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Personal Income/Spending/Savings Rate due out at 8:30.
Favorite day of the month!
jb
JB,
My day was made when I picked up the Star Ledger. Sorry, it was not an article about you.
Headlines;
“Sen. Bryant is indicted in bribery, brazen graft.”
I call this a start. Go Chris Christie. There may be hope after all.
Sorry, forgot to add the link,[Post # 2],
http://www.nj.com/news/ledger/index.ssf?/base/news-11/1175233224107850.xml&coll=1
Question for the group- When do you think prices are going to drop dramatically?
I’m going with August ’07. I think it’s too hard to predict a bottom and the timing of the bottom, but I think August is typically a month where people become more willing to accept a lower price. The whole buying/selling before school starts thing.
I saw this last year and came real close on 2 houses that had dropped their price by 20% and 30% of OLP. I submitted bids in June and helped convince them to drop their price. They came down to me, but I still didn’t pull the trigger because I wasn’t sure about the market. Both prices were lower than today’s comps.
I think the same thing could happen again, but this time more widespread and deeper as I think panic will set in. Make your low-ball bids and watch them come to you.
Don’t jump in too early or we’ll just be stuck in this overpriced, low sale volume market for another year.
“Don’t shoot until you see the whites of their eyes”
JB, [1],
……and when things slow down, we have;
NAPM-NY-9:00
CHI PMI- 9:45
U of M- 10:00
Const Spending- 10:000
Bernanke- 12:30
BOOOOYAAAAAAA.
Still Looking,
When I looked up 2390261 in the NJMLS it shows ‘No Properties’
Sorry, Rich
Shoot, forgot;
PCE Deflator- 8:30
Don’t jump in too early or we’ll just be stuck in this overpriced, low sale volume market for another year.
It’s not about buying at the absolute bottom, it’s about buying when the numbers make sense. I don’t think many buyers here care about catching the bottom, nor do I think anyone is going to lose sleep over a few thousand dollars.
However, with that said, I don’t think prices have fallen far enough for the numbers to make much sense yet. Affordability at the low end of the market hasn’t yet improved much.
jb
sl,
MLS# 2390261 – Branchburg
339 Pleasant Run
OLP: $685,000
DOM: 3
Agent Remarks have the good ol’: PRESENT ALL OFFERS
Purchased 11/2004 – $556,200
Was previously listed in 2002 under:
MLS# 1549402
OLP: $574,900
LP: $549,900
DOM: 209
(Expired)
I do not expect more than 5%/YoY drops… If inflation Picks up there might be no drops at all – just stagnation of home prices. However if home prices stay the same for 5 years, and my salary raises 30% doring thouse 5 years – I will consider it the same as droping the price by 30%. Chances are – in 5 years I will not be looking to buy in NJ – I will be looking for my way out.
From MarketWatch:
Higher inflation, slower spending in February
Core consumer prices increased at the fastest pace in six months during February, even as consumer spending slowed to the weakest in six months, according to government data released Friday. The core personal consumption price index rose 0.3% in February, the biggest gain since August, the Commerce Department reported Friday. Core inflation matched economists’ expectations. On a year-over-year basis, core inflation ticked up to 2.4% from 2.2%, moving further away from the Fed’s comfort zone of around 2%. Real (inflation-adjusted) consumer spending growth slowed to 0.2%, the weakest gain since August. In February, personal incomes rose 0.6% in nominal terms after a 1% gain in January.
Personal savings rate still solidly negative at -1.2%.
From the BEA:
http://www.bea.gov/newsreleases/national/pi/2007/pdf/pi0207.pdf
“I do not expect more than 5%/YoY drops… If inflation Picks up there might be no drops at all – just stagnation of home prices. However if home prices stay the same for 5 years, and my salary raises 30% doring thouse 5 years – I will consider it the same as droping the price by 30%. Chances are – in 5 years I will not be looking to buy in NJ – I will be looking for my way out.”
Hopefully other companies don’t take the same stance as Circuit City.
-R
Wage growth is accelerating and we are outside of the fed’s comfort zone [core cpi]. If they cut, in an environment with these #’s, watch out. It will backfire. The dollar will get crushed and the 10 year will sell off[rates higher]. Back to the same question, the fed is cornered, do they inflate to support housing or do the RIGHT thing and raise to stem the inflation risk. Again, not Ben’s fault.
Fall of Empire – this once great Nation is sliding down the road of destruction faster than any other great empires in the past.
Pay no attention to those numbers, there is no inflation..
Milk Prices Expected to Rise 9 Percent
Dairy economists predict the retail price of milk could rise as much as 30 cents per gallon – a 9 percent jump – by fall. The reasons include rising fuel and feed costs for farmers and increasing demand for milk products around the globe.
The average retail price of whole milk could rise to $3.35 per gallon by October, up from $3.07 in January, said Ken Bailey, an agricultural economist at Penn State University who specializes in the dairy industry.
From Bloomberg:
Fed Risks Moral Hazard as Housing Market Melts: Mark Gilbert
“Interest-Only Mortgage Payments and Payment-Option ARMs — Are They for You?” asks the U.S. Federal Reserve in a November brochure on its Web site.
The answer should have been a resounding “No.” Instead, cash-strapped Americans embraced loans offering low initial payments, praying that rising house prices would build a refinancing buffer before the monthly rates become unaffordable.
The hangover from that borrowing binge is beginning to hurt. Evidence is building that the U.S. economy is slowing sufficiently to warrant a soothing reduction in interest rates from the Federal Reserve. That poses an interesting dilemma for Fed Chairman Ben Bernanke.
Cut too soon, and he will stand accused of ignoring inflation in an attempt to rescue the housing market. Leave it too late, and he risks tainting his second anniversary at the helm of the world’s biggest economy by overseeing a recession.
All four legs of the U.S. housing market are wobbling precariously. The mortgage lenders who funded the boom are going bust or shutting up shop. The homebuilders who slapped together the bricks and mortar are seeing their earnings plummet. The financial alchemy used to repackage home loans into tradable securities is starting to unravel.
…
Moral Hazard
Targeting asset prices is anathema to the current generation of monetary-policy guardians, who invoke the risk of moral hazard — the danger that investors will throw caution to the wind in the belief that central banks will always bail out their risky adventures by making money cheaper.
“I do want to emphasize that we have not shifted away from an inflation bias,” Bernanke told Congress. As the crisis engulfing the subprime mortgage market worsens and the contagion threatens the wider U.S. economy, though, the Fed chief may find he’s damned if he does cut, damned if he doesn’t.
BC Bob,
I think Fed’s bigger concern is inflation than the housing market. Probably they will raise the interest rate to curve the inflation. In the mean time, housing market will get crushed at a faster pace.
And crumbling of housing market will have bigger effect on overall economy than many people expects.
Bergenbuyer #4
Here are my two cents. I’ve been watching the market in Fair Lawn in the 300-400K range for a while. In Oct there were about 35 houses offered and a few dropped prices early december before being withdrawn early 07. The whole inventory thing puzzles me, because only 6 of the current 26 houses were there in Nov.06. Almost all the current ones are relatively new offerings. The 30 houses that have left the market in the last 5 months have not sold, I’m sure. But they are not coming back and swelling the inventory either. Not yet. Anyway, what gives me heart (and flatly contradicts Sally, Gary and Richard) is that 5 houses have lowered prices within the last three weeks. That is 20% of the market, and some had only been listed for two or three weeks before they capitulated. In other words, they are coming into the market with peak or near peak prices but already know that they are deluded. They are just giving it a shot. I think houses that come into the market after this ruinous spring “rebound” will simply price lower and the ones already listed will adapt or perish. Of course reductions have been modest, 3 to 8%, but also very quick. Caveat: it is only one town, one segment of the market, and paying the “reduced” price for such POSs is still insulting.
Marito
Marito,
I noticed the same thing. I have been watching Closter for a long time (I live in Closter). During Oct and Nov, 2006, there were close to 150 houses listed. Around Dec. Jan, it dropped 80. Since then, it has been around 80 until last week. Within a week, the inventory went to 90. Price has certainly been dropped. But the inventory is not there.
Same in my town, there were 120 homes last summer, down to 80 right now. I know a lot of people tossed their homes up for sale to see if they could sell them at their ridiculous high prices. Maybe they’ll try again soon.
In any case, 80 is much higher then the 20-25 that were available in 2004/2005.
Asset Deflation : The Death of Real Estate
http://www.marketoracle.co.uk/Article639.html
Since inventory trends typically follow a seasonal pattern, it is difficult to compare anything but year over year changes (without adjustment). This time of year is generally the low-point for inventory, summer generally marks the peak.
https://njrereport.com/images/feb07_salesinventory.gif
JB[17],
Cows have to eat. By the way, I’m not totally bearish RE, very bullish on farm land.
David [19],
I feel that’s the stance the fed should take. However, they realize that we are on the cusp of a major bust. Their doctrine encompasses both growth and inflation. Churn up the presses, flood the market before there is a major crisis. We’ll worry about inflation later. Pay me now or pay me later. Either way, there are major problems, [a plethora of storm clouds colliding], in the future.
Ran across this email on Broker Outpost.
To: All National City Home Equity Approved Brokers
Re: Revised Fixed Rate Loan Credit Grids
March 30, 2007
As you are probably all well aware, the dramatic changes in the sub prime lending industry are having a ripple effect on Alt-A and prime lenders. As a result, investor appetite for stated income, high CLTV and lower FICO originations is evaporating quickly.
The rapid changes in market acceptance of these products necessitate an equally rapid response and a responsible modification of our product offering.
Effective Monday, April 2, 2007 the programs listed below will no longer be offered for new fixed-rate loan applications or rate lock requests for existing pipeline.
INCOME VERIFIED Fixed-Rate Loan programs eliminated:
Occupancy
CLTV
FICO
Over 95
Less than 680
Primary
Over 89.9
Less than 660
Over 89.9
Less than 700
Second Home
89.9 or less
Less than 660
Investment
Over 89.9%
Less than 700
STATED INCOME Fixed-Rate Loan programs eliminated:
Occupancy
CLTV
FICO
Over 95%
Any
Over 89.9
Less than 700
Primary
89.9 or less
Less than 680
Second Home
Any
Less than 700
Member FDIC ©2007, National City Corporation NationalCityHomeEquity.com For commercial use only. Not intended for consumers.
David,
But the inventory is not there.
Inventory is lower compared to last year but it is still high.
Active Listings: Closter March 1-31
2007 93
2006 117
2005 60
2004 49
Rich,
Once again, you are my Oracle. Thanks for the info.
Do you have info on inventories in Closter before 2004 also? thanks.
I’m going with August ‘07. I think it’s too hard to predict a bottom and the timing of the bottom.
My guess…December 2008 for the bottom of nominal price declines followed by 5 – 7 years of stagnant prices (real price declines)
Rich,
Also can you run the history on MLS 2637644?
I think the builder built 5 of similar houses on one big lot. I think this is the last house remaining which is still not sold.
Thanks.
#29,
I thought that the price will bottom out around 2009 or 2010. I will go with December idea. :)
David,
To quote the NJMLS:
“Historical Actives are not available prior to 1/1/2004 or for future dates”
Future dates, I love it! Who would expect the MLS to know the number of active listings in the future?!
Rich,
Sorry to bother you but here’s another one I have been looking.
2700857
BC,
The Fed is going to have to make a tough decision; raise/hold rates to defend the dollar against on going inflationary pressure or lower rates to cushion the fall of housing, which consistently comes in worse than analyst expectations.
I think the Fed will choose housing. Don’t forget, the Fed serves at the pleasure of congress and congress could strip their power. This was the threat after Greenspan’s “irrational exuberance” comment. Politically, the decision will be to maintain the value of China’s massive dollar holdings or help out Joe sixpack. With an election looming, my guess is that it won’t be China.
I think we will know the Feds direction before the end of the year.
Rich,
hahaha. that’s funny.
At least, NJMLS doesn’t behave like David Diarrhea, all knowing powerful wizard piece of garbage.
Quite an unexpected jump in the Chigaco PMI..
Chicago Purchasing Managers’ Index Rose to 61.7 in March
A gauge of U.S. business activity unexpectedly expanded this month to the highest level since April 2005, signaling the economy may be gaining momentum heading into the second quarter.
The National Association of Purchasing Management-Chicago said today its business barometer rose to 61.7 in March from 47.9 the prior month. Readings greater than 50 signal expansion.
Gains in production and new orders point to an economy that is overcoming the damage from rising mortgage defaults and the slump in housing. The report contrasts with others this week that showed businesses are reluctant to invest until excess inventory is cleared out, economists said.
“We may see spending improve as fears about exceedingly slow growth or a recession are dispelled,” Richard DeKaser, chief economist at National City Corp. in Cleveland, said before the report. “If we get evidence of better numbers, capital spending should come back.”
Economists had expected the index to rise to 49.4, based on the median estimate of 57 economists in a Bloomberg News survey. Forecasts ranged from 47 to 52.
Mortgage crisis hits million-dollar homes By Walden Siew
Thu Mar 29, 12:21 PM ET
NEW YORK (Reuters) – Sheriff Leo McGuire presides over foreclosure auctions in Bergen County, New Jersey, where the bidding for a home reached $1.2 million last June — a record for one of the wealthiest counties in the nation.
ADVERTISEMENT
Homes sold on the auction block for as much as $852,000 this month — more than quadruple the median home price in the United States. County officials believe they are close to setting another record soon.
In Troy, Michigan, Dorothy Guzek, a credit counselor since 1988, has also seen the changing face of foreclosure.
Her clients, while predominantly poor and minorities, increasingly are neither. Nowadays, homeowners holding professional careers with six-figure salaries regularly drop by her office. More and more they come from upscale Michigan communities such as Independence and Clarkston — once the summer retreat for Henry Ford, founder of Ford Motor Co.
“Because of the financing that was possible, so many people bought the bigger house, the million-dollar house with the bowling alley or the tennis court outside,” says Guzek, who works for GreenPath Debt Solutions, a nonprofit service based in Farmington Hills, Michigan. “People across all income brackets are having financial hardship.”
For those on the frontlines of the growing U.S. mortgage crisis, these are the early signs that the explosion of subprime loans made to mostly poorer borrowers is reaching higher ground. The damage is hitting homes financed through jumbo loans for more than $400,000 and so-called Alt-A loans that are a notch above subprime and a step below prime.
Americans already are facing foreclosure at a record pace, according to the Mortgage Bankers Association. Lenders started foreclosure actions against more than one in every 200 U.S. mortgage borrowers in the last quarter of 2006.
About 2.2 million foreclosures due to bad mortgage loans may cost U.S. homeowners $164 billion, mostly from lost home equity, according to the Center for Responsible Lending, a Durham, North Carolina-based research group.
In the last three months, the percentage of foreclosures for U.S. homes valued at more than $750,000 has climbed to 2.5 percent, the highest since early 2005, when RealtyTrac, a online marketplace for foreclosed properties, began tracking data. The overall rate of foreclosures also is on pace to increase by a third this year.
“Everyone’s looking at subprime. The rock they aren’t looking under are the adjustable rate mortgages and teaser rates and low money-down loans,” said Mark Kiesel, a portfolio manager for Pacific Investment Management Co., the world’s biggest bond manager. “It’s going to affect prime as well.”
Kiesel said he sold his Newport Beach, California, home for more than $1 million in May last year after the property appreciated more than 20 percent in two years. He believes delinquencies and defaults will rise, weighing down most of the housing market.
California, with 3,384 foreclosures of higher-scale homes since December, is leading the nation, followed by Florida and New York, according to RealtyTrac. The MBA doesn’t track foreclosure data by home value.
ICEBERG
Josh Rosner, managing director at investment research firm Graham Fisher & Co., says the growing numbers of foreclosures outside the subprime market is just the start.
“To define the problem as a subprime problem is short-sighted,” Rosner said. “It’s really seeing the tip of the iceberg as the iceberg.”
Compounding the risk is the nature of homebuyers of higher-end homes, says Rosner. About 40 percent of homes bought last year were second homes or investment properties. Speculative buyers may be more at risk, he said.
Standard & Poor’s said on a conference call on Thursday that foreclosure rates are likely to surpass levels last seen during the 2001 recession.
“That giant ATM you’ve been living in has just shut down,” said David Wyss, chief economist at S&P in New York. “Consumers are in debt and we’ve been living beyond our means for some time.”
CDOs
The latest foreclosure data also may spell trouble for Wall Street, where pools of bonds may be susceptible to nonperforming
loans that underpin debt vehicles known as collateralized debt obligations.
CDOs group debt based on credit quality and are similar to mutual funds in packaging securities to help diversify risk. In CDOs, the strongest debt is at the top of the capital structure, helping to smooth out any drag on performance from weaker debt, such as subprime loans.
Just as more expensive homes are beginning to fall through the cracks, the fear is higher-rated bonds within CDO structures may be vulnerable.
The declining performance of subprime loans have resulted in CDOs losing about $20 billion in market value, according to investment bank Lehman Brothers.
UBS Securities said in a report last month that rising delinquencies may cause losses within some subprime mortgage bonds rated as high as the “A” category.
FRAUD-FUELED
At the Justice Center in Hackensack, New Jersey, on Friday, the wood-paneled room is filled with about 40 people and the auction is routine. The first property on the sales sheet lists a Korean homeowner with $509,000 of outstanding debt. There are no bidders. Deutsche Bank, holder of the busted loan, buys the property with a quick $100 bid.
Sheriff McGuire calls the process “one of the most distasteful parts of my position.” He places most of the blame on bankers who allowed questionable lending practices.
“This might not have happened if not for these new type of loans,” McGuire said, minutes before the auction. The loans also have helped millions of Americans purchase new homes, he concedes.
“The banks took a chance on the future, and the homeowners took a chance so there’s enough blame to go around,” McGuire said. Still, “the banks and lenders have largely set them up for this downfall.”
Adding to the grief, mortgage scams and con artists trying to take advantage of distressed homeowners abound, boosting foreclosure rates, county workers said.
