This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From Bloomberg:
Pfaffenbach Sees Worries U.S. Stimulus Plan May Be Insufficient
World leaders meeting in Davos have voiced concerns that an economic stimulus plan proposed by President George W. Bush may fail to revive the U.S. economy, German Deputy Economy Minister Bernd Pfaffenbach said.
“One of the questions is whether the measures” envisaged in the U.S. “are suitable for solving the core of the problem, whether it will be an incentive for more consumer spending,” Pfaffenbach said. “There’s a widespread worry here that those who are immediately threatened by default will use the money to plug holes in their finances and set the money aside.”
From Reuters:
Morgan Stanley to Cut 1,000 Jobs as Markets Slow
Morgan Stanley is cutting about 1,000 jobs in the coming week, part of efforts to trim costs ahead of what it expects will be a tougher business environment, a person briefed on the moves said on Thursday.
From Bloomberg:
Bernanke’s Easing Thwarted by Surging Commercial Mortgage Rates
Federal Reserve Chairman Ben S. Bernanke is proving powerless to prevent a deteriorating commercial real estate market.
While the yield on 10-year Treasury notes fell 1.43 percentage points in the past three months to the lowest since 2003 following four interest rate cuts, the cost of borrowing for apartment buildings, offices, retail properties and hotels climbed as much as 1.25 percentage points, according to David McLain, principal and chief investment officer of Palisades Financial LLC, a private equity firm in Fort Lee, New Jersey.
“The market is locked up right now because there’s a huge overhang of leveraged assets of every type, development deals that won’t meet projections made last year when things were rosy,” said David Tobin, a principal at New York-based Mission Capital Advisors LLC, which was involved in $5 billion of asset sales last year. “It will end just like the residential housing market.”
From BusinessWeek:
How Real Was the Prosperity?
…
The housing markets, of course, overshot as too many buyers took out subprime mortgages they couldn’t afford. The outcome will be a decline in home values, with prices in some areas already down.
But the economic writedown is likely to go far beyond housing. Household spending, consumer debt, financial sector profits: All may need a retrenchment, sudden or gradual, to get back to sustainable levels. That’s bad news for investors and the global economy, which still depends heavily on U.S. consumption for growth.
There may even be a reassessment of whether recent productivity gains were fueled by excess credit. If growth in productivity slows, the economy will stagnate, real wages will weaken, corporate earnings targets will be harder to meet, and inflationary risks will increase.
…
The rule for a prudent individual is simple: Don’t spend more than you make. For a long time, the U.S. economy obeyed that rule. As far back as the 1960s, personal spending, adjusted for inflation, has basically tracked the overall growth of the economy, as measured by gross domestic product. Sometimes consumers would get ahead of the economy for a few years, and sometimes fall behind, but never for very long.
That pattern changed in the 1990s. As of the third quarter of 2007, the 10-year growth rate for consumption was 3.6%, vs. GDP growth for the same period of 2.9%. This difference represents an enormous gap. If consumer spending had tracked the overall economy over the past decade as it has in the past, Americans today would be spending about $600 billion less a year. The extra spending has amounted to a total of about $3 trillion since 2001.
…
The past 10 years will go down as one of the greatest consumer-lending sprees ever. Adjusted for inflation, consumer debt—including mortgages—rose an average 7.5% per year since 1997, far faster than the 4.2% rate of the previous 10 years. The last time debt rose so fast was the 1960s, as the postwar generation bought homes and autos. If Americans had kept borrowing at their pre-1997 pace, they would have had about $3 trillion less in debt.
From the Star Ledger:
How low will N.J. mortgage rates go?
The phones in Autumn Urling’s mortgage brokerage began ringing as soon as the Federal Reserve slashed its benchmark lending rate earlier this week.
And they haven’t stopped ringing as mortgage rates dipped yesterday to their lowest levels in four years. Urling said her fax machine, e-mail and waiting room are now swamped by homebuyers shopping for mortgages as well as homeowners hoping to refinance.
“It’s crazy,” said Urling, the owner of First Prestige Mortgage Services in Montclair. “We’ve been trying to upload loan applications all day, but the automated systems are jammed.”
