From NY Magazine:
Peter Schiff is laughing at me. I’ve just asked him to entertain the following notion: that we dodged a bullet during August’s financial-market turmoil and, with the stock market bouncing right back from every dip, things might be okay. So why worry?
He stops laughing. “Why worry?” he asks. “Because we dodged a bullet but are about to step on a hand grenade.”
Sitting in a corner office of a nondescript building just off I-95 in Darien, Connecticut, Schiff, the president of brokerage Euro Pacific Capital, will spend the next hour spelling out a singularly pessimistic view of the American economy. And he will do so while exhibiting a curious juxtaposition unique to the bearish prognosticator: He speaks of disaster with a smile on his face. No, he’s not happy about our impending doom. But he is happy that people are finally taking him seriously.
…
THREAT NO. 1
The Bottom Continues to Fall Out of the Housing Market
…
Manhattan’s gravity-defying real estate aside, it’s quite clear the nation is experiencing a genuine housing crisis. In August, pending home sales dropped 6.5 percent, and they currently sit at their lowest level since 2001. The National Association of Realtors conducted a recent survey that showed more than 10 percent of sales contracts fell through at the last moment in August, primarily owing to disappearing loan commitments from banks. The crisis will only deepen, when more borrowers see their adjustable-rate mortgages adjusted upward. There was a foreclosure filing for one of every 510 households in the country in August, the highest figure ever issued, and by one estimate, more than 1.7 million foreclosures will occur in the country by the end of 2008. That’s not just subprime borrowers: According to the Federal Housing Finance Board, while nearly 35 percent of conventional mortgages in 2004 used ARMs, some 70.7 percent of jumbo loans—those above $333,700 (the jumbo threshold in 2004; it’s now higher)—did too.
…
Hedge-fund veteran Rick Bookstaber, the author of A Demon of Our Own Design, spells out a potentially disastrous scenario that could unfold regardless of what the Fed does: Continued foreclosures result in a further drop in housing prices, which results in further foreclosures, which result in a further drop in housing prices. Even for those of us not selling, reduced home values result in a reduced sense of security, which results in reduced consumption, which results in a slowing economy, which … you get the point.
…
THREAT NO. 2
The Derivatives-Related Meltdown, Part II
…
Each time one of these write-downs has been announced, the market has had a curiously positive response, taking the news as a sign that the worst was over and the banks were cleaning up their books. But because these derivatives are linked to other debt, there’s no reason to be certain that trouble won’t bleed into other markets. Among other things, the liquidity crisis froze the market in structured investment vehicles (SIVs), a nifty bit of financial engineering that banks use to profit from the spread between short-term debt and long-term debt. No one yet knows how nasty these losses could turn out to be because SIVs are stashed, Enron style, off the books.
…
THREAT NO. 3
Consumers Run Out of Steam (and Take the Economy Down With Them)
…
The willingness of consumers to keep spending and piling on debt in the midst of a slowing real-estate market is hailed on Wall Street as an act of patriotism, which Schiff considers perverse. Imagine, he suggests, that you ran into a good friend and asked him how he was doing. His reply: “I took out a third mortgage, maxed out my credit cards, and emptied out my kids’ college savings account so I could buy a bigger TV and a new car, and we’re going to Greece on vacation over the holidays. Things are great!” Schiff lets the idea sink in and then finishes the thought: “And we’re celebrating the fact that we’re doing this as a nation?”
…
THREAT NO. 4
That the Rest of the World Decides They Don’t Need Us and the Dollar Tumbles Hard
…
The dollar is falling, possibly collapsing, depending on whom you talk to. The greenback has sunk close to its lowest point in the post-1973 floating-exchange-rate era, so low that it’s been overtaken by the Canadian dollar—affectionately known as the loonie—for the first time since 1976. How low will it go? When Alan Greenspan was asked by Lesley Stahl of 60 Minutes last month what currency he’d like to be paid in, his response was telling: “[The] key question … is, ‘In what currency do you wish to hold your assets?’ And what I’ve done is I diversify.” Translation: He isn’t betting on the dollar. And neither is the majority of Wall Street.
…
THREAT NO. 5
That We Don’t See It Happening Because It’s a Slow-Motion Train Wreck
From the WSJ:
UBS Confirms Third-Quarter Loss,
Warns of Future Write-Downs
By KATHARINA BART
October 29, 2007 4:28 a.m.
ZURICH — UBS AG said Monday its third-quarter loss will be in line with a profit warning earlier this month, but primed investors for further write-downs due to U.S. mortgage-securities the bank still holds.
The Zurich-based bank said it will Tuesday post a pretax loss of between 600 million and 800 million Swiss francs ($515.5 million and $687.3 million), as flagged earlier this month when the bank was forced to disclose massive write-downs and sweeping management changes as a result of the subprime mortgage woes.
UBS said the current quarter has started positively in all its units, including the investment bank, where the recent trouble has centered.
However, the bank cautioned that it may record further write-downs in the future because it remains exposed to the deteriorating market in the U.S. for mortgage-securities. “As a result, UBS is not assuming that the quarter will continue as positively as it has begun, or that the current difficulties will be resolved in the short term,” UBS said in a statement.
From Bloomberg:
Bernanke, `Reluctant’ to Cut Rates, May End Up Doing So Anyway
Federal Reserve Chairman Ben S. Bernanke and his colleagues sound as if they’d prefer to just say no to an interest-rate cut this week. The financial markets may not let them.
Policy makers from Bernanke on down have avoided signaling they want to reduce benchmark lending rates at their Oct. 30-31 meeting, ever since lowering them by a larger-than-anticipated half percentage point in September. Instead, Fed officials have stressed how uncertain the outlook is and, in words Bernanke used twice in a single week, how “challenging” it is to make policy.
Traders don’t agree. They consider the chances of a rate cut this week as a cinch, judging from federal funds futures prices at the end of last week. If the Fed disappoints them, it risks upsetting still-fragile markets and hurting the economy.
“The Fed is reluctant to ease,” says Louis Crandall, chief economist at Jersey City, New Jersey-based Wrightson ICAP LLC, a unit of ICAP Plc, the world’s largest broker for banks and other financial institutions. “But it also doesn’t want to unsettle the financial markets unnecessarily.”
The likely rationale if the Fed cuts: a desire to prevent the worst case, in which renewed market tumult, rising oil prices and falling home values drive the U.S. economy into recession.
From Bloomberg:
Dollar Falls to Record Low Against Euro on Bets Fed to Cut Rate
The dollar fell to a record low against the euro on speculation the Federal Reserve will cut interest rates this week to prevent the worst U.S. housing slump in 16 years from slowing the economy.
The U.S. currency slid to its weakest in 33 years versus the Canadian dollar and a 23-year low against Australia’s dollar. Yields on two-year Treasuries are now the least among bonds of the Group of Seven nations excluding Japan after traders increased bets the Fed will reduce rates on Oct. 31.
“Dollar weakness is going to continue,” said Hans-Guenter Redeker, head of currency strategy at BNP Paribas SA in London. “What’s driving the market is interest-rate and yield differentials, which are supportive of other currencies against the dollar.”
Housing starts, permits and completions down over 20% yoy, inventories/foreclosures rising, selling season a major bust, credits standards tightening and H-B’s struggling to stay afloat. In conjunction with this the home atm has vanished, credit card borrowing in on the rise and now 401K plans report an increase in borrowing. There is a tidal wave of transformation coming and most don’t even have a clue.
The American consumer machine has been greased by asset appreciation for the past 10-12 years. This game is over. The US standard of living is in the throes of adjusting downward. Our worldwide purchasing power has collapsed. Can you imagine saving will be the new buzz word. A major retrenchment is coming and there will only be a handful primed to take advantage of this.
http://www.nytimes.com/imagepages/2007/09/23/weekinreview/20070923_BAJAJ_GRAPHIC.html
people are betting the credit market is going to explode..
http://market-ticker.denninger.net/
From the Houston Chronicle:
Lengthy standoff ends in Spring with man’s suicide
A 12-hour standoff ended this morning with a north Houston man lobbing Molotov cocktails at Houston Police before taking his own life rather than vacate a home he’d lost to foreclosure.
James Hahn, a chemist, had told police he would not be taken from the home alive, said Capt. Bruce Williams, an HPD spokesman.
” ‘You know what I do for a living and you know what I am capable of,’ ” said Williams, recalling one of the conversations police had with the man on Wednesday.
The standoff began at 1:10 p.m. Wednesday when police said Hahn pulled a gun on Precinct 4 constable deputies who had attempted to serve him with a warrant for eviction at the home in the 21000 block of Covington Bridge in Spring, authorities said.
…
An hour and a half later, Hahn shot himself as officers closed in on his home.
Residents noted there had been a number of foreclosures in the neighborhood lately.
But none imagined that Hahn would take his life rather than leave a home that no longer belonged to him.
The dollar is down 15% since 2005, so if your house’s ‘value’ is the same as it was in 2005 it has really dropped 15% on an international basis.
As I’m in the market for a home like many here I have been hoping for a price correction.But the perfect storm of RE,huge write off & lay off on the street & the fed tanking the dollar could spell more down turn than we want.Geopolitical concerns are just the iceing on the cake! Not a finacial guy,history is my thing. Empires fall, I’m sure we do not want to get a great deal on a house and put the kids future in the toilet.But it already was sealed by this run up of re and the siv’s & cdo’s used to enable it.A million dollar home in high end town for 600,000 wil happen.But a collapse of re to even lower levels could sink the whole ship.We are on the path to the begining of the end of U.S.Gloom & doom maybe but if you study history not finance it is all to clear.Our grand children will be in a very bad place here in the U.S.I hope for the future but the signs are to clear ingnore.Be careful what you wish for you might get it, that great deal is just around the corner.Maybe we would have been better off paying more?!!!!
Home prices’s need to fall to 1998-2000 levels. Anything above is still not true value of any home.
And the story about ML “Stan” and the loss of annual profits will continue to grow.We still have one more quarter go ..and what about 1st. quarter 08?? More bad news to come !!!
mikey (9)-
My warning to all from the first day I posted here.
Who wants to buy a super-cheap house against a backdrop of total economic collapse?
It is always darkest before the storm, this ain’t the great depression or WWII or even 9/11 this is just a few overpriced houses.
In fact if you only count equity in a house as an asset for most people who bought in 2004-early 2007 the car in the garage is worth more than the house.
Plus for the over 40 crowd the whole thing is a paper event anyhow. I bought pre-2000 like most of my neighbors and and other than we had some fun watching our crap houses fly from 250K to 600K on paper it is back to reality and we are still up a lot, who cares. Good news is that we don’t have to worry about building affordable housing in my town anymore, in a year or two we will have plenty of it.
