Hold on to those hats…

From Bloomberg:

Tough Times Are Still Ahead for U.S. Home Market: John F. Wasik

If you think the worst is over for the U.S. home market, hold on to your hats.

The credit crunch is not only making mortgage financing tougher, it will force more homeowners into foreclosure. The surge of more bargain homes on the market will further depress prices. Along with a corresponding pinch on home equity, auto loans and credit cards, this pullback doesn’t bode well for the economy.

The credit industry has become an inadvertent cheerleader for a recession. Consumers who can’t borrow typically don’t spend on items such as homes, cars and remodeling projects. It’s a punishing economic boomerang of mass psychology.

Only those with above-average credit ratings will fare well in the purge of the riskiest kinds of mortgages from lender portfolios.

“It’s been a bloodbath,” says George Jenich, owner of Milwaukee-based Lender Rate Match LLC, which runs an online mortgage service. “Since the beginning of the year, 25 lenders have been dropped from our database who have either gone bankrupt or stopped lending. We’re down to 15 lenders now.”

Jenich said all but the largest lenders have curtailed or halted their offerings of the riskiest kinds of loans. That includes subprime, so-called Alt-A, stated income, no- documentation and 100 percent financing.

Congress, market regulators and the Federal Reserve are trying to prevent a liquidity crisis that will cripple the already depressed home market.

Yet it may be too late to contain the collateral damage. At the end of last year, there were an estimated 7.5 million subprime mortgages totaling $1.4 trillion, according to the Center for Responsible Lending, a research organization in Durham, North Carolina. Some 20 percent to 30 percent of those loans may result in foreclosure. All told, the center predicts more than 2 million Americans will lose their homes. It may be more if the credit crunch continues unabated.

In July alone, foreclosures almost doubled compared with a year earlier, according to RealtyTrac Inc., the Irvine, California-based property tracking service. Hit hardest were those who were trying to refinance but couldn’t obtain loans after their adjustable-rate payments rose.

Also hurt are those homeowners refinancing loans who have no equity or money down.

Jenich said lenders are most restrictive in Arizona, California, Florida, Georgia, Michigan, New Jersey, New York, Nevada and Ohio.

That means banks in those states will require more equity or cash and offer lower loan amounts. Not surprisingly, Nevada, Georgia and Michigan posted the highest foreclosure rates in the U.S., with California and Florida showing the highest total foreclosures, RealtyTrac reported.

The trigger point for what industry experts say will be the next wave of foreclosures is November — when the next resets are scheduled — and then in April of next year.

“This will put borrowers in a straitjacket if they need to find 100 percent financing since no products will be available,” says Jenich.

The credit industry will eventually adjust to the new reality of tighter standards after the free-wheeling, no-money- down days that ended last year.

It’s too late for regulating out of this morass, though Congress may be forced to compel secondary-market leaders like Freddie Mac and Fannie Mae to buy a wider range of mortgages and improve disclosure on loan contracts.

In the meantime, if you need a loan, you will need more savings in the bank and extensive documentation to prove income and assets. That was a safeguard all along. Why does it suddenly seem like a good idea to the industry and Washington?

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

203 Responses to Hold on to those hats…

  1. chicagofinance says:

    sobering….not happy to read this stuff as obvious as it is to most of us

  2. AntiTrump says:

    I am on my way back from a two week business trip to India. Construction is booming like crazy over there. Prices in many neigbourhoods are getting ahead of prices in the New York metro area. It is hard to say if it is a bubble or not since India is growing at about 9% a year unlike our anemic

  3. AntiTrump says:

    Read in the economist that Fed is pricing the assets pledged to it as collateral by banks for the recent credit infution at 85% of face value for AAA rated securites prvided the loans held are not impaired.

  4. AntiTrump says:

    chilling in the heathrow lounge for now, waiting for the flight back to newark

    later,
    AT

  5. James Bednar says:

    From the AP:

    Ahead of the Bell: Existing Home Sales

    A report due Monday is expected to show sales of existing homes inched upward in July, the first increase after four straight months of declines.

    The National Association of Realtors’ report on U.S. home sales, due out at 10 a.m. EDT, is projected to show sales rose 0.1 percent to a seasonally adjusted annual rate of 5.76 million units, from 5.75 million units in June, according to the consensus forecast of Wall Street economists surveyed by Thomson/IFR.

    If the results meet analysts’ expectations, it would the second upbeat report in the past two trading sessions after weeks of bleak housing market data.

    The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. It was only the second monthly increase in new-home sales this year and surprised economists, who had been expecting a 1.1 percent drop.

    Sales of existing homes, which make up about 85 percent of the residential real estate market, were more than 11 percent below year-ago levels in June. If July’s results meet analysts’ projections, they will be nearly 9 percent below last year’s levels.

    The Realtors’ group projects U.S. home sales will rebound next year after a rough 2007. Earlier this month, it projected that existing home sales home would fall 6.8 percent this year to 6.04 million, but then rise next year to 6.38 million. This year’s sales are expected to be the lowest since 2002.

  6. BC Bob says:

    “Jenich said lenders are most restrictive in Arizona, California, Florida, Georgia, Michigan, New Jersey, New York, Nevada and Ohio.”

    Punt?

    So if you want a home loan, you’ll now need savings and documentation proving income and assets? What grinch is saying this? Who comes up with these revolutionary ideas?

  7. HomeInput says:

    I can’t understand why no one saw this coming. I’m all for calculated risk. What most of these people going through foreclosure did was live way beyond their means, obviously. I don’t know about anyone else, but I’m looking at this as a perfect opportunity to pick up some decent real estate at once in a lifetime prices and be set 10 yrs. down the road. Anyone else?

  8. BC Bob says:

    “but I’m looking at this as a perfect opportunity to pick up some decent real estate at once in a lifetime prices and be set 10 yrs. down the road. Anyone else?”

    Input,

    It depends on one’s agenda.

  9. James Bednar says:

    I don’t know about anyone else, but I’m looking at this as a perfect opportunity to pick up some decent real estate at once in a lifetime prices and be set 10 yrs. down the road. Anyone else?

    While I agree on a general level, I don’t believe we’ve yet reached a point where a buyer is getting good value. I still see considerable downside potential in the market. Prices have much farther to fall.

    jb

  10. chicagofinance says:

    OT: OK – I have to take this Gahan thing off repeat. My son likes it, but my wife is going to hit me.

  11. JIM says:

    Did anyone notice that there are 5 FULL pages of sheriff sales in today’s Star Ledger.

    I think it is going to be a lot worse than mant have predicted.

    JIM

  12. RentinginNJ says:

    A report due Monday is expected to show sales of existing homes inched upward in July, the first increase after four straight months of declines.

    I’m betting on a weaker than expected existing home sales. A diminishing pool of buyers took advantage of generous incentives on new homes, thus pushing up new home sales at the expense of existing homes.

    Just a guess. We’ll see at 10:00.

  13. Comrade 3b says:

    #6 BC Bob: “Jenich said lenders are most restrictive in Arizona, California, Florida, Georgia, Michigan, New Jersey, New York, Nevada and Ohio.”

    I thought all our borrowers in NJ were wealthy people who got mtgs form Hudson City Savings Bank?

  14. James Bednar says:

    Major jump in yields on the short end of the curve this morning.

    jb

  15. Comrade 3b says:

    #9 JB: These July numbers will not reflect all that has trasnpired over the last few weeks, regarding the severe credit crunch,and the almost total disappearance of sub-prime.

    So why the numbers might meet expectations, I would think the trend going forward would be down, reflecting what has happened, end of July/August and beyond.

  16. It's over grubbers Prices are plunging says:

    ” I don’t know about anyone else, but I’m looking at this as a perfect opportunity to pick up some decent real estate at once in a lifetime prices and be set 10 yrs. down the road. Anyone else?”

    NOT even close yet to 1993 prices.

  17. James Bednar says:

    Did anyone notice that there are 5 FULL pages of sheriff sales in today’s Star Ledger.

    I didn’t look, but I’m hoping my wife didn’t throw the paper out yet.

    jb

  18. Richie says:

    I’m watching the Morris County sherriff’s sales online. The numbers just keep growing, and a large number of lenders are getting properties for $100. (FYI: $100 is the minimum required for the lien-holder to take control of the property).

    What does that mean? Properties are selling well below what the outstanding balances on the mortgages are…

  19. BC Bob says:

    “Did anyone notice that there are 5 FULL pages of sheriff sales in today’s Star Ledger.”

    Did Sam Ali quote that RE expert again?

  20. AL says:

    Richie Says:
    August 27th, 2007 at 8:58 am
    I’m watching the Morris County sherriff’s sales online. The numbers just keep growing, and a large number of lenders are getting properties for $100. (FYI: $100 is the minimum required for the lien-holder to take control of the property).

    What does that mean? Properties are selling well below what the outstanding balances on the mortgages are…

    Wrong assumption – whoever buys the FK property pays FUll Balance owed on teh property with all outstanding liens fee’s and loans PLUS their bid.

    SO banks effectivelly buying it from themselves for 100$.

  21. AL says:

    Thats why in my opinion buying At the FK auction should be left to the professionals – you might miss an outstanding loan or lien and it is bidder’s responsibility to so their own research.

  22. James Bednar says:

    The numbers just keep growing, and a large number of lenders are getting properties for $100.

    What does that mean? Properties are selling well below what the outstanding balances on the mortgages are…

    Means one of two things:

    1) Nobody was interested in the property, so there were no other bids.

