Tue 8 Jan 2008
From the NY Daily News:
New York economic slump! ‘08 forecast looks at few new jobs, ballooning deficit
Need a job? Good luck.
New York will gain just 500 jobs this year - if we’re lucky - according to a scary new city forecast that sees slowdowns on Wall Street, stagnant real estate prices and an ocean of red ink in the city budget future.
Things won’t improve until next year, when city employment will rise by 20,800 jobs - compared with 41,100 jobs last year, the Independent Budget Office said.
“The fiscal picture has dimmed considerably,” IBO spokesman Doug Turetsky told the Daily News yesterday. “There is a fairly significant risk that things could get worse.”
If Wall Street loses even more money this year, the agency expects the city’s jobs will shrink by 8,700 this year, rebounding by just 15,000 jobs next year - and that’s if the national economy doesn’t sink into a recession.
“While there appears little reason to think our assumptions are too pessimistic, there is a reasonable chance that they are overly optimistic,” the IBO said.
…
The city housing market also is projected to finally cool down as prices stagnate or fall and fewer homes and apartments change hands. Commercial real estate deals also are slowing down, the IBO says, and business profits are shrinking - which means business taxes will fall by $500 million next year and property transfer taxes will fall by $1 billion.“The Manhattan real estate market is still holding firm. The rest of the city is weakening,” Turetsky said. “The good, strong corporate profits seem to be coming to an end.”
From Bloomberg:
Victoria Finance SIV Debt Cut to Junk After Asset Values Tumble
Victoria Finance Ltd., a $6 billion structured investment vehicle managed by New York-based Ceres Capital Partners LLC, had its investment-grade ratings cut 13 levels to junk after the value of its assets slumped.
Standard & Poor’s lowered Cayman Island’s-based Victoria from AA, its third-highest ranking, to B-, six steps below investment grade. The net asset value of the company, a measure of what would be left after selling assets and repaying debt, has dropped to 21 percent of capital, the ratings firm said in a report late yesterday.
…
“The downgrades reflect the significant decline in the market value of the asset portfolio, which has a high concentration of collateralized debt obligations, including those with corporate, residential, and commercial real estate exposure,” the S&P statement said.
From the AP:
Corzine to seek 50 percent toll hike every 4 years
New Jersey’s highway tolls would increase at least 50 percent every four years starting in 2010 under a plan to be unveiled Tuesday by Gov. Jon S. Corzine to raise money to cut state debt and pay for transportation projects, four Statehouse officials told The Associated Press on Monday.
Tolls would increase 50 percent in 2010, 2014, 2018 and 2022 under Corzine’s proposal that will be unveiled Tuesday during the governor’s State of the State address to the Legislature.
But the increases would also include adjustments to reflect inflation in the years tolls weren’t hiked, said the officials who requested anonymity in order not to upstage the governor’s Tuesday speech.
Watch the toll roads empty.
NAR Pending Home Sales for November due out at 10am this morning.
From Bloomberg:
Pending Sales of Existing U.S. Homes Probably Fell in November
The number of Americans signing contracts to buy previously owned homes probably fell in November for the first time in three months, signaling further deterioration in housing, economists said before a report today.
The National Association of Realtors’ index of pending home sales decreased 0.7 percent, following a 0.6 percent gain in October, based on the median estimate of 33 economists surveyed by the Bloomberg News.
More stringent lending practices after the collapse in subprime lending and prospects that home prices will keep falling are deterring buyers, economists said. The housing slump is likely to last well into 2008, hurting economic growth and prompting Federal Reserve policy makers to lower interest rates.
The economy will “remain soft throughout 2008 and early 2009 as falling home prices and tighter credit undercut growth,” said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York. “As home inventory climbs, the end of the housing recession moves further into the future.”
From Bloomberg:
U.K. Real Estate Losses May Be Biggest in 25 Years
LaSalle Investment Management put Condor House, a seven-story office building facing London’s St. Paul’s Cathedral, on the market for 130 million pounds ($256 million) six months ago. The building sold last month for about 117 million pounds, 10 percent below the asking price.
Appraisal values fell at a record rate in November and commercial real estate derivatives contracts indicate owners of British offices, shopping malls and warehouses may suffer their biggest annual losses in more than a quarter century.
“The U.K. market is falling apart,” said Peter Hobbs, London-based head of research at RREEF Real Estate, a Deutsche Bank AG unit that manages about $100 billion. “There’s a risk that this cyclical downturn turns into something worse.”
Good morning gentlemen,
Grim, those charts yesterday were quite impressiive..
And I learned a new word: intelli-bling.
When you are “poor” - you are just thrilled that your daughters graduate from college by hook or crook…No matter where they went to HS… One from UofO Eugene, Or. The other with a master’s degree from Concordia U on Portland, OR. All of us ended up with student loans to pay off. Mine are all settled ($46,000 from 1995 - 2007) but the daughters are still working on theirs.
Have a great day!
Cindy
From Bloomberg:
Citigroup May Take $16 Billion Subprime Writedown, Merrill Says
Citigroup Inc. may post a larger loss than previously estimated because the biggest U.S. bank may have to take a $16 billion writedown in the fourth quarter, Merrill Lynch & Co. analyst Guy Moszkowski said.
“Corzine Showdown in New Jersey Recalls Goldman Ouster”
http://www.bloomberg.com/apps/news?pid=20601109&sid=aqGRuv4dEL34&refer=home
California’s Governator is set to tell the State how he plans to cut 4bill from this year’s budget later in the week. My faculty senate (no union - I’m the school’s rep.) is set to discuss the cuts we expect to our budget on the 16th. Do they plan to tell teachers they have to take a cut in salary?
#2,
I got a novel idea for the governor, how about cutting spending instead? Has anyone though of this yet?
Paulson gust on CNBC now will be on for i hour.Housing next up to discuss check it out.
“I got a novel idea for the governor, how about cutting spending instead?”
Akin to telling a home seller to lower their price.
KB Homes results ugly..
From MarketWatch:
KB Home Q4 loss $9.99 per share vs 64 cent loss
KB Home Q4 loss $773 million vs $49.6 million loss
KB Home Q4 revenue $2.07 billion vs $3.01 billion
KB Homes cancellation rate at 58%!
Cindy it does not matter which school you went to. Other than bragging rights at the country club. Someone on this board ran a list of CEOs, CFOs and CIOs ane where they went to school and good old Rutgers and St. Johns had more people at the top in the NY region that Harvard or Yale. The two highest paid persons I know, who both made in the many many milionaires last year are Queens College and Baurch College. Oy yea they have some low level Harvard MBAs working for them. Name brands are important and I wish I had a Harvard MBA even though I know it would not get me one extra nickle at work.
The Conference Call on the Fourth Quarter 2007 earnings will be broadcast live TODAY at 9:00 a.m. Pacific Standard Time, 12:00 p.m. Eastern Standard Time. To listen, please go to the Investor Relations section of the Company’s website at http://www.kbhome.com.
9am KB conf call, should be fun.
grim (15)-
I’m sorta amazed that 42% of their buyers were able to close (albeit 42% of a very small number).
Paulson worked that flip chart like a maestro. Nice graphics, no big words.
“KB Homes cancellation rate at 58%!”
pant up demand!!
Just an anecdote..
In the past week two NJ residents (not related) told me they were moving out of state and have already put deposits on their new home (PA & FL). They plan to list their current homes for sale just before their new homes are complete.
I wished them both the best.
#10
Cindy,
In NJ they never cut teacher’s salaries. The teacher’s union (NJEA) has the legislators in their pocket.
Watch the toll roads empty.
With the exception of the Penske trucks going south on the Turnpike
During the last “Great Depression”, the old timers at AT&T talked about how salaries were cut, rather then layoff people. They supported the idea that all getting some, was better then some getting all, and many getting none. Be interesting to see with the next “Me Generation Depression”, if folks will feel that way? Probably would never be proposed, as the Leaders would consider it to be an Alien Concept.
From Marketwatch:
Fed’s Plosser: Economy will improve before rate cuts hit
Plosser sees worrisome signs of inflation
Plosser hints he’d vote against further rate cuts
[20],
JB,
I know a slew of former floor traders, nymex, heading to Fla.. The majority of the business is now electronic. It’s very difficult for a floor trader to adapt to screen trading. They figure why pay the high cost here, their income will now be much lower. They made huge $ in the past, took their stock, nymex buyout, and are saying goodbye. Bloomberg saw this coming, they have been repoting this for the past year. However, pret did not have a clue.
From the Courier Post:
Commerce warns more losses expected
Commerce Bancorp Inc. notified shareholders Monday of details of the impending sale of the company, just as New Jersey’s largest bank warned investors to expect bigger losses in the fourth quarter.
In a filing with the Securities and Exchange Commission, Commerce said the bank will set aside up to $60 million for credit losses in the fourth quarter, up from $26 million in the third quarter, the bank’s first losing quarter in more than a decade.
Commerce attributed the losses to bad loans in real estate and leveraged commercial loans.
Social Security, which is expected to start paying out more than it receives in 2017, has attracted the most attention, but few new proposals. Most of the candidates support a “bipartisan process” to seek solutions, and some, including Edwards and McCain, specifically endorse creation of a commission such as the one headed by Alan Greenspan in 1981 to come up with suggestions for reform. Giuliani, Romney, and McCain endorse private accounts, while the three Democrats oppose them. Thompson has outlined a plan to let workers contribute 2% of their wages into private investment accounts and receive a 2.5% employer match.
That’s what we need an Allen Greenspan Commission, to suggest Social Security/Medicare Changes. “If the peasants have no bread, let them eat cake”, Greenspan, will really take care of them.
New Medicare policy will be give each retiree a mirror & a hand gun with one bullet. Look in mirror, if sick, put gun to head, and pull trigger. Problem solved.
New Social Security Policy will give Wall Street your Social Security Dollars to put in various Structured Investment Vehicles, which will be used to pay for Wall Street Bonuses.
It’s only a matter of time before the banks start dumping the properties.
As housing crisis deepens, cities fight lenders over abandoned homes
#27
Would they legislate that employers had to match? My husband’s company does not match at all. Up until now, we have just put the money in his IRA but we now want to contribute more than the IRA limit so he has joined the 401K at work.
Frank 11 wrote: “I got a novel idea for the governor, how about cutting spending instead? Has anyone though of this yet?”
Please, tell us all where exactly “spending” should be cut.
Whitman cut ’spending’ on the pension system, that’s working out just great!
