptown or downtown, walk-up or doorman buildings, and old or new construction, many New Yorkers agreed on one thing about the Manhattan real estate market in the last year: it was safer to rent than to buy.
Some feared that if they bought, the market would fall. Others simply put off the hassle of buying for as long as they could. Not surprisingly, the situation has given landlords the upper hand, and the opportunity to raise rents significantly on market-rate apartments in the face of one of the tightest markets in many years.
Now, many tenants are crying uncle. If they don’t want to buy, they are fleeing to Brooklyn and the other boroughs. If they want to stay in Manhattan, they are deciding that with rents climbing, it makes financial sense to take the plunge. In some cases, they are buying after outgrowing their current apartments. In other cases, they are buying with the hope that they can sublet if their lives change.
http://www.nytimes.com/2007/02/25/realestate/25cov.html?_r=2&ref=realestate&oref=slogin&oref=slogin
JB – #243 awaiting moderation undoubtedly due to the positive story I have on Realtors.
http://www.nytimes.com/2007/02/25/realestate/25wczo.html?ref=realestate
In the Region | Westchester
A Thaw in the Housing Market
Jay [246],
Thanks, very much appreciated.
Seneca
See #4
http://homebuying.about.com/od/realestateagents/tp/AgentProtcol.htm
Oops, sorry, you wanted agents’ input. Well you might see something in there helpful.
sas:
“NYTimes is claiming that NJ market is going up”
I wouldnt wipe my dog’s a*s with this paper!
To #244 .. same experience a year ago.
However, if I am looking to buy and know what I want, why bring in a “buyers RE agent”? If I put in an offer at a good discount to list price, the listing agent should still like the deal because the agent is getting a full comission and influence the seller to accept it. Anybody tried that?
av
Profuscious (218)-
Damn, we’ve got the whole ACC on the board now.
Do they still make that stinky blue cheese at Clemson?
Seneca (244)-
Like a UN negotiation there. The seller’s agent could propose a disclosed dual agency and represent you AND the seller…except then, he could not negotiate on either party’s behalf. I bet he didn’t explain that to anyone…in fact, he intimated to you that he could use his relationship with the seller to get his price down; too bad that if he did that, he would be violating his agency obligation (can’t negotiate for either side).
Very scuzzy. Better you just let your agent walk in front of you and let him take the brunt of the BS from the other side.
I went to a Clemson-UNC football game there and ate a sandwich with that funky blue cheese.
Tasty, but whoa! I was having head rushes!
Perhaps Everclear punch is not the ideal beverage/food match for that cheese, either…
Chill Extends to the Housing Market
Biz Briefs
NJBIZ Staff
2/12/2007
New Jersey’s housing market won’t be pulling out of its slump in 2007, according to an economic forecast released last week from Patrick O’Keefe, CEO of the New Jersey Builders Association in Robbinsville. Builders are estimated to start construction on 27,000 new homes in 2007, compared with approximately 33,500 in 2006, according to O’Keefe, who attributes the slowdown in housing starts to builders delaying new projects and curtailing other activity. As for the resale market, he expects home prices to adjust in the first half of the year, as more prospective sellers lower their asking prices in order to sell homes.
By the third quarter, he sees monthly sales exceeding monthly listings, which will in turn reduce housing inventory.
http://www.njbiz.com/enews_article.asp?lID=68&sID=69&m1=70&m2=&cID=8&aID=406143402.4629428.908414.93046202.2876776.768&aID2=69869
“Builders are estimated to start construction on 27,000 new homes in 2007,”
That still seems like alot to me?
yes? no?
SAS
From Bloomberg:
Treasuries Rise 4th Straight Week as Investors Flee Subprimes
U.S. Treasuries advanced for a fourth straight week, the longest streak since August, as investors sought safety from losses of subprime mortgage bonds.
Yields on benchmark 10-year notes fell near their lowest level in six weeks as the risk of owning bonds backed by mortgage loans to risky borrowers fueled speculation a slowdown in residential real estate will hurt the economy. Yields on interest-rate futures declined as traders increased bets the Federal Reserve will lower rates this year.
“The sting from the subprime market is clearly flowing into the banking system,” said Michael Cheah, who manages about $2 billion in assets at AIG SunAmerica Asset Management in Jersey City, New Jersey. “It’s going to be good for Treasuries.’
…
“There has been some very significant buying of the market going on,” said Dominic Konstam, head of interest-rate strategy in New York at Credit Suisse. “People are worried about contagion effects of credit products in general.”
Inflation talk spooks the market
Commentary: Gold $1,000 is on the way
http://www.marketwatch.com/News/Story/Story.aspx?column=Kevin+Kerr
US mortgage crisis goes into meltdown
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/24/cnusecon24.xml
>>>
subprime meltdown goes international.
That still seems like alot to me?
yes? no?
It’s a significant drop off from the pace we’ve seen, but historically, it’s not tremendously high. Let me plot the data including the 80’s boom and 90’s bust for reference.
jb
#238
Citi started their layoffs this week.
Re NY Times Article. I really think that this is a false bottom. In my opinion the inventory trend after this spring season will give us a view of the future.
Well, we didn’t have the winning lottery ticket so we’re not making any bids anytime soon.
“The cost of insuring against default on these loans has rocketed in recent weeks, from 50 basis points over Libor to 1,200, raising fears that a credit crunch could spread to the rest of the property market.”
“Low-grade BBB-rated securities – measured by the ABX index – have crashed from near par of 100 in early November to 72.5 this week.”
The above from bear[262],
In 1987, the stock market lost 22.6% in one day. That was a crash. The BBB- securities have lost almost 30%. Granted it is over a period of more than 3 months. That in itself is much more troubling than a one day phenomenon. Crash or meltdown??
In 1987, the fed reacted quickly and immediately lowered short term rates. In conjunction with this, companies went into an aggressive stock buyback mode. At the same time the Nikkei was in the midst of their own massive bull market which spilled into our market.
2007? What’s the course of action?? Interesting times.
From today’s wsj:
Mortgage-Bond Pioneer Dislikes What He Sees
By JAMES R. HAGERTY February 24, 2007; Page B1
___________________________________________
“As a star Wall Street trader more than two decades ago, Lewis Ranieri helped create a vast new business: selling bonds backed by millions of Americans’ home-loan payments.
Today, that business has gone through what Mr. Ranieri calls a “staggering” transformation, and he doesn’t like some of what he sees. The rumpled 60-year-old says he is worried about the proliferation of risky mortgages and convoluted ways of financing them. Too many investors don’t understand the dangers.”
“It isn’t that Mr. Ranieri is risk-averse. The 1989 best-selling book “Liar’s Poker” celebrated his billion-dollar trades in these bonds, along with his polyester suits and the junk-food “feeding frenzies” by him and his trading-desk partners at the old Salomon Brothers, where he worked.”
Some more excerpts from the same article:
“The problem, he says, is that in the past few years the business has changed so much that if the U.S. housing market takes another lurch downward, no one will know where all the bodies are buried. “I don’t know how to understand the ripple effects through the system today,” he said during a recent seminar.”
“The housing boom kept loan losses unusually low, because borrowers who got into trouble could easily sell their homes for a profit or refinance into a cheaper mortgage. Many “subprime” borrowers (people with weak credit records) bought homes with no down payments. More than 40% of subprime borrowers last year weren’t required to produce pay stubs or other proof of their income and assets, according to Credit Suisse Group. At the same time, some lenders have become more reliant on computer models to estimate the value of homes.”