    2) Outstanding liens are greater than the current market value of the property.

    jb

  23. Bloodbath in Winter 2007 says:

    Looking forward to the usual suspects claiming the uptick in existing sales canceling out the reams of data that suggest things are about to get ugly.

    The best place to be: renting, having saved 100k, which is nicely tucked away in ING, and have no credit card debt.

    Also, if anyone you know says that they are about to buy a place, the smart move is to tell them to hold off for 6 months. At least.

  24. Comrade 3b says:

    JB/Rich NJ: If either of you guys get a chance, could you provide me with the sales history (if possible) for njmls 2713621 (oradell),2734220, and 2734468 (both in river edge). Thanks in advance.

  25. James Bednar says:

    From American Banker:

    Institutional Strains Have FDIC on Call

    The very existence of deposit insurance has made bank runs pretty much a thing of the past.

    But that did not stop what some have called a mini-run on Countrywide Financial Corp’s thrift two weeks ago, as the company suffered market reversals and financial services companies in general were buffeted by bad news.

    It was only a few branches of one institution, the crowds were small, and the trouble itself was, at least according to Countrywide’s chief executive, exacerbated by a report published in the Los Angeles Times.

    But the clear anxiety among depositors — and continued fears about an enduring credit crisis — have sparked obvious questions of whether institutions remain vulnerable to runs and whether consumers know enough about government protection not to spark one.

    How does the Federal Deposit Insurance Corp. provide useful information to address a sequence of events that essentially were triggered by a lack of information?

    Though they would not discuss the Countrywide incident or any specific banking company, FDIC officials said inquiries from consumers to its banking call center have run two to four times higher than average over the past two weeks as depositors have sought details about their coverage. But the officials also said runs remain highly unlikely, because most consumers are well aware of deposit insurance. The agency also provides information on its Web site and brochures for customers about the deposit insurance limit.

  26. Richie says:

    Wrong assumption – whoever buys the FK property pays FUll Balance owed on teh property with all outstanding liens fee’s and loans PLUS their bid.

    SO banks effectivelly buying it from themselves for 100$.

    Isn’t that what I said, without being too overly specific?

    In short, I meant that in order to buy that foreclosed property, the would-be bidders would be paying much more then the current market value of the home.

  27. AL says:

    From Post#18

    Thats what you have said:

    What does that mean? Properties are selling well below what the outstanding balances on the mortgages are…

    Properties are not selling below outstanding balances – they are selling at outstanding balance +100$.

  28. Clotpoll says:

    ChiFi (10)-

    Dave Gahan…perfect soundtrack for the RE bust.

    Jesus…

  29. James Bednar says:

    Megadeth – Foreclosure of a Dream

    Rise so high, yet so far to fall
    A plan of dignity and balance for all
    Political breakthrough, euphoria’s high
    More borrowed money, more borrowed time
    Backed in a corner, caught up in the race
    Means to an end ended in disgrace
    Perspective is lost in the spirit of the chase

    Foreclosure of a dream
    Those visions never seen
    Until all is lost
    Personal Holocaust
    Foreclosure of a dream

    Barren land that once filled a need
    Are worthless now, dead without a deed
    Slipping away from an iron grip
    Nature’s scales are forced to tip
    The heartland cries, loss of all pride
    To leave ain’t believing, so try and be tried
    when sufficient funds, insanity and suicide

    Now with new hope some will be proud
    This is no hoax, no one pushed out
    Receive a reprieve and be a pioneer
    Break new ground of a new frontier
    New ideas will surely get by
    No deed, or dividend. Some may ask “Why?”
    You’ll find the solution, the answers in the sky

    Rise so high, yet so far to fall
    A plan of dignity and balance for all
    Political breakthrough, euphoria’s high
    More borrowed money, more borrowed time

  30. Clotpoll says:

    Bath (23)-

    Not everyone is you. Not everyone is in your situation. Your “advice” may not be appropriate for someone else.

    It certainly won’t be received well by someone who didn’t ask for it. Hell, people come to me and do ask for my advice all the time…and 90% of ’em don’t like the advice I give.

  31. Clotpoll says:

    Grim (29)-

    Megadeth before 10 AM.

    Slick.

  32. HEHEHE says:

    Credit crunch reaches ’emergency’ state
    Mortgage market commentary

    http://www.inman.com/inmannews.aspx?ID=64355

  33. NJGal says:

    Well, we have found out the major reason why the prior owners sold our house only 2 years after buying it – money. So the money issues are certainly not limited to the subprime folks. Wife doesn’t work, and hubby, although a lawyer, works in the ‘burbs so the money isn’t city money. They downsized – told the neighbors the taxes were too high and if they moved into “town” (into a smaller house) they could get rid of a car b/c they’d be closer to the train. And these were people who were carrying a mortgage below the conforming limits (sold an apt. in bought in Brooklyn in the 1990s and took the profits to the suburbs).

    I think there were some other snob factors, and a lack of suburban knowledge – they apparently made a complaint that they had not met the neighbors until ’07 – I think they had some idea of bringing their idea of a Brooklyn utopia to the ‘burbs and remaking Park Slope in Northern Westchester. I really think it has more to do with their rather unfriendly personalities (according to the neighbors they did meet) – after all, we’ve been in for a month and we have met most of our neighbors already and they’re great – they’ve made babysitting offers, offered to show us around, watch our dog, etc. A neighborhood is what you make it and snobbery and standoffishness is a benefit to no one.

  34. lena1008 says:

    Bloodbath,
    that’s the position i’m in ($ saved, no credit card debt, investment in a second home purchased at an inexpensive price, and rented out seasonally to cover the mortgage).

    i recently moved out of the NY tristate area (to florida) and the market here is a mess!!

    am waiting at least 6 months, and am going to lowball left and right, and not pay more than $200K for a house down here. eventually, i figure, someone will be desperate enough to take that amount!!

    with foreclosures, this should be doable.

  35. BC Bob says:

    “Hell, people come to me and do ask for my advice all the time”

    Clot,

    Have you studied the College F-Ball lines for this weekend? I need advice.

  36. James Bednar says:

    “Hell, people come to me and do ask for my advice all the time”

    They aren’t asking for advice, they are fishing for an opinion that justifies their position.

    jb

  37. chicagofinance says:

    James Bednar Says:
    August 27th, 2007 at 8:52 am
    I didn’t look, but I’m hoping my wife didn’t throw the paper out yet. jb

    grim: to save money, we’ve been using the Real Estate sections of newspapers as TP

  38. Richie says:

    grim: to save money, we’ve been using the Real Estate sections of newspapers as TP

    Those paper-cuts could be nasty.

  39. Bloodbath in Winter 2007 says:

    What JB said. The truth hurts, and most people can’t take it. But you’re right clot, I should have said, ‘i think the best situation would be …’

    But homeowners needn’t be worried – if you plan on living in our house for many more years, none of this matters.

    HOWEVER, i think buying now would put you at negative equity for probably the next six months. At least. Again, that means nothing if you are going to live there for 10 years.

  40. Rich In NNJ says:

    3B,

    Oradell – 2713621 – Taxes: $(,035
    SLD CENTER ST $405,000 6/27/2003

    ACT CENTER ST $629,000 4/8/2007
    PCH CENTER ST $599,000 5/16/2007
    PCH CENTER ST $569,000 6/28/2007
    PCH CENTER ST $549,000 8/12/2007
    PCH CENTER ST $519,900 8/26/2007

    River Edge – 2734220 – Taxes: $8,631
    SLD TENNEY AVE $480,000 8/1/2005

    ACT TENNEY AVE $459,000 8/21/2007

    River Edge – 2734468 – Taxes: $9,800
    SLD MADISON AVE $160,500 8/15/1997

    ACT MADISON AVE $549,000 8/23/2007

  41. dreamtheaterr says:

    The switch from 2-ply to 1-ply might inflict less pain than newspapers :)

  42. stuw6 says:

    Keep Shooting your mout off BI:

    AP
    Home Sales Hit Slowest Pace in 5 Years
    Monday August 27, 10:06 am ET
    By Martin Crutsinger, AP Economics Writer
    Existing Home Sales Drop in July to Slowest Pace in Nearly 5 Years

    WASHINGTON (AP) — Sales of existing homes dropped for a fifth straight month in July, falling to the slowest pace in nearly five years, while home prices fell for a record 12th consecutive month.

    The National Association of Realtors reported that sales of existing homes dipped by 0.2 percent last month to a seasonally adjusted annual rate of 5.75 million units.

    The median price of a home sold last month slid to $230,200, down by 0.6 percent from the median price a year ago. It marked the 12th consecutive month that home prices have declined compared with a year ago, an all-time high.

    The deep slump in housing, combined with recent severe turmoil in financial markets, has raised worries about a possible recession. But many economists believe the Federal Reserve will ward off a full-blown downturn by reducing a key short-term interest rate should financial market conditions fail to stabilize.

  43. Comrade 3b says:

    #40 Rich Thank You, very much. I will be watching those.

  44. dreamtheaterr says:

    Confirmation bias anyone? It’s more rampant than we think -just ask your brother-in-law who is mouthing off the latest stock tip/condo flip.

  45. James Bednar says:

    Inventory at 16 year high..

  46. scribe says:

    ECONOMIC REPORT
    Home inventories rise to 16-year high
    Existing-home sales fall 0.2% to 5.75 million pace, lowest in 5 years

    By Rex Nutting, MarketWatch
    Last Update: 10:01 AM ET Aug 27, 2007

    WASHINGTON (MarketWatch) – Inventories of unsold single-family homes increased 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years, the National Association of Realtors reported Monday.