Willow #21 and confused #23
I work for a unique school district (Clovis Unified -Clovis CA) Student population of 35,000 and still non-union. We have gone several years with out raises in the 10 years I have worked for them. (This year - no raise - the 2.4 COLA went for step and column increases and since we are self-insured..increases there.) We had 35 extra teachers this year due to a declining enrollment and they were still worked in. No one fired yet. If the trend continues we may see layoffs next year. These folks are very fiscally responsible and for the most part, the employees are on board..For now that is. What will happen if they begin to cut salaries is anyone’s guess.
Cindy
God help us all…Paulson now showing slides of his fishing trips.
No kidding.
First it was a sales tax increase, now it is Tolls, soon NJ will raise income tax.
Most posters here are paying paying the state rate of 6.37% since the salary range is 75k-500k. I can see a nice 2% income tax increase coming up the turnpike from Trenton any day now.
Moving out of state sounds better and better every year.
#13,
How about cutting everything by 20%? Starting with all thousands of union jobs that have been added under Corzine. How about getting rid of the enormous pensions for teachers and cops? How about making the government employees pay for their health care? How about getting rid of the government paid cars?
I have an idea on how to cut spending - increase cops and teachers mandatory retirement age to 65, and make them pay freaking health insurance co-pays!!!! Cut their full dental coverage and optical to mroe inline with what private employeer would offer.
In the past week two NJ residents (not related) told me they were moving out of state and have already put deposits on their new home
On channel 5 this morning, they were interviewing motorists on the Turnpike about the Corzine toll hike. One guy said with high taxes, high property taxes & now higher tolls, he was thinking of leaving NJ.
I propose to increase 2000 percent in 2010, 2014, 2018 and 2020
And one more - make cops and teachers vacation days expire after two years - take them or loose them - because you can accumulate you vacation days early in your career and get paid for them at MAX pay when you retire.
Clotpoll Says:
January 8th, 2008 at 7:10 am
Watch the toll roads empty.
clot: ever take the Penn Turnpike? The NJTP is like a 40% off sale. Just to get from the east gate to about 1/3 into Penn at I-81 is $8.25.
If they will use higher tolls to widen the turnpike from Exit 6 to the Car/Truck merge at 8A…fine.
Since Corzine has become Governor, the sales tax has increased 16.5%, my property taxes have gone up 27%, the tunnel and bridge tolls are about to go up 33%, the PATH is increasing 17% and the highway tolls are increasing 50% every four years starting in 2010. I know I’m missing a few things but hey, that’s the price you pay for living in the most prestigous state in the nation.
# 3 “Clotpoll Says:
January 8th, 2008 at 7:10 am
Watch the toll roads empty.”
I am not so sura about that. People will pay tripple or more to travel the Turnpike from Woodbridge to Trenton/Princeton area rather than endure the nightmare that is Rt.1. Likewise, they will do the same traveling from, say Rahway to AC, rather than traveling Rt. 9. Folks will kvetch and curse and pay. BUT, they will have fewer dollars to spend on entertainment, housing, etc. Some commercial carriers may try to travel the state and U.S. highways at night, rather than the toll roads, but for the commuter it will be a matter of getting sc-rew-ed without a kiss or an alternative; welcome to Turnpike State Prison, cellmate, come give me a little love.
For a little perspective, though, I have observed that the tolls on roads like the Indiana Toll ROad and the Chicago Skyway are even higher than what they will be in NJ. Chifi may be able to offer thoughts on the size of the tolls out there.
#9 BC Bob: It was in interesting time at goldman before they went public. The long and the short of it is Corzine was booted because he wanted deep employee ownership of the firm, from the top all the way down to the lowest ranks.
The younger hawks wanted to keep the bulk of the firm’s ownership concentrated at the top. They also eliminated many people with 10 years or servie or more, simply to avoid sharing the IPO, with long time employees. It was a real ugly time down there for lots of good people. They forced Corzine out because of that, not because of the losses in 1998.
Also many of the partners did not want to go public at all, they felt the firm would lose its uniqueness.
I know I’m missing a few things but hey, that’s the price you pay for living in the most prestigous state in the nation
You mean the “Armpit of the Country” how people outside NJ call it??? I am not kidding.
Al - I’m not disagreeing with your point, but thought I’d correct some of your details. Under the state HMO plan for teachers, they do pay a copay. Also, dental is controlled by local school districts, not the state, so depending on the district, it may be similar to a private employer. Also, teachers dont get any vacation time, technically. It’s all sick time.
Again, not making any comments on your point, just correcting some details.
Sold my house in North Arlington this past july, when we brought house in 2002 taxes where $11,000 when we left taxes where up to $14,500. North Arlington is 2 miles wide by 2 miles long and a third of the town is a cemetery, no parks, no services, very little of anything to do! Heard that the town just “smacked” all homeowners with another 33% town tax increase. Where’s all this money going?? Increased property taxes, increase sales tax, increased tolls….where does it end??? How can a young family afford to survive in this state?? I was working a full time job and a part time job…and my wife was working a full time job and it was still a struggle! We are leaving the state headed south …the politicians, the unions, and public employees are driving this state into the ground!!!
“As home inventory climbs, the end of the housing recession moves further into the future.”
That can’t be true! Those Lehman people are dumb. Inventory is falling. Bi, tell them it’s falling!
“Citigroup Inc. may post a larger loss than previously estimated because the biggest U.S. bank may have to take a $16 billion writedown in the fourth quarter, Merrill Lynch & Co. analyst Guy Moszkowski said.”
That can’t possibly be true - bi said there’d be no more writedowns!!
Cayne given a cardboard box and 15 minutes to get out of the building.
Personally, I think that big industry shipping in NJ is ripping off the state.
We have the “most dangerous 2 miles in the U.S. by Port Newark, and trucks galore fan out north and south up and down the Turnpike and speed out to points east on 78. What should be done is making 78 and 80 toll roads with a disproportionate burden placed on truck traffic.
HOWEVER, these tolls should be funneled into public transportation options……
Drivers? F- ‘em.
# 16 “John Says:
January 8th, 2008 at 8:20 am
Cindy it does not matter which school you went to. Other than bragging rights at the country club.”
John,
I largely agree with you with this cavaet, when it comes to a first job, or later on when one is looking over resumes, having the cachet of an Ivy League (or Chicago, Stanford, CalTech, etc.) name can get one an interview that one might not otherwise get. The clubbiness of the Ivys can also be helpful in places like D.C. and the investment banking community and for those looking for NYC Big Law positions.
Having been reading this site for 6 months, great site with many informed people!
I have a question: now that market is so slow, I am thinking just to contact the seller agent directly to view houses without having a buyer agent, and hopeful if I found a house I liked, the seller agent would be more motivated and also chip in 1%. Would this work? Am I being stupid in “not having a buyer agent represent your best interest”, as a buyer agent would no doubt tell me?
OK, you may tell me just wait for a couple of years I may do that, but I have a relocation assistance package due to expire in 6 month…
Thanks!
Well My point is not only about teachers it is about ALL state/unionized workforce in NJ: cops, goverment officials, municipal officials, teachers.. and such.
They suck life out of NJ and wil lead to all Big Buisness leaving the state.
50% real increases in tolls every 4 years? Fine. Now, if only I can convince my employer to do the same thing with my base pay.
Kurt # 30
How about we start by getting rid of the so called “property tax relief”. This so called relief is a joke. The take $100 from you and give you $20 back while calling it relief. They have relieved anything! They really should pass a law stating that the state cannot spend more then it takes in
They really should pass a law stating that the state cannot spend more then it takes in
Thats not an american way !!!
Clot
God help us all…Paulson now showing slides of his fishing trips.
Has he taken his shirt off?
I am lost ,,,why builders just dont reduce price of homes insted of reporting those huge losess? Little profit is better than none!!!
“KB Home reports $773 million loss
Charges, housing slump undermine builder’s fourth-quarter results”
#53 Kettle1
The Governator here in CA funded on-going programs with one-time money last year. Who does that?
There outta be a law..
NJ may solve its own problems at the rate it is going. NJ has in my opinion hit and passed the point of diminishing returns in tax revenue. The 35 and under crowd is currently experiencing a net exodus from the state and by increasing the taxes, the state is only accelerating the exodus of the younger and older population groups. Unless changes are made, then in the near future the state may collapse financially from the spending /debt burden. NJ may have the honor of being the first state in the union to go bankrupt. Unfortunately i do not see any changes being made until the system has collapses or is in severe crisis, bu by then the damage will have been done.
tobuyornottobuy,
Most large agencies frown on dual disclosed relationships. Even if they did, the seller would also need to agree to the relationship, not a likely situation.
You will simply be assigned another agent from the same firm and that firm will pocket the full commission (two scoops of ice cream, not just one). Cut commissions? Again, not policy.
We discussed this strategy in depth about a year ago. The goal was to leverage the dual disclosed relationship to reduce the overall commission, resulting in a savings for both the buyer and seller.
If you wish to utilize a strategy that attempts to reduce overall cost by minimizing transaction costs, contact the seller directly and propose a purchase after all contractual limitations expire.
kettle - now there’s a specific example, bravo.
Much more constructive than sweeping platitudes like “cut everything 20%”, or idiotic suggestions like “get rid of enormous pensions for teachers and cops”. Sure, cut 20% on everything (except for the services that I take advantage of) and renig on obligations to the rank and file that keep this place together, that’s the way out!!!
sorry, ‘renege’ not renig :)
never had to type that word, heh
grim: “We discussed this strategy in depth about a year ago. The goal was to leverage the dual disclosed relationship to reduce the overall commission, resulting in a savings for both the buyer and seller.” — thanks for the reply!
I will search for the old archive, a link would also be appreciated. In any case, is the conclusion that there is no benefit to go it alone? So I might as well find a buyer agent and play the game the usual way?
I have a colleague who bought a house last month, he did not use a buyer agent, and told me that the seller agent kicks in 1%. Also, when I sold my house, on the contact it says that if my seller agent find a buyer, she will charge 5% instead of 6%, although that is not in NJ.
I’ve heard a few people mentionm relocation packages and wanting to buy before they expire in 6 months, etc. What are these packages worth? I’m sure every one is diff, but can you give me an example? What doe sthe co. pay for?
#45 Raul,
Just curious what your experience was with the % run up in N.A. from your 02 to 07 and your current thought of the values in that area.