Finally, our kids are fine. Lets say your POS cape runs up to 1.2 million well if you have three kids when you kick the bucket they just sell your POS cape and get 400K each and buy their own POS capes with a big dwn pmt.
“There’s something wonderful about American consumers,” Dr. Yardeni says. “If we can’t sell our homes at the price we’d like and we’re down about high gasoline prices, we’ll sit and sulk for a week or two and then get totally bored with it, get in the car, fill up the tank, go to the mall and buy a big flat-screen TV.”
No comment necessary.
“Be careful what you wish for you might get it, that great deal is just around the corner.”
Mikey,
I was only looking for 30-40% off 2005, not financial armageddon.
The storm coming down the road was not wishful thinking. All you had to do was open your eyes, block out all the BS and react accordingly.
Everything’s ‘boken #12
Classic.
John #11, let’s suppose your income/SSI doesn’t keep pace with inflation and you have to reverse mortgage your home to survive your retirement, leaving your kids with zip.
Which scenario do you think is more likely?
#10 Just me:
“Home prices’s need to fall to 1998-2000 levels. Anything above is still not true value of any home.’
Friend: I have been bearish on housing sine 2005. You have to be reasonable about your expectations. Over the long run housing appreciates slightly over inflation. The last few years have been an anomaly. The real run up started post 2001 so why would you expect prices to go back to 1998-2000 levels? Yes, it can happen, but there would have to be a significant US recession or a geopolitical event for that to happen. Just my 2 cents.
for discussion purposes only…..
to quote Ed McMahon…”hoyoooooooo”
http://www.bloomberg.com/apps/news?pid=20601109&sid=aT5zKfx31GAY&refer=home
My lease is up for renewal in January so I did some round of open houses in the so called *train towns* this weekend. I have learned a number of things this weekend.
No-one really wants, Capes, split-levels and bi-levels, hence realtors will lie and list them as “Custom Home”. I wonder why there are so many bi and split levels if nobody likes them. Guess they may have been fashionable at some point.
Open houses help realtors much more than they help the home seller. Most people are just window shopping and the seller has a sea of strangers walking through their house with no intention of making an offer on their over-priced POS. For realtors on the other hand, open houses may bring in buying leads and even if the buyer buys a different property through the listing agent, they pocket the commission for the buyer’s agen.
Some of these sellers have had their homes in the market for over a year. I can understand that homes above a million take longer to sell, but some fools who have homes listed in the 500 to 800 range in the train towns for over a year, have to realize that their homes are over-priced if it doesn’t sell in a couple of months.
Buying a home in NJ means that the property taxes, maintenance and insurance along will be almost equivalent to your rent.
Buying a home in NJ means that you will be contributing to the welfare of the 1000s of state employees who will take your hard earned money in the form of pensions and move to warmer places. When these state employees retire they will be having fun in the sun, while you pay 20 grand a year in property taxes so that their pensions get paid.
AntiTrump will be renewing his lease for another year.
#9
“.Be careful what you wish for you might get it, that great deal is just around the corner.Maybe we would have been better off paying more?!!!!”
what we wish for has no bearing on the inevitable collapse – if there is one. our wishes have nothing to do with the housing spending spree and current hangover. all we can do here is try to make the best of it for ourselves.
would we have been better off paying more? well, they tried that in 2003, 2004, 2005 and 2006 and it lead us here. the false housing economy could not last forever – unfortunately, the collateral damage from the housing market returning to something more normal will probably hurt many innocent people, which really stinks. but continuing to pay skyrocketing prices, spiraling out of control is not the answer. not to mention property taxes.
3#, dollar cannot be saved even by bc bob’s favorite paul volker as long as the folks here so much admire foreign cars. no mention cheap korean electronics and chinese appliances.
re….buying into this market…
Middletown is in the midst of a reval….do I even care?
Three months ago, I mentioned the reval to the realtor who represented the landlord. He said….”…well, if the landlord’s cost go up, they will probably want to pass that along to you…”…..my response…”what? the market is the market….the market doesn’t care what its participant’s cost structure is…”
Response…..he stroked his moustache….
soup of the day: fed is going to cut rate despite of record oil price. why? the logic is simple: the inflation pressure is minimum even with such a high oil price. what if the oil price goes down? deflation hurts economy more than inflation.
# 11 John Says:
October 29th, 2007 at 8:49 am
It is always darkest before the storm, this ain’t the great depression or WWII or even 9/11 this is just a few overpriced houses; Plus for the over 40 crowd the whole thing is a paper event anyhow; Finally, our kids are fine. (paraphrased)
John,
All is not well. I would suggest that the current situation is far beyond 9/11. 9/11 was a local tragedy and not a manifestation of a systemic problem within the US economy. The US has spent far beyond our means and the hoe is only going to get deeper before we start to fix it.
The babyboomer issue is huge and is certainly not “just on paper” . The US does not ave enough money/assets to pay for the promised benefits that the baby boomer generation expects to receive for the remained of their retired lives. This burden only increases as medical technology allows this generation to live longer and longer. At some point in the next 20-30 years, the Boomer generation is going to have to face a serious cut in their benefits as the younger generation is going to be taking over government and will not accept the burden that has been placed upon them. Ultimately, the retirement benefits promised to the boomers is a pyramid scheme and we have reached a point where there are not enough new suckers to support the people who already bought into it
Our children are not fine. I’m 29 and my generation will have to start dealing with serious environmental consequences of global development, however our children will be the ones who really get hit with it( see GLOBAL ENVIRONMENT OUTLOOK.
On top of environmental issues, Our children are going to have to cleanup our financial mess. All of the money spent on the Iraq war and the numerous social programs that are unfunded has to be pad back at some point. Who is going to pay? our children are. On top of that consider the rampant inflation of the US dollar; the dollar is in danger of a complete collapse. While not a certainty, collapse is an actual possibility at this point, not just a scary bed time story.
Still another factor is that energy will never be as cheap as it has been for the last 50-100 years. We are currently exiting a period of unprecedented abundance of all resources (energy,food, money)and once again our children will be the ones who inherit this problem, the question is how do we mange it? do we ignore it and dump it in their laps, or do we start making hard decisions now, such as developing not oil energy sources on a large scale?
Prediction: Over the next few years we will once again review the paper those Ivy League professors wrote back in the early 90’s indicating how owning a house was a financial loser. Then, some 15-18 years from now, prices will skyrocket and we’ll repeat again
soup of the day: fed is going to cut rate because of halloween. realize that on halloween, one only has two possible actions to take, either trick or treat. since trick would scare market, fed would rather gives treat
Rumor has it Benny will be wearing a dove costume to the Wednesday meeting. Apparently, the hawk costumes were all taken.
#12 Clotpoll Says:
October 29th, 2007 at 8:47 am
mikey (9)-
My warning to all from the first day I posted here.
Who wants to buy a super-cheap house against a backdrop of total economic collapse?
Clot,
The point is not for housing to drop so low that we can all live in 10,000 SF mansions, but for housing to drop to affordable levels. Places like in the northeast such as the boston/NY/DC metro areas will always be more expensive then average to a degree. When the average new home price in NJ is 488K and the median income is 56K you have a problem. Right now the average home price is 8.7 times the income of the median family in NJ!
# Kettle1 Says: Your comment is awaiting moderation.
October 29th, 2007 at 9:34 am
# 11 John Says:
October 29th, 2007 at 8:49 am
It is always darkest before the storm, this ain’t the great depression or WWII or even 9/11 this is just a few overpriced houses; Plus for the over 40 crowd the whole thing is a paper event anyhow; Finally, our kids are fine. (paraphrased)
John,
All is not well. I would suggest that the current situation is far beyond 9/11. 9/11 was a local tragedy and not a manifestation of a systemic problem within the US economy. The US has spent far beyond our means and the hoe is only going to get deeper before we start to fix it.
The babyboomer issue is huge and is certainly not “just on paper” . The US does not ave enough money/assets to pay for the promised benefits that the baby boomer generation expects to receive for the remained of their retired lives. This burden only increases as medical technology allows this generation to live longer and longer. At some point in the next 20-30 years, the Boomer generation is going to have to face a serious cut in their benefits as the younger generation is going to be taking over government and will not accept the burden that has been placed upon them. Ultimately, the retirement benefits promised to the boomers is a pyramid scheme and we have reached a point where there are not enough new suckers to support the people who already bought into it
Our children are not fine. I’m 29 and my generation will have to start dealing with serious environmental consequences of global development, however our children will be the ones who really get hit with it( see GLOBAL ENVIRONMENT OUTLOOK, http://tinyurl.com/2j2kcz).
On top of environmental issues, Our children are going to have to cleanup our financial mess. All of the money spent on the Iraq war and the numerous social programs that are unfunded has to be pad back at some point. Who is going to pay? our children are. On top of that consider the rampant inflation of the US dollar; the dollar is in danger of a complete collapse. While not a certainty, collapse is an actual possibility at this point, not just a scary bed time story.
Still another factor is that energy will never be as cheap as it has been for the last 50-100 years. We are currently exiting a period of unprecedented abundance of all resources (energy,food, money)and once again our children will be the ones who inherit this problem, the question is how do we mange it? do we ignore it and dump it in their laps, or do we start making hard decisions now, such as developing not oil energy sources on a large scale?
22,
What the hell are you talking about? The dollar exchange rate has absolutely nothing to do with foreign cars nor cheap electronics. It all about fiscal/monetary policy and exports.
30#, I noticed word “exports” in your sentence.
For people hedgeing against inflation using precious metals this is very interesting!!!
Recent lawsuit against Morgan Stanley and other large financial institutions alleges that Morgan Stanley never posessed actual silver commodities sold to investors.
http://tinyurl.com/ypsw6d
What’s the Fed’s next step when they lower rates down to zero and housing continues to drop? And the Fed doesn’t seem to care about oil prices or the dollar at all, that will have a big impact on the economy as well, right?
I don’t need an over priced single family house but I do need food and utilities. And it seems like whether you bought an overpriced house or not your still getting screwed.
Kettle, what the heck are you talking about SS can never go bankrupt. All they have to do is keep raisin the retirement age, heck by the time you retire they will have it at 80! Plus they can cut off the widows and orphans provisons and the diability payments if they have to. Maybe we can just have a mandatory death age if necessary, take them to the pearly gates at age 85.
By the way the UN is just one big scam to get cheap NYC apts and to get out of parking tickets.
I say lets just pass a law that all holders of US debt that are not citizens don’t get paid back. Hey Russia stiffed everyone in 1998 and now look at it!
A few well placed Neutron bombs in the middle east to kill all the people with out damaging the oil should solve that problem.
OK I just solved, our SS, Oil and Financial Problems, what do I get to do on my second day as President!
I should write for The Onion!