    Resales of homes fell 0.2% to a seasonally adjusted annual rate of 5.75 million, stronger than the 5.69 million sales pace expected by economists surveyed by MarketWatch.

    Sales of single-family homes fell 0.4% to a 5.0 million seasonally adjusted pace.
    Sales were essentially unchanged, despite disruption in the pipeline for mortgage loans, the NAR said.

    Inventories of single-family unsold homes represented a 9.2-month supply at the July sales pace, the highest since October 1991.
    Inventories typically fall in July, said Lawrence Yun, senior economist for the real estate trade group. The inventory figures are not seasonally adjusted.

    “The inventory is very high,” Yun said. He reckoned that rising foreclosures might be increasing levels of inventories by 5% to 7%. But Yun said the problems in the subprime market won’t damage the broader economy.

    July sales are based on sales that were contracted in May or June. About a quarter of the realtors surveyed said they had a client whose previously committed loan had fallen through. Further disruptions in the mortgage market in August should impact sales in coming months, Yun said.

    The median sales price was $228,900, down 0.6% since last July.

    By sector, July’s sales of single-family homes dipped 0.4% to an annualized 5 million, while condominium sales rose 1.4% to a seasonally adjusted annual rate of 750,000.

    By region, sales fell by 2.2% in the Midwest, were unchanged in the South, rose 1% in the Northeast and fell 1.8% in the West. End of Story

    Rex Nutting is Washington bureau chief of MarketWatch.

  47. James Bednar says:

    From MarketWatch:

    Home inventories rise to 16-year high

    Inventories of unsold single-family homes increased 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years, the National Association of Realtors reported Monday.

    Resales of homes fell 0.2% to a seasonally adjusted annual rate of 5.75 million, stronger than the 5.69 million sales pace expected by economists surveyed by MarketWatch.

    Sales of single-family homes fell 0.4% to a 5.0 million seasonally adjusted pace.
    Sales were essentially unchanged, despite disruption in the pipeline for mortgage loans, the NAR said.

    Inventories of single-family unsold homes represented a 9.2-month supply at the July sales pace, the highest since October 1991.
    Inventories typically fall in July, said Lawrence Yun, senior economist for the real estate trade group. The inventory figures are not seasonally adjusted.

    “The inventory is very high,” Yun said. He reckoned that rising foreclosures might be increasing levels of inventories by 5% to 7%. But Yun said the problems in the subprime market won’t damage the broader economy.

    July sales are based on sales that were contracted in May or June. About a quarter of the realtors surveyed said they had a client whose previously committed loan had fallen through. Further disruptions in the mortgage market in August should impact sales in coming months, Yun said.

    The median sales price was $228,900, down 0.6% since last July.

  48. James Bednar says:

    From Bloomberg:

    U.S. Existing Home Sales Fell 0.2% in July to 5.75 Mln Rate

    Sales of previously owned homes in the U.S. fell in July for a fifth consecutive month, adding to the inventory of unsold properties and showing the housing slump that triggered a collapse in credit markets will drag on.

    Purchases declined 0.2 percent, less than forecast, to an annual rate of 5.75 million, from 5.76 million in June, the National Association of Realtors said today in Washington. That was the slowest pace since November 2002. Sales dropped 9 percent compared with a year earlier.

    With no recovery in sight for residential real estate, lower property values and harder-to-get mortgages threaten to weaken consumer spending, economists said. The Federal Reserve this month acknowledged a growing risk to economic growth in the wake of subprime mortgage defaults and a plunge in stock prices.

    “We still have an overhang of inventory that needs to be reduced,” Robert Stein, senior economist at First Trust Advisors in Lisle, Illinois, said before the report. “The housing recession will continue into the middle of next year. Then we may see a glimmer of hope.”

    Resales were forecast to fall 0.9 percent to a 5.7 million annual rate, according to the median forecast of 74 economists in a Bloomberg News survey. Estimates ranged from 5.5 million to 6 million. Existing home sales averaged 6.51 million in 2006.

    The median price of an existing home dropped 0.6 percent in July from a year ago to $228,900, the Realtors group said.

    The supply of homes for sale at the end of the month climbed 5.1 percent to 4.59 million. At the current sales pace, that represented 9.6 months’ worth, up from 9.1 months’ worth at the end of the prior month.

    The inventory of single-family homes represented a 9.2 months’ supply, the most since October 1991.

    Resales of single-family homes declined 0.4 percent to an annual rate of 5 million. Sales of condos and co-ops rose 1.4 percent to a 750,000 rate.

    The Midwest accounted for all of the decline in sales. Purchases declined 2.2 percent in the Midwest and were unchanged in the South. They increased 1 percent in the Northeast and 1.8 percent in the West.

  49. stuw6 says:

    “But Yun said the problems in the subprime market won’t damage the broader economy.”

    You would think that an RE expert with a name like Yun would be experienced with reading tea leaves. Perhaps he should not have used them for brewing a refreshment at dinner last night.

  50. scribe says:

    Stu,

    The numbers were up in the Northeast. From that NAR release:

    Existing-home sales in the Northeast increased 1.0 percent to a level of 1.02 million in July, but are 2.9 percent lower than July 2006. The median existing-home price in the Northeast was $290,900, up 5.9 percent from a year ago.

    How do they define Northeast? Is that New England plus the mid-Atlantic states of NY and NJ, DE, etc.?

  51. James Bednar says:

    How do they define Northeast? Is that New England plus the mid-Atlantic states of NY and NJ, DE, etc.?

    Regional Definitions

    Northeast
    Connecticut
    Maine
    Massachusetts
    New Hampshire
    New Jersey
    New York
    Pennsylvania
    Rhode Island
    Vermont

  52. RentinginNJ says:

    Total existing-home sales – including single-family, townhomes, condominiums and co-ops – slipped 0.2 percent to a seasonally adjusted annual rate1 of 5.75 million units in July from an upwardly revised pace of 5.76 million in June, and are 9.0 percent below the 6.32 million-unit level in July 2006.

    At this point, the YOY numbers are comparing 2 soft years. If you compare July 2005 sales (7.13 million), you will see that sales have fallen 19.4 percent from the peak year.

  53. Bloodbath in Winter 2007 says:

    Anyone think the AG resigning will have an impact either way on housing?

    http://www.nytimes.com/2007/08/27/washington/27cnd-gonzales.html?hp

  54. stuw6 says:

    scribe,

    I don’t typically worry about the fluctuations from one area to another. The greater trend will eventually bring all the markets down. The Northeast is funny like that. Correct me if I’m wrong, but the NE always seems to be last to drop, but last to gain in other economic categories such as employment, economic growth, etc. It wouldn’t surprise me if RE worked the same way.

    Ultimately, none of these monthly reports really mean much anyway. They’ll all be way down post the October arm resets. This will trigger the recession. I’m currently looking for a decent foreclosure play. Maybe a publicly traded self-storage facility?

  55. skep-tic says:

    #25

    just because there is insurance does not mean that depositors shouldn’t worry. insurance can fail. for example, the state insurer that backed RI S&Ls in the early 90s went under and many people lost their savings. obviously, failure of the FDIC is less likely, but not impossible.

  56. RentinginNJ says:

    Lawrence Yun, NAR senior economist, said the market is holding on despite temporary mortgage disruptions. “Home sales probably would be rising in the absence of the mortgage liquidity issues of the past two months,” he said.

    While standards were being tightened through the year, we really didn’t see any serious “mortgage liquidity issues” up until a few weeks ago; certainly nothing that would impact July sales.

    It’s interesting to note that Yun sees the mortgage disruptions as “temporary”. Is he really implying that we are going to quickly return the days of easy 107% stated-income interest only loans?

  57. hughesrep says:

    Anyone think the AG resigning will have an impact either way on housing?

    Only low income housing in Cuba.

  58. Richard says:

    >>They’ll all be way down post the October arm resets. This will trigger the recession.

    contact me i have a bridge to sell you.

  59. gary says:

    …but sales and median price in the Northeast are up.

    And I read in the Bergen Record yesterday that purchasers in the prime towns in North Jersey are those who bring 20% to the table with assets and top credit scores. That’s the third time in a couple of months I read something like that. I wish I could recall the other sources but I can’t.

  60. James Bednar says:

    From Bloomberg:

    LBBW to Buy SachsenLB to Help Rescue State-Owned Bank

    Landesbank Baden-Wuerttemberg, the largest German state-owned bank, agreed to buy Landesbank Sachsen Girozentrale following a 17.3 billion-euro ($23.7 billion) credit bailout because of investments in U.S. subprime debt.

    LBBW will pay at least 300 million euros for the bank and immediately provide 250 million euros in cash for SachsenLB, whose finance affiliates have struggled to sell commercial paper amid a global credit crunch. A final purchase price will be set by the end of the year, LBBW said yesterday in Stuttgart.

    SachsenLB got emergency funding from fellow state-owned banks on Aug. 17 to pay debt owed by a unit that invested in asset- backed securities, including subprime loans. Rising defaults on U.S. housing loans to borrowers with patchy credit histories have curbed demand for bonds backed by mortgages, spawning a financial contagion that’s spread as far as Germany and China.

    “The first big step was the bailout and the takeover is about making sure it doesn’t happen again,” said Konrad Becker, a Munich-based banking analyst at Merck Finck & Co. “SachsenLB was too small to survive alone and now it’s in stronger hands.”