“It’s not the American Dream anymore,” said Fran Napolitano, a county clerk in Hackensack. “It’s ‘who can I stab next.”‘
In Detroit’s suburbs, hit hard by the U.S. auto industry downturn and financial troubles at General Motors Corp. and Ford Motor Co., the story strikes home each day for GreenPath’s Guzek.
“It’s sad. It’s just an awful feeling,” she said. “You hope that you can come up with a financial plan to help people remain in their homes, but sometimes it’s not the best thing for them.”
These days, her calendar of eight counseling sessions a day, 40 a week, remains full. Increasingly, she offers different advice than devising financial plans to save her clients’ homes.
“If they can’t afford it, sometimes the best thing for them is to walk away,” Guzek said.
Renting[34],
I agree. The fed better hope the #’s justify it.
Position yourself for it.
Why of course, save the proletariat from themselves. Drop those rates, votes are more important than anything else. Like, party on, dude!! We went from putting a man on the moon to dissecting Britney’s social habits. As someone said earlier in this thread, this country is going in the dumps real quick.
A gallon of milk is $16, no problem, hand out more paper. And thank God my government issued bailout mortgage payment is coming soon!
They all appear to be knock-downs…
ACT 19 WALKER AVE $1,599,000 9/25/2006
PCH $1,499,000 10/28/2006
ACT* $1,499,000 2/28/2007
ARR $1,499,000 3/12/2007
——
ACT $1,399,000
PCH $1,450,000
EXT $1,450,000
ACT* $1,450,000
U/C $1,450,000
SLD $1,400,000 7/19/2004
ACT 49 WALKER AVE $1,799,000
EXT $1,799,000 12/18/2005
ACT* $1,799,000 12/29/2005
U/C $1,799,000 3/16/2006
SLD $1,750,000 3/17/2006
ACT 55 WALKER AVE $1,175,000
ACT* $1,175,000 2/22/2006
ARR $1,175,000 4/9/2006
PCH $1,110,000 5/24/2006
PCH $1,095,000 7/11/2006
EXT $1,095,000 7/11/2006
EXP $1,095,000 8/12/2006
ACT 55 WALKER AVE $1,045,000 10/17/2006
U/C $1,045,000 1/10/2007
SLD $935,000 1/30/2007
Two other Walker listings around $2M where homes are to be knocked-down and McMansions built.
House of Pain in the …
Ya don’t have to post the entire article. A few lines and a link suffice.
Besides, it was posted yesterday.
What are the typical terms for a 3/27 ARM?
I have a friend who took such a loan back in 2004 at 5.5% interest. He told me that he would refinance once the rate is about to reset.
What is generally the re-financing penalty for such a loan. He has a good credit score of greater than 750 with 2 incomes (both him and wife working at good/decent salaries). Is it a fixed amount of some % of the loan?
Rich,
I thought the first number I gave you was a house on Homans Ave. There were 5 houses built at the East end of the street right at the border of Alpine.
And the 2nd house is one of very few houses in Closter which is duplex.
My observations are biased based on the location/price range/style I am looking at. I probably follow about three dozen homes at a time in the Union County towns that haven’t seen a lot of subprime lending.
I have only one example of a home selling for significantly less than comps (Westfield). Most of what I see are the same homes that have been listed for months, still not selling, minimal price reductions, asking prices above any recent (past month to past 12 months) comp.
In the past month, I have seen about half a dozen homes sell for more than any recent comp, in fact, by 10-30% more.
If I was selling my home, this would give me hope and make me holdout for a buyer willing to pay the new peak price I am trying to set. Thus, no major price reductions.
Any home with detail comments that the asking price has been DRASTICALLY REDUCED means that instead of asking 25% over 2005-2006 comps, they are now asking only 5-10% over those comps.
I won’t even bother bidding until end of summer, and I am not sure if I mean end of summer 2007 or end of summer 2008. Right now I am thinking ’08. There is still some funny money out there.
Rich In NNJ Says:
March 30th, 2007 at 10:00 am
House of Pain in the …
Ya don’t have to post the entire article. A few lines and a link suffice.
Besides, it was posted yesterday.
JB – may be you need to post gudelines – such as: post a link and few excerts from the paper – to avoid copyright issues, like the ones encountered last week with app.com ??
David,
It’s already under Attorney Review, but it looks as if they have been through this a few times…
ACT $1,150,000 9/24/2004
W-C $1,150,000 8/31/2005
EXP $1,150,000 9/24/2005
ACT $839,900 6/14/2005
W-C $839,900 7/25/2005
EXP $839,900 9/13/2005
ACT $779,900 8/30/2005
PCH* $779,900 8/31/2005
PCH $699,800 10/2/2005
ACT $779,900 8/31/2005
PCH $699,800 10/2/2005
W-U $699,800 11/2/2005
ACT $699,000 11/11/2005 (Hey! A new agent & broker!)
PCH $674,900 2/6/2006
W-T $674,900 3/2/2006
BOM $674,900 4/22/2006
PCH $649,900 4/22/2006
EXP $649,900 5/11/2006
ACT $699,000 11/11/2005
PCH $674,900 2/6/2006
W-T $674,900 3/2/2006
BOM $674,900 4/22/2006
PCH $649,900 4/22/2006
EXP $649,900 5/11/2006
ACT $599,900 5/21/2006 (Hey, another new agent & broker!)
W-T $599,900 8/1/2006
EXP $599,900 11/22/2006
ACT $509,900 1/7/2007
ACT* $509,900 1/13/2007
ARR $509,900 1/24/2007
ACT* $509,900 1/29/2007
U/C $509,900 2/2/2007
BOM $509,900 2/16/2007
ACT* $509,900 2/27/2007
ARR $509,900 2/27/2007
ACT* $509,900 3/14/2007
Rich,
Is your posting #46 about MLS 2700857?
I remmeber it was listed at $840K and I thought it was too high. Now, it’s down to $509K?
I didn’t know this house was listed at $1.15M initially.
Now, that’s a huge reduction.
I thought about buying this one for a while as an investment property. For $500K? It’s a good price. I would buy it right away for $450K.
#44 Seneca: We are probably watching the same towns. I too have seen this phenomenon (complete lack of regard for comps). My only guess is that there are still buyers out there who bought the line that the bottom was in September ’06, and that they are getting “deals” because they are now getting 10% off OLP. Why they don’t do some simple homework and realize that current OLPs are 25% higher than 2006 is beyond me. Or maybe overspending just doesn’t bother them. It’s possible I guess.
Rich, also, can you explain all those acronyms for me?
ACT, ARR (attorney review?), BOM, U/C (under contract?), PCH, W-T, W-U, etc.?
From MarketWatch:
U.S. Feb. construction spending rises 0.3%
Spending on U.S. construction projects unexpectedly rose by 0.3% in February, despite a 1.0% drop in outlays for private residential construction, the Commerce Department reported Friday. It’s the eleventh straight monthly decline for private residential construction spending. Private nonresidential construction spending advanced by 2.3% in February, while spending on public construction projects rose by 0.4%. Economists surveyed by MarketWatch were expecting construction spending to fall by 0.5% in February.
David,
Yea, it’s for 2700857. I want to check the tax record…
No active listins on Homans Ave except for land which is near downtown.
Rich
Rich #46, I didn’t see different MLS# mentioned. Is it the same house dropping from 1,150,000 to 509,900?
Marito
From yesterday:
Clotpoll Says:
March 29th, 2007 at 5:45 pm
Doyle (189)-
Yes. If you transfer some of your many $$$ in your bank to their bank…like at least the difference between the deficient value of the property and amount financed.
Jesus.
Clot, thanks for the backhanded answer to my idiotic question yesterday… sorry to waste your time. I know zero about any of these topics (obviously) but this is exactly what I thought. The reason I wanted to clarify is because I know a number of people with ARM’s that will not adjust for a few years. They all think they are going to just refinance (at minimal cost) when they are up. If things play out the way most here predict than they may not be able to do so (owe more than appraisal). They will not be in trouble as they will be able to afford higher payments or can make up the difference if this happens, but that is not what they are planning on. I don’t like to get into these things, so I don’t pry. I just always thought I was missing something in the equation… the difference is I’m factoring in depreciation, they are not.
Thanks again
ACT: Active
ARR: Attorney review
BOM: Back on Market
U/C: Under Contract
PCH: Price Change
W-T: Withdrawn Temporarily
W-U: Withdrawn Unconditionally
2700857: No liens or multiple mortgages on tax records. Just an odd seller.
Rich NNJ,
Can you stand on your head and spit out gold coins for me.
Rich,
Can you check the sales record for houses on Homans Ave for the past 2 years? I think the builder bought an old house with 2 acre lot and built 5 houses (around 1/3 acre each with about 4000 square feet). I believe the numbers are somewhere around 540 Homans Ave and up?
Marito,
Yes, it’s the same house.
David,
Give me some time, I need to get some real work done.
BC Bob,
No. I’ve tried and now my screens a mess.
Doyle,
That wasn’t a dumb question at all. In fact, I don’t think Joe Sixpack even realizes that he can’t refinance if the property value falls under his mortgage amount (unless they make up for the shortfall out of their own pocket).
In fact, if the appraised value falls far enough down to push up the LTV on the loan, the borrower might find himself facing an even higher rate on the new loan. In this case, refi isn’t even an option.
This also goes for those marginal borrowers with terrible credit histories. They might have qualified for the loan in the past, but as standards tighten, they might find themselves facing significantly higher rates on a refi loan.
jb
#23 HomeOwner
Read the article but I have some disagreements/questions on some of it.
Rental supply and demand in NYC and NNJ will not cause rents to fall that much, If EVERYONE decides that owning is the BAD idea then rental demand should rise?
And secondly if they continue tigheting the standards they pill put people out of owning and back into renting?
Rich,
It’s an old house with two units. One unit is 2 bed/1 bath and another one is 1 bed and 1 bath.I thought about many times to buy for investment. But at $840K, it was an absolute negative cash flow. Even at $510K, it is still negative cash flow. at $400K, it is a great investment property.
What’s the address on that house with the odd seller? :)
Bob, Rich is already handing out the Gold bars – he does have the Midas touch. :)
David,
382 High (Odd seller is 2-family. I mean come on, look at the numner of times he’s listed it and for how much. Odd.)
1st Flr Lease: $1,300
2nd Flr Lease: $1,500
Both expire 7/31
Thanks for the info JB.
#59 R Patrick,
Traditionally, when people stop buying, the rental price goes up.
But due to recent explosion of so many new constructions, there are so many empty condos/apartments/SFHs in Northern NJ.
I doubt that rental price will go up. It won’t fall too much though.
Rich,
As you know, High St. is where there are mostly small and old houses. I always thought that it is a good place to buy investment properties. People think that Closter/Demarest/Haworth have good school district and if they can’t buy a house, they want to rent it.
yep, it is an odd seller. I bet the current owner is the original owner from the 60’s. :)
David,
Sold on Homans in Closter
463 1,050,000 4/04
412 $815,000 11/05
520 $1,650,000 1/06
530 $1,500,000 3/06
540 $1,419,000 4/06
510 $1,200,000 5/06
500 $1,320,000 11/06
430 $1,590,000 11/06
Under Contract
511 $1,100,000 Est Closing 3/1/07
463 for rent, $5,500
519 Second flr for rent $1,500
2700857: Tax records show it was purchased 1/1999 for $210,000
Rich,
You are just amazing. :)
I guess the right price for that house should be around $310K then. :)
As for the Homans houses, I guess the builder sold them privately so that it may not show up on NJMLS? He started selling those houses starting Fall of 2005 and I think the street numbers were 540 and up. The first house sold was around Oct or Nov. 2005 for $1.6M.
Rich,
I wonder how much this house is under contract for. If the person bought in Jan. 1999 for $210K, it can’t be worth more than $350K.
The price is Still TOO HIGH.
I will take that house for $300K for rental units. :)
RE: Seneca Union Cty Towns.
I have to agree with you. I follow Summit, New Providence and Berkeley Heights.
Most properties are still listed @ 2005 peak price and most of them do go under contract. Don’t know the actual sales price.
I think these towns will eventually go down from these insane prices. Due to the “prestigious” reputation and easy commute to the city. People see value in these insane prices.
I casually go to open houses in these towns. I only hear potential buyer say if you want to live here, you need to pay these prices…………..
No debt slavery. And worst yet, no freaking 800k Cape.
CC
“I will take that house for $300K for rental units. :)”
David[69],
I might get into a bidding war with you. I’ll bid $304,942.
$306,000!
Bob and Rich,
How about this?
Instead of getting into a bidding war,
we offer $250K as a group and look for 2 other places like this. Let’s lowball them. hahaha
Isn’t that better?
From Bloomberg:
Bank of America Says Housing May Trigger `Correlation Crisis’
.S. homebuilders may trigger a “correlation crisis” similar to the credit sell off in 2005 when Ford Motor Co. and General Motors Corp. lost their investment-grade credit ratings, according to Bank of America Corp.
The ratings cuts to the automakers triggered losses for banks and hedge funds holding the riskiest parts of collateralized debt obligations, securities that package bonds, loans and credit-default swaps and use the income to pay investors.
An increase in the perceived risk of default by homebuilders such as Dallas-based Centex Corp. and Lennar Corp. in Miami could cause similar losses this year, Bank of America analysts Glen Taksler and Jeffrey Rosenberg wrote in a report today. Construction company profits have plunged since the five- year U.S. housing boom ended a year ago. Rising inventories of unsold homes and reluctance by potential buyers wary of falling prices has stifled sales.
“We see increasing risk signals that remind us of the run- up to the 2005 correlation meltdown,” the analysts wrote in the report titled “The Correlation Crisis of 2007?”
Even if the Fed eases sooner rather then later (June), how much will they, and for how long?
Will it be one fell swoop 5.25 to 4.25, or 4.00, or will it be in increments of 25 bp laste it was ont he way up, for the next few sessions.
Will one or 2 cuts of 25 bp this Spring/Summer, make that much of a difference for housing?
Personally I think Bernanke will choose to fight inflation, and he will use that as a cover, so that housing prices can continue to decline.
I think he knows the excess has to be driven out of the real estate market, and that will cause casualities.
But it is necessary for the long term strenght and health of the economy.
#70 CC Peopel see value? Well peopel are for the most part stupid.
BBB,
don’t be too harsh on people. Average Americans have 4th grade education. :)
My biggest complaint to my jouralist friends was that — hey, are you writing your newspapers for morons? He said, Yes. Average Americans are morons. 4th grade education. We have to sell our newspapers to average morons. :)
Remember. Vox Dei, Vox Populi.
JB – what’s your take on “personal savings rate” and stuff like pensions and 401(k)’s?
I got into a discussion with a coworker who argues the PSR isn’t as bad as it seems because it doesn’t take into account any retirement saving. We found data from 2001 that said 60% of the working population contributes to a retirement plan of some sort or have a pension.
Of course, we both came to the realization that 40% of the population does NOT save anything for retirement. Are they capable of bringing down the rest? Sure!
But in my case, we save what we can save budget-wise, but at this stage, both my wife and I contribute the max to our 401(k)’s as we receive decent match money from our employers. But on paper, our PSR is relatively low like 10-15% – factor in our 401(k)’s however and we’re closer to 30%.
If Joe sixpack nearly lives paycheck to paycheck, but his HR person convinced him to put contribute 10% of his salary to the corporate retirement program, he’s TECHNICALLY doing a little bit better than the numbers indicate, no?
That’s what I’ve been saying all along. If you want to live in those so-called desirable towns like Summit, New Prov., Westfield, Glen Rock, Ridgewood, etc., prepare to pay the price. Competition is dog fierce in these towns and the prices will not change much. The border towns (of which I live) might see a decline and will be more affordable in a year or two.
As I’ve said, we’ve been in our current home for 6 years now and if we sold tomorrow, pulled out the equity PLUS what we’ve been saving on the side, we STILL would be reaching for a decent size home in one of those “sort after” towns. I don’t want to discourage anyone but unless you’ve got a quarter of a million in cash (that’s $250,000), PITI is going to be real tough for anything other than a POS cape. Unless your family income is substantial and you could afford $4,000 plus a month.
This is my second home, I’ve been through it. Appliances break down, water heaters start to leak, painting needs to be done, grass needs to be fed. When you calculate monthly budgets, leave yourself A LOT OF ROOM. It sucks, but that’s the way it is.
I too am following Westfield. One factor, at least in the $500K-$750K price range I am looking in, seems to be builders bidding on homes for teardowns. Traditional comp factors, ie, number of rooms, condition, etc, are irrelevant to them–the important factors seem to be lot size and location in town.
BBB,
Credis quod habes et habes.
Should have added to #80 my conclusion:Land in Westfield is worth more than the more modestly priced homes on it.
thx, jb!
back to my dynamic duo of gatorade sippin’ pukey men.
sl
Uh oh..
U.S. sanctions China in paper-subsidy dispute
The Commerce Department announced sanctions against paper imports from China on Friday, the first time in 23 years that U.S. duty law has been applied to imports from China.
Commerce Secretary Carlos Gutierrez said Chinese producers and exporters of coated free sheet paper received subsidies ranging from 10.9% to 20.3%, putting U.S. producers at a disadvantage.
“It is critical that companies compete on a level playing field,” Gutierrez told reporters. “With today’s decision we are demonstrating our continued commitment to create an environment of true competition for American manufacturers, for workers and farmers.”
The department’s decision is a reversal of a policy of not applying U.S. countervailing duty law to non-market economy countries.
From Bloomberg:
Dollar Weakens as U.S. Applies New Import Duties on China
The dollar fell against the yen and euro as the U.S. Commerce Department decided to levy new duties on imports from China to compensate for Chinese subsidies to exporters.
“It is pure protectionism,” said Michael Malpede, a senior currency analyst in Chicago at Man Global Research. “The measure raises fear that China may retaliate. They may not keep buying Treasuries.”
(emphasis added)
Gary,
“Prestigious” is all relevant, isn’t it? Many people around Closter, Demarest, Tenafly, Old Tappan think that Alpine is the prestigious area, and we are just common average folks. :)
As for the school system, I know kids who went to Cornell from horrible school districts as they graduated valedictorians.
