Housing recovery postponed until 2009

From the New York Times:

Top Lender Sees Mortgage Woes for ‘Good’ Risks

Countrywide Financial, the nation’s largest mortgage lender, said yesterday that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades.

The news from Countrywide, widely seen as a bellwether for the mortgage market, initiated a sell-off in the stock market, which is at its most volatile in more than a year. The Standard & Poor’s 500-stock index fell 30.53 points, or 2 percent, to 1,511.04, its biggest one-day drop in nearly five months. The dollar dropped to a new low against the euro, edging closer to $1.40 to 1 euro. Stocks opened sharply lower in Japan this morning.

The slumping housing market has become the biggest worry for the stock market, which just four days ago set records, because of its potential impact on the broader economy and financial system.

Countrywide’s stark assessment signaled a critical change in the substance and tenor of how housing executives are publicly describing the market. Just a couple of months ago, some executives were predicting a relatively quick recovery and saying that most home loans would be fine with the exception of those made to borrowers with weak credit who stretched too far financially.

Executives at Countrywide had for some time been more skeptical than others but the bluntness of their comments yesterday surprised many on Wall Street. In a conference call with analysts that lasted three hours, Countrywide’s chairman and chief executive, Angelo R. Mozilo, said home prices were falling “almost like never before, with the exception of the Great Depression.”

Nationally, home prices have not fallen in the 35 years or so that the government and private services have tracked them. Some researchers like Robert J. Shiller of Yale have compiled data that goes as far back as 1890 and shows that home prices fell for several years during the 1930s.

Mr. Mozilo said that because of a large number of homes on the market, the housing sector would continue to suffer until sometime in 2008 and not begin recovering until 2009.

“Where you will see prime borrowers have trouble is where they took the riskiest of adjustable-rate mortgages and put nothing down with a first and second combined,” Thomas Lawler, a housing economist, said.

Many of Countrywide’s home equity loans were second mortgages made to people who were financing the full or nearly full cost of their homes. These loans are particularly risky because when house prices are falling and a home is foreclosed and resold, the holder of the first lien is paid off and often there is little left to apply to the second mortgage.

“Countrywide is highlighting what is an industrywide problem,” said Christopher C. Brendler, an analyst with Stifel Nicolaus, an investment firm in St. Louis. A second mortgage “is really an unsecured loan like a credit card.”

This entry was posted in Housing Bubble, National Real Estate. Bookmark the permalink.

264 Responses to Housing recovery postponed until 2009

  1. James Bednar says:

    From Bloomberg:

    California Home-Loan Defaults Rise to a Decade High

    California mortgage defaults rose to the highest level in a decade in the second quarter as falling home sales and higher interest rates battered the housing market.

    Homeowners received 53,943 default notices, more than double the 20,909 filed a year ago, DataQuick Information Systems, a La Jolla, California-based provider of real estate data, said today in a statement. Last quarter’s default level was the highest since the fourth quarter of 1996, when 54,045 notices were recorded in California.

    Californians are struggling to repay home loans as mortgage rates jumped to an 11-month high and tighter lending standards limited their ability to refinance. Southern California home sales last month slumped 36 percent to the lowest for a June in 14 years and San Francisco Bay Area sales fell 26 percent to a 12-year low, mirroring the national slump, DataQuick said last week.

    Most of the loans that went into default in the second quarter were originated between July 2005 and August 2006. Loan originations peaked in August 2005. At the top of the market, when price appreciation rates topped 10 percent, lenders let many households stretch their finances beyond what they could afford, DataQuick said. Those borrowers are now at risk of default.

    “We’re going through a lot of that activity,” DataQuick analyst John Karevoll said in an interview. “There’s more to come.”

  2. rhymingrealtor says:

    JB/Rich,
    Just ordered thru your anti-cost website I try to look on it often, it happens I have been looking for a higher powered digital – I’ve been using fuji since my first, Had a cannon for about a week, returned for another fuji, just got the 9MP for what seems like a great deal, the 6MP I was looking at was around the same price.
    Thanks
    KL

  3. lisoosh says:

    “In a conference call with analysts that lasted three hours, Countrywide’s chairman and chief executive, Angelo R. Mozilo, said home prices were falling “almost like never before, with the exception of the Great Depression.””

    Think quite a few bloggers need to take a bow for having been saying this was a distinct possibility for 2 years now.

  4. dreamtheaterr says:

    We’re only into the second half of 2007 and the ‘recovery’ has already been postponed into 2009. Me thinks the collapse has not started as yet, yet they are talking of recovery. The punch bowl is empty and the hang over is only getting started. Get wholesale quantity of Tylenol and Pampers ready. The enormity of the massive downturn unfolding has not registered in people as yet. Expect plenty of fraud to be exposed and scacepegoats to be made off people as this circus unfolds.

    Time to write my piddly rent check for August….. kidding about the piddly bit :)

  5. looking in ny says:

    This caught my eye on the second page of this story about Countrywide:

    ‘Another problem is how Countrywide pays Mr. Mozilo, 68, and one of the company’s two founders. Though he is considered a pioneer in the mortgage business, he has become a target for shareholder activists as more attention has focused on executive pay in general and on the lucrative rewards reaped by mortgage executives in particular during the housing boom.

    On the conference call yesterday, one investor asked Mr. Mozilo how he could justify selling stock while Countrywide was buying shares, which have fallen.’

    This from the AFSCME site:
    ‘In our view, senior executive compensation at Countrywide has been excessive in recent years. In 2004, CEO Angelo Mozilo received a salary of $2,466,667—well over the threshold for deductibility of non-performance-related compensation—and an annual bonus of $17,273,290. His bonus for 2003 was even larger, coming in at $19,890,455. In each of 2002, 2003 and 2004, Mr. Mozilo was awarded at least 1.4 million stock options; the options he received in 2004 had a present value on the grant date of $29,806,000. ‘

    http://www.afscme.org/issues/4978.cfm

    and a funny take about Mozilo here (ya gotta check out his photo!):

    ‘Mozilo is laughing all the way to the bank, but we all know you can’t take your money to jail… Good luck Orange Man with the gotta-be-coming-soon SEC investigation.’

    http://housingpanic.blogspot.com/

  6. HOUSE OF CARDS says:

    read: http://housingpanic.blogspot.com/2007/07/flash-and-today-for-all-world-to-see.html

    FLASH: And today, for all the world to see (including the SEC), we see why Countrywide Mortgage’s Angelo Mozilo was dumping shares like rotten oranges

  7. jmacdaddio says:

    I love how the pundits on bubblevision and the other economy cheerleading networks all just assume that a recovery is coming.

    Dumb question – does every real estate listing make it to the MLS? I’ve got my attentions on a couple of condo buildings and I’m concerned that if I rely on checking realtor.com, I’ll miss out.

  8. James Bednar says:

    Existing home sales due out at 10am this morning.

    jb

  9. pesche22 says:

    So when is NJ going to do the ID cards
    for the illegals?

    They need to get in on the action.

    We need to have a program so they can
    become homeowners to build a better NJ.

  10. James Bednar says:

    From the Philly Inquirer:

    Radian profit plummets 86%

    Radian Group Inc. said yesterday that its second-quarter net income fell 86 percent, as the Philadelphia mortgage insurer paid a steep price for a rise in defaults.
    “Our second-quarter results clearly illustrate the credit challenges in today’s mortgage market,” particularly in California and Florida, said S.A. Ibrahim, Radian’s chief executive officer.

    Radian’s net income plummeted to $21.1 million, or 26 cents a share, in the quarter ended June 30, compared with $148.1 million, or $1.79 a share in the same period a year earlier. Revenue fell 20.2 percent, to $243.2 million from $304.6 million.

    At Radian, mortgage troubles forced a $173.96 million provision for loan losses in the second quarter, about double the $84.86 million set aside a year earlier.

    Another big factor was a steep decline in net income from a partly owned company that issues, services and invests in risky residential mortgage assets. Income from Credit-Based Asset Servicing & Securitization L.L.C. fell to $23.21 million from $61.4 million.

  11. thatBIGwindow says:

    Angelo is my brother-in-law’s uncle. lol. He was even at my sister’s wedding.

  12. James Bednar says:

    From Marketwatch:

    Weekly mortgage applications down 3.6%

    The volume of applications for both mortgages to purchase homes and to refinance existing loans decreased last week, as did the interest rates on fixed-rate mortgages, the Mortgage Bankers Association said Wednesday.

    Refinancing applications dropped a seasonally adjusted 1.4% for the week ended July 20 compared with the prior week, while purchase applications decreased by 5.0%, according to the MBA’s latest survey.

    Total mortgage application volume fell a seasonally adjusted 3.6%, compared with the week before, but volume was up 13.1% compared with the same week in 2006. The four-week moving average for all loans was down a seasonally adjusted 0.4%, according to the survey.

  13. JLB says:

    Newsflash to all including our hardworking moderator: One is not pushing real estate simply because they aren’t sure there will be a steep decline tomorrow. Read my posts and you will say I have said I don’t know where the market is headed or if it is the time to buy for an investment. I do believe if you need to buy you should consider using a lowball offer (wow, that is so bullish of me). A suggestion for everyone would be to fully read posts so you have an accurate depiction of what is being expressed before you respond to thin air. This response is based on comments in yesterday’s thread regarding my pushing to buy real estate. It is great to exchange ideas and opinions, it is a great way to learn and grow. Sometimes it is even better when you don’t agree as you can practice “moderating” your emotions. Have a great trip to Europe JB!

  14. thatBIGwindow says:

    Many sellers are reluctant to accept a low ball. Before we bought our current home, we saw a bigger home in Saddle Brook which was on the market for over a year and was an estate. The heirs were initially asking in the 425 range, but dropped their price to 385k. We offered 350k. The realtor called and explained that the “Sellers were insulted by your low ball offer”

    I refused to go any higher. They ended up selling for asking by a definate subprime borrower..who, as I suspected 100% financing IO ARM. Now, if that was today, that house may have been mine. Not for the better, I am in a better town now anyway.

  15. James Bednar says:

    From Bloomberg:

    Ambac Second-Quarter Net Falls on Subprime Bond Loss

    Ambac Financial Group Inc., the world’s second-largest bond insurer, said second-quarter profit dropped 27 percent after a slump in the value of subprime mortgage securities.

    Net income declined to $173 million, or $1.67 a share, from $238.6 million, or $2.22, a year earlier, the New York-based company said today in a statement. Unrealized mark-to-market losses on collateralized debt obligations containing subprime mortgage bonds cost $56.9 million, or 36 cents a share, Ambac said.

    Ambac’s slide added to evidence that insurers of bonds are being hurt by escalating defaults on mortgages to the riskiest of borrowers. Shares of Ambac had the biggest drop in two years yesterday after rival Security Capital Assurance Ltd. announced a 29 percent drop in quarterly profit on losses from derivative investments. As well as losses on their holdings, insurers could be forced to cover payments on securities they guaranteed.

  16. James Bednar says:

    From the Staten Island Advance:

    15 percent of callers to foreclosure helpline were from the Island

    More than 1,000 people called the city comptroller’s three-month-old Foreclosure Prevention Helpline, with 175 of those phone calls, or 15 percent, from distressed Staten Island homeowners.

    Comptroller William Thompson was expected to announce today the borough breakdown of callers, people often struggling to pay high-interest, subprime loans. Subprime loans are fueling a surge in foreclosures on a national and local level.

    So far, operators have fielded at total of 1,150 calls, with 45 percent (518 queries) from Queens; 32 percent (366 calls) from Brooklyn; 7 percent (80 calls) from the Bronx, and 1 percent from Manhattan (11 calls).

    According to the Neighborhood Economic Development Advocacy Project, a Manhattan-based nonprofit, there were 986 foreclosure actions filed on Staten Island last year. The nonprofit estimates that number could climb to 1,600 by the end of this year because of adjustable rate mortgages.