  61. James Bednar says:

    Some great graphs over at CR:

    July Existing Home Sales

  62. Richard says:

    over the weekend i got 2 just sold glossies in the mail from coldwell banker both within 2 blocks of my house. one house sold for asking and the other +3% in less than 3 weeks. prices are about 5% below 2005 peaks. silly me i was expecting a sheriffs sale.

  63. stuw6 says:

    Richard:

    I heard the Pulaski Skyway is cheap.

  64. James Bednar says:

    They’ll all be way down post the October arm resets. This will trigger the recession.

    I’m not ready to jump on a recession call, but it’s clear that ARM resets will put further downward pressure on the marketplace for at least the next year to year and a half.

    jb

  65. James Bednar says:

    At this point, the YOY numbers are comparing 2 soft years. If you compare July 2005 sales (7.13 million), you will see that sales have fallen 19.4 percent from the peak year.

    Here is an illustration of that, from CR:

    Existing Home Sales – NSA

    jb

  66. HEHEHE says:

    Stu,

    I was reading this article on Minyanville:

    http://www.minyanville.com/articles/index.php?a=13848

    Pawn Shops?

  67. jcjp says:

    #50 – Stuw6

    While I agree with your assessment of Yun’s statement.. no need to get all racial… :)

  68. skep-tic says:

    I don’t know how anyone can pretend the RE market is stable with inventory at a 16 yr high amidst a credit crunch. We know for a fact that Americans have little savings, so the newfound love for the downpayment should hit sales of homes pretty hard. The only support left is strong employment, but we’ll see how long that lasts.

  69. stuw6 says:

    I’ve heard a lot of people quote that the expected number of foreclosures is between 20-30% of all non-fixed loans (forget any of the other I/O liar, etc. business). How are the banks going to absorb these losses? Their gonna sell the homes at 20% off for survival. This means YOUR home is going to be worth 20% less. Add this drop in people’s perceived net worth and the spending on consumer crap is going to dry up. Add to it high oil prices, higher property taxes (I pay 14G on a 600G home, Will be 15-16G on a 480G home), higher interest rates on CC debt (which will be much tighter), and finally CDs and money markets paying 3% thanks to the FED lowering lending rates.

    Earnings growth is the key to economic expansion. As people stop spending the earnings growth will end. They were only spending, because they thought they were rich. In essence, they are poorer than they were 5 years ago since their ‘real’ wage has dropped vs. rate of inflation.

    Keep dreaming Richard and other bulls hear, cause eventually, you’ll wake up.

  70. stuw6 says:

    While I agree with your assessment of Yun’s statement.. no need to get all racial… :)

    I knew someone would have that take on it.

    I didn’t tell you? Some of my best friends are Asian ;)

  71. Comrade 3b says:

    365 JB: I think the recession call is just a question of when at that this point, not if.

    I caught the repeat of the Mazillo interview over the weekend on CNBC, and the one thing I find amazing is the whole well the economy is creating jobs.

    And my response to that is so? What kind of jobs, are they the kind of jobs that can sustain housing prices etc. etc.

    And the one thing I find truly amazing is nobody seems to be talking about the world outside of sub-prime.

    How many people made decesiosn based on how quickly and by how much prices were rising. So even if they do not have a sub-prime mtg, how many took out HELOCS,and Home Equity loans, how many have done 50K and more kitchen addditions, whole house additons.

    How many have bought that second home, how many are driving expensive cars, with HELOC proceeds etc.

    It seems aevrybody I know (family friends) has at least one home equity loan.

    The sub-prime madness afffected all sectors, IMHO, and this is what will ultimately casue the recession.

  72. Comrade 3b says:

    #63 Any yet still over 200 coops/conods and SFH’s available for sale in Westfield, and we are just about in Sept.

  73. skep-tic says:

    from the CR post:

    “The 9.6 months of supply is the highest since 1982 – when mortgage rates averaged 16%”

  74. Everything's 'boken says:

    When will Dewey chime in with the rise in NE sales?

  75. stuw6 says:

    Comrade 3B,

    I proudly have no debt (HELOC) besides my fixed 5.5% fixed jumbo. I did buy on September 2004 cause I was sick of waiting for RE to drop. After 3 years of waiting for a pull back, it appeared that RE was actually accelerating in it’s upward pace of value and there was no way my salary or investments could keep pace. In retrospect, I still should have rented. Luckily I got a good deal on the home and still have about 20% of downside before I’m holding the bag. What I didn’t expect was for my property taxes to increase by 13% on average. In another 10 years, my property tax increases are going to eat up all of my wage increases. Crazy!

  76. daniel says:

    Lawrence Yun, NAR senior economist, said the market is holding on despite temporary mortgage disruptions. “Home sales probably would be rising in the absence of the mortgage liquidity issues of the past two months,” he said.

    And if my aunt had balls, she’d be my uncle.

  77. RentinginNJ says:

    Anyone check out the breakout for condo’s?

    There is currently a 11.9 month supply of condos.

  78. Comrade 3b says:

    #60 gary: and yet there is tons of inventory in the top BErgen County towns available for sale.

    The question one has to ask I belive is just how many will have that 20% to bring to the table.

    Willt here be some, of course, will ther be others who will have that based ont eh sale of their current home, of course, assuming they can sell their curret home to the first time buyer.

    Will the first time buyer have the 20% or 10% to buy that home, plus closing.

    Last week the family member who is a closing attorney told me of a closing they are working on,whereby the lender listed all the borroweres credit card balances, and wanted them all paid in full, before closing (over 10k the deal is scheduled to close this Wednesday, assuming they can pay these debts off, this was a 5% down deal, in one of Bergen’s premier towns)

    She said she had not seen that kind of requirement on a deal in years.

  79. Comrade 3b says:

    #76 stuw Property tax increases will be part of the hang over, rising taxes, declining prices.

    A lot of spending decesions (at least in my town) were the result of elected officials believing real estate can only go up.

  80. skep-tic says:

    #79

    are you sure about that 20% down figure? my impression was 10% is adequate. still a big departure from 0% down.

  81. Comrade 3b says:

    #81 skep: teh 20% was in reference to an articel in teh Begen Record that stated that people wilth 20% down would have no problems getting a mtg.

    10% is still adequate from what I understand too.

    The question would be how many first time home buyers have 50k to put down on that typical 500k POS starter Cape/Ranch or Colonial.

  82. It's over grubbers Prices are plunging says:

    This Baaaaawahahahaha is for you Friskie eating bunch!
    Unethical slicksters.

    All you young first time buyers. It is payback time baby. You stick it to’em. After years of being kicked around stomped and and lied to you send these greedy grubbers a message.
    NO MAAS!

    BOOOOOOOOOOOOOOYAAAAAAAAAAAA

    Bob

  83. It's over grubbers Prices are plunging says:

    Houses will sell, lower your prices you greedy grubbers.
    Price matters now with loans being much much much much much more difficult to obtain since you have to be able to pay it back now, what a thought. Property taxes are putt’en the squeeze on many dopes that got sucked into the propaganda.

    If you have to sell you will have to accept reality as banks foreclosures mount and forced selling crumbles prices into 2009.

    hehehehhehehehe

    READ MY LIPS: NO HOPE NO REBOUND SPRING SUMMER FALL 2008.

    BOOOOOOOOOOOOOOYAAAAAAAAAAA

    Bob

  84. bi says:

    what make you guys so excited? the media price was up 5.9%? am i wrong? yes. the sales number was down 10% from 2006. that is why we need rate cut to stimulate economy. your are right, clot. the market is what market is. 10 year yield is at 4.58%, 8 bps to my year-end target.

    by the way, the median price does not mean anything since it was up 5.9%. it certainly mean something if it was down 5.9%.

    > Existing-home sales in the Northeast increased 1.0 percent to a level of 1.02 million in July, but are 2.9 percent lower than July 2006. The median existing-home price in the Northeast was $290,900, up 5.9 percent from a year ago.

  85. Everything's 'boken says:

    If it walks like a Duck…

  86. James Bednar says:

    10% is still adequate from what I understand too.

    Take a peek at the most recent Countrywide subprime rate sheet:

    http://njrereport.com/files/WLDBCNJ-827.pdf

    20% down required on stated loans, 10% down on full doc. Not to mention the knee-breaker rates they are charging.

    jb

  87. It's over grubbers Prices are plunging says:

    Go ahead bi you try to convince everyone that prices are not going down. To late everyone has caught onto the propaganda machine.

    The current housing market is much much worse than early 1990’s when i bought and cleaned up. prices have to go down alot more to correct the affordability factor which pimps like you will never acknowledge.
    Keep up the chatter I am not listening to anyting you say. prices today are absurdly high vs early 1990’s boom bust period.
    bababababa

  88. Comrade 3b says:

    #85 bi: So even when your predictions are wrong (as noted in your posts this weekend), you just reinterpert the numbers so that they appear positive (in your mind at least),you really are too funny.

    Like I have said in the past, you have never lived through a real estate down turn. You are just rambling on now, hoping you do not get burned with all of your ARM resets I guess. Enjoy your fnatasty world!!

  89. stuw6 says:

    Fnatasty? Yum!

  90. It's over grubbers Prices are plunging says:

    Read my Lips: 2008 House implosion coming to a hood near you. Yes you will be able to buy a house without signing up for debt slavery. of course prices here relative to most parts of the country will still remain high but it will be a reprieve from the stupid prices of 05.

    Bababababa

    It’s sad that grubbers and friskie eaters cannot admit prices are out of wack vs incomes.
    Lower prices are good for the housing market clean out the excesses and make it stronger long term, but we have to many lifestyles that are in the process of being wrecked and deservedly so.