It’s all perception. Just be thankful of what you have.
not that this is new news:
http://articles.moneycentral.msn.com/Investing/JubaksJournal/LettingTheWorldPickOurPocket.aspx
The developing world continues to clean the developed world’s clock in the new global economy.
Lower overall costs and, most visibly, cheap labor drives companies trying to increase profit margins to export jobs to countries like China, India and Vietnam.
But developing countries aren’t just waiting for free-market forces to deposit jobs on their doorsteps. They’re aggressively using government-backed incentives of cheap land, lower taxes and low-cost capital to win jobs in cases where they don’t have a compelling market advantage.
For example, the Saudis have emerged as the leading potential buyer in the April auction for General Electric’s (GE, news, msgs) plastics division, and Intel (INTC, news, msgs) has just announced it will, for the first time, build a chip manufacturing plant in China.
And the response from the United States? Zippo. (end blurb)
goodbye more jobs??
JB [84].
Here we go. It’s not nice to mess with one of your bankers. Backed by good faith and credit. There was a time when our dollar was king. Pretty soon, worthless paper.
#79 Gary These so called desireable towns will fall too, they did before, and there is no reason that they will not again.
Prices are just simplyy unaffordable.
1. Lets wait and see how this Spring/Summer market turns out.
2. Lets wait and see how many people that have put bids on houses will be able to close.
3. Lets wait and see how many people are out there now looking, totally oblivious to the whole sub-prime debacle, the tightening of lending standards etc.
4. Lets wait and see what the Fed does, if Benrnake wants to maintain credibility, and claims his decesions are data driven, thenIMHO he has no choice but to raise rates.
Believe Me Glen Rock Riodgewood, Franklin Lakes etc, they all fell in price before, and they will again Franklin Lakes for example has over 140 houses ont he market rightnow, and that number will continue to grow.
5. Lets wait and see what inventory will look like after the Easter/Passover holidays pass.
Chances are with these 2 holidays coming up over teh next 2 weeks, there will be little activity, after they pass i would assume more assumes will come on the market.
I know it is frustrating,and it is taking so long, but the only logical conclusion is that it will happen.
We have to sell our newspapers to average morons. :)
David [77],
As long as they don’t pander to those pesky below-average morons, then we’ll be just fine ;)
Of course, the above-average morons already own beautiful homes with Alt-A mortgages!
Gary said,
” I don’t want to discourage anyone but unless you’ve got a quarter of a million in cash (that’s $250,000), PITI is going to be real tough for anything other than a POS cape. Unless your family income is substantial and you could afford $4,000 plus a month.”
Are you sure you can buy a nice house in a desirable town with $250K downpay and $4000 a month mortgage?
Decent houses in desirable areas go for around $900K. $650K at 5.75%, 30 years is about $3800/month without the tax. Tax will be another $1000/month.
You need to borrow $500,000 at 5.75%, 30 years for $2920/month payment plus another $800/tax.
$750K will probably get you a below median house in desirable towns like Ridgewood.
Gary and BBB,
the price did fall during 87-91 in Bergen County. Yes, in those what you call the Prestigious areas.
How much? I think about 18-25%.
So just wait and see what happens.
David: I agree and I’m thankful, but tell that to the masses. It’s a prestige thing. It’s just my observation. I don’t know why it is but it is. It’s competitive.
BBB: I’ll believe it when I see it. :)
Re: “Prestigious” Towns.
My observation was there are a lot of people on the sideline for these towns.
They have been for some time now. And they hear the negative news from the media.
Instead of going to bidding war and buy at 10% above asking. These folks are paying asking price or 3-5% discount.
Like Gary stated the surrounding towns going very soft now. There would be Arbitrary pressure on these “Prestigious” Towns.
IMO, these towns will go soft. But they would the last ones to go.
Like Gary stated, not too many ppl can afford 750k starter homes or 850k expanded cape.
CC
#78 Cirrius: I am not sure how much people actually contribute to their 401K plans, just becasue they have one does not mena there is a whol lot in it.
For instance my company matches 6% dollar for dollar, if the employee puts in 6%, that is free money, but I know quite a few who don’t do the 6%.
Also I read something in Forbes or Kiplingers last year that said the average 55 year old American male head of house hold family of 4 that has a 401k, has less than 50K in it.
If that number is in fact accurate that is dismal.
David,
I was using bare minimum numbers. Again, I agree, that’s why I was saying you need bucks to even think about these areas.
#93 Gary You will see it gary, I saw it before, and all the same old prestige silliness was there back then too believe me.
The north Jersey suburbs are extremely peculair like that. The whole my town is better then your town silliness.
“This is my second home, I’ve been through it. Appliances break down, water heaters start to leak, painting needs to be done, grass needs to be fed. When you calculate monthly budgets, leave yourself A LOT OF ROOM. It sucks, but that’s the way it is.”
Gary,
LOL. You are right, it’s a money pit. Leaky faucets, water in the basement,ants,bats in the soffet,grass must be green/trimmed ,paint ,caulking, shades, trim,doors misaligned. That’s just a start, forget about a new roof and updated electrical. You better be handy, otherwise start writing checks.
#92 David I believe it was more in the 25 to 40% camp,and for coops and condos even more.
My spouse and I were in shock at looking around at what we could have bought had we waited;we purchased at the peak of the last bubble, and sold it 10 years later, for a little less than what we paid for it, minus the improvements.
Also co-ops that were selling for 125k to 150k at the peak could be ourchased for 25K.
BBB,
The worst part of living in northern Bergen County is these suburban house wives. When was the last time you went to the PTA meeting? newest cars, bigger diamond rings, bigger and thicker mink coats. It’s obnoxious.
Yes, the price will fall. I am waiting 25-28% fall from the peak price of summer 2005 to buy some investment properties.
#86 David, and everybody in those towns turn their noses up at people from Norwood and Northvale.
BBB,
I was refering to SFH. I don’t see too many condos or co-ops in northern Bergen area. But yes, condo market is very vulnerable.
I am so thankful that I sold my investment condo in Fort Lee in May (or was it June) 2006.
BBB,
I like Norwood. A friend of mine bought a house in Cobblestone area (spelling?). I like that Cobblestone area houses.
As for Northvale, I will refrain from making any comments. hahahha.. (just kidding). :)
#102 I ahd to stop going,to these meetings because of people like that, and sadly most of them, how can i say say it are clueless.
They come to the meetings, they are instructed by the BOE,on what to tell people regarding the budget, and their job is to then go back and tell everybody to vote yes on the budget or their property values will fall.
God help you if you ask a serious question, or voice dissent of any kind. You and your children will pay for it.
bergenbubbleburst,
You wouldn’t believe some of the sh*t I’ve read, heard and seen. I witnessed a fight between mother and daughter outside an open house because Mom was helping with the down payment and suggested they look in another town but daughter threw a tantrum because she “had” to live in Wyckoff. This was in 2000. My wife and I crouched down behind our car outside the house to hear that one. No way we were leaving that show.
I witnessed another couple (you probably heard me talk about this one) looking at an open house in Little Falls thinking she was in Upper Montclair. When the realtor told her the address, the pregnant wife headed for the front door.
Oh yeah, I’ve got plenty of stories, that’s why I found this blog. We went through a whole lot of sh*t ourselves 7 years ago. That’s also why I’ve become an open house junky (wearing out the wifes patience), I’m still awed by the madness.
You’re right, it’s insane. Some people need to live in Upper Vainglorious, NJ or they’ll die. LOL!
#104 Lots of co-ops/condos in Mahwah, Allendale, Montvale, River Edge, a couple of developments in Oradell, also Park Ridge and River Vale.
Uh Oh x2..
Dollar Share of Reserves Falls to Lowest Since 1999
The dollar’s share of global foreign-exchange reserves fell to the lowest level in at least eight years as central banks accelerated their purchases of euros, the International Monetary Fund said.
Dollars accounted for 64.7 percent of reserves last quarter, down from 65.8 percent in the prior three months, the IMF said today in Washington. The share of euros climbed to 25.8 percent from 25.1 percent, reaching its highest proportion since the single currency was introduced in 1999.
“These figures show the euro consolidating its status as the world’s second reserve currency,” said Paul Mackel, currency strategist at HSBC Holdings Plc in London. “We are moving toward a more bi-polar world in foreign exchange reserves.”
BC Bob (98),
Touche’
David,
You are right about the late 80’s.
Gary,
This whole process/adjustment is just starting. Just wait until Wall Street catches a cold.
What happens when the property you are seeking falls 20% and your house falls equally. In other words, what’s your plan of action if prices decline but your spread remains constant?? Do you think the houses that you consider desirable will fall to your # but your existing property won’t be affected??
BBB,
Yep, that’s why I thought about running for BOE and decided not to run.
Yep, they are clueless, especially the BOE memebers. One BOE used her influence to put her child to Honor’s class. Sadly, a week later, the child had to move to a regular class as the child couldn’t keep up.
That’s why I decide to send my kids to boarding schools for their high schools.
And the schools are not bad but NOT as great as they think it is.
Talk about a slide (from Calculated Risk):
http://bp1.blogger.com/_pMscxxELHEg/Rg0wllGIISI/AAAAAAAAAUc/TE_fe5bSlBQ/s1600-h/Construction+Spending+0207.jpg
#80 startingoverinNJ
Most agents have been telling me that the teardowns are no longer a factor for the small builders. They are no longer bidding on spec so short of having a buyer in hand, they won’t buy for a teardown.
I looked at one house that tried to lure in builders with a 699 ask and they have yet to get any bites at all. Large property too, and the home standing there is ripe for a tearing down. The problem is, not enough profit baked in for a builder and way too expensive for a regular buyer. You need to add $150k in upgrades to make the place livable.
Anyway, has anyone else heard this feedback re: builders are no longer buying on spec. One less competing bid to have to deal with would be nice.
I have been following South Brunswick $400K-$650K price range. the prices stagemenant and not going any lower, must be thei the good school system.
ranches and homes older than 30 years are more afforable, but for newr homes (5-15 years old) it’s very hard to find sonething in the low $500k
any1 with some info about south brunswick
“Uh Oh x2..”,
JB [107],
Depends on your perspective/position.
China gave us a lay up over 6 months ago. They actually told us what their future course of action would be. Opec and Russia have been promoting pricing of energies in Euros for at least the same amount of time. There is an orgy of dollars floating around the world. How valuable can it be??
>>Question for the group- When do you think prices are going to drop dramatically?
depends on what you mean by dramatically. historically prices are lowest in the winter. the last couple of years the best deals i’ve seen have occurred with closing in the nov-jan timeframe.
If anyone wants to see lists of closed sales for particular towns, by all means let us know. We seem to have NJMLS and GSMLS covered pretty well between us.
It’s not worth your time to bother trying to track the market by looking at asking prices alone.
jb
Gary, BBB and Bob,
As Mephistopheles said in Paradise Lost,
Vanity, my favorite Sin. :)
investorDavid Says:
March 30th, 2007 at 9:05 am
Marito,
Price has certainly been dropped. But the inventory is not there.
Lower inventory makes sense….
https://njrereport.com/sd.ppt
Note: this analysis was from about a year ago, so I should update it…..
“Talk about a slide (from Calculated Risk):”
Looks like a cattle chart after bovine spongiform encephalopathy was reported.
From Bloomberg:
Home Sales May Fall Because of Subprime Crisis, Realtors Say
U.S. home sales may fall as the subprime mortgage crisis spurs tighter lending standards, the National Association of Realtors said.
Home sales may decline as much as 3 percent a year in the next two years, the group said today in a news release distributed by PRNewswire.
Here was the release that went out on PR Newswire:
NAR Foresees Short-Term Impact on Housing Markets From Subprime Reforms
Current market problems
and reforms in the underwriting and pricing of subprime loans, including
the tightening of underwriting standards by regulators, will have a
short-term impact on housing markets. That will be lessened if Congress
enacts legislation to expand the roles of Fannie Mae, Freddie Mac and the
Federal Housing Administration to provide more housing opportunities to
lower-income homeowners and those living in high cost metropolitan areas,
the National Association of REALTORS(R) said today.
NAR Senior Vice President and Chief Economist David Lereah predicted
that tighter underwriting practices may cause total home sales to fall by
about 100,000 to 250,000 nationally, or no more than 3 percent a year over
the next two years. Many of these households will probably, over time,
purchase a home when they have attained the financial capacity to do so by
saving for a down payment or growing their income.
CF,
Thanks for the explanation. That “sticky” thing .. Only sticky things I like is..
>>If you want to live in those so-called desirable towns like Summit, New Prov., Westfield, Glen Rock, Ridgewood, etc., prepare to pay the price. Competition is dog fierce in these towns and the prices will not change much.
i live in westfield for the past couple of years and know the market fairly well. yes it’s a desirable town and competition is fierce however the level is dependent on price. if you have a ridiculous asking price people will browse but no one will buy. no different than anywhere else.
so far this spring season i’ve seen a couple of homes list their initial price 10% above recent comps, have a couple of open houses and then lower the price by some amount. a realtor who uses this technique told me they do it for a # of reasons. one they are gauging the market. they don’t expect a buyer to pay asking but by starting high they get a better sense of how close or far it is to what they will pay. second psychology. by starting a price A and lowering it to price B you feel that you are getting a discount. lastly if some sucker comes along and gives you asking or close to it you win after all it only takes one.
i can’t say i agree with the technique but i understand the thinking.
Chi[118],
Thank you. Please post evey day.
I would like to thank everyone in this forum. The info is certainly useful.
I started looking at Ridgewood properties (
sorry shouldn’t use any paranthesis.
I would like to thank everyone in this forum. The info is certainly useful.
I started looking at Ridgewood properties
Interesting piece by Benny B. From the Fed:
The Community Reinvestment Act: Its Evolution and New Challenges
Third, access to credit in lower-income communities is obviously much greater today than when the CRA was enacted. This greater access has had tangible benefits, such as the increase in homeownership rates (Joint Center for Housing Studies, 2006). However, recent problems in mortgage markets illustrate that an underlying assumption of the CRA–that more lending equals better outcomes for local communities may not always hold.12 Whether, and if so, how to try to differentiate “good” from “bad” lending in the CRA context is an issue that is likely to challenge us for some time. One possible strategy is to place more weight in CRA examinations on factors such as whether an institution provides services complementary to lending–for example, counseling and financial education.
I am just curious as to what percentage of this blog users are homeowners, renters, looking to move to bigger/smaller houses than their current home and what percentage is investors, and also realtors/brokers.
#113 NJ GUY Patience
129 I-Dave,
renter – looking to buy our first home.
CC
Newark Police training video.
http://www.youtube.com/watch?v=fI-auynxWLk
BC Bob (109),
Let it drop, whatever my house sells for is fine. Sure my current house will be affected but I’m looking at the price I want to pay. I’ll come up with the money, it’s all about price for me. If my dream house is listed at $750,000 and drops 20% in a year or two, then AMEN! A 480K principal as opposed to a 600K principal is almost $1000 a month LESS in payment on a 30 yr. fixed at roughly 6%.
sorry background….
http://news.yahoo.com/s/ap/20070330/ap_on_re_us/bartender_beaten_video
#110 David Thats right, the schools are not bad, but they are not great. I have found this having gone through the system with one child, and almost done with the other 2.
The schools are incredibly over rated, you can do very little to get by, and they demand very little.
We demand a lot from ours, and we get it, but form time to time there have been battles.
Such as how come I have to do this and my friends don’t. The schools demand very little, and the parents just want to say Blue Ribbon,and power house sports teams. sports teams.
Gary [133],
Gotcha.
Patience will be rewarded.
#109 BC Bob I think that Wall St may already be getting that cold.
#133 Gary And don’t forget all that interest you will save, on borrwing less principal.
BBB, #135
I concur categorically.
My older one takes all the honors class and told me it’s too easy. He is in 6th grade and he is almost done with algebra I. I asked school principal about the foreign language – either Latin or Chinese or Russian. I was told, we only offer spanish. He has to wait until getting to High school.
That’s why my kid is doing traveling hockey, water polo and golf.
Nope, the school is not quite challenging enough.
He kept saying.. dad .. but I am getting all A+ taking all honors classes.. and what more do you want me to do?
Yep I know that line “how come I have to do this and my friends don’t”…. same line..
BBB and Gary,
And one more thing which irks me.
To live in “desirable” town, both parents work so much that many hardly has time to take care of the kids.
My son says.. so and so can play computer games all night but you don’t let me.
I ask him, what do their parents say? my son: their parents are not home. They are working.
The price you pay for living in so called, “desirable” town for many.
Gary, is this what you want?????
I am just curious as to what percentage of this blog users are homeowners, renters, looking to move to bigger/smaller houses than their current home and what percentage is investors, and also realtors/brokers.
Homeowner.
On the sidelines looking for investment properties, multi-unit or commercial.
BBB (138),
Yup, I agree. Why don’t people understand this? When I tell people I don’t care if I sell my house for less if I intend to move up, they look at me sideways. They say, “But you’ll lose money.” NO!! I WON”T LOSE MONEY, I”LL SAVE MONEY! :) sigh… I need lunch… or a drink. lol!
You want a crash, elect Hillary.
http://www.bloomberg.com/apps/news?pid=20601087&sid=atUKcP4eSEvY&refer=home
David (140),
No, that’s why I won’t make a move unless I can do so and still have a life with the family. I’m antsy but I’ll have to wait.
“I am just curious as to what percentage of this blog users are homeowners,”
David [129],
Owned for 20 years, ran the other way in 2005.
Gary,
Good things come to those who wait. :)
Give another 2-3 years. You should save up and be able to move into those so called, “desirable town”. But once you move into those towns, there is always another “desirable town”.
Vanity. :)
Bob,
You lucky dog. How were you able to time the market?
#139 David It paid off, becasue my oldest in college now, tells me I was right to stay on their back, becasue the kis is now working incredibly hard in the honors program there, and thriving. (Lots to be said for marrying young and dumb, just kidding)
My staying on my child’s case and demanding more was a huge help. Like my kid said to me, high school was a joke, and this kid was in all honors,and AP, and of course a blue ribbon school.
