From Bloomberg:
Home Resales in U.S. Rose 3.9% Last Month to 6.69 Million Rate
Sales of previously owned homes in the U.S. unexpectedly rose in February at the fastest pace in three years, a sign the housing market is still recovering even as lending standards tighten.
Purchases increased 3.9 percent last month to an annual rate of 6.69 million, from 6.44 million in January, the National Association of Realtors said today in Washington. Sales were down 3.6 percent from a year earlier
…
Existing home sales averaged 6.51 million last year, lower than the 7.06 million average for all of 2005.The median price of an existing home fell 1.3 percent last month from a year ago to $212,800, the Realtors group said.
The supply of homes for sale increased 5.9 percent to 3.748 million last month, representing a 6.7 months’ supply at the current sales paces. That compares with 6.6 months at the end of January.
Resales of single-family homes rose 3.7 percent in February to an annual rate of 5.88 million, the report said. Sales of condos and co-ops rose 5.3 percent to an 810,000 rate.
…
Purchases increased in all regions of the country except the West, where they were unchanged. They rose 14.2 percent in the Northeast, 3.9 percent in the Midwest and 1.6 percent in the South.
From Marketwatch:
Existing-home sales rise 3.9% in February
Sales of existing homes unexpectedly rose 3.9% in February to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors reported Friday. The sales pace is the highest since April. The 3.9% gain was the largest since March 2004, exceeding expectations of a decline to about 6.35 million. Sales have risen three months in a row for the first time in three years. Sales are down 3.9% compared with a year ago. Inventories of unsold homes rose 5.9% to 3.75 million, representing a 6.7-month supply. Inventories are not seasonally adjusted. The median price of a home fell 1.3% year-over-year to $212,800, the seventh straight monthly decline.
The EHS releases can be found at the NAR website:
From Star Ledger:
N.J. American rate hike OK’d
It soon will cost a bit more to take a shower, do the laundry or wash the dishes for more than a half-million customers of New Jersey American Water.
The state Board of Public Utilities yesterday approved a $56.1 million rate increase for New Jersey American Water and several of its companies, a decision that will boost the monthly bills for the typical residential customer about 12.5 percent. Three years ago, the company won rate increases ranging from 3 percent to 10 percent for the same customers.
[1]
OK, food prices are climbing, energy is thru the roof, PSE&G is sticking it to us, health care, money supply is growing at approx 3X GDP, and now water. Hell, the last price increase for the Star Ledger,daily, was over 40%. However, its constantly drilled into our heads that there is no inflation.
By the way, at least I can understand the Star Ledger increase. When you place Grim on the front page, papers fly off the shelf.
From Bloomberg:
Freddie Reports Fourth Quarter Loss of $480 Million
Freddie Mac, the second-largest U.S. mortgage finance company, had a $480 million net loss for the fourth quarter on a drop in its credit guarantee business, the value of derivatives used to hedge interest-rate risk fell and expenses rose. Freddie Mac said it plans to buy back $1 billion in stock.
The loss was narrower than the $500 million the previous quarter and compares with net income of $684 million in the fourth quarter of 2005, the McLean, Virginia-based government- chartered company said in a statement today. The results are preliminary estimates as the company continues a three-year overhaul of its accounting.
Freddie Mac, which owns or guarantees about 20 percent of the $10.5 trillion U.S. residential mortgage market, hasn’t released timely financial reports since disclosing in 2003 that it understated net income by $5 billion to minimize earnings volatility. The company plans to provide results for the first quarter of 2007 sometime during the second half of the year.
Freddie Mac in January said it would report a loss in the fourth quarter as lower bond yields reduced investment returns. Losses “on the company’s credit guarantee portfolio, derivatives and administrative expenses more than offset net interest income and management and guarantee income,” Freddie Mac said today.
…
Freddie Mac today said that as of the end of December, its $704 billion retained portfolio included $238 billion of non- agency mortgage-related securities, 96 percent of which were rated AAA or equivalent. Included in this amount were $124 billion of non-agency mortgage-related securities backed by subprime loans, of which more than 99.9 percent were AAA rated.
PSE&G is subject to the same high fuel costs as the rest of the world. Because much of New Jersey’s electricity comes from natural gas, we feel it when gas prices go up.
Citizens of NJ are also subject to all of New Jersey’s social and environmental programs that cost to the electric bill that other places aren’t subject to, like tougher environmental standards, renewable energy mandates & limits on greenhouse gas emissions. Is it really necessary for NJ to be the “toughest/most stringent in the nation” on every one of these issues? It really adds up.
A glimpse into our future? From the NY Times:
Foreclosures Force Suburbs to Fight Blight
In a sign of the spreading economic fallout of mortgage foreclosures, several suburbs of Cleveland, one of the nation’s hardest-hit cities, are spending millions of dollars to maintain vacant houses as they try to contain blight and real-estate panic.
In suburbs like this one, officials are installing alarms, fixing broken windows and mowing lawns at the vacant houses in hopes of preventing a snowball effect, in which surrounding property values suffer and worried neighbors move away. The officials are also working with financially troubled homeowners to renegotiate debts or, when eviction is unavoidable, to find apartments.
“It’s a tragedy and it’s just beginning,” Mayor Judith H. Rawson of Shaker Heights, a mostly affluent suburb, said of the evictions and vacancies, a problem fueled by a rapid increase in high-interest, subprime loans.
“All those shaky loans are out there, and the foreclosures are coming,” Ms. Rawson said. “Managing the damage to our communities will take years.”
we feel it when gas prices go up.
Unfortunately, what I fear most is that the pain felt New Jersey employers is much worse.
We already saw this with Marcal Paper in Elmwood Park. Whether or not this was really the case, or just the scapegoat, I don’t know. However, what I do know is that the state Senate approved a substantial tax break ($3-4m) in an attempt to keep Marcal out of bankrupcy (which would result in more than 800 job losses).
jb
Is it just me or does it seem like New Jersey is facing death by a thousand cuts?
Or is it just that I have a negative selection bias? That these minor changes really only represent a minor impact to our economy, and even when combined they don’t represent a real problem…
jb
Bergen County / February Only
Year Average$ Median$ Sold UC
SFH (Single Family Home
1995 $253,605 $195,000 341 559
1996 $251,391 $205,500 267 591
1997 $274,565 $205,000 465 650
1998 $292,907 $219,900 346 711
1999 $307,010 $237,000 443 610
2000 $350,463 $260,000 357 527
2001 $379,499 $280,000 332 521
2002 $414,569 $325,000 412 626
2003 $517,741 $390,000 323 478
2004 $526,031 $410,000 379 562
2005 $618,831 $464,000 395 551
2006 $718,911 $530,000 343 483
2007 $670,967 $490,000 349 533
Condos/Co-ops, Townhouses Only
1995 $137,186 $120,000 72 122
1996 $181,358 $145,000 78 154
1997 $157,437 $139,000 89 149
1998 $166,334 $141,000 110 178
1999 $182,029 $150,000 133 192
2000 $193,769 $152,500 151 188
2001 $224,928 $190,000 117 197
2002 $246,605 $225,000 172 223
2003 $276,192 $256,500 166 220
2004 $303,120 $270,000 149 208
2005 $356,201 $319,900 157 233
2006 $419,627 $378,000 153 231
2007 $403,215 $347,500 146 225
SFH, Condos/Co-ops, Townhouses
1995 $233,309 $187,000 413 681
1996 $235,558 $190,000 345 745
1997 $251,604 $187,000 454 799
1998 $262,374 $200,000 456 889
1999 $278,152 $220,000 576 802
2000 $303,887 $235,000 508 715
2001 $339,221 $259,900 449 718
2002 $365,100 $300,000 584 849
2003 $435,742 $345,000 489 689
2004 $463,126 $380,000 528 770
2005 $544,134 $423,000 552 784
2006 $626,592 $479,500 496 714
2007 $591,993 $455,000 495 758
Thanks Rich! Now that the site is moved, I’ve got to focus on the Wiki so we can have a place to put this info. Well, a place where others can find it easily, things tend to get lost in the comments of old posts.
jb
“OK, food prices are climbing, energy is thru the roof, PSE&G is sticking it to us, health care, money supply is growing at approx 3X GDP, and now water. Hell, the last price increase for the Star Ledger,daily, was over 40%. However, its constantly drilled into our heads that there is no inflation.”
Add to that property tax increases… Passaic County to go up another 7.7% after years of similar increases. My PSE&G bill was 10% greater in March than February despite using a little less gas and same electricity.
We replaced all our lighting with CFL this past month. A little upset because one of the Philips Marathon bulbs we’re using already died (after approximately 10 hours use). They’ll have hell to pay, I want my replacement.
jb
#2 BC Bob And lets not forget the 12% increase for NJ Transit that is coming in June.