I have been witness to a disastrous flip, across the street. Flipper bought a 2/3b 2ba pos cape in late 06, in the low 3’s. Although he did a pretty good job gutting and updating exterior, it was ridiculously overpriced for resale by mid 07 at 464K. DOM is approaching 1yr and price has been chasing market down, currently 420’s, and likely approaching breakeven excluding carrying costs. I have noticed an abundance of supply in the upper 300’s over the last several months.
bergenbuyer: it differs, some covers closing cost/home inspection only, some also cover the extra mortgage and tax you have to pay when you move from an inexpensive state (say Alabama) to NJ for a couple of years, which can worth up to 10% of home value.
63 bergenbuyer
We are currently being relocated with one.
They paid for all our closing costs on the sale of our home including the realtor fee, lawyer and that nasty NJ tax etc. Then, they moved us professionally, put our stuff in storage. We’re in a furnished temp apartment for 90 days, with the stuff paid for in storage too.
Then for the house we are buying, they pay all fees associated with it plus two points on the mortgage. They also gave us two househunting trips that we didn’t really use.
The one thing they didn’t do is give us a guaranteed buyout of our house. I’m sure they still do it for certain levels, but apparently this company doesn’t do it anymore, due to, you guessed it, the housing slump.
So I might as well find a buyer agent and play the game the usual way?
Depends on whether you think a buyers agent can add value above and beyond any discount you think you might negotiate on your own.
Also, realize that they buy-side can cut their commission as well.
Oh and 2,000 for incidental expenses.
so it could be anything from $2K to $100K depending on the price level you’re at. Not too bad, I gotta get me one of d’em.
I’d say if you are going to lowball - do it without Buyer’s agent:
Sller agent will be more interested on deal to go through as he is getting 6% commission vs. 3%.
When you lowball with buyer’s agent - you are pissing off both seller and also seller’s agent…
#56
They have lowered, however they have to revalue the assets on their books. The revalue or projected asset sales or properties will result in losses. They have to increase their loss reserves which causes current accounting losses. Either way they’re S.O.L.
Lowball and have seller negotiate the realtor fee with his agent..
bergenbuyer
Yep, the total value varies based on the price of the houses you are buying as long as it’s not a capped benefit.
Sometimes they try to cap them at some total benefit amount, but ours isn’t. Although I think they may have tried to cap it and my husband negotiated it because the cap was ridiculously low for NJ.
2008 Dead Pool for Builders
I will take HOV
kb home and home builders are turning around. it will fly after 10:00 am pending home sales numbers.
Kurt a quick glance at the 2007 Nj budget shows property tax relief at approx 28 Billion dollars!!! Kill the fake property tax relief and force towns to actually decrease the tax rate.
Both NJ’s and the USA’s current tax issues are best summed up by quotes attributed to Alexander Tytler. Tytler warned: A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.
The average age of the world’s greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
* From bondage to spiritual faith;
* From spiritual faith to great courage;
* From courage to liberty;
* From liberty to abundance;
* From abundance to complacency;
* From complacency to apathy;
* From apathy to dependence;
* From dependence back into bondage.
I have an idea:
How about changing realtors contracts so:
If house sold lower than original listing price suggested by realtor and agreed by seller realtor comission is cut by 50% of difference.
If he sells it by higher amount his comissions are increased by 25% of difference. In addition to that increase fees to list property on MLS to 500$/6 month/or each relistings.
If house did not sell within a year on the market REALTOR will have to pay 3% inconvinience FEE to seller!!!
Realtors provide VALUABLE services - if these services netted NOTHING BUT TROUBLE to seller - I think seller deserves to be reimbursed.
- that will take care of: overpricing, and buying the listings by realtors.
Lowball and have seller negotiate the realtor fee with his agent..
Why not present your offer directly to the seller directly and cut out the agents/brokers entirely?
Why try to game the system when you can just circumvent it?
#64 mneer1
north arlington is faced with same problem as state of nj, very few sources of revenue (outside of taxpayer) to pay for all of it’s salary and pension benefits for it’s public employees. our property taxes rose 33% in five years living there. take a look along ridge road in north arlington, almost every other business is closed. Town has a severe debt problem with some 25 million dollars in bonded debt, interest on that yearly is about 2 million and that the town struggles to pay the interest. Most cape’s in the town are 50, 60, 70 years old…I wouldn’t pay anything over $300,000 for any of them, and taxes on most of them are quickly approaching $9,000 $10,000 a year. the year before we sold our house, our neighbor sold her cape for $345,000, I couldn’t believe she got that much…the roof on the garage had a huge whole in it, driveway was in shambles….wonder what current owner is thinking now about his “investment”!!
#49
my first “real” job out of college was a paralegal position at prestiges law firm Cleary, Gottlieb, Steen and Hamilton (i thought i wanted to be an attorney, ugh). any way, during my interview i was told that my work was going to be scrutinized because i attended a state college (good ol’ Stockton College). my counterparts were all ivy leaguers or high end private liberal arts schools. i was shocked that i was “discriminated” during an interview at a LAW FIRM but justification came in the form of knowing all of the paralegals were doing monkey work for the firm and my 20K education was at par to those “great minds” of the 100k tuition ilk.
although, i will say the built in network in tier 1 schools is incomparable. they really take care of their own and i suppose that alone is worth the price of admission.
grim Says:
January 8th, 2008 at 9:54 am
Lowball and have seller negotiate the realtor fee with his agent..
Why not present your offer directly to the seller directly and cut out the agents/brokers entirely?
Two reasons:
1. Not everybody can wait for 6 month untill contract expires.
2. Average person (for example me) have no experience buying or selling RE. All forms, sandard disclosures, contigincies and other legal stuff and paperwork can be handles by Lawyer instead of realtor, but often what realtors do is hand-holding for either buyer or seller - acting as intermediate between two very interested parties.
I heard that it is quite difficult to buy anything FSBO due to sellers and buyers both being quite-unreasonable in their expectations.
From MarketWatch:
Pending home sales sink 2.6% in November
Sales contracts on previously owned U.S. homes fell by 2.6% in November, a sign that home sales will continue to decline. The pending home sales index, based on contracts signed but not closed in November, fell 2.6% in November and was down 19.2% in the past year, the National Association of Realtors reported Tuesday. The index, which is considered a leading indicator of existing home sales, had risen in September and October. Existing-home sales for December (representing closings on contracts signed in October and November) will be reported on Jan. 24. Exiting-home sales have dropped 20% in the past year.
Pnding home sales down 13% in NE.CNBC
Cindy
http://www.pebc.ca.gov/images/files/final/080107_PEBCReport2007.pdf
# bi Says:
January 8th, 2008 at 9:52 am
kb home and home builders are turning around. it will fly after 10:00 am pending home sales numbers.
Its good to see that the court jester is back
From Bloomberg:
Pending Sales of Existing U.S. Homes Fell 2.6% in November
The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling further deterioration in housing.
The National Association of Realtors’ index of pending home sales decreased 2.6 percent to 87.6, following a revised 3.7 percent gain in October that was larger than previously estimated, the group said today in Washington.
More stringent lending practices after the collapse in subprime lending and prospects that home prices will keep falling are deterring buyers, economists said. The housing slump is likely to last well into 2008, hurting economic growth and prompting Federal Reserve policy makers to lower interest rates.
“We’re not at the bottom of the housing downturn yet,” Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts, said before the report. “Prices are probably going to go down for a while. Until people see things stabilizing, they’re going to wait.”
Economists forecast the index of signed contracts for existing homes would fall 0.7 percent following a previously reported 0.6 percent October increase, according to the median of 33 projections in a Bloomberg News survey. Estimates ranged from a drop of 3 percent to a 0.3 percent increase.
Compared with a year earlier, the index was down 19 percent.
Today’s report showed pending resales fell in three of four regions. Purchases decreased 13 percent in the Northeast, 4.1 percent in the Midwest and 2.1 percent in the West. Sales rose 2.3 percent in the South.
#75 bi: You are insane!!!
tobuyornottobuy:
I struggled with the same dilemma as you. I have access to the MLS, and was working with a buyer’s agent until I realized that she was simply trying to pressure me to buy something, anything, to get her commission. In fact, I was doing all of the research and analysis to come up with appropriate properties, and asking her to set up appointments to view them.
After a few rounds of this, I came to the realization that I can do this without her, and in fact, I can look more objectively and without her pressure to buy.
Now, keep in mind not all agents are like she was, but my new approach is to simply conduct searches on my own, and evaluate properties with my own calculations. I’ll then contact the seller’s agent to work out the details.
I also like Grim’s idea of contacting the seller directly, but you may not have the luxury of being able to wait until the contracts expire.
Remember, you have several individuals here that can look up the same information that a buyer’s agent can, so you can use this site a resource (within reason, of course).
NAR says -
bad news :
U.S. Nov. pending home sales index down 2.6%
good news :
Realtors expect existing-home sales to rise 0.9% in 2008
You can find North Jersey “pending home sales” by county here:
http://njrereport.com/files/contracts.xls
In addition to November data (looking backwards), we have the more recent December data.
DID any one see the chart posted by region,
northeast at 13% rest of regions in singles.
As it was posted, I was reading I didn’t get them all.looked to our area first as they were talking about how high it was.
it has been discussed before, but what is the best place to browse foreclosure listings?
Raul [79],
I grew up in NA, my parents still live there. It’s a mess. I tell people in town that their capes are worth 250-280K. They think I’m delusional. Granted, these same houses sold for 400-450K in the bubble.
Hey tobuyornottobuy if you got a set of balls and see a house you really like don’t contact any realtor get owners name off property shark and write letter or call directly that you may be interested. If he has a clause that he can sell on his own or if he sells on his own the realtor gets reduced commission he may work a deal with you.
“kb home and home builders are turning around. it will fly after 10:00 am pending home sales numbers.”
bi,
Didn’t you get stopped out in 2007?
“kettle1 Says:
January 8th, 2008 at 9:15 am
“Kurt # 30
How about we start by getting rid of the so called “property tax relief”. This so called relief is a joke. The take $100 from you and give you $20 back while calling it relief. They have relieved anything! They really should pass a law stating that the state cannot spend more then it takes in”
Typical stupid @ss government program. Think about how much money they spend on the mailings of the paper back and forth with those stupid rebates. They could save a bunch of money right there by making it a tax deduction only. Of course that wouldn’t employee a bunch of state senators brother-in-laws and cousins to sort through the paper.