“We’re not really sure what the guy’s income is and…we’re not sure what the house is worth,” says Mr. Ranieri, who now runs his own investment businesses in Uniondale, N.Y. “So you can understand why some of us become a little nervous.”
In recent months, amid a surge in early defaults, lenders have become much more cautious, insisting on down payments and doing more diligent checks of a prospective borrower’s income. Those changes are too late to save many loans granted in 2005 and 2006.
From The Record
28% hike in water rates filed
North Jersey residents face a 28 percent surge in their water bills if United Water New Jersey, the region’s largest water company, is granted a rate hike by regulators. The company is seeking the rate increase, its first request in 12 years, to help offset higher energy expenses and the cost of nearly $250 million in capital improvements.
…
If approved, quarterly water bills for a typical residential customer would increase $23.73, to $108.48. The yearly hike would be $94.92.
More at the link above,
Rich
Anti,
Lew is the father of securitization. Salomon developed MBS’s back in the mid-late 70’s. Lew was known for creating the market to trade/sell these and solely was responsible for lobbying Washington to remove tax barriers. This guy has ice water in his veins and he’s nervous?? You can take all the news regarding the subprime and throw in in the dumps. This is THE news.
Great find.
From HeraldNews
Marcal seeing brighter days ahead
Support from creditors has buoyed Marcal Paper Mills’ hopes of emerging from Chapter 11 bankruptcy protection by September, an attorney for the company said this week.
“The case is unbelievably stable,” Michael Sirota said. “The company has more than sufficient liquidity. It’s getting support from its creditors and customers. We’re targeting to be out of Chapter 11 by September.”
…
Meanwhile, on Wednesday, the state Department of Environmental Protection will hold a public hearing at Borough Hall at 7 p.m. to hear from residents concerned that the state Legislature is about to authorize a seven-year moratorium during which Marcal would not have to pay sales tax in an effort to save the company’s more than 900 jobs.
(Emphasis added)
More at the link above,
Rich
“Gold $1,000 is on the way”
yes, I think there is a good possibility of that. And I always thought sometime either last year or this year we would see $100 crude.
China has been doing a good job of keeping a firm grip on Iran. But, if Iran starts to get a little defiant and starts playing with the Straight of Hormuz. In my opinion, you would see $100 crude.
Look how fast crude moves. It was not too long ago crude was on a slide down and its was going toward $50, now, its back on its way up.
I think Gore Vidal is a fruitcake, but I did like this quote. “The United States of amnesia”
SAS
The next question would be….
How would the Fed handle it? Yikes…
SAS
derek (264)
Is it just loan officers or tech staff too?
Here’s another little “report from the trenches” for all:
Yesterday, a mortgage banker friend of mine who works the Hispanic immigrant beat in Union County came by to say hello. Of course, I pumped him mercilessly for info…especially about who’s still levering up and paying up for housing there.
His answer? His clientele is still hungry for housing, not worried about paying up, cash poor and using 100% financing, I/O and other exotica.
Of course, getting these buyers through an approval process that used to be a snap now takes many hours and big effort. The discrepancies are being picked off and questioned in the first electronic approval submissions, not in underwriting.
However, at the end of the day, my pal is happy, because even though his loan stream has been cut in half, the loans he’s getting through are so profitable that the extra margin has made up for the loss in volume.
The thirst for subprime- in its new, borrower-gouging configuration- seems to continue. However, I still am of the opinion that there are not adequate risk premiums built in (he has one 100% program with a 9.5% rate…and the worst garbage on his menu tops out at 12%- including piggyback seconds!). I’d be more encouraged if those premiums got to the point of practically drying up demand, at least for a while.
“Straight of Hormuz”
SAS,
Nothing left to be said.
What you lose when you move to North Carolina……
http://www.chelseaguitars.com/
Clot #255
re: the stinky blue cheese, that’s quite an indoctrination.
I wrote an article on that stuff, it has a pretty wild history.
When you were there, did you make it to the Esso Club?
“His clientele is still hungry for housing, not worried about paying up, cash poor and using 100% financing, I/O and other exotica.”
Clot,
Top of the line 9.5%?? What’s the adjustment,
15%? Brain surgeons???
[255],
“Damn, we’ve got the whole ACC on the board now.”
Where is the ACC tourney party??
#275
IBanking/Finance and Tech. The big wave is coming in March. Guys that been there 20 years got the boot this week.
njrebear Says:
February 24th, 2007 at 8:17 am
US mortgage crisis goes into meltdown
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/24/cnusecon24.xml
bear: noise
focus on this item……
Rating agency Standard & Poor’s is shifting its focus to the tier of debt above sub-prime, eyeing loans covering people viewed as better credit risks but who lack the steady income needed for prime status.
Derek Says:
February 24th, 2007 at 8:24 am
#238
Citi started their layoffs this week.
SOURCE?
#276,
They want 100% financing with no SSN# but who’s going to give it to them. Most banks stopped buying this kind of loans in the last few weeks, if not last week.
#283
Inside info…
In the Region | Westchester
A Thaw in the Housing Market
typical NYTimes real estate article…
notes that sales are down 13.6% YoY
Prices down YoY for the first time since 1994
And that inventory is up 21% YoY
the conclusion? You guessed it– the westchester real estate market is going up, up, up!
I’ve got a bottle of champagne saved for the day this paper goes bankrupt
“IBanking/Finance and Tech”,
Derek,
Option to move to Lehman, China??
well, I did a search for zero down loans this morning just because I was curious. as far as I can tell, no major lenders are offering these anymore… they are all requiring minimum 5% down. given that the MEDIAN downpayment for 1st buyers last year was 3%, I’d say this just about kills the entry level market
I did see ads on google for 100% financing from some shady outfits, but I would expect that collectively, these are a small and rapidly shrinking portion of the market
“bear: noise”
Chi,
The noise is so damn loud it seems to be giving Lew a major headache??
BC Bob Says:
February 24th, 2007 at 9:19 am
Lew is the father of securitization. Salomon developed MBS’s back in the mid-late 70’s.
Bost: the Lewie I knew would hit you in the head with a phone across the Solly desk
quote from a consumer BK lawyer on Ben Jones’ blog:
“Whew!!! I’m coming up for air now!!! I’m at 100%+ for BK cases post-new-BK-law now in San Diego and almost EVERY case has a house, or 2, or 3 that is being given back. Spoke to about 40 realtors/mtg. brokers yesterday and explained that, depending on their origination, servicing and foreclosure/sales practices, they may shortly be sitting across the table from a lawyer that looks like me (white, middle age, short, fat, balding, slurred words, you know the type) at their deposition in a fraud lawsuit. These guys are scared and know that their lending practices are under scrutiny. Glad Ben is still cranking away.”
http://www.hudsonteatenants.org/tearoom/posting.php
Seneca,
Don’t call the listing agent to show you a home if you have an agent. Call your agent.
BC
I agree with 1080p, screen size should be appropriate for your room size. Go for lesser price -like computers- you will want latest and greatest soon enough. HDMI input will be good for the future I wouldnt spend the xtra $80-100 for the cable, your eye cannot differentiate. You will need HD tuner from Cable to recieve the cable hd stations, they provide the wires.
KL
Option to move to Lehman, China??
Last month I was in Bombay, India. Lehman was hiring like crazy there. My friend, who works for one of the top Tech company there, told me, all FSI from NY (Lehman, Citi, UBS) hiring crazy, offering almost double salaries at times. I think once many operations are up, lot of back office shifting there.