Saw an article the other day in the local newspaper, the Paramus municipal budget, this of course does not include the schools or the county portion, is going up 10%!!
Even with all the rateables in that town, still they have this large increase.
I can onky guess what RIver Edge and Oradell’s increases will be. Its insane!
Is it just me or does it seem like New Jersey is facing death by a thousand cuts?
I get the same sense. As far as government policy in NJ goes, its almost like no one is looking at the big picture and adding up the tab. Each of these paper cuts is looked at in a vacuum.
…for just a few more $ on the electric bill, we can get renewable energy
…for just a few more $ on the electric bill, we can reduce greenhouse gas emissions & send a message to Washington
… for just a few more $ in property taxes, we can give our police the best salaries in the country
…for just a few $ more in taxes, we can support stem cell research
…for just a few $ more in property taxes, we can help inner city schools.
Its not like any of these things are bad idea or aren’t laudable objectives, but it seems like NJ feels the need to be a leader on EVERY social issue. Any one of these things alone would be fine, but it really gets expensive when we feel compelled to be #1 in everything.
“Is it just me or does it seem like New Jersey is facing death by a thousand cuts?”
JB,
We discuss this often. I have two criteria before buying, price and the state of the state. I know how the price issue will work out. However, even if I obtain my price, I’m not sure if I want to buy here. My concern is the following 10 years, taxes, corrupt Trenton and the potential for baby boomers getting out of dodge. Actually, this issue is more crucial, to me, than pricing.
Here’s a good example of one of those thousand cuts:
FREEHOLD — Monmouth County’s emergency management coordinator has been suspended without pay and charged with official misconduct for putting about $20 worth of gasoline from the county motor pool into a privately owned vehicle.
Harry J. Conover Jr., 58, of Neptune makes $92,000 annually.
Conover was charged by the county Prosecutor’s Office with third-degree official misconduct, third-degree tampering with public records or information and the disorderly persons’ offense of theft.
Prosecutor Luis A. Valentin said Thursday that Conover on March 13 went to the county motor pool complex, located on Center Street in Freehold Township, with the privately owned vehicle of another county employee. Conover obtained approximately 7.8 gallons of gasoline for the vehicle.
Conover then completed a gasoline inventory form on which he falsely represented that the gasoline had been placed in his own assigned county vehicle, Valentin said.
Conover has been released on summonses and the matter is pending review by a Monmouth County grand jury.
County Administrator Louis Paparozzi said Conover is suspended without pay, pending disposition of the charges.
Conover could not be reached for comment.
The Office of Emergency Management, which Conover has been head of, is a division of the Prosecutor’s Office.
Monmouth County Deputy Emergency Management Coordinator Gary McTighe has been designated to serve as the acting coordinator.
Conover was appointed to his job by the Board of Freeholders in January 1996, but he has worked for the county since 1988. His earlier job was as a deputy emergency management coordinator.
The state Office of Emergency Management has guidelines for municipal and county emergency operation plans in cases when an emergency or disaster overwhelms local emergency capabilities. The county coordinator is charged with gathering the necessary county, state and federal resources to address the crisis.
BC,
I agree 100%. Even if home prices dropped by 30% tomorrow, I would still be living in a state with a looming pension crisis, massive deficit, corruption, runaway public sector unions that call all the shots, ridiculous property taxes, high auto insurance and energy costs & a high sales tax.
Never to mind the fact, that even after a 30% price drop, housing would still be expensive here. Okay, so a $450k POS 1940’s starter cape with $7k in taxes now becomes a $315k POS 1940’s starter cape with $7k in taxes. In many places, $315k will get you a brand new 3,000 sq. ft. home. In many places that starter cape would cost $150k at today’s prices, even if they don’t drop.
#8 Rich in NNJ: Thanks for the information, looks like a slight improvement from feb of last year. Perhaps the ealry Spring bounce, and than nothing.
The realtor I have made contact with tells me things are flying off the shelf in River Edge, I did notice a lot of drop offs on the njmls site. I was not sure if they went under contract or the listings expired.
If they have really gone under contract, it will be interesting to see how many actually close, especially with the the melt down in sub-prime, and the ever tightening lending standards in general.
>>I would still be living in a state with a looming pension crisis, massive deficit, corruption, runaway public sector unions that call all the shots, ridiculous property taxes, high auto insurance and energy costs & a high sales tax.
that’s the northeast. accept it and live or move to a different region cause things aren’t going to change substantially enough to change the climate.
#13 –
…for just a few $ more in taxes, we can support stem cell research
This is absolutely needed and will probably create future jobs. We don’t want to lose the edge in research.
Do you know how many research scientists are leaving the country because they cannot do stem cell research? Atleast now they can set up research labs in NJ instead of going to europe.
So, let’s strike that off the bad list
that’s the northeast. accept it and live or move to a different region cause things aren’t going to change substantially enough to change the climate.
What you fail to acknowledge is that the demographic shift you describe is already changing the climate. I’m not sure why you think that those who “move to a different region” don’t account for a significant portion of our economy. Don’t forget that more than 72,000 Jersey residents made that decision last year.
jb
#18 Ricahrd: And all of those negatives are destrying the northeast, and NJ is right at the top.
We are in a state of decline;its nothing to be proud of.
“NJ feels the need to be a leader on EVERY social issue.”
California/Arny makes us look like wussies. carbon emissions, green house gas, universal health care.
“The recession in housing may have bottomed out in September,” Lereah said, adding that he’d need a few more months of data before making a call.
Didn’t he ALREADY make that call?
…for just a few $ more in taxes, we can support stem cell research
This is absolutely needed and will probably create future jobs. We don’t want to lose the edge in research.
So, let’s strike that off the bad list
Please reread my message. I never said any of the list were bad. In fact, what I said was:
“Its not like any of these things are bad idea or aren’t laudable objectives…”
First, realize this isn’t about creating tech jobs; it’s about NJ Democrats poking the Bush administration in the eye over its position on stem cell research. I’m personally fine with stem cell research, but I don’t like the idea of my tax dollars being spent to “flip the bird” to Bush, even if I don’t agree with his policies.
This leads to the next question; is this really the most cost effective way to bring tech jobs to NJ? I guess we will never know, because the alternatives weren’t explored, because brining jobs to NJ wasn’t the motivating force behind this policy decision.
Lastly, okay, so you get stem cell research, someone else gets the environmental program they want, another constituency gets the needle exchange program they want, the effect is higher taxes.
Richard (18)
You are absolutely correct, Sir! If anyone thinks that prices are gonna drop substantially then you’re smoking diesel. That $450,00 POS cape is going to stay flat in price at the very worst. So, things are flying off the shelf in River Edge? Gee, why am I not shocked? That goes for any desirable town in Northern New Jerky. Why do I see one out of three cars on route 46, 80, 17 and the GSP with ‘New York’ plates? They’re not all shopping; that’s because they’re fighting for the 25’ by 50’ section of yard. Remember when New Yorkers wouldn’t even look at Jersey? My, times have changed indeed. And hey, don’t get p*ssed at me folks, I’m just the messenger. This is the way it is, get used to it. If you don’t have the stomach to drop a hundred large on a dump, then move.
Richard [18],
Corporations/the public are speaking with their feet out the door. If there are not substantive/concrete changes, it will evolve into mass migration. If this occurs and WS catches a cold, what then.
#25 Gary Prices will drop, and are in fact dropping (slowly). If you think all these NY’ers are banging down the door to live in north Jersey, you might want to think again, (yes many of them are shopping)
I suggest you take a look at an article in today’s NY Times about all the affluent white people, that are staying in Manhattan. The % of whot kids under 5 is at its highest since the 1960’s.
Are these not the same NY people who were allegedly moving in droves to Short Hills, and Summit, and Ridgewood and Saddle River.
As far as River Edge, goes, its not nearly as desireabel s it once was;those in the know, know that.
Gary, Welcome aboard the Bubble busting bus.I have been saying this for quite a while ,even with the facts on the table bubble heads don’t get it .Sub-prime has created a great buying window here,lets hope home buyers see it.
Renting.. I hear what you say.
Every program needs to be looked at on a case-by-case basis. That’s the state govt’s job after all.
IMHO, The reason for this exorbitant taxes is not necessarily the programs themselves as much as the inefficiency, bureaucracy and corruption in implementing them.
We have a choice on what programs to approve at elections, etc., but we do not have a choice on how the govt implements them – and that’s where the ppl are ‘taken’.
Gary[25],
I totally disagree regarding your price outlook. I guess I’m smoking diesel. By the way, I was told that I must be on something more toxic when I sold in 2005. The s*it is just starting to hit the fan.