You want in on PE?
http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=BX
Sotheby’s International Realty’s Ursula Reimann who has strong roots in Europe as well as the US has received numerous inquiries from England on her Peconic Bay exclusive. The Brits are also keen on renting, and one agent in her East Hampton office commented, “Half of London is here securing all the good rentals early.” Reimann also notes that the Hamptons are attractive because compared to the density in Europe, buyers can procure more acreage and open spaces. Accordingly Sotheby’s is keying their advertising to European publications and networking with their worldwide offices in 30 countries. And good news for sellers: foreigners, according to the National Association of Realtors, are four times more likely to pay all cash than Americans. Asians are also reportedly flowing more into this market. Here at home, Sotheby’s recently celebrated the opening of their new office in Sag Harbor just off Main Street on Spring Street next to the Sag Harbor Garden Center.
Another player familiar with the international market, Laura Bennett of Engel & Volkers, describes a Sunday morning in her Southampton office as a visit from a man from Germany, an Italian couple, and an American looking for a property in Spain. Quite the international fare before even a cappuccino. With 310 offices spanning 25 countries, Engel & Volkers is cross collateralizing their client base and capitalizing on buyers across borders. To meet the growing demand says Bennett, “We have an office opening somewhere in the world every 100 hours.” She credits the name brand recognition with foreign buyers as a plus in the Hamptons market. The company is also expanding its presence in the North East including the grand opening of their Greenwich Connecticut office in January.
RE Gossip - “Property Shark partners Matthew Haines and Ryan Slack have had an acrimonious behind-the-scenes split, disposition of the company unclear.” “There is a major catfight at PShark amongst the two partners that is coming to ‘blows.” The two partners are splitting up and it is getting ugly.
COUNTRYWIDE HOME LOANS MTN BE 4.00000% 03/22/2011 FR
Basic Analytics
Price (Ask) 67.250
Yield to Worst (Ask) 17.880%
The bonds are saying - KAPUT!
95#, bob, if you can endure short-term volatilities, i think home builders and mortgage companies appear to be attractive for long term at this price level.
From CNN/Money:
Home sales sink again
Sales contracts to sell existing homes turned lower once again in November, falling more than expected to the third weakest reading on record, according to Tuesday’s latest reading on the battered housing market.
And the trade group that published the report has now pushed back its forecast for even a rebound in housing prices until 2009.
The National Association of Realtors’ Pending Home Sales Index, which measures the level of sales agreements, fell 2.6 percent to 87.6, turning lower after two months of modest improvement from the record low hit in August. Economists surveyed by Briefing.com had forecast only a 0.8 percent decline.
The latest reading is better only than the pace of sales in August and September, when the meltdown in mortgage markets cut off the availability of mortgage financing for many buyers.
The report suggests that there’s more trouble ahead in housing sales going into 2008, despite hopes that the year might see at least a bottoming out of the problems in housing and home building.
It is even worse than the 89.8 reading in September 2001, the month when the terrorist attack shook buyer confidence to that had been the weakest month on record before the current housing downturn.
Holy Cow!
From Bloomberg:
Paulson Sees `No Evidence’ Housing Decline Is Ending
Treasury Secretary Henry Paulson said the housing decline will continue, and a program aimed at heading off a wave of foreclosures may need to be expanded beyond subprime borrowers.
“There is no evidence it is bottoming,” Paulson today said of the housing decline on CNBC television during a trip to New York. “The evidence would be that it has further to run.”
grim (103),
That’s like 180 turn from 3 months back.
John- I think that your Property Shark approach is unethical. Simply going around the realtor after they paid to advertise the building is wrong in my book.
I can understand the idea of presenting an offer directly to the sellers agent. I would only do it if I found a property at an open house. I also agree that I would be more objective on my own. But since you would be assigned an agent anyway by the seller’s agency and there would be no savings, why not bring your own advocate to the table?
I can understand the idea of presenting an offer directly to the sellers agent. I would only do it if I found a property at an open house.
What if the agent at an open house isn’t the listing agent? Realize that there is a very good chance the agent at the open house isn’t the listing agent. This is most convenient as the agent who shows you the house can also represent you in the transaction.
According to the NJREC, the agent that held the open house, and showed you the home prior to your offer submission, is the “procuring cause”, thus is owed commission for securing a ready, willing, and able buyer (as evidenced by your offer).
So, you are basically trying to sidestep the agent that showed you the house and led to the sale by approaching the listing agent directly.
Is this really the more ethical approach?
d2b
I dont think that it would be unethical for the buyer. The buyer has no relationship with or obligation to the sellers agent. if the seller has an exclusive contract with the seller with no provision for selling themselves then it might be unethical but the buyers hands are clean. On a side note in the real world how often are agents 100% ethical; I personally would not be kept up nights worrying because i circumvented an agent.
Another thought d2b
A buyers agent is not 100% in your favor, they have an inherent bias in you actually making any purchase as opposed to the most appropriate purchase based on the individual.
#100 John,
Agree, looks like yields are anticipating CW to go under. Any data on where the MBS issued by CW and others are trading at? Prime, Alt A’s and non prime?
Prediction: BofA to have $2B adjustment….
#108
Exactly. I realized this after my buyer’s agent kept prodding me to make offers on properties by telling me that if I didn’t, another buyer was going to come by and steal the deal from under my nose. Low and behold, I’ve been tracking these properties, and many of them have been reduced repeatedly since I originally went to look at them.
Cindy : “The Governator here in CA funded on-going programs with one-time money last year. Who does that?”
In New York, the state sold its prisons to itself and used the money to fill one year’s budget gap. Neat trick.
ket,
While not common, the buyer can compensate the agent directly. The possibility for a fee-based buyers agent does exist. The caveat is that the buy-side can only be compensated by a single party, be it the buyer or seller, but not both.
Would you pay an agent hourly, or per transaction? Would you pay a retainer fee?
When I sold my last house I had a deal if a buyer directly approached me during the listing the realtor would get 1% to cover his costs of advertising, if he sold it himself he got 4.5 and if it got sold MLS I paid the whole 6, pretty standard. I that case anyone who rang my bell got a better price. My town does not allow for sale signs so one or two neighbors did contact me direct. Why should I pay 4.5% commision to sell to my next door neighbor? Is that ethical?
# 103 ““It comes from my mind, my heart, my experience — a strong dollar is in the nation’s best interest,” Paulson said.”
It is hard to see how this view jibes with cutting interest rates, which brings with it a decline in the value of the dollar. Between this comment and the one by Plosser, out of Philly, I wonder if the markets are going to get a rude slap in tha face at the next FOMC meeting.
Sybarite,
The only way to eliminate this bias is to eliminate the linkage between purchasing and agent compensation. The agent would be need to be compensated whether you buy or not.
How many buyers would go for that?
Grim 112
A 1 time fee or some other non % compensation plan could be an option. it would really depend on the buyer. How savvy are they in housing markets , what are their financial s like etc.
shore 114
Its going to take more then 1 or 2 rate hikes to make the dollar string again. For the Dollar to really be strong again the US needs to get its financial house in order and that includes balancing trade deficits, reducing debt, balanced spending etc. All of these would be painful moves initially and the general public is not interested in anything that might hurt a little even for the long term benefit.
Grim 115
A 1 time buiyers fee for buyers agent seems like an interesting/reasonable proposition. You do the leg work and find a short list of homes you are serious about and ready to put money down on. Then you get the agent to facilitate negotiations in order to mitigate the emotion aspects of the business transaction as well as to streamline paperwork and regulations.
#115
I understand that inherent bias; honestly, I think a fee-based or hourly compensation structure would be more appropriate for a buyer’s agent.
When I was searching with one, I simply couldn’t stomach “giving” my buyer’s agent 2.5 - 3% of the purchase price for doing barely any work. That being said, I’m sure there are better representatives out there which can advise buyers more objectively.
ket,
Agreed. Still, I get the feeling that The Street is looking for a 1/2 point reduction and with Big Ben’s comments today and Plosser saying rate cuts are not needed I have a suspicion that they are not going to drop rates. Playing the cynic, I would not be surprised if some folks at the White House (and the RNC) have realized that housing will not be fixxed with lower rates and that the rate cuts are causing gas and other energy prices to rise.
People willingly shell-out $4 for coffee but they get ticked off — and cuss government — when gas prices rise. In an election year in which the Dems would seem to have a real advantage, who needs John and Jane Q. Public getting pissed off at government — every couple of days when they fill-up the car?
kettle [117],
Exactly. Raising rates does not automatically equate to a stronger dollar. The dollar slid while the fed was raising rates from 2004. The world is as concerned, probably more, with fiscal policy. Unfortunately, we have been spending like a bunch of drunks. There are zero checks and balances.
When I was searching with one, I simply couldn’t stomach “giving” my buyer’s agent 2.5 - 3% of the purchase price for doing barely any work.
Why not find an agent that will work for a lower rate?
“I would not be surprised if some folks at the White House (and the RNC) have realized that housing will not be fixxed with lower rates and that the rate cuts are causing gas and other energy prices to rise.”
shore guy [120],
Where does our govt find these astute individuals?
# 121 “Unfortunately, we have been spending like a bunch of drunks. There are zero checks and balances.”
The thing that gets me is that the data is as clear as day that we are acting as you describe and that it is unsustainable but an awfuly-large number of people do not see or do not want to see this AND, worst of all, really, is that the officials we have elected to mind the store and tell us the truth of where we stand are also ignoring the problem. If we do not watch our step we may find ourselves the new France; once a world power, and still a great place to live, etc., but a shadow of our former glory. Even great powers fail to remain great powers when they stop doing the things that made them great. Just ask Rome, Spain, Portugal, Denmark, Great Britian, etc.
# 123
Bob Jones University? Karl Rove’s closet? Ken Melman’s basement? Karen Hughes coffee klatch?
I think that the whole buyer’s agent thing should be split out or something.
It seems that many of them are tour guide types who get the tip on the buyer, who emails the listing agent who actually advertises and all of that. With the internet now, you can do so much research o your own too as a buyer.
I guess they give some of commission to the person who gave them the buyer though.
The agent who listed our house wouldn’t compromise on the 6%. In an objective way, I kind of admired that because it meant she really believed in herself.
She also wrote a listing agreement where we could dump her at any time for any reason (on the agreement, she wrote zero days). She said she didn’t want anyone who was unhappy to stay with her just because of a piece of paper and she had never had anyone take advantage of it. I really admired that too.
grid said “Why not find an agent that will work for a lower rate?”