DE
I have similar concerns. look at real inflation (M3), gold, silver, etc. All of these are spiking at the same time we are experience the bursting of a historic housing bubble. Most of the financial outlooks are grim. The real question is how do you protect yourself from the chaos. And more importantly how do you profit. The chinese character for danger is a combination of risk and opportunity. We are in a dangerous financial period, how to we profit from it?
But the perfect storm of RE,huge write off & lay off on the street & the fed tanking the dollar could spell more down turn than we want.
What worries me the most isn’t so much falling home values, but the Fed’s response to the risk of recession. Recessions are part of the normal business cycle. They serve an important function of clearing out the dead wood and leveling imbalances so the economy can reemerge even stronger.
We now seem to live in a time when recessions are no longer acceptable and the policy response is to avoid a recession at all costs; even if it means further destabilizing our economy. The Volker days are over.
Had we just accepted a recession after the dot com blow-up, things today would likely be fine. Instead, we created a housing. Instead of just allowing the market to correct the housing situation, we are now trying to devalue our way out of a recession. I’m worried about the long-term implications of such shortsighted policy making.
I thought the cheap doller makes imports more expensive?
bi Says:
October 29th, 2007 at 9:29 am
3#, dollar cannot be saved even by bc bob’s favorite paul volker as long as the folks here so much admire foreign cars. no mention cheap korean electronics and chinese appliances.
Mikey,
No one here is happy that WE are loosing our status as the only Economic superpower of the world. That WE have a corrupt Federal Reserve. That in the last 20yrs WE went from being the number one lender and exporter in the world to being the number one debtor and importer in the world.
The longer a correction is put off the worst will be long term. Like BC BOB said, we are not rooting for the correction we are just aware that one is imminent.
Who in their right mind wishes ill on their kids and grandkinds. Ideally you want to leave them a better country than the one you lived in.
Vote RON PAUL for President in 2008.
Plus for the over 40 crowd the whole thing is a paper event anyhow. I bought pre-2000 like most of my neighbors and and other than we had some fun watching our crap houses fly from 250K to 600K on paper it is back to reality and we are still up a lot, who cares.
If you saw this as a “paper event”, good for you. You did the right thing. For you this downturn may very well be a “who cares” event.
Many of your cohorts, however, did not see this as a paper event. They saw this as their just reward for being such as savvy investor. Their house became their retirement nest egg. And why bother saving money when your house is appreciating 15% per year? Many people in your cohort banked on appreciation for retirement. They would either downsize or borrow their way into a comfortable retirement. Those looking for an even more comfortable retirement borrowed against their newly-formed deep home equity and bought investment properties or second homes (really just code for investment property).
What happens to them? At the very least, they will begin to save again, which will reduce consumer spending.
Arron #17 thats my take.Clot if you agree I guess I’m real scared , always thought your posting was on the money.TCM #21 I agree, the wishing glib was just that.But Greenspan should be tarred & feathered.The fed could have reined this in early but did not.But its to late now.A little pain 2-3 years ago would have averted this.I will also be renewing my lease Anti Trump.The recession is on the way if not already here and geopolitical event has been going on for 5 years and more bad sh%t on the way. Iran with Russian backing,Pakistan 1 bullet away from not being a friend if they ever were.They have nukes already.How about Turky on the border with our new conquest!Empire building is a dangerous and exspensive game just ask Rome.This will take time but U.S. wiil fall ,as you & I know it.History like economics has its bulls & bears I hope I’m so wrong.
i think it is the time to get into oil again (short) – all disclaimers apply
re 19
Why assume that dividend levels can be held in the face of huge losses?
Kettle–“9/11 was a local tragedy”
As you say, you’re only 29, but if you consider an attack on US soil that killed almost 3,000 civilians and has since sickened many more just a “local tragedy,” well, then there’s very little hope for this country, economically or spiritually.
You also seem to have bought in to the contention that Social Security will be bankrupt before your generation reaches retirement age. This is debatable.
http://www.factcheck.org/article302.html
Man, it’s only 1047a and the Empire is falling… I need a drink.
Ridgewood
SLD 379 GROVE ST $495,000 1/14/2005
ACT 379 GROVE ST $489,000 10/29/2007
A loss in Ridgewood? It just can’t be, Rich. Everyone wants to live in Bergen County.
peaceNow
9/11 is not on the scale of the depression or WWII with which it was being compared. Compared to these events 9/11 is a “local event” Bombings happen all over the world and are not uncommon, spain, UK, Turkey, USA.
9/11 was a significant event by all means, but people need to open their eyes to the world. 9/11 was a tragedy of our own making and this was not the first large bombing on american soil, how about Oklahoma city? Our own foreign policies have been and continue to be the driving force behind the various extremists groups that perpetrate such acts. The number one lesson we should be learning from this event is that our foreign policies can have very real and very destructive consequences on our own soil.
Regarding SS; If SS stays in its current form it is insolvent. SS can be maintained only by increasing ages and decreasing service. The question here is will the senior voters allow this to happen. Senior voters tend to be one of th most powerful voter blocks in this country. Any politician that attempts to reduce their benefits will face their full wrath in the voting booth.
45#, this one is at the corner of two busy streets. now it is not 2 years ago when every house goes up. real estate principal starts to work
Doyle,
The empire has not fallen yet, but there are serious financial troubles that need to be addressed and that are being ignored such as inflation and housing. If these issues are ignored long enough who knows where it leads…
Citigroup: ‘Gimme shelter’
Why on earth, Fortune’s Allan Sloan asks, should we protect banks from their mistakes?
http://money.cnn.com/2007/10/26/magazines/fortune/citishelter.fortune/index.htm?postversion=2007102910
Always happy to see Allan calling Wall St. to task. I like to naively dream that some of those readers will actually email their displeasure to their congressman/senators…
for example here: http://lautenberg.senate.gov/contact/
http://menendez.senate.gov/contact/contact.cfm
http://www.congressmerge.com/onlinedb/cgi-bin/newseek.cgi?site=congressmerge&state=nj
hint, hint…
Citi is a steal, if you are chicken shit over the dividend getting canned get into the perf. 6% at 15% tax rate with upside potential.
Now is a good time for KBW Bank Index or any banks convt bonds or any perf non mortg bank. Get into common on Citi,BOA, JPM or any blue chip. Big Ben is going to bail out the banks with two more .25bps before year end and if you are going to bitch about it you might as well ride it.
The Fed wants mtg lending back at the money centers and to screw the mtg bkrs who are thinly regulated they are just collateral damage.
If you sit on your ass you will end up with 3% in the mny mkt with 40% being sent to uncle same, now is the time to move. Housing ain’t coming back for 1-5 years and you can’t afford to keep the nest egg at 3% for that long a time.
By the way go way out and short a leap on some China crap, by 2009 the only thing your friends on wall street will be buying from china is an egg roll from Yips.
My big call of the day is SOV, low teens today and will be 40 by 2011 with a good div to boot for your ride.
Gotta buy banks when you are very very scared to hit the enter key right before the purchase. Stay away from SIV/ALt A crap buy buy the diversified money centers.
Heck I say short the damm homebuilders and buy the banks, not something you hear too oftern.
49#, the major issue in this country is not iraq war, not social security, not housing, not oil, not illegal imigrants… the issue is people now consider it is financially more rewarding by working as a government employee.
The real run up started post 2001 so why would you expect prices to go back to 1998-2000 levels?
I also think that 1998 – 2000 levels might be kind of aggressive.
On the other hand, what happens when buyers (and lenders) figure property taxes into the overall cost of ownership?
Property taxes in many places are up about 60% from 2000 (about 6.9% per year on average). This means that a $5,000 tax bill in 2000 is now an $8,000 tax bill in 2007; that’s about $250 per month.
$250 per month is about $40k in buying power that is now being diverted away from the house and into taxes.
I also think that buyers today are much more nervous about future tax increases, as there doesn’t appear to be any solutions on the horizon for annual increases of this magnitude continuing. This may make the “smart” buyer less willing to buy “up to the very edge” of their affordability and more apt to leave some room, further reducing buying power.
50#, john, buying banks may make sense but shorting homebuilders are too risk – they are very cyclical just like semis.
#39 What happens to them? At the very least, they will begin to save again.
That is of course assuming they can save again.
If most or all of your income goes to to service debt, than how can these same people save.
As far as housing goes, well all the pieces (except one) are in place, and as Clot has said several times they fell into place rapidly.
The only missing piece is significant declines in asking prices,fromm the areas I follow.
There have been some, and in fact there are listings again with asking rpices below 400K, something I have not seen since 2004.
Grant it thery are not on the nicest blocks ,nicest hosues etc, but one local long time realtor told me not too long ago we would never see anthing in town again asking below 400K, and yet now we are.
I would suspect that this will evntually spread to the more desireable blocks/areas but it has been slow going.
That being said here we are into Nov, and there are tons of houses available for sale not just in the samll area I follow, but in all of Bergen County.
You truly have to wonder just how delusional sellers are, do they not watch the news, read the papers?
Is the denial that deep and that pervasive? Perhaps since this was the biggest real estate boom in history, current sellers cannot bring themselves to admit the party is over.
Perhaps they still see an odd house here or there sell, and are figuring all they have to do is be patient, and theirs will sell too. Especially if the sale price was not totally horrible (from the sellers perspective).
I am sure local realtors know what the house may have sold for before it actually closes. Does this give the seller a false sense of hope? I would think the seasoned Realtors who take the business seriously would be actively cmapaigning to have their clients lower their asking prices.
Perhaps many are, but at the end of the day it is up to the sellers to lower their asking prices.
I am also still seeing new listings come on the market, and November is in 2 days. I would suspect that any little bit of buyer activity that is out there will be gone shortly as the holidays approach.
So there we have it all the peices in place except seller acceptance.
I think they will ultimately accept the new reality, after the holidays.
And I think we will see a Spring market start right after the holidays, with sellers figuring better to get the house on the market early, before March/April.
And when they do accept this new reality, the asking price declines will be swift and furious.
All those of us who are waiting can do , is continue to wait and be disciplined.
I personally think it is insane to be out there buying now, unless you are getting an absolute deal, or money is absolutely no object.
#45 & 46
They go down in Union County too…
Mountainside
1395 Wood Valley Rd Oct 05 SP $585,000
Listed today at $549,000 – MLS# 2417362
Hi grim, Citigroup: ‘Gimme shelter’ stuck in moderation-land, could you set him free? tks!
Here is a question.
There is a lot of talk in the media about “pent-up demand”; a pool of buyers just sitting on the sidelines ready to pounce once the price is right, putting an end to the RE downturn.