Sally, your house still not selling?!
#28 Sa;;y What facts have you ever placed on the table, excpet the usual realtor drivel.
Please tell us exactly what it is you have been saying?
Please enlighten us as to why sub-prime has created a great buying opportunity for hoem buyers/ Can you do more than just parrot what you hear?
God I dislike realtors, (except) for Clot)
Sally,
Yes, in 2008-2010, bargains galore. Just talk to the problem loan dept of your local bank. Yikes.
–re: #6-James-/Marcal /& higher energy costs.
NJ (and the nation) should face the fact that generating Electrical Energy by Nuclear power is one of the answers to cheaper costs for our residental and to what remains of our Industrial base….I have said it before on this blog : France and other Western nations are ALL going that ‘route’…..The enviro-‘wackos’and left-wing nuts have made this seem like we would be placing a nuclear bomb in our backyards –NOT !!!—-Look out for tremendous energy increases in the next few years-with the hikes in natural gas and fuel oil costs -along with all the other increases that others here have been posting——-A TOTALLY unaffordable-to-live New Jersey coming your way ! Unaffordable to most of us as the salaries will NEVER keep up with the costs associated with living in this state–Not to mention the anti-business climate that the government has created during the past 30 years…
We cannot even have the PRIVATLY FUNDED and non-polluting wind powered electricity generating structures constructed off the southern jersey coast. This non-leadership governer corzine has put this proposed and ready-to-go project on the ‘back burner’ —another “study-group” commission appointed-what a laugh !!–Study for what, corzine ??—The MOST POWERFULL Governer of ALL states in the Union cannot not make a forward-leap into the future by approval of this NON-TAXPAYER project ??? The future does not look too good for this state–No leadership at the top at all !
P.S. I understand that about 25% of the NJ Senate will either retire or not run for re-election……..Maybe this is an opportunity for some new blood to enter —HMMMMMMMM.
Catching myself up from yesterday:
Jay (95)- Dodd has a “good handle on this issue”? The only thing he’s got a good handle on is a tumbler full of J&B. He is a card-carrying forced-wealth-redistributor, and he’s simply demagoguing this issue to fan the flames of class warfare…the Dems’ primary MO.
BC (91)- Too busy watching Kobe pump in another 60 last night. Better than any March Mildness to date. I’m glad the Vols puked up that game last night. Getting too many calls from buddies back home as it is. This is the biggest thing there since they reopened The Peabody.
Don’t know if anyone’s heard about this: in places like Detroit, Gary, Cleveland, etc, the few buyers who want to purchase are having hard times getting mortgages, because when lenders run the appraisals, all the comps are frauds.
Nero tuning up fiddle.
Sayy is here to happily and enthusiasitcally service all of our real estate needs,she even took a test.
Sally (28)-
This is absolutely the best troll ever. Will never be topped.
#35 Clot: What is your take on today’s existing home sales number, especially as it might realte to the PRNJ,(formerly the state of NJ
Sally,
Great home buying opportunity? I doubt it. Prices are still insane and so are the people buying. It’s beyond a bubble, it’s nuts! My point is that logic doesn’t apply here and I don’t know why.
——-
BBB,
Two houses sold on my street in the last year. One across the street from me and one four doors away. Both homes had NY plates on their respective cars for months until they switched to Jersey plates. Again, I’m just calling it as I see it.
RentinginNJ:
No offense, but why are you still living in New Jersey then? It seems that you really hate the place.
burst (38)-
No opinion, don’t care. I’ve seen enough to know that we’re in a narrowing market right now. The speculators are wiped out, the moron sellers who want it to be ’05 again are about to be wiped out…and there’s a small undercurrent of legitimate buying and selling that won’t budge an iota until massive changes occur.
We’ve gone to the mattresses, and I’m not standing up to look out the window until all the gunfire has stopped.
I’m enjoying this immensely. Every time I go to a Barnes & Noble or HD, I see some idiot former agent who made my life a living hell during the gold rush.
You tell me what this means –> http://biz.yahoo.com/ap/070323/economy.html?.v=9
James Bednar Says:
March 23rd, 2007 at 8:58 am
We replaced all our lighting with CFL this past month. A little upset because one of the Philips Marathon bulbs we’re using already died (after approximately 10 hours use). They’ll have hell to pay, I want my replacement.
jb
Also we do not repac3d all oh hour light bulbs with CFL, we are not buying anymore cinventional – old school light bulbs abd replacing them as we go. Replaced aobut 1/2 of light bulbs in the house so far: no effect on electricity consumed. Proves the point, that main consumers of electricity are refrigirator/tv/cable/dishwasher. as they run at a lot higher energy consumpption and all the time. Of course our management company wil not replace Fridge and appliances. At least they are paying for heat/hotwater/natural gas/AC.
Biggest bonus I have gotten: as we swtiched o lower power CFL light bulbs – we can put Brighter Lights in our lamps without being afraid of melting surrounding plastic/starting a fire.
#39 Gary I understand, but to assume this is all NY driven, or that NJ is a apradise for Ny’ers is a little too simple.
Speaking of a former NY’er who purchased. there was one on my block who closed in the fall of 05. The house is now in pre-foreclosure (realty trac)
I do agree with you that prices are still insance, and that the people buying are even insaner, and I am shocked that there still appears to be this kind of activity out there, and yes disappointed.
Like I said in an earlier post, I will be curious to see how many that went under contract actually close.
If as you say prices will nevr go down, and at best be flat, then I guess we have to ask the question is it really worth buying at all. becase if they in fact stay flat, than they will b flat for years, no appreciation high taxes (your 7k will be 15k in no time), maintenance costs, all in a state that is in dismal financial condition now, and we are not even in a recesion.
Perhaps that should be a new topic. “If SFH prices do not decline by at least 20 to 25%, is it worth it to buy? Or at what point do posters here throw in the towwl and buy, prices be damned.
Clot [35],
Been to the Peabody a few times. The owner of office that I was affiliated, Memphis, with in the past, was very instrumental in the campaign/funding for the Pyramid. Have you heard of Wilard Sparks, Sparks Commodities??
gary Says:
March 23rd, 2007 at 10:41 am
You tell me what this means –> http://biz.yahoo.com/ap/070323/economy.html?.v=9
g: pent-up demand…..people who waited out 2006 are finally throwing in the towel and diving in……this spike will dissipate like morning fog…..part of the “false bottom”
Sally sal.ly
sal·lied , sal·ly·ing , sal·lies
1. To rush out or leap forth suddenly.
2. To issue suddenly from a defensive or besieged position to attack an enemy.
3. To set out on a trip or excursion: sallied forth to see the world.
———-
Sales are down 3.9% compared with a year ago.
Even Leareh is smart enough to not to call a bottom yet.
“a living hell during the gold rush.”
Clot[41],
Hopefully, no pun intended.
“a living hell during the gold rush.”
Clot[41],
Hopefully, no pun intended.
Never to mind the fact, that even after a 30% price drop, housing would still be expensive here. Okay, so a $450k POS 1940’s starter cape with $7k in taxes now becomes a $315k POS 1940’s starter cape with $7k in taxes. In many places, $315k will get you a brand new 3,000 sq. ft. home. In many places that starter cape would cost $150k at today’s prices, even if they don’t drop.
In many places, believe it or not, there is nosuch thing as cape cod houses and people would laugh at them as ridiculous cramped and incovinient way of living…
I never saw a “classical” 1920 Cape Cod untill I came to North-East….
#41 Clot: What kind of massive changes?
-Sales: “They rose 14.2 percent in the Northeast”
-Inventory:up just a tad.
-Prices: down just a tad.
Seems the world is not ending.
Both homes had NY plates on their respective cars for months until they switched to Jersey plates.
Wow… two… on your street… wow.
BC (45)-
Talk about six degrees of separation! Sure. Went to school with many Sparks kids.
Must do a little bragging here: also went to school w/Paul Tudor Jones, and Fred Smith (FedEx) was a grad & gave our commencement address.
BTW…The Pyramid was the biggest public works boondoggle ever…in a city that invented the public works boondoggle. I think they are going to turn that toilet into a casino. Or a church. Or the Hall of Fame for professional bass fishing.
Al,
Get yourself a kill-a-watt, or try to borrow one.
You are right in that the big applicances are generally the big offenders, but I was surprised to find out how much power (in total) the smaller devices were using. Things like the cordless phones (I have a few), all the wall-wart power supplies, clock radios, routers/switches, computer, etc.
jb
I’m sure this buried post has been bypassed by everyone. Read the article. You will appreciate that the main driver in the market is “massive liquidity”. Until the actors get punched in the face HARD and REPEATEDLY, this is not going to stop. Don’t make a mistake, we are staggering, but there is only so far things will fall in th short term, because people will see “opportunity” and step in and place a floor.