I-D,
Give another 2-3 years. You should save up and be able to move into those so called, “desirable town”. But once you move into those towns, there is always another “desirable town”.
LoL, it is never enough.
That’s why my kid is doing traveling hockey, water polo and golf.
David,
Why not some exposure to rowing (crew)?
jb
CF your charts sound good until you throw in the financing wrench.
Effects of leverage.
#142 Gary they never will, incredibly frustrating, but true. its hard taking the other side, and its hard to be contrary, but most times when you are, you end up being right.
It can also be dangerous when you remain silent as witness what happened to St. Thomas More,but we do what we have to do.
For what it is worth, my absolute cut off point for buying is March/April of 09, hoping for 08, but we shall see. If not, (prices have not fallen enough), then I have to reevaluate what I might do. I don’t like not knowing, or not yet havong a back up plan, but it is what it is.
“You lucky dog. How were you able to time the market?”
David,
I didn’t try to time the market, you can’t. I just knew I wanted out. I never thought I would rather rent than own. The market created this change in philosophy. All I did was react. I’ll be back, don’t know where/when.
By the way, I once asked the most successful investor that I have ever known, what his secret was. He told me, “I always sold too soon”. You don’t go broke by taking chips off the table.
#129 David; Long time owner , job loss (right before IPO, very painful) some huge orthodontist bills rising property taxes, on a big house.
Spouse reestablishing career after being home for many years rasing our kids.Me establishing new career.
We bit the bullet sold(made a very large profit), and now we rent but do plan to purchase again (Small modest home)
By the way, you guys are on fire today. Does anybody work?
JB,
The site performance has been great. Thank you for all the hard work.
CC
bbb,
If I saw your post, I would never have posted # 155. Sorry. What area are you looking into??
#157 BC Bob, Fortunately I have already reestablihed my career, (and doing well) just writing about what led up to my selling house in first place back in late 2003.
Damn, this can’t be good if it’s true..
Treasuries Rise After Report Americans Advised to Leave Bahrain
U.S. Treasuries rose, erasing earlier declines, on an unconfirmed report on debka.com that U.S. military officers advised American investors to leave Bahrain amid a standoff between the U.K. and Iran.
iDavid #129
Started reading this blog as a renter.
Now a (well-informed) homeowner :)
bbb,
Glad to hear that.
#150: JB,
water polo – fall, hockey-winter, golf-spring
and I don’t know where I can take my kid to learn rowing. I know it’s one tough sports.
Can you give me some info on rowing? is this fall sports? Maybe my little one can take rowing.
http://www.federalreserve.gov/boarddocs/speeches/2000/20000606.htm
June 2000
Bob,
Well, I call it delegation of responsibility.
As I mentioned previously, I am incredibly allergic to work. :)
I love that quote: I sold too soon. Great Motto.
The depths of misery 2008.
No REBOUND. More Misery.
You Buy and do NOT knock down the price U deserve to be a bagholder.
BOOOOOOOOOOYAAAAAAAAAAAAA
Bob
BBB,
glad to hear that you are doing well in your new career.
And also glad to hear that maybe some day my kids might thank me for being too hard on them. I can just dream about being thanked. :)
As for “marrying you and dumb”.. I will respectfully refrain from making any comments. :)
JB,
The high mark for # of posts, weekend, will be surpassed this weekend.
David,
On April 14th, Nereid in Rutherford is hosting an open house. Kearny is hosting the “Passaic River Sprints” on the same day (at the Kearny Boathouse). All the local high school teams will be competing. You can find some more information at the Kearny Crew site http://www.kearnycrew.net/ or the Nereid site http://www.nereidbc.org/
jb
JB,
Mea culpa.
#169.
thanks JB.
PRRA in Lyndhurst as well, http://www.prra.org/
This area is home to the crews from Ridgewood, Montclair, Westfield, etc.
jb
#129 Homeowner. Recently divorced with teenagers. Selling McMarital home now. Hope to be able to buy something (anything) affordable with my share of the equity as the downpayment.
JB,
Thaks for the info. It seems like my older one is little too young. The minimum age is 14 and my older one just became 12 last week.
#173. sorry to hear about your situation. or it could be a good thing also, right?
I hope you see the kids often and kids don’t get affected.
why don’t you rent after you sell McMansion? plan to stay in the same town?
Pat Says:
March 30th, 2007 at 1:21 pm
CF your charts sound good until you throw in the financing wrench.
Effects of leverage.?
Pat: please clarify
A few years head start will get him ready for the Lawrenceville varsity team.
http://www.geocities.com/lvillecrew/
jb
#177,
JB,
My kid has been going to lawrenceville hockey camp for the past 3 years. Groton already wants my kid for the Varsity hockey team (not JV) even though he is only 6th grade. :)
Is crew a fall sports? or spring?
#129: Renter. Spouse and I came “of age” during the bubble. We have basically been renting our starter home for 4 years while saving. Now technically able to buy a “forever” home but still too sickened by prices to move at this point. Fortunately our children are too young to realize how crowded the house has become.
JB,
It looks like crew is late Spring sports.
Someone help me out here…. I don’t get the arrogance. China is the biggest buyer of US Treasuries, and big bro is crying foul on the paper imports. This is sending the wrong message; we can’t compete any more so let’s try and bully.
Goodbye dollar, hello Euro/Yen. Goodbye European vacation, hello Newark vacation.
“My kid has been going to lawrenceville hockey camp for the past 3 years”
David,
Keep him skating. Hopefully I can get to wear a National Championship shirt for some sport. Note: no comments from the peanut gallery.
http://www.ncaasports.com/icehockey/mens/brackets/2007/DI
Sure am glad I hold citizenship in an EU country..
jb
“Goodbye European vacation”
dream [181],
The Griswald’s will be the only ones that will be able to afford.
JB [183],
Now I would get into a bidding war for that.
Bob,
he has been skating since 3. His team won the AAA New England Championship last year and my kid scored the winning goal (backhand wrist shot) with 20 seconds left in CT State championship after beating all 5 kids and deeking the goalie from the other team after puck dropped with the game tying at 37 seconds left – (I call this incredibly run-on sentences). He has always played the 1st line since he was 4 years old.
He skates with mark Messier’s nephew and Nylander’s kid from the Rangers. I hear many inside stories about the Rangers from Michael N. :)
I always thought about retiring in New Zealand.
David,
Send him to BC, Beantown not Oradell.
Bob,
Bergen Catholic? are you kidding me?
My kids want to go to college. :)
or boston college?
He wants to go to a college next to Lawrenceville or next to East Haven.
James Bednar Says:
March 30th, 2007 at 2:24 pm
Sure am glad I hold citizenship in an EU country..
How did you swing that?
and Bob, are you sure you want to wear a NCAA championship t-shirt given to you from someone who is a liberal? :) After all, I got my doctorate from Cal — yep, ol’ hippie dude from Berkeley. I used to be a bleeding liberal – now, I am a moderate liberal.
David,
Set his sights higher, further east, Chestnut Hill.
Don’t understand your point about giving me a Nat.Champ shirt? I was talking about the BC Eagles.
Sure am glad I hold citizenship in an EU country..
How did you swing that?
Oh, let me guess!
By being born in a EU country?
Clotpoll,
Is this anywhere near you? If so, you may get your wish for a local site for authentic Indian cuisine.
Asian-Indian stores to open in Old Bridge
Home News Tribune Online 03/27/07
By RITU JHA
STAFF WRITER
rjha@thnt.com
OLD BRIDGE — A new shopping center to serve the growing Asian Indian population in this part of Middlesex County should be open in about six months.
The center, called Patel Plaza, will occupy a remodeled warehouse at Route 9 and Hartle Lane, just north of the Route 34 intersection, on the northbound side of the highway.
The center is being built by Patel Cash and Carry, a company that already has stores in North Brunswick and Jersey City and two on Oak Tree Road in Iselin.
Mahendra Patel, owner of Patel Cash and Carry, said his new 19,900-square-foot strip mall in Old Bridge will have a food court, a beauty parlor, a video store and a grocery store that will draw customers from a 20- to 25-mile radius.
He said Patel Plaza will have six takeout-only restaurants in a food court that will include a variety of cuisines.
Jus sanguinis
BC Bob (155),
I have 2 PC’s in front of me and about 30 sessions of madness between them. I’m monitoring, copying, renaming, running and posting all at the same time.
Funny, my boss just asked me why do I know more about re than the fx markets. Told him the Star Ledger was a great source for info.
BC Bob,
If my kid plays D1 hockey and wins the National championship, I will buy 1000 t-shirts and give to everyone I know. :)
so you think BC is better than Princeton or Yale? Hmm… for hockey, yes.. but for academics? hmm…
Bob,
I did some consulting work for a British FX company – near the Tower of London (old English Mint) and also near 16 Threadneedle St.
But I am much more interested in RE than FX myself.
Hi.. I am David. I am an addict. It has been 5 seconds since I have not refreshed NJ RE Report website….
You don’t know what an addiction is until you have had full access to an MLS…
Rich,
touche. I humbly bow to you at your presence. :)
so you think BC is better than Princeton or Yale? Hmm… for hockey, yes.. but for academics? hmm…
I was told by HS guidance counselor that any top 25 schools are essentially the same!
CC
Currently, there are 30,873 properties advertised for sale in NJ on [GSMLS.com]
What’s the over\under on hitting 31,000 by the end of the weekend?
When did we hit 31,000 last year? I though it was later in the year.
David [199],
Entire package, based on the fact that an individual has the brains and is a top Div 1 hockey player, BC. However, I’m biased.
In conjunction with that, there is no green monster in Princeton or New Haven. How about Harvard??
176 CF
during recession (assume period of real housing price stagnation) demand would fall but the debt obligation does not/leveraging would normally amplify this (both moving back the demand curve and increasing the supply, perhaps from foreclosures).
Anyway, I don’t know if I’m clarifying this correctly – the normal supply/demand chart 3 do not reflect conditions in the mortgage market.
Bob,
Harvard is his “safety” school according to my kid. :)
As you know, it’s toughest to get into Princeton then Yale then Harvard. :) I can probably get him into Stanford but I don’t want my kids to go too far away from me. :)
My dad kept telling me to consider Oxford or Cambridge for my sons (as he has an MBA from London School of Economics – he is pro-British).
“I am just curious as to what percentage of this blog users are homeowners, renters, looking to move to bigger/smaller houses than their current home and what percentage is investors, and also realtors/brokers.”
I just started posting yesterday, but to answer your question, Im renting. I will be looking to buy for the first time when prices come down to reality.
And Im addicted to this site already. Its giving me the type of education Im looking for so Im ready when the time is right.
BLEED’EM DRY!
Plankton Says:
March 30th, 2007 at 3:37 pm
Think Think Think……….
and BLEED”EM DRY!
Real estate will be a hated topic soon for many…
BOOOOOOOOOOOOYAAAAAAAAAA
Bob
“My dad kept telling me to consider Oxford or Cambridge for my sons (as he has an MBA from London School of Economics – he is pro-British).”
I recently heard a report on NPR that employers are increasingly looking for students who were educated overseas. It gives them a global perspective in an increasingly globalized society. Plus its cheaper for you.
I hear no more boasting about re values.
Silence!
hehehehehheehhehe
Now if you want more ya better get a second or third job.
PapapapapapappaPANIC
BOOOOOOOOOOOOYAAAAAAAAAAA
Bob (a happy homeowner(s) eventhough prices are tumbling)
hehehehehehehehehe
I live for days like these when bargains will be widespread. Hope to pick up a number of dream toys in next 1-2 years at .25-.50 on the dollar….
hehehehehehehehehhee
BLEED’EM DRY!
Go gett’em
BOOOOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
Re post 24:
(It’s like going back in time)
JB, I’m a big fan of the YOY numbers, but I think there is a way to get a sense of the market from month-to-month if you want to do a little math and you have the data.
Have you considered measuring the inventory change (or any other change for that matter) on a specific day each month over a period of years?
If that’s at all unclear let me give an example.
Using the charts posted by the invaluable CR it was easy to figure that national new home sales (NSA) in March of 05 and 06 were both about 35% higher than February of those same years. If that’s the benchmark, a jump of something notably less than 35% (or notably more, hey it’s a possibility, though not a probability) would seem to tell you something very important about the direction of the market in the very short term.
Obviously the sample in the example is too small to do any truly valid extrapolating, but if you have enough data…
Plankton, I’m not so sure you can use the name “Plankton” in good conscience anymore, now that you’ve stated you’re “looking to buy.” Elective renters have been elevated to the level of “Sponge.” As in “sponging off the rental arbitrage opportunity.”
Maybe by the Fall, we’ll be “Clownfish” due to our happy financial situation, and then next Spring, “Turtles” because we find we like renting and take our good-natured time deciding when the price is right. Finally, “Barracuda” due to our classic type of lie-in-wait or ambush style of house-buying.
Pat, you are too funny.
Plankton, sponge, clownfish, turtles, Barracuda? why not shark or fighting fish? :)
how about blowfish?
Pat – I like your thinking.
Pat [218]
Classic.
#183 JB Me too, and spouse, and kids.
I wonder if Clot is out selling real estate today.
scribe,
I heard he was either in the hills digging or in NC setting up shop.
#161 BC: yeah it was tough going for a while, especially since I had been with the one company since right out of college, and then they let us all go right before the IPO (I already knew my numbers), but thats the way it goes.
But at least I get to use my experience from the old career in the new one.
#167 David: I Should have said young and dumb.
I have friends my age now, who are just starting out with kids, and some who are one family number 2.. Don’t know how they are doing it.
#226 David Let me clarify yet again. I should have said, both my spouse and I were young and dumb, but hey thats love.
Re fed rates (posts 25, 34,38 etc.):
If I skipped down to early I apologize, but the ship has sailed for meaningful action on housing by the fed cutting interest rates.
Simply put, nobody who is both interested and capable of buying a house right now is being held back by interest rates. Even if the fed cut to 0, and the banks played along and cut rates to 2% where will qualified buyers come from?
Sure, I’ll refi, but that doesn’t exactly make the bank’s money or improve anybody else’s situation.
Affordability is the issue now and the cuts have to come from the price not the interest rate. Also, the damage that would be done by cutting (the potential collapse of the dollar’s international exchange value) could easily swamp the overall economic upside of helping housing.
Bernanke can jawbone and hold still or he can go up, he can’t go down. My guess is he’ll jawbone, but I think we’d all be better off if he went Volcker on the situation.
#17 JB
“Milk Prices Expected to Rise 9 Percent”
So what?? Computer and Cars have dropped in price helping bring down the prices of goods in the basket, so instead of drinking milk you start chewing at the rubber parts of the computer and car and maybe drink up some of the coolant. Who needs break milk and eggs in this age of cheap computers and electronics.
JB,
The size of these threads is getting crazy, you may have to consider “Son of Weekend Open Discussion Thread” to keep things from getting totally out of hand.
Also, apologies for the length of my last post.
#229 Lindsey: And even if he cuts, all the really toxic loand are all going away on their own, due to the tighter lending standards.
Lindsey,
First of the Month
Bergen County SFH Active Listings
Month 2004 2005 2006 2007
Jan 2,218 2,271 3,084 3,253
Feb 2,258 2,293 3,344 3,357
Mar 2,296 2,331 3,498 3,398
Apr 2,414 2,391 3,810
May 2,625 2,609 4,168
Jun 2,931 2,940 4,589
Jul 3,102 3,050 4,706
Aug 3,139 3,200 4,749
Sep 3,113 3,225 4,615
Oct 3,141 3,457 4,583
Nov 3,003 3,612 4,387
Dec 2,702 3,537 3,901
You can see how inventory is seasonal.
So Y-O-Y comparisons ARE the best method instead for example, comparing last year’s Aug high to this month’s numbers.
Here’s a classic I’m getting every other day in the mail from Realtors: “It’s a great time to buy as interest rates are at historic lows and there’s a great selection of homes to choose from.”
Ok, sure. Lower the prices by 20% and I’ll give you a call.
Lindsey, I’m still thinking about your inventory post at or about 217.
#227 BBB,
When I was younger, I thought I was Young and smart. As I am getting older, I feel that I am Old and Dumb.
#229 Anti Let them eat cake!
#233: But gary…surely the sheer wealth of “choices” entices you, no? What do prices matter when low rates and choices are so appealing? Why, you can have your PICK of capes for 699K….
JB, I’m a big fan of the YOY numbers, but I think there is a way to get a sense of the market from month-to-month if you want to do a little math and you have the data.
Have you considered measuring the inventory change (or any other change for that matter) on a specific day each month over a period of years?
How about comparing the rate of change in year over year inventory compared on a month to month basis? (2nd derivative?)
jb
#228 Lindsey
I think to the extent that a housing bust doesn’t spill over into the larger economy, you are right. Bernanke will jawbone, but will ultimately defend against inflation by not cutting.
However, if the housing bust turns out worse than expected and does lead to a serious potential for a recession, then all bets are off. It’s important to remember that Bernanke is somewhat of a “Great Depression aficionado”. His nightmare scenario is a deflationary spiral. He would rather deal with upside risk (inflation) than a deflationary recession ala Japan or the Great Depression.
To your point, cutting rates might not help housing just as cutting rates in 2001 didn’t save the NASDAQ. We got a housing bubble instead, but the bubble prevented a more serious recession.
So not, he won’t cut rates to save the housing market, but he may cut to stave off recession, even if it means significant inflation. The question is; if the Fed cuts rates & starts printing money, do we see another bubble emerge or just generalized inflation?
#239 I don’t think we can see another bubble emerge with out the toxic financing.
re post 121:
Home sales may decline as much as 3 percent a year in the next two years, the group said today in a news release distributed by PRNewswire.
Really, 3%? Heaven forbid. Whatever will we do?
Man, I love the way these people do math. If subprime’s correction accounts for a 3% drop, what’s going to account for the other 7-10%?
From the Bloomberg story at the link:
“Tougher lending standards imposed by the marketplace and the regulators are necessary, but we need to be mindful of overcorrection,” David Lereah, the association’s chief economist, said in the statement. “Responsible lending practices are what the doctor ordered, not practices that cause a credit crunch.”