One thing that never gets discussed in pent-up supply (probably because supply is so high already). My question is; is everyone who wants to sell pretty much trying to sell at this point? Or, is there a significant pool of sellers just sitting on the sidelines waiting for conditions to improve? Maybe waiting for the spring turnaround?
#57 rent: Maybe waiting for the spring turnaround?
Than that question begs another, which is what will be significantly different in the Spring than now, that would help the market improve, from the sellers perspective?
3b [54],
I agree. My parents are trying to sell their home (active adult community, yeah, right) in Jackson to move to Florida permanently. Last year, they denied an offer for what they are currently listing it for. This year they received an offer that was 15% below their current asking price and they still won’t take it. I’m pretty confident that next year, they will not even get an offer close to this one.
Believe me, I tried to talk some sense into them, but they did not want to listen. Even though they are still up significantly from their purchase price.
All I can say is that people are entrenched in their denial stage. The China bubble is gonna burst soon and the damage will be catastrophic. Very similar to the tech bubble. I was smart enough to get out only 15% from the top. I’m also smart enough to stay out of China. Unfortunately the herd is about to run off the cliff again.
It always amazes me how short term the herds’ collective memory is.
Rent [52]
“I also think that buyers today are much more nervous about future tax increases, as there doesn’t appear to be any solutions on the horizon for annual increases of this magnitude continuing. This may make the “smart” buyer less willing to buy “up to the very edge” of their affordability and more apt to leave some room, further reducing buying power.”
Right on, this is certainly one of my biggest issues. I simply do not trust any municipality in NJ to do anything to curb these outrageous real estate tax increases. They will continue to do it because there is zero political fallout for it.
If you have to extend on your payments to get into a more expensive house with a 30 yr fixed, you can at least do some cash flow planning and be prepared, and the whole process is at least a forced savings mechanism assuming reasonable appreciation over time. Real estate taxes are just pissed away and there is no end in sight. I haven’t met one person who can really admit that they have seen a bit of difference in their local quality of life as a result of the recent hikes in real estate taxes. Unless the taxpaying voting public takes a stand, it will be more of the same, but after witnessing the NJ electorate the past few years, I have very little hope things will change and one must plan accordingly.
In what way will a rate cut and further erosion of the dollar lower the cost we pay for oil?
“The likely rationale if the Fed cuts: a desire to prevent the worst case, in which renewed market tumult, rising oil prices and falling home values drive the U.S. economy into recession.”
RentingNJ [57]:
Pent up demand or potential buyers will take a while to release their apprehensiveness about buying.
How willing were you to jump into the tech market after the tech bubble burst. Was there pent up demand for tech stock buyers? Absolutely! Did any of them buy near the bottom? Only the very smart few.
Same analogy holds true for the home buyers. Not until the bottom is found (and you won’t know it until a year or so after), will the pent up demand begin to put a dent in the oversupply. Rapidly dropping asking prices won’t even lure them in. When the media calls it a bottom (probably 18 months late), then the pent up buyers will begin to trickle in and the whole cycle will repeat once again.
#59 stu2#6 With all due repsect to your folks, sometimes the older people are the worst as far compromising, being realistic on their asking prices.
That being said, when they do finally wake up, they can make swift deep price cuts, as opposed to those who purchased in the last few years, and or those who have spent their equity.
58#, the housing market will be significantly improved next spring if 30 year mortgage rate will stay around 6% level, which i bet will due to next 2 fed fund rate cuts. why? a lot of folks who want to trade up cannot since they feel they have to pay more than 1% in mortgage rate. once the rate falls to their confortable level, they will move on.
Just as psycology played a big part of the housing runup (I must buy before I’m priced out forever!), it will play a part in the housing decline (I can’t buy or else I will be in debt forever!).
I expect prices will decline more than is rational, just like they appreciated more that was rational.
#64 That comment reminds me why I stayed away from this site for a while.
Breathe in, take deep breath,ignore.
3b, it’s the new you! I could have sworn we were due for a “you too will learn Grasshopper, they all do” kinda comment.
Nice restraint…
66#, i am talking about psychology of sellers i know. people can take loss since they know they can buy cheaper other side but 2 things they cannot avoid: interest rate and tax. you have to leave nj if you don’t want to pay higher nj tax but you can pay less interest next spring.
Most people are not cutting prices near me for two reasons, a lot of old folks with zero mortgage and plans to move to Florida when they evenutally sell. Not a lot of pressure. The second group have cashed out, or only put 5% down so they have no equity or they need the type of loans that banks no longer
Back in 1991 non of this existed, people had equity in their house which they were losing by the month so they wanted out, mortgages were sky high so people wanted out and Florida was still dirt cheap so old folks could take less for their house and still buy a mansion in Florida.
People are brain washed that RE always comes back so they sit and wait. We need the wait and sit people who are flippers or between two houses people to start dumping homes to get people to start moving properties 20% off. This is one train wreck a turtle could avoid, but these folks won’t.
Bet a few subprime cali people did a jig this weekend when there house burned, yippie ka yie.
#69 John: Are not the old folks losing equity by sitting and waiting?
#67 doyle; I am trying.
Some interesting reading I found on the internet:
1985-1986: Housing is booming, inventory is low.
1987: Housing still booming, prices increasing, inventories low.
1988: People start to question the boom. Realtors assure us the boom will continue. Houses aren’t like stocks afterall.
1989: Prices are very expensive; affordability an issue. Sales slow and prices drop. Mention of risky loan types.
1990: Prices take a serious plunge. One article claims that housing booms are a bad thing and we should hope prices stay low. Increasing mortgage rates are blamed for the bust. The word “recession” is mentioned. Gloom and doom.
1991: A “dead cat bounce”? Some folks wondering if the bust has bottomed out or not. Sales are abysmal (e.g., -42%). Other parts of the country showing some signs of recovery.
1992: No one is buying; housing is an investment that no one will touch. Desperate political efforts being made to encourage house buying. Rock bottom prices and lower mortgage rates encourage some purchasing. The year ends with some buying. Another “dead cat bounce”? It’s not clear.
1993: It’s definitely a buyer’s market. Some people are saddened by the fact that current prices are 50% of what they were in the 1980’s. The housing bust in Southern California is clearly negatively impacting the California economy and the national economy at large. Sellers are desperate to sell (and some people taking extreme measures like putting huge “for sale” signs on their lawns for passing planes to see). Folks who waited out the boom to buy at the bottom are being handsomely rewarded for their patience. Proof-positive of the contrarian investing style — be greedy when everyone is fearful and fearful when everyone is greedy. The “slump” may be ending.
1994: Housing begins its comeback. People who had the intelligence to wait for the bottom are buying now at great values. Even rising mortgage rates are not shaking the recovery.
1995: Some parts of the Southland are recovering others are not. People with “negative equity” are in despair.
1996: A tentative recovery is still in the making.
1997: Finally, housing has recovered.
Gee does this look familiar at all?
I guess people did not learn….
BI says “the housing market will be significantly improved next spring if 30 year mortgage rate will stay around 6% level, which i bet will due to next 2 fed fund rate cuts.”
Well it’s official. The housing bottom will not occur in 2008.
John Says:
Most people are not cutting prices near me for two reasons,
I agree. So many of the home you see haven’t had any updating in 30 years. Grandma is cashing out to retire and doesn’t read the financial press enough to figure out that time = $money. Or, they don’t want to bring a check to closing so they’re holding out for a miracle.
regarding sitters…
Some friends of mine, an older couple in their 60’s just finished building their retirement home on the NC shore. They moved into the new place last week, while the house in hunterdon county has been on the market for 1 year. their problem is they want 05 prices and will not accept anything less. before building the new place the house was paid off for its original 1982 purchase with no equity loans. but after building the new place, who knows. it will be interesting to see how long they hold out
3b,
I was wondering if your user name had been changed; bergen bubble buyer.
Ridgewood
SLD 977 HILLCREST RD $999,000 8/25/2005
SLD 977 HILLCREST RD $970,000 10/25/2007
SLD 621 SPRING AVE $650,000 11/8/2004
SLD 621 SPRING AVE $625,000 10/19/2007
SLD 106 PINE ST $489,000 4/21/2004
SLD 106 PINE ST $478,000 9/7/2007
Is Bernanke gonna cut .25, .50 or is he gonna shock the world cut the FFR 100 BP.
I can see the headlines. Ben cuts 100BP and the bulls roar. DOW is up 500 points to an all time high. Inflation is low. America is a great country. Wall St doubles bonuses and blames stan O’Neal for the subprime mortgage mess.
And then dollar tanks another 20% and sellers not knowing what this means refuse to lower prices and this period of sales stagnation continues.
I was in a liquor store this weekend. The guy in line behind me says to the counter guy, my brother can’t sell his home so he took it off the market. The counter guy says, I know so and so is in the same boat. Everything’s dead. An old lady standing on the side says that’s all your hear about nowadays is how real estate is crashing down.
I went out and enjoyed my six of Becks.
Patience comes to those who wait. Another six months of it soaking into everyone’s psyche, and prices will start moving.
Rich [78],
Wow. Ridgewood, below 2004 prices. Must be the bad side of the street.
doh!
http://news.yahoo.com/s/nm/20071028/us_nm/usa_creditcards_debt_dc
What do they care, they will be dead in ten years.
3b Says:
October 29th, 2007 at 12:15 pm
#69 John: Are not the old folks losing equity by sitting and waiting?
many of the older homeowners are actually worse off than their younger neighbors. they have planned their retirements around a housing windfall and are too old to start over. failure to achieve the wish price means that they will have to revise their retirement lifestyle downward, or perhaps not retire at all. so it is hope against reason
Layoffs Watch ’07: Bear Stearns Is Back
Haven’t heard much from the Bear Stearns Department of Failure lately, have we? Probably because everyone’s too busy piling on Merrill and Stan (including Bear Stearns, which may have something to do with some unresolved anger toward MER for sort of screwing BSC this summer by grabbing assets from the funds with the impractically long names, and accelerating their demise). Good to know things are apparently still chugging along, business as usual: we’ve heard from a few places (probably all Stan O’Neal, calling from different numbers to throw us off) that Bear Stearns laid off approximately 600 people today, across all lines. Did you hear that, too?
#77 BC Bob:No not me, been around the block a few time, and I know madness when I see it. I am still 3b, bergen bubble BURST!!
#85
Source: http://www.dealbreaker.com/2007/10/layoffs_watch_07_bear_stearns.php#more
#85What do they care, they will be dead in ten years.
Well than all the more reason not to wait.
human beings are risk aversion in nature: people prefer not-losing than gaining. due to relocation, a friend of mine had his home in plainsboro on market last winter and listed 729K, which was the price he bought in 2005 and insisted that price even other homes in the development sold quickly this spring. finanlly he sold at $725K. i asked him why don’t lower the price and he replied that there was nothing to lose since he paid off the mortgage. acctually he could earn risk free $35K a year for 700K in the bank. but reality is sometimes decisions people make are not financially optimal.