  17. James Bednar says:

    From Bloomberg:

    Nomura Profit Soars on Trading, Asset Management Fees

    Nomura reduced its U.S. subprime loan portfolio to 71.1 billion yen at the end of June from 210.2 billion yen on March 31. The company buys subprime loans, packages them into securities and sells them. Demand from investors declined as loan defaults reached a 10-year high in the U.S.

    “We took a hit from the subprime loan business,” Chief Financial Officer Masafumi Nakada said at a press conference in Tokyo. “We kept reducing our position rapidly, but the market’s deterioration was faster.”

    Nomura will carry out a “drastic overhaul” in the U.S., Chief Executive Officer Nobuyuki Koga said in a statement today. The company cut 105 jobs during the past quarter.

  18. john says:

    “House sales for spring did not bloom quite as well as expected”

    In Newsday today this is how a RE press release mentions that the northshore luxury housing market on Long Island had a 11.3% decline in prices in a single year.

    ON Wall street that would be a very healthy correction. I love how they spin it.

  19. lostinny says:

    RE: 17 SI Foreclosures

    This doesn’t surprise me at all. People are swarming to SI, mostly from Brooklyn, as has been the norm for at least the last 30 years. Prices are shy high in Brooklyn so they look at SI as a deal. However, they don’t realize that they still cannot afford to buy, even at SI pricing.

  20. NJGal says:

    The Today’s Show was all over the Countrywide thing – it was practically their lead story, along with a “how to handle the drop in the price of your house” story. I didn’t watch the whole thing, but they were not just focusing on housing but on the hit the market took when Countrywide made its announcement. Maria Bartiromo was speaking when I left for work.

  21. BC Bob says:

    Seems to be many references made, in the recent past, of the Great D.

    For what it is worth. The word is that “many” hedgies have frozen redemptions. Can’t verify this, just chatter.

  22. chicagofinance says:

    remember….chatter can be chowder…think to last week’s Lehman gossip

  23. James Bednar says:

    From Reuters:

    Mortgage apps hit 5-month low

    Mortgage applications fell for the first time in four weeks, touching a five-month low and largely reflecting a drop in demand for home purchase loans, an industry group said Wednesday.

    The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, widely considered a timely gauge of U.S. home sales, for the week ended July 20 decreased 3.6 percent to 609.0, the lowest level since the week ended Feb. 16 when it stood at 606.6.

    U.S. housing industry indexes in general tend to be volatile, but recent data suggest a delayed recovery for the hard-hit sector.

  24. chicagofinance says:

    hedge unwinds can actually force the market upward depending on circumstances

  25. Frank says:

    “$58 Billion Shortfall for New Jersey Retiree Care”

    Just raise the taxes, the suckers will pay anyway. Keep voting Democratic, you’ll have ID cards for illegals and taxes thru the roof.

  26. BC Bob says:

    “The falling US dollar is lowering the Organisation of the Petroleum Exporting Countries’ purchasing power by up to a third, making the powerful oil cartel more reluctant to increase production and cut prices.”

    “Although oil is trading near last August’s record $78.65 a barrel, Opec calculations show that, when adjusted for the weaker dollar and inflation, an average of the 12 Opec members’ crude oil prices has fallen in the past year.”

    “The adjusted “Opec basket price” averaged only $43.60 a barrel in June compared with $44.30 a barrel in the same month last year, according to the organisation’s latest monthly report.”

    http://www.ft.com/cms/s/743a52a2-3959-11dc-ab48-0000779fd2ac.html

  27. BC Bob says:

    Chi [25],

    Violent swings.

  28. Joe R says:

    Does anyone know where I could find a list of the top performing realtors in NJ? By top performing, I’m not interested in dollar amount, but by sides of transactions – both buy side and sell side.

    Thanks.

  29. commanderbobnj says:

    _________________________________________
    NJGal Says: (#21)
    July 25th, 2007 at 8:32 am
    “..The Today’s Show was all over the Countrywide thing – it was practically their lead story, along with a “how to handle the drop in the price of your house” story. I didn’t watch the whole thing, but they were not just focusing on housing but on the hit the market took when Countrywide made its announcement. Maria Bartiromo was speaking when I left for work..”

    ________Commanderbob Sez:
    I saw that complete clip on the Countrywide news on Channel 4 and the Final comments by Maria about when to buy your ‘dream home’—-Matt was not saying much, he let her do most of the talking—-she said something like “…don’t let the current ‘down’ market influence your decision on buying NOW–If you find what you WANT out there –Do it..” (???)

    What is this woman thinking ?—Does it mean that you should go out NOW and finance a grossly overpriced $750,000 split-level so-called “dream home” and one shouldn’t worry about the REAL potential to drop in value next year to $600,000-or less??

    YEAH, Right-on, Maria !!——-Like a Real Estate “expert” like YOU would personally do such a thing—better watch out– A few more dumb opinions like that and your bosses might send you back to squawking about sub-penny stocks in the ‘pits’ over at CNBC..

    BOB

  30. Richie says:

    JB/Rich,
    Just ordered thru your anti-cost website I try to look on it often, it happens I have been looking for a higher powered digital – I’ve been using fuji since my first, Had a cannon for about a week, returned for another fuji, just got the 9MP for what seems like a great deal, the 6MP I was looking at was around the same price.
    Thanks
    KL

    You rule. Send me an email at richieweb@iglar.com with your address and I’ll send you some antiCost.com keychains!

    -Richie

  31. nwbergen says:

    “$58 Billion Shortfall for New Jersey Retiree Care”

    “Just raise the taxes, the suckers will pay anyway. Keep voting Democratic, you’ll have ID cards for illegals and taxes thru the roof.”

    Frank this problem is bigger than just blaming the Democrats. The career Republicans need to go as well. Any two term Senator and 10 year Assemblyman must go regardless of party affiliation. Trenton needs a good house cleaning across the board if we expect any change in this incestuous system.

  32. john says:

    Subprime Mess Fueled by Crack Cocaine Accounting: Jonathan Weil

    By Jonathan Weil

    July 25 (Bloomberg) — Back in 1998, as the subprime- lending industry imploded, critics blasted the loose rules that allowed profits to be booked under “gain-on-sale” accounting – – the financial world’s equivalent of crack cocaine. While the rules got a few patches, they stayed largely intact, and most investors forgot the whole mess.

    Nine years later, the subprime world is imploding again. One difference now: The folks who write U.S. accounting standards say they want to redo the rules, insisting that their desire predates the current debacle. Whatever the impetus, it’s about time.

    If you had to list the culprits for the subprime-mortgage mess, the Financial Accounting Standards Board would be a good place to start. Under its rules, lenders that sell blocks of loans to certain types of off-balance-sheet trusts are allowed to take the loans off their books and record immediate profits. Often, the gains are permitted even if the lenders still bear risks of losses on the loans, and even if they still hold influence over the trusts’ activities.

  33. APAULIPTICA says:

    Frank Says:
    July 25th, 2007 at 8:42 am
    >“$58 Billion Shortfall for New Jersey Retiree >Care”

    >Just raise the taxes, the suckers will pay >anyway. Keep voting Democratic, you’ll have ID >cards for illegals and taxes thru the roof.

    Frank:
    I guess that it was the “Democrats” who reduced the Federal surplus (the first after Reagan) to a deficit, and the expenditure of taxpayers money to fund a going on a $trillion war, the country in massive debt to China, Japan, etc. Open you eyes to the forest and be not limited to the tree. But, to clean up the debt mess we want the Democrats to do that, don’t we ? – by raising taxes. Do you have a better solution. How about taxing the American corporations who have their offices registered in Bermuda, Dubai, etc, and the fraud tax shelters, etc. which neither a Dem or Rep Senate/Congress want to touch.

    Apauliptica says: The end is near, repent ye sinners.

  34. bi says:

    both democrats and repulicans should go. this blog is next congress in trenton and dc.

  35. bi says:

    one solution to reduce tax came out from trenton is to redistrict school systems including sending newark kids to millburn, which will certainly fail my optimastic projection of RE market.

  36. commanderbobnj says:

    bi Says:(#35)
    July 25th, 2007 at 9:38 am
    “…both democrats and repulicans should go. this blog is next congress in trenton and dc…”
    ______________________________________________
    Commanderbobnj Sez:

    HUH ???— What are you trying to say ?–“..This blog is next..” (?)

    BOB

  37. Richard says:

    sounds like mozilo is pulling a cya.

  38. par4156 says:

    wow. all this noise makes me think…once again…that the market will bottom much faster than the general consecus on this blog. Falling applications even as credit has tightened (and the number to applications needed to get approval rise) and consistantly rising inventory means that prices will HAVE to fall. Lower prices will bring buyers back. All this eguals …a new stable equlibrium! By next year this time prices will have bottomed and be steady. Look for bargains in summer 2008.

    Any bet takers???

  39. t c m says:

    bi Says:
    July 25th, 2007 at 9:42 am
    “one solution to reduce tax came out from trenton is to redistrict school systems including sending newark kids to millburn, which will certainly fail my optimastic projection of RE market.”

    do you remember when that was proposed?

    is it still on the table – or was is squashed?

  40. SG says:

    Minor observation from Inventory-Sales overlay chart.

    In year 2003 & 2004, the peak of Inventory normally happened in July. In year 2005 & 2006 this peak occured in October.

    For current year, we are almost at the end of July, I am seeing inventory on GSMLS continue to increase (now at 35,470) albeit slowly but steadily. I think 2007 is pretty much dead and glut of supply will ensure no recovery.

  41. thatBIGwindow says:

    How about cutting County cops from the NJ payroll. We don’t need them when we have municipal and state troopers.

  42. SG says:

    par4156: I predit the bottom will be winter 2009, not summer 2008. Trying to buy at the bottom point is like timing to sell in peak at 2005. I would prefer to buy after the bottom has been firmly established, which should be at the least summer 2009. You will definitely have large flat time from 2009 to 2012 at the least.

  43. James Bednar says:

    From MarketWatch:

    U.S. June existing-home sales fall 3.8% to 5.75 million pace

    U.S. June existing-home inventory falls 4.2% to 4.20 mln

    U.S. June median home sales price up 0.1% in past year

    U.S. June existing-home sales weaker than 5.90 mln expected

    U.S. June home inventories 8.8 months supply, 15-year high

  44. CB in SJ says:

    I read somewhere that, long term, house prices closely track to wage growth. Wage growth tends to track closely to inflation (I get about a 3.5% raise each yr). So, when I bought my house in 1993 for $137,000 it should be worth about $193,000. Houses like it have sold for about $300,000 (although recent listings are in the $275k range). So, if this shakes out like I think it should, houses in my neighborhood need to lose about 30% of their value before they return to a true market rate.
    Inflation calculator: http://www.austintxgensoc.org/calculatecpi.php

  45. James Bednar says:

    From the National Association of Realtors:

    June – Existing Home Sales

  46. 3b says:

    #39/43I am going with late Summer Fall of 2008.

    Because of all the excess and recklessness that was involved, this thing is unraveling faster than normal.

    I do not know if it will be the absolute bottom, but I think you will see iinventory for sale 20 to 25% less than 05 peak.

  47. RentinginNJ says:

    APAULIPTICA,

    I see this less of a Democrat versus Republican problem and more of a balance of power problem. Anytime one party, Democrat or Republican, has too much power, the system of checks, balances, compromise & debate breaks down. As a result, you get problems like the debacle in Iraq (hat tip to the R’s) and New Jersey’s government run amok (thank you D’s).

    NJ desperately needs change. Since we only really have two parties to choose from & the Dems are solidly in control today, this will mean voting more Republican’s into office in November to restore some balance of power.

    My concern with your post against the Republicans is that it sounds like you are going to punish NJ Republican’s (who tend to be relatively moderate) running for NJ state office this November for the sins of national Republicans from Texas.