The average rate for a 30-year fixed-rate mortgage dipped yesterday to 5.25 percent, the lowest point since mid-2004, according to Bankrate.com. The average 15-year fixed-rate mortgage, a popular choice for refinancing, stood yesterday at 4.79 percent, also the lowest since mid-2004.
Four weeks ago, the average 30-year mortgage was 6.31 percent, while 15-year loans averaged 5.98 percent, Bankrate figures show.
…
Rates have come down as New Jersey’s inventory of existing homes for sale is growing and, for the first time in years, property values in some areas of the state are falling.
Erin Brown-Dailey, owner of Re-Max Llewellyn Realtors in West Orange, said the existing home market is suddenly buzzing as mortgage rates have fallen. “Buyers are out, agents have appointments, negotiations are happening, appraisers are calling,” she said. “That tells me there’s activity in the market.”
…
But new barricades face many homebuyers and owners hoping to refinance existing mortgages.
According to the most recent Federal Reserve Senior Loan Officer Survey, published in October, lenders have dramatically tightened their underwriting standards to require down payments, good credit scores, cash in the bank and a paper-trail of pay stubs and tax documents.
That means the days of nontraditional adjustable-rate mortgages, interest-only loans and “alt-A” mortgages made without proof of income are all but over — and many of the companies that specialized in those deals have gone belly up.
“I’ve gotten a lot of calls from people who want to refinance their homes, but they have issues,” Urling said. “It’s not like it used to be.”
Many of her clients in New Jersey, New York and Maryland, Urling said, cannot qualify for federally insured loans because the standards are too high.
“You’re kind of stuck between a rock and a hard place,” she said. “The rates are wonderful, but people can’t fit into the products.”
…
“The American dream is to have a home,” said GMAC’s Mahfouz, “but maybe sometimes you should wait.”
The link I’m posting is a killer for Vernon NJ market.This home is in one of the best sub-divisions in town.I don’t know if it is a relist or new?Either way it will force many to lower price in less desirable areas.
IF it sells at full price it would be a comp killer plus.
http://www.pzambelli.remax-nj.com/remaxnj/modules/agent/agent.asp?p=findahome.asp&page=search&search=mlsnumber&selected=mls&listing=true&mlsnumber=2479400&mlsid=203&acc=21982&lwsredirect=1
Lets see if & how long it takes to sell I will keep an eye on it.
(5) Grim
So you got the flyer? I sent it by email.
Cindy,
I got it, if it works for you give it a shot.
C: 4:18? Ever heard the song “Working In The Coalmine”?
From Herb Greenberg:
Reality Check on Raising Mortgage Caps
Nobody in a high-housing-price state will scoff at raising the cap on government-sponsored loans to $700,000 from $417,000, as is proposed in the economic-stimulus package. If nothing else, that should give psychological relief.
However, checking in with our old friend Mark Hanson, a mortgage banker and the author of the very well read “Straight talk on the mortgage mess from an insider” post here, the reality is:
–New borrowers still have to qualify. Fannie/Freddie is full doc only primarily.
–Without stated income for wage earners, it’s tough to qualify for a $700,000 loan.
–In 2005 to 2007, 70% of all jumbos were stated income for a reason: Ninety percent of all stated income borrowers lied about their income to qualify.
–Refi’s will still have trouble due to values dropping in jumbo areas by such a large amount. These are the ones that really need the help.
And the good news, says Mark: “This will be a positive for those purchase money loans for people that actually make the money and have the down payment.”
grim: did you see the SocGen article in the WSJ?
Gold now sitting @ $922. Here comes the moonshot.
All disclaimers. Everybody knows gold bugs are nothing more than right-wing fanatics and survivalists.
(8) Grim
No, I didn’t need one – I currently have a 15year 4.75. It was just that I wanted to alert any coworkers if it was one of those aggregators.
Also, I obviously get up pretty early each day. I used to do my crossword etc. but I am now back to reading. Peter Schiff is considered by many to be an alarmist..yes?
But his book has been quite enlightening.
I would love to read other financial/economics selections. Any suggestions? What do you all consider “must reads?”
The front pager?
I’m not sure whether to believe SocGen’s account or not. Maybe I shouldn’t be so skeptical, my wife’s been yelling at me for using up all the tinfoil.