BC,
More thing – plasma is more delicate, go for the LCD
KL
BC Bob Says:
February 24th, 2007 at 10:58 am
“bear: noise”
Chi,
The noise is so damn loud it seems to be giving Lew a major headache??
Bost: We’re only talking about a limited swath being vaporized (I agree f—-breathtaking). However, I’m looking for a spread of the contagion.
What you lose when you move to North Carolina……
http://www.chelseaguitars.com/
That might just be the best link ever.
jb
#294,
Get ready to wear a turban and shower once a month. We’re moving to Bombay!!!!
sorry
chicagofinance Says:
February 24th, 2007 at 11:03 am
http://www.hudsonteatenants.org/tearoom/viewtopic.php?t=746
chelsea guitars…
I’ve seen that guy play in Wash Sq Park as part of a sick Hasidic funk band. definition of face melting
“Bost: the Lewie I knew would hit you in the head with a phone across the Solly desk”
Chi,
That would be one of his good/calm days. I don’t know him but have heard numerous stories. One great one; when the markets would be going against him he would slam his desk drawer back and forth resulting in his fingers getting crushed. He would continue to slam with more and more force, yelling out; [paraphrasing] “don’t you love the pain, I want more, give it to me”. I can’t vouch for the accuracy. However, this is from traders would dealt with him. Classic!!
KL [295],
Thanks. If it’s good enough for the Yankee fans in your place, it’s good enough for me.
SG [294],
It where the ib businees is going.
“However, I’m looking for a spread of the contagion.”
Chi,
Gotcha.
I don’t know whether to laugh or cry…..
http://sports.espn.go.com/nfl/news/story?id=2777832
The Citi layoff is just a rumor. Since they promoted the cost-cutting czar. lay-off rumors have been flying all over the place.
We won’t have massive lay-offs.
Lay-off within certain area happens all the time. Especially with front-office, when business is bad they layoff the whole area. It is just business.
CC
I think the India offshore is overblown.
I have inside info regarding Citi Indian outfit. It is good for off-hour support. But not good for “real” work.
Their turn-over rate is about 75% with a year. 75% of new hire don’t stay more than a year. And most of them aren’t qualified with bs resume to begin with.
CC
To the people earlier in this thread who were against owning “starter homes”. Fact is you can get a 3br, 2ba in a nice town for 350-370K. Thats a lot better than 500-600K you guys were talking about. I did it
Re: The NY Times article about Buy is better Rent.
It is all BS. I don’t know if it is a true article or marketing material.
The first example is a Doctor paying 5k a month in Tribecca. Then rent went up to 6k and he had enough.
So he decided to look for apt with 5-6k carrying cost a month. (basically in 1.2m range). But he wasn’t happy and he wanted more. So he bought a 2.6million apt with 1.1 million down!!!!! And his monthly carrying cost would be 6k!!!!
it doesn’t make sense, this doc can afford a large downpayment. 6k for 1.5m mortgage with maintenance is probably I/O.
Tf they take into account how much return he can get with his downpayment. and also when I/O reset. THen it probably doesn’t make sense.
CC
India is sooooo 2004.
Philippines, Eastern Europe, Canada and Mexico (nearshore) are the new stars of the emerging BPO world.
jb
CC,
“Hedge funds are staffing up in Asia, and in many cases they are transplanting traders from New York or London to Hong Kong or Singapore,” Greenwich’s Karan Sampson said in the report.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=axIY7lPO8qn8
BcB,
Hedge funds probably want to jump on the India bandwagon. Or they needed a 24 hr currency trading desk, so they choose india instead of Toyoko.
CC
India has no time overlap with U.S. market hours. It makes for good overlap for 24 hour coverage.
chaoticchild Says:
February 24th, 2007 at 12:03 pm
Re: The NY Times article about Buy is better Rent.
NY Times is written for a very specific demographic. If you do not live in Manhattan, and have the choice whether to work or not, then you waste your time with that rag. They certainly show little regard for your time and interests.
There’s no money in India, hedge funds are after China that’s why they’re moving to Hong Kong. China bought most of our Treasury and mortgage bonds last year.
I’ve been watching real estate for 5 years now. People bying houses now can be equated to those who bought tech stocks at Nasdaq 5000. I would not pay any more than a 2004 price for a house(zillow.com). If you buy
now and pay today’s prices you’re buying into the bubble.
A poster from Roubini’s blog
Several posters mentioned this as well, and I have interest in it myself. I worked construction in the west in the early 90’s in the beginning of the boom, and the low quality of the construction then was a joke. It’s only gotten worse since then. The same was found in New Jersy, where the NJCI put out a report called ‘the good the bad and the ugly, new home construction in New Jersey’ summary of the findings:
The gamut of construction deficiencies is far more serious and complex than the normal run of “nail pops,” drywall cracks, loose fixtures and other easily-remedied cosmetic flaws common to new homes, and includes:
• Missing, broken, disfigured and/or improperly installed walls, beams, joists, decking, roof trusses and other structural supports
• Cracked, crumbling foundations, and/or improper foundation anchorage
• Homes built smaller by hundreds of square feet than specified in architectural plans and, conversely, homes built larger than specified plans – a situation that can result in a potentially dangerous structural condition known as over-spanning
• Inappropriate and/or improperly installed and vented heating/air-conditioning systems
• Faulty plumbing
• Flawed electrical systems
• Basements, crawl spaces and habitable areas prone to flooding, moisture intrusion and/or toxic mold
• Site engineering deficiencies, including problems with drainage, collapsed roadways, sink holes and premature failure of storm-drainage systems
Deficiencies of this nature are neither rare nor isolated and could constitute potentially life-threatening hazards. In some instances, they are an outgrowth of, or are directly attributable to, low-quality materials and/or inferior construction. Entire subdivisions consisting of hundreds of single-family detached homes, some ranging in price above $300,000, were found to be plagued with assorted structural and mechanical problems; in the case of one 400- home development, surveys showed the same defect to be present in every house on every street.
In the worst individual cases, homeowners discovered that the new homes they had purchased came equipped with structurally unsound ceilings and roofs; façades unfastened from support structures; wobbly, moving walls; walls fouled by sewage from cracked pipes; improperly installed heating systems venting poisonous exhaust, including carbon monoxide, directly into living areas; flooded crawl spaces; and collapsed porches.
We have an overhang of housing stock of very poor quality which people bought at inflated prices. No one is going to be fixing up the vinyl sided pella palaces in 200 years, like people do now with an 1800’s house. The majority of the houses built will fall down by then, probably much sooner. That is the loan collateral – very poorly built, and leveraged all the way up to the fraudulent assessed value. Worthless.
Another issue I have thought about – when someone defaults on a mortgage, there is a judgment against them
that stays on their credit rating. They can buy another house for a long time. As people default, they are taken out of the pool of buyers, as their vacant house adds to the pool of homes – yet another vicious cycle.
Here’s a question for the investors out there:
With all of the bad news coming out of the housing sector, can someone here explain why the HGX has been rising steadily since Aug?
#318
Look at the homebuilders stocks. A lot of people are betting that homebuilders have hit the bottom and started buying. I thought about it but the bottom will be when at least one large one files for bankruptcy.
Look as if it may be heading south again.
http://www.phlx.com/market/advcharts.asp?SYMBOL=HGX
#318
Despite prices going down, it is still enormously profitable to build as long as you don’t over do it. Most home builders are slowing down construction.
cc,
In my group at work the whole QA department (20+) was moved to India. Quality was a bit flaky for almost a year. The problem was fixed after the whole process was streamlined. They still need to work on their domain knowledge. Most of sustaining engineering has also been moved. Engineers come in at 11:00 PM EST and work till 11:00 AM EST. Managers stick around even after 11:00. They are well supported by engineers working in Britain.