    As a result, NJ will continue down a path of high taxes, inefficiency, a declining population and increasing overall irrelevance. The national Republicans would love nothing more to see this as NJ will lose a seat (probably Democratic) in the House.

  48. Richard says:

    >>So, if this shakes out like I think it should, houses in my neighborhood need to lose about 30% of their value before they return to a true market rate.

    as you’re calculating watch out those flying pigs don’t smack into you.

  49. James Bednar says:

    Existing Home Sales down 11.4% nationwide (SAAR) 13.6% (NSA). Northeast sales down 7.3% (SAAR) and down 10% (NSA).

    jb

  50. 3b says:

    #44 JB There is that median increase again, still seems a little odd we are still supposedly seeing increases in the median price.

  51. bi says:

    43#, similar to equity market, better timing is after you see the unside trend. it would be 7 to 8 years from now – i don’t know if i would sleep with another woman or ghost that time

  52. James Bednar says:

    Nationally, both median and average up 0.3% YOY, in the Northeast, median up 1.8% and average up 2%. Northeast was the strongest showing across all regions.

    jb

  53. Richard says:

    >>is it still on the table – or was is squashed?

    rumors, nothing more.

  54. 3b says:

    #49 Richard: Don’st be so sure abou those flying pigs, I have seen them fly before.

    There were houses in my town at the peak late 80’s selling for 260K, those same houses were selling in the decline for high 180K’s, 190K’s, so there is your 30% or so.

    I know, it was different back then, or it did not happen, but what do I know, I only lived it.

    Remember Richard you used to be one of us.

  55. James Bednar says:

    From Bloomberg:

    U.S. Existing Home Sales Fell 3.8% in June to 5.75 Mln Rate

    Home resales in the U.S. fell for a fourth straight month in June, a sign housing remained mired in the worst slump in 16 years going into the second half.

    Purchases last month declined 3.8 percent to an annual rate of 5.75 million, the slowest pace since November 2002, from a revised 5.98 million in May that was less than initially reported, the National Association of Realtors said today in Washington.

    Rising borrowing costs are discouraging buyers, leaving a glut of unsold homes on the market and dimming prospects for a quick recovery in housing. Federal Reserve policy makers last week trimmed their economic growth forecast amid persistent weakness in home building.

    “Higher mortgage rates, tighter lending standards and the absence of home price appreciation have dampened the demand for housing,” Steven Wood, president of Insight Economics LLC in Danville, California, said before the report. “Many buyers have become quite patient, waiting for lower prices.”

    Resales were forecast to fall 2.1 percent to a 5.86 million annual rate from a previously reported 5.99 million in May, according to the median estimate of 73 economists in a Bloomberg News survey. Estimates ranged from 5.45 million to 6.12 million.

    Sales last month were down 11.4 percent from a year earlier.

    The supply of homes for sale fell 4.2 percent to 4.2 million, the first decline in inventories this year. At the current sales pace, that represented 8.8 months’ worth, the same as at the end of the prior month.

    The median price of an existing home rose 0.3 percent last month from a year ago to $230,100, the first increase from year- earlier levels in 11 months, the Realtors group said.

    Purchases fell 7.3 percent in the Northeast, 6.8 percent in the West, 2.8 percent in the Midwest and 1.7 percent in the South.

  56. 3b says:

    #53 JB Any thoughts on that (northeast)# ?

  57. make money says:

    #53 JB Any thoughts on that (northeast)# ?

    It means that the junk houses and the one’s in an undesirable spots are not selling.

    lack of subprime lending is not allowing the first time buyer to buy those.

  58. James Bednar says:

    #57 – Surprisingly, strength in the condo/coop market:

    http://www.realtor.org/Research.nsf/files/condoreport.pdf/$FILE/condoreport.pdf

    versus the single family home market:

    http://www.realtor.org/Research.nsf/files/singlefamilyreport.pdf/$FILE/singlefamilyreport.pdf

    Median SFH price in the northeast was up 1.4% and average up 1.3%, while condo/coop pricing was up 4.4% and 5.1%, respectively.

    jb

  59. James Bednar says:

    lack of subprime lending is not allowing the first time buyer to buy those.

    Also a plausable argument, continuing changes in the mix of the properties underlying those sales. If first time and low income buyers are holding back, median and average prices would increase as sales fall.

    It means that the junk houses and the one’s in an undesirable spots are not selling.

    This one is a bit more difficult to address, remember, we’re talking about the entire Northeast here.

    jb

  60. bi says:

    Here is my two cents: tomorrow will have new home sale numbers. these national or regional data is full of statistical errors and useless for your decision for buying or rent. you should look at your local market and stick with my premier/discount theory. for example, no matter how well short hills is doing, the median will be down in essex county considering huge population base in newark.

  61. 3b says:

    #60 JB Housing mix, thats right I forgot that, component. Thanks.

  62. BC Bob says:

    “these national or regional data is full of statistical errors and useless for your decision for buying or rent.”

    bi,

    Are you assuming that one makes a decision based on this? If my decision was based on these reports and msm, I would still be a homeowner.

  63. 3b says:

    JB Article in today’s Bergen Record Business section on residential real estate.

    Looks like some Realtors are staring to be more forthright etc.

    Sorry I cannot post the link. Take a look if you get a chance.

  64. James Bednar says:

    these national or regional data is full of statistical errors and useless for your decision for buying or rent.

    Useless? Don’t throw the baby out with the bathwater here.

    Just because a report or methodology has flaws or weaknesses doesn’t mean that it is useless, it just means that you better understand those flaws when you interpret the data. Most every economic or statistical release has flaws, as well as some amount of error. (I can’t believe I’m defending the NAR here.)

    That said, we are looking at broad macroeconomic indicators here, even at a regional level, they say little about the underlying towns. In fact, with only 30-40% of MLS systems sampled, it’s likely that broad areas underlying these regions weren’t even sampled.

    I don’t think anyone here is basing their decision to buy, sell, rent, or move based on the EHS or NHS datasets. Although, remember that the EHS data was one of the primary tools used by the NAR and the media to “hype” market gains. They certainly worked to influence market psychology “on the way up”.

    jb

  65. bi says:

    64#, Bob, what is wrong being a homeowner even today? i did not see a single transaction which was 5% less than comps in my area. don’t throw me a list of transactions which was 30% off OLP. I still have one which was listed 1.25M and now asking for 780K in my neighborhood.

  66. James Bednar says:

    From the Record:

    Residential glass half-empty

    Real estate agents overwhelmingly believe house prices will not rise significantly over the next year, according to a new survey by the National Association of Realtors.

    According to the Realtors Confidence Index released this week, 62 percent of Realtors expect house prices will rise from 0 percent to 5 percent this year, and about 24 percent think prices will decline. About 13 percent expect prices to increase 5 percent to 10 percent, while only 1 percent believe prices will gain more than 10 percent.

    In the survey, which was taken in June, 324 real estate agents were asked to rate the market on a scale of 0 (weak) to 100 (strong).

    Agents in the Northeast had the most pessimistic view of the market, giving it an average of 37.5, down from 54 a year earlier. Nationally, agents ranked the crucial measure of “buyer traffic” at only 40.7, down from 53.1 a year ago.

    Beverly Lanterman, a veteran agent with Re/Max Properties in Saddle River, said the survey matches her own view of the housing market. She said in some towns, sale prices are off 10 percent or more from the peak a couple of years ago.

    “There are just not enough buyers to pick up all the inventory,” Lanterman said. “Everywhere you drive, all you see are ‘for-sale’ signs.”

    Sellers, she added, are reluctant to lower prices. “They’ll start at $679,000 and when it doesn’t sell, they’ll go to $650,000, when they should have been at $619,000 to start with,” Lanterman said. As a result, houses are staying on the market longer.

    “It’s going to stay fairly flat over the next year or so,” Lanterman said. “If there’s any appreciation, I think it’s going to be minimal.”

    Buyers have backed off for several reasons, housing economists say. For one thing, prices rose so far from 2000 to 2005 that many would-be buyers are still priced out of the market. Moreover, mortgage lenders have stopped making some of the riskier mortgages that allowed less-qualified buyers to purchase homes a couple of years ago.

    Finally, buyers apparently believe prices may have further to fall.

    “Nobody seems to be in a whole big hurry,” Lanterman said.

    In the NAR survey, condos and town houses were rated the weakest, at around 30 – down from around 45 a year ago. The single-family market was rated 45.5 compared with 60 in 2006.

    The NAR has been doing this survey since 1999. Though the association says it is not scientific, the results have been good predictors of the NAR’s quarterly home-price data, according to NAR researchers.

  67. RentinginNJ says:

    Also a plausable argument, continuing changes in the mix of the properties underlying those sales. If first time and low income buyers are holding back, median and average prices would increase as sales fall.

    JB,

    Supporting this argument are the most recent household formation data, showing a marked slow down in the number of new households (ie first time buyers) being created. Home sales are likely biased toward the move-up market.

    Anecdotally, most of the buyers I know today are move-ups. Many of which are now paying 2 mortgages. Most of the first time buyers that I know are on the sidelines (either by choice or priced out).

  68. make money says:

    I have a question. Assuming rates don’t change much. How tight can credit get? With the absence of a recession, can credit tighting alone impact a 30% correction in housing? How and why?

    Any thoughts?

  69. syncmaster says:

    Federal Reserve Bank of St. Louis President William Poole said he sees signs that inflation is “moderating just a bit” and suggested the central bank can afford to wait before lowering interest rates.

    “Given that the real economy is doing quite well, there is certainly no reason to believe we have to quickly respond to signs of moderation in inflation,” Poole said in response to questions from reporters following a speech in Wilmington, Delaware.

    Poole, 70, voted with all other members of the Federal Open Market Committee last month to leave the benchmark lending rate at 5.25 percent.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a85.iKSlVhUU

  70. bi says:

    69#, RentinginNJ,
    > Anecdotally, most of the buyers I know today are move-ups. Many of which are now paying 2 mortgages. Most of the first time buyers that I know are on the sidelines (either by choice or priced out).

    That is the problem. If RE market is not down 20% somthing, these guys have equity to trade up. they can sell for 10% less if they can get deal other side.
    I am not convinced that first time buyers are pricing out. They cannot buy a decent house in the towns desired but it is still very affordable in central jersey – commute is a little longer though.

  71. bi says:

    after housing data, stock erased all early gains. 10 yr stays up 4/32.

  72. Lindsey says:

    As Lisoosh noted:

    …home prices were falling “almost like never before, with the exception of the Great Depression.”

    I’ve read that phrase, or a variation of it, an awful lot in the last couple of years. As more and more logs get thrown on the pile, it starts to look more and more like a camp fire. I can’t help thinking that someone is going to come along w/ a match.

  73. BC Bob says:

    64#, Bob, what is wrong being a homeowner even today? i did not see a single transaction which was 5% less than comps in my area

    bi,

    That may very well be the case in your particular area. However, we are in the very initial stages of this decline. The structural aspect of this market is fractured. When all the stars align; fundamentals, technicals, sentiment and psychology, the process begins to unwind. These cycles go on for years. Did you actually believe that RE would gain 80-100% when we were in the midst of 9/11?

    What we have witnessed is once in a lifetime markets, unprecendented. Unfortunately, the corresponding reaction will be just as severe. That’s the way markets work. It’s been this way since Tulip Bulbs. Just like the Nasquack proved it wasn’t different, this market will do the same. All the talk about price declines, at this time, is preliminary and nothing more than noise. The fat lady just started to sing. The concert will last awhile. It does not matter what anybody says, just listen to the fundamentals of the market. What is it telling you? It’s loud and clear to me, putrid and getting worse. I don’t need Paul Revere, riding down my street, yelling “The market is dumping, The market is dumping”, to react.

    This unraveling is playing out in textbook form. It does not pay to be a stubborn seller in these times.