He doesn’t seem to understand that responsible lending practices will look exactly like a credit crunch to his paymasters.
BC (182)-
Is there a national championship for point shaving?
uh oh potential escaped italics
hope that got it.
David (186)-
Hear any stories about Jagr’s poker games?
#240
I don’t mean another housing bubble. Sorry I was unlear. That horse is just about dead. I mean a bubble somewhere else in the economy…stocks part 2, alternative energy, gold, ethanol…take your pick.
I’m going to break this thread at 300
jb
scribe (195)-
Thanks for the info. I’m in Hunterdon, so Old Bridge is a little far for everyday trips.
Anybody know a great Indian/Thai/SE Asian restaurant wanting to expand…have them call me! I know of several belly-up Stewart’s/burger stands that would be easy conversions.
Sorry for the troll, Grim. This is my stomach talking!
Here is a property I’ve been tracking for a while (since it was a REO).
MLS# 2383114 – New Providence
39 Murray Hill Square
OLP: $424,900
SP: $416,000
Purchased 5/2004 – $410,000
jb
Clot,
Never asked about that one. But once in a while I ask Michael, why didn’t you take that shot and passed to Jagr? His wife tells me.. Jagr is a puck hogger. me, me, me. Season is over but I will probably see him during Tryout and Spring hockey. will ask about the poker game.
hey is it the year 2000 again?
New lsiting in River Edge MLS #271201 4 bedroom 1 bath Cape ( being sold as is condition) Offering price $299,000.
Now of course I am sure it is a real POS, but hey its been a long, long, time since I have seen any listing with a 2 handle on it.
#245:
I heard that Uranium might be a place to invest in a near future.
I made money on gold between 2005-2006. If it drops to $500, buy.
scribe (223)-
Closings. Last business day of the month.
“but I think we’d all be better off if he went Volcker on the situation.”
Lindsey,
That’s what needed now and for the good of the economy in the future. If not, it will be worse going forward. However, I agree with RentininginNJ. They’ll flood the markets if housing dictates their hand. The worst possible scenario, a total housing bust while inflation ticks higher. They’ll favor growth. Unfortunately it will not work. This bust is not about a ffr at 5.25 or 4.50. The financing that sent this market to the moon came from the market[IB’s] not the fed. The market has spoken, liquidity for RE, subprime and Alt A, is drying up. It will still be available but it comes with a dp and no 80/20. The fed may shoot themselves in the foot. A cut, in a rising inflation environment, will send the 10 year reeling. Net effect, you have a lower ffr, which will not help housing and higher 10 year yields. Double Ouch.
#240 rentin; Time will tell, but Bernanke is going to have his work cut out for him, but hey he gets to clean up Greenspan’s mess.
And of course Greenspan’s legacy becomes tarnished.
Fed’s pinched so tight, the only mechanism they have left is talk. Any rate move- in either direction- equals painful consequences.
Remove inflation bias from last month’s FOMC comments, but talk about inflation vigilance. Talk the strong dollar, and work behind the scenes to turn it into Monopoly money.
They should give Bernanke a leotard, tightrope and balance pole for his public presentations.
And maybe a Chihuahua in a tutu.
#256 Clot: I am picturing that in my mind now;its not pretty.
#255..
I rather see Sophie Marceau doing the tightrope than Helicopter Ben.
re #255
omigod…..peeing in my pants as we (read)…….LOL
sl
Lindsey,
I’m working on your graph/data request now. Let me tell you, you’ll laugh when you see this thing.
jb
David (251)-
The last 5 years in uranium have been off the charts. Like many other minerals, it’s now entering hockey-stick mode.
Have always liked & traded in-out of Cameco (CCJ), the world’s #1 uranium miner. A recent mine flood has caused their stock to take a beating; however, I think it’s also created a buying opportunity (CCJ’s already starting to inch up):
http://money.excite.com/jsp/ct/bigchart.jsp?symbol_search_text=CCJ&chartdate=3
Note: more nukes going up all over the world…especially “pebble-bed” reactors in China. Also, Total is building a nuclear facility in Alberta, dedicated SOLELY to powering the oil extraction from tar sands process. This sucker is going to gobble uranium, and CCJ is right there to sell ’em all they want.
All disclaimers apply. I also called UNC-G’town “over” at halftime.
burst (256)-
Now picture M3. That ain’t pretty, either.
Going home to dig.
Clot [255],
Lost my apple. How about a Bengal Leotard?? Something like the Iggy Shuffle.
“I made money on gold between 2005-2006. If it drops to $500, buy.”
David,
Prayer of the faithful.
If it gets under $550, I don’t know if I want to own.
J.B, I also had my eye on that one in N.Prov. Have you ever gone to see those properties, really nice , I was ready to take the cheque book out, until we saw the maintenence fee, $475 and up.
Does anyone have any info on mls. 2389489,2387649,in N.Prov., not sure where, also looks like being sold by same person, flipper maybe?
http://www.youtube.com/watch?v=F9rkyyzoqI8
A relic from the last bubble. Absolutely hilarious!!!
JY,
Thanks for posting that, what a great clip.
jb
suziehomemaker,
Condo conversion perhaps.
jb
Clot/Other Final 4 Fans,
Buckeyes +1??
Looks like the market is developing an aversion to Alt-A..
M&T Bank, Buffett Holding, Says Alt-A Home Loans to Hurt Profit
M&T Bank Corp., the western New York bank partly owned by Warren Buffett’s Berkshire Hathaway Inc., said low bids for the Alt-A mortgages it planned to sell will cut first-quarter earnings by $7 million.
…
The loans didn’t attract the offers M&T expected at a recent auction. M&T cut their carrying value, resulting in after-tax costs of 7 cents a share. The loss on the loan buyback will cut profit by 3 cents a share.
“Unfavorable market conditions and lack of market liquidity impacted M&T’s willingness to sell Alt-A loans in the first quarter,” the Buffalo, New York-based company said in the statement.
…
M&T said it plans to keep $883 million of Alt-A home loans instead of selling them because management believes the bids don’t reflect their value.
Bob,
I am a gold bug. American Museum of Natural History has a nice gold exhibition. Been there twice already and still love it.
I am not sure it will go near 500 but if it does, I am buying again.
Clot,
I think Uranium has much more room to go up. But who knows. I don’t have a crystal ball.
Also, I am still following Palladium — waiting for the Cold Fusion to be successful.
Then Palladium will go through the roof.
waiting for the cold fusion ?
1st: What does Pd have to do with Cold Fusion??
Also just for the record: Cold Fusion so far has been a one huge scam. Goverments and private investors around the world spend trillions of dollars in total with no results.
The future source of energy is: Controlled Thermonuclear Reactors. At lest US, France, Russia, Japan, China believe so and investing lot’s of money into it.
http://www.iter.org/
Before you read, realize the writer has an agenda. That said, IMO, dead b*lls on.
“But why would a slowdown be something the Fed should be concerned about? The only reason the Fed would try to prevent an economic slowdown is if it were concerned it could spiral out of control. And that’s the core of the matter: in our assessment, Fed Chairman Ben Bernanke is concerned we could enter a deflationary spiral akin to what Japan experienced. How could such a deflationary spiral come about? You start with a credit bubble, with a consumer loaded up to their teeth with debt. In a credit crunch, the consumer would be forced to reign in his or her spending to service the debt; given that about 70% of the U.S. economy is comprised of consumer spending, we are talking about a severe recession or possibly a depression to force consumers to become savers rather than spenders.”
http://www.kitcocasey.com/displayArticle.php?id=1300
“I am a gold bug.”
David,
You’re preaching [no pun] to the choir.
David,
Gold is a treasure, and he who possesses it does all he wishes to in this world, and succeeds in helping souls into paradise.
Christopher Columbus
Al,
check the price of Palladium when Cold fusion was first published. I believe you need Palladium for cold fusion of heavy water (H2O2) as catalyst.
I heard that MIT had a renewed interest in cold fusion and doing some work on it.
Bob,
I am not sure I would value too much of what C. Columbus said. After all, he brought nothing but disease and destruction to the natives of America.
Also, he is falsely credited with “discovering” America – how the h*ll can you discover America when people have been living here for millions of years.
But I do believe that we should bring back the Gold backed financial system. Being more fiscally responsible.
Gov’t don’t publish M3 numbers any more right?
David (280)-
M3…you can’t publish what you don’t know. And the Treasury has gone on the record as saying they don’t know. How this is not newsworthy is a prime illustration of what sheeple most Americans have become.
I think it’s also unknowable how much high-quality counterfeiting (especially by North Korea, where counterfeiting is the only growth industry) has inflated the supply of $$$ floating around the planet.
And don’t even get me started on petrodollars!
Although “petroeuro” has a nice, alliterative ring to it, don’t you think?
Talk about doomsday scenarios!
“Gov’t don’t publish M3 numbers any more right?”
David,
Why would they want to tell us that M3 is up approx 9-12%, can’t verify those #’s.[street #’s]. However M2 is up over 5%. Do you think they want everybody to trade their dollars for gold??
http://www.federalreserve.gov/RELEASES/h6/hist/h6hist1.txt
This is why their inflation #’s are bogus. Doesn’t monetary inflation figure into the equation?? The fed can try to run but they can’t hide. The world sees it, look at the dollar. By the way how bearish is the dollar? After a 30% drop [dollar index] since 2001 and 17 rate hikes since, its still clinging, precariously, to its bottom. It should be rallying based on our inflation/wage growth #’s. It can’t even muster a relief/short covering rally. If it does, be prepared. Major problems will surface if this index takes out the 80 level and stays below there. We’ll see. Now I know what Yogi was talking about; when you come to the fork in the road just take it.
By the way, the fed has not answered my constant annoying question, why did they really stop reporting M3?
“petroeuro”
Clot,
This can be a whole new blog in itself. There are rumbles, take our military out of the equation and it’s a done deal.
By the way, the fed has not answered my constant annoying question, why did they really stop reporting M3?
Maybe it’s a good thing we don’t know.
Can you even imagine the consequences of going transparent? It’s like being naked in front of a crowd
#218 Barracuda Pat :)
This LOD member would love to hear the analogy for sellers
Bob,
M3 discussion sounds like gold bug discussion of conspiracy theory. :)
Clot,
I believe that gov’t knows M3 but they did say that they will not publish it.
As Bob asked “annoyingly”, they never said why they are not reporting M3.
But we know why. They want to “protect” sheeple from chaos – big brother in action.
Reminds me of George Orwell’s 1984.
And all this time, I thought communism has been disappearing.
“First thing we do, kill all the lawyers first.” — Shakespear’s Henry VI.
I wonder how Billy Shakespeare would have written this line if he were alive today.
Do you think Billy might have added, realtors, mortgage bankers, especially subprime lenders, IBankers and most of all, politicians to this list?
I wonder what our founding fathers might have said to our sad state of government if they were alive today?
Pat? would you like to add to this post?
G. Washington might have said..
Tommy J. might have said..
Benny F. might have said..
I know what John Hancock might have said.. don’t use my name in vain. Don’t john hancock on that gazillion dollar gov’t check to Halliburton.. or was that the blank check endorsed by Dick Cheney?
my advisor, a Nobel laureate, once told me.. David, if you are young and a Republican, you have no heart. If you are old and a Democrat, you have nothing.”
I would like to consider myself Young. hahaha
just for curiosity– can someone tell me the fate of 25? willow dr in bedminster?
Thx in adv, as usual,
sl
# investorDavid Says:
March 30th, 2007 at 8:43 pm
Al,
check the price of Palladium when Cold fusion was first published. I believe you need Palladium for cold fusion of heavy water (H2O2) as catalyst.
I heard that MIT had a renewed interest in cold fusion and doing some work on it.
There is always New Interest in Cold Fusion. There always will be. As long as scientists can get money they will keep asking for the money and saying this: give us a bit more money and we will solve this problem.
I know it very well.
More info on cold fusion: http://en.wikipedia.org/wiki/Cold_fusion
The idea that palladium or titanium might catalyze fusion stems from the special ability of these metals to absorb large quantities of hydrogen (including its deuterium isotope). The hydrogen or deuterium disassociate with the respective positive ions, but remain in an anomalously mobile state inside the metal lattice, exhibiting rapid diffusion and high electrical conductivity. The special ability of palladium to absorb hydrogen was recognized in the nineteenth century by Thomas Graham.
Anybody who knows how much Pd this process will take would now that you need very little cmpare to use of Pd as Commercial Petroleum Industry Catalysts and !!!! more importantly in some catalytical converters in the cars. we have literally too much Pd. However show to someone that copper jewelery is very popular this year andd price of copper will go up.
Pure speculation for profit.
mor importantly I believe Cold fusion is Hoax.
Here’s a nice tidbit — a listing agent begged me to make an offer awhile ago, mentioning a specific number where the owner would accept. I said “no thanks.”
A few months later the house went into contract, and closed recently for $30K above what the sellers would accept. These last Greater Fools running off the cliff are a riot. $30K (at least) burned. But the sellers weren’t “insulted”! Morons.
On another note, lots of spring inventory hitting the market this week. The various price points are getting crowded now, and it comes down to which house provides the most value. But prices still have a long way down to go…
2007 should be an interesting year to sit back and watch the fireworks. My checkbook might come out in 2008, if the right deal comes along…
dream: Someone help me out here…. I don’t get the arrogance. China is the biggest buyer of US Treasuries, and big bro is crying foul on the paper imports. This is sending the wrong message; we can’t compete any more so let’s try and bully.
China can’t compete in a lot of areas, so it places 30-40% tariffs on most imported products, and has double digit percentage subsidies on many exports. It buys US Treasuries because it generates tons of dollars from exports to the US – Treasuries are better than just letting the dollars sit without earning interest. If it decides not to hold dollars, then global interest rates will spike, reducing worldwide growth, and decreasing Chinese exports to the world, which is responsible for almost 30% of China’s annual output. This will lead to economic unrest in China, which has 20% unemployment/underemployment, perhaps hastening the end of the Communist dynasty. This is why China will wave its arms, and generally make menacing noises, and continue to hold dollars and buy Treasuries – not because it likes Americans, but because exporting to the rest of the world is how the Communist Party stays afloat.
I understand how foreigners would want to portray Americans as arrogant – foreign greed (for our wealth), envy, narcissism and self-interest accounts for all of it. In other words where they stand depends on where they sit. What I don’t understand is why domestic audiences would accept a foreign slant on the situation at hand.
Maybe it’s Christian guilt transmuted into Western guilt, in this time of irreligion (in a traditional sense). We must have sinned somehow, and must be punished.
From Bloomberg:
First NLC to Shut Some Operations, Lay Off Workers
First NLC Financial Services LLC, a mortgage lender owned by investment bank Friedman, Billings, Ramsey Group Inc., said it will close some operations centers because of slowing sales of so-called subprime loans.
The restructuring will involve employee layoffs, Deerfield Beach, Florida-based First NLC said today in a statement distributed by Market Wire. Spokeswoman Susannah Harter didn’t immediately return a call seeking comment.
Subprime borrowers, those with poor or limited credit records or high debt burdens, made up about a fifth of all new U.S. mortgages last year. Late payments on the loans reached a four-year high of 13.3 percent in the fourth quarter, the Washington-based Mortgage Bankers Association said this month.
“These restructuring actions, which include employee layoffs, are being taken in response to reduced origination volumes across the industry and align the companies’ cost structure with the current operating environment,” First NLC said in the statement.
ZF (294)-
Bravo! One of the best things I’ve ever read here. We are not the cowering, economically-dominated nation so many believe us to be (I agree with you that some sort of guilt complex does drive this feeling).
China is an emerging nation with a host of serious flaws and challenges ahead. Unilateral, provocative and preemptive economic actions are not in their best interest, and the people in control there do seem to understand this fact.
I also believe China understands that Communism is a system that is woefully inadequate as a substructure for any sort of sustainable economic growth. Some interesting things are going to happen post-Olympics in 2008, when the double-digit growth fueled by the need for immediate infrastructure improvement begins to abate.
They say there are no second acts in American lives. It’ll be interesting to see what China’s second act will be.
New definition of “bagholder”= anyone who would pay more for a property than UnRealtor.
Or should that be, pay more than Zillow says a property is worth?
can someone provide me the address for MLS ID#: 707722 and MLS ID#: 707767 please.
thanks
Renting
https://njrereport.com/index.php/2007/03/31/weekend-open-discussion-58/#comment-87323
Did you not see my post about hitting 32,000 by april 17th. Thats my prediction. Last 32,000 was oct06
Investor David
I think Tommy J and G Washington and
Benny F would say…. What’s with the nicknames Pal are you a frat boy like dubya..and his boys.
KL
I made 300!!
KL
I thought that China is buying US Treasury as they don’t want US economy to tank. After all, isn’t US the biggest importer of Chinese exports?
In addition, they don’t want to re-evaluate Yuan as it will make exporting much harder.
#301. KL,
Your post 301 sounds like a frat boy. :)
and I think Elvis looks like our fearless leader Jim B.
http://www.houseplantpicturestudio.com/brushwith/artwork/costello.jpg
David,
China is playing us like a violin. The American consumer is addicted and China is our pusher. Like Zhang stated there is only one reason why China is buying our Treasuries. Once we stop greasing them??
Their future target is their domestic economy and BRI. There is a reason why China is promoting domestic spending. Their savings rate is the highest in the world. They realize that this gravy train [US consumer] will not go on forever. They will try desperately to resuscitate the US consumer. Unfortunatlely, the US consumer is tapped out. In conjunction with this, the asset appreciation party of the last 10 years is over. The US consumer has tapped all sources to spend,spend,spend. In the near future, spending will be a function of savings. Hah.Hah.
On the other hand, China has a multitude of their own problems; sustaining job growth for tens of millions laid off from state owned enterprises, massive corruption, environmental challenges, 100’s of millions adrift between villages and cities, loss of arable land with economic expansion and a non-existent banking system. I agree with Clot, watch out after the 2008 Olympics. If the contnued growth and expansion of BRIC does not materialize, how about a deep worldwide recession, maybe worse.