But given the account, as published, I find it hard to believe that the Fed wasn’t in the loop.
Or is the risk management and oversight at these firms really so lax?
“6pm Sharp!”
But Mrs. Patient and I like to be fashionably late….
What do you all consider “must reads?”
Since the Fed and Fed conspiracy theory have been a hot topic lately, try these two.
Secrets of the Temple
-William Greider
The Creature from Jekyll Island
-Edward Griffin
These two are hot sellers from the “tinfoil hat” book club.
Have you heard some of the feedback from Davos? The rock stars (other that the real rock stars) are Steve Roach and the Roubinator. Lots of hedgies skipped the conference, because everything right now is so f– up. Especially on “SocGen” Monday…..
Is now a good time to refinance?
Another “must-read” tome…
http://www.amazon.com/Stripped-True-Story-Depeche-Mode/dp/1844494152/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1201264641&sr=1-1
Do we have any trading desk guys here that can talk?
I really need some insight into the machine.
I couldn’t tell a trading floor from a killing floor (yes, I watched Fast Food Nation the other night).
high fructose corn syrup…it is in everything. my wife and I threw out everything in our kitchen containing corn syrup for FY08..uh I mean 2008
grim: a trading floor is just like your set-up, adding an open Bloomberg, proprietary internal applications, heaps of testosterone, and most importantly….sound deadening ceiling tiles….
Organic food sales are booming, now major supermarkets offer many products in organic form..no corn syrup or hydrogenated material in certified organic products. Trader Joes is your friend
Helpful link of the day:
Search public deed and tax records online. You can see what houses sold for (if within the past 5 years)
http://tax1.co.monmouth.nj.us/cgi-bin/prc6.cgi?menu=index&ms_user=monm&passwd=data&district=1301&mode=11
thatBIGwindow Says:
January 25th, 2008 at 7:41 am
high fructose corn syrup…it is in everything. my wife and I threw out everything in our kitchen containing corn syrup for FY08..uh I mean 2008
Biggie: HFCS is used because the government gives so much money to grow corn. Then they gave more money away for energy-sucking corn based ethanol. Now, you have to pay more for HFCS, because corn prices have shot through the roof.
The whole thing reeks like grim after 4 days of not showering…..
NPR had a couple of interesting comments and ideas re Societe Generale last night on the ride home, so this is what folks were chewing on overnight.
http://www.npr.org/templates/story/story.php?storyId=18391664
Is now a good time to refinance?
If the numbers make sense,
any time is a good time, it might be worthwhile to explore the option.grim Says:
January 25th, 2008 at 7:46 am
Is now a good time to refinance?
If the numbers make sense, any time is a good time.
you sound like a hooker
“World leaders meeting in Davos have voiced concerns that an economic stimulus plan proposed by President George W. Bush may fail to revive the U.S. economy, German Deputy Economy Minister Bernd Pfaffenbach said.”
[1],
Of course it won’t work. You spend $150-200 B to return approx $70-80B. Great trade. Prime example of Risk/Reward.
I briefly dated a guy in college who couldn’t eat anything with carmel color. It was intense suspense waiting to see what would happen to him if he accidentally ate carmel color, but being young and polite (?), I didn’t ask.
We never went out to eat.
you sound like a hooker
Right, that did come off sounding like a press release from the Mortgage Bankers Association, or worse, the NAR.
Always a good time to buy!
Clot [12],
With Bennie and The Fed Heads running the show, who needs Nelson Bunker and William Herbert?
(23) thatBIGwindow
Farmers around here say it is more expensive to go organic but they will be happy to as long as the consumer is willing to pay that higher price. Love Trader Joes. Open 9 to 9 -7 days a week. Smaller portions for singles. Good quality.
By the way, Socgen employs 2,600 in their risk management dept and received top awards for risk man in 2007. Jerome Kerviel was running neck and neck with Brian Hunter, Amaranth Advisors, for trader of the century. When Jerome reached 6.5B, he said what the hey, let’s go for the top spot.