  74. REBear says:

    from 56

    “Resales of single-family homes fell 3.5 percent to an annual rate of 5.01 million. Sales of condos and co-ops fell 6.3 percent to a 740,000 rate. ”

    Could this have caused skewed YOY price change? Assumption : SFH are priced higher than condos.

  75. ac says:

    Financing seems to have vanished for the Chrysler deal. This may herald a new era of risk aversion.

    http://www.reuters.com/article/bankingfinancial-SP/idUSSP19614720070725

  76. CB in SJ says:

    NYT: $58 Billion Shortfall for New Jersey Retiree Care

    This bodes well for the future of property taxes in NJ.

  77. Doyle says:

    #77

    I read that article on my commute this morning, f’ing scary…

  78. 3b says:

    #77 Does not matter we are close to NYC. Nothing that happens in NJ will impact NJ property values, because we are close to NYC.

    Thank God we are close to NYC.

  79. lisoosh says:

    Development near me:

    Resale listed at $749,000.

    Developer still selling last 3 of the same model – 2 new construction and 1 the model home (some wear but top of the line upgrades, appliances and furniture thrown in) for the price of…..

    $649,000.

    Don’t think the reseller can be happy, or likely to get his price.

  80. RentinginNJ says:

    I am not convinced that first time buyers are pricing out.

    I don’t think it’s necessarily one or the other with “priced out” versus “voluntarily sitting the sidelines”. “Price” is defined as what someone is both willing and able to pay.

    I’m priced out of anything that I would be both willing and able to pay for. There are homes that I’m willing to buy, but can’t reasonable afford (without a suicide loan). There are homes that I am able to buy, but I don’t want them.

    Until both of these conditions are satisfied; no sale. That’s not being snooty, that’s just the reality of how markets function.

    As for move up buyers, they are already on the property roller coaster. If they overpay for a house, its less of a problem, because theoretically someone will overpay for their house. Of course it doesn’t always work this way.

  81. 3b says:

    #77 Most people in NJ Will not care, until the state is bankrupt. The and only then will people care.

    And yet we are portray ourselves as highly educated, sophisicatsd, wealthiest in the nation.

    But maybe every one makes 250K a year (300k come August 1), then it does not matter, And we are of course close to NYC.

  82. chicagofinance says:

    ac Says:
    July 25th, 2007 at 11:09 am
    Financing seems to have vanished for the Chrysler deal. This may herald a new era of risk aversion.

    ac: Captain….the shields are down 73%….the engines are full reverse AND THEY ARE BUCKLING

  83. James Bednar says:

    From Reuters:

    ABX fall to record lows on weak subprime loan data

    Benchmark ABX indexes fell to record lows on Wednesday as July performance data showed further deterioration in loans underlying subprime mortgage securities, traders and analysts said.

    “The “BBB-” indexes are down by one to two points across the board on the latest remittance reports,” said one trader. The indexes are a tool used to hedge subprime mortgage risks

    Remittance reports, which provide a snapshot of subprime loan performance over the last 30 days, showed delinquencies continued to rise, market participants said.

    July remittance reports are “worse than we expected,” said another market source. “Delinquencies are accelerating still.”

  84. fanshawe says:

    #79, 3b:

    You’re just as guilty of using rhetoric as the bulls on this blog.

    I don’t think any of the bulls ever said that NYC is the one overwhelming influence on the NJ market.

    That said, only someone with their head in the sand would deny that NYC has some influence on the NJ market, especially in commuter towns.

  85. RentinginNJ says:

    NYT: $58 Billion Shortfall for New Jersey Retiree Care

    This bodes well for the future of property taxes in NJ.

    To put $58 billion in perspective, you would need to double property taxes in NJ for the next 3 years to collect $58 billion.

  86. pesche22 says:

    Wait till they give the illegals id cards
    here in NJ. Party Time.

  87. 3b says:

    387 fanshawe: Well maybe I cannot say all, but many of the Bulls, and not only ont his site, have in effect said time and time again, that becasue we are close to NYC, this will not happen, or that will not happen, because we are close to NYC,and this will some how protect us from that.

    As far as commuter town effects on the real estate market, I am on record here as saying that it is my belief that commuter towns effects on real estate prices is vastly over stated, IMHO.

    The overwhelming majortiy of people who live in NJ, including north Jersey, work in NJ.

    It has always been my belief too, that we as residents of the NJ, should be far more concerned with what transpires in NJ,and not be obsessed (IMHO) with being close to NYC.

    It appears to me that any time something crtical or negative is reported regarding the dismal state of NJ’s finances/economy, it is always pointed out that somehow it will not matter that much because we are close to NYC.

  88. syncmaster says:

    I don’t know about the rest of NJ but according to the 2000 Census, less than 10% of the residents of Middlesex County work in NYC. Over half work in Middlesex County and lot in Somerset.

  89. ac says:

    chifi, BC or anyone else:

    http://www.newyorkfed.org/research/staff_reports/sr291.pdf

    In the LTCM debacle, the Fed (FRBNY President McDonough at the 1998 congressional testimony) was primarily concerned with the “likelihood that a number of credit and interest rate markets would experience extreme price moves and possibly cease to function for a period of one or more days and maybe longer…Most importantly, this would have led to further increases in the cost of capital to American businesses”.

    I’m sure that they will intervene again if the s@#! hits the fan. I’m just curious what level of increase would justify such similar actions. Given their concern with the state of the general economy, it is also notable that this time round, the problems started from subprime loans issued to the Joes on Main Street rather than the collaspe of a currency halfway around the world.

  90. Joe R says:

    Be aware that many of the train NJ train lines didn’t go directly to NY during the last housing decline.

    Could having direct trains now soften some of the real estate weakening? There has been a huge influx of people who work in Manhattan to the train towns in the past 5-7 years.

    Also, as per my last request in #29, anybody know where to find a list of the top performing realtors in NJ? By top performing, I’m not interested in dollar amount, but by sides of transactions – both buy side and sell side.

    Does a list like this exist?

  91. fanshawe says:

    3b,

    I agree with you that NYC does not and will never serve as some sort of broad-based panacea to whatever financial problems that NJ might be experiencing. Wall St money does not have the capability to save an entire real estate market.

    However, regardless of how many NJ residents work in NJ, the economic specter of NYC looms large on NJ, like it or not. Without NYC, the cost of housing in Northern NJ would not be as broadly high as it is. Otherwise, houses in Cranford would be just as cheap as houses in Cherry Hill.

  92. Joe R says:

    I’m looking to plot the stats.

  93. bi says:

    i strongly suggest corzine to sell $60B to his buddies at GS and declare bankruptcy soon after.

  94. Donald says:

    “Donald, you say you wouldn’t look at an offer 100k below ask. I’m sorry for you. You will end up like every loser in a bear market, unable to bear the small pain and letting it turn into something absolutely huge.

    The house I live in today, I paid 750k for. I originally bid 700 against an 895 ask. It had been for sale for five years and I have a copy of the first listing sheet at 1395. My agent told me that the vendor chased the market down, as so many vendors do, turning down an even million two years before I showed up. Poor shmuck would have been better off taking the first bid at 400 off his wishing price than waiting another two years and having to settle for another 250 less.

    But I guess it will never happen to you.

    BWAHAHAHAHAHAHAHAHA.”

    That is the worst sotry I have ever heard. If the seller dropped the price by 50%, then the hosue was obvivously overpriced. DRASTICALLY overpriced. And there is a reason why I will not entertain a lowball for $100k below asking: Because then I would be selling for $100k less than what I paid for the house. Get that drilled into your head before you make these silly comments.

    A house that started out at $1.4 million and then went down to $895k was overpriced. WAY overpriced. I did not go crazy and list my house on day one for over $1 million so therefore I have more flexibility. I can GUARANTEE you that my price will be the same today as it will be next year. I am not chasing down the market anymore. I am sick of doing that.

  95. bi says:

    94#, joe, i also think if may be affected by train line. i am comuting by northeast corridor line and found out almost 70% of riders look like with india origin during rush hour. I would contribute strong local market to this influx.

  96. 3b says:

    #94 Agreed, but still over hyped as a cure all. NNJ was always close to NYC,and there was always a premium for that.

    Our state is in sad economic shape today, I am simply amazed that so few appear to know or care.

    Eventually we will encounter a recession, including NYC, and then what? We are in such poor financial shape now, what happens to us when we do enter that recession?

    Just as NNJ is close to NYC, so are many other areas so they will compete with us as well, for whatever jobs NYC maybe able to produce during a recession.

    How will we as a state fare during a recession if things are so bad now? Scary stuff IMHO, even scarier is that most residents of NJ do not seem to know or care.

  97. bi says:

    3b, 99#,
    we will not enter a serious recession in our lifetime unless we have a global recession. Now it is global economy and the risk here can be easily distributed (smoothed) globally. Strong china economy will support us for next 15 to 20 years and next frontier is India and …

  98. AntiTrump says:

    #42 “How about cutting County cops from the NJ payroll. We don’t need them when we have municipal and state troopers.”

    Can’t do that. We would have to then deal with decreased revenue from traffic tickets these ass-holes issue to people going 2 mph over the speed limit !!

    It doesn’t pay to fight crime, issuing tickets are more profitable for the city/state easier for police

  99. RentinginNJ says:

    I don’t think any of the bulls ever said that NYC is the one overwhelming influence on the NJ market.

    I disagree. Not to say all bulls subscribe to the New York City, but we have had debates again and again on this board about that start off something like…”NJ prices are justified because of Wall Street bonuses” or “NJ is bubble proof because it’s close to NYC”.

    I can tell you that there are more bulls that claim NYC is the primary driver for NJ prices than there are bears that claim NY has absolutely no impact.

    That said, only someone with their head in the sand would deny that NYC has some influence on the NJ market, especially in commuter towns.

    I agree. NYC absolutely has an influence on Northern NJ home prices. I think that many of us just argue that much of the NYC premium was already priced into the market before prices doubled. I also think that the RE bulls overestimate the importance of NYC on NJ’s market.

  100. AntiTrump says:

    Like Frank said, if people keep voting lib tax and spend dems to govern NJ, then they have to stop wining about taxes and cost of entitlements !!!

  101. Carol says:

    I had a car accident with a police car(it is his fault) and reported to the police department and their insuance. After 5 months, it turned out that he was on duty and no damage will be paid even if people get kiiled.

    Very sad.

  102. lisoosh says:

    “bi Says:
    3b, 99#,
    we will not enter a serious recession in our lifetime unless we have a global recession. Now it is global economy and the risk here can be easily distributed (smoothed) globally. ”

    The housing/credit bubble is global. Guess that global recession is well on its way.

  103. lisoosh says:

    “Joe R Says:
    Be aware that many of the train NJ train lines didn’t go directly to NY during the last housing decline.
    Could having direct trains now soften some of the real estate weakening? ”

    Actually being in Manhattan didn’t help the real estate there during the last bust, so why will direct trains make a difference here?

  104. thatBIGwindow says:

    #100: Is the revenue the county cops generate greater than the cost of operating the department/salaries/benefits/pension, etc??

  105. dreamtheaterr says:

    #103, nothing paid to you for damages done by the police officer?

  106. 3b says:

    #97 bi:”we will not enter a serious recession in our lifetime unless we have a global recession.”

    You do not really believe that do you? Surely you are joking in making that kind of statement.

    I hope you are not making decesions on that delusional statement.

  107. dblko says:

    One of the houses we considering bidding for had old asbestos tiles in the basement, possibly already damaged.

    How much of a concern is this, especially since we have young children?

    We are thinking of getting them all covered up and finishing the basement to make a playroom.

    However is there a chance that the asbestos dust is already all over the house and the air vents? What is going to be the cost of getting it professionally fixed up?

  108. make money says:

    The housing/credit bubble is global. Guess that global recession is well on its way.

    This is BS. World economy is stronger than US, and Credit is much tighter than here. get a clue.