One of my favorite articles ever from The Onion…
http://www.theonion.com/content/node/31049
Headline: “Chinese Factory Worker Can’t Believe The Sh*t He Makes For Americans”
C: Bravo! One of the best things I’ve ever read here. We are not the cowering, economically-dominated nation so many believe us to be (I agree with you that some sort of guilt complex does drive this feeling).
China is an emerging nation with a host of serious flaws and challenges ahead. Unilateral, provocative and preemptive economic actions are not in their best interest, and the people in control there do seem to understand this fact.
I simply wanted to point out that China is neither in a strong position to dictate to Uncle Sam nor the virtuous free trader that many people seem to think it is. The Bush administration may in fact withdraw the tariffs in response to any Chinese trade retaliation. But that would be due to the Chinese initiative providing political cover for Bush doing what he was already inclined to do anyway – keeping to US market open to imports, not the (illusory) strength of Chinese economic leverage over the US. (It’s kind of like Bush’s philosophy with respect to illegal immigration – he doesn’t enforce immigration laws and has used public anger about illegal immigration to press for an amnesty).
It’s not generally known that corporations that put a factory in China are not allowed to move it out of country. Once installed, the equipment has to stay in China. Most foreign investments have to be joint ventures, which means the automatic transfer of technology to the local partner. (This is why foreign cars locally assembled in China cost more there than in foreign countries – no foreign company will take the risk of having its engine or transmission ripped off* by a Chinese local partner, and so import these major sub-systems from plants outside of China, which means they are subjected to the 30-40% Chinese tariff). There are only a small number of exceptions, such as the recently announced Intel plant, where the Chinese government seems to have made an exception in order to land a huge and prestigious investment. The list of protectionistic Chinese trade measures goes on and on.
* Reverse-engineering only goes so far – Chinese manufacturers can make something that looks like the foreign product – they just can’t make something that functions exactly like it, despite having a working copy of it to rip off. This is why a lot of their earth-moving and other construction equipment continues to be foreign – brands like Hyundai, Hitachi and Caterpillar predominate. But give them the production technology via joint ventures, and they will be able to make the whole enchilada. Which is why most foreign companies will make peripheral stuff (body panels, molding, et al), but not the crown jewels in China.
I’m sure that I will be taken out back and shot, but I am no fan of commodities. Most of recent returns relate to pressure to park excess global liquidity. As such, they provide no safe haven as a hedge or asset allocation mechanism. My $0.02.
Please don’t go Lorena Bobbitt on me.
C: China is an emerging nation with a host of serious flaws and challenges ahead. Unilateral, provocative and preemptive economic actions are not in their best interest, and the people in control there do seem to understand this fact.
I think the Chinese will retaliate, partly because they believe what some Western financial analysts are saying about the amount of leverage they have, and partly because they believe Bush’s paper tariff is just fluff for a domestic audience, to be reversed as soon as Bush can point to the Chinese response as an example of how tariff initiatives can get out of hand.
Chi,
I’ve had the same concern. So, where does one put one’s money when a recession is on the horizon but inflation and execess liquidity are still a factor? What is a good hedge?
John.. I mean CF..
so what do you recommend if not commodities?
certainly not RE.
P.S. When will CF be in a movie like John Bobbitt after the operation? :)
#307 Zhang Fei,
Thank you for your great posts.
I have a dumb question regarding “reverse engineering”.
When there are so many Chinese American engineers/scientists working in US, why do they need to reverse engineer?
I read that many Chinese living in America are going back to China.
I also read from the Time Magazine that Samsung Eletronics grew so fast (actually beating Sony in so many areas) since they staffed most of their upper management and scientists/engineers with mostly US educated Korean Americans (Harvard, Yale, MIT, Stanford, Berkeley MBA’s, Ph.D’s).
On top of that, due to our “Shrub” governments opposition to stem cell research, top US scientists are leaving America to work in Sweden, Singapore, China, Korea as they offer better treatment.
Soon other countries will come up with great products, leaving America in dust.
It’s not generally known that corporations that put a factory in China are not allowed to move it out of country. Once installed, the equipment has to stay in China
What’s preventing China from changing their policy? If they can make an exception for Intel, they can definitely make other exceptions as needed.
After all, lack of democracy is their biggest advantage.
RentLord,
Vietnam did the same thing. Ask for foreign investment and once factories are built, gov’t banned the foreign ownership, literally taking the factories away from foreigners (probably not all foreign ownership, but taking away from the foreigners little by little by changing their laws).
#293 Unrealtor last year werent you saying something along the lines of
2006 should be an interesting year to sit back and watch the fireworks. My checkbook might come out in 2007, if the right deal comes along…
My prediciton next year you’ll be saying
2008 should be an interesting year to sit back and watch the fireworks. My checkbook might come out in 2009, if the right deal comes along…
I was just wondering.. I know that this blog educates people and helps the readers making educated choices regarding RE.
I wonder whether this blog has any overall impact in RE transaction in NJ.
ID: I have a dumb question regarding “reverse engineering”.
When there are so many Chinese American engineers/scientists working in US, why do they need to reverse engineer?
I don’t actually know. I suspect it’s because no one has access to everything – just the piece he’s working on. Which makes sense – if you give a guy the whole enchilada, what’s to stop him from heading off to the competition – or to China?
ID: I read that many Chinese living in America are going back to China.
I also read from the Time Magazine that Samsung Eletronics grew so fast (actually beating Sony in so many areas) since they staffed most of their upper management and scientists/engineers with mostly US educated Korean Americans (Harvard, Yale, MIT, Stanford, Berkeley MBA’s, Ph.D’s).
China is at a much lower level of development than South Korea, let alone the US. This means that life in the US is far more attractive to the average US-educated Chinese than returning to China.
Samsung is a major Korean company, but it’s not really a name that screams quality. They’ve come up with a lot of me-too products, but nothing innovative like either the Walkman (Sony), the CD (Sony) that makes you want to run out and buy one. If all the Chinese can achieve is parity with Samsung, or Sony (which, despite significant innovation by Japanese standards, is an also-ran in many of the most important technologies, without any startup* Japanese companies to fill the gap), American technological dominance is secure.
* This is key. The existing major American companies don’t always come up with next generation innovations. But new American companies always fill the gap – whether it’s drugs, computers or retail, American entrepreneurs always come up with major improvements on existing products or services. Note that it’s not just high-tech – it was an American who invented both the supermarket and the shipping container.
Chi,
Do you own any multi-nationals, emerging markets, internationals?? If you don’t buy into commodities, would you want to be long these?? [question, not a statement]. If I was bearish commodities, long term treasuries would be my play. The world is sucking up zinc, nickel, iron ore, crude, gas, grains,etc…. The bobbleheads cheer on our stock market like it’s the second coming. Well the nasquack is 50% off its high, 7 years ago, real terms?? The Dow has been led by the Multi-Nationals [dollar]. Now compare our stock market to the worlds markets. We are a laggard, the Dow measured in Gold the last 6 years. Not even close. Add in leverage, [futures], it’s a rout.
Up to 2001, we were in a 20 year bear market for commodities. This changed in 2001 with the end of the dot com and 9/11. Once the dollar started to turn, commodities started to rally.
During this run, there have been periods when it has been distorted. Yes, excess liquidity has at times exaggerated the move. However, like all bull markets do, this market has shaken out the excess, very volatile downturns, absorbed it and continued on. These markets have have showed the resiliency that characterizes a major bull. Believe me, I’m cognizant of the other side of the equation. I realize that there are two scenarios that will throw this for a loop. I don’t feel that we are close to either one. I’ve been with this for 4 years and will not let gains evaporate, ins is in play.I always ask, what am I missing. Nothing in RE, however I always entertain the other side of the commodity debate.
That said, I feel this bull has many years left. If I am wrong and commodities crash tomorrow, I feel it would be wise to be out of multi-nationals, at the very least prudent to be hedged. It’s one big play right now.
Also, gold is a different animal as compared to pure industrial commodities. It is a precious metal, a de facto currency, simply an anti-dollar play. It is not affected negatively by hidden coordination, fudged stats, the gargantuan creation of money/abusing the power to do so. Also, it is not burdened by vast quantities of sovereign debt and prior obligations. In addition to this, it is shielded from the financial consequences of corrupt management and incompetent politicians. Most importantly, especially at this time, it is not backed by full faith and credit.
Can anybody help with the status of these NJMLS houses: 2710000, 2627657.
Thanks a lot!
Marito,
Both of these are under contract.
2710000: March 28; Est. Closing: May 15
2627657: March 27; Est. Closing: April 27
Marito
Both those properties are under contract.
Investor,
I think this blog/and others have a tremendous effect on real estate, I do not think awareness of what is going on around you was as easily obtained in 1990 as it is now. These blogs have made the main street media stand up and account.. yes it took them too long, but it would have taken them longer.
It is the power of telling 2 friends.
KL
RhymingRealtor,
Are other realtors aware of this blog or blogs like this? what do realtors and mortgage bankers think of blogs like this?
thanks
Back in Feb, there was a lot of chatter on this blog (and others) about a surge of inventory in March. Today is the last day of March and I have been tracking inventory in my town (zip code 08854 – Pisc a taway) and in certain price categories for Middlesex County as a whole. These numbers are from GSMLS.com only.
FWIW…
http://img106.imageshack.us/img106/5239/piscatawayallpricepointir4.jpg
http://img158.imageshack.us/img158/8122/piscatawaypricecategoridd7.jpg
http://img158.imageshack.us/img158/3100/middlesexcountyvariouspim4.jpg
JB, my post with date/time March 31st, 2007 at 12:11 pm is awaiting moderation.
Can anyone tell me an address for njmls 271201, want
to take a drive by. Thanks.
BBB,
aren’t you missing a digit for your NJMLS number?
Yikes this thread is lengthy.
Re post, 259
JB thank you for the effort on the chart. based on the short sample provided by Rich, I get the feeling there’s going to be little in the way of a useful correlation on the supply side.
I liked my little sample on the demand side, but supply looks like it isn’t going to play ball. Just a guess at this point.
BC Bob Says:
March 31st, 2007 at 11:20 am
Bost: Do you own any multi-nationals, emerging markets, internationals?
We have discussed this often – of course [note the openended-ness of the term “any”]
The Dow has been led by the Multi-Nationals [dollar]. Now compare our stock market to the worlds markets. We are a laggard..
On a risk adjusted basis?
However, like all bull markets do, this market has shaken out the excess, very volatile downturns, absorbed it and continued on.
No way. We have barely scratched the surface.
Gold is a different animal as compared to pure industrial commodities. It is a precious metal, a de facto currency, simply an anti-dollar play. It is not affected negatively by hidden coordination, fudged stats, the gargantuan creation of money/abusing the power to do so.
Too many people agree with you. It is a time tested philosophy, but with too many bandwagon jumpers, it loses its immunization strength.
Everyone: you know me, I do not deal in black and white…..you need to be exposed everywhere, just over/under allocate. I am uncomfortable with “matter of fact” discussions that revolve around DO THIS.
If we get blitzed, there is not going to be anywhere to hide, because even hold cashing is risky given the uncertainly of future returns. Simply DIAL DOWN THE RISK – a lot of us are fat at this point, I am not going to tell my people to be pigs. 2007 is going to be good. However, the market is going to frontrun all of our problems, and you need to DIAL DOWN THE RISK. Commodities ADD risk IN THESE SPECULATIVE MARKET CONDITIONS —- its all about price/valuation —- good ideas are bad ideas at the wrong prices.
February 27th was you chance to shock-test your portfolio. The market needs something that is about 3x-4x the magnitude of that event to really change psychology. You tell me, are you ready? When it happens, people are not going to hold fast and steady with gold and the other stuff.
BC Bob, about Gold –
Most importantly, especially at this time, it is not backed by full faith and credit.
What are the chances that some other currency, like some South American, will start backing with Gold? Has any other currency ever backed with Gold (other than the dollar which it did till ’73)?
Ugh! Worked all day yesterday then from 9:30 last night to 4:30 this morning. (Insert tearful, compassionate violin music here.. lol!). End of month stuff… so is the life of an IT Analyst. I hate EOM stuff. Oh well, how else am I going to afford that $600,000 cape and $11,000 in property taxes in Haughty Hills, NJ.
Gary,
No violin for you. :) You are still young. You can take the beating. :)
I personally don’t believe that IT will come back to the glory days of late 90’s.
As for the Haughtyville cape house, give some time and it will come down.
ID: On top of that, due to our “Shrub” governments opposition to stem cell research, top US scientists are leaving America to work in Sweden, Singapore, China, Korea as they offer better treatment.
Soon other countries will come up with great products, leaving America in dust.
The opposition is to the government funding of stem cell research. Private funding is still available. The bit about top US scientists leaving is a little vague – what’s a top US scientist? Someone whose ideas are original and useful enough to get private industry to fund his ideas or someone who needs a government subsidy to do his work? I understand that foreign governments need to use the label of “top US scientist” to justify funding for their boondoggles, but my general understanding is that a top scientist is not someone who has a lot of degrees – it’s someone who has actually discovered something that will be featured in future textbooks on the subject. Hence, Einstein, who is less credentialed than many of his contemporaries, is a great scientist, whereas many of his more degree-laden contemporaries are also-rans whose names will not appear in science textbooks.
David,
Not that young, I’m still trying to find a way to turn back the clock. :) As for IT, as long as they keep me employed, I won’t miss the glory days. Although, I often wonder what I would do if I ever got pink slipped. I always wanted to own a little, ratty shop cluttered with all kinds of junk. I’ll become a Pawn dealer!! NO FOLKS, I SAID “PAWN” NOT “PORN”. LOL!!!
332. Fei,
Sure, there are great scientists without degrees but there are more great scientists with degrees. by the way, Einstein went to Swiss Federal Institute of Technology in Zurich.
Here’s an excerpt from some article..
“Two of the most prominent American cancer researchers, Neal Copeland and Nancy Jenkins, are planning to arrive here next month to take posts at the Institute of Molecular and Cell Biology in Singapore. The husband and wife team, who worked for 20 years at the National Cancer Institute in Maryland, said politics and budget cuts had left financing in the United States too hard to come by.
In 2003, Singapore lured Jackie Ying from the Massachusetts Institute of Technology, where she had become its youngest-ever tenured professor, to head its Institute of Bioengineering and Nanotechnology at Biopolis. This year, Singapore attracted another pair of Americans, the dean of the University of California at San Diego’s school of medicine, Edward Holmes, and his wife, Judith Swain. Swain was the school’s dean of translational medicine – the specialty of turning laboratory discoveries into practical drugs or therapies.”
Fei,
one more point. I am not sure you came from academia or not, but I am.
When a big name researcher moves to another location, many, but not all, who work with them, usually follow them to a new location/instution.
#333 – my wife personally knows Niel and Nancy, and works in the field. So, yes talent is leaving the US – no two ways about it
Chi,
“Dow risk adjusted basis”.
No, strictly performance based. However, I am no proponent of the emerging “stock” markets at this time. Out completely. Currently, I would agree with you regarding risk adjusted Dow compared to these stock markets, not talking their economies, just stock market.
“Excess”,
Every pullback/decline in the metals has coincided with a big drop in OI. If OI increased on the declines, I would certainly re-evaluate.
“Too many people agree with you.”
No. They’re in the Goldilocks play, not Gold. Hell, the majority can’t even name the 3 top gold stocks, take it one step further, they can’t name 3 gold stocks. When they all agree with me, “with a position”, I’ll be heading out the door.
“February 27th was you chance to shock-test your portfolio. You tell me, are you ready?”
I was waiting for that day for months, suprised it did not happen sooner. I am completely hedged. If this craps out tomorrow I will not be hurt. If it continues to advance, I’ll lose my protection premium. Small price to pay to protect years of gains.
When we start to demonstrate some fiscal responsibility[fed,state,municip.,Joe 6 pack] and revert from an addicted consuming nation, [requiring $3 billion a day to finance our current account deficit] back to a producing/saving nation, I will change my tune. The dollar will also respond accordingly and I will be with it. I just don’t see it on the horizon.
Note: Just my opinion, not a recommendation by any means.
#325 njmls 2712301 in River Edge any body with access to the address? Would just like to take a drive by. Thanks David.
52 Elizabeth
Samsung is a major Korean company, but it’s not really a name that screams quality. They’ve come up with a lot of me-too products, but nothing innovative like either the Walkman (Sony), the CD (Sony) that makes you want to run out and buy one.
I hate Sony. Just wanted to let that out.
Their product quality sucks and is guaranteed to break after the warranty expires. Happened to me 4 times (2 cd players, 2 phones). They are completely proprietary with their products which the new CEO was supposed to change, but apparantly that didn’t happen. If you bought a PS3, you cant even use a standard HDMI cable, you have to use a “special” HDMI cable that costs over $50. That’s the kind of shit that annoys me. If you say your product is HDMI compatible, then dont require a stupid-ass cable connection because you want to nickel and dime your customers some more. F’em.
Sony also did not invent the CD, Philips is actually credited with the invention, Sony collaborated on it, but by no means did they come up with the idea themselves. They came out with the minidisc in the hopes that it would be more popular then the CD, but look where that took them. $700 minidisc players that no one uses.
Let’s not forget Betamax! Sony has a history of attempting to lock customers into proprietary media and accessories, Memory Stick is a good example of this.
jb
#341 Thanks JB
JB,
I do have to say this. Betamax is much better quality than VHS. When I was working on my doctorate, I used Betamax to record my experiments.
I am off to Connecticut for my kid’s water polo practice. I wonder how many open house signs I am going to see in Greenwich.
jb,
I was following that REO in New Providence as well. I noticed very many odd things about it.
According to Realtytrac, the mortgage was from Wells Fargo (iirc).
The REO was listed on Countrywides website.
The property was listed FSBO about 6 months ago on Craigslist for $370k or thereabouts (he did mention the pending foreclosure).
Searching for the property on Zillow shows many “recently sold” properties in the same development with selling prices of $1 or $100. My assumption is that this development was a flippers nightmare, and there were multiple foreclosures there.
Oh, and I think the REO was originally listed on Countrywide at $470k (although I could be wrong about this).