BC:
http://www.dealbreaker.com/2008/01/risk_magazine_stands_behind_po_1.php#comments
ChiFi (25)-
HFCS is another insidious way in which the gubmint keeps the population docile. You can’t develop and sustain revolutionary fervor when your insulin levels roller-coaster.
The average reader jacked up on HFCS also cannot read more than 1-2 pages of anything before falling asleep. TV is the perfect medium for keeping them in a light coma/sonambulent state.
hehe [35],
Meriwether is right up ther in the pack, can’t leave the US far behind.
I am sure you all notice that the now raised ceiling for conforming loan has a deadline of Dec 31, 08, after which it goes back to 417K, so this could cause a mini rush in NJ and other expensive states to buy houses this year. Am I the only one who is upset? Why delay the inevitable fall by creating a dead-cat bounce?
I get sinus and asthma issues whenever I consume sulfites in food. The wet corn milling process (high fructose corn syrup, maltodextrin, carmel color, etc) starts with a long soak in sulfur dioxide-laced water.
Without many exceptions, processed foods at a normal grocery store contain such corn products. I would be up the proverbial creek without Trader Joes or Whole Foods.
BC (32)-
Those were good times. I remember them well (at least the stuff I can remember). My roommate at UNC had introduced me to gold/money market speculation, and we were the mack daddies among our circle of 12-13 fellow longhaired, bong-kissing losers. We worshipped at the altar of Hunt (plus, the Hunts introduced professional soccer to the US…can’t get cooler than that). Our investment endgame had us moving to Kansas City, taking jobs with the Chiefs and helping the Hunts rule the world.
Of course, the Hunts came up a little short…but, they pulled off the stunning feat of cornering the silver market. Nothing we see in the commodity markets in our lifetimes will ever rival it.
See what happens when individuals cannot possess large quantities of physical gold? We must reclaim our straw men in due course!
The Hunt Brothers and the Silver Bubble
Brian Trumbore
President/Editor, StocksandNews.com
“In 1973, the Hunt family of Texas, possibly the richest family in America at the time, decided to buy precious metals as a hedge against inflation. Gold could not be held by private citizens at that time, so the Hunts began to buy silver in enormous quantity.
In 1979 the sons of patriarch H.L. Hunt, Nelson Bunker and William Herbert, together with some wealthy Arabs, formed a silver pool. In a short period of time they had amassed more than 200 million ounces of silver, equivalent to half the world’s deliverable supply.
When the Hunt’s had begun accumulating silver back in 1973 the price was in the $1.95 / ounce range. Early in ’79, the price was about $5. Late ’79 / early ’80 the price was in the $50’s, peaking at $54.
Once the silver market was cornered, outsiders joined the chase but a combination of changed trading rules on the New York Metals Market (COMEX) and the intervention of the Federal Reserve put an end to the game. The price began to slide, culminating in a 50% one-day decline on March 27, 1980 as the price plummeted from $21.62 to $10.80.
The collapse of the silver market meant countless losses for speculators. The Hunt brothers declared bankruptcy. By 1987 their liabilities had grown to nearly $2.5 billion against assets of $1.5 billion. In August of 1988 the Hunts were convicted of conspiring to manipulate the market.
One other experience in the silver bubble worth noting, according to author Edward Chancellor (“Devil Take the Hindmost”), is the experience of an official at the Peruvian Ministry of Commerce, employed to hedge his country’s silver production, who lost $80 million by illicitly selling silver short. Said Chancellor, “Although a relatively small sum for a sovereign nation, it was an omen: the ‘rogue trader’ had appeared on the modern financial scene.”
The stock market had its own troubles during the rise and fall of silver. The Dow Jones peaked on February 13, 1980 at 903.84. The day of the collapse, March 27th, the Dow closed at 759.98, a decline of 16% in just 6 weeks. [However, intraday, the loss between the 2/13 high of 918.17 and the 3/27 intraday low of 729.95 was actually 20%.]
For many traders the collapse in silver was the final straw for a stock market already under siege from worries as diverse as the Iranian hostage crisis, the Russian invasion of Afghanistan and soaring interest rates. [The consumer price index climbed at a 13% rate for 1979. The prime lending rate hit 22% in early 1980]. But by the year’s end, the whole decline was almost forgotten. The Dow ended the year at 963.99, thanks in large part to the euphoria over the election of Ronald Reagan.”