Sorry about that grim
From MarketWatch:
Fed to cut rates to manage risks, analysts say
Many economists believe the Federal Reserve will cut its policy interest-rate target by a quarter-percentage point to 4.5% on Wednesday to contain the risks that financial market turmoil could continue, possibly leading to a recession.
“The risk of a financial-market disruption spilling over into real economic activity is too serious for the Fed to ignore,” said Kevin Logan, U.S. economist at Dresdner Kleinwort, in a note to clients. “Not easing at this juncture runs the risk of a financial market catastrophe and a possible recession.”
Simply put, economists said the debt crisis is not over, and the danger exists that banks won’t be able to make loans and mortgages, even to buyers with good credit history and high income.
Under the risk-management approach, the Fed reacts to an event that may not be probable but would be damaging if it occurred.
“Fears of a credit crunch still loom large,” said Dan Seto, economist at Sumitomo Mitsui Asset Management.
Mesirow Financial chief economist Diane Swonk agreed, saying, “The Fed can’t risk [the debt crisis] going on too long without putting a little bit more liquidity to keep the machine going — a little grease in the engine.”
“The dust has not settled. They are watching it still slowly settle. While it not the most-likely scenario to have a lot more spillover effects, it is a possible scenario,” Swonk said.
Ridgewood bubble has been blown? nothing new ,,,,town is nuthing special ….let it sliiiideeeee :)
more to come :)
So does anybody sees mortgage rates falling below 6%???
Because so far all Fed is doing by cutting rqates is saving banks by providing them with lower interest credit.
Untill I see 30 years fixed going below 6% – rate cuts will have no effect on housing.
How can one convince someone not to withdraw or from their 401k to throw into their house payments? Isn’t it literally borrowing against their future?
If people have higher mortgage payments because of rate resets and assuming it’s not huge, they should be instead be increasing their IRS tax witholding in their W4s to compensate for the extra deduction because of extra interest payments. That way, they can squeeze out some extra cash flow before raiding their retirement accounts.
#94 Al: Untill I see 30 years fixed going below 6% – rate cuts will have no effect on housing.
And those effects will be what?
Al [94],
5.25-5.38% 30 year, no points was available in 2004. How many decided to go with an arm/teaser since they either could not afford the fixed rate or decided to buy up?
97#, bob, that is the lowest point. i guess most people cannot catch that. on average, i would say around 5.5% to 6%
Hey – I am not saying it will save the hosing but lowering rates right now does nothing for average Joe.
Current rate cuts are there to only helps Banks.
I want a loan from the goverment at 4.5%!!!
#55 3b –
“You truly have to wonder just how delusional sellers are, do they not watch the news, read the papers?
Is the denial that deep and that pervasive? Perhaps since this was the biggest real estate boom in history, current sellers cannot bring themselves to admit the party is over.”
From what I have seen a lot of sellers are actually blaming the media for their homes not selling. They seem to think that if they hold off, the hoopla will die down and appreciation will return. Or they think if they hold off, buyers will “give up” and give them what they want.
I gotta agree with BC Bob and disagree with BI(as usual). Everyone knows that interest rates used to be in the mid to high teens. The difference between 5 and 6% is completely insignificant, especially when considering that in the early 80’s people paid 19% for a fixed 30 year mortgage. I would even bet that a 4% mortgage rate wouldn’t even spur a recovery.
Wages decreasing + rising fuel costs + rising insurance rates + out-of-control government spending (property taxes) = Major recession.
As soon as you hear that the rules are different this time, you should immediately begin to worry. Those here who say, “don’t fight the FED!” are going to suffer.
http://mortgage-x.com/trends.htm
#100 lisoosh: Or they think if they hold off, buyers will “give up” and give them what they want.
You cannot get blood from a stone.
[98],
I got it, 5.38%
At Pulte Homes, inclusion and diversity is embraced, celebrated, managed and led at all levels and every function within the organization. We welcome you to read some of the insightful comments on our inclusion and diversity efforts from leaders across our company.
“Diversity is a trait in all great teams. Different backgrounds, different experiences, different ways of thinking can be a powerful thing when channeled to a common set of goals. In fact for the right price your town can be as diverse as an NFL Football team”
Tony Barbee, Division President, Indianapolis
——————————————————————————–
“Allow yourself to experience diversity, and you will truly learn to value the people around you. You will genuinely become more appreciative, understanding, and empathetic towards everyone. Don’t wait, embrace diversity and celebrate people today!. If fact later on tonight I am getting a quick rub and a tug from our asian friends”
Patrick Beirne, Western Regional President
——————————————————————————–
“There is no doubt that our Council’s focus on Diversity and Inclusion will only enhance our already strong Company Culture. We only believe in the color green, you could be fresh out of lock-up for peeping at the little pee pees and I would sell you a house”
Brian Brunhofer, Division President, Illinois Traditional
——————————————————————————–
“At Pulte, we are excited about the journey we are now on making progress embedding the principles of diversity and inclusion. People of all colors can get themself in debt in our little sheetrock castles”
Roger Cregg, Executive Vice President and Chief Financial Officer
——————————————————————————–
“The question of diversity shouldn’t be why should we………. but rather why not.
Speaking of spice………Diversity is like a great recipe, the more ingredients you use, the more interesting the result.
Which would you rather have:
Chicken with chicken with chicken with chicken with chicken with chicken.
Or
Chicken, marinated in a broth of balsamic vinegar with a touch of basil and topped off with some lemon caper sauce and a side of steamed broccoli and some wild rice pilaf.
I don’t know about you but I know where I’m pulling up to the table and I gurantee you people of color will be cooking my food and cleaning up afterwards.”
Sean Degen, National VP of Architectural Services
——————————————————————————–
“Pulte’s culture is wrapped around a strong sense of family and a ‘small company’ atmosphere despite our size. Any great company that sustains itself over time doesn’t achieve that status on the brilliance of a few but rather the combined and diverse views of many. In fact my pappy told me the clan has lasted so long cause we always were sure to welcome the first person of color who moved to our town.
Richard Dugas, President and CEO
——————————————————————————–
“The greatness of our country arises from its diversity. For Pulte, greatness will be achieved when we value the ability to unite people of different backgrounds around a common goal.” The goal is to get the last house sold in a development before we get lynched
Cisco Garcia, Vice President Land, South Carolina
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“A more inclusive culture will allow Pulte to be as diverse as our customer, not that housing has crashed we and the customers are broke.
——————————————————————————–
“From the moment I immigrated to this country until this day it continues to amaze me the powerful synergies created by the different cultures and ethnic groups as well as the tolerance to different beliefs and religions that exist in our society. This country is truly a melting pot and I believe that is why we enjoy one of the strongest democracies and economies in the world. Pulte Homes is no different, and its diverse employment base and strong culture is what makes it the strongest builder in the planet!”
Alex Krell, Division President of Operations, Nashville
——————————————————————————–
“Pulte’s success – and the success of our entrepreneurial culture – depends not on the schools we attended and not on, among other things, our ethnicity, race, gender, sexual orientation, religion, physical abilities, or national origin. Instead, our success depends on every employee being given the chance to succeed. It depends on each of us working together to deliver value for our clients and our shareholders, and feeling a sense of pride and fulfillment in what we do.” By the way I am gay.
Jim Leiferman, Florida Area President
——————————————————————————–
“Over the last two years of working at Pulte Homes I have felt like I am part of a caring family that uses all of its diverse talents and different skills to pull together and accomplish tasks collectively that we could not accomplish individually. The advantages of working in an inclusive environment is we easily produce deliverables in a manner where the sum is greater than the individual parts.”
Matt Ludwa, Systems Engineer, Home Office
——————————————————————————–
“I am a division president at Pulte Homes who happens to be a woman. A white women married to a white guy but last I checked I still am a women.I am a woman who happens to be a division president at Pulte Homes. At Pulte Homes it does not matter. Diversity is lined with riches
Alicia McPhee, Division President, Georgia North
——————————————————————————–
“Nothing is more contageous than genuinely loving what you do!” “For me that is screwing first time home owners, it is that deer in the headlight moment that makes me hard as a rock”
Veronica Perez, Vice President, Sales
——————————————————————————–
“When we include everyone we get a culture that is rich and binds us all together.” Kinda like a night at whitecastle, you see all races and in the morning you fell all binded up on the crapper”.
“Diversity in our workplace drives diversity in our thoughts and ideas.”
“By not all thinking alike we will make a difference.”
“Inclusion happens not by chance but from insightful leadership seeking a better business result.”
“How will we know when we have conquered diversity? When we can no longer see our differences!” “Well unless you tried to date my daughter and then I would kick your ass”
“A “Sea of sameness” provides little difference in the business world.”
“Our diverse culture will be the steering currents we need to get ahead.”
“Plus if they ever got together we would get a class action lawsuit”
Steve Petruska, Executive Vice President and Chief Operating Officer
——————————————————————————–
“Diversity of thought and opinion is what drives our company into the future and turns good ideas into great ones. The more opinions we have to shape our thoughts, the more likely we will be successful with any project. In fact opinions are like assholes and you in my opinion you have to be an asshole to buy our homes”
Steve Schlageter, Division President, Raliegh
#100 lisoosh: And I might add, it will snow in July if the buyers think they are going to get what they want from me.
people in general seem to be missing that a recession is a good thing in that it removes the weak players from the markets and allows the market to be stronger for it. the longer you hold off a recession the worse the correction becomes…
kettle (28)-
Agreed. Affordability is always the golden standard for someone in my line of work, because it yields the greatest velocity of deal flow.
However, the overshoot to the downside on this epic collapse is going to leave us all in a post-nuclear moonscape.
BTW…I think Bernanke should wear a Dick Nixon mask to the Fed meeting on Wed.
#105 Should have said sellers.
Did anyone see Property Virgins or My House is Worth What? this weekend? The first show features an obnoxious realtor who carts around first time buyers. Amazingly one of her couples got into a bidding war. It turns out that the show is filmed in Toronto, so maybe things are better in Canada, who knows.
The second show is the biggest pile of crap I’ve ever seen. The sellers expect to list their house for enough to make a tidy profit, and the appraisal “expert” magically prices the house for more than they expect. I almost tossed my cookies when a home in Las Vegas, purchased in 2005 for 879k with about 200k in renovations was appraised for 1.5 million, in 2007 when Vegas is toast.
John (34)-
“I should write for The Onion!”