ID: Sure, there are great scientists without degrees but there are more great scientists with degrees. by the way, Einstein went to Swiss Federal Institute of Technology in Zurich.
I wasn’t suggesting that Einstein had no degree, but that he went to a school much less prestigious than his contemporaries. In science, what you accomplish has little to do with all of the little ticket punches you accumulate along the way – it’s all about what you produce. Just because some highly-credentialed scientists decide to go abroad doesn’t mean that they’ve actually accomplished anything other than accumulate ticket punches.
ID: Here’s an excerpt from some article..
“Two of the most prominent American cancer researchers, Neal Copeland and Nancy Jenkins, are planning to arrive here next month to take posts at the Institute of Molecular and Cell Biology in Singapore. The husband and wife team, who worked for 20 years at the National Cancer Institute in Maryland, said politics and budget cuts had left financing in the United States too hard to come by.
I don’t know if you know anything about Singapore at all, but let me just say that it is not a hardship posting. Singaporean civil service pay is very high, about double American levels – and that Institute is a government-run organization. If this couple had left for China, where the money is far below American levels, but unlike Singapore, there are zero restrictions on the kinds of experiments they can conduct (including, potentially with live political/condemned prisoners), I’d believe that they left the US for other than financial reasons.
ID: In 2003, Singapore lured Jackie Ying from the Massachusetts Institute of Technology, where she had become its youngest-ever tenured professor, to head its Institute of Bioengineering and Nanotechnology at Biopolis. This year, Singapore attracted another pair of Americans, the dean of the University of California at San Diego’s school of medicine, Edward Holmes, and his wife, Judith Swain. Swain was the school’s dean of translational medicine – the specialty of turning laboratory discoveries into practical drugs or therapies.”
Is this relevant to federal government funding of stem cell research? I suspect not. What this shows is that the Singapore government is shoveling money at American researchers, hoping to strike gold. I’m not sure it’s such a wonderful strategy – if these people were so productive, they’d have been snapped up already by the private sector.
Fall of Empire – this once great Nation is sliding down the road of destruction faster than any other great empires in the past.
Oh brother.
Has there EVER been a time when some fool wasn’t predicting this?
R: Sony also did not invent the CD, Philips is actually credited with the invention, Sony collaborated on it, but by no means did they come up with the idea themselves. They came out with the minidisc in the hopes that it would be more popular then the CD, but look where that took them. $700 minidisc players that no one uses.
That reinforces my point. Samsung is even *less* innovative than Sony. If all the Chinese can do is get to Samsung’s or Sony’s level, American technological leadership is safe.
#348 BLB – maybe the following analogy by Peter Schiff in his book will help you understand the gravity of the US situation:
Do you get what’s happening?!!!
Apologies for the typos.. I was typing from the book
…
test
RentL0rd,
If the author of that bit is going to correctly characterize what the American does (service sector employee, right?), then he would have to do all the Asians hair, develop and maintain efficiency tools that allow the Asians to do what they do at maximum efficiency and in his spare time he can be a process consultant too. You know, study the oceans and help the Asian who fishes avoid overfishing, etc.
Schiff (via RentLord): Let’s suppose six castaways are stranded on a desert island, five asians and one american.
The problem is that this supposition is wrong. The proper analogy would be that the American is the creator of recipes and the Asians are the cooks, the gatherers of ingredients for these recipes and the servers. We run big trade deficits not because the American consumer has a voracious appetite, but because Europeans have bigger trade barriers, and Asian countries have major trade barriers dwarfing those of the Europeans. We could correct these trade deficits by enacting barriers of our own or by devaluing the dollar. But we’d simply be enacting the same mercantilistic policies as them, which is silly.
My attitude is that if they’re willing to sell us a buck’s worth of goods for less than a buck on the theory that they’re sticking it to us in some cosmic way, more power to them. If Schiff is saying that Asians will eventually get tired of their silly mercantilistic theories, thereby reducing the dollar’s buying power, he’s right. If he’s saying that the dollar is worth zero, he’s overreaching – it’s worth what foreigners are able to buy with it. At the moment, that includes McDonald’s hamburgers, P&G’s Tide, Apple iPods, Cisco routers, Pfizer’s Viagra, Nike’s sneakers, Colgate’s toothpaste, WD-40’s lubricants – all of which are popular and widely-used products all over the world (including in China). Note that a lot of these products don’t even show up as American exports, since US corporations operate plants abroad, but ultimately repatriate the profits by selling foreign currency and buying dollars in order to pay dividends, buy back stock or pay interest on corporate debt.
Do you get what’s happening?!!!
That does not answer my question.
Has there EVER been a time when there were some people who were absolutely convinced the sky was falling?
The answer of course is NO.
And every single one of them could produce convincing and copious evidence that supported their position.
Every one of them was a little right. But in the end they were mostly wrong.
“Has there EVER been a time when some fool wasn’t predicting this?”
yes, but they did really have anything to support their claims, other than the bible.
Now, economics is really on the fool’s side.
SAS
#348
So you will be voting with your feet and moving to the third world soon along with the great tide of the cognoscenti?
324 Sync, I’ve also been inventory watching over here in PA, and expected more of the pulled stale listings to come back on than actually have, and expected a final surge in flipper remodel completions.
I didn’t get the surge. Instead, it’s been a drizzle. A few pulled occupied listings came back on, now empty, and some seemingly normal spring new stuff.
The foreclosures and pre-foreclosure activity has been higher than I expected, however, and the rental business is picking up for some RE agents. Last week I started to notice more “rental price reduced” listings on craigslist.
I’m not sure what this lull portends. The calm before the storm? Did you see the resets graph posted earlier?
From the AP:
Clinton Wants Stricter Loan Standards
Sen. Hillary Rodham Clinton said Saturday she favors stricter home loan standards, clearer mortgage documents and better counseling for borrowers to stave off delinquencies and foreclosures.
The Democratic presidential candidate proposed more leniency for borrowers in a financial crisis, allowing them a grace period from mortgage payments. She also called for more selectivity when screening people for loans to ensure they are qualified.
More cracks starting to show in the Alt-A segment. From CR:
http://calculatedrisk.blogspot.com/2007/03/fulton-financial-alt-repurchases.html
Carter jumping on the subprime bandwagon. From Reuters:
Jimmy Carter sees subprime mortgage stress
Former U.S. President Jimmy Carter and Habitat for Humanity officials said on Saturday they expect stress in the subprime mortgage market to boost demand for housing for low-income families.
“I think (with) the subprime market being so fluctuating and uncertain, and making it more difficult to own homes, it will be even more important for Habitat to expand its program,” Carter, the 2002 Nobel Peace Prize winner, said at an event announcing the nonprofit group’s plan to build more homes in the Los Angeles area.
David (323)-
Realtors and MB’s daily process (actual thought attached to actions are optional):
1. Wake up.
2. Try to stay awake.
3. Check weather.
4. If it’s not golf weather, go to office.
5. Drink coffee.
6. Check watch.
7. Go to lunch. Gorge on simple carbs.
8. Take nap in car.
9. Go back to office.
10. Stand at water cooler and whine about market.
11. Surf internet for questionable material.
12. Pick up kid at school, go home.
13. Dinner. Another 2,700 calories of empty carbs.
14. Wheel of Fortune or reruns of Welcome Back Kotter
15. Call listing clients and beg for price reductions.
16. Pour large drink.
17. Swallow drink.
18. Pass out on couch.
ChiFi (308)-
To me, the time to be short- or out of- commodities is if a full-blown recession is upon us. And, just like BC, at that point, I’m long Treasuries of all maturities…and high-quality corp bonds, to boot.
All I know is every time I hedge or even try to cheaply insure my metal/mineral positions, I get my head handed to me. After taking enough body blows, I think I’m gonna let the trend be my friend.
I concur with BC that the other side of the commodity trade has its good arguments and interesting points, but sometimes the trade just goes one way, and markets just want to rally.
I think the bear argument starts to be more convincing in the soft commodity arena. Corn, especially, is taking a beat-down right now…and I don’t like the disruptive market effects that the ethanol scam has brought to bear. It’s causing problems that are even beginning to affect farm RE. As the whole ethanol industry is an artifice and a government-backed racket, these developments are especially troubling and merit close monitoring.
Clinton Wants Stricter Loan Standards
Sen. Hillary Rodham Clinton said Saturday she favors stricter home loan standards, clearer mortgage documents and better counseling for borrowers to stave off delinquencies and foreclosures.
Where were these ‘senators’ 2-3 years ago when the real problems were starting?
I’m sick of politicians voicing their opinions after the fact. If they were smart, they would have said something years ago. Now it’s all about getting the popular vote.
-R
Would anyone be able to find the address for MLS#: 2282800 in the Bloomingdale borough? I would appreciate it very much. Thanks
http://www.reuters.com/article/reutersEdge/idUSN2738006320070330?pageNumber=1
“Subprime mortgage scare spurs even fancier CDOs”
Zhang Fei # 348 (I missed this earlier) –
Just because some highly-credentialed scientists decide to go abroad doesn’t mean that they’ve actually accomplished anything other than accumulate ticket punches.
The scientist couple moved to singapore ONLY because there were greater research opportunities there than here. Neal Copeland is my wife’s Ph.D advisor’s advisor so we know this information first-hand.
Most (genetic) research is conducted in Academia, not private companies. When a scientist discovers something and he is employed by a company, the company gets to keep and use the discovery and the scientist gets only partial (if any) credit. One reason, why passionate scientists opt to work in the Academic field.
The current stem-cell funding cap by the govt strictly limits NIH funding – which is the principal funding body for academic research.
jb – i’m in mod
Time for predictions –
If mortgage rates remain the same, prices will fall another 20%.
This according to Bill Gross at PIMCO:
http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2007/IO+April+2007.htm
Rent (371)-
The oracle has spoken. Thanks for the link.
Another item to cc to my listing clients.
I’m new to this thread, and usually only have time to read, learn but not post.
I currently rent in NYC, and am looking to buy our first house, not sure exactly where yet, but affordability of course, is the main factor.
Thanks to all of you for continuing to put the info out there!
Here’s an interesting link, especially the part about seeing your document 24 hours before closing a home loan…
“Industry executives said borrowers should demand to see the final loan documents, known as the HUD-1 statement, 24 hours before the closing, to avoid any surprise costs or terms.
Mr. Moskowitz said borrowers should also ask the lender to connect them with three customers in similar situations. “A reputable company will have no problems with that,” he said.”
http://homefinance.nytimes.com/nyt/article/mortgage-column-by-bob-tedeschi/2007.03.30.01mort
Clot,
After watching Fla&Ucla, I may gravitate to your camp [Koby].
Jimmy Carter, Yikes.
On November 4, 1979, Iranian students stormed the U.S. Embassy in Tehran, seizing the staff. They demanded the extradition of the deposed Shah of Iran from the United States, where he was receiving cancer treatment. Iran’s revolutionary government, headed by the Ayatollah Ruhollah Khomeini, a conservative Muslim leader, supported the students, calling the embassy “a den of spies.”
Female and African-American hostages were released within the first month, and one other hostage was released months later, due to illness. The remaining 52 were held hostage for 444 days. They were finally released on January 20, 1981, the day Jimmy Carter’s successor, Ronald Reagan, was inaugurated
Rent,
Your buddy;
“Of course, the ultimate bag holders will be American taxpayers. As the crisis widens, politicians will inevitably seek to bail out everyone in danger of losing money on real estate purchased in the boom years. This will result in huge run-ups of the Federal deficit, which will be financed by inflationary monetary and fiscal policies. As a result, the biggest losses could be reserved for savers, retirees, investors, or anyone left holding dollar-denominated financial assets when the music finally stops playing.
http://www.financialsense.com/editorials/droke/2007/0331.html
“We run big trade deficits not because the American consumer has a voracious appetite, but because Europeans have bigger trade barriers, and Asian countries have major trade barriers dwarfing those of the Europeans.”
Zhang,
Trade barriers?? Steel.
Ask our friendly Canucks about lumber.
Oh, by the way, who garners more subsidies than the US farmer.
Zhang,
Trade war;
Suppose all countries bastardize their own currencies in an all world trade war? Let’s say coordinated intervention will be akin to a dp in the 80’s.
Who is the winner?
# BC Bob Says:
April 1st, 2007 at 1:05 am
Zhang,
Trade war;
Suppose all countries bastardize their own currencies in an all world trade war? Let’s say coordinated intervention will be akin to a dp in the 80’s.
Who is the winner?
goverments – debitors: as they get to pay their obligations in devalued currency.
Looses: people who draw a fixed pension – never in the history fixed pensiond were fairly indexed for inflation.
Speaking of million dollar foreclosures:
http://newjersey.craigslist.org/rfs/302454061.html
SAS: The scientist couple moved to singapore ONLY because there were greater research opportunities there than here. Neal Copeland is my wife’s Ph.D advisor’s advisor so we know this information first-hand.
Most (genetic) research is conducted in Academia, not private companies. When a scientist discovers something and he is employed by a company, the company gets to keep and use the discovery and the scientist gets only partial (if any) credit. One reason, why passionate scientists opt to work in the Academic field.
The current stem-cell funding cap by the govt strictly limits NIH funding – which is the principal funding body for academic research.
That’s just another way of saying that they moved to Singapore because that’s where the money was. I understand what they said, but the question is whether they took a major pay raise, as I expect? We all understand why some people don’t like the private sector – it is extremely results-oriented. That is to say that researchers who don’t produce testable product get to work somewhere else, no matter how many PhD’s from how many brand name universities they have. I fully understand why they prefer to coast on the Singapore government’s dime, but it’s not equally clear to me why we should be worried about losing people who don’t have any confidence that their work will produce marketable results. Are the people at American medical product companies asleep at the switch, that they won’t compete with the government of Singapore for what it considers hot prospects?
Or could it simply be that American medical product companies, which collectively have research budgets greater* than Singapore’s entire government budget** ($20B) don’t really think these particular people are worth the money that Singapore wants to pay them?
* Amgen’s alone is $3.5B per year.
** Singapore spends $4B on education every year. This includes elementary, secondary and tertiary (i.e. college) education.
bcb: Zhang,
Trade barriers?? Steel.
Ask our friendly Canucks about lumber.
Oh, by the way, who garners more subsidies than the US farmer.
The steel tariffs are gone. The Chinese still have their 30-40% across the board tariffs. Until a few days ago, Japan had an across the board ban on American beef, supposedly because of CJD (mad cow disease fears) – odd, because we have had a handful of cases over the past decade since it became an issue, whereas Japan has had more cases than the US. But this Japanese ban was the latest in the postwar series of non-tariff barriers on beef and other agricultural products. The lifting of the ban was accompanied an expensive regimen of inspection steps. China and South Korea have similar bans, the latest in a long series of non-tariff measures against American agricultural products.
As to lumber, the basic complaint was that Canadian producers were getting a subsidy because they were logging on federal land, allowing them to underprice American producers, who got their materials from private land. An arbitration panel composed of Canadian and American ruled against the US, causing the reduction of the tariffs to a nominal percentage. So these tariffs are effectively gone. Do you think the rest of the world has lifted its trade barriers?
As to subsidies, the Euros are the kings of agricultural subsidies and non-tariff barriers (i.e. bans on imports). This is why food prices are significantly higher there than in the rest of the world.
But the ultimate test of a country’s commitment to free trade is the domestic cost of products that are made abroad. Imported cars (Japanese, American, Korean) cost 40% more in China than they do in the US. Canadians routinely cross the border to buy cheaper US goods. For a UK consumer, a routine consumables shopping trip at K Mart (to buy products that mostly cost double in the UK) will pay for the round-trip cost of a plane fare to the US. These are American products that cost less in Hong Kong, twelve time zones away from the US, than they do in the UK, which is six time zones away. Most products are simply cheaper in the US than anywhere else in the world. This includes Korean-made cars that are shipped to China (right next door) vs the same cars shipped to the US.
What are we discussing again? Why the US isn’t the big, bad wolf or why every other finger-pointing country is blowing smoke?
Can’t it be both (A), one(B1, B2) or none of the two options(C)?
In any case, the publicity of antagonism serves the same master. Run through the logic. For example, Wolf(A) plus others NOT blowing smoke (B2) is the worse for the US. This end belief on the part of the world benefits a specific process/function. B1(non-wolf US) plus smoke blowing others…same process/function. A monetary process.
Zhang,
1. I think you missed SAS’s point by a mile.
2. I don’t think you understand Academia – do you understand what basic science does?
Sync (324)-
Hate to say it, but GSMLS is going to give you bad numbers for Middlesex Co. Middlesex MLS is the dominant organization there. Many agents will post in Middlesex MLS and not in GSMLS.
Reposting due to non reply.
What is a typical re-financing penalty for a 3/27 ARM loan? E.g. a person with good credit score (>750) takes 400K ARM loan, the rate of which would reset after 3 years.
After 3 years, if he refinances, what would be the penalty that his mortgage co. would typically charge him??
BC (375)-
Mavs v Suns today…if it’s half the game the last one was (2 OTs, up-and-down, great players hitting big shot after big shot), it will be a classic. The last match-up was the best basketball game I’ve seen in 3-4 years; Suns-Nets earlier this season was no slouch either.
Those two games yesterday were just brutal. That Hibbert can be called an “accomplished” big man is proof positive that all the truly good ones are in the NBA already.
att #387
Pre-payment penalties vary, but I’ve seen them as high as $10K and more.
This should have been explained to the borrower at closing, and is probably spelled out in the fine print somewhere. But you can bet that most borrowers just signed where told to and never read what they were putting their signature on at the closing table.
That’s why in a “bail-out” of these poor unfortunate borrowers (if it comes to pass) it will be very difficult to separate the borrowers who were taken advantage of, from those that just what the gummint to wipe their bloody nose and say it’s all better.
Every lender better be able to produce a signed disclosure document, at the very least.
att #387-
Pre-pay penalties vary, but I’ve seen them as high as $10K and more.
This should have been spelled out in the fine print at closing. But most borrowers just signed where they were told to, happy to get into their dream house.