Hey with a 700k confirming loan how much documented income do you need?
I think we have a short term RE/stock bounce coming. Lots of cash needs to be put to work. Lots of BDs/banks pay on 2-15 and rates are rock bottom so it has to go to stocks, real estate etc. Plus people like me got their damm bonds/cds rolling out of 5-6% into 3-54 each month and rather than re-roll or rebuy low yielding bonds we are going to be forced into the market. On LI alone it said in the paper today there are 100,000 married couples who make over 186K AGI who won’t be eligible for a piece of cheese from the govt when they give out their spring welfare checks. That is 100,000 couples who no longer can hide in a 5.25% cd while the market is choppy, they won’t let their cash sit at 3% they will put it to work.
Long term we still have issues but short term if everyone is dancing you got to dance.
tobuy,
If the conforming loan limit is raised, it will never be cut.
Precedent has already been set for this behavior, the conforming loan limit was set to be reduced for 2008. Instead of reducing the conforming loan limit, which the Mortgage Bankers said would cause turmoil in the industry, OFHEO buckled and kept the limit status quo.
The last I heard OFHEO was seeking comment on the methodology used to reduce the conforming loan limit given declines in market value. I believe the proposed solution was a 1 year deferral of the limit reduction, as well as limiting the reduction to 1% for every 3% decrease in market values.
“Plus people like me got their damm bonds/cds rolling out of 5-6% into 3-54 each month and rather than re-roll or rebuy low yielding bonds we are going to be forced into the market.”
John,
S#it justification to move $ into a certain asset class. Sometimes you’re simply better served worrying about the return of your $ rather than the return on your $.
BC (34)-
SocGen risk manager:
http://tinyurl.com/2nyum5
Clot[40],
LOL.
Clot [46],
That’s an insult to Homer.
Hamlet (38)-
Don’t worry. They could raise the limit to 1 MIL, and it wouldn’t make a difference.
This is not about rate, not about liquidity, not about anything other than seller solvency (shaky at best) and prices that reflect real value (for the most part, not here yet).
The one thing that will flow from this will be that the jumbo buyer with dry powder will be even more the king tomorrow than he was yesterday.
Move on. Nothing here to see.
grim (43)
Are you saying that once the limit is raised, NAR and others will lobby to keep it? The news I saw clearly said it is a temporary raise, e.g.,
http://www.latimes.com/business/la-fi-jumbo25jan25,1,2691497.story
“The economic stimulus plan worked out Thursday in Washington would provide nearly a year of cheaper loans for Californians buying or refinancing higher-cost homes, and the news elicited jubilation in the beleaguered housing and mortgage industries.
Leaders of the House of Representatives and the White House agreed that the size of loans that can be purchased by government-sponsored mortgage buyers Fannie Mae and Freddie Mac should be increased sharply for a year from the current cutoff of $417,000.
“
Najarian notes lots of European put-selling this week.
Hamlet (50)-
Ever see a “temporary tax increase” rolled back?
Nuf said.
From Reuters:
Commerce Bancorp 4th-qtr profit falls 47 pct
Commerce Bancorp Inc, the large New Jersey bank being acquired by Canada’s Toronto-Dominion Bank, on Friday said fourth-quarter profit fell 47 percent, as credit losses quintupled.
Net income fell to $33.4 million, or 17 cents per share, from $62.8 million, or 32 cents, a year earlier.
Commerce set aside $55 million for credit losses, up from $10.2 million a year earlier and $26 million in the third quarter, hurt by exposure to soured residential real estate, real estate development, and commercial loans.
Although I guess the conforming limit could get dropped in a couple of years, when the gubmint has to rescue an insolvent Fannie/Freddie.
Thronburg – Upgrading to a Hold — We are upgrading TMA to Hold (2S) from Sell (3S) as we see less downside in the shares due to 1) capital raising to shore up the balance
sheet, 2) aggressive Fed easing environment and 3) potential gov’t initiatives to try
and stabilize the residential mortgage/housing market. TMA’s shares are down 64% from pre-credit crisis levels in early 2007.