These “floors” are temporary and are more steps on the way down. However, they have a false appearance of strength, such as this morning’s numbers. You have to be patient, but also, don’t be caught flat footed if things don’t always go your way, every day. I still like boooyaaa’s 2008 housing massacre scenario as a working thesis for now.
WickedOrange Says:
March 22nd, 2007 at 10:49 pm
Why the debt bubble hasn’t burst — yet
I believe the bubble is going to get worse before it explodes. Here’s why, and what it means for retirement saving for you and me.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/WhyTheDebtBubbleHasntBurstYet.aspx
BBB,
I here ya and I’m not saying ALL NYers are buying up, I just don’t think the same scenario that is seen in Fla., Ohio, Ariz., Cali., etc, applies here. Everytime I think we’re gaining traction, we go to a number of open houses and our reaction is “Oh My God”. Reality seems to not apply. Anything that looks decent is priced in the stratosphere. And yeah, that is a great question, will it ever be worth it to buy?
burst (51)-
First massive change: an entry-level, first-time buyer will not need to spend 50%+ of his income on housing expense.
Once that happens, the rest will follow. First-time buyers grease the wheels of the machine.
Rich In NNJ,
That’s just within a few doors of me. Multiply that by a few.
gary Says:
March 23rd, 2007 at 10:55 am
BBB,
….. And yeah, that is a great question, will it ever be worth it to buy?
May be not ever in NJ….. By buying now you are basically paying for someone’s retirement – so they can move out of the NJ and live comfortable elsewhere.
I would argue that NJ prices are HIGHER that Southern California’s – yes their prices are at 500-700K but not for 700sqft cape cods…..
quality, size, climate are way superior to what you get in NJ. But wait we a close to NYC…
“they have a false appearance of strength, such as this morning’s numbers.”
i hope/assume you are right CF. that said, considering the media hype of the ‘housing bubble’ and the ‘collapse of subprime’ you cant be a little surprised by the sales volume. these ARE healthy numbers…and we must not ignore the possibility of ‘flat w/volume’ as opposed to ‘gradual decline w/massing inventory’… particularly if rates stay DOWN.
Bottom line…..you need a house, you plan to live there at least 7-10 years, and you are not stretching….dive in….go buy
Keep in mind all these housing numbers are blowout only because they are happening within an environment of lowered expectations and comps that are easy to clobber.
‘The FED has the authority to set rules prohibiting “unfair or deceptive” practices by (ALL) lenders under the Home Ownership & Equity protection Act of 1994.’ (Caps & emphasis mine)
62/63, as long as i am being contradicting, i mind as well contradict my self. CR posts an interesting point this AM…
“Existing home sales are reported at the close of escrow. This means these contracts were mostly signed in December and January. So these numbers are prior to the subprime implosion of mid-February.”
so, we’ll see where we go next..
chicagofinance Says:
March 23rd, 2007 at 11:07 am
Bottom line…..you need a house, you plan to live there at least 7-10 years, and you are not stretching….dive in….go buy
I think thats is the question for people who do not own a house – Are you going to live in NJ for 7-10 years??? Can you have a lot better life by moving elsewhere?? Is living in NJ worth it? Is it going to get better or worth?
The February EHS data is much less impressive when you see it graphed YOY..
Perhaps this is much ado about nothing..
http://bp0.blogger.com/_pMscxxELHEg/RgPiZP-zY3I/AAAAAAAAAQE/V8r41tN9PlY/s1600-h/existing+home+sales+10207.jpg
From:
http://calculatedrisk.blogspot.com/2007/03/february-existing-home-sales.html
jb
#58 Clot: Perhaps the debacle in sub-prime will get rid of many of the first time home buyers, since sub-prime did not blow up until Feb 07.
Than maybe we will see these numbers reflected in the months going forward, as todays numbers were for homes that went UC in Dec 06 and Jan 07.
Speaking of the Peabody, do they still have the duck parade?
No comments about price movements?
http://biz.yahoo.com/ap/070323/economy.html?.v=4
The price of a median home sold last month dropped to $212,800, down by 1.3 percent from the same month in 2006. It marked a record seven straight months that the median home prime has fallen compared to the same period a year ago.
#66 Al I plan on livng in NJ for at least another 20+ years, but as I say if prices do not correct, (and I believe they will, as they did before, just taking longer than I would have thought) I would still have to question the prudence of buying in NJ.
Curious [52]
“-Sales: “They rose 14.2 percent in the Northeast””
How about a temporary abberation contrary to the overall down trend pattern. Simply put, a dead cat bounce. There will be many along the long term decline down. The key is to recognize it for what is is and don’t get sucked in to the Goldilocks hype. The spigots are in the process of being turned off. This baby is just in round 1.
Clot,
Wilard, one of the best cattle traders of all time. Oh wait, he’s 2nd behind Hillary.
#56 chicagofinance. Mr. Jubak has changed his tune, he at one time poph.pooh the whol credit bubble idea, but hey better late than never.
No offense, but why are you still living in New Jersey then? It seems that you really hate the place.
Hate is a little strong. But I extremely dislike the politics and cost of living in NJ. Due to my line of work, I see and deal with the politics a little more than others do. I think the politics of the state unnecessarily drive up the cost of living here.
On the other hand, I have a job I like and family and friends here, so making a decision on where to go from here will be tough.
It’s either stay here, accept a lower standard of living, try to tune out everything I don’t like, but I get to be near family & friends; or
Live someplace with a better quality of life, but have to start over career wise & leave behind my family & friends
Make no mistake, most of us here love NJ. We’ve grown up here, we’ve moved here, we’ve got family and friends here. Heck, even those who don’t love the state will put up with the problems because of those same reasons.
We’re ticked off and frustrated because we’re watching our state go to hell in slow motion. Many of us here feel (or are) powerless to intervene.
By highlighting and drawing attention to these issues, we hope we can ignite some kind of passion in ourselves and others to speak out against what is going on here.
Take a look at the post above, where the Pol steals a few gallons of gas from us. Yes, we’re taxpayers, he’s stolen the gas *WE* paid for. Believe me when I say that he isn’t the only NJ politician that doesn’t understand the difference between an elected position and divine right.
jb
Seems like reasonable numbers. Prices a little down, sales a up in line with seasonal trend but down YoY. Inventory change continues to outpace sales change. I don’t know what people are really expecting. This is fine by me.
One thing is confusing–why is sales change compared to previous month, while price change is compared to previous year?
If you use the same time span, say YoY, then the headline becomes Sales and Price both down YoY. But if you use MoM number, then the headline becomes Sales up 3.9% and price changes ???
Actually, what is the price change compared MoM?
Ultimately, the numbers are what they are, and to each his or her own spin.
*** Sales were up 14.2 percent in the Northeast according to Yahoo Finance
wowzers! I expected a bounce back but not that strong. This is great news for existing home owners.
#76 why is it great news for existing hoemowners? Sales voluem was up, but you forgot to mention that median price was down.
As a hoemowner I would think you would be more concerned with price than volume.
Think before you post.
Why all the hoopla regarding one mom report. The only # that is of any importance is yoy. Remember, these are closed sales. Financing occured before the current mess materialized. Do you think realtors/lenders were pushing to get the unqualified in before the taps started to close somewhat??
my prediction : Sales will be down atleast 16% for March existing Home sales. Feb WAS cold.
BC,
You’ve got to admit, all the hoopla/back and forth tends to make for an exciting discussion. Personally, I tend to enjoy the days when the comments degenerate into a battle royal. The bulls come running with folding-chair in hand, Booya Bob pulls out the 2×4, and Jimmy the Superfly Snuka takes a swan dive off the top ropes.
jb
Take a look at the post above, where the Pol steals a few gallons of gas from us. Yes, we’re taxpayers, he’s stolen the gas *WE* paid for. Believe me when I say that he isn’t the only NJ politician that doesn’t understand the difference between an elected position and divine right.
Actually I have another question: yes he got caught this time… How many years have he been filling his car with taxpayers money. How many officils are doing this in one form or another – for example I know of couple of people who get their Internet at home and their cell phone paid by state goverments as their line of work requires them to have cell phones and online connection.
While it might be true but they are getting free internet/with basic cable and free cell phones which they are using for personal use as well – they do not have their own cell phones….
thats a perk with taxpayers money, tax free.