Frank Says:
February 24th, 2007 at 1:21 pm
#318
Look at the homebuilders stocks. A lot of people are betting that homebuilders have hit the bottom and started buying. I thought about it but the bottom will be when at least one large one files for bankruptcy.
Mr. Hot Dog: Interesting that Bob Toll spent some time talking on their earnings call about their financial vitality and the resources they had lined up in case of duress. Not so noteworthy WHAT he said, it’s just the fact that it was a topic that he felt worthy of highlighting in their financial results. Probably in an effort to draw a distinction among their peers, or others.
BC (280)-
Didn’t even talk about adjustments. My banker bud is so paranoid, they’re tacking on tons of vig upfront in points and fees. Thye’re just hoping the defaults don’t happen too quick. BTW…I forgot to mention that this lender had his first default WITHIN THE FIRST 30 DAYS last week. Natch, they blamed it on the investor’s underwriter. LOL!!!
All should realize that even with the Novastars & HSBCs running for the exits, there are plenty of independent investors who will take on this stuff all day long. In fact, their due diligence makes the big guys look like the morons they are.
ACC tourney party sounds good. Time to play some serious hooky from work. Where?
Profuscious-
May have hit the Esso Club, not sure. A long, long time (and many brain cells) ago.
I do remember having a very, very good time.
Profuscious-
One other Clemson story. I played soccer against Donald Igwubuike (later was kicker for TB Bucs), and he hit me so hard, I thought I was dead.
Did anyone got a sneak preview of the February prime and ALT-A delinquencies yet??? Monday is the day the devil will come out.
Ouch, this one hurts.
MLS# 2299823 – West Caldwell, NJ
128 Central Ave
OLP: $480,000
LP: $409,000
Purchased 10/26/2005 – $439,500
Not sure if this is a REO or short sale.
jb
“All offers subject to bank approval”
on realtor, 2299823 is coming up listed at 449k. Just in case someone wants to buy it at that price.
afe
CDO Ponzi finance, great read.
http://wallstreetexaminer.com/blogs/winter/?p=461
NY Times Article:
I believe the Dr. is taking into account the tax savings, probably at the 38% marginal rate.
$1.5 million loan, 6.5 rate, 30 years is about $10,000 a month, knock off $4,000 in savings he is back to $6k a month
What about carry cost on his 1M down payment?? at 5% he looses $4166 a month.
Good thing he’s a doctor not a financial adviser.
BC,
regarding the straits…
enough said?
I guess I missed the point?
SAS
Shifting Housing Market Snubs Bad Credit
http://biz.yahoo.com/ap/070224/subprime_woes.html?.v=2
Shifting Housing Market Begins Rejecting Some People With Credit Troubles Due to Risks
The shifting market is prompting investors to demand higher standards for loan approvals. Loans for 100 percent of a property’s value required a minimum credit score of 580 last year, but now require at least a 600 score, said David Zionts, owner of Connecticut Mortgage Lenders LLC.
A high-value loan with no income verification could be had last year with a credit score of 620 a year ago but now needs a minimum score of 640, he said.
“Some consumers are being squeezed out of the market,” Zionts said. “Some of the more forgiving guidelines are beginning to go away.”
There’s still a saturation of lenders still out there lending in the subprime market,” he said.
http://www.phillyburbs.com/pb-dyn/news/84-02242007-1304241.html
You folks in Clifton better teach Fido how to tell time.
Frank,
I guess the Dr. may feel his “investment” will grow at 2% a year to cover that carry cost. Not unreasonable…but….
Anyone have the skinny on Scottsdale? The wife and I are looking to go out there in May.
jb
Poll: How Americans Really Feel About Their Credit Card Debt
http://finance.yahoo.com/banking-budgeting/article/102463/Poll:_How_Americans_Really_Feel_About_Their_Credit_Card_Debt
Do you worry about how you’ll pay credit card bills every month?
Don’t worry 51%
Don’t worry much 19%
Worry 25%
Refused to answer 5%
How often over the past two years did you miss a credit card due date?
Once or twice 33%
Several times 6%
Never 58%
Refused to answer 4%
How do you pay your cards?
Pay off balance each month 55%
Pay some of the balance each month 29%
Make the minimum payment 9%
Sometimes cannot even pay the minimum 3%
Refused to answer 4%
>>
I bet the above numbers will be much higher if a truth serum was used.
How about a survey on mortgage debt? :)
James Bednar Says:
February 24th, 2007 at 6:56 pm
Anyone have the skinny on Scottsdale? The wife and I are looking to go out there in May. jb
Go out there in July to understand. My brother used to live there. I think the place is good for seasonal use. You have to dig up the cacti from your (sand/rock) lawns so the dog doesn’t get injured. If you see anything green, then someone is wasting a whole lot of water to keep it that way. I don’t think there are a whole lot of serious people out there, other than retirees.
I’d rather live in Krakow.
Not to live there, just as a getaway.
jb
Much better off driving just a few more hours to the Grand Canyon
Scottsdale, Keys
Scottsdale, Las Vegas
Scottsdale, Anything else.
;) Just kidding. Might be an adventure.
http://www.youtube.com/watch?v=OBmr6k5rr1I&mode=related&search=
I Just posted th following on Kannekt, it is 9:28, How long will it last?
Sing It!!
Flipping away again in Kannektaritaville
Waiting for my 3 year arm to default
Some people claim HEHEHE is to blame
But I know, it’s my own damn fault :-D
The Role of Real Estate in Funding Retirement
http://www.fidelityresearchinstitute.com/pdf/wp5_brief_final.pdf
This might be a duplicate.
http://www.fidelityresearchinstitute.com/pdf/wp5_equity_final.pdf
BC – payback is a bit*h
Clot – Igwubuike hit – sounds like the Z.Z. peg in this year’s cup final. I was there 85-89. It’s changed a lot since then, I think the school is pretty much run by BMW anymore, which is quite ironic.
9:39 gone.
“China bought most of our Treasury and mortgage bonds last year.:”
Frank [315],
Japan. Remember the Yuan must be adjusted, the Yen corresponds to market fundamentals.
BC,
“regarding the straits…
enough said?
I guess I missed the point?”
SAS,
I meant to say I agree 100%. The Straight of Hormuz is the largest powder keg on the agenda for 2007.
” I played soccer against Donald Igwubuike (later was kicker for TB Bucs), and he hit me so hard, I thought I was dead.”
Clot [326],
OK, Posh Spice is accounted for, at least I think. Are you married to Baby Spice??
By the way, only wimps take a hard hit from a kicker!!
Pro [349],
S*it, we needed that win more than Toll needs a buyer!!
By the way, I’ve been all around the country for big college football games. Touchdown Jesus, The Big House, The Swamp, Hook Em Horns, etc… I must admit, there is something special about driving on 95 south and following the Tiger Paws to Tiger Stadium. That being said, I don’t have one inkling about what Clot is talking about. Smelly cheese?? I guess I’m late to the ACC party??
JB–unless you have a compelling reason to go to Scottsdale, might I recommend Silver City, NM? Great desert scenery, relaxing hot springs, much to see and do, including…
http://www.silvercity.org/dest_Tour_of_the_Gila_Bicycle_Race.php
Why is everybody focused on Japan regarding the liquidity trade?? Will the Kiwi be the culprit??