    BOOOOOOOOOYAAAAAAAAAAA

    Bob

  91. skep-tic says:

    #87

    those are some brutal rates. if those aren’t some short term aberration, then prices need to come way down– otherwise affordability is toast

  92. stuw6 says:

    I just found Bob’s picture. (It’s over grubbers Prices are plunging)

    http://tinyurl.com/2cpuc5

  93. Comrade 3b says:

    391 NAd they were alwasy high relative to the rest of the country. IMHO humble opinion prices will revert back to 2002/03 levels.

  94. It's over grubbers Prices are plunging says:

    “The rise in prices helped fuel a craze among buyers hoping to get into a new home, investors wanting to make quick cash and lenders looking to make money off new mortgages. ‘The less you understand and know, the more money they make,’ Jeff Lazerson, CEO of a mortgage broker in Laguna Niguel, Calif., said of mortgage lenders.”

    “That is what has helped fuel the current foreclosure situation around the country. ‘Many of the lenders were loose or had no standards for underwriting,’ he said. ‘You could be dead and get a loan.’”

    It’s funny how all these so called experts warn now.
    ‘You could be dead and get a loan.’”
    Perfect example of the lax oversight all driven by greed.

    It’s payback time baby and young first time homebuyers with an “attitude” can make a big statement.

    Much Lower house prices are good for society.

    Bababababa

  95. Comrade 3b says:

    #95 Lower prices in the end will be good for the economy and the country. Real Esate uber Bulls cannot seem to understand this, but they will.

  96. lisoosh says:

    NJGal – Hey!

    How did the move go? Enjoyng the house? How you feeling?

    I am going to defend people who don’t always jump all over the neighbours. I grew up in the UK and we are definitely more reserved. The knock-on-the-door-chat-all-the-time neighbourliness of the Deep South makes the hair on the back of my neck rise. I would probably deal better with New England reticence. Different horses for different courses.

  97. biluva says:

    10 year yield is at 4.58%, 8 bps to my year-end target.
    hi bi,
    i’m very impressed with your forecast you seem to be right always. your good in bond market, stock market, real estate market, etc. are you economist? or you work for government? do you have special access to information?
    do you think there will be recess coming? when? do you think fed will cut rates in september?

    thanks!

  98. BC Bob says:

    “your good in bond market, stock market, real estate market, etc.”

    Yeah, and Pee Wee Herman was good in the movie theatres.

  99. bi says:

    70#, thank you. it is one of few (if any) positive response to my post here. i am not a economist and don’t work for U.S. government while i did some science research work for U.S. government 10 years ago. The information i have is public internet site.

    By current Fed fund futures, it is almost 100% fed will cut rates in september. My prediction is fed will cut it again in December for your holiday gift. I don’t see recession within 5 years and depression in our life time. enjoy your short life.

  100. ADA says:

    stuw6 #76,

    I also bought recently and in retrospect also should’ve have rented. What I drastically underestimated was how much upkeep a house requires, sh*t is expensive man. I know I pay for some luxuries like landscapers/house cleaners etc and these things add up real fast and that’s not even counting how utilities appear to be higher than when we rented and like you said tax increases.
    Luckily, we played it safe with a 30/6.25 and bought well with our means,(our mortgage is 1.5x annual salary) but I was hoping to be saving alot more at this point than I am.
    I fell for the homeownership propaganda machine and am missing out a building a bigger nest egg if I had rented.

  101. Eagle says:

    Could someone with MLS access please provide listing history and address on the following four properties (one I only have an address, not the MLS, so not need the address), all in Ridgewood:

    2434840 (listed for 929 thousand);

    2706902 (listed for 1.1 million);

    2430549 (listed for 949 thousand);

    234 Phelps (I think listed for 1.1 million).

    Thanks!
    Eagle

  102. scribe says:

    grim,

    Here’s the answer on the top 10 foreclosing banks in NY state. Just came in via email.

    … here are the top 10 foreclosing banks for the last 13 months and the number of foreclosure filings they have made in NYC,
    Westchester and Nassau. Please note that this list only reflects the final
    bank to own a foreclosed loan, which is not necessarily the bank that originated the loan.

    1.Deutsche Bank 2299
    2.Wells Fargo 1791
    3.U.S. Bank, N.A. 1711
    4.HSBC 989
    5.JP Morgan Chase 838
    6.Bank of New York 807
    7.Washington Mutual, Inc. 673
    8.Fremont Investment & Loan 622
    9.Citigroup 582
    10.Countywide 520

    Senator Jeff Klein
    34th Senate District

  103. James Bednar says:

    Send my thanks to Senator Klein.

    jb

  104. scribe says:

    grim,

    Here’s his email – jdklein@senate.state.ny.us

    Always impressive when someone like that answers emails quickly.

    That’s a lot of foreclosures.

  105. WickedOrange says:

    RE 35

    Friday night take the Cuse and the points… Boo-ya

  106. James Bednar says:

    I’m having a bit of a problem reconciling the data above with recent comments from DB..

    Deutsche Bank subprime exposure currently relatively flat – CFO

    Deutsche Bank AG’s subprime exposure is currently relatively flat, chief financial officer Anthony di Iorio said in regard to the crisis of the US subprime credit market.

  107. subprimate says:

    “Aug. 27 (Bloomberg) — Sales of previously owned homes fell to a five-year low in July and the glut of unsold properties climbed to the highest since 1991 as the U.S. housing slump dragged on.

    With no recovery in sight for housing, lower property values and higher mortgage costs threaten to weaken consumer spending, economists said.”

    Apologies if I’ve been beaten with this.

  108. stuw6 says:

    JB [107]

    I agree with ya. I think a lot of CEOs are doing a lot of lying lately.

  109. stuw6 says:

    weaken consumer spending = recession.

    Of course, if some RE bull (Richard) wants to offer some supporting data as to why I’m wrong, I’d be happy to debate it with you.

  110. Rich In NNJ says:

    biluva,

    #98
    It’s ironic that you have the same sentence structure as bi. I guess this would explain your feelings and why you may be one to the few that actually understand his posts.

    Unless of course your IP is the…

  111. Comrade 3b says:

    #100 bi: Fed Fund Futures have been wrong all year. Do not count 100% on that rate cut in Sept.

    And if housing was as in great shape as you say it is, then there would be no need for a cut at all now would there.

    you cannto have it both ways.

  112. PQG says:

    Some good news on the housing front from a Senior Fellow at the American Enterprise Institute.

    Housing Market Crisis May Already Have Passed: Kevin Hassett

    …the good news is this: The housing market may be getting close to a turnaround.

    http://www.bloomberg.com/apps/news?pid=20601039&sid=a_dqu6AxIdIw&refer=home

    Hoorah! Then again Hassett also co-wrote this 1999classic…

    http://www.amazon.com/Dow-36-000-Strategy-Profiting/dp/0609806998

    so his timing may not be all that great.

  113. scribe says:

    grim,

    I thought Deutsche as No. 1 was odd, too.

    What he said about the foreclosing bank not necessarily being the bank that originated the loan … maybe they’re more involved in the loan servicing side, and therefore the bank of record on the foreclosures?

  114. Rich In NNJ says:

    Eagle,

    2434840
    GSMLS number?

    2706902
    ACT COTTAGE PL $1,225,000 2/21/2007
    PCH COTTAGE PL $1,190,000 6/21/2007
    PCH COTTAGE PL $1,100,000 8/4/2007
    EXT COTTAGE PL $1,100,000 8/20/2007
    ACT* COTTAGE PL $1,100,000 8/22/2007
    U/C COTTAGE PL $1,100,000 8/24/2007
    Est. Closing Date: 10/15/2007

    2430549
    GSMLS number?

    2722544
    ACT 234 PHELPS RD $1,195,000 6/4/2007
    ACT* 234 PHELPS RD $1,195,000 6/18/2007
    ARR 234 PHELPS RD $1,195,000 6/30/2007
    PCH 234 PHELPS RD $1,100,000 8/20/2007

  115. Comrade 3b says:

    Rich: Could you check out the sales history on one more njmls listing, Oradell 2732399. Thanks again.

  116. James Bednar says:

    MLS# 2434840 – 174 Grant

    History:

    MLS# 1582281
    Sold: 04/15/03 $775,000

    MLS#: 2277853
    List Date: 05/13/06
    List Price: $1,159,000
    Reduced: $1,109,000
    DOM: 183
    Expired

    Relisted MLS# 2434840
    List Date: 08/12/07
    List Price: $929,000
    DOM: 15

  117. BC Bob says:

    “Unless of course your IP is the…”

    Rich [111],

    Exactly. Bi and biluva? How about bilusional?

  118. James Bednar says:

    GSMLS 2430549 is also NJMLS listed as 2730953, 360 South Van Dien.

    MLS# 2711191
    Listed: 3/22/2007
    List Price: $1,049,000
    Price Change: $992,000 4/27/2007
    Price Change: $959,000 7/6/2007
    DOM: 124
    Expired

    Relisted: MLS# 2730953
    List Price: $949,900
    DOM: 29

  119. Rich In NNJ says:

    3B,

    SLD 811 WOODLAND AVE $320,000 6/23/1989

    ACT 811 WOODLAND AVE $689,000 8/8/2007
    PCH 811 WOODLAND AVE $659,000 8/24/2007

    You can see that they bought this 2 bedroom, 1.5 bath at the top of the market in 1989.
    It’s STILL a 2 bedroom…

  120. stuw6 says:

    How about BIle?

  121. RentinginNJ says:

    current housing market is much much worse than early 1990’s when i bought and cleaned up.