Stuff like this going on all over the country but espetially in NJ.
i’m a born and bred NY’er who moved to NJ due to my job. i know lots of other former NY’ers in my neighborhood, many of them from brooklyn. people are still buying houses and prices are not down much from their peaks. life goes on. there won’t be a catastrophe and there won’t be 50% housing price drops. this area is expensive to live in. always has been, always will be. even with out-migration statistics i don’t see anything resembling a death spiral. the wait until tomorrow for the other shoe to drop argument is getting real tiring don’t you think?
BBB
but doesnt sales volume eventually shrink inventory and drive up price?
bergenbubbleburst Says:
March 23rd, 2007 at 11:47 am
#76 why is it great news for existing hoemowners? Sales voluem was up, but you forgot to mention that median price was down.
As a hoemowner I would think you would be more concerned with price than volume.
Think before you post.
Also don’t forget the way “the” graph looks like for bubbles.
You get the slow runnup, followed by the insane spike northward (where 65 year olds are flipping houses using their retirement savings.) Then the brief plateau followed by a quick little dip, then the “false bull recovery” period which can sometimes go higher than the previous peak before plateau’ing once again (possibly where we are now?) and then the rather rapid fall back to reality.
Call it a dead-cat bounce, I see no value in spinning the positive data that was February, in fact, I say it mimics a typical bubble perfectly.
And I’m not a huge fan of YoY comparison when it uses 2005 and 2006- why compare YoY performance with arguably the most insane years of real-estate? (Obviously because that’s the data that’s a available…) but it’s like trying to compare the stock market performance of 2001 with that of 1998 and 1999. “OMG look at the YoY performance – it’s terrible!” Of course it looks awful because you’re comparing it with outlier years!
but doesnt sales volume eventually shrink inventory and drive up price?
Generally true, but the statement seems to make the assumption that there isn’t a corresponding growth in inventory. If the growth in sales is being outpaced by the growth in inventory, the opposite is going to take place.
jb
BC (71)-
Coffee spewed all over my screen (LOL!).
And Hillary’s the same person who’s gonna dictate to capital markets every time we get into a scrape with the Chinese.
Richard, how much under are you now?
If you sold your house would you still have your pants on?
Burst (68)-
Still a duck parade, 2x daily. Fun to watch…especially after a couple of Knob Creeks at the very nice lobby bar.
“Perhaps that should be a new topic. “If SFH prices do not decline by at least 20 to 25%, is it worth it to buy? Or at what point do posters here throw in the towwl and buy, prices be damned.”
You know, at some point, if prices don’t decline much (and it’s looking now like declines will be real and that we’re not going to see huge nominal declines), it won’t matter what you do – even if real estate stays down for years, there is hope that the rest of the economy will chug along. If inflation is tamed, and rises at a normal rate, and wages increase, eventually it will all be a wash. I don’t think I would be waiting for some crash for 20 years, because in that time, things will probably even out. Waiting another year or two? Not a bad idea.
We have not yet gone to contract on our place by the way – certain issues arising, and I believe if I do go into contract it will be a good 10-15K less than what I offered to correct some issues. What’s better is that if they’re not corrected to my satisfaction, I will smile and walk away. They clearly need us more than we need them. Seller greed is one thing, but being an irresponsible homeowner and neglecting certain upkeep duties and then balking at paying them is another story.
Grim (80)-
Don’t leave out one of the all-time greats, One Man Gang…laying the patented “Gourdbuster” on everyone, including the referee.
“Gang” now works as a death row guard at Louisiana State Prison (courtesy Wikipedia).
I’ve posted this elsewhere but figure this is a good place too.
A lesson in deflation: 3 years for NASDAQ, how many for housing market?
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=nasdaq&sid=0&o_symb=nasdaq&freq=2&time=13
“the wait until tomorrow for the other shoe to drop argument is getting real tiring don’t you think?”
Richard,
Quite the contrary. It’s just starting.
It’s more akin to waiting for the fundamentals, [that support this market], to revert back to the norm. Either prices have to fall back in line with incomes or come Monday, all are alerted that they just received a 80% pay increase. All markets are eventually drawn back to their underlying fundamentals. This market was/is classic textbook; mania, fear, greed, sales falling off a cliff, inventory rising, a glimpse of hope [dead cat bounces],lis pendens, foreclosures, wall street, hedge funds, boiler room lending operations, insider selling before the news, fear and panic coming soon, etc, etc…. Just classic stuff.
JB [80],
Very true. It is quite entertaining, reminds me of Barbara Streisand, convinced that she is smarter than the markets, starts managing $ for Donna Karan. I started to buy puts on the nasquack right at that time. My puts expired 2 months before the downturn, damn timing. However, I was flat all cash positions. This industry will be wiped clean of all the Barbara Streisand’s. Unfortunately, most are trapped looking in the rear view mirror and miss the wreck just ahead. It does add spice to the blog. I am still waiting for somebody to come up with a substantive argument on why to buy now. Nobody seems to be knocking on my door.
I give – I think it is time to throw in the towel and buy soon. I have watched for 2 years as prices have remained high and passed on buying. I am not seeing anything changing anytime soon. There is not enough proof that it is or will.
If inflation is tamed, and rises at a normal rate, and wages increase, eventually it will all be a wash.
IMHO, this is looking like a new phase of high-growth inflation, more than ever seen before in recent history, for the long term – and that is scary.
Everyday we grow our deficit by $2Billion. Mr. Chang and Mr. Patel now have a much stronger purchasing power in their respective countries, and very soon they will be competing with Mr. Joe for the same products. Given that, and the lack of “made in usa” tags anywhere, prices here are going to shoot up like crazy. Why would the Chinese want to pay for shipping to US what can be sold for the same price in China?
Do you know that Mr. Chang saves 50% of his gross income? Mr. Joe spends more than he makes. And it’s not just Mr. Joe that’s affected. Mr. Smith who saves a lot also suffers ‘cuz of Mr. Joe.
GSMLS is now at 30,443.
Can anyone recall the record for last year and when it happend?
Also, how does this number compare with this time last year?
“IMHO, this is looking like a new phase of high-growth inflation, more than ever seen before in recent history, for the long term – and that is scary.”
I believe that’s part of Itulip’s theory – disinflation (which we are seeing a little of now in the housing market) followed by hyper-inflation. It follows a fairly long timetable though. But scary nonetheless, because then my kids starter homes in 30 years will be a million dollars – if they’re cheap.
(76)
The exclamation point is a dead give away that the above referenced post came from everyone’s favorite dim-witted realtor.
Sally, I remember your tricks from Shorebubble……..
I am not seeing anything changing anytime soon. There is not enough proof that it is or will.
Then this would be the first time in history that prices didn’t revert to the mean following a parabolic increase in prices driven by speculation. Every bubble in recorded economic history was followed by a correction.
Please don’t fall into the trap of thinking just because it hasn’t happened yet, it won’t happen.
…not until the last bear capitulates.
jb
Hat tip to Ben for this one..
From the Herald Tribune:
Three hope to finish CCI homes
Investors from California to New Jersey jumped at the opportunity to sign contracts for the investment homes in Florida. They were drawn by a group of companies that included CCI, Enchanted Homes, American Mortgage Link and Seashore Resorts LLC of South Carolina.
…
Timothy and Maryann Stefanik of Swartswood, N.J., contracted with Enchanted to build a home in Cape Coral. They said they were introduced to the builder by Seashore Vice President Carl Cirinelli.
The couple has claimed that a $100,000 lot sold to them on March 3, 2006, was virtually identical to two adjacent lots sold for $50,100 each on Nov. 11.
The Stefaniks, who have hired a lawyer, maintain that Seashore and Enchanted misrepresented the deal to them and that the appraisals supplied by American Mortgage Link to the couple and to Coast were not current.
The deal “put us in a position of having a house that’s value is $125,000 less than the mortgaged amount,” Maryann Stefanik said.
There is one substantive, rational reason to buy right now. Many have mentioned it. If your occupancy horizon is 7 years +, and you can wait out the storm, go ahead. Odds are you’ll be ok on the other end.
Although I’m a Realtor, and I love doing business, the worst reason to buy right now is because waiting for things to drop further is killing you. That’s the same mentality that wiped out so many people during the run-up. If you’re bound and determined not to pay up, your ante into the game is discipline. It’s all you’ve got right now.
A little patience will always be rewarded.
Interesting story.
You would think with an investment that size, you would perform your own due diligence.
I’ve brought this point up before, its also interesting that the couple involved is from NJ.
While NJ wasn’t as big of a speculator’s market like Vegas or Florida, I wonder how many people from NJ played this game in Florida, i.e. withdrew home equity from their expensive NJ home to roll the dice on a Florida condo?