I forgot the source but I read somewhere that it is illegal for agents to discount in NJ?!
I do think that in this day and age, a buyer agent is not as valuable as may be 10-20 years ago: you can search the internet yourself, you can search tax record, and trim down the short listed houses to a few, and I don’t mind drive myself to see a house myself. So what service does a buyer agent do that is essential and time consuming to justify the 3% is a large sum?
In some part of the world, there is no buyer’s agent, and commission is much lower. E.g., UK standard is 1.5%.
grim: you suggested approaching seller directly, but you have to see the house first to know you like it, and for that I think you still have to go through the listing agent, no?
Countrywide Financial Corp. plunged the most since 1987.
# 127
The Internet is going to change things in ways unfathomable 10 years ago — well, once the information online improves. Having “walk-through” tours, floor plans with dimensions, addresses so people can do virtual neighborhood tours, etc. posted online will make it easire for people to skip much of what they used buyer-side agents to do. The advertising costs are reduced all while providing better service to the buyer. Whether the seller is better off, I don’t know, but I suspect so. But, with a reduction in selling-agent advertising costs, I suspect there will be downward pressure on commissions.
It is unfortunate that one need come to a board like this to ask Grim, etc. to tell them the address of a listed house. That basic data should be readily available; I wonder how long it will be before the address is freely available?
CF: you drive a relatively long ways to work. Nice to see somebody manning up to pay, rather than complain about the gubbmint taking his hard-earned dosh. I drive the toll roads on occasion, mostly in summers to visit the folks “down the shore.” I have a choice: Not to drive as much.
Shore Guy. Yeah, in summer, it’s the Parkway, or an interminable crawl down rt. 9. Again: Choices.
The broader point here (and I apologize for restating the obvious): I think Corzine is threatening to make the tolls dramatically higher to prove a point about privatizing the roads: It’s his way, AND the highway; propose something crazy (”To have the letter ‘M’ stricken from the English alphabet!” - Steve Martin), so the only slightly-less-insane option suddenly seems palatable.
And to one and all here, I abjectly and resolutely apologize for ever defending Corzine as governor. Maybe I have a soft spot in my heart for him because he donated a gym to my high school, but I gotta say, he’s a pretty piss-poor governor, even by the benighted standards of governors of New Jersey.
Just go knock on the door, that is how the best deals are done. Of course it only works if you are presentable, nice and have the 20% dwnpmt. Sometimes the seller will give a discount for a good new neighbor. RE’s lie through their teeth
tobuyornottobuy Says:
January 8th, 2008 at 12:05 pm
grim: you suggested approaching seller directly, but you have to see the house first to know you like it, and for that I think you still have to go through the listing agent, no?
U.S. stocks shed the bulk of early gains Tuesday as the financial sector weighed on equities following a report that Countrywide Financial Corp. had fabricated documents, spelling further trouble for the country’s biggest home loan provider.
Shares of Countrywide (CFC) were down 14% in the wake of a New York Times story detailing the company’s alleged role in the bankruptcy case of a homeowner in Pennsylvania.
“This is the largest mortgage originator in the country, trading like it wants to go out of business; the financials are dragging everything down,” said Peter Boockvar, equity strategist at Miller Tabak.
Up more than 65 points earlier on, the Dow Jones Industrial Average (DJI) more recently fell 59.2 points to 12,768.3, with 17 of its 30 components in the red, led by financials, including American Express Co. (AXP), which was down 1.4%, Citigroup Inc. (C), off 2.6%, and J.P. Morgan Chase (JPM), down 1.9%.
shore 131
That sounds like a business opportunity. Collect street addresses of homes for sale and post it on the web. then link to the other various data sources like property shark and tax records. Circumvent the current establishment. It would take someone with a fairly intimate knowledge of the listing process to help figure out the data collection process, but i think it could be done.
hey grim want to start a business?
# 30 Kurt Said: “Please, tell us all where exactly “spending” should be cut. Whitman cut ’spending’ on the pension system, that’s working out just great!”
Whitman cut FUNDING of the pensions, not the pensions themselves. Had she actually cut the pension benefit, we might not be in this mess. One party like to cut taxes but raise spending anyway (note the Reagan and Bush deficits). Dems like to spend more, but are not afraid to tax more to pay for it. If only we had a party that would spend less AND tax less.
I thought the reason that you can’t get addresses of houses for sale on the internet was because sellers don’t give their permission for that.
I guess they think someone is going to get a brilliant idea to come break in if someone knows the house is for sale.
Some houses seem to have the address, either on Realtor or the agent’s site, some don’t.
COUNTRYWIDE HOME LOANS MTN BE 6.25000% 04/15/2009 FR
Basic Analytics
Price (Ask) 74.047
Yield to Worst (Ask) 32.975%
Yield to Maturity 32.974245%
Third Party Price 72.456
33% yield - Those are Michael Milken rates?
Someone here predicted 50% price reduction in home price few days ago …well “RAISE your Hand” !!
Based on today’s news you are probably correct!!!
Ann 137
A 3rd party can collect any public information that they choose. So if i formed Kettle data services LLC, i can go collect any addresses i want and publish them as i have no agreements with the home owners. The real trick is how do you efficiently collect and maintain a list of addresses that are currently for sale and tie them to other relevant data such as MLS #’s
WOW I just had a CFC bond briefly on my screen with a 42% yield!!!
kettle..ask Zillow what’s been the biggest stumbling block.
John,
At those yields I’m tempted.
pat 142,
What do you think it is? i do not know what zillows stumbling block is/was, just shooting from the hip on a random thought
grim Says:
January 8th, 2008 at 12:25 pm
John, At those yields I’m tempted.
why?
CHIFI
Re CFC
Arent bonds one of the first things paid out in bankrupty? i dont know much about it, but i thought that was one aspect of it.
http://www.zillow.com/search/RealEstateSearch.htm?dg=dg1&addrstrthood=pine&citystatezip=franklin+lakes&GOButton=%3CSPAN%3EGO%3C%2FSPAN%3E
kettle, check out the map. Do you really think there are only 5 houses for sale within a nice little walk of Vera’s pizza?
Ann,
You said:
I guess they think someone is going to get a brilliant idea to come break in if someone knows the house is for sale.
A while ago, I saw a segment on the local news about burglars scoping out homes via virtual tours.
Also, keep in mind - these days, a fair number of the houses in the MLS are vacant and could be targets for looters.
In 2001 the Legislature Boosted Retiree Pensions, even though they knew the Pension Fund was losing Billions.
“U.S. stocks dropped, led by financial shares, after pending home sales declined more than economists forecast and speculation increased that Countrywide Financial Corp. faces a funding shortage.”
“There’s rumors around that they’re going to file for Chapter 11,” said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. “That’s taken most of the financial stocks down and it’s taken the market down.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDUZ.B.jjITM&refer=home
chicagofinance Says:
January 8th, 2008 at 12:28 pm
grim Says:
January 8th, 2008 at 12:25 pm
John, At those yields I’m tempted.
why?
Why not you don’t really expect CFC to implode? It’s too big and too connected. It will be bailed out by the tax payer via S&L.
Bond holders are first in line in bankruptcy court. If you buy debt at 70 cents on the dollar you could potentially arbitrage at liquidation of assets or at least break even at your acquisition cost. Not much downside, however, if CFC survives you just pocketed a nice chunk of change.
Given that, risks are quite substantial. Do we really know the value of CW risk and what potential legal liabilities could coming down the pike.
Is there any room on that Penske truck, out of NJ?
correction: CW assets
“There’s rumors around that they’re going to file for Chapter 11,” said Michael James, senior equity trader at Wedbush Morgan Securities in Los Angeles. “That’s taken most of the financial stocks down and it’s taken the market down.”
Ask yourselves “Who the hell is Michael James at Wedbush and what’s his motivation” Is he or his firm short on CFC?
Mozillo is a shark and you don’t defeat a shark as long as you have a corrupt fed and Federal Reserve.
107- Grim
I would be making the offer to the agent that is doing the open house because he or she is representing themselves as the seller’s agent. If they are not it changes things. But keep in mind that I am going to the open house expecting to meet a representative of the seller and view the home.
We’ve discussed many times that agents use open houses as recruiting events to find buyers. I’m not trying to circumvent the established buying process. I view the open house the same way that I would view contacting the seller’s agency to schedule a showing.
Most of the open houses that I went to when purchasing were worked by seller’s agents. But most people attending open houses do so without their buyer’s agent. The NJREC code may be the way that RE professionals view the open house procedure. I’m not sure that this view is shared by the general public. If it were, we would be looking at a three way commission split between seller’s agent, buyer’s agent, and showing agent.
chicagofinance Says:
January 8th, 2008 at 12:28 pm
…
why?
Flights to Vegas are too expensive..
By Stephen Roach:
“A sharp decline in asset prices is necessary to rebalance the US economy. It is the only realistic hope to shift the mix of saving away from asset appreciation back to that supported by income generation. That could entail as much as a 20-30 per cent decline in overall US housing prices and a related deflating of the bubble of cheap and easy credit.”
“As home prices move into a protracted period of decline, consumers will finally recognise the perils of bubble-distorted saving strategies. Financially battered households will respond by rebuilding income-based saving balances. That means the consumption share of gross domestic product will fall and the US economy will most likely tumble into recession.”
http://news.yahoo.com/s/ft/20080107/bs_ft/fto010720081324550910;_ylt=Aowq_522SCo0vjzHOs.Lr5b2ULEF
how do you think bofa’s investment in CFC is looking now? No wonder they’re trying to concentrate on bracnh banking more.
Here’s the NYT story on Countrywide:
http://www.nytimes.com/2008/01/08/business/08lend.htm
Grim,
Sent you an update of your contracts spreadsheet with NJMLS data for November and December.
Bergen County’s 4th quarter was a stinker (-29.7) and December simply reeked (-37.4).
Rich
make money Says:
January 8th, 2008 at 12:38 pm
Why not you don’t really expect CFC to implode? It’s too big and too connected. It will be bailed out by the tax payer via S&L.
albani: it is a black box at this juncture….better places to put money to work….nobody here has a competitive information advantage, so ultimately, you have to assume that the risk adjusted market pricing is appropriate.