    The big differences I see between now and the 1990’s

    1) Skin in the game – in the late 80’s/early 90’s, you did see a growing number of ARMs. These ARMS, however, were coupled with verification of a buyers income and assets and required substantial down payments. People are less willing to walk away from their life savings down payment in the event of a downturn.

    2) Interest rates were falling during the bust. This served 2 goals: 1 – it helped restore affordability to the housing market without the need for major price drops. 2 – it helped keep people with ARMs in their homes. They didn’t face the reset shock they are facing today.

    These factors meant that many buyers in the late 80’s early 90’s both wanted to ride out the storm (they plunked down their life savings as a down payments) and could actually ride out the storm (since they were qualified to pay the mortgage and their rates didn’t spike).

  122. PQG says:

    #113 In moderation. What did I do wrong?

  123. Comrade 3b says:

    #119 Rich:Yeah i know that,we stopped in yesterday, out of curiosity. The did a beautiful family room addition, ( I assume after they bought it?), and in the process they took the 3rd bedroom and made it part of the family room.

    It could easliy and be turned back into a 3rd, for the life of me I cannot understand why they did not do that before listing.

    Thanks again for the listing

  124. Comrade 3b says:

    #122 rent: Agree. Except we did have major price drops. I bought at the peak,and 18 months or so later, when I saw what I coud have bought had I waited (bigger house, less money, lower rates), it was depressing.

  125. Imus says:

    Hey bi; speaking as one who does not post on here much but reads the threads, I think your postings are well informed and interesting. Keep up the good work. Hearing the same thing over and over from the same 3 guys who post every 10 minutes (and will never sack up and buy a house anyway gets boring). Cheers.

  126. James Bednar says:

    From CNBC (yea, yea, I know):

    July Housing Numbers: I Say Just Plain ‘Bupkiss’

    I said the word bupkiss on TV this morning. Is that kosher? I just couldn’t think of a better word, for all my years of hifalutin network journalism experience. It’s just that everyone wanted to talk about the July existing home sales numbers, how sales were essentially flat, and that was better than many folks had predicted, and yadda yadda, isn’t that nice? But the fact of the matter is, the real credit crisis didn’t hit until after all those contracts that make up the July numbers were signed, sealed and delivered.

    The one thing I will take from today’s numbers from the National Association of Realtors is the inventory number, because that’s only going to rise, thanks to increasing foreclosures, and, dare I say, wow, it’s pretty high right now. A 9.6-month supply. We haven’t seen that since Sept. 1990, and that was when the nation lost about a million jobs. We have job growth today, but nobody’s buying houses with all that newfound, newly earned cash.

    A study from Credit Suisse shows the adjustment date for all those dicey ARMs that were sold during the peak of all that aggressive boom lending is October and beyond, so we haven’t seen the worst of the defaults and resulting foreclosures. If I’m right, and who knows if I am, those foreclosed homes will only push the inventory numbers up even higher. Yes, everything’s local, and yes, some markets will be hit harder than others, but yes, it’s all telling me that when I look at a bunch of numbers from July, they don’t really mean bupkiss.

  127. James Bednar says:

    Speechless…

    Hoboken chicken assaulted, saved: Sunday park pleasantries in Hoboken were tainted yesterday by an unruly mob of three men assaulting a white chicken with sticks and a slingshot, The Jersey Journal reports. Then, after alerted adults at Pier A Park rushed to the chicken’s rescue, one of the men threw the chicken into a bush and ran away.

  128. James Bednar says:

    I’ll post the new Otteau eNewsletter around 5pm or so.

    jb

  129. It's over grubbers Prices are plunging says:

    Some housing bubble news from Wall Street and Washington. MarketWatch, “Inventories of unsold single-family homes increased 2.2% to 3.85 million in July, sending the inventory in relation to sales to the highest level in 16 years, the National Association of Realtors reported Monday. Sales were down 9% compared with a year earlier. The results were the slowest since November 2002.”

    “Inventories of single-family unsold homes represented a 9.2-month supply at the July sales pace, the highest since October 1991. For all homes, the inventory rose 5.1% to a record 4.59 million, representing a 9.6-month supply. Condo inventories surged 20% to 742,000, an 11.9-month supply at the July sales pace.”

    Baaaaaaawahahahahahaha.

    A big price cut will move inventories. Face it grubbers you have to cut and cut big to compensate for the tougher loan environment, oh you can pay back the loan?, higher property taxes so the few buyers available now can buy your home. CUT CUT CUT CUT PRICES.

    BOOOOOOOOOOOOYAAAAAAAAA

    Bob

  130. It's over grubbers Prices are plunging says:

    This market is much worse than 1991-1993.

    I have been in both markets and this one is absolutely stupid in terms of lending standards and house prices. Lots and lots and lots and Lots and lots of room to drop.

    Bleed’em dry

    BOOOOOOOOOOOYAAAAAA

    Bob

  131. Eagle says:

    MLS inquiry (sales and listing history and address)-

    Milburn – 2421148, listed at 849.

    THanks!
    Eagle

  132. dreamtheaterr says:

    Looking at the Country wide sheets it’s apparent that affordability is decreasing, not increasing.

    Who are the sellers going to sell to? All plankton are on strike……. by choice or force.

  133. stuw6 says:

    Seaking Alpha:
    Will the Housing Slump Raise Consumer Defaults?
    http://tinyurl.com/3568p7

    Credit cards next?

  134. James Bednar says:

    Looking at the Country wide sheets it’s apparent that affordability is decreasing, not increasing.

    … or that Countrywide doesn’t want to be in the subprime business without compensation for the risk involved.

    jb

  135. Tarheel Stuck in New Jersey says:

    Hey, I posted this on the weekend thread, before. Can anyone help me?

    Does anyone have any info on this listing?

    2410655

    Specifically, was it listed before this mls number under another number, and if so, at what OLP? Thank you very much, in advance.

  136. versity says:

    It would seem to me that house prices would generally “slide” (i.e., stagnate or drop only very slowly) in a down market, as oppossed to drop precipitously, because of the high transaction costs involved with buying/selling and the fact that most homeowners try to wait out, as opposed to flee, a weakening market. And by “generally” I mean in owner-occupied, primary residence markets. Does anyone know if this has historically been the case in down RE markets?

  137. Richard says:

    #137 yes.

  138. James Bednar says:

    MLS# 2371714 – 372 Wyoming
    Listed: 02/04/07
    LP: $859,000
    DOM: 177
    Expired

    Relisted: 2421148
    Listed: 06/28/07
    LP: $849,000
    DOM: 60

    Purchased: 11/8/2004 $675,000

  139. Comrade 3b says:

    #137 versity: Assuming that mnay can hang on, that is the big question.

    IMHO many that have no skin in the game have no reason to hang on, and if some wanted to hang on, they may not be able to, due to nasty rate resets.

    Its one thing if your payment goes up by 100/150 a month, quite another if your payment goes up 600/700k a month, and of course the ever increasing property taxes.

  140. James Bednar says:

    #137 yes.

    Richard,

    You know, as well as I, that there are many caveats associated.

    Or, are you going to tell these people that the price of their properties didn’t fall..

    New Jersey Condos – A Look At The Last Crash

    jb

  141. Richard says:

    >>Of course, if some RE bull (Richard) wants to offer some supporting data as to why I’m wrong, I’d be happy to debate it with you.

    job market is good, incomes are growing, people still spending, major government indicators point to a growing economy. the slowdown in real estate has had an impact on growth, the debate is to what extent and how protracted.

  142. Richard says:

    jb see post #142.

  143. dreamtheaterr says:

    job market is good For how many folks?

    incomes are growing Oh yeah? Try real incomes…

    people still spending Selling their kidneys, right?

    major government indicators point to a growing economy by ever imcreasing M3.

    Nice spin Richard….

  144. AL says:

    dreamtheaterr Says:
    August 27th, 2007 at 1:52 pm
    Looking at the Country wide sheets it’s apparent that affordability is decreasing, not increasing.

    Who are the sellers going to sell to? All plankton are on strike……. by choice or force.

    By Choice??

    How about starting salarues for young people with degree are rasing by 3%/year at most – , mostly staying flat for last 5-7 years, how about ALL insurance premiums rasing at 7-10% and medical insurance rasing 14% year (to have a healthy, perfectly normal baby cost abour 20-30K around here), – yes I can always can get a job at McD… And buy a house with 9$/hour… salary, right??

  145. DoughBoy says:

    The slide price drop theory only works for so long if the market continues with the current trend, how long can those prices slide before they’re forced to take a jump to make the sale… causing others to jump… turning that slide into an avalanche.

  146. bi says:

    101#, ADA, i agree with you in some degree. it takes more money to maintain a SFH. but it is also the reason why SFH will not come down that much since owners keep adding value to it.

    For first time buyers who and both work and have no time for much house work, i think suburban townhouse is a good alternative. especially if you can get into an end-unit, which makes you only one wall connecting to your neighbor. My first home was an end-unit townhouse and i paid a little over $100 association fee per month, which covers all the structure related maintainance, home insurance, grass cutting, snow removing… the only thing you see is your home value going up. i miss those good old days.