What does this mean to NJ’s economy? Did enough people do this to have a real impact?
bbb: 22 houses currently under contract in River Edge
16 currently sold listings in 2007
6 of those were purchased with an ARM (according to MLS data)
Avg DOM was 93 days,
Average List: $525,525
Average Sold: $502,938
enjoy! :D
TJ [93],
Step up and buy. You certainly have your pick of the litter. Akin to the entire pit looking to sell and one buyer comes in and bids. White on rice.
Cirrrus [84],
I’m in your camp [bull trap]. Like drawing a picture of a staircase, lower highs, lower lows. Resistance is a downward sloping line.
Richard Says:
March 23rd, 2007 at 12:16 pm
the wait until tomorrow for the other shoe to drop argument is getting real tiring don’t you think?
Reech: While Bost & clot can take turns projectile vomiting stuff at their computer screens, I seldom have a visceral reaction that isn’t mollified by writing something terse and emotional. However, in your case, I actually had the urge to reach into my computer screen, move through the Internet, and come out your end, so I could SLAP YOU UPSIDE THE HEAD!
I’m planning to buy in South Brunswich township (kendall park, Dayton ..) any infomtion how’s the house market in this area? Thes prices did not go down that much, I see a lot of Single families in high 500k and low 600k.
read this from Ne0-con HQ
http://aei.org/publications/pubID.25836,filter.all/pub_detail.asp
Does anyone else find it odd that housing prices FELL, year over year, and yet all the headlines are only trumpeting the rise from Jan to Feb?
“Please don’t fall into the trap of thinking just because it hasn’t happened yet, it won’t happen.”
This is my all time favorite trap. It’s most fun when it comes to things that can only happen once.
104 BC – I intended to put an offer on a house a few days ago, only to be told by the listing agent that sellers would only accept full price offers and intended to create a bidding war over the weekend. She almost admitted she would drag her feet in presenting my offer. I honestly haven’t seen any price reductions that amount to anything. NJ prices are so high and I cannot see a turn around for quite some time. No one will accept that their neighbor got $750k last year and they should expect a lot less. This is just my observation from the towns I have been looking in for the past 2 years.
#103 thatbigwindow: I have to say I am shocked, that there are still people out there who have been buying in RE, especially with all that is going on in the town etc.
16 sold so far in 2007, that is a big number, disappointing but it is what it is.
22 currently under contract, that should be interesting to watch and see how many of those close, much has happened in the mortgage market over the last few weeks.
It looks like from your numbers provided that prices are flat to this time last year, is that correct?
>>Richard, how much under are you now?
i’m up about 30% but i really don’t care unless i have to sell or borrow against it of which i’m doing neither.
yawn chicago. unfortunately your visceral convictions don’t jive with reality. keep on though. maybe if you shout long enough and loud enough things might go your way.
>>It’s more akin to waiting for the fundamentals, [that support this market], to revert back to the norm. Either prices have to fall back in line with incomes or come Monday, all are alerted that they just received a 80% pay increase.
are you suggesting people who want to buy wait 5, 10, 15 years? i’ve been hearing the out of whack with incomes bubble talk since 2002. if you sat on the sidelines waiting for a revert to mean you’re 5 years in and further behind the curve than ever before. i feel for those who take yours and others prophetic predictions too much to heart and get hurt by it.
that would be “jibe”
the only thing “jive” is that you are a jive turkey
i’ve been hearing the out of whack with incomes bubble talk since 2002.
Not here you didn’t.
jb
Leave those folks alone. Some people don’t mind over-paying. I overpaid for my sandwich today, but hey, that’s life.
BuyNextYear Says:
March 23rd, 2007 at 2:31 pm
Leave those folks alone. Some people don’t mind over-paying. I overpaid for my sandwich today, but hey, that’s life.
BNY: you went to Quiznos?
TJ[104],
Hate to bring up a different market. However,I know a more than a few investors/traders that would not accept selling CSCO for $60, $50, or $40. Unfortunately, the market determines the price, not their nosy neighbor.
What happens when they need to sell, job transfer, retirement, downsizing, divorce, just some of the standard reasons someone may decide to sell a property. What their neighbor received last year will be of zero consequence. These turn in trends/prices take time. All along I have stated that it may be a 5-7 year period of price adjustments. If we look at history, past declines have averaged close to 46 months, peak-trough. If we assume that this market peaked around the 4th quarter of 2005, we are only in out 18th month. There is an eternity of time ahead of us, along with major storm clouds, for this to unwind/unravel. Anybody who is seeking instant gratification will have a much better shot going to AC.
That said, I agree with Chi.[just not my situation]. If you are financially capable of withstanding future price declines, have a good down payment available and will stay put for close to 10 years, go ahead and make the plunge. Just make sure your *ss is comfortable on that couch. If your personal situation changes within the next ten years, and you are forced to sell??
By the way, why are you listening to a listing agent regarding a bidding war? Move on, there is a ton to choose from. You call the shots, not the listing agent.
FYI for SFH in Bergen County
With a little over a week left in the quarter SFH sales compared to Q1 of ’06 are down about 10%, units under contract are down about 7% and median prices are down about 6%.
Q4 of ’06 median prices was down 8% compared to Q4 of ’05 (which shows to be the highest $ quarter).
For March of this year compared to last, sales are down about 35%, units under contract are down about 33% and median prices are 2%.
But there’s a week and half a day left to the month.
Don’t forget to factor in inflation %.
—-
Richard,
Your UP 30%? Congrats!!
Typo for March:
…and median prices are down 2%.
To whomever asked,
The last time gsmls inventory was at this level was last July, it has been higher in OCT..however it is coming on fast and furiously now.
KL
Richard
i’m up about 30%
how do you know?
I had a stock that was trading 10x its current price during the boom
KL is a spreadsheet pro!
jb
Reechard-
Let me get this straight. If memory serves, you bought within the last year (please correct me if I’m wrong). Where is it that you picked up 30% appreciation anywhere in NJ in a 12-month (or less) window? Is that 30% the amount of your downpayment?
What am I missing here? I bought in a top community 20 months ago, ground the seller down to a nub, buried my commission in the transaction…and I’m flat.
Richard [114],
Hideous. Bubble talk in 2002, not from me.
I owned in 2002,2003,2004 and most of 2005. Like Scent of a Woman, “I’m just getting started”.
Sorry,way ahead of that curve ball. Seems like you are exagerrating/stretching a little. Stretching, yeah similar to approx 40% of the buyers in 2006. These are the ones about to be busted, way behind the curve. Add this to the current wave of those behind the 8 ball and it becomes downright scary. As a matter of fact, the curve is so damn nasty that many are frozen.
No ones know how much they are up until one decides to monetize that asset.
From Bloomberg:
New Jersey Lawmakers Plan to Hold Hearing on Subprime Crisis
New Jersey lawmakers plan to hold a special hearing next month on the subprime home-lending market and its possible impact on residents in the state.
Subprime mortgages are granted to people with poor credit histories or high debts. Some homebuyers may have taken out subprime loans without a full understanding of how fast their
monthly mortgage payments can increase, said Assemblyman Neil Cohen, deputy speaker of the state Assembly and chairman of the chamber’s committee on financial institutions and insurance.
Clot,
Sec 104, row 7. Go Tar Heels.
KL (122)-
Tell Sally to get back on the Abilify. Inventory puffing up around here the past 3-4 days, too.
Just like they have been calling stock bubble in 97. Got really loud in 99. It did not burst until 2000.
Bubble is more psychology/herd driven than data and fundamentals.
CC
Seller greed is one thing, but being an irresponsible homeowner and neglecting certain upkeep duties and then balking at paying them is another story.
NJGal …like what?
You sound a bit miffed.
Now I’m seeing the slop that couldn’t find buyers last year come back on market. Sorta the RE equivalent of throwing up in your mouth. Some of these are even with the same agents…you can look for them at your neighborhood bookstore or HD by July. What- other than desperation- would convince an agent to try to market the same POS, at the same idiot price, a second time?
However, a handful of sellers are showing a little sensitivity to today’s kinder, gentler pricing.
BC (128)-
You were a man on a mission. Enjoy!
Here are the words, if you want to sing along tonight:
I’m a Tar Heel born, I’m a Tar Heel bred. And when I die, I’m a Tar Heel dead. So rah rah Carolina-lina, rah rah Carolina-lina, rah rah Carolina-lina…go to hell Dook!
If we look at history, past declines have averaged close to 46 months, peak-trough. If we assume that this market peaked around the 4th quarter of 2005, we are only in out 18th month.
Spot on as usual BC Bob!
This RE bubble took a while to get to the stratospheric prices of 05 and people can wish as much as they want but plateauing at around 5-10% off the highs for 10-15 months is just the air starting to hiss out before hell breaks loose. There will be plenty of dead cat bounces, but a series of lower tops and lower bottoms will be quite evident in the months ahead.