There is also litigation risk here……
Countrywide (CFC) is in free fall. Shares plunged 23 percent in heavy trading Tuesday as investors resumed speculating that the troubled mortgage company is on the way to bankruptcy. Countrywide went through a similar swoon back in August before Bank of America (BAC) stepped in with a $2 billion investment. This time around, though, there’s more fear and no sign of a white knight. Credit default swaps tied to Countrywide’s debt soared to record levels
Contracts spreadshet has been updated to include NJMLS (Thanks Rich!).
http://njrereport.com/files/contracts.xls
#161 Rich OMG!!!! In Bergen County? But, but, we are special, NY’ers will pay scads of money to live in our so called Blue Ribbon School districts, and be only minutes from all that NYC has to offer.
My realtor told me so, this just cannot be!!! WAHHHHHHH!!
grim Says:
January 8th, 2008 at 12:45 pm
chicagofinance Says:
January 8th, 2008 at 12:28 pm …
why? Flights to Vegas are too expensive..
Fine…we should have the next event with a place that possesses a vodka locker…
http://www.chinagrillmgt.com/redSquareNJ/main.cfm?pp=0
“My realtor told me so, this just cannot be!!! WAHHHHHHH!!”
That reminds me, where is Listen?
Looks like they halted trading on CFC. A big jump from 5.90 to 6.32 out of no where.
VODKA LOCKERS????!!!!!
Lets go!
Is that the same joint as in Vegas (Mandalay Bay)?
Arent bonds one of the first things paid out in bankrupty?
Haha. Its true bonds have priority over stockholders, but administrative fees (lawyers, auditors, etc), tax claims, and secured creditors have priority over bondholders. Very often, in a big bankruptcy litigation the bondholders get jack shtt.
Check out #3 re Paulson and the Area Code Rule:
http://www.minyanville.com/articles/cvs/index/a/15448
From Schwab’s Web site:
Countrywide Financial (CFC) Resumes Trading; Says No Substance to Bankruptcy Rumors
1:18 PM EST January 8, 2008
Countrywide Financial (NYSE: CFC) resumes trading after halted. The stock is up about $0.40 from halt price.
Countrywide said their was no substance to bankruptcy rumors.
I’ve said it before and I’ll say it again CFC and WaMu will be .pk by April. A much smarter move is to hedge any long position in SRS. If your reasoning is that they are too big, then I would invest in FNM, since they will surely get the Federal relief.
The question though is, who wants the properties that these banks will own? How could the government even bail them out? Pay for the nonperforming loans? Eventually, those who can’t afford to make payments today, certainly can’t afford to make payments tomorrow. Is the government gonna buy the foreclosed homes?
The depression is coming and my 70% bonds position is looking better and better everyday. Position will be 80% come February. Earning season starts tomorrow. This should just add to the party. There is zero impetus to turn this ship around. I suggest you all don your life jackets.
Of course, you could take Bi’s advice instead.
http://research.stlouisfed.org/fred2/categories/24
For fellow data geeks.
I would argue that from my understanding, a deflationary tract is one of the scarier options we are looking at ( at least with a fiat currency). I am not sure i agree with some of the economic theories behind “deflation is bad” as i tend to agree more with the austrian school of thought, but assuming that the keynsian crowds are correct, the deflation could be very very messy
shore [175],
I want my M3.
This was picked up by the Mortgage-Implode-O-Meter this morning:
Bush convenes Plunge Protection Team
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 12:05am GMT 08/01/2008
Bears beware. The New Deal of 2008 is in the works. The US Treasury is about to shower households with rebate cheques to head off a full-blown slump, and save the Bush presidency.
**On Friday, Mr Bush convened the so-called Plunge Protection Team for its first known meeting in the Oval Office.**
The black arts unit - officially the President’s Working Group on Financial Markets - was created after the 1987 crash.
—
First I’ve seen anything in the press about a meeting on Friday, and it’s in a UK paper.
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/01/07/ccview107.xml
kettle1 Says:
January 8th, 2008 at 1:09 pm
VODKA LOCKERS????!!!!! Lets go!
Famous for its sub-freezing, vodka lockers,
Red Square provides fur coats for the ladies
and authentic Russian army coats for
the men while visiting their private vodka
storage.
#179,
hmmmm, so can i get a ride with someone, could be a long night, might not be able to drive next morning ;)
How does one go about shorting Manhattan real-estate? Any ideas?
scribe [178],
We were talking about that this past Friday. It hit all the financial sites then.
#177 BC bob
“I want my M3.”
OK here you go…..
http://tinyurl.com/3bhh8b
Bost,
I guess I missed it. I was pretty busy on Friday.
# 178
“”At this point the debate is not about a soft land or hard landing; it is about how hard the hard landing will be,” said Nouriel Roubini, professor of economics at New York University.
“Financial losses and defaults are spreading from sub-prime to near-prime and prime mortgages, to commercial real estate loans, to auto loans, credit cards and student loans, and sharply rising default rates on corporate bonds. A severe systemic financial crisis cannot be ruled out. This will be a much worse recession than the mild ones in 1990-91 and 2001,” he said.
Sovereign wealth funds stand ready to rescue banks, as they have already rescued Citigroup and UBS. But as Moody’s pointed out this week, the estimated $2,500bn in lost wealth from the US house price crash is more than the entire net worth of all the sovereign wealth funds in the world.”
On the positive side, those who made it through the Great Depression talk about it like it was a wonderful character-building experience; well, 30+ years after the fact, anyway.
kettle,
I guess the gold market is ignoring our govt releases and following Shadow?
Frank,
Short Manhattan office landlord SL Green. Ticker is SLG.
http://www.whitehouse.gov/news/releases/2008/01/20080104-4.wm.v.html
OT: NJ Indian restaurants… the number in NJ seems to have exploded…..what follows in rank ordered by food score in ZAGAT, then a list of new ones….opinions?
Karma Kafe
505 Washington St.
Hoboken, NJ | Map
Moghul
35 Morris St.
Morristown, NJ | Map
Moghul
1655-195 Oak Tree Rd.
Edison, NJ | Map
Karma
2015 Burlington-Mt. Holly Rd.
Mount Holly, NJ | Map
Aangan
3475 Rte. 9 N.
Freehold Township, NJ | Map
Aamantran
1594 Rte. 9 S.
Toms River Township, NJ | Map
Passage to India
2495 Brunswick Pike/Rte. 1
Lawrenceville, NJ | Map
Saffron Indian Cuisine
249 Rte. 10 E.
East Hanover, NJ | Map
Raagini
1085 Rte. 22 E.
Mountainside, NJ | Map
Bombay Gardens
1020 Rte. 18 N.
East Brunswick, NJ | Map
Moksha
1655-200 Oak Tree Rd.
Edison, NJ | Map
Chand Palace
257 Littleton Rd.
Parsippany, NJ | Map
Amiya
160 Greene St.
Jersey City, NJ | Map
Namaskaar
275 Rte. 4 W.
Paramus, NJ | Map
DabbaWalla
427 Springfield Ave.
Summit, NJ | Map
India on the Hudson
1210 Washington St.
Hoboken, NJ | Map
Akbar
21 Cortland St.
Edison, NJ | Map
NEW
Kinara Cuisine of India
880 River Rd
Edgewater, NJ | Map
Neelam Exotic Indian Cuisine
295 Springfield Ave
Berkeley Heights, NJ | Map
Cafe Spice Newport Inc
537 Washington Blvd
Jersey City, NJ | Map
Piquant Bread Bar & Grill
349A George St.
New Brunswick, NJ | Map
Sona Classic Indian Cusine
612 Highland Pl
Maplewood, NJ | Map
Malabar House
1665 Stelton Rd.
Piscataway, NJ | Map
Rasoi Restaurant 2 Llc
1567 Oak Tree Rd
Iselin, NJ | Map
Cinnamon
2920 State Highway 10 N
Parsippany, NJ | Map
Chowpatty
1349 Oak Tree Rd.
Iselin, NJ | Map
Taj Palace
702 Bloomfield Ave
Montclair, NJ | Map
148 scribe
I agree, I think it should be up to the seller whether they want to post their address or not. That’s interesting about thieves scoping out good stuff on virtual tours. Yikes.
Empty houses, well, not so appealing unless you’re homeless. Empty houses are depressing even to look at for a few minutes!
Northeast Is Toughest Place in U.S. to Sell Home, Realtors Say
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTz4fhd91UcY&refer=home
I’m sorry if this has been answered but so many comments at this time of day I could’nt finish reading them.
To whomever asked about lowball/seller’s vs buyer’s agents.
Anecdotaly from viewing and making mental notes, yes I believe the bigger price reductions are dual agency situations. Which by the way goes against that whole dual agency crap. The selling agency’s job is to get the best price for the seller.
KL
BC Bob,
“I guess the gold market is ignoring our govt releases and following Shadow?”
They are more trust worthy then the GOV numbers. The GOV numbers are fudged to the point that they should have a little Keebler Elf stamp on them. Heck look at the employment #’s. The GOV method assumes a certain % of jobs were created without any supporting data!
As this board is representative of a subgroup of people who are aware of the real direction of the housing market, there is indeed the subset that is very aware of what direction the financial markets are going in; and even a novice such as myself can tell you they are going down.
I AM POSTING AN ARTICLE….YOU SHOULD PERFORM YOUR OWN RESEARCH…..I AM NOT RECOMMENDING AN INVESTMENT IN ANY OF THESE VEHICLES. USING THIS INFORMATION FOR AN INVESTMENT DECISION PROVIDES PRIMA FACIE EVIDENCE THAT YOU SHOULD BE STERILIZED, SO THAT SOCIETY CAN BENEFIT FROM PREVENTION OF FURTHER BREEDING OF PURE IDIOCY.
Our 2007 Fund Managers of the Year
Christine Benz | 01-08-08
Philosophy 101 students are often asked to consider whether a tree falling in the forest makes a sound if no one is around to hear it. Morningstar analysts have often pondered a similar question in relation to fund investing. If a manager puts up great returns that real human shareholders weren’t around to earn–either because the fund was ultrasmall at the time or because the fund was so volatile that investors bought and sold at poor times–is he or she really a great manager?
Maybe. After all, closing a fund to preserve future returns for shareholders is one of the most shareholder-friendly actions that a fund could take.
But those managers whose efforts have enriched many shareholders over a long period of time also deserve praise. Morningstar’s three Fund Managers of the Year for 2007 fit that description. All have delivered strong absolute and relative returns for huge numbers of investors over many years. Their terrific Morningstar Investor Returns, which demonstrate that their shareholders have actually pocketed the lion’s share of their published total returns, attest to their ability to steer steady ships that have kept shareholders aboard in all types of weather.