Fed Cuts Should Help — Mortgage REITs and residential mortgage focused
companies should benefit from aggressive Fed easing. Assuming the Fed cuts
rates to around or below 3%, that would represent over a 225+ bp reduction which
should provide a boost to the ailing residential mortgage market.
Credit & Balance Sheet — TMA’s credit has held up well compared to their peers,
with 60+ day delinquencies at only 27 bps as of 9/30/07. While we would expect
some deterioration through ’08, TMA should continue to outperform the peers. In
terms of the balance sheet, they successfully raised $200+ mm of common/conv.
pref equity earlier this month after raising $500 mm in late ’07. While TMA is still at
risk of margin calls and has high leverage, we believe the capital base should be
sufficient in the current environment.
The Stock — While we remain cautious on the outlook for the residential mortgage
market and don’t see much upside for the stock near-term, we now see less
downside in TMA’s shares so a Hold rating is more appropriate. We believe TMA’s
GAAP book value is approximately $8.25. Our target is now $9.50, up from $7,
based on 1.15x P/B. Div yield is 9.9%. Yield becomes particularly attractive to
investors when the Fed brings rates down to low levels.
Clot (49)
I am not sure why you think raising the limit for just 1 year would not have any effect: wouldn’t that temp people sitting on the fence to jump into the water as they have now have a window of time to get cheap loan? Cutting rate from 6.5% to 4.5% (jumbo to conforming) is almost like cutting the house price by 20-30% payment wise (assuming you don’t sell later of course). Appreciate your insight.
“prices that reflect real value” — what is the real value? 2004?
BC-
Curiouser and curiouser:
http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-22523360.htm
To the moon, Alice. Hi-ho.
Squeezing the trigger now…firing until the bandolier is empty.
4.5% conforming loan? Where?
The Bank of Mom and Dad won’t even lend on those terms.
#10 grim: Thanks. That is te insight I was looking for.
Grim (58)
I was not clear: I was talking about 15 years loan with 1 point down, jumbo 6.625% and conforming 4.5% (as of a couple of days ago, with one lender). Not sure about 30 years.
#56 See post # 10.
Clot [57],
platinum.
re: sneaking in the conforming loan limit increase into the “stimulus” plan.
Two words –> Chuck Schumer
Never mind the conforming loan limit change, that is only smoke and mirrors. If Schumer, Rangel, Kennedy and other have their way when this bill hits the floor it will contain a provision so subprime mortgage holders can refinance into federally insured loans via Fannie and Freddie. The language in Schumer’s original bill S. 2169 contains the following “Eighty-five percent of the portfolio increase described shall be used for the purpose of refinancing subprime mortgages at risk of foreclosure.”
If that language from Shumer’s original bill makes it into the new bill as I suspect, we will be seeing a banker’s bailout bill, with a smattering of unemployment extensions, rebate checks and increases in food stamps.
Can you say a trillion dollar banker bailout?
There is supposed to be a debate next week over this Bill in Congress and sent to the floor for a vote ASAP, before anyone notices or speaks up I suspect. Many lawmakers such as Rangel, Kennedy and others want to add lots of other provisions such as increasing extending unemployment benefits, and boosting home heating subsidies.
Pork for everyone but the middle class taxpayer.
If I hear anyone say middle class again in reference to this new bill, I may have to take out my anger pills and swallow the entire bottle.
3b (61)
Accepted, provided that the number of people who do qualify is insignificant.
What is the loan to salary ratio for conforming loan anyway?
Like Herb and Clot said, if you’ve got the income, down payment, and credit to take advantage of that situation, god bless, you’ve been given a very nice gift.
Home prices are lower, the market is in a standstill, and now you’ve got a way to get an even lower mortage rate. Sounds like a great time to be in your shoes.
Is this the spark that reignites the housing boom?
Unlikely.
“LONDON (Reuters) – A farmer built an entire mock castle behind a screen of hay bales and lived there concealed for four years to evade planning regulations, officials said on Friday — but it may be torn down anyway. ”
“Robert Fidler hopes to take advantage of a provision of planning law that allows buildings without planning permission to be declared legal if no objections have been made after four years”
http://news.yahoo.com/s/nm/20080125/od_uk_nm/oukoe_uk_britain_castle
“Can you say a trillion dollar banker bailout?”