That’s why if a “bail-out” comes to pass, it will be difficult to distinguish those that were truly taken advantage of by predatory lenders. Which borrowers just want the gummint to wipe their bloody nose and say everything is going to be OK.
ID: Zhang,
1. I think you missed SAS’s point by a mile.
2. I don’t think you understand Academia – do you understand what basic science does?
Absolutely. Basic science is something that the private sector funds. Except in areas where the federal government provides a subsidy by funding it. Why does the federal government fund basic science? Because the basic idea is that government bureaucrats composed of ex-academics (who used to live off government grants) have a better idea of useful areas of research than the private sector, which judges usefulness by the possibility of marketable products from the research.
Massive and indiscriminate government funding of basic research is how the Soviet Union came up with the kinds of technologies that overtook the West and resulted in Soviet victory during the Cold War. Large scale funding of basic research at IBM is why IBM is the market leader in every computer field including networking, microprocessors, operating system and application software, graphics processors and both dynamic and static memory architectures. (Just kidding – the funding part is true, but the results have been underwhelming, to say the least).
Sorry about the double post above…..I hit submit and didn’t see the post, then tried to re-create it from memory (not an easy thing on Sunday morning). The first reply probably makes the point better.
In thinking about this “bail-out” the politians are conjuring up (during an election cycle)….what form would such a bail-out take?
All exotic mortgages are magically converted to 30 yr fixed at 5% or less????
Any homeowner faced with losing their house gets squatter’s rights????
Mortgage Brokers get to keep all money paid to them in the form of bonuses and “points on the back-end” and other fine-print foolishness???
Just asking……
Great Article (371) from Bill Gross RentLord
Unfortunately despite the ability of some to understand the broad overview of this crisis when left to politicians and their appointees, such as Bernanke, I have to think they will inflate their way out of this crisis and the pain will be shared by all not those who made the poor decisions.
Clot,
Your forgot number 19 in your post 364
.19 Obsessivly check Njrereport.
Now that’s a good day (-:
KL
But most borrowers just signed where they were told to, happy to get into their dream house.
Fiddy,
I made this similar point on other topic, just this morning.
KL
BC-
What’s your take on Gross’ new (really not so new) missive (link at #371)?
KL (391)-
You and I are the only RE people here. I have really good agents, and I can’t even interest them in lurking here…not for ten minutes!
I guess I should be happy. My guys are smart, razor-sharp and completely programmed to sell. I think they fear the bearishness will get into their heads if they pay too much attention to sites like this.
Besides, I just gave out the Glengarry leads (LOL!!!).
Lots of new inventory seems to have hit the market in the past 5-10 days (at least in town(s) I am observing) while the old ones languish.
One more interesting fact that I observerd was that many of them are pretty old (1960s) but are priced at almost the same level as the newly constructed. I think these 1960s guys are going to be in (finding buyer) for the laung haul :). Probably they were bitten by the “entitilement” bug.
Anyone else seeing the same?
Zhang,
1. Ref. SAS, look at the reference of Bible.
2. You really don’t have a clue regarding Basic Science, do you?
IBM with networking? hahaha
OS?
I think you should try becoming a stand-up comic. :)
#397,
Inventory has been rising 1-2% per week or 13.5% since the beginning of the year.
#380,
These people are full of it, similar houses in Closter are selling for $1.5M. Foreclosure or not the house is worth the same.
Frank,
do you have the address of that pre-foreclosed house? also do you know it’s NJMLS number?
#387,
Typical prepayment penalty is 6 months of interest on 80% of outstanding balance.
Fiddy Cents on the Dollar,
What would you call yourself if you’re a second lien mortgage, two cents? That’s more in line with the market.
#401,
I don’t, but the address is around 211 Alpine Dr Closter NJ
Frank-
When I came up with that handle I was thinking more about what I was going to pay for a vacation home…..you know, those second homes that all the YUPs bought with no idea how to cover the nut when rates reset.
Cash will talk loudest when they need to liquidate.
Frank,
Would you be able to find the address for MLS#: 2282800 in the Bloomingdale borough? I would appreciate.
Thanks
Clot [395],
Didn’t read the link. I’m on my way to get my *ss kicked by 20 somethings on the HW, will read later.
On another note, I did read a story in the Bergen Record regarding Sen. Hank McNamara, who is retiring in 2008.
Now I knew the state was paying the majority of the cost for the Newark public schools. However, I did not realize it was 90%. The result; 75 Newark school administrators, including the head of cafeteria services earn over 100K per year. Why the hell am I wasting my time playing around with option spreads?
I hope this does not throw off my shot.
#390 Zhang,
Like iDavid said, you have no understanding of the dynamics behind research in Science.
The private sector, especially public companies have a short term, quarterly horizon which is detrimental to long-term research goals.
If it wasn’t for govt funding of research for ARPANET (the mother of internet) you and I wouldn’t be here on this blog.
Anyways, it looks like you were sent on a special mission by Dick Cheney to spread his good-will to the common American. I bet you endorse Lynnne Cheney’s book “A family adventure across america” (and how halliburton benefits).
Does anyone have suggestions on secure places to hold cash while this unfolds? I’m considering moving cash out of online banking institutions (etrade, ingdirect, etc.) and into T-bills. Thanks.
Judicious (409)-
Are you 80 years old?
Clotpoll Says:
April 1st, 2007 at 11:30 am
KL (391)-
Besides, I just gave out the Glengarry leads (LOL!!!).
Second place is a set of steak knives……third place?
Since some of you guys know closter, there was this REALLY big house underconstruction last summer on one of the main roads.
Looked like a castle, two big round turrets in the front on either side of the door. Lots of pretty wood. MASSIVELY huge.
Anyidea what it sold for?
Clotpoll:
No, why? Do you think the orange-bouncing-ball is a safer place than US Treasury securities? If so, please explain.
I hate to sound like a pain, but what is the definition of safe?
My definition is “in the event that you will need to tap the said sum for a defined purpose, that sum will maintain its current purchasing power in the future environment.”
Everyone has unique circumstances, so there is not a single answer to the question. However, if the situation is relatively straightforward, you probably do not want to kill a fly with a sledgehammer.
grim: post disappeared into the ether at 3:06PM
moderated now….grim what kind of bizzaro algorythm to you have for content check…..you are a fruitcake.
Out.. There is a blacklist of about 150 or so words that will push a comment into moderation.
jb
#413, R. Patrick,
Are you talking about a house on Durie right across from the one on sale which went down from $3.4M to $2.5M?
That house belongs to Architect Gary. That’s his house. He is a creative and excellent architect though he has no clue about economy or real estate. I told him that he would never be able to sell his house.
Jimmy B for Congress next year..
Jimmy, the Elvis Costello, B for Senate a decade from now..
#316 ADA says:
Sorry, but no.
My prediction is that my checkbook will come out when the numbers make sense. Paying 100% more than the current owner paid 4 years ago may make sense to you, but certainly not to me.
Until then, thanks to the bank for paying my rent, food, and utilities (and then some) last month. At this rate, being “priced out forever” is looking pretty good.
#409 RentLord,
1. I enjoy what Zhang writes about China as I am learning something. But beyond that, it’s funny to see infantile effort speaking on subjects one knows nothing about. Everyone thinks he is comedian. :)
2. As for Cheney et. al. where do I start? Poor Shrub, blinded by Cheney et al. Leaving the legacy as the worst Commander in Chief of our history.
Realtor™ Clot writes:
New definition of bagholder = anyone who would pay $30K more than a buyer is willing to accept (i.e., makes a full price offer so as not to “offend” the seller).
Unrealtor,
paying 100% more than the curent owner paid 4 years ago? that’s 2003. The price was already up. Do you mean, 7 or 8 years ago? And I think the price is down about 10% from the peak price of summer 2005. I think it will go down another 15-18%.
bank paying your rent, food and utilities? how did you manage that? do you mean the owner of current dwelling subsidizing your rent?
InvestorDavid writes:
It’s amazing that “Shrub” is so all-powerful, that he could control the entire Clinton administration while serving as the Governor of Texas:
http://freedomagenda.com/iraq/wmd_quotes.html
And then, years later, “Shrub” then controlled the minds of the House and Senate, forcing them to vote the way he wanted.
It could be that “Shrub” also faked the moon landings.
Perhaps “Shrub” should, as FDR did, round up muslims and put them into camps (Executive Order 9066) and then drop nuclear bombs on the cities of our enemies.
Judicious,
safe place? I highly recommdn BC Bob’s tractor trailer which will be parked in my drive way. hahaha.. just kidding. :)
bank paying your rent, food and utilities? how did you manage that?
Interest income from money not spent on an over-priced crapbox.
“paying 100% more than the curent owner paid 4 years ago? that’s 2003.
A colleague paid double for a house in 2006, than the previous owner paid in 2003.
I’ll let you work out the mathematical semantics.
#428: your “colleague” needs his head examined.
“#428: your “colleague” needs his head examined.
Indeed you are correct. But he’s just another Bagholder caught up in the mania, like millions of others.
Keeps telling me about “equity,” and I just nod politely.
he bought in 2006??? that’s when market already turned its direction – downward.
I bet he is referring to “Negative Equity”. :)
David[426],
Re: Risk,
As we are aware pm’s are very volatile and are not suitable for an investor who can not tolerate risk. That said, I can guarantee that I can show my position [gold] to any risk manager on the street and compare it to anybody’s unhedged stock portfolio and the risk manager will say that they are carrying more inherent risk. In my approach, the amount of risk is of no consequence. It all comes down to how you manage the position/risk. The mistake that many make is they let the position manage them. If someone else decides to be naked long/short [any asset class], that’s their prerogative.
Judicious (414)-
Just having fun with you. Treasuries are the ne plus ultra of safety plays, but following up on ChiFi’s (#415) comment, we’re not talking about complete financial catastrophes and runs on banks- a la 1929- here.
Perhaps at your age (assuming you’re not 80), your risk tolerance/profile might allow for something a bit more adventuresome.
All disclaimers.
BC-
This could’ve been Univ. of Memphis’ starting five three years ago. All these players were there, or signed to a letter of intent:
1. DaJuan Wagner
2. Amare Stoudamire
3. Qyntel “Pit Bull” Woods
4. Darius Washington
5. Earl Barron
All five are currently in the NBA.
BC (432)-
I think the concepts of hedging, risk management, etc are ideas that even the Street is having a hard time digesting. Witness the latest mini-correction we got a month ago. A percentage drop that was truly inconsequential triggered far too much angst- and too many margin calls- that’s appropriate for a market driven by “professionals”.
The proliferation of Cramer, “Million Dollar Challenges” and other nonsense that equals nothing less than the modern equivalent of tout sheets has given us markets full of naked shorts (managers and retail investors alike).
Ratcheting down risk in a portfolio via trailing puts, covered calls or utilization of other forms of insurance can’t be explained in a five-minute segment on CNBC. However, they are vital tools in the management of any portfolio of substance.
(436)-
Naked shorts AND longs.
Rich in NJ,
Today, I drove by Homans Ave. The 5 almost identical houses built at the end of Homans ave. were 500,510,520,530,540.
520 $1,650,000 1/06
530 $1,500,000 3/06
540 $1,419,000 4/06
510 $1,200,000 5/06
500 $1,320,000 11/06
How would you feel if you were the guy who bought 520? well, I know the guy pretty well — greed got him nowhere (he tried to flip his previous house unsuccessfully and he bought 520 to flip it) — actually, he went negative big time.
Greed, greed, greed
“Commodities Trounce Stocks, Bonds on Oil, Copper, Soy Revival”
“When we look at the supply and demand” of most commodities, there’s a lot “to be very bullish about,” said Larry Kantor, co-head of research in New York at Barclays Capital Inc., which told customers last week to buy tin, gold and corn. China has “a voracious demand for raw materials.”
“The bears, led by Morgan Stanley, aren’t impressed. The firm’s chief global economist, Stephen Roach in New York, and ABN metals analyst Nick Moore in London anticipate slowdowns in the U.S. economy later this year will damage commodity demand and vindicate their forecasts. Moore in January said declining prices then marked the “definitive end” of the commodity price boom.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8Rn5x4D23LA&refer=home
Bob,
Gold is always nice way to hedge against inflation. I don’t buy gold stocks. I prefer physical gold.
Stocks can go worthless but gold? never. It always retains value.
investorDavid-
That might be it, I had a patient that was a frequent flyer and we drove by it like 3-4 times a week.
It really looks like the entrance to a castle with the huge round front turrets on either side of the doorway.
It’s totally out of scale for the lot, and comes right down to the road. They had the plans posted on some plywood outside.
But it’s really cool looking. I figure if I ever have 2.5 million dollars to spend on a house I want it to look like that with more stained glass and some carving on all that woodwork or something out of Rivendell from LOR instead of a generic mcmansion in East Palisades Gardens ( formerly known as Englewood cliffs near the bridge )
R Patrick,
1. 2.5M is house is across the street.
2.The last time I talked to Gary, he thought his house was worth around $6M. I asked him what he was on. :)
3. That house created a lot of noise – destroyed the “historical” building to build that one.
4. yes, that’s Gary’s house. Gary Segal.
5. It has the “Roman garden” architecture — “U” shape house — garden in the middle of U.
Thanks Clotpoll and Chi-Fi. I should probably be doing more research on my own rather than posting this question in a RE blog. My wife and I are currently renting and waiting for prices to settle. I’ll throw this one out there for the heck of it – if you had, let’s say, $500K set aside for a down payment but weren’t planning on buying for a few years where would you invest it?
That’s cool, does it store rainwater like the Roman ones did?
Roman townhouses had almost no windows on the street for security purposes and then all the windows faced the courtyard. The cloisters is like that as well.
My patient said there was a very old/nice house that was there before it was torn down.
I like it because it has feeling. There is this area of mega mcmansions I think south of there. I was only in there once. All same builder all huge.
And the house was monstrous, like soemthing off of MTV cribs. But it had no feeling like a catering hall. Like a museum.
My friends house growing up was someones life project. They were short like 5’2″ and the house was on 1-2 acers of heavy woods. The sink and the door knobs were 2-4 inches lower. The floor was slate and the walls were hand done paneling. It was only a 1200 square foot house but it gave off an energy. The dining room had a rounded turret like the from of that building and then hand done stained glass in like 12 narrow windows. The Bathroom was so 1940-1950’s and had a hand made light/vent in the middle of the shower ceiling and the tiles sloped up.
Anyway who knows if it’s still there, the land was worth a fortune. But it felt like something special. We don’t build like that anymore.
I call troll on Judicious.
Judicious (443)-
If, by chance, you really have 500K sitting in a checking account, and you don’t presently own RE, I’d say that you need to be speaking to someone other than me.
I’m no troll…just someone too wise to get caught up in all the competition to buy in ’05 after getting married. You’re probably right Clot, I should be speaking to someone other than you.
J: Drive down the GSP. Make a left at mile post 38. Drive until you see many blinding lights. Park car. Find roulette table. Before betting, ask pit boss to make an exception. If you have EZ-Pass, then pull out $5 for the parking lot, and bet $499,995 on RED. If you do not have EZ-Pass, pull extra $5 out for tolls to get back to NNJ.
ChiFi (448)-
That’s the prudent, timely investment advice we’ve come to depend on from you.
Happy April Fool’s!
GSP? Is that the Parkway? Hmmm…it would be a long drive considering I live in Redondo Beach, CA. I may consider moving to NJ, but everything I read about it is so negative.
“If, by chance, you really have 500K sitting in a checking account, and you don’t presently own RE, I’d say that you need to be speaking to someone other than me.”
Clotpoll: Why would someone invest cash in an asset class poised for what looks to be a 20-30% correction off the ’05 high? Please advise…looking forward to it.
“Crops — and our wallets – may get stung by bee problems
$14 billion worth of agricultural products at risk from mysterious bee disease”
http://tinyurl.com/289mdu
SAS
Judicious (451)-
Depends on your timeframe for holding the property. If you’re looking to flip, this isn’t the best time to own a home. However, if your timeframe for ownership is 5 years- and out- you’ll likely ride out the current unpleasantness and be fine on the other end. I’m not at all an advocate of looking at a primary residence as a pure investment vehicle; there is an investment element, but there’s also the comfort and satisfaction of ownership. If your current position is that of having half a mil sitting in the bank, I’d think one of the things you might want to do is quit making a landlord rich. I fully understand why some of the wealthier posters here cashed out a butt-load of equity in ’05-’06 and went into rentals; the amount of equity they had accrued was beyond their wildest dreams and was significant enough to fuel other investments…or create an instant reservoir of massive savings. This, though, is not your situation. Your 500K does not represent the end result of money put to work. One might even say that if your 500K is in traditional savings-type vehicles, it is not keeping up with the real rate of inflation.
Finally, if nothing else, we’re on the cusp of seeing a goodly number of income properties that should offer the potential for nice cash flows come on market.
And if that doesn’t float your boat, check some of the better-performing REITs (real estate investment trusts) out there. Commercial, apartment, mall and hotel REITs are on a nice run, and the top issues sport very nice, reliable dividends. My favorites would be: BXP, VNO, HST, HOT, CT and GGP (although not limited to those).
All disclaimers.
However, if your timeframe for ownership is 5 years- and out- you’ll likely ride out the current unpleasantness and be fine on the other end.
Clot,
What do you base that 5-year suggestion on?
jb
5 Years in a normal market with normal appreciation is about the cutoff for a buy/rent decision where buying makes sense.
You have to figure, even with normal appreciation, once you sink closing costs, the opportunity cost associated with a down payment, the fact that you pay down little equity in the first few years of a mortgage, and the 6% cut the realtor will take once you sell, it takes about 5 years for buying to make sense.
If we see prices fall by 5% per year for the next 3-4 years, it could take 15 years before buying at today’s prices pays off.
I have a calculator that looks at the NPV of renting verus buying under various scenarios.
Does anyone have any recent sales #’s for nutley? My wife and I are finally looking for our first home and are indecisive whether this is the right time to buy. We found a cheap fixer upper in a great location but still don’t know whether we want to pull the trigger. Some more info: The house we are looking at is ~425k and the surrounding houses were all assessed late last year in the range of 600k-1mil.