When making our Fund Manager of the Year selections, our deliberation process doesn’t stop with a consideration of the number of shareholders that a fund has enriched and a fund’s investment results in the current calendar year and over the long haul. We look for managers who show courage in their convictions and who aren’t shy about differing from the consensus, even if that comes at the expense of short-term performance. After all, to be better than the competition, you’ve got to be willing to differ from it. We also favor managers from shareholder-friendly firms. Good stewardship is an important factor in successful investment management, and it stands to reason that top managers would exert a strong influence over their firms’ cultures, fee-setting policies, and so forth.
Without further ado, here are this year’s three winners.
Domestic-Stock Manager of the Year: Will Danoff
Fidelity Contrafund FCNTX and Fidelity Advisor New Insights FNIAX
When it comes to enriching real human shareholders, Fidelity Contrafund’s Will Danoff sets the gold standard. A fixture in 401(k) plans, Contrafund has been enormous for more than a decade, yet Danoff hasn’t been content to put the fund on autopilot and hug the S&P. Instead, he prides himself on staying a step ahead of the competition and berates himself on the very few occasions when he has not. In 2007, for example, Danoff’s embrace of long-unloved growth-oriented firms has helped Contra and Advisor New Insights leave the S&P 500 and the typical large-growth fund in the dust. The funds’ long-term results have been similarly impressive: Both have bested the index and rival funds by breathtaking margins during Danoff’s tenure. Even more impressive has been Danoff’s consistency. The fund’s showing in 2002’s dreadful market, when it lost 10% even as the S&P 500 posted a devastating 22% drop, testifies to his sharp maneuvering and commitment to growing and preserving shareholder capital amid all market environments. Whereas rival large-growth managers were content to excuse their losses that year by saying, “Our style was out of favor,” Danoff was not.
Danoff’s success here has created a virtuous circle for shareholders. Simply put, the fund has been easy to own, and that, in turn, has prompted investors to add to their holdings at opportune times. As a result, the typical Contrafund shareholder has actually bested the fund’s published total returns over the past decade, pocketing a handsome 11.5% return versus the fund’s stated return of 10.9%. True, we’ve voiced concerns that Contrafund isn’t as nimble as it once was, but it’s impossible to deny the magnitude of Danoff’s achievement here.
International-Stock Managers of the Year: Hakan Castegren and Northern Cross Team
Harbor International HAINX
Hakan Castegren took home our Fund Manager of the Year award back in 1996, and we’re happy to note that he and his team have continued to deliver great returns for investors over the subsequent decade. This year, we’re giving the award not just to Castegren but also to the team that supports him: Jim LaTorre, Howard Appleby, Jean-Francois Ducrest, and Ted Wendell of Northern Cross. Under the watch of these talented investors, the fund notched a tremendous gain in 2007, owing to some well-chosen names in the energy and metals industries. Its long-run returns have been even more impressive: Bill Rocco recently noted that its 15-year return is the best of any foreign large-value fund.
Harbor International is one of those funds that we find ourselves recommending again and again. We’re compelled by this team’s experience level, respect for growing (and preserving) shareholder capital, and the discipline with which it continues to execute its sensible, bargain-hunting strategy. In addition to posting strong returns in the buoyant market environment of the past several years, its losses during the 2000-02 bear market were quite subdued, making it, like Contrafund, a remarkably smooth ride. Fabulous 10-year Morningstar Investor Returns are evidence that this fund’s many shareholders have profited handsomely from this team’s labors.
Fixed-Income Manager of the Year: Bill Gross
PIMCO Total Return PTTDX and Harbor Bond HABDX
Bill Gross took home our Fixed-Income Manager of the Year honors twice before–in 1998 and 2000. This is a well-deserved three-peat, in that his showing in 2007 exemplifies what he and the brain trust at PIMCO do best. Back in 2006, long before “subprime crisis” and “credit crunch” entered the national lexicon, Gross was discussing the potential for housing-market weakness to damp the economy. He began positioning his portfolios accordingly, reducing their exposure to corporate bonds and increasing their sensitivity to interest rates so that they would benefit from the lower interest rates he expected. That positioning proved off at first, leading to an uncharacteristically average showing in 2006 and the first part of 2007, but in hindsight it was amazingly prescient. As the housing market went from bad to worse and the Fed ratcheted down rates in the second half of this year, Gross’ charges reaped the rewards. In 2007, Harbor Bond and PIMCO Total Return smoked the typical offering in the intermediate-term bond category and topped the Lehman Brothers Aggregate Index by nearly 200 basis points–an astounding margin of victory in the bond world.
That sort of bold move is precisely what we’re talking about when we say that we look for managers who show courage in their convictions. And fortunately for Gross’ legions of shareholders, this is far from the first instance when he has risked short-term performance weakness with an eye toward improving long-term results. Both funds’ returns over the past decade are among the very best in their peer group, thanks to the PIMCO team’s keen evaluation of macroeconomic trends, considerable human resources, and derivatives capabilities. And owing to PIMCO’s gigantic footprint in the mutual fund world, many shareholders have enjoyed the fruits of Gross’ labors.
grim - restaurant listing is in moderation
RE ZILLOW ,,,,i think Re agents have been starting to imput data in last few months.
Try http://www.trulia.com/,,,it also gives data of whats sold in a past month!!!
good luck
Here is my 2008 forecast for New Jersey home prices. The numbers are 4th quarter 2008 numbers for New Jersey.
OFHEO – 575
NAR median price of existing single family homes – $355,000
“They are more trust worthy then the GOV numbers.”
kettle [192],
I hear you, preaching to the choir. In 2007, approx 75% of jobs created were the result of birth/death stats. What a bunch of rubbish. Our job creation is a function of paper adjustments and models. That said, real jobs are being created in restaurants, bars and health care. Our new economic model is to pig out, get hammered and then take drugs for depression, weight loss, diabetes, etc…
“take drugs for depression”
well at least i know my wife will have a job :) (a head shrinker)
The market just took a 100 point digger.
Jack Treynor Selected as the Recipient of the 2007 IAFE/SunGard Financial Engineer of the Year Award
If you are a CFA that is the Academy Award for best actor.
From MarketWatch:
U.S. Nov. consumer credit up $15.5 billion, or 7.5% rate
U.S. consumers took on more debt in November, increasing their credit-card balances at the fourth fastest pace during the six-year expansion, the Federal Reserve reported Tuesday. Total seasonally adjusted consumer debt increased by $15.5 billion, or a 7.5% annual rate, in November to $2.51 trillion after a revised 1% rise in October, the Fed reported. It was the biggest gain in outstanding debt since August. Credit-card debt rose by $8.7 billion, or 11.3%, in November to $937 billion after an 8.6% gain in October. Non-revolving credit - such as auto loans, personal loans and student loans - increased by $6.7 billion, or 5.2%, to $1.57 trillion after a 3.5% drop in October.
kettle [199],
Nothing to worry about. Major growth industry. I can fill her office in a minute.
Giants 27 - Cowboys 13 — Romo gets battered the whole game and finally limps to the bench with a concussion late in the fourth. Jessica dumps Tony the following Tuesday and is in bed with Owens on Wednesday.
“d2b Says:
January 8th, 2008 at 10:57 am
John- I think that your Property Shark approach is unethical.”
I appreciate the sentiment and all, but why should Joe 6-Pack, or John for that matter, have a fit of ethics to benefit Burgdorff? Seriously, which of the following would do something to their own financial disadvantage because they didn’t want to treat a buyer “unethically”:
Century 21
Ara Hovnanian
Citigroup
Moody’s
Alan Greenspan
It’s business, folks. The law exists for a reason. These aren’t your friends and family, they’re business men and women who are trying to make money, and if it’s legal, they’ll do it. I don’t see why the little man has to play by a different set of rules.
should obviously have included Mozillo and GS…
Gary [204],
“Jessica and Tony, who hooked up around Thanksgiving, started their vacation on a playful note as shutterbugs caught her hand resting on his tight end upon arrival.”
“They were “rubbing each others butts and laughing on the tarmac,” a bystander relays to Us.”
“But their togetherness will likely come to an end next weekend, when Romo and his team take on the New York Giants in the playoffs. Given how the QB played last time Simpson was on hand to cheer him on, odds are she’ll steer clear of the stadium.”
http://entertainment.msn.com/music/hotgossip/1-07-08_2?GT1=7702
any word on what the gov had to say
“There is also litigation risk here……”
162 chi - this is a good point, and one that even a corrupt fed crew can’t fix unless they’re willing to go to Congress and ask to pass a bill granting immunity (though with the Bush admin, that’s actually not unlikely).
189 chi
Mrs. Patient and I are big fans of Raagini. Looks like a standard place along 22, but damn the food is good, the service is superb and the ambience grows on you.
BC Bob,
If she does stay out of the stadium, will it be because she volunteered or he told her to?
Mozillo, He Slays Me:
http://www.dealbreaker.com/2008/01/how_we_got_here_downpayments_w.php#comments
NJ patient # 209
Retroactive immunity is technically illegal/unconstitutional ( no i am not a lawyer)
In the United States, ex post facto laws are prohibited in federal law by Article I, section 9 of the U.S. Constitution and in state law by section 10. Over the years, when deciding ex post facto cases, the United States Supreme Court has referred repeatedly to its ruling in the Calder v. Bull case of 1798, in which Justice Chase established four categories of unconstitutional ex post facto laws. The case dealt with Article I, section 10, since it dealt with a Connecticut state law.
However, not all laws with ex post facto effects have been found to be unconstitutional. One current U.S. law that has an ex post facto effect is the Adam Walsh Child Protection and Safety Act of 2006. This law, which imposes new registration requirements on convicted sex offenders, gives the U.S. Attorney General the authority to apply the law retrospectively.[1] The U.S. Supreme Court ruled in Smith v. Doe (2003) that forcing sex offenders to register their whereabouts at regular intervals and the posting of personal information about them on the Internet does not violate the constitutional prohibition against ex post facto laws, because compulsory registration of offenders who completed their sentences before new laws requiring compliance went into effect does not constitute a punishment.[2]
Another example is the so-called Lautenburg law where firearms prohibitions were imposed on those convicted of misdemeanor domestic violence offenses and subjects of restraining orders (which do not require a criminal conviction). These individuals can now be sentenced to up to 10 years in a federal prison for possession of a firearm, regardless of whether or not the weapon was legally possessed at the time the law was passed. Among those that it is claimed the law has affected is a father who was convicted of a misdemeanor of child abuse despite claims that he had only spanked his child, since anyone convicted of child abuse now faces a lifetime firearms prohibition. The law has been legally upheld because it is considered regulatory, not punitive - it is a status offense.