New Zealand’s 7.25 percent official cash rate is 6.75 percentage points higher than Japan’s benchmark. The gap may widen as there’s an 83 percent chance the Reserve Bank of New Zealand will raise its key rate next month, according to an index calculated by Credit Suisse Group based on trading in overnight interest-rate swaps.”
“New Zealand’s 7.25 percent rate is the second-highest among countries with the top rating at Moody’s Investors Service, after Iceland. Reserve Bank Governor Alan Bollard said he may increase rates at his monetary policy review on March 8 because of growth in the housing market and increased domestic demand.”
Still, the New Zealand dollar is getting “fairly overvalued,” Gordon said, and may decline next week.
“The factors supporting it lately, the rate hike, the weak U.S. dollar, the yen carry trade, are all pretty much priced in,” Gordon said. “We will need new information to push the currency higher and I don’t see where that could come from.”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTUBelM246uk
BC,
“The Straight of Hormuz is the largest powder keg on the agenda for 2007”
You got that right. I have a feeling its going to get alot worse before it gets better.
SAS
SAS,
As you are well aware;
http://www.navy.mil/search/display.asp?story_id=27314
BC
Clot is a true sportsman, sampling some wonderful traditions. And to sample with his everclear concoction, now that’s called heading to the front of the class. If memory serves, that’s what we used to call “bug juice”.
you would think this was somewhere in Wisconsin:
http://www.clemson.edu/foodscience/cheesehistory.htm
I bought my first starter home in monmouth county in 98. It was a little 1200Sqf sh*tbox and I paid 175k for it. I had to write a letter to my potential lender explaining why I didn’t pay for getting my wisdom tooth pulled! (it had gone to collection) 20% down and 7.25% 30yr.
In 04 I sold said sh*tbox for 309k and moved out of state because I couldn’t afford to move up. It just sold again last fall for 450k.
I thought it was overpriced in 98!!!
Look at the nasdaq… it was 2 years for the air to go out of that bubble, and the stock market is much more liquid.
You’ll know that it is time to buy when all the subprime lending is gone and the 20down/30yr is 7.5%
Greatest craigslist posting for Hoboken I’ve seen…anyone who buys this should have their head examined…
http://tinyurl.com/yopkao
This flipper is bragging about the NYC views but the real view immediately around the building is not so pretty: This building overlooks the NJ Transit railway tracks leading into Hoboken. Anyone living in this unit will get a panoramic view of trains coming and going (not to mention, hear them coming and going).
Sorry for the lack of participation and updates this weekend, I’ve been incredibly busy with some non-blog related work.
jb
I promise a lowball or price reduced tonite, to make up for it.
jb
Inventories are up last week again. When is the madness going to stop?? I must go to church to pray for NJ housing market :)
Let the slacker comments rip.
JB,
You been slacking all weekend what gives??
You have a real job besides blogging?? :)
if you are going to scottsdale, definitely go to La Hacienda, the restaurant at the Fairmont Hotel.
I believe it was rated the top mexican food in all of north america by conde nast
seriously– one of the best restaurants I’ve ever been to in my life
James Bednar Says:
February 25th, 2007 at 8:16 am
Let the slacker comments rip.
SLACKER!
BC/Profuscious (354, 359)-
1. Not married to any Spice Girl (not that the wifey ain’t spicy). Currently carrying about two stone more than Beckham’s playing weight, too…and it’s not muscle.
2. Still not sure Igwebuike collision didn’t cause brain damage (damn, he was only 5’8″ or 5’9″). Maybe it was the Everclear.
3. Only football crowd I’ve ever been in that was like Death Valley was Neyland Stadium at Tennessee. The look in Clemson fans’ eyes are like unmedicated psychiatric patients.
4. Seems like BMW runs the part of S Carolina that the golf industry and senior care industry don’t have locked up. Weird.
ACC tourney 1st day party? I’m in! Where???
Clot,
You want an exciting crowd?
http://p.vtourist.com/1787355-Football-Krakow.jpg
http://p.vtourist.com/2082771-Football-Krakow.jpg (yes, those are flares)
Wisla Krakow – http://www.wislakrakow.com/www/
jb
Scottsdale –
Golf, golf and golf. Some nice hotels in the area. Balloon ride is pleasant. Sedona is wacky and gorgeous and worth a trip.
You’ve got to love news like this:
http://www.wislakrakow.com/www/showarticle.php?articleid=13530
Fans allowed to enter the stadium
Wisla Krakow supporters will be allowed to watch Wisla – Zaglebie match on Sunday. Krakow president has given a temporary permission which is valid for one match only. The stadium is going to be controlled again by the police. The club must improve the conditions and take care of safety means to get a permanent permission to let the fans in.
We’ll be heading back there again this summer, I’d like to go for a month, but can probably only swing two weeks at the most. Jayne has never been out to Poland (or Europe for that matter), so it should be a fun experience for her. Even though the stadium is only a few kilometres from our place, we won’t be attending any matches.
jb
From Bloomberg:
Ryanair Sparks Surgeon Commutes, European Vacation Home Frenzy
Andrzej Majewski, a Pole who works as a thoracic surgeon in the U.K., catches a ride to the airport in Wroclaw on Sundays and hops a Ryanair Holdings Plc flight to his hospital in Nottingham, England.
Most Fridays he commutes home to southwest Poland. The flights cost him about $50 each way.
“It takes about three hours, and I’m eating lunch at my house,” Majewski, 47, says.
Dublin-based Ryanair, Europe’s biggest budget airline, and its main rivals, No. 2 EasyJet Plc and No. 3 Air Berlin Plc, are drawing a new map of how people and money travel in Europe.
Fares as low as 1 euro cent, or $0.013, plus tax, encourage workers to jump borders for jobs, pump up real estate prices in France and — to the horror of residents of towns newly served by the carriers — spur British bachelors to shop for cheap beer and strippers in Prague and Riga, Latvia.
No-frills airlines also let Europeans seek cut-rate health care in Malta, Poland and Spain.
An implant and crown that cost 2,500 euros in the U.K. go for 1,400 euros in a Polish dentist’s office, says Marcin Gaborski, a board member of Dental Clinic HAHS in Szczecin. English patients have boosted the clinic’s income by as much as 10 percent in the past year.
“Fifty people come a week from all over Europe,” Gaborski says. “They book a cheap flight by Ryanair.”
Cross-border job commutes and international dental visits were impractical a few years ago. In July 2000, airlines ran five routes between the U.K. and Poland, serving Gdansk, Krakow and Warsaw. Poland joined the European Union in 2004.
In 2006, airlines had 37 routes linking 10 Polish cities to 13 U.K. airports, the U.K.’s Civil Aviation Authority says.
on realtor, 2299823 is coming up listed at 449k. Just in case someone wants to buy it at that price.
afe
Check it today, $409k. Solidly below 2005 pricing.
jb
374# Since when do Brits go the dentist? :)
Argh. typo. 37# Should be “Since when do Brits go to the dentist? :)
re: strait of hormuz
found this interesting:
http://en.wikipedia.org/wiki/Operation_Praying_Mantis
Operation Praying Mantis was the April 18, 1988 action waged by U.S. naval forces in retaliation for the Iranian mining of the Persian Gulf and the subsequent damage to an American warship.