Psychology is turning for the worse and the more the MSM sycophants (who were way behind the curve) talk about it, the more the herd will rush for the exits. Granted it may be a small number of people in absolute terms being affected, but the damage to comps will be substantial.
Richard, your ‘up 30%’ is meaningless till you bank it. Or perhaps you’re valuing your house in Euros?
#119 BC BOB: Directt and to the point BC as always,in your opinion if you had to look out over the next 12 to 18 months, what kind of correction do you think we will see in the market by then?
JB,
I actually have been using my spreadsheets alot, I am glad I am learning it. I have had a few Big PTA functions lately I was stuck on something 2 weeks ago and got help from the blog and Seneca,and was able to complete a project on time.
I am currently running a town-wide scholarship raffle and it has been a great help with keeping tabs on the money coming in from each school, also last year’s VP made a big deal of saying what schools did better than others at the raffle dinner,in front of everyone. My plan is just to leave a chart at each table, and say nothing!
(-:
KL
bbb[135],
Heading to the Meadowlands right now.
It’s difficult to arrive at a certain % within a designated time frame. However, I do feel that prices declines will be more pronounced, during this time frame, as compared to 2006. Sellers are starting to get it. I think fall/winter of 2008 will be very interesting. Gotta run.
BC (119) I didn’t listen to the agent. I told her she wasn’t getting my offer until after her supposed “bidding war weekend” and I wasn’t going to be part of her game. I was just surprised she came out and said that. It sounds unethical even if she were honest about it. Thanks for the advice. I am still shopping but have expected not to get any great buys anytime soon.
What- other than desperation- would convince an agent to try to market the same POS, at the same idiot price, a second time?
Denial.
“Wait a second…The market is supposed to be hot. My neighbor got half a mil for his cape in September 2005…mine has to be at least worth that much…last year was just an anomaly…I just got really unlucky…It’s bound to bounce back…My house is much nicer than my neighbors…were so close to NYC”
#137 BC Bob Thanks, maybe we can continue this conversation at a later date.
Here is an interesting kinda off topic point that was in the paper today (forgot if I read it in the WSJ or NYT). Do you know how long real estate prices dropped in Japan after their R/E bubble burst? They dropped for 16 straight years. In fact, 2006 was the first year prices increased! Now that is scary.
#75 Duckweed says:
“If you use the same time span, say YoY, then the headline becomes Sales and Price both down YoY. But if you use MoM number, then the headline becomes Sales up 3.9% and price changes ???”
Guess you have optimists looking at an uptick in the MoM number to call a bottom in housing. Not me, I think you will see many such false bottoms that will make people jump in thinking that they are getting a deal only to be disappointed few months down the line. The inventory that remains on the market after this spring will be a good indicator of next years market.
“I am not seeing anything changing anytime soon. There is not enough proof that it is or will.”
I agree with you *assessment*. All data points to continued surge in home prices aided by strong job growth and and excellent economy, not to mention the trade and budget surplus and *on*shoring of manufacturing jobs from china and service jobs from India to US.
Please buy ASAP, before you get priced out of the market completely.
NJ, a high tax state with high tax capacity. The tax capacity matter is often neglected by commentators on this board. We pay high taxes because we can afford it. It is that simple.
http://tinyurl.com/2upcq5
When we take into account what NJ can afford against what it taxes, it is a little worse than an average state. Wisconsin and Kansas are tougher on their citizens, CA is in line with NJ.
The tax talk moves us away from one of the correct themes of this site, namely, that housing prices are killing family budgets, taxes are incidential.
One thing I would like to know more about is the redistributive effect (largely generational) of the housing bubble. After all, complaints about prices, either housing or taxes, are really about shifts in cash from some to others, with the implicit understanding that the shift is unjust (that is, immoral government gas stealers or immoral flippers, lenders). The moral questions are sometimes lost in the technical talk.
Anyway, I love reading the blog and as a long-time renter, I hope you dudes are right!
sidelines (144)-
What brainwashed, NPR-loving, tree-hugging, card-carrying forced-wealth-redistributor came up with this nonsense? Let me guess…it’s someone associated with the NEA, that cabal of left-wing nutjobs.
We have a “high tax capacity”? Holy merde!
Guess what? My personal “tax capacity” passed “overload” about three grand ago. And I suspect I’m not alone in that feeling!
This “unjust shift” is unjust because it is stripping wealth from all homeowners- across the spectrum of income- and placing that wealth in the incinerator of a welfare state run amok, rife with corruption, nepotism, pay-for-play, union skulduggery and no-show careers.
Not to mention supporting a system that does anything short of imprisoning a h@@ker like Carla Katz.
Clotpoll,
I’m not saying that Trenton shouldn’t push back against spending, perhaps, for example, moving public employees away from defined benefit pensions. But in NJ, we spend it ’cause we got it! There is lots of wealth in this state. I would like NJ to be in line, or slightly below national averages for spending, once we adjust for the state’s wealth. What is your alternative? Mississippi?
Ugh! #147 moderated due to that forced-wealth-redistribution word.
sidelines (146)-
Until my post un-moderates, yes, Mississippi IS an excellent alternative. They understand you don’t grow an economy by taxing people into oblivion.
JerseyCity
Does the conclusion that taxes are high in NJ because residents can afford it really mean anything? Should that be the case? Is the public service (for example, a clean park, a teacher, or a traffic light that works) necessarily more expensive because the users can afford it?
I’m not sure the inverse shouldn’t be true…as wealth increases, the costs should be a relatively smaller share. Higher value production (defined by wage) should actually lead to lower costs…including costs for many public goods and services. Efficiency.
The same wealth transfer you point out – from higher housing prices – occurs when tax inefficiency is in play. Taxes are basically wealth transfers if taxes do not decrease.
So I’m not sure how you can divorce taxes from any other “moral” monetary transfer in NJ.
Wisconsin residents suffer from a reasonable cost of living, clean air, good roads, and reasonably competent government.
Naturally, I moved here.
Isn’t Mississippi the number 1 recipient of federal tax dollars?
WE pay for the economy there.
Pat and others,
Taxes are moral decisions–extensions of the social contract betweeen individuals and the community. NJ residents traditionally have reaffirmed a higher tax higher service mix that the state’s economy can handle (that speaks to the tax capacity issue).
NJ wants lots of “good” public goods. Unlike other states, we can foot the bill for it fairly easily. Sometimes we face up to it and pay for it (as Jim Florio bravely did when he raised taxes to cover the deficit). Sometimes we consume the public goods and skip out on the bill (that happened in the Whitman years). But the talk on this blog ignores that there is quite a lot of value being produced in the public sector–this waste, fraud and corruption line is carried too far. NJ has a better school, healthcare and mass transit system compared to other states. It does a better job of taking care of its poor than the states of the deep south. The tone of many on this site is that government is some invader knocking on the door. But NJ residents have–through their voting patterns–always reaffirmed their support for this system. It is childish (and James is really off of his game today in my view) to write as if some stolen gas carries the full weight of the problems of the state–that is, the view that the corruption of someone else–pols or interest groups–once eliminated, clears the way to change.
Looks like we got us a card-carryin’ pinko here.
Our schools may be a tad above the norm for the US (since in the US, the biggest challenge facing schools is keeping weapons out of the classroom). However, we are in a non-competitive position when it comes to educational comparisons with the rest of the developed world.
“Value in the public sector”? Please. We’re about to pawn off our toll roads AND lottery. Where’s the “value” in that? In the world of family finance, that’s called digging into principal. In Biblical terms, it’s called selling off a birthright. What new-speak would you use as a euphemism for this? What moniker is best suited to the act of throwing money at problems in the hope that they’ll go away? The problems we throw money at only come back for more (money, that is).
Tell ya what, sidelines. I’ll send you part of my tax bill. You pay it. Buy my “value” for me.
Grim’s take on the stolen gas is on the mark. And when public servants start treating their jobs as a fiduciary responsibility, things will get a lot better…fast.
sidelines-
I’m attacking the message, not the messenger. Last post was done while Carolina was down 14. Not good times.
Much better now.
JCS
This morning, I watched the washer desperately trying to churn and do its job despite the two loads I transferred in there (working Mom with lotsa Saturday chores, see).
I thought, “I better be careful here – the good of the few outweighs the need of the many.” See, I shouldn’t do that, just because my family needs clean sheets, towels and clothes – even if I have 12 other things to do this morning.
I was thinking about your belief that wealth transfer is a moral good if caused by long-term voter behavior.
Long-term inefficient behavior, regardless of deemed “morality through majority vote” eventually causes that washer to give up the ghost.