  109. chicagofinance says:

    bi Says:
    July 25th, 2007 at 12:17 pm
    3b, 99#,
    we will not enter a serious recession in our lifetime unless we have a global recession. Now it is global economy and the risk here can be easily distributed (smoothed) globally. Strong china economy will support us for next 15 to 20 years and next frontier is India and …

    bi: I saw some people complaining about your posts in the last few days. Now I see that they were justified. You are entering the Reech/guan rarified air of whimsical stupidity.

  110. Richard says:

    #109 you need to have the house assessed by an asbestos professional. accept nothing less as sometimes realtors will attempt to downplay issues. realtors are also known to bring in contractors who do their best to keep the deal together. not everyone is a crook but it’s of course in the realtors best interest to keep things moving. since asbestos is a safety issue you should take it with all seriousness.

    there are a # of firms in the area if you do an internet search. my advice is go with a bigger outfit.

  111. skep-tic says:

    #99

    bi– I can only hope this statement is more of the same cynical cheerleading you’ve been spewing the past couple of days. if you truly believe this, I suggest you consider which nation is the principal consumer of all of those goods and services upon which the current global boom has been built

  112. Richard says:

    bi don’t let the sky is falling crowd cloud your vision. expect to be ganged up on as you’ve entered the bubble den. ignore chikago he’s a mindless clown with just enough knowledge to make him dangerous.

  113. john says:

    Re absestos

    Abating Abestos is expensive, if you are using your paronia to get a few bucks off the house it may work. If you are really concerned the home owner will die of shock when he finds out the actual cost of abating and will sell to someone who does not care, cover it with wall to wall or get the guys in the home depot parking lot for ten bucks an hour to rip it out.

    I have it in my basement under my wall to wall carpeting. Bid Deal

  114. RentinginNJ says:

    Strong china economy will support us for next 15 to 20 years and next frontier is India and …

    China is strong because the U.S. has a voracious appetite its salad shooters, tainted dog food and other low-quality cheap consumer goods. China doesn’t have the internal demand to support its own manufacturing economy. If U.S. consumers catch a cold, China is in deep trouble.

  115. still_looking says:

    Anyone? Can you find out what the UC price was of 240 Paramus Rd Ridgewood.

    Thanks in adv,

    sl

  116. bi says:

    i just heard many people in germany use 50 yr or 60 yr mortgage. by that standard, we are still affordable.

  117. 3b says:

    #114 Remember Richard you used to be one of us.

    Surely even you cannot go long with:

    “we will not enter a serious recession in our lifetime unless we have a global recession.”

  118. 3b says:

    #118 bi: Who needs 50/60 year mortgages, prices are dropping.

    It was a sellers market that is now starting to turn, simple as that. All that is required is a little more patience.

  119. john says:

    What the heck do these people do with their money? My wife never started at 28k in 1986 and ended at 69k in 2000 when she quit work for good and only gave in 5% and has a healthy six figure 401K. How the heck do baby boomers mainly born in the 1950’s only have 38K? It is this nuttness that worries me about housing. They max out their mortgage cashed out their 401K and have no savings and they are in their 50s, what gives.

    The median balance for those workers who had participated in their 401(k)s for at least one year rose 30 percent to $32,000, according to a report released Tuesday by Fidelity Investments, which administers plans covering 10 million participants.

    For those with 5 years of continuous participation, it rose 20 percent to $59,000. And among age groups, balances for:

    Baby Boomers rose 7 percent to $38,000
    Gen Xers rose 10 percent to $15,000
    Gen Yers rose 21 percent to $2,100

  120. make money says:

    Friedman Billings Ramsey analyst Paul J. Miller Jr. downgraded Countrywide stock to “Underperform” from “Market Perform” and cut his price target to $25, which is the net value of Countrywide’s assets.

    anyone short?

  121. bi says:

    RentingInNJ,

    > China doesn’t have the internal demand to support its own manufacturing economy.

    Surely exporting to U.S. has big part in china economy. unlike Japan, china has very dynamic economy. the development level varies very significantly from shore areas to the inner areas, which generates huge internal demand. asia crisis happened decade ago could happen in china but i don’t think it will be in near future. by that time, we are moving to india…

  122. RentinginNJ says:

    i just heard many people in germany use 50 yr or 60 yr mortgage. by that standard, we are still affordable.

    People can’t afford homes on I/O mortgages, which are fundamentally “infinite” year mortgages (resets aside, theoretically you could make the I/O payment forever).

    Also, once you get past 30 years, the payments aren’t a whole lot different once you jump to 50 or 60 years. The higher interest rate due to the longer term eats most of the “savings”.

  123. 3b says:

    #114 Hey Richard just one more thought for you, regarding “the sky is falling crowd”.

    Mr. Mazillo from Countrywide as you know siad the declien in real estate will be the worst since the great depression. Even I do nto subscribe to that belief.

    With that kind of statement, he could become president of the sky is falling crowd, and he is in the business.

  124. thatBIGwindow says:

    Asbestos is fine if you don’t touch it. By simply encapsulating the aspestos you eliminate the chances of breathing it in.

    Most older houses have it. Mine does, I really don’t care.

  125. Carol says:

    #107
    right—nothing paid by police officer. It is all my cost to fix the demage. That is the law( I was told).

    Sad. —just want to tell everybody my experience with the police.

  126. thatBIGwindow says:

    #127 Carol: Same thing happened to my neighbor.

  127. john says:

    I fought the law and the law won!

    I loved the grandchildren mortgages in Japan last bubble. It was legal to do a 50-100 year morgage where your unborn children were legally obligated to repay.

    They got rid of that, but that was so cool.

  128. chicagofinance says:

    3b Says:
    July 25th, 2007 at 1:15 pm
    #114 Remember Richard you used to be one of us.
    Surely even you cannot go long with:
    “we will not enter a serious recession in our lifetime unless we have a global recession.”

    3b: correctly stated “[when the U.S.] enter[s] a serious recession …. we [will cause] a global recession.”

  129. john says:

    Few details would distinguish computer consultant Scott Seidenstock’s apartment from any other Lower East Side two-bedroom in Co-op Village. It’s in decent original condition, and has a balcony and a sellable view of the Empire State Building. Then again, there is the stripper pole in the living room, complete with a stage and strobe lights. Seidenstock (pictured) and his girlfriend love it. “We have a lot of fun,” he says. But he placed his co-op on the market three weeks ago—“I’m looking to buy a brownstone,” he explains—and once his broker starts showing the place, buyers may not be so charmed. (He says he won’t dismantle the stage until he moves.) “People [who’ve visited] have given me strange looks, and some don’t say anything,” he admits. “It’s like the 300-pound gorilla in the room.” One naïve family didn’t know what it was, he says, and their 3-year-old started playing on it.

  130. chicagofinance says:

    bi Says:
    July 25th, 2007 at 1:22 pm
    asia crisis happened decade ago could happen in china but i don’t think it will be in near future. by that time, we are moving to india…

    bi: in what kind of shape do you think India will be at that point? You really are a newbie….

  131. john says:

    “The 2Q 2007 Long Island/Queens Market was characterized overall by weakening prices, rising inventory and a declining sales,” begins an email from Miller-Samuel, which has just issued its latest report for Prudential Douglas Elliman. Dear God, is the bloom off the Long Island City rose? Someone hold us! Oh, wait, there’s more: “However, the changes varied widely by market. Condos showed the most price growth with Queens leading the other markets.” In fact, while the median sales price of a Queens residential property fell 4.3% to $469,000 from the same period of time in 2006, the upper 20% of the market showed a 4.6% increase to a $852,973 average sales price. In other words: Rockrose, keep building those waterfront condos!

  132. Bystander says:

    Fanshawe #94,

    Thank you for making the point I was about to make. I read some people talking about how most NJ residents work in NJ therefore NYC’s economy does not influence us..blah,blah,blah. Are these companies in NJ because they love the beautiful scenery? Geez, NJ is a NYC spillover state, plain & simple. We have a high standard of living because companies that would normally set up shop in NYC wanted cheaper rents and more space…or they are companies servicing clients in NYC. The surrounding shops, restaurants, caterers, banks etc. service the companies & people in the area because many people live here. It is a chain and that chain in tethered nice and tight to NYC.

  133. James Bednar says:

    From Bloomberg:

    Chrysler Sale to Be Completed After Banks Take Loans

    Chrysler’s sale to Cerberus Capital Management LP will be completed after banks agreed to keep $10 billion of loans that investors refused to buy.

    The DaimlerChrysler AG unit scrapped the sale of loans after banks led by JPMorgan Chase & Co. failed to find demand, said investors who were briefed on the decision. In addition to the banks, Cerberus and DaimlerChrysler agreed to assume $2 billion of loans.

    KKR Banks Fail to Sell $10 Billion of Boots Loans

    Kohlberg Kravis Roberts & Co.’s banks, led by Deutsche Bank AG, failed to sell 5 billion pounds ($10 billion) of senior loans to fund the leveraged buyout of Alliance Boots Plc, two people with direct knowledge of the deal said.

  134. bi says:

    133#,
    i just use india as an example. maybe india will be in better shape than china that time and we are coming back to re-invest our inner cities. but why should we worry that much far away in the future? i would go to gym more often to keep myself a little better shape.

  135. john says:

    Blocking Property of Certain Persons Who Threaten Stabilization Efforts in Iraq

    …all property and interests in property of the following persons, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in…

    When I came across this order, I wondered what would the US government do with the property? If a consumer bought a property that was formerly owned by someone that the government deemed a threat to national security, would anyone really want to live in it if they were fully informed about the prior owner? Does the buyer second guess the government to determine whether the threat is real and its worth the risk to take possession?

    If this prior ownership was clearly disclosed at sale, presumeably in an auction, I would think this stigma could have an adverse impact on market value. However, on a more macro level, Dan Green debunked the relationship between recent terrorist threats and mortgage rates over at The Mortgage Reports.

  136. James Bednar says:

    Geez, NJ is a NYC spillover state, plain & simple.

    or they are companies servicing clients in NYC. The surrounding shops, restaurants, caterers, banks etc. service the companies & people in the area because many people live here

    What about big pharma? Telco? Shipping? Chemical industry? Refining? Agriculture? Manufacturing?

    You seem to have a very skewed view of the New Jersey economy.

    jb

  137. ac says:

    jb,

    That’s the end of the bull run funded by LBOs and M&As as we know it. If the stock market corrects severely, this will limit the market’s currently voracious appetite for risk, further dampening the already contracting demand for housing related debt.

  138. Jamey says:

    What’s happening to RE prices in Hoboken?

    There’s part of your answer about the NYC “spillover” effect.

  139. 3b says:

    #134 To yet another I would point out yet again the recently released Rutgers study on the state of job creation in NJ. It is available on this site.

    I am amazed yet again at the whole NYC thing; I will leave it at that. I do not wnat to be rhetorical.

  140. REBear says:

    Signs of slowing pop up in economy: Beige Book

    Consumer spending rose at a modest pace, but four of the 12 Fed banks reported sales as “mixed” or “below expectations.”

    http://www.marketwatch.com/news/story/fed-fed-beige-book-reports/story.aspx?guid=%7B74FB267F%2D6451%2D44D7%2D8A3A%2DE3304CC3F571%7D&dist=hplatest

  141. 3b says:

    #134 One final point.

    I never said NYC did not influence NJ I said the affect of being close to NYC is over inflated.

    Yet another poster who has yet again confirmed that belief for me.

  142. dreamtheaterr says:

    #127, Carol, that’s so unfortunate. Why should ordinary folks have to pay the price for cops whose duty it is to protect us, but instead don’t use better judgement while driving?

    Sorry, but it is ridiculous to see cops always yapping on cell phones and making u-turns whenever and wherever they please while on duty. Hmm, if they paid you for the damages incurred, they’d have less left over for their ‘retire at 40’ pension.