What’s interesting to me is that in 2003 the ICJ dismissed Iran’s claim for reparations and said, “the actions of the United States of America against Iranian oil platforms on 19 October 1987 (Operation Nimble Archer) and 18 April 1988 (Operation Praying Mantis) cannot be justified as measures necessary to protect the essential security interests of the United States of America.”
Gee, I wonder why we haven’t joined the ICJ.
Has anyone noticed how real estate agents are trying to poach you anytime you go to an open house? Every open house I’ve gone to they ask me if I’m working with someone, when I say yes they say they can give me better service, price, blah, blah blah. Is this something new? I don’t remember experiencing this in 99/00 when I was looking for townhouses. Not once have they asked for my agents contact details.
PS made another typo on 377#. New keyboard.
Nothing new at all, open houses are a great way to capture new clients (especially the nosy neighbors). That has always been their primary purpose, showing/selling the home is secondary.
jb
I saw a few more houses yeserday. A few have been marked down 10-15% and are still sitting unsold. I just moved back to New Jersey from Sydney so I need to stay calm. Everything seems so cheap here compared to Austrlia. It is cheaper to shop in Whole Foods then it is to go to Australia’s version of Shoprite, Acme, Foodtown. Unbelievably cheaper. In Sydney if you want a bowl of rice with your meal almost every asian restaurant will charge you $2 to $3 extra per bowl. Beer is at least $10 a six pack. Paperback books at least $20, movies $14 (matinees don’t exist)
I’m thinking about renting a townhouse in either Madison/Chatham area or Basking Ridge/Bernards/Warren for a year or so while I try figure what area to buy in. If houses drop another 10% or more I wouldn’t mind buying a pre 1940’s colonial, a colonial cape, or a newer 3 bdr ranch with a basement. As long it is an area I want to live in for 8 to 10 years so. I don’t think $350k for a well mainatained home in one of those areas on 1/3 of an acre is too unreasonable onsidering the amount of $ the fed has been creating this decade.
JB,
You are the best damn slacker in my book!! :)
I’m just stunned — yet more dummies buying houses that are fresh on the market at 2005+ prices.
MLS 2376812 — Went into Attorney Review in less than a week.
MLS 2374757 — Went into AR in 2 weeks (and compare to MLS 2363115, which is the same price). Do people have no sense of value, or any common sense?
MLS 2368193 – This one backs up to the NJ Transit train tracks (and a nicer comp down the street is under contract for $80,000 less).
Apparently there is still no shortage of Greater Fools. Either the realtor/NAR propaganda campaign is effective, or people with big bucks are dumber than rocks.
A fool and his money…
#317
This is a very important warning to anyone considering purchase of new construction. Priority of fat profits typically overrides value of materials and methods in the construction biz, so caveat emptor, in extreme.
As far as quality control, who can you trust?
#374,
Easter Europe is on fire, if you think the property values went up a lot in US, try Eastern Europe. Great article JB, I take the slacker comments back.
could this look any more like slacker/moderator?
http://www.blankpixel.com/images/creations/digital/paintings/slackerdude/slackerdude-cartoon.jpg
This joke is supposed to be an insult to the slacker. Instead, it just sounds like a sub-prime mortgage originator…..
http://www.polishjoke.com/polish_joke-loan_shark.htm
“Either the realtor/NAR propaganda campaign is effective, or people with big bucks are dumber than rocks. ”
I think it is dumb people with no money but with access to liquidity. I have friends who just bought investment properties in NNJ & India for US$100s of K each with practically no down payment. The general theme is “i know i might have paid more but i will make it up in the next couple of years”. You see house prices always goes up.
UnRealtor,
It’s absolutely maddening. I agree, these people are delusional. It’s a status symbol, a mere trophy to boast a specific address. Move any of those houses you posted to say.. Livingston and the price drops from astounding to just simply absurd.
We were at an open house about a year ago and the house was 2 doors away from the Upper Montclair border; the house had a Little Falls address. There was a young couple talking to the realtor as I signed the sign-in sheet and the moment this girl heard “Little Falls” address, she turned to her husband and said, “Oh no, I need an Upper Montclair address.” Enough said.
chicagofinance Says:
February 23rd, 2007 at 11:29 am
Any meeting to discuss RE/affordable housing creation in Sharpe James’ bailiwick is ridiculous on its face.
Lee Harvey:
We got this queued up for the weekend….it looks to be a blast
http://www.netflix.com/MovieDisplay?movieid=70044385&trkid=90529
Yo’: a nice little slice of NJ Politics – only 82 minutes, so you don’t have to blow out an afternoon or evening on it. Booker is impressive. Was not intended to be a Booker-infomercial, but James essentially froze out the director, and so the parallels to Marion Barry are striking.
Long Island/ N Jersey like chemisty
Magic point where it gets easy
Below struggle, hell, and ramen
Above on easy street.
Real estate will not drop.
Save massively now so you can buy later.
750K 1/2 houses by NYC and 700K capes.
Everywhere is Prime.
Kill your Parents take their money.
Or whine so they give down payment!
Don’t throw money away on rent
Graduate and get started condo.
Think of all the money you save
The equity grows and grows
Credit score increases dramatically
Get good lease on Luxury Car
Parents never bought Benz or Beemer
Your car better than who work 30 year
Go show your friends how well you doing
25 and already “made it”
http://www.theacc.com/this-is/accchampionships.html
the St. Pete forum? What happened to Greensboro?
http://www.hobokenx.com/html/modules/newbb/viewtopic.php?topic_id=8302&forum=9&post_id=76831#forumpost76831
Pro [292],
I was wondering the same??? Wherever it is held, it is still very difficult for me to get accustomed to. I’ve been going to the Garden for 20 years [still go] for the Big East Tourney. No BC??? By the way, is anybody selling extras for 3/9, Big East or know of anybody??
The Tigers need a big run in the ACC tourney. Otherwise, it’s probably NIT. Didn’t they start the season at 17-0?? I don’t know who has had a bigger fall, the Tigers or the subprime??
Clot,
You are right on the money about Neyland Stadium. My brother is the king of college football, has been to over 40 different stadiums. He says nothing compares to this. He says the tailgates on the Mississippi are incredible, not to mention the Southern Belles. He goes there every year with 10 guys. The females flock to them, telling them that they love the NY accents, that southern guys are hicks and very cheap. I guess it doesn’t hurt when these guys are buying cocktails for every female in the joint.
Is it me, or is there something a foul with this?
Any truckers on this blog? If so, sound off on this one.
“U.S. Opens Border to First Mexican Trucks in 25 Years”
http://tinyurl.com/32dn7o
SAS
Mortgage company shut down
Mesa-based firm caught in state’s fraud crackdown
http://www.azcentral.com/community/mesa/articles/0225mortgageshutdown0225.html
Regulators have shut down Mesa-based Eagle First Mortgage and its more than 75 Valley branches, citing illegal lending practices.
Most of the fraud is coming from cash-back deals that involve obtaining a mortgage for more than a home is worth and pocketing the extra money. But there are other types of fraud such as faking and forging documents and lying about income and other personal information for loans.
jb,
My post is marked for moderation.
Congressman Ron Paul on Federal Reserve, banking and economy
http://www.youtube.com/watch?v=ji_G0MqAqq8
[paper money and inflation.]
Fed stance puzzles economists
http://www.ft.com/cms/s/47f73cf2-c512-11db-b110-000b5df10621.html
Economists are chewing over a puzzle that could have profound implications for the future path of US interest rates: has the Federal Reserve changed its thinking about the relationship between unemployment and inflation?