The few in New Jersey – those few who are the engine – are not able to sustain the “moral vote” any longer. New Jersey needs to have the good of the few outweigh the needs of the many, so that the few can keep going. This is a difficult path, and will take time and education.
JC: While I agree with clot and Pat [rather demonstrably actually], we all appreciate your willingness to post here. Especially when you present a well written opposing viewpoint.
Ultimately, NJ is off its game. It’s growth and current economy was built on plentiful and inexpensive land, and the pharma and telecom industries.
The biggest growth sectors in the last ten years have been construction [which is evaporating as we speak], low paying manual labor jobs, and government jobs. There is no allure or opportunity for the next generation of business leaders.
It may not be apparent in 2007, but the signs are there, and the state will be hollowed out given time.
NJ is becoming France. Hopelessly handcuffed by structural impediment to business, and the population that remains is angry that past glory has dissipated. The problem is that the smart and motivated people leave, and you are left with the people who do not add value and rely on drawing down their own wealth or the wealth of others. That scenario is not sustainable.
lisoosh (152)-
Actually, Mississippi runs 3rd or 4th over the past few years, in terms of federal dollars that come back per dollar sent in taxes:
http://www.taxfoundation.org/taxdata/show/347.html
Note that NJ is perennially 50th on this list. You can’t help but think that this stat is anything other than politically-driven. Mississippi doesn’t rank high on the list because the government’s hearts bleed for poor black kids living in tar-paper shacks…it’s because Trent Lott is a snarling pit bull who wields tremendous budgetary control (at least until he became part of the minority). We send reps and senators to DC to “bring home the bacon”…and Messrs. Toricelli, Lautenberg, Corzine, Menendez, et al have all failed miserably at this simple task.
I can’t imagine the party the directors at Goldman threw the day they got rid of that stiff Corzine.
JCSidelines: But the talk on this blog ignores that there is quite a lot of value being produced in the public sector–this waste, fraud and corruption line is carried too far.
Where was your highschool prom this year? You cannot be a day older than 18.
I refuse to waste anymore of my time with your insane thoughts. This may be the most ridiculous comment I have ever read on this blog!
Commercial (159)-
I can never erase from my memory the day that I went to the RE Commission in Trenton to personally pay for my brokerage’s partnership license.
The guard in the lobby would not let me go upstairs at all (these were the days after 9/11). I was instructed to use a “house phone” in the lobby to call up to the RE Commission office to have someone come down to get the payment.
I was then kicked to a series of 3 or 4 cubicle monkeys who basically didn’t feel like interrupting their nail-filing to take a 2-minute elevator ride. Each clerk sounded more stuporific than the previous one.
Finally, I asked for the supervisor, who then demonstrated only a fraction of a degree more enthusiasm than the previous crew. At least she deigned to come get the money.
Fifteen minutes later, a bag of cellulite in lycra/polyester emerged from the elevator, civil-service-shuffled it over to where I was, grabbed my payment out of my hands, gave me the once-over, grunted and shuffled back to the elevator with the grace and enthusiasm of a three-toed sloth.
This will be my enduring mental image of government in NJ.
The sad thing is, so many duties have also been outsourced, and the inefficiency goes as well. If there’s a perceived level of high technology involved with a public activity, or a high professional demand to work with business, the responsibility is outsourced, but the bad traits seep into the transaction.
I could relate many, many such experiences, Clot.
Attitude infiltrates each step. Examining behaviors such as individual theft must be a priority to have any hope for attitude adjustment.
Chicago and others,
I do appreciate the idea that citizens should not be complacent about government inefficiency, as well as the point that NJ does have some structural problems with taxes that should be addressed. I do think that schools can be more efficient, maybe a 10% margin, significant-but not much more. In fact, I would argue that the best way to make the schools more efficient would be to require an across-the-board per capita spending requirement–no more talk of floors. The wealthy districts have the most fat, and if the spending were capped, they would have to find a way to deal with it.
To be honest, a strong case can be made for spending more in certain categories, mass transit, smart growth incentives to name two. A state that intends to compete in the global economy has to make investments to keep up with world economies elsewhere. A narrow view (low taxes, low public services) will turn us into Mississippi (and then I am sure we will be on the getting end of a lot of cash–whatever the skills of Trent Lott are, the money flows because of federal entitlement programs to help the down and out.
Reading CREC’s 159 consultant, it would seem to follow that the writer never voted for an incumbent for any office, or for any major party candidate too, since every elected official, simple by virtue of holding office, is corrupt, or so ineffectual in execution that they would not merit reelection. I doubt that is fact fact the voting pattern of #159, but it should be if that level of contempt for the public sector is so dearly held.
Pangloss (162)-
Your assumptions would all be wonderful, if it were a given that NJ’s government was an actual goverment and not a racket.
Increased spending in ANY area is wholly unjustified, as the current regime has proved that it is incapable of properly executing and administrating a program of ANY type or size. The graft, corruption and gross incompetence at every level screams for money to be cut off until such time as adequate oversight can be established.
I’m sure many on the board would have no beef with paying taxes to an entity that could deliver a result commensurate to the amount invested. However, that would be the behavior of mature, responsible adults…the exact opposite of the lowlife and riff-raff that currently lurk in the halls of Trenton.
BTW, Trenton’s current contribution to our “global competitiveness” has been to methodically brutalize businesses of all sizes via escalating taxes and enforcement of smothering regulations.
The exceptions to this approach come in the form of corporate welfare handouts to failing, last-century businesses, such as buttwipe (oops, I meant Marcal). The fact that such as sorry excuse for a business can hold NJ hostage and extract reward in return for failure is a prime example of the utter incompetence of government here.
We don’t need any more “initiative” from them than what they’ve already shown.
JC: to add some point about the inefficiency…a lot of it is in the areas of government where there is no motivation to enforce standards and restrictions..
in Hoboken, we have too few foot patrol police officers and way to many promotions and captains. Tons of desk jockeys that make too much, and then they have the unmitigated gall to state that the department is undermanned because there are not enough street cops….the graft is subtle
education….to many administrators per classroom….why should MORE than 50% of budgets go to administration…
self-dealing…….government officials bartering off contracts either through direct business connections, or implied business connections [i.e. private sector jobs and contracts after leaving office]
broken record
not enough regional government, too much redundancy…some of the problens are subtle, no one director/supt/chief is the problem, but out of 5 you could probably get rid of 1 with the proper planning
The wealthy districts have the most fat, and if the spending were capped, they would have to find a way to deal with it.
That’s not true. The Abbott districts spend far more than the state average. Asbury Park schools spend $19,102 for each student and the Newark schools $17,974 per student.
http://tinyurl.com/yst83v
Clot #160 JC Please read as well.
Clot
That is another story to add to my list of so many. I’ll share one of my favorites.
I walk into Edgewater’s Zoning Department’s a few years back. It was a small messy area and four people were in engaged in conversation about their weekend activities. After about five minutes, a woman asked me if she could help me. I said “yes, can I please purchase a zoning map and look at the ordinance code book.” She looked at me as if I had three heads and said, “I don’t know what that is, we don’t have that.” I replied “this is the zoning office, and the map is hanging on the wall directly to your right. I need a copy of that!” Then a man eating a bagel overheard our conversation, probably because I was getting annoyed and began looking for the code book. A half hour later I left the office….meanwhile the other two people in the room were still engaged in a personal conversation…
JC Sidelines: Tax payers dollars hard at work!!! I have experienced and know a hundred of stories like this…I invite you into any town hall in New Jersey for one hour, just to see what goes on. Sorry to be so hard on you, but, I feel like you are the little old lady getting scammed by a used car salesman. I feel the public needs to be aware of this. I know most people are, but you slipped through the cracks!
JC do you work in the public sector? If so, do you have a parent/grandparent/sibling who worked in the the same town as you?
Commercial (170)-
I think you’ve hit paydirt.
February EXISTING HOME SALES down bigtime vs. year/year !!!
READ
The NAR f*cks over the gullible MSM and sheeple, leads them to believe used home sales were up last month. That was NOT the case.
http://housingpanic.blogspot.com/2007/03/nar-fcks-over-gullible-msm-and-sheeple.html
Dubious NAR report shows home sales continue to crater, off 3.7% vs. last year, while unsold inventory explodes by another 763,000 units and median sales price (without incentives) is down 7.6% from peak
February used home sales (per the dubious NAR numbers) were supposedly 387,000 units, vs. 402,000 units February 2006, down 3.7%. Inventory is now at 3,748,000, vs. 2,985,000 in February 2006, up 763,000 unwanted homes, or 25.6%. And the median sales price (without cash back or incentives) in February of $212,800 is down $17,400 from the July 2006 peak.