  147. stuw6 says:

    Richard [142] says:

    job market is good: I’ll give you this one, but I feel it has a direct relationship to the easy credit that was formerly available and is no longer.

    incomes are growing: Not mine, nor is any one elses in the middle and lower classes. I posted various articles revealing drops in ‘real’ wages since 2000.

    people still spending: Not sure about that either. The restaurant and consumer discretionary retail stocks are showing signs of breaking down. Discretionary retail is first to go when recession hits. Sales at the likes of WFMI (whole paycheck) have swung lower yoy. Walmart is lousy. Sears starting to show signs of cracking. Wait till consumer credit tightens.

    major government indicators point to a growing economy: Growing or slowing? The latest GDP numbers for personal discretionary income…Disposable personal income increased $86.6 billion (3.5 percent) in the second quarter, compared
    with an increase of $225.9 billion (9.5 percent) in the first. Real disposable personal income decreased
    0.8 percent, in contrast to an increase of 5.9 percent. This is the separation between the haves and the have nots.

    the slowdown in real estate has had an impact on growth, the debate is to what extent and how protracted: I agree with you here, but this is prior to an almost quadrupling of arms resets. If the foreclosure numbers doubled from June to July can one not see the potential for this number to double at least 4 more times on the next 6 months? What about those trying to hang on? Their not in the mix either yet.

    Richard, I don’t need you to agree with me. I’m fine agreeing to disagree. We’ll see where we are at this time next year. Maybe I’ll have to eat crow, but it’s a lot better than eating cat food.

  148. x-underwriter says:

    job market is good, incomes are growing, people still spending, major government indicators point to a growing economy. the slowdown in real estate has had an impact on growth, the debate is to what extent and how protracted.

    Yep, job market is growing:

    Temp hiring falls for 6th straight month

    http://money.cnn.com/2007/08/27/news/economy/temp_workers/index.htm?postversion=2007082710

    In 2001, a fall in temporary employment occurred roughly a year before a drop in overall employment, said the Journal. Economists believe that businesses usually cut temporary workers first before dismissing full-time employees.

  149. gary says:

    dreamtheaterr,

    I gotta be honest, I’m getting three emails per week on average from recruiters asking if I’m interested in IT jobs in Manhatten and Jersey City. They’re looking for bodies.

    And it seems every conversation I hear from my kids friends parents and people at work seems to revolve around vacations, new toys and new cars. I asked my wife about a month ago to observe the conversation when we get together with friends and now she sees what I’m talking about.

    I’m not saying it won’t change, but right now I don’t see it.

  150. Clotpoll says:

    Gal (33)-

    Imagine an army of Jerseyites trying to remake NC in our image.

    Youch!

  151. Clotpoll says:

    BC (35)-

    First week of college football is usually off-limits for me, although I do like teams who were big upset bowl game winners the season before. There is a “carryover effect” that is investable.

  152. stuw6 says:

    Gary [150],

    I thought the same thing. My friends all recently bought homes, drive $30,000+ cars, open new Helocs to upgrade their kitchens, bathrooms and basements. Lately, I’ve been asking around about their mortgages and at least half of them didn’t put 20% down and have non-fixed rate loans in a piggy back situation. One of ’em has 70,000 plus already at rates over 10%. Of course prior to asking, everything seemed honky dory. Dig a little deeper and ask what kind of debt your friends with the new cars are carrying.

  153. Aaron says:

    NJ is the Camelot of debt. Nobody I knew had any savings and were continually tapping their refi.
    I know I don’t speak for everyone here but thats what I saw in the land of POS Capes.

  154. Clotpoll says:

    bi (100)-

    “…i did some science research work for U.S. government 10 years ago.”

    In what…cold fusion?

  155. Clotpoll says:

    Grim (128)-

    “Hoboken chicken assaulted, saved: Sunday park pleasantries in Hoboken were tainted yesterday by an unruly mob of three men assaulting a white chicken with sticks and a slingshot, The Jersey Journal reports. Then, after alerted adults at Pier A Park rushed to the chicken’s rescue, one of the men threw the chicken into a bush and ran away.”

    I think this is one of the signs of the Apocalypse.

  156. gary says:

    stuw6,

    I’d love to delve into their “financial” opinions. I’ll have to think of a tactful way of doing it. Either that or I’ll give my wife a glass of wine, whisper nasty rumors in her ear and sit back and watch. ;)

  157. chicagofinance says:

    gary Says:
    August 27th, 2007 at 2:38 pm
    I asked my wife about a month ago to observe the conversation when we get together with friends and now she sees what I’m talking about.

    g: I am actually thoroughly shocked when I talk to many people who I have known for most of my adulthood, but haven’t been as close in the last five years. It is as if everyone has lost their individuality and has become sucked into a materialistic morass of crap.

    When I try to find a common theme, it seems to always circle back to this issue. People have kids and then lose their ability to explore and cultivate intellectual pursuits. Instead, they get drawn back into their homes, watch more TV, and spend their time focusing on what is at arms length: home, car, kids…….seriously, my wife and I have had to step back from more than one friendship because these people just have nothing “going on”. It is a very bitter and distasteful thing to see. At the same time, you see a number of troubled marriages in motion as well.

  158. chicagofinance says:

    Clotpoll Says:
    August 27th, 2007 at 2:39 pm
    Gal (33)- Imagine an army of Jerseyites trying to remake NC in our image. Youch!

    clot: as you know, this is indeed what is happening, and NC is going to have all the same problems in 5-10 years that NJ has circa 2007, except with a south-fried (lack of) sensibility

  159. Richard says:

    chicago, well said. unless you’re financially well off or have a sizable support structure nearby your choices are limited. kids ground you or as some say shackle you to an area. you can’t just run off and do whatever you want as there are more considerations. do you have kids?

  160. chicagofinance says:

    reech: one ten month-old :)

  161. chicagofinance says:

    sheeez:

    August 27, 2007, 1:04 pm
    Economists Aren’t Scared Off by Housing Woes
    Few economists expect a housing recovery before next year, but they don’t appear to be scared by the softening housing market.

    The latest policy survey by the National Association for Business Economics asked members, “Would you buy a house today if you intend to use it as a primary residence?”

    The response from three out of four: yes. One out of three even said they’d buy a second home. (The survey didn’t ask if they’ve actually made a purchase or planned to do so.)

    Despite those responses, fewer than one in five economists (out of the 258 responding) expected a “meaningful recovery” in U.S. housing market activity by the middle of next year. About 38% selected the second half of 2008 for a recovery, and 42% said 2009 or later.

    The economists’ longer-term outlook was more positive, perhaps supporting their positive attitude about buying today: About 42% of respondents said they expect home prices to be flat, on average, over the next five years, and 41% expect price increases. Just 16% expect price declines.

    The survey, conducted July 24 to Aug. 14, also showed many top economists admitting how much they don’t know about many of the financial instruments that helped drive the housing boom.

    About half “admitted to having little or no familiarity with the structure, activities and risks” associated with asset-backed securitization and collateralized debt obligations, two tools used in recent years to spread risks from mortgage debt. More than two-thirds said they had little or no knowledge of credit-default swaps, a form of credit insurance. About 45% said they had little understanding of hedge funds, and 40% admitted ignorance about private equity funds. –Sudeep Reddy

  162. Richard says:

    chikago you’re just starting out. i’d be curious what solutions you’ve concocted for avoiding the monotonous provincial lifestyle.

  163. stuw6 says:

    Richard/ChicagoFinance: Spoil the kids with travel, not with toys. You’ll enjoy it a lot more as well. Weekends at the shore, playgrounds, etc.

  164. Comrade 3b says:

    #160 Richard: I agree. I believe that when you have kids, their needs and considerations come first (not directed at you chgo). You only get one shot at doing it.

    When you are a parent, you wants and needs are secondary. That is not to say that you subsume all facets of you life to your kids, but the reality is that you subsume a lot.

    As they get older than parents can start to consider their wants and needs again, IMHO.

    for all you guys that might just eb starting out, it goes by quickly though.

  165. gary says:

    chicagofinance 158,

    Exactly. I could tell a dozen stories.

  166. bi says:

    164#, stu, we finally have something to agree with. my daughter got silver medal in her figure skating competition last weekend in a group of three and with one withdrawn.

  167. Essex says:

    Debt…debt….debt…it is a number as long as you can make the payments….One day we’ll get out of debt is the mantra of the middle class….yet so few actually do. Meanwhile try to enjoy the things you have and be somewhat intelligent about what you acquire in the future.

  168. kettle1 says:

    Dont know if this was already posted…

    NYTimes article on countrywide “Inside the Countrywide Lending Spree”

    http://www.nytimes.com/2007/08/26/business/yourmoney/26country.html?ex=1345780800&en=114a08fd2c6e219e&ei=5090&partner=rssuserland&emc=rss

  169. Comrade 3b says:

    #158 chgo I agree with you on the materialistic aspect, it is/was simply out of control. It was out of control,a d quite frankly with some people I was quite shocked at just how much they had. Thats why I narrowed the circle.

  170. lisoosh says:

    Comrade 3b Says:
    “When you are a parent, you wants and needs are secondary. That is not to say that you subsume all facets of you life to your kids, but the reality is that you subsume a lot.
    As they get older than parents can start to consider their wants and needs again, IMHO.”

    I would agree with that. Especially when you jump to two, they start squabbling and you have to juggle their associated schedules.

    That said, Number 1 is starting full time kindergarten, Number 2 is stepping up his nursery schedule and the smell of freedom is in the air!!!

  171. MJ says:

    Number 1 and 2 starting full time kindergarten, the smell of freedom is in the air!!!

  172. dreamtheaterr says:

    Kids mostly, if not always take a cue from their parents. If they see the credit card being whiffed out for every purchase, will the kids know any better than to not reject a credit card application when they hit college? If parents only shop at Nordstrom, won’t the kid feel that buying anything less than Abercrombie is demeaning to them?