Sean,
Exactly. It will dwarf the RTC.
#40 John: Soc Gen soun off Cowen last year, as it was a disaster from the begining.
BC,
Fantastic! My kind of guy!
“It looks like a mock-Tudor house from the front and it’s got two turrets at the back,” the spokeswoman said. “I understand there is also a cannon.”
“Is this the spark that reignites the housing boom?”
Better chance that BB will become a hawk.
JB [69],
I read it 4 times, trying to find Clot’s name.
So does this mean the jumbo market will come to a grinding halt while buyers wait for the regulation to pass?
Why on Earth would anyone even consider buying with a jumbo loan right now?
Who is going to call the press to let them know?
STOP! Don’t buy! You risk losing thousands by overpaying for a loan!
grim (72)
The jumbo rate has been very high anyway since the subprime crisis, often it is cheaper to get a conforming loan plus a HELC, provided the loan is not too much over the old conforming limit. So this regulation perhaps just push it a little more down a slope it was already on.
#40 John: I should have said Soc Gen spun off Cowen last year. A French bank and an American investment bank/broker/dealer, is/was a bad marriage form the begining.
The listings I’m receiving are still at 2005 prices. In fact, I’m more shocked, appalled and horrified as I’ve ever been because it appears as though they may even be higher. As a result, I’ve asjusted the price on my home upward by $30,000 to $40,000 as it’s evident that there are still buyers who are willing to sell their souls to live in the NYC/NJ area.
Conforming limits have increased and the 30yr. fixed rate is sinking so you’ll probably see fence sitters start to jump in which will keep prices flat to slighter higher for the next year or two. It’s evident that a lot more people have the assets and income to get approved… especially when we’re talking about the better towns. Again, don’t shoot the messenger, I’m just going by what I see.
The jumbo rate has been very high anyway since the subprime crisis
tobuy,
Jumbo rates are a bit higher than during the boom time, but like conforming loans, are still pretty low.
I can’t help but giggle a bit when folks point to a 6-handle jumbo as “expensive”. Can I get a show of hands here, who purchased a home while rates were in double digits?
To use some lingo from the Fed, I’d still consider loan rates in the 7% range to be “accommodative”.
“Can I get a show of hands here, who purchased a home while rates were in double digits?”
Two hands here.
From Reuters:
Greenspan says subprime risky but helped home ownership
Former Federal Reserve Chairman Alan Greenspan said on Thursday that subprime mortgages were risky, but they helped broaden home ownership.
During a speech to a financial audience in Vancouver, Greenspan said subprime mortgages financed an increase in housing among minorities.
Subprime mortgages were risky, but they were worth the risk, he said.
I found out through searching records, neighbors of mine put a whopping $4,000 down on their $380,000 1940’s cape. ARM, naturally
grim (69)-
“It looks like a mock-Tudor house from the front and it’s got two turrets at the back,” the spokeswoman said. “I understand there is also a cannon.”
I need to get plans for that castle.
Here’s a vacation idea: All Aboard the Foreclosure Bus (tour) – unbelievable
http://www.abcnews.go.com/GMA/MellodyHobson/story?id=4186872
Hamlet (74)-
Please find me the lender who allows a piggyback.
The only piggyback 2nds I’ve seen lately carry super-high rates, still require 5% down and are only for full-doc, 720+ FICO.
grim (77)
By “jumbo rate has been very high”, I mean that you could get a conforming plus a HELC, and end up paying less that a jumbo.
I agree that 6-7% mortgage is low historically. If the mortgage were in the double digits now, I bet the house price should “reflect real value”.
With the fed and government continue to inject credit into the market, it is likely that we will see double digits inflation and rate in the not too distant future…
Former Federal Reserve Chairman Alan Greenspan said on Thursday that subprime mortgages were risky, but they helped broaden home ownership.
Kinda like chemo: kill the patient to cure the patient.
This was our former central banker. No wonder the sheeple believe debt = wealth.
Regarding the Gold Coast meet up, do we have any details yet? Like, when or where?
wifey (82)-
It’s been suggested that the regulars here pool some $$$ and start a NJ version of this.