Wrong. You should be under round-the-clock surveillance.
make (38)-
Wake me up when Ron Paul starts raising a militia and stockpiling food and ammo in undisclosed safe houses all over the US.
bi (41)-
Exactly how does it feel to know you’re on the other side of the trade from Boone Pickens?
http://economictimes.indiatimes.com/Mukesh_Ambani_elbows_out_Gates_as_richest/articleshow/2500036.cms
#93 grim; The problem with another rate cut from our perspective is that it will probably give sellers a false sense of hope.
Thw Fed cut, so i should be at elast able to sell my house at its curretn asking price, if not more.
BI
Looks like $90+ oil may continue for a while. I still say that oil is not going back under $80 except for occasional transient dips
Mexico shuts down a fifth of its production
http://tinyurl.com/2x7ea8
grim-
Take a look at bi’s #66. Can’t you impose some sort of minimum IQ required for posting here? This guy’s number may not exceed my age.
Just heard tale of young couple in Manalapan who just bought a $550k house.
Apon stripping the wallpaper to start decorating, discovered the house is riddled with mold, unlivable, everything they own needs to be tossed. They are currently living with her parents and trying to sue the original sellers (a very nice couple who loved their wallpaper and had no idea).
Oh the pitfalls of not bothering to spend a few hundred bucks extra for a more thorough inspection….. Probably went 100% and had no more money.
In other news….
House listed for $450k last summer (fell out of contract couple of times) now listed at $369 – in BI’s favourite up and coming South Brunswick.
And in Somerset we have a house sitting at $660k and not moving, identical to a house across the street which sold 18 months ago at $740.
Now we return to regular programming…
Be careful what you wish for you might get it, that great deal is just around the corner.Maybe we would have been better off paying more?!!!!
==========
so go ahead fool and pay wish asking.
yes it is bad and it is going to get worse until the economy is allowed to correct the excesses of the past.
vodka (78)-
More money than brains?
116#, anybody know where you can take a free IQ test? by the way i don’t know my IQ.
For entertainment purposes, I think we should all try to simulate the demented mind and style of a BI post.
I’ll go first…
I bet next spring the homebuilders will recover as the days will be longer and they will have more time to build. You should see those cranes and bulldozers in Harrison. Judging by their activity, we are 7 months into the recovery.
“You truly have to wonder just how delusional sellers are, do they not watch the news, read the papers?
Sure, but they also believe that the “news” is talking about someone else. They can’t possibly be talking about my house in Shoreside Vail. After all, this is Bergen County; the most desirable place in the entire world. We have great schools and are only a short distance from the center of the universe (NYC). Throw in the fact that my house is special; it’s much nicer than the crap-boxes my neighbors live in, and you see why I’m not going to “give it away” for less then what my neighbors got in 2005.
if fed cut the rates by a quarter pp, is the market going to go up or down?
#119
i think its “i’m not giving my house away” syndrome. They also seem to be in the “real estate downturn is media hype” crowd. I have casually mentioned some of the numerous factors we talk about here but they them say that i dont know what i am talking about and dont have enough experience in real estate to make such calls. oh well, you can only show someone the door, they have to walk through it….
People are brain washed that RE always comes back so they sit and wait. We need the wait and sit people who are flippers or between two houses people to start dumping homes to get people to start moving properties 20% off. This is one train wreck a turtle could avoid, but these folks won’t.
==============
one should target those that have to sell. do not waste any of your time with sellers that do not have to sell. their home equity will vanish as they wait anyway.
3b Says:
“You cannot get blood from a stone.”
Ain’t that the truth.
Paraphrase of conversation with desparate delusional seller (DS).
DS – “Buyers these days are greedy and spoiled, they all want something for nothing, expecting me to give away my house. Everyone complaining because I don’t have granite countertops and SS appliances. Nobody wants a nice modest house any more.”
Me – “Lots of buyers for a modest house AT A MODEST PRICE.”
DS – Silence.
#127 Good One!!
MJ # 123,
if (when) the FED cuts rates you will see an initial upward bounce in the stock market, followed shortly by an increasing devaluation of the dollar as foreign banks and investors continue to flee the US dollar at an ever accelerating rate. Housing stagnation will deepen as sellers see the rate change as supporting their unrealistic prices while in reality it does nothing to solve the real source of the problem ( the USA and it population is essentially bankrupt)
vodka (124)-
I DO have enough experience in RE to make such calls. Housing is toast. Will be for the next 5-8 years.
#130 Clot Any idea as to how long it will take sellers to accept that reality? I am thinking by after the holidays, but then again I live in Bergen,and its special.
Home sellers are so desperate, they’re willing to write you into their will
http://tinyurl.com/27k9gj
When the housing market slows, some home sellers drop their asking price. Others give buyers allowances to cover the cost of upgrades or offer help with financing.
Bob and Ricki Husick came up with a more creative twist: Whoever buys their four-bedroom, 31/2-bath home on Fountain Hills Drive in Pine would get their money back after the Husicks die.
Not only that, but if the buyers are willing to care for the Husicks in their old age, they could also inherit the Husicks’ retirement home in Arizona for a total estate now worth about $500,000. The couple has no heirs.
“Why not go for the works? So if we’re worth $2.5 million, you get it all,” said Mr. Husick, 55, a former Wachovia mortgage broker who would like to continue working after he and his wife move to Arizona.
“That’s one way you get a built-in child or a built-in someone to care.”
Of course, the value of the estate could erode, too, depending on the Husicks’ fortunes and the cost of their long-term care. But Mr. Husick points out that he began saving for retirement at age 21, and he’s willing to let the buyers write the will to ensure they inherit the Husicks’ assets.
123#, 128#, current stock and bond market has already factored in 25 bps rate cut. i won’t be surprised to see inital selloff after anouncement. but in the long run, it will help solving current problem of stagnant housing: arms holders can refi at lower cost; banks will have lower cost doing mortgage. but i doubt it will boost equity market that much since we have had 4 years of good running and global market espcially emerge market is too hot to touch.
3b,
Good to see you back, I’ve been asking about you.
From Reuters:
Bear Stearns to cut about 300 jobs
Bear Stearns Cos Inc on Monday said it would cut about 300 jobs in business units at all levels of the investment bank.
Bear Stearns, which saw two of its hedge funds collapse this past summer, said the cuts are part of its year-end planning process. The company, a leading underwriter of mortgage-backed securities, has been battered by escalating defaults on risky subprime loans.
“We are working to deploy our resources in areas where growth opportunities are greatest and to reduce costs in areas that can no longer justify their current level of infrastructure,” the company said in a statement. “Accordingly, we are reducing our headcount by approximately 300 people in various business units at all levels of the organization.”
“116#, anybody know where you can take a free IQ test? by the way i don’t know my IQ.”
[120],
Before you do that, learn the difference between contango and backwardation.
#134 gary: Yeah, I had been on the road for a while, although I still could have posted, just decided to take a break for a while.
A few posters were really getting under my skin, my fault,not theirs.
So I have elected to just ignore them, no matter how tempted to do otherwise.
#134 gary: Oh and thanks for the welcome back.
Before you do that, learn the difference between contango and backwardation.
That is funny, around two or three years ago I flew in an ex Andersen, ex enron trader to a client in New York and charged then five hundred an hour so he could find where the bodies are buried.
Loved when client said stuff like “What’s wrong with using a batch job to do VAR in EXCEL”
When I explained that is like putting sand in vasoline he was not happy.
The CFTC is one POS SRO and front running and insider trading is par for the course in commodities.
delaying foreclosure with plastic…
http://news.yahoo.com/s/nm/20071028/lf_nm/usa_creditcards_debt_dc;_ylt=AvEgmmRBdm3DUxMs5IXOgUes0NUE
http://www.mensa.org/index0.php?page=10
Speaking of IQs, does anyone belong?
I AM SO FED UP WITH RE. Would you damn sellers just accept my offer!!! I am the market, I am the buyer. The RE market is/was not that lucky lottery ticket you have been attempting to find every week with your paycheck instead of sticking it into a retirement account. Stop watching “Sell This House” and thinking that removing cluttered photos and taking your crap off the wall is going to keep your house at that 20% premium!!! Note: This applies to all sellers in Basking Ridge & Bernardsville in the 400-600K price range for which I placed fair offers.
t141#, TJ, the reason for your frunstration is you are misguided by 20% low-ball techniques. if you started with 5% off the asking, you will be in happy camp by year end.
Bi is a realtor. As such, take his/her advice as you would from the NAR
3b#114 I agree my agent said this after last cut[buy now rates are lower before you lose that house]what alot of bull.However I haved noticed more people are aware of the down turn in pricing, rise in forclosures & glut of homes.The public is slow to catch on but the buzz is out there.In time it will hit the fan and then we’ll see.
tj (141)-
“Fair” is in the eye of the beholder, whether they be right or wrong. Perhaps soon, many of those sellers will wish they’d accepted your offers.
Did you leave any of those offers on the table?
3b (130)-
My crystal ball’s a little fuzzy today. Perhaps the best place to look now is the pre-foreclosure list.
Nothing like an impending sheriff sale to help sellers accept reality.
#145 mikein waiting:The public is slow to catch on but the buzz is out there.In time it will hit the fan and then we’ll see.
Maybe the sea of For Sale Signs all over the place as we are just about in November, ahas something to do with that buzz.
#147 Clot: I know you can’t answer that question, just rhetorical on my part.
#141
my father in law is selling his townhouse in basking ridge (newly retired and headed to Florida) 2bed 2 1/2 bath 367k, will that do?
Where are these jobs located?
http://www.marketwatch.com/news/story/bear-stearns-cut-300-jobs/story.aspx?guid=%7BE5A8D509%2DF8A8%2D4C0F%2DBC9D%2D56667C0BBC37%7D
Bear Stearns to cut 300 jobs to reduce cost
Sellers statement from a forum (great place to hang):
“If I own Macy’s and someone wants to buy my cold cream that retails for $100 for only $25, I would think they are crazy. So, when someone puts in an offer WAY less than the asking price, then I think that is crazy as well. (depending on some factors such as CMA’s, appraisals…as long as one has done their homework on what they are asking) When we go to buy a home we will only look at what we can afford and we will not put in a low ball offer just to see if we can get away with it. This is business and I do not intend to rob the family I am looking to buy from. I will put in an offer based on facts and not just b/c I have HEARD the market is really bad and maybe I can get something for nothing. (I say “HEARD” b/c not all markets are bad and the media does make it sound like it is a free for all-literally)”
BTW the above poster’s house has been on the market for months, no offers, they have moved out and are paying rent on their current abode and carrying costs on the home they are trying to sell.
Oh well.
It seems to me that there is a strong Bergen county focus to this board. What about Essex? Do posters believe that these countys’ RE prices move in tandem? I am actually specifically wondering about Montclair, Glen Ridge, Maplewood and South Orange. I can’t get out of my head the idea that I should be able to buy a $500-600k house for 10% off the list price in these areas, but last house I bid on (after 4 mos. on the market) had two other offers and we lost.