See also: Fourteenth Amendment to the United States Constitution, Fourteenth Amendment, Bouie v. City of Columbia, Rogers v. Tennessee, and Stogner v. California
#202 grim: One wonders, if credit card debt increased in November, and the Christmas selling season was considered a bust, are people using their CC’s for everyday living expenses, assuming they were not buying presents?
And another thing… the Giants are smelling a little blood in the water and Tony boy is feeling all love struck (there’s another term, but I won’t go there) and sh*t. You gotta go into a game like this feeling very angry with a chip on your shoulder… with no shave and shower for a few days. You gotta sort of be like Bobby D. in the Cape Fear. You know, a little pyscho.
From Nytimes
The Countrywide Financial Corporation fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess.
http://tinyurl.com/26shvf
225 point digger.
213 kettle
the constitutional prohibition on ex post facto laws has generally been interpreted as being a ban on new laws that would retroactively jeopardize a bad actor, not retroactively absolve him (see your own examples).
Retroactive immunity is commonly granted, and has been even more common under the Bush admin (Eli Lilly was granted immunity from suits for environmental damage, and more recently a big part of the FISA bill reauthorization hinged on Bush admin attempts to include retroactive immunity to telecom companies that illegally engaged in wire-tapping of US citizens in violation of the Fourth Amendment (while simultaneously telling the public that this action was perfectly legal)).
217
Was watching that Led Zeppelin imitation myself. Big “whooosh!” sound.
December, 2007 Economic Outlook
On the heels of surprisingly strong GDP growth of 4.9% in the third quarter, the economy is expected to slow sharply in the fourth quarter, with GDP rising at a scant 0.1% pace.1 In part that weakening reflects pay-backs from surprising third-quarter strength, but it also reflects restraint from the continued decline in housing construction, rising energy prices, and worsening financial conditions. Nevertheless, the economy should resume trend growth by the spring of next year.
Worsening of financial conditions will require one additional ¼-point rate cut from the Fed to ensure a resumption of solid growth. An expected cut in January would lower the federal funds rate to 4%, a level implying outright accommodation. With a return to trend growth next year, expect the Fed to then raise the funds rate to 4.5% over the second half of 2008.
GDP growth averaging just 2.1% (from 2006:Q3 to 2007:Q1) contributed to a sharp deceleration of employment and set the unemployment rate on a gradual rise. The unemployment rate will rise to 5.1% by the second half of next year, where it is expected to stabilize.
Core consumer price inflation remains tame near the top end of the Fed’s implicit comfort zone in this forecast. Core CPI inflation of 2.3% in both 2008 and 2009. Recent energy price surges will push headline CPI inflation to 3.7% in the fourth quarter of this year, before expected energy price declines arrive early next year, but net overall CPI inflation of 2.2% in 2008 and 2.0% in 2009.
With inflation anticipated to remain tame and short-term rates now expected to briefly undershoot neutral, long-term interest rates will remain lower for longer than previously anticipated. The 10-year T-note yield will remain below 4½% over the first half of next year, but then rise to 5% in 2009 as the Fed tightens and as normal term spreads reassert themselves.
Equities are fairly valued and expect gains over each of the next couple of years of 5% - 7%. Continued solid increases in dividends will mostly offset the restraining effects of modestly rising long-term interest rates.
Hamlet (51)-
Won’t work. That agent’s allegiance (unwritten) is to the seller. Any break will go the seller’s way.
Get a good agent who will negotiate for you.
NJ patient
not to go to far afield, but for whatever it may or may not be worth i strongly disagree with that so called “interpretation”. Its literally in black and white ( or maybe yellow now)
No Bill of Attainder or ex post facto Law shall be passed.
on and there is this as well!
The privilege of the Writ of Habeas Corpus shall not be suspended, unless when in Cases of Rebellion or Invasion the public Safety may require it.
. it doesn’t get much simpler then that. I know i am not a constitutional scholar, but it stinks to high heaven how some constitutional clauses are “interpreted”!
Hamlet (63)-
Agency kickbacks to buyers are illegal in NJ
regarding habeous corpus, has there been a rebellion or invasion i am not aware of?
#220 That report look a little dated already.
Ann Says:
January 8th, 2008 at 12:16 pm
“I thought the reason that you can’t get addresses of houses for sale on the internet was because sellers don’t give their permission for that.
I guess they think someone is going to get a brilliant idea to come break in if someone knows the house is for sale.”
I would think the big “For Sale” sign outside would be a dead giveaway.
MLS’s in many/most other states do show the addresses.
It’s a sales technique - get in front of the buyers/prospect at all times. It’s a way of keeping control of the process as much as possible.
2nd (81)-
“…although, i will say the built in network in tier 1 schools is incomparable. they really take care of their own and i suppose that alone is worth the price of admission.”
Yep. Look how well it’s worked out for Dubya.
192 rhymingrealtor
I don’t see the big deal with dual agency. I think the agents work better together when they are in the same office. Could just be coincidence, but it’s based on my experience. I’m going on my fifth RE transaction and four were dual agency. I know they say as a buyer, you could be at a disadvantage, but I always do so much of my own research anyway and any info I’ve ever asked for, I’ve never been turned down because it was a dual agency situation.
“225 point digger.”
TJ,
Bigger decline in the nasdaq, on a % basis.
Ouch.. The DJIA is at 12,589 at the moment. It was, umm, maybe a week ago that I asked if anyone thought the DJIA could possibly finish 2008 someplace between 12,000 and 12,250. A few more weeks like this one and that range will look good.
Ann,
What happened yesterday with the house?
226 lisoosh
For Sale signs are a big giveaway. Seriously.
I agree it’s a sales technique, although I respect sellers who are paranoid and don’t want to list their address.
It’s nice even just to do drive bys when you are first looking, and freely availabla addresses aid that. Although, as you said, the listing agent would prefer you contact them.
bi (102)-
Obviously, your rehab didn’t “take”:
“…if you can endure short-term volatilities, i think home builders and mortgage companies appear to be attractive for long term at this price level.”
…but Cramer said buy techs.
222 kettle
I agree with you - was just pointing out the reality, which is that the Supremes have a long history of interpreting the constitution in such a way that permits entities that have amassed quite a bit of capital to go on doing so.
Frankly, this one falls into the exact same place as the interpretation of the “takings” clause - the Endangered Species Act was late to the game: there were no property rights in this country to begin with!
231 scribe
We are still waiting to hear back on whether they will address any of the repairs. So far, we have only heard that they won’t from the agents, along with of course all the talk that they want to pull out anyway due to this new, generous buyer.
Our lawyer has put a call in and their lawyer was all dopey and said, oh yeah, I’ll call them and see what’s up. Our lawyer is advising we don’t give up yet and try to get something out of them for the repairs.
“njrebear Says:
January 8th, 2008 at 4:11 pm
…but Cramer said buy techs.”
That’s because techs make fun gadgets and toys, and we all know that, in a recession, folks buy more fun gadgets and toys. Or something.
# 209 “unless they’re willing to go to Congress and ask to pass a bill granting immunity”
Immunity legislation, truely you jest. Who needs it when one has the power to pardon? Just ask scooter.
Ann,
I agree dual agency goes smoother I am often relieved when an agent in my office sell’s my listing, all questions are readily answered and the process goes much better. I was noting that lowballs I notice seemed to me to be same listing agent/ selling agent.
KL
224 “regarding habeous corpus, has there been a rebellion or invasion i am not aware of?”
The Democrats took the House, no?
238 points. Nice time for the President to be heading off to Israel and the Gulf for a week.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aw399QZh5grs&refer=home
““The consumer is finally getting pinched, and that’s probably going to cut a lot deeper than people thought,” said Dan Genter, who helps manage $2.8 billion as president of RNC Genter Capital Management in Los Angeles. “This market is very, very vulnerable. That is shining through now.” ”
Pinched? With the decline in the home piggy bank, the increase in prices for food and energy, flat or declining wages, and increased credit card debt, it is more like the consumer is being tased, kicked, tied up, stuffed into a gunny sack and tossed into a canal.
Bigger decline in the nasdaq, on a % basis.
Can’t be Cramer says buys tech stocks and you will make MAD MONEY!!!!
Ann (228): you said in the last 5 RE transaction you went with dual agent on 4, did you get a better deal that way? (I am not sure you were selling or buying…)
Manhattan prices are not rising for all;
http://www.nysun.com/pics/68830.jpg?ref=patrick.net
#243 I wonder if he will be screaming again for more rate cuts.
247
Just what we need, then oil will go up even more.
245 tobuy
It just happened that way, that we ended up with dual agent on four out of five. I don’t think we got a better or worse deal on any of them, but it does seem to make things go more smoothly overall.
194 cf
It’s very nice of you post the M* fund manager picks for 2007 but I’m one of those guys who looks back to see how previous years turned out. Google immediately turns up the 2005 picks at
http://advisor.morningstar.com/articles/doc.asp?docId=4298
and if you look at the “recommendations”, you see little evidence of their value in the following years. First number is performance relative to benchmark in 2006, second in 2007
SLASX -0.6% -0.7%
NYVTX -0.7% -0.5%
MWTRX +2.7% -0.7%
ICEUX -2.0% +0.4%
Investors are well advised to avoid investment porno, even if it’s soft like at M*.
239 shore guy
power to pardon
By the time the telecoms go to trial for bugging us all on behalf of the cryptofascists, Dubya will be out of office. I find it impossible to imagine that Huckabee has a chance. 20 straight years of Bubbas in the White House has to mean we are living in some alternate universe.
http://illwillpress.com/
Click on foamy to hear the solutions to bad drivers
Grim,
Can you post the pending sales excel spreadsheet again. Thanks
Thanks Pat for that link.#85
I had heard the Governator would like to eliminate WEP to encourage teachers from other states and those in private industry to enter education here in CA. The baby boomer idealists (yes, I too wanted to change the world by becoming a teacher) are about to retire…..in mass.
#112 Shore Guy
“In New York, the state sold its prisons to itself and used the money to fill one year’s budget gap.”
Now that sounds like something we would do here in California. Wait a minute - maybe this year!
Cindy
mkfinancial,
Just scroll up to post 164 for the link to pending (under contract) sales.
Rich
Thanks, Rich.