The report shows Fed policymakers think unemployment will be between 4.5 and 4.75 per cent this year and next, while inflation will decline from between 2 and 2.25 per cent this year to between 1.75 and 2 per cent in 2008.
It means inflation is slower to rise when the economy is overheating, but also implies that it takes a more brutal increase in unemployment to bring inflation back down if it does get stuck at a higher-than-acceptable level.
http://www.hobokenx.com/html/modules/newbb/viewtopic.php?topic_id=8343&forum=9&post_id=76984#forumpost76984
That was great Chicago! (#401)
Scottsdale:
Take climbing shoes. Climb the Camelback, but start early in the day and take lots of water, especially that time of year.
Visit Taliesin West. Go to the dream community Arcosanti.
Drive further north to some of the many ruin sites: Montezuma’s Castle, Walnut Canyon (near Flagstaff), Wupatki and Sunset Crater (further north). Check out Slide Rock Park at Sedona. If you can possibly do it, go to the Grand Canyon.
South near Tucson, check out Saguaro National Park.
Gary, #390, but even given the “address factor” you have two houses on the market — one assessed at $1.1M one assessed at $550K (the one this buyer chose), and both are priced at $1.2M, who on Earth would choose the house assessed at half as much?
The other house is assessed at $1.1M because it has more square footage, 2X the lot size, redone kitchens/bathrooms, and a 2-car attached garage.
And one house has been on the market for 6 months, one for 2 weeks (the one this buyer chose).
I’m just amazed at the stupidity.
Sign seen on River Rd.
Must Sell House
Cheap
Call 201-???-????
Details for comparison of these two similarly-priced properties:
63 Cambridge Drive, 07078
MLS 2363115
List Price: $1,250,000
Originally Listed: May 31, 2006 @ $1,499,000
Lot Size: 105 x 148
LNDASMT: $435,700
BLDASMT: $575,000
TOTASMT: $1,010,700
http://new.gsmls.com/public/getMediaReport.do?mlsNum=2363115
24 Pine Terrace West, 07078
MLS 2374757
List Price: $1,195,000
Originally Listed: Feb 12, 2007 @ $1,195,000
Lot Size: 60 x 130
LNDASMT: $242,400
BLDASMT: $347,500
TOTASMT: $589,900
http://new.gsmls.com/public/getMediaReport.do?mlsNum=2374757
Details for comparison of these two similarly-priced properties:
63 Cambridge Drive, 07078
MLS 2363115
List Price: $1,250,000
Originally Listed: May 31, 2006 @ $1,499,000
Lot Size: 105 x 148
LNDASMT: $435,700
BLDASMT: $575,000
TOTASMT: $1,010,700
http://new.gsmls.com/public/getMediaReport.do?mlsNum=2363115
24 Pine Terrace West, 07078
MLS 2374757
List Price: $1,195,000
Originally Listed: Feb 12, 2007 @ $1,195,000
Lot Size: 60 x 130
LNDASMT: $242,400
BLDASMT: $347,500
TOTASMT: $589,900
http://new.gsmls.com/public/getMediaReport.do?mlsNum=2374757
by the end of Feb…
will we see $70 crude & $700 gold?
Its going to get interesting.
SAS
Bairen (380)-
Grim is right on. Nationally, less than 2% of all homes held open are sold as a result of the open house.
Try going into work tomorrow and proposing a project that has a sub-2% chance of succeeding…
bear [399],
Is this what Ron Paul is saying??
http://charts.barchart.com/chart.asp?sym=GCJ7&data=D&date=022507&den=MED&divd=n&evnt=ADV&grid=Y&jav=ADV&size=B&sky=N&sly=N&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=011&argd=&arge=&argf=&ch2=030&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&comp1=sph7&code=BSTKIC&org=stk
BC (395)-
My little brother is a UT grad and season-ticket holder. He has been diagnosed with 30%+ hearing loss in both ears that he attributes to hundreds of Saturdays @ Neyland.
BTW, that’s the Tennessee River. The Mississippi runs thru Memphis…other end of state.
SAS [408],
Globex trading, April gold is is at $690.20, up $3.50 from Friday’s close.
BC-
The rocket is on the launch pad.
“BTW, that’s the Tennessee River. The Mississippi runs thru Memphis…other end of state.”
Clot,
I failed geography.
When you live by the Passaic River, it’s hard to imagine anybody tailgating on any river.
“The rocket is on the launch pad.”
Clot,
I’m not clicking tonight. Roger Clemens?? Hah,Hah.
Combined, we’re making about $200k. Of course, neither of us like our jobs and we always talk about quitting. Quitting to do what? Not sure.
At any rate, we’ve got the 20% downpayment (and then some) sitting in ING, waiting to buy. Our rental lease (Brooklyn) is up at the end of July. Along with some smarter, wealthier friends, we’re probably tossing 20k as a silent partner in purchasing a hotel in the next year (not in this area, though).
We get married in April. She, from central Jersey, has for YEARS talked about buying a house in NJ with a yard, away from noisy streets, etc. I, a city guy, always wanted to be in the city.
So now that she’s got me thinking BURBS, she says the market will continue to tank and we should WAIT one more year.
Kind of upset … we do need the space (all wedding presents will go to her mom’s until we get room), and I do lots of freelance work and could use an office to myself instead of sharing a cramped 2nd room with her. Not to mention lack of closet space.
Somebody just please tell me buying in June/July will be a smart move. PLEASE. Someone. Anyone? Likely it’ll be Bergen County, but we’re considering others (I work in the city).
(Been on this site for a year, you guys crack me up. I’ll hang up now.)
“Somebody just please tell me buying in June/July will be a smart move”
Go to the beach in Summer 07,
June/July, 08-09??
Somebody just please tell me buying in June/July will be a smart move. PLEASE. Someone. Anyone?
Ok. It will be a smart move. No matter where you buy or how much you pay, it will be a smart move.
Feel better?
“Somebody just please tell me buying in June/July will be a smart move”
You won’t have an answer for about 8 weeks. At that point, it will be obvious whether we are bouncing off the bottom, and this minor sign of life will dissipate.
If you do jump in the market….buy EXACTLY what you want and at the price point you want. There is no good reason to stretch. No compromises.
# chicagofinance Says:
February 25th, 2007 at 9:34 pm
“Somebody just please tell me buying in June/July will be a smart move”
You won’t have an answer for about 8 weeks. At that point, it will be obvious whether we are bouncing off the bottom, and this minor sign of life will dissipate.
If you do jump in the market….buy EXACTLY what you want and at the price point you want. There is no good reason to stretch. No compromises.
For about 4 monthh There was no activity on the market.. Now – every house I was iterested in have an offer on at about 10% off listed price. the ones which are overpriced, ubderpriced – does not matter. Some completelly idiotic cases – extreme fixer upper with a leaky roof at higher price than completelly remodeled house one block down the same sqft, same 1920 builder, same town – same everything. both were in the middle of the neighbourhood.
So it seems tht there is a spike in buyers activity right now…
If it will develop itself into a a sale is not clear yet but right now – it seem like there is a definite pick up in activity – buying activity.
BC (414)-
The only “tailgating” next to the Passaic River involves bodies (and assorted “parts”) rolling from truckbed to water.
Went to some open houses today in Somerset County. 3 of the 4 male agents had huge books with them on the dining room table next to the sign in sheet (smooth!!). 1 women was sitting in her suv with the motor running while she was smoking. Didn’t catch any of the women with books, perhaps they were more clever then the guys and made them appear to belong in the house or even hid them?