  143. chicagofinance says:

    bi Says:
    July 25th, 2007 at 1:52 pm
    133#,
    but why should we worry that much far away in the future?

    bi: Isn’t this what people said in 2005 about an ARM resetting in 2007?

  144. thatBIGwindow says:

    I wonder how the River Park at Harrison is doing? Just minutes from Newark.

  145. James Bednar says:

    From the Fed:

    Second District–New York

    Construction and Real Estate

    Commercial real estate markets across the New York City area strengthened in the second quarter. Manhattan’s office market tightened further in June, as asking rents continued to soar, rising more than 30 percent from mid-2006 levels. Midtown’s vacancy rate edged up 0.1 point to 6.4 percent in June but is still down a full point from a year ago. Lower Manhattan’s rate tumbled to 8.2 percent in June–down from 9.3 percent in May and 11.7 percent a year earlier–due partly to space removed from the market for residential conversions. Long Island’s office vacancy rate was little changed at just above 10 percent in the second quarter, while the average (Class A) asking rent jumped 11 percent from a year earlier. Vacancy rates in Northern New Jersey and Fairfield County (CT) fell noticeably in the second quarter, reaching their lowest levels in at least five years, while Westchester’s rate retreated to its lowest level since early 2006; asking rents in all three of these areas rose moderately.

    Housing markets have been mixed but generally stable since the last report, with New York City continuing to show more strength than the rest of the region. Manhattan’s co-op and condo market remained brisk in the second quarter: sales activity picked up further, with the number of transactions more than doubling from a year earlier, though prices have flattened out. The listing inventory is reported to have retreated fairly sharply from the exceptionally high levels of a year ago. A major regional rental management firm reports strong rental rate increases in southwestern Connecticut, and moderate gains in the Albany area, but flat rents across the Hudson Valley and the Buffalo area. Finally, New Jersey home-builders report ongoing weakness in new home prices; they also note that residential development activity has slowed further, particularly for age-restricted communities, and along the “Gold Coast”–communities along the Hudson River across from New York City.

  146. James Bednar says:

    Also from the above link:

    Financial Developments

    Reports from small to medium-sized District banks suggest weakening demand for credit, tightening supply (standards), and a slight increase in household delinquencies. Bankers indicate a decrease in demand in all credit categories, particularly commercial mortgages, residential mortgages, and refinance mortgages. More bankers report tightening than easing standards, particularly on residential mortgages, for which roughly one in four indicate tightening. No bankers report eased standards in any loan category. Interest rates on all loans types and deposits were reported higher, on net, with the most widespread increases on residential mortgages. Overall, delinquencies are reported to be little changed since the last report, though some modest increases were reported on consumer and home mortgage loans.

  147. 3b says:

    #145 Chgo: I gave up trying to decipher what he/she is talking about.

    I still do not undestand how that justifies the price of a POS cape/ranch/colonial in NNJ,and how it will prevent prices from falling.

  148. njpatient says:

    #144

    Worse yet is when ordinary citizens get shot by the cops for reaching for their ID.

  149. zane says:

    Could anyone tell me the transaction history of the house with MLS ID# 722968.

    Thanks!

    Zane

  150. dreamtheaterr says:

    #121, John

    It’s unbelievable how people think the govt. will support them at retirement…. yes, all people will afford with Social Security payments will be tainted cat food.

    Until elementary personal finance classes are not mandatory in the educational system, the lack of savings epidemic will not get any better.

  151. BC Bob says:

    “they also note that residential development activity has slowed further, particularly for age-restricted communities, and along the “Gold Coast”–communities along the Hudson River across from New York City.”

    Gold Coast slowing? Oh my.

  152. 3b says:

    #153 BC: Is the “sky falling” on the gold coast?

  153. syncmaster says:

    BC Bob 153,

    What inference can one draw from the use of the word ‘particularly’ as applied to the Gold Coast observation?

  154. john says:

    WASHINGTON (Reuters) — U.S. economic activity expanded further in June and early July, the Federal Reserve said Wednesday, as slower housing markets were offset by gains in manufacturing and commercial real estate.

    In the Fed’s Beige Book summary of the economy, seven Fed districts reported the pace of growth as “moderate” or “modest”, while others said conditions were “moderating,” “decelerating,” “mixed” or “varied.”

    Only the Philadelphia district noted that economic conditions had improved.

    The Fed said districts overall reported ongoing cost pressures, particularly for oil-related items, but retail prices were increasing at a moderate rate.

    Wage gains were described as either moderate or similar to the previous reporting period, but “significant upward pressure” was reported for wages and salaries for in-demand, highly skilled workers.

    The Fed districts reported that businesses were having mixed success in passing on higher costs to their customers.

    Most districts said residential construction and real estate activity continued to decline through mid-July, with some describing conditions as “soft” and “weak.”

  155. njpatient says:

    OT, but here’s a humorous take on the spike in foreclosures in CA (get a load of what the “good news” is!):

    http://www.washingtonmonthly.com/archives/individual/2007_07/011742.php

  156. Bloodbath in Winter 2007 says:

    I’m in LA for business and here’s the headline on A1 of the LA Times:

    “Foreclosures in state hit record high.”

    Subhead: “The housing crisis spreads to middle-class buyers. The economic outlook ranges from a slowdown to recession.”

    Coming to NJ sooner than you think!!

  157. Bystander says:

    #138,

    jb,

    My rebuttal is to name one of those industries that is growing in NJ and not shrinking. The future of NJ’s livelihood will be tied to NYC more than ever in the coming years.

  158. pesche22 says:

    Strange objects being found at our airports.

    Humm.

    Housing may turn out to be a side show.

    Newark is well guarded . These are very
    capable people in security.

  159. 3b says:

    #159 All the more reason to be concerned about real estate prices in NJ, if being close to NYC (when most residents of NJ work in NJ) is all we have got.

    Because Westchester, Rockland, LI, and parts of Conn are close to NYC too. And when we talk about NYC I assume e include all 5 boros.

    There are even those who would argue Dutchess and Putnam, some even the Poconos.

    And if there is a recession, oh yes I forgot, that is not happening in our life time. Talk about rhetoric.

  160. njpatient says:

    #158

    BOOOOOOOYYAAAA!!!

  161. njpatient says:

    Oil up $2.14

  162. New Investor says:

    Is this a POS cape? MLS 2422885

  163. dblko says:

    Thanks for the answers regarding the asbestos. I’m the nervous type and want to sleep good at night in the new house.
    First I need to look around for a good inspector then. I’m in lower Westchester, any recommendations? Thanks

  164. Doyle says:

    I think everyone needs to take a deep breath and watch this video to help regain our sense of NJ State Pride.

    http://www.youtube.com/watch?v=jY4SF8xWKFo

  165. 3b says:

    #158 blood: It does not matter, we are close to NYC (Sorry Fanshawe,I could not help myself).

    “The housing crisis spreads to middle-class buyers. The economic outlook ranges from a slowdown to recession.”

  166. James Bednar says:

    “they also note that residential development activity has slowed further, particularly for age-restricted communities, and along the “Gold Coast”–communities along the Hudson River across from New York City.”

    Gold Coast slowing? Oh my.

    This seems to be running contrary to the anecdotal information being posted here.

    Who is correct?

    jb

  167. syncmaster says:

    Isn’t the Beige Book also anecdotal information?

    Comes down to who has better sources. Donald Duck or the Fed?

  168. Escape from NJ says:

    Quick question for anyone. I just recently put my condo up for sale. (Not a flip, just time to move on). I have a flat fee MLS with a 2.5% fee to a buyers agent. I have been having a debate with some people at work if a flat fee MLS is purposely “black balled” by other real estate agents and if a secret MLS exists which only the agents use (very cloak and dagger). Will a buyer’s real estate agent leave money on the table to show solidarity to other agents?

  169. syncmaster says:

    post 169 stuck in moderation

  170. Donald says:

    JB,

    I drive along the gold coast at least once a week and there is no slowdown in construction. Take Jersey City for example. K Hov recently started construction on 2, 45 story condo/rental towers, their first high rise project.

  171. syncmaster says:

    172- I don’t know. But if I had to guess, I’d say it’s a lot easier to ‘blackball’ agents when volume is high. Volume is trending down now, so I imagine a lot of agents will jump at a chance to make a sale and get that commission.

  172. Robert T. says:

    grim,

    unmoderate?

  173. lostinny says:

    In a strange turn of events, my parents’ recent refi was just sold to Countrywide. How lovely for them.

  174. James Bednar says:

    From MarketWatch:

    Economist cuts housing forecasts

    The chief economist for the National Association of Home Builders on Wednesday in a mid-year housing outlook lowered his forecasts for new construction as the market has weakened further on subprime-mortgage problems and tighter lending standards.

    “It’s fair to say the performance of the housing market during the first half [of 2007] and the outlook for the second half and next year are a lot weaker than six months ago,” said David Seiders, referring to his last semi-year forecast.

    His outlook for 2007 single-family housing starts is now 9% lower than it was at the beginning of the year, while his 2008 forecast has been slashed by 15%, Seiders said on a conference call. His forecast is for housing starts of 1.42 million this year and 1.45 million in 2008.

    The key reason is the “unanticipated and sudden turmoil in the subprime-mortgage sector” which has resulted in more stringent lending requirements for home buyers, and also spread into other higher-quality loans.

    Delinquencies and foreclosures are rising and the market is “still dealing with problems and that creates massive uncertainty over where we’re going,”
    Seiders said.

    “Financial markets are clearly correcting dramatically as it becomes clear what loans were made earlier and their performance,” the economist said.

    He said the repricing of mortgage-backed securities and collateralized debt obligations represent “strong signals from the securities markets.”

    Meanwhile, financial regulators “are now in the game” and establishing stricter lending standards. Also, major ratings agencies, which he said were “behind the curve,” are “finally in the game in earnest” and “downgrading securities all over the place.”

  175. pretorius says:

    JB #168,

    The report says that the pace of residential supply growth in waterfront Hudson County is decelerating.

    Everybody knows the bull case for home prices in this area. The bear case is supply – price rises will inevitably be followed by a flood of new supply which will reduce the growth rate of home prices.

    The bear case is playing out now. I am amazed that new projects are still coming out of the ground.

  176. BklynHawk says:

    Donald (175)-
    I’m not sure you can draw a correlation from that kind of construction and the health of a real estate market. Financing for those kinds of projects is started well before ground is broke and would not be pulled back except for extremely dire circumstances.
    JM

  177. Robert T. says:

    #181

    The report is wrong. Go to the following website and loook at all of the Gold Coast Construction:

    http://newyorkssixth.com/

  178. Rachel says:

    Escape #173–

    My boyfriend had his listed with a flat-fee MLS. He got tons of traffic but had trouble selling. It was a condo right on 287 so many buyers were turned off by the noise, which has nothing to do with the flat-fee MLS. Your 2.5% is just as good as the next guys…

    Rachel

  179. BC Bob says:

    [181],

    The fed beige book or new york sixth? Wait, I’m thinking…….

  180. scribe says:

    New Investor,

    I don’t know that area. The house looks overpriced, but it also looks to be well maintained, updated, with a nice deck and pool.

    Here’s an example of what I would consider a POS cape. Badly maintained – the listing says it needs a lot of work – and for the area, the price is still high.

    http://homes.realtor.com/search/listingdetail.aspx?mindt=1%2f1%2f0001+12%3a00%3a00+AM&maxdt=12%2f31%2f9999+11%3a59%3a59+PM&ctid=27103&ml=3&typ=1&sid=1cedb6cc68f34f6d9cf061fbcbf78037&pg=4&lid=1085969382&lsn=39&srcnt=144#Detail

  181. Robert T. says:

    pretorius,

    You know nothing about the Gold Coast. Most new buildings are at least 51% sold out. Devleopers have a reputation of raising prices and reducing incentives on the Gold Coast. The Gold Coast is strong because you have buyers coming from Manhattan. To them, a $900,000 2 bedroom condo is a bargain comapred to prices across the river. They have no problem paying these prices and that is why prices will not come down.