Clot,
I have left all my offers on the table. Hah, where to start.
I have run into two buyers that have had offers on below their OLP. Now the current listing priced is lower than the original offers.
I have justified all of my numbers. Basically if you purchase in 95-98 I calculated an average appreciation of 6.5% year (fair to high I would think). If you purchase prior to 95 I calculate 5% yearly appreciation. I do take into account upgrades, additions, etc. But I am not paying a professional contractor premium for your unplumb Ikea cabinets (Disclaimer: I really like Ikea).
Can anyone (except bi) please tell me who the hell thinks reducing FFR is going to help housing? The spread between FFR and what you the consumer can borrow at has increased. A 4.5% FFR is good for the company that might want to borrow here and perhaps expand in some overseas markets. Even a 1% FFR isn’t going to save housing, but the corporates are going to be rubbing their hands in glee. Borrow in USD, expand in countries running surpluses because of increased revenues thanks to commodities zooming because of a bastardized US dollar. Hmm, maybe I’m 5 years behind the curve….
My new handle is going to be ‘RE will be dead for a decade’. The first two years of the decay can only be ascertained by looking at the rear-view mirror. But 8 years of atrophying lies ahead. The RE supertanker is in full speed astern mode.
Secondary,
No condominiums for me. Not that I do not like condo, but they are dropping like rocks in that area. Even the “bulletproof” Hills. I have GSMLS access and keep track of everything. I have a spreadsheet to track it all. It has become my disgusting and frustrating hobby, but it makes perfect sense to me since I figure it will be saving me 50-100K down the road.
143#, i am not a realtor but just a reasonable person. when the seller is expecting $600k and you give $480K, i don’t think any sane person will take it. it is another story if the market will go to tha point a few months now (again i doubt).
By the way, i think the premium at basking ridge (bernards township) is too high. you can see from realtor.com that a few 3/2.5 townhouses are asking 800K even after “large price reduction”. but the market is what the market is. clot, right?
Bi,
Please do not respond to any of my postings. Rile someone else up with your Biconomics. How many days left before your “no longer than 5-days above $90.00” oil doesn’t come to fruition?
anotherone #152,
This is what I try to tell people on this blog all the time. Western Essex and Northern Bergen was, is and will continue to be fierce competition for desirable homes. There seems to be the idea that there’s going to be a huge haircut across the board. Forget it. If you want a cape or a split in Fairlawn or Clifton or Maywood then you could probably get a bargain. If you want a Center Hall Colonial at a better price, one would have to go to Sussex or Warren County or out of state. This isn’t Ohio, it isn’t Indiana, it’s Northern Jersey and it s*cks. We lost in bidding wars… we have friends that lost in bidding wars… this is how it is. Up market, down market, whatever the universe wants to call it.
TJ (155)-
You are applying logic to a game which has none. I’d suggest more time looking for a seller in trouble and less time running spreadsheets. Please also promise me you will NEVER, EVER show one of those spreadsheets to a seller. :)
bi (156)-
“…clot, right?”
What’s the frequency, Kenneth?
Sorry; I don’t have time to answer you right now, bi. Too busy shorting your portfolio.
gary (158)-
Nuclear winter for everyone. No one will be spared.
#151
this is a really interesting post. I guess maybe a lot of people think of homes as they think of consumer purchases in general–, i.e., you don’t walk into Macy’s expected to pay anything other than the price as advertised.
I think the reason why many here (including myself) find such a point of view so confusing and frustrating is because there is no concept of value anywhere in there. For example, I almost never buy anything in a department store or mall or whatever because I think almost everything these places sell is overpriced crap. When I do buy something, it is based on need and usually in the off season (coats in summer) so I can get a deep discount. I still don’t feel like I am getting a steal (I know what the markup on these things are); I simply think I am paying an appropriate price at 50% off. Same thing with houses, should I get one at roughly 20-30% off down the line. But obviously this point of view is somewhat unusual because Macy’s is filled with idiots every weekend buying full-priced crap and seller’s like the one in the post above think someone is a freak because they question the list price.
skep (162)-
Obviously, that poster never saw my wife in Macy’s, haggling her a** off over some stupid schmatte.
Clotpoll,
No doubt you got the inside scoop but I gotta tell you, as an outsider, I’m still not seeing it. BUT…. I’m ready nonetheless.
Clot,
Hah, I wish you were my Realtor. My cousin is my Realtor, she is great because she is my cousin and will sit and listen to my logic and put in my offers. I guess I am being impatient and hoping it’s 2009.
The problem is, this economy has been screwing me since day 1.
2001: Graduated college; receive job offers from Goldman and Andersen Consulting. Both withdrawn after major lay-offs. Go to work for father’s construction company.
2003: Offered awesome job with with great consulting firm.
2005: Married and making great money; ready to buy a house. Oh wait, I can’t I have to be making 200K a year to afford one.
2007: Waiting
2008: Probably waiting some more
158#,
i have the same observation but cannot figure it out why it acts that way. with rate cut coming and the rest of the country except seattle area are worse, i doubt this situation will change in near future.
TJ (165)-
You’re about to screw it back. Hard.
What does buying $100 worth of junk in Macy’s have to do with buying real estate?
The analogy is perverse, there is very little in common.
#141, #153, #157#, 165#, tj your posts are very entertaining – i was almost falling sleep before reading your #141
Clotpoll,
So, your strategy for pitching a lowball would basically be as follows:
Be polite, but don’t try to justify or give an explanation for your offer. If it’s not accepted, thank the seller for considering your offer and let them know they can contact you should they change their mind. Smile and walk away.
Is this about right?
From Retuers:
Greenspan: Subprime securitization seen too risky
Former Federal Reserve Chairman Alan Greenspan said on Monday securitized assets backed by subprime loans were unlikely to become a problem in the future because markets have lost their enthusiasm for them.
“Markets have made the decision that subprime securitization is much too risky, so problem solved,” Greenspan told a conference on hedge funds. Soaring foreclosure rates on subprime loans made to borrowers with poor credit have severely crimped the U.S. housing market and spurred a tightening of credit globally.
Greenspan also said that a rise in the price of crude oil to $100 a barrel would not be all bad, as it would “break our dependence (on oil) some and we would see smaller cars.”
Love the reporting..
Greenspan, between rum swizzles on Horseshoe Bay, proclaimed the subprime crisis over today. “Subprime won’t be a problem tomorrow, because tomorrow there won’t be subprime.” mumbled Greenspan, slighly irritated over our interruption.
More Fun With Bank Numbers:
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=awZJNZCT7waY
JB [174],
I could just picture AG coming out of the Rum Swizzle Inn and hoping on his moped.
“i was almost falling sleep”
[171],
When have you been awake?
174#, 176#, seriously i think it could be a marketing technique created by his agency: he is making at least 250k for 30 minutes now.
Clotpoll Says:
October 29th, 2007 at 4:46 pm
skep (162)- Obviously, that poster never saw my wife in Macy’s, haggling her a** off over some stupid schmatte.
clot: excellent word, although I always saw it as shmate……my personal favorite is shtup
Dealbreaker reporting 500 layoffs at BOA SF and IB..
#160 gary no area is immune, none, period. And when Fairlawn nad Clifton fall, than the other areas fall too.
Being close to NYC does not change the logic of the situation. Hard as it might be you just have to be be patient, ultimately the sellers will come around.
There will be no talk of Wall St bonus money this year scooping up houses in the train towns laocated in teh Barony of Bergen.
It happened before, it will happen again;we are NOT special. Me personally I belive it will bew worse than lst time, at leas then you really di have to qualify for a mtg etc. etc.
rent (172)-
Exactly. Kill with a kinder, gentler machine gun hand (Neil Young’s words, not mine).
ChiFi (179)-
“Shmate” is the original Yiddish. My inlaws taught me just enough to be dangerous.
grim (173)-
“Former Federal Reserve Chairman Alan Greenspan said on Monday securitized assets backed by subprime loans were unlikely to become a problem in the future because markets have lost their enthusiasm for them.”
Greenspan should start considering spending large amounts of time at his local dog track.
#157 TJ saving me 50-100K down the road. Or even much more than that.
BC (176)-
In a couple of years, a moped could be considered a luxury vehicle.
dreamtheaterr Says:
October 29th, 2007 at 4:31 pm
Even a 1% FFR isn’t going to save housing, but the corporates are going to be rubbing their hands in glee.
Yan: corps want asset/liability match….so if you are going to build a widget factory with a 10-year usable life before upgrade, you will be expected to borrow at a 10-year rate for that corp’s credit profile….essentially 10Y UST plus the credit spread. Every corp has it’s own flavor of debt charge depending on whether it is a net borrower or lender. E.g., MSFT is sitting on $B’s in cash, so assuming it is held short (2 years and in), FFR rate cuts drag down their returns – i.e. cash drag is enhanced.
Clotpoll Says:
October 29th, 2007 at 5:27 pm
ChiFi (179)- “Shmate” is the original Yiddish. My inlaws taught me just enough to be dangerous.
clot: what did the wife teach you about the shtup?
3b,
I hate using static numbers like 50-100K, but that number is relative to my price range. You may be right (hopefully you are) that it will be greater.
ChiFi (188)-
All I need to know. She’s no miskeit, and has excellent schwanze technique.
(190)-
That’s similar to the reverse Heimlich maneuver, for anyone who cares to know.
This place has now broken down to the level of Yiddish blogging.
It is the end of days.
These layoff WILL start to have an impact on NJ train towns…….I guarantee it. It may not be immediate, but sooner or later, some of these people will realize that they have become structurally unemployed. When this sinks into their thick-headed craniums, they will leave NJ unless they are originally from this area.
Bear in mind….look at where the job losses are in NYC. Bear is next to GCT, so these are really Westchester / CT, and to some extent LI residents. A hit to Lehman, MS has a better shot at nailing NJ. Goldman & Mer is NJ/LI.
That article, The Catastrophics View, is so unbelievably bleak on the economy’s future. Is it possible that the writer is just overly pessimistic? The hopelessness I read between the lines is depressing. Still, I’m glad it was posted. In this case, ignorance is not bliss.
#194 Chgo Bear has a big complex in Whippany. I have to believe there will be hits there too.
It is Wall Street, so yes while they will fire the O’Neals of the “street”, teh typical street logic is whil we are at , lets fire the Receptionist and lots of other employees who do not produce revenues/profits for the firm.
grim: Can you tell me what street njmls #2743709 is on in River Edge. Thanks.