    If you stay in a simple enough neighborhood without the urge to move to a greater area just because you have built-up equity in your house, my guess is the pressure is less to keep up with the Joneses.

    We approach every spending decision with ‘does it adversely affect our safety net’ because as immigrants, we have none. I think when you lose fact of this, live for today and expect a bailout tomorrow by the government, you’re breeding irresponsibility. Our biggest line item (outside of paying rent) in our bidget is savings, since we consider it an expense in our budget.

    We’ll try to bring up our kids without materialistic desires, and the easiest and best way to do that is to lead by example. Time will tell….. since we’re just starting out.

  173. dreamtheaterr says:

    lol, bidget = budget above

  174. Essex says:

    Yeah I agree with the dreamtheaterr comments — but bro — we love to spoil our little girl…..*shrug*

  175. Bloodbath in Winter 2007 says:

    # Imus Says:
    August 27th, 2007 at 1:11 pm

    Hey bi; speaking as one who does not post on here much but reads the threads, I think your postings are well informed and interesting. Keep up the good work. Hearing the same thing over and over from the same 3 guys who post every 10 minutes (and will never sack up and buy a house anyway gets boring). Cheers.

    Imus – you’re wrong, pal. I jumped in and bought new construction in Fla while prices were rising. Sold in one year (after i caught wind of this helpful website) and pocketed my winnings. I could have been a bagholder … but i wasn’t greedy. Put it on the market in the Fall of 2006 and had no offers in the first week or two.

    I panicked (this board will do that to you), dropped the price $30,000 (much to the chagrin of my realtor, who was a relative) and it sold in less than a week.

    I’m sure there are a lot of NJ bagholders kicking themselves for NOT taking those lowball offers in 2006. If you had a 700k house in 2006, and someone offered you 650k, you should have taken it. Because this winter, when you lower your house to 600k, you’ll know what im talking about.

    Greed is a bad, bad thing.

  176. chicagofinance says:

    bi Says:
    August 27th, 2007 at 3:38 pm
    164#, stu, we finally have something to agree with. my daughter got silver medal in her figure skating competition last weekend in a group of three and with one withdrawn.

    bipolar: you are exceptionally subtle, and I have ignored most everything you have written reflexively, but you finally have exposed yourself as merely the troll-du-jour……..consider yourself warned – stop f—ing around – stop posting nonsense and filling up space

  177. RentinginNJ says:

    clot: as you know, this is indeed what is happening, and NC is going to have all the same problems in 5-10 years that NJ has circa 2007, except with a south-fried (lack of) sensibility

    Chi,

    I’m one of those people strongly considering a move to NC. I also agree with you; NC isn’t some utopia and will likely end up like NJ at some point.

    At least in NC, I can “get in” before the mess. When things eventually do get bad, I will be living in a nice house, with a very reasonable mortgage, sitting on lots of equity. Taxes will be my only real concern. Very much like someone who bought in Jersey 10 years ago, assuming they didn’t p*ss away their home equity.

    In NJ, I’d by jumping into the fire on day I. Why pay outrageous taxes today when I can put them off for 5 – 10 years (with no real cut in benefits).

  178. bi says:

    do we live in USSR?

    > bipolar: you are exceptionally subtle, and I have ignored most everything you have written reflexively, but you finally have exposed yourself as merely the troll-du-jour……..consider yourself warned – stop f—ing around – stop posting nonsense and filling up space

  179. ADA says:

    seriously CF what prompted the tirade in response to Bi’s daughter figure skating?

  180. dreamtheaterr says:

    Question to folks on board: how are property taxes increases playing into your calculations for housing affordability? As a percentage of principal + interest payment, it is already quite high in NJ. But 7-10 years out, it’s going to be obscene. How do you wrap your head around this monster?

    I mean, it’s crazy to think that you’ve locked in a 30 yr FRM, only to have property taxes eviscerate the benefits of a FRM.

  181. ADA says:

    dream,

    I think IF you have a 30 year fixed your salary increases could be matching the tax increases. Also, inflation will be reducing the real amount you spend on housing each month and this might offset some of your tax increases. Just my guess, I could be and probably am wrong.

  182. Aaron says:

    Instead of spoiling my kids with toys last Christmas I took my kids(S5 & S7) to Wolf Creek and taught them to ski.

    They are already talking about this years trip.

  183. versity says:

    Will the rosy “spread the risk” view of mortgage securitizations/CDOs prove to be partly true, and good for America? So far it looks as if a Chinese bank and some profit-starved German banks are going to be two big bag-holders in the sub-prime implosion. So while the sub-prime induced credit crunch will almost certainly hurt American businesses and consumers, haven’t the mortgage chop-shops done their part to lessen the blow and spread the pain of the reckless US real estate risk miscalculations to the generally healthier global economy?

  184. chicagofinance says:

    bi Says:
    August 27th, 2007 at 5:08 pm
    do we live in USSR?

    bipolar: no, we live in the USA…and you should give to this community as opposed to trying to sabotage it….spare me the incredulous garbage….act as if you want to be here or get your jollies destroying someone else’s property who is less willing to police it

  185. Hell_Is_Like_Newark says:

    [I]”“but I’m looking at this as a perfect opportunity to pick up some decent real estate at once in a lifetime prices and be set 10 yrs. down the road. Anyone else?”
    “[I]

    When prices drop enough that I can a property, renovate it, rent, and make a decent return on investment.. then it will be the time to buy. For me at least

  186. Bloodbath in Winter 2007 says:

    Funny you mention NC. Friend of mine wants to pull up stakes and bolt for Charlotte.

    I feel for him, really; he was living in a townhouse and his wife (who loves to spend; when he married her, she had like 22k in CC debt with nothing to show) pushed him to move to a BIGGER townhouse.

    They bought before their old place sold – damn RE con artists pulled the wool over his eyes with a “75k price drop” and all kinds of amenities so that he would buy before his old place sold – and now have 2 places with a mortgage total of $4400 a month.

    His wife makes peanuts as a teacher and he carries them, we we make far more than they do and our rent is less than half his mortgage. They want to make a run for Charlotte to upgrade yet again.

    I really need to talk some sense into him.

  187. t c m says:

    #181 dream –

    that’s a great question. i’ve been struggling with that myself……

    generally, if i see a house with unusually high taxes for the size of the house, i would be willing to pay less.

    millburn/shorthills just did a reassessment, and the values are in as well as the rate, but most of the listings that i’ve seen from mls don’t have the current info. i have to wonder if they are trying not to highlight how high the taxes are.

    i’ve also seen several houses offered significantly lower than the assessed value. i would imagine that if i bought, i could appeal, but i find the rules quite confusing, and i don’t trust the system to work in my favor.

  188. NJGator says:

    tcm #188 – Regarding the new Millburn taxes, what scares me there is not so much what the property taxes are on a place this year, but how fast they are rising.

    I was considering buying a place in the South Mountain neighborhood earlier this year and was keeping an eye on the new assessments. When the new assessments were announced, I believe the 2006 equivalent tax rate was 1.36. The 2007 tax rate is 1.55! Perhaps the spike has to do with their settlement of the Short Hills Mall assessment?

  189. Joeycasz says:

    1. I thought the same thing. My friends all recently bought homes, drive $30,000+ cars, open new Helocs to upgrade their kitchens, bathrooms and basements. Lately, I’ve been asking around about their mortgages and at least half of them didn’t put 20% down and have non-fixed rate loans in a piggy back situation. One of ‘em has 70,000 plus already at rates over 10%. Of course prior to asking, everything seemed honky dory. Dig a little deeper and ask what kind of debt your friends with the new cars are carrying.

    My cousin owns a house in Allentown PA. paid $317,000 for this amazing house but got it on a no interest loan. They also just put in an in ground pool which from what i hear cost $30,000+ in which a second mortgage was taken out for. Yet they have no money. You wouldn’t think it by looking at them. You really wouldn’t.

  190. Joeycasz says:

    #176

    Bloodbath,

    1. I’m sure there are a lot of NJ bagholders kicking themselves for NOT taking those lowball offers in 2006. If you had a 700k house in 2006, and someone offered you 650k, you should have taken it. Because this winter, when you lower your house to 600k, you’ll know what im talking about.

    Greed is a bad, bad thing.

    A friend of the family is selling their house in Forest Hills, Newark of all places and was asking $490,000. She got an offer for $450,000 and was totaly insulted and turned them down. Many months have gone by since then. The house is now listed at $450,000 and IMHO is still listed to high.

    My Uncle owns a house in Clark and his house was also listed for $490,000. He got an offer for $460,000 and you’d think someone spit in his face. Turned them down. Now it’s listed for $459,000. Again, still listed WAY too high.

  191. Richard says:

    >>I mean, it’s crazy to think that you’ve locked in a 30 yr FRM, only to have property taxes eviscerate the benefits of a FRM.

    if you’re mortgage is say $2500 a month and your taxes are $8k a year or $666 a month. if your taxes go up even a crazy number like 10% a year that amounts to an increase of $66 a month the first year. figure 25% tax bracket for writeoff and your out of pocket is $50 a month. chump change when looking the larger expense which is your mortgage.

  192. t c m says:

    #192

    but richard, if that continues for 5 years, the increase is more like $400 a month – and many of us do not get to deduct prop. taxes due to AMT.

    also, most of the extremely modest houses i’m looking at have taxes from 9000-13000 now –
    what’s going to happen in 5 years? with all this stuff i’m reading on this blog and in the papers about how this state has been run, i can’t imagine it’s gonna be tax relief.

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