    And as far as any type of slowdown in construction, you can balme that on government red tape. It is a lot harder to get approval for a 20+ floor building than a McMansion.

  182. scribe says:

    If anyone has access to the Middlesex MLS, I’m curious to know if these have been sold yet.

    This “two-fer” is right down the road from one of my relatives. We’ve seen a lot of people coming and going, but it looks like they’re still for sale.

    720781

    720784

  183. njpatient says:

    #175

    “I drive along the gold coast at least once a week and there is no slowdown in construction.”

    Was that a joke? I really can’t tell…

  184. Home Seller says:

    #182

    When you say “tons of traffic”, you’re not just talking about hits to your site/property, correct? That to me is not worthwhile traffic. OTOH if your getting offers, that’s legitimate.

    Obv if the offers are not in your expected price range, the selling price is too high. When you move unfortunately to a high noise area, selling it is twice as hard.

  185. john says:

    Hey I an buy this website below on godaddy, do you think I would get some traffic???

    NJREALESTATESUCKS.COM $8.95*/yr

  186. dreamtheaterr says:

    Quack quack, unless you are a security guard at a construction site watching people come and go on a daily basis, you can’t possibly gauge level of activity by driving by once a week.

  187. Hehehe says:

    Gold Coast = Tin Coast

  188. James Bednar says:

    From Crain’s New York Business:

    Cuomo joins probe of credit rating agencies

    New York state Attorney General Andrew Cuomo has joined attorneys general in at least three other states who are investigating Moody’s Corp., Standard & Poor’s, and Fitch Ratings over the role the credit-rating agencies played in the subprime debt debacle, according to two people familiar with the matter.

    Mr. Cuomo’s office seems particularly interested to learn more about the relationship between the ratings agencies and the investment banks. The banks typically work closely with the ratings agencies in order to get the highest ratings possible for their bond offerings. Mr. Cuomo’s office is seeking to learn what steps could be taken to reduce the potential conflicts between the institutions, according to one person familiar with the matter.

  189. lurkerA says:

    #191 – I think Pyrite Coast might be more appropriate

  190. 3b says:

    #181 Robert T (Ducky) Of course if the report said all was well, than the report would be right. Right?

  191. New Investor says:

    “scribe Says:
    July 25th, 2007 at 3:42 pm
    New Investor,

    I don’t know that area. The house looks overpriced, but it also looks to be well maintained, updated, with a nice deck and pool.

    Here’s an example of what I would consider a POS cape. Badly maintained – the listing says it needs a lot of work – and for the area, the price is still high.

    http://homes.realtor.com/search/listingdetail.aspx?mindt=1%2f1%2f0001+12%3a00%3a00+AM&maxdt=12%2f31%2f9999+11%3a59%3a59+PM&ctid=27103&ml=3&typ=1&sid=1cedb6cc68f34f6d9cf061fbcbf78037&pg=4&lid=1085969382&lsn=39&srcnt=144#Detail

    Wow; now that’s surely a POS. Iselin is nothing special, either, to demand such pricing. Utterly ridiculous. No interior shots either; I bet the inside looks as bad as the outside.

  192. Robert says:

    If you had bothered to read #156, it is mainly discussing age-restricted communities. Most of the buyers on the Gold Coast are yuppies so it is quite obvivous why there is a slow down of age restricted communities. I like how everyone totally disregarded those little two words.
    Many Condos Drop the Enticements
    THERE are signs that the residential market slowdown is over — at least for new condominiums, especially if they are near the water. At a number of condo projects, sales are going well enough that buyer incentives like free upgrades or discounted prices are being reduced or eliminated.
    http://www.nytimes.com/2007/02/25/realestate/25njzo.html?ex=1185508800&en=a4f421a4e3960c9c&ei=5070

  193. fanshawe says:

    scribe, 184:

    LOL: 6 total rooms. 4 BRs.

    Why not go ahead and just call the living room and kitchen additional BRs while you’re at it?

  194. Hehehe says:

    Robert thanks for the timely article.

  195. syncmaster says:

    The Beige Book’s use of language is interesting.

    The words they chose are:

    “… particularly for age-restricted communities, and along the “Gold Coast”…”

    As opposed to:

    “… particularly for age-restricted communities along the “Gold Coast”…”

    Ducky – Can you tell the difference?

  196. 3b says:

    #196 Robert (ducky) You need to read it again, it says resdiential development activity has slowed further, particularly for age-restricted communities AND along the Gold Coast. I guess you missed the AND.

    “Finally, New Jersey home-builders report ongoing weakness in new home prices; they also note that residential development activity has slowed further, particularly for age-restricted communities, AND along the “Gold Coast”–communities along the Hudson River across from New York City.”

  197. Robert says:

    #198

    If Gold Coast developers were able to sell lots of condos during the dead of winter, then I am pretty sure that sales are just as strong today, if not even stronger. Even if there is a slowdown in construction, it does not mean that demand has weakened. Developers are having trouble coming up wit capital to build in NJ because their projects in other markets are failing, especially Florida.

  198. 3b says:

    #197 fanshawe: It might be 2 bedrooms up, and 2 on the main floor;many of those however do not have a formal dining room.

  199. lostinny says:

    I think feeding Leprauchans can be much more profitable then feeding Trolls.

  200. 3b says:

    #210 Robert So you are saying the report is wrong, but if the report said the all was well, then the report would be right. Right?

  201. lostinny says:

    Re: the POS in Iselin- maybe I’m seeing things but I could swear when I originally looked at the listing, it was for $297 not 397. For 397 they couldn’t pay me to live there.

  202. fanshawe says:

    #202, 3b:

    “It might be 2 bedrooms up, and 2 on the main floor;many of those however do not have a formal dining room.”

    That’s what I figured, I’m just wondering if they’re just playing fast and loose with the number of BRs like I’ve seen with a lot of other POS capes.

  203. 3b says:

    #207 Would not be surprised. I have also seen ones with 2 beds down, 1 bed up with a landing (all open) that they were calling another bed room, fro a total of 4.

  204. Robert says:

    “thatBIGwindow Says:
    July 25th, 2007 at 7:07 am
    Here is a savings idea: Eliminate County cops. With State Troopers and Municipal cops AND the BC Sheriff unit why does NJ need county cops? Hudson County got rid of their county force and all is well. County cops are usually only traffic cops. I am sure the revenue they bring in for tickets does not pay their cost of employment.”

    Really? Hudson County has one of the highest murder rates in NJ. All of Hudson’s 2007 murders occurred in Jersey City. Do you want Bergen County to become the suburban version of the JC Heights? I would like to keep the police, thank you very much!

  205. njpatient says:

    #206
    Yet another timely article, Duck. Thanks.

  206. par4156 says:

    Re: 153.

    I don’t know whether to laugh or cry…

  207. scribe says:

    lost,

    Now that you mention it, $279,000 would make more sense. I say that because it’s got an 80 x 100 lot in a pretty good location – walking distance to Oak Tree Road. At less than $300,000, it might make sense as a knock-down. Knock-down value is usually seen as $250,000 – or that’s what it was about two years ago.

    So maybe the $379,000 is a typo(?).

    fanshawe,

    The details in the ad say 2 bedrooms up, 2 down.

    But I don’t think they’re terribly concerned about the number of rooms or bedrooms.

    It will probably be sold as a knock-down if it’s that bad.

  208. 3b says:

    #206 Ducky The FIRST TWO MONHS of the year!! We are now almost into August,and you are posting something thats 7 to 8 months old?

    “Hudson County showed the largest increase in sales from last year, posting a 25 percent jump in the FIRST TWO MONTHS of the year compared to the same time in 2006. Hudson County is home to Jersey City and Hoboken, which are both…………..”

  209. syncmaster says:

    Man, I’d gain so much weight if I lived near the Iselin part of Oak Tree Road. Samosas all day, mmmmmm.

  210. scribe says:

    Sync,

    What’s a samosa?

    I’ve walked through the downtown area a number of times, but I don’t know anything about Indian food.

    Then again, there’s no shortage of Indian restaurants in Queens, either :)

    I’m a vegetarian so I should learn more about Indian cooking.

  211. syncmaster says:

    Samosa, from Wikipedia:

    It generally consists of a fried triangular- or tetrahedron-shaped pastry shell with a savory potato, onion, fresh coriander, cottage cheese known as Paneer and pea stuffing, but other stuffings like minced meat and fish are often used. The size and shape of a samosa, as well as the consistency of the pastry used, can vary considerably. It can be spicy and is often eaten with chutney, such as mint, coriander or tamarind.

    While samosas are traditionally fried, many Westerners prefer to bake them, as this is more convenient and is perceived to be healthier (this could be seen as an example of fusion cuisine).

  212. BC Bob says:

    3b Says:
    July 25th, 2007 at 4:53 pm
    #206 Ducky The FIRST TWO MONHS of the year!! We are now almost into August,and you are posting something thats 7 to 8 months old?

    3b,

    Par for the course. However, he’s improving. After all, his sales price is 2 years too old.

  213. RentinginNJ says:

    Gold Coast slowing? Oh my.

    This seems to be running contrary to the anecdotal information being posted here.

    Who is correct?

    Donald or the Federal Reserve?

    Donald must be right.

    JB, you have to understand that the Gold Coast is in very close proximity to New York City. The entire world revolves around NYC. This means that anything other that robust development and rapidly appreciating prices is a virtually impossibility. Saying the gold coast is slowing is as preposterous as saying the sun revolves around the earth.

  214. lostinny says:

    I love Samosas! I’d also be huge if I lived in a place I could get them everywhere. And yes as a fellow veggie, my advice is to learn a lot about Indian cooking.

  215. scribe says:

    Sync,

    Let’s do lunch :)

  216. rhymingrealtor says:

    Escape,

    There is nothing in the listing, that indicates you are using a flat fee service. The listing agent is a Realtor,probaly out of town, but a realtor, the only heads up is appointments and negotiations are thru the owner. They are just as easy if not easier than working with a seller’s agent. There are a few real estate company’s that are the listing agent, if an agent has had experience with them they would know, if they did not they would not know before hand.

    KL

  217. njpatient says:

    #220
    The article is from May, Duck, but the stats are half a year old (as already pointed out and ignored by you at 213 and 214).

  218. njpatient says:

    …and 219

  219. Robert says:

    Sorry to put a fork into the gloom and doom party here, but NJ is not going bankruptcy. It is illegal for a state to declare bankruptcy. If NJ needs money, we can get bailed out by the feds, just like NYC got bailed out when Ford was president.

  220. BC Bob says:

    “If NJ needs money, we can get bailed out by the feds,”

    Worry about your own exposure. You can’t get hurt but what you don’t have on.

  221. scribe says:

    Does anyone else remember the famous Daily News headline: “Ford to NYC: Drop Dead”?

  222. Punch My Ticket says:

    “If the seller dropped the price by 50%, then the hosue was obvivously overpriced. DRASTICALLY overpriced. And there is a reason why I will not entertain a lowball for $100k below asking: Because then I would be selling for $100k less than what I paid for the house. Get that drilled into your head before you make these silly comments.

    A house that started out at $1.4 million and then went down to $895k was overpriced. WAY overpriced.”

    But WAIT JUST A COTTONPICKIN’ MINUTE, Donald. I also happen to know that the vendor paid $1.2m for the house four years before he listed it for sale. I assume his purchase price was every bit as good an indication of fair market value at the time as your purchase price was when you bought.

    And he still ended up selling it to me for much less.

    Those bear markets are killers.

    And you’re going to find out.

  223. 2010 Buyer says:

    The so called Gold Coast is puzzling to me. Anyone know the history of the name?