Even the healthiest markets, though, have downturns and after the past 10 years it is not unreasonable to predict some drop in prices. It leads me to conclude that, since I need to get a house, I should just get something on the lower end of my range to limit my exposure. That still leaves me with the problem of accurate pricing, especially when there is some sense that prices have already come down a bit and 18 month old comparables might not be useful.
gary (160) Says:
October 29th, 2007 at 4:40 pm
anotherone #152,
This is what I try to tell people on this blog all the time. Western Essex and Northern Bergen was, is and will continue to be fierce competition for desirable homes. There seems to be the idea that there’s going to be a huge haircut across the board. Forget it. If you want a cape or a split in Fairlawn or Clifton or Maywood then you could probably get a bargain. If you want a Center Hall Colonial at a better price, one would have to go to Sussex or Warren County or out of state. This isn’t Ohio, it isn’t Indiana, it’s Northern Jersey and it s*cks. We lost in bidding wars… we have friends that lost in bidding wars… this is how it is. Up market, down market, whatever the universe wants to call it.
TO ALL SELLERS:
I would like to buy your house if it meets my criteria. I have 20% down. Approved for 30-year conventional. Will Pay up to 425K.
Qualifications:
* Upper Somerset – Lower Morris – Western Union County – Preferably Basking Ridge or Bernardsville, but will accept Chatham, Madison, Long Hill, New Providence, etc.
* 3/2 or 1.5 with character – Character is a huge qualification – Victorians are a huge plus
* No Capes/Bi or Split Levels
* 1/4 acre minimum
* Must not have oil heat or septic
* Must not be able to touch front door from the street
* Must not have bad upgrades that I will have to redo anyway
* Must not be the ghetto section of town
* No flood zone
* Must not be next to Dunkin Donuts
About me: I am a very active member in the communities I belong to. I am planning on having a family very soon. I am the perfect person to buy your house.
Thank You
#198 anotherone: 18 month old compareables are definitely not useful, and for that matter neither are 6 months.
TJ/#199-
Bravo!
Ok, sellers, looks like it would be pretty easy to me for someone to match these criteria.
JM
Not RE, but thought many would like to know.
Mukesh Ambani world’s richest now
NEW DELHI: Billionaire Mukesh Ambani on Monday became the richest person in the world, surpassing American software czar Bill Gates, Mexican business tycoon Carlos Slim Helu and famous investment guru Warren Buffett, courtesy the bull run in the stock market.
Five richest people in the world with their net worth
1. Mukesh Ambani ($63.2 billion)
2. Carlos Slim Helu ($62.2993 billion)
3. William (Bill) Gates ($62.29 billion)
4. Warren Buffett ($55.9 billion)
5. Lakshmi Mittal ($50.9 billion)
Now that you bought a house you can’t afford, why not max out your credit cards
and stay a little longer…LOL Now Ive heard of everything.
http://cardit.com/
3B,
824 Summit
tj (199)-
“About me: I am a very active member in the communities I belong to. I am planning on having a family very soon. I am the perfect person to buy your house.”
Nobody cares. Sellers here would sell their homes to be turned into meth labs if the price were right.
TJ #199,
I have that same dream about twice a week. Tack 250K onto that price and you’ll be in the running.
gary (206)-
Whoa! I wouldn’t say 250K…but it’s gonna take 35-50K more.
Clotpoll,
Upper Somerset – Lower Morris – Western Union County – Preferably Basking Ridge or Bernardsville, but will accept Chatham, Madison, Long Hill, New Providence, etc.
No capes, bi’s or splits…
You’re saying under 500K buys a CHC or victorian in these areas?? What am I missing?
Maybe not a CHC or Victorian, but a ranch with some character would suffice…
gary (208)-
JUST under 500K will…give it a few more months.
gary (208)-
I’ve got a 495K lowball on the table in Berkeley Heights on a house that both my buyer and I know is going absolutely nowhere.
That puppy’s gonna come in…even if it takes until February for the owner to give up.
Kudlow now bleating that massive Fed rate cuts will end up strengthening the dollar.
Urrrp…
Clotpoll,
Spread some of that stuff up route 287 a bit, the sellers are still partying like it’s 2005. Don’t you realize by now I’m not happy unless I’m b*tchin and moanin?
I’m gonna buy all you guys a drink IF you all prove me wrong.
From NJBIZ:
Poll Reflects Poor Business Climate in South Jersey
Business activity declined at South Jersey companies in the recent third quarter, according to a survey released today by the Federal Reserve Bank of Philadelphia. The poll, called “South Jersey Business Survey,” said companies “perceived deterioration in overall business conditions for the nation, the state and region, and reported lower sales at their own companies, compared with the second quarter.” The survey was taken among members of the Chamber of Commerce Southern New Jersey.
The results plunged the survey’s index of general activity at individual companies from a reading of 13.0 in the second quarter to –21.8 in the third—the lowest reading since 2001. Respondents indicated that problems in the construction and financial sectors had contributed to the decline in business activity. The findings were reflected in the firms’ employment situation: 18 percent said they had cut jobs in the third quarter, compared with only 9 percent that said they had added positions. A total of 62 percent said there had been no change in their employment.
here’s a general question for the group. What is the best way to buy physical gold silver (1oz coins or 10oz bars). lets just say that i am starting to feel less secure in the US dollar and would like to have readily liquid assets available that are not sensitive to helicopter ben
Hypothetically?
From someone willing to sell for cash, and willing to do so without reporting the sale. Bid/Ask tends to be high for physical bullion, in this case buyer gets a lower price, seller gets a higher price, and Uncle Sam stays out of the mix.
Not that I would ever suggest such a thing.
Have been thinking about that to, gold would help me sleep better.
Looking at etf to invest in gold found GLD any one know about it.
Time for the ol’ disclaimer..
The information on this site is provided for discussion purposes only. Under no circumstances does this information constitute a recommendation to buy or sell securities, assets, or otherwise.
gold would help me sleep better.
Scotch is cheaper.
I have some money in gold etf’s. i only know the basics, my financial planner arranges most such things. But as they say, history favors the prepared. Even if gold decline rapidly after acquiring the real bullion i would consider it an acceptable loss.
This is also interesting, consider this…
major USA brokerages are “selling” ficticious silver and are charging storage fees for silver that doesn’t exist.
http://tinyurl.com/ypsw6d
Grim,
Where would you normally purcahse the bullion; from offical sources anyway
If you didnt think the dollar was already in trouble, here comes the end of the petro dollar, should i say it……. Hey Bi told you so:)
OPEC to study currency basket for pricing
http://tinyurl.com/2lbhj3
1. Mukesh Ambani ($63.2 billion)
2. Carlos Slim Helu ($62.2993 billion)
3. William (Bill) Gates ($62.29 billion)
4. Warren Buffett ($55.9 billion)
5. Lakshmi Mittal ($50.9 billion)
I guess younger brother Anil couldn’t be too far behind. If they didn’t squabble and split the empire, they might be even more. Or maybe the split extracted more value from all their diversified investments for shareholders.
Ayyone interested in reading a rags to riches story could read up on their father at http://en.wikipedia.org/wiki/Dhirubhai_Ambani
Disclosure – I’ve been holding their stock the past 9 years.
Kettle1 Says:
October 29th, 2007 at 8:43 pm
I have some money in gold etf’s. i only know the basics, my financial planner arranges most such things.
hervidor uno: You have a financial planner. He/she placed you in an investment. Go drill them for the details. You have a question? Repeat instructions from two sentences prior….
Chicago Finanzierung gesprochen hat, werden wir sein Wort Gesetz
kettle, all investments are related to horizon and risk tolerance level. mine is very short. i am going to lose wager with you but my dug made money and out last monday and in today at 38.30 and will hold for a few days.
To all those contemplating buying gold, look how quickly it went from $700 to almost $800. Don’t forget that the reverse could occur too. Not saying it will, but am throwing out some food for thought.
Allocations to gold should not be replacing cash held in a portfolio. It’s a commodity that pays no dividends. Think why you have commodities in your portfolio, how much exposure you have, how much you might want, and your exposure to gold should be somewhere in there.
at this market,i would hold depreciation usd and real estate than long gold, oil or growth stocks.
bi,
glad you made money! thats what we are all in this (market not RE specificly) for
#228
My desire to hold bullion is wihtin a single % or my portfolio, i already have a large percent of it diversified in europe/asia/etc
About gold: don’t you think that by the time an investment trend becomes fad among the lumpen investor the smart (or inside) money has already profited and is about to move on?
not looking to profit, pplan to hold long term as an “rainy day” hedge, not talking about 50% of my portfolio…..
232#, kettle, any idea on boitech for long term ( 5years+). i am not interested in single stock but on sector?
Interesting sale from Montclair, NJ:
44 Union Street (1br/1ba condo)
Purchased: 11/1/2005
Purchase Price: $220,000
Sold: 10/29/2007
Sale Price: $217,500
Approx. Loss: $15,000
by any chance does anyone have any opinion on Bridgewater? my wife and I were looking around the Rte 28/Vanderveer lane area
thanks
How about this one folks?
322 Pinnacle
Jefferson, NJ
Purchased: 08/06/04
Purchase Price: $550,000
Foreclosed, JP Morgan
Sold: 10/26/07
Sale Price: $510,000
Lower than 2004 prices? Ouch.
Really stinks to be 325 and 330 Pinnacle, both for sale at $600K+.
234#, it is a loss but i don’t think it was too bad: lost 15K including cost for 2 years.
how bad is the new construction market?
my parents bought a brand new house with all upgrades in southern cal from KB homes… original list price $780k… purchase price… $490k
Kettle1,
You seem like a reasonable thinking guy, so I can’t figure out why you buy the garbage on SS.
Here’s a link to get you started:
http://tinyurl.com/2clty8
It’s short and mostly to the point.
SS is nowhere near being a significant problem, Medicare/Medicaid is another story, but they are not the same thing.
What is the best way to buy physical gold silver
Ben from Ben’s Blog (thehousingbubbleblog.com) recommends http://www.apmex.com/
Caveat Emptor…All Disclaimers Apply
Expensive Day for HSBC at the Sheriff Sale
http://www.visitmonmouth.com/sheriff/sale/index.asp
2 Properties sold
1) Judgement was $567k HSBC bought it back for $298k
2) Judgement was 218k sold for $100
grim Says:
October 29th, 2007 at 4:57 pm
“What does buying $100 worth of junk in Macy’s have to do with buying real estate?
The analogy is perverse, there is very little in common.”
That is why it is such a good example of the twisted logic that many sellers are using to convince themselves that they are doing the right thing.
#251 Kettle
Buying Bullion. If it is a small ammounts, head to the diamond district in NYC. You should be able to buy troys over the counter. My grandfather always had gold sovereigns. I think Krugerands are the world standard for gold coins.
The foreclosurer rate all over is rising. It is definitely a buyers market only where is the buyer suppose to obtain funds?