Lots of nice, shiny lamminated brochures, even for houses under 450k.
The thought of paying 500k with 3k+ PITI payments that will only increase so i can spend at least 1 weekend a month going to Home Depot made me gag. The wife now definitely wants to rent and wait till at least spring of 08 to buy. Mission accomplished.
Was given a few free donuts. Entemann’s, not dunkin. If you want me to pay 500k for your sh*tbox, please serve dunkin, preferably chocolate glazed or frosted. Even munchkins would be nice.
24 Pine Terrace West, 07078 is within waliking distance from train and millburn’s high and middle schools. even with that price looks high.
the other house has been on the market since last summer at $1.5mm. not sure what’s wrong with it. At this price or slightly below does not look horribly overpriced.
Summer of ’42 (416)-
Think RE’s tanking? Kiss that 20K hotel jack goodbye…unless you haven’t ponied up. In which case, don’t; you’ll thank me later. You’d get more pleasure from torching 20K singles with a Bic lighter or giving it away to a stripper. Your “wealthier friends” can afford to lose; it sounds like you can’t. Small, independent hotels feature only a slightly slower burn rate than restaurants.
Want to be in the hotel game? Check out HST (Marriott/Host) or HOT (Starwood), two of the most rocking hotel REITs going. Growth plus 2.5%-3% dividends cannot be ignored!
All disclaimers apply.
bc 395
Watching the Tiger’s this year has been like having a nice dip in the pool turn into a water-boarding experience. I sometimes don’t know why I do this to myself, but you have to gut these kind of seasons out. The ACC is an unforgiving temptress, and she’ll blow your mind just when you think you’ve got her riddle solved.
Bairen (422)-
I like the agent sitting in the SUV, smoking. The friggin’ 21st Century version of Death of a Salesman. Classy.
The best-ever portrayal of what open houses are really about was the scene from “American Beauty” in which Annette Bening tries- and fails- to sell her POS listing by doing an open house. That just ruined it for me; I do maybe 1 or 2 a year now.
Prof (425)-
And boy, did I get waterboarded today. Losing to Maryland? Ughhh.
Hey, we’re all 0-0 when the tourney starts. Imagine what it must have been like when it was win the ACC tourney, or go home…
Bairen, come ON..What about those crumbly thingys on the top of the coffee cake? They make me dizzy with joy (and sugar high). Mmmmm…Wawa coffee and Entenmann’s. Sitting on the beach, middle of May, first morning sand of the season. Big ole box of Entenmann’s. Go down to the water and wash the crumbs off.
http://entenmanns.gwbakeries.com/product.cfm/upc/7203000118
The agent smoking in the SUV was clssic. She then proceded to spend more time describing her other listings then the open house she was in. 2 agents really did work it and had lot surveys, articles on the schools, floor plans, 1 even had blueprints for expanding the house.
We sold our townhouse back in 03 when we moved overseas. Sold it the first day at an openhouse. My wife and I hosted it. Had 2 offers 1 for list, 1 for 2% over list.
Maybe if agents spent the open house trying to sell the house they were in the sales rate would be a bit higher? Nah, lets have an open house and try to poach other agents clients and sell our other listings. I’m pretty sure the behavior of these agents at the open houses would be illegal in the secrities indusrty if they were stock brokers.
#428 Pat,
Forgot about those. are those coffe cakes? Haven’t had one of those in a few years.
as usual: great advice, Clot!! (424)
forget the silent partner stuff…. buy $20K of something that will actually yield you something. Less glamorous but financially sound.
sl
We got discouraged after looking at about 60 homes and not really seeing anything good for $500K. We decided that we would re-sign our lease for a year. If after a year and 50K in additional savings, if prices arent any more reasonable we are just going to pack it up and move south to NC or ATL.
I just cant get myself in a sober state to agree to paying $500K for someone’s POS capecod that does not even have a formal dining room.
Av, #424, I think the house on Cambridge is overpriced, but the house on Pine Terrace West is extremely overpriced, and that’s the one that went into Attorney Review after only 2 weeks on the market!
To get a sense of scale when looking at houses, colonials in particular, count the number of windows across the second floor.
4 windows: small house.
5 windows: larger, more substantial house.
—
24 Pine Terrace West: 4 windows across.
63 Cambridge Drive: 8 windows across.
ck986 #433, right there with you.
It’s frustrating to try and compete with idiots who are paying absurd prices for crappy houses. People have lost all sense of value and perspective. The house they’ve bid up and “won” was sold for 50% less 4 years ago. Winner, or sucker?
Greetings. I’m a frequent reader here, first time poster. I currently live in Middlesex Co. and looking to purchase in Hunterdon Co. (I really hate this area). I’m 24 and self-employed. I have no debt, and I have more than enough saved for a very healthy down payment. I am looking in the $300k-$400k range. I will need a stated income/no doc. loan because of my self-employment (I would never purchase over my means). It seems the general consensus is to wait at least another year to buy. I am living in a really ideal situation right now, but I will need to make a move in the next six months.
I guess I’m looking for some input/tips on the Hunterdon Co. area, a no-doc/stated loan and the market in the next six months or so. Any input/suggestions appreciated. Thanks, John
http://www.bloomberg.com/apps/news?pid=20601087&sid=avtvUzsah.wM&refer=home
Fed likely to hold rates, but article right above it …
“Treasury notes that protect investors from an increase in consumer prices are posting their biggest gains in three years as fund managers from Franklin Resources Inc. to Pacific Asset Management Co. grow increasingly concerned inflation will accelerate.”
bloomberg.com/apps/news?pid=20601087&sid=a0_Dfj2vHp_k&refer=home
FYI: I have been watching the Boston/Mass Area Housing Market for at least a year. Heres what I found. Houses that have been 500 – 550 that we have been looking at our now at listing prices of 500 and below and relisted as a NEW LISTING and nothing is SELLING. 10 houses that we had our eye on last year are either still for sale or have sold for 100k less than there OLP. If it can happen in MASS , it can happen in NJ. And it will. Be patient. You know how long it takes to save 100k. Another year of waiting is worth it. I am buying in Fall of 08
“Kind of upset … we do need the space (all wedding presents will go to her mom’s until we get room), and I do lots of freelance work and could use an office to myself instead of sharing a cramped 2nd room with her. Not to mention lack of closet space.”
Calm yourself and listen to her. I am a woman, and my wedding presents are still in my mom’s basement. Who cares? Are you really going to use that stupid silverware anyway? And having storage space versus making silly financial decision that will affect your marriage? Choose the marriage. And deal with the small workspace.
I have lived with my hubby in a 2 bedroom (no real storage space) for almost 4 years now. We’re finally getting ready to buy a place – and I know the need to have space, etc. But the first year of marriage is not really the time to be entering into a huge decision like buying a house, especially with the market where it is, and with one half of the couple wanting to wait it out.
$436 Unrealtor” very frustrating. You thibnk things ar finally falling into place (and really they are), and than some one comes a long and agrees to pay soem ridiculous amount for a crap box, and you get the felling is starts all over agin, becasue other sellers say, well see they got that price, I will get it too, and so they wait.
That being said themat numver is still getting smaller every day,a nd I think you may be havving some pre-Spring activity now, which will dry up in the next few weeks.
And as always, it is nver sold until it closes. There is one house in myt own that whent unde contract 3 times since early December, and this last one fell through too, becasue it just cam back on the market yesterday.
Of course the seller has nto lowered the price yet, poor decesion on theri part, but to all be patient. It is happening as we all thought it would.