    I visit Miami frequently and the Gold Coast with their cranes everywhere looks somewhat similar to me but on a smaller scale. And they have obviously over built in Miami. With foreclosures increasing, ARM resets increasing every month into next year….you have to think this is affecting buyers’ confidence in the market. I wonder what the buyers who jumped at the chance to put down a deposit on a pre-construction building in 2006 when the media was not covering any negative housing news are thinking now? Assuming their building is scheduled to be finished later this year. The flippers are SOL now. Will the deterioration of market affect projects that are not scheduled to begin until the beginning of 2008 like the second Trump Tower?

  224. Pooch123 says:

    On the other hand, Donald, the “big guys” statistics might be overbroad and less precise and less relevant to your little slice of new jersey. To me, the opinion of “some little appraiser” who is doing work thats relevant to my situation is definitely more important…

  225. Pooch123 says:

    unmoderate?

  226. RentinginNJ says:

    Sorry to put a fork into the gloom and doom party here, but NJ is not going bankruptcy. It is illegal for a state to declare bankruptcy.

    I see NOT being able to declare bankruptcy as more of a doom and gloom scenario. Ideally, NJ would enter bankruptcy, wipe out some of its debt & renegotiate contracts with the unions. It could emerge with a restructuring plan & get a fresh start. Under the current situation, NJ has no hope.

    If NJ needs money, we can get bailed out by the feds, just like NYC got bailed out when Ford was president.

    That’s a good one. The Feds barley help out places like New Orleans with a legitimate need. You really think they are going to send the richest state in the US money because we can’t control our spending, like a teenager with mom’s credit card? Sure, “please send money because we won’t stop corruption, we pay our public employees too much and Upper Haughtyville refuses to share services & schools with slightly less wealthy Snooty River.”

  227. lostinny says:

    233 Renting
    While I agree that NOLA needed and still needs money legitamately, Bush made it very clear that he remembers partying there. I strongly believe for that reason, he thought of it as a place to party and that’s it. Why would he care about people who live there and work hard? What did they have to offer besides good food and a culture he obviously didn’t understand. I think because New York is a money making city he would be more apt to fund it if it went under. But ask yourself, and this is not a dig at Jersey, what does NJ have to offer that Bush would see as worth saving? Maybe if we found oil somewhere.

  228. Bubble Disciple says:

    Pretorius said:

    The bear case is playing out now. I am amazed that new projects are still coming out of the ground.

    I’m not surprised at all. The building frenzy is always greatest just before the crash. This storm of oversupply has been sweeping over the country, and it is only a matter of time before Manhattan itself is affected. There is a point where people say: “This property is just not worst X dollars.”

  229. Everything's 'boken says:

    231
    I think it must be the beautiful beaches that give our ‘Gold Coast’ its name.

  230. dreamtheaterr says:

    I thought the Gold Coast applied to the south eastern part of Australia?

  231. Robert says:

    Wow, so many people here want the Manhattan market to collapse. Sorry, but that is not going to hapopen. Did you read the article in the NY Times about 3 bedroom apartments? There are none for sale! Inventory is barely existent. That does not sound like the market is going to crash.

    Now for NJ: How can a crash be around the corner when inventory is down and prices are up? Did anyone bother to read the NAR report I posted, which was jsut realeased today?

    People here love to make claims without any facts to back them up!

  232. PeaceNow says:

    Uh, just two points…

    The federal government did not bail out NYC. Those of us who are old enough remember the headline: “Ford to City: Drop Dead.”

    I was in the Times twice, both times with photos. One of those times was the front page of the Sunday Real Estate section….

  233. Robert says:

    “The building frenzy is always greatest just before the crash.”

    Do median prices incrase 0.3% and inventory decline 4.4% right before a crash too?

  234. Robert says:

    Ford changed his mind after the article you mention and gave NYC the money.

  235. BC Bob says:

    “Did anyone bother to read the NAR report I posted”

    I’d rather watch Tim Donaghy ref a game, even if I was laying the points.

  236. Robert says:

    “I’d rather watch Tim Donaghy ref a game, even if I was laying the points.”

    It’s nice to know that you only read things that agree with your gloom and doom predictions. Do you isolate yourself from all news that you do not agree with? A self-cesnsore, as you may call it?

  237. Robert says:

    The Manhattan market will never collapse. It is a desireable place to live. Just ask a certain N.J. U.S. Senator who claims he lives in a certain Bergen County town but is actually living large on Park Avenue.

    More to come…

  238. 3b says:

    #241 Robert (Ducky) Oh my God 0.3% gain in median prices, Oh my God, a decline in inventory, Oh My God!!

    Are you not the same one who in the past has said small declines in prices mean nothing,and are statiscally insignificant.

    And yet 0.3% increase. Could it be subject to downward revisions next month? Oh my God!!

    Ducky was the decline due to sales, or did people’s listings expire unsold? Oh my God!!

  239. 3b says:

    #238 Ducky: Did you read what Mr. Mozillo said from Countrywide? Who should we believe, him, the NAR, you!!

  240. 3b says:

    #220 Ducky the articel may be form May, but it quoted numbers from Jan/Feb 2007, which like I said is now 7 to 8 months old.

  241. l-i-s-o-o-s-h says:

    testing

  242. PeaceNow says:

    Robert–242

    you are so wrong. that just didn’t happen. NYC issued bonds and bailed itself out, but this isn’t a blog to debate old NYC history.

  243. UnRealtor says:

    Here’s a good article — note the relevant terminology used, which is long overdue from RE reporting:

    CNN
    July 25 2007: 3:45 PM EDT

    Prime borrowers catching subprime ills

    By Les Christie, CNNMoney.com staff writer

    The subprime mortgage meltdown has begun to spread to prime loans as even credit-worthy borrowers have started to fall behind on payments.

    On Tuesday, Countrywide Financial, the nation’s largest mortgage lender, attributed a big drop in profits to a spike in delinquencies among prime borrowers of “second-lien loans,” including home equity loans and home equity lines of credit.

    These loans were often “piggybacked” onto first mortgages to help finance low- or no-down home purchases. They were also taken out by prime – but overburdened – borrowers to help pay high housing bills or fund their lifestyles.

    In the past, mortgage delinquencies were tied to personal problems or basic economic reversals, such as a job loss. Today, many delinquencies can be traced to unaffordably high home prices.

    Unable to afford their own homes, [borrowers] turned to increasingly risky mortgage products,” said Amy Klobuchar, a member of the House of Representatives from Minnesota, speaking Wednesday before a hearing of the Joint Economic Committee examining the national foreclosure crisis.

    Some home buyers, caught up in red-hot markets and afraid of getting locked out of homeownership forever, overpaid for houses.

    As long as prices escalated, they were able to tap the added equity in their properties to cover debts.

    But now home prices are falling – off more than 2 percent from their highs, according to the Case Shiller home price index.

    http://money.cnn.com/2007/07/25/real_estate/prime_catching_subprime_ills/

    It’s rare to see a RE article written by someone who understands the topic. The Star Ledger, for example, is a complete joke.

    Kudos to Les Christie.

  244. Kim says:

    I haven’t visited this board in a while. Who is this Robert clown?

  245. Everything's 'boken says:

    253
    Epitome of denial.

  246. Everything's 'boken says:

    250
    Actually responding to 249

  247. Joeycasz says:

    #185

    New Investor,

    I don’t know that area. The house looks overpriced, but it also looks to be well maintained, updated, with a nice deck and pool.

    Here’s an example of what I would consider a POS cape. Badly maintained – the listing says it needs a lot of work – and for the area, the price is still high.

    I just LOVE how there is only 6 pictures of the OUTSIDE of the house, brilliant!

  248. Bubble Disciple says:

    Robert,

    I don’t want the Manhattan market to collapse. My mother owns a co-op there, and I personally have no desire to live there, so I’m not waiting for prices to drop so I can buy there.

    I’m just calling it as I see it – they’re throwing up high rise luxury buildings all over the place, yet when I meet people at social events there, most of them seem to be in lower paying jobs than me, so I wonder where all of this money is supposedly coming from.

  249. Pat says:

    All I know, is if Duck is JB playing games, JB better have either a phone booth or good access in Polski or we’re all gonna kind of know if there aren’t regular Donald posts.

    Doesn’t the Duck seem really positive and persistent, despite the volley of friendly flak?

    (Just keeping you on your toes..;)

  250. Robert says:

    “so I wonder where all of this money is supposedly coming from.”

    I think you will find your answer below:

    Flush with cash, Irish investors buy condos in Manhattan
    Weak dollar tied to buying spree
    By Patrick McGeehan, New York Times News Service | May 8, 2007

    NEW YORK — They live an ocean away, but that has not stopped the Irish from lining up to buy condominiums in midtown Manhattan, often years before they are built.

    Article Tools
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    Boston.com
    Sign up for: Globe Headlines e-mail | Breaking News Alerts In some cases, entire buildings or large blocks of apartments in unfinished highrises are being sold to Irish investors hungry to own a piece of New York City.

    Neil McCann, an entrepreneur in Belfast, said he joined the rush of would-be Manhattan landlords last year when he signed a contract to buy a one-bedroom apartment near Gramercy Park for $600,000.

    “It’s an Irishman’s dream to be able to go to Manhattan and be able to buy property there,” said McCann, 36, who added that he hoped to buy more New York apartments because with a weak dollar, they are relative bargains compared with real estate in Ireland and Britain.

    After a long economic boom that earned their country the nickname the Celtic Tiger, the Irish are flush with cash and searching the globe for places to invest it.

    The westward flow of money “seems to be another example of how, in the wake of the Celtic Tiger, the relationship between Ireland and the United States has flipped,” said Linda Dowling Almeida, who teaches Irish studies at New York University.

    The buyers do not even have to travel to New York, because the sellers are coming to them. Armed with glossy brochures about amenity-laden towers, New York brokers such as Anne Marie Moriarty, of the Corcoran Group, have been dropping in to Dublin and Belfast and taking deposits.

    “Most of these people are buying one or two apartments at a time,” said Moriarty, who has specialized in selling to the Irish for about 2 1/2 years.

    “Many of them buy off plan, because they’re fearless,” she added, referring to the custom of putting money down on apartments long before they are completed.

    People from all over the world have been contributing to the sustained demand for apartments in Manhattan. But developers and brokers said the Irish seem to be the voracious newcomers of the moment, though their purchases have drawn less attention than previous buying sprees by the Japanese and the Saudis, who made splashes by acquiring trophy properties such as Rockefeller Center and the Plaza hotel.

    http://www.boston.com/news/world/articles/2007/05/08/flush_with_cash_irish_investors_buy_condos_in_manhattan/

  251. Robert says:

    re: #255

    This is why the Manhattan market will not collapse. When you have foreign buyers armed with Euros flooding the market, prices will only go up.

  252. Pat says:

    254? Polski is a No-No?

  253. UnRealtor says:

    Don’t think saving $40 a month by not having a burglar/fire alarm is a smart move:

    http://www.cnn.com/2007/US/07/25/home.invasionb.ap/index.html#cnnSTCVideo

  254. Pat says:

    http://www.reuters.com/article/fundsFundsNews/idUSSYD21215020070726
    “Second Australia hedge fund suspends withdrawals”

  255. Bubble Disciple says:

    This is not good… These people won’t hesitate to sell if they think prices are starting to fall and they can park their Euros in better performing investments.

    Roberts said:

    This is why the Manhattan market will not collapse. When you have foreign buyers armed with Euros flooding the market, prices will only go up.

  256. REBear says:

    Its [New Jersey] popular program to preserve green space just fell victim to the need to devote huge amounts to the retirement plans and debt servicing.

    http://njrereport.com/index.php/2007/07/25/nj-retiree-obligations-skyrocket-to-58b

    Did we just create more land???

  257. pesche22 says:

    Nothing like the liberal irish.

  258. Arr Elle says:

    Awwww poor baby, this wanna be Investor wants someone to bail him out from his overpriced renovated home. Awww

    http://newjersey.craigslist.org/rfs/381934044.html

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