I’ll drive!
I can also get the Jagermeister girls and booze for wholesale.
Some lenders have posted rates for loans “up to 715K or up to 1million” that are the same as other banks conforming loan rates. I’ve seen 30 year jumbo for 5.825% – as long as you have the income credit and down payment – so does this really change anything for someone who shops the market – nah.
80
Where do you find people’s mortgage records? Is that public record?
[90] Mortgages are recorded and thus public records. Some online data basis may have them (some for a fee do doubt). Or you could go to your county’s hall of records and do a one minute search on their computers. In the old days you had to actually look through books!
FRENCH TRADER WAS FORCED TO WORK 30 HOURS A WEEK
FRIENDS of rogue trader Jerome Kerviel last night blamed his $7 billion = losses on unbearable levels of stress brought on by a punishing 30 hour = week.
Kerviel was known to start work as early as nine in the morning and = still be at his desk at five or even five-thirty, often with just an = hour and a half for lunch.
One colleague said: “He was, how you say, une workaholique. I have = a family and a mistress so I would leave the office at around 2pm at the = latest, if I wasn’t on strike.
“But Jerome was tied to that desk. One day I came back to the = office at 3pm because I had forgotten my stupid little hat, and there he = was, fast asleep on the photocopier.
“At first I assumed he had been having s@x with it, but then I = remembered he’d been working for almost six hours.”
As the losses mounted, Kerviel tried to conceal his bad trades by = covering them with an intense red wine sauce, later switching to = delicate pastry horns.
At one point he managed to dispose of dozens of transactions by hiding = them inside vol-au-vent cases and staging a fake reception
ThatBigWindow, thanks for the great link for searching tax records.
#79 grim:Subprime mortgages were risky, but they were worth the risk, he said.
I guess that should make all the sub-prime borrowers whoa re losing their homes feel good;hey at least we tried.
Its time for Mr. Greenspan to go quietly into the night;and stay there.
#93: Happy surfing!
[94] did he say for whom the risk was worth it?
91 jam
Thanks. I did not know that about mortgages.
Since we’re sharing sites, here is my favorite. Gives you property sales records, tax records, all sorts of public data for NJ.
http://www.app.com/apps/pbcs.dll/section?Category=DATA
Here’s a question for the mortgage savy people:
If you have 20% down on any of the below prices, how much income do you think is necessary to make the purchase – not qualify for the loan – but make the purchase and be able to sleep at night:
700, 750, 800, 850k
[97] I know that site. I think its a little irresponsible of the app to post some of the data. Although the data is all public record, it puts certain information such as the home addresses of public officials easily in the hands of others.
John (92)-
“At one point he managed to dispose of dozens of transactions by hiding them inside vol-au-vent cases and staging a fake reception”
Is this like the ground cardboard in Chinese buns thing?
And HGTV is still running shows that have home buyers purchasing houses with no money down and piggyback loans. We just got HDTV so I am sitting there watching HGTV until the wee hour. Funny how economic train wrecks are so much more entertaining when you can see the suckers’ pores.
Last night on “Property Virgins” — young couple with huge car payments, motorcycle payments, five-figures in credit card debt and a refusal to compromise on anything they want ends up buying a $220K house by taking out two loans.
After a few days of this I’ve decided to try to get on HDTV so that they’ll remodel my bathroom or help with my minor kitchen remodel.
What tBw said about Trader Joe’s, BTW. The only thing there that I’ve found has HFCS in it is the sauce with the frozen Asian vegetables. So I make my own sauce.
jam (99)-
“Although the data is all public record, it puts certain information such as the home addresses of public officials easily in the hands of others.”
I’m gonna eventually need that info…this is great!
Uh…that should be HGTV.
Still, some families might find it worth the wait. Here are some preliminary scenarios provided by Rep. John Boehner, R-Ohio:
Example: John Doe had a job for part of the year, earning $9,000. He has custody of two children. He owed no federal income taxes for 2007. Under the proposal he would be eligible for a base amount of $300 for himself (because his earned income was at least $3,000). His earned income would also be sufficient to get a $300 children’s bonus for each of his two kids, for a total rebate of $900.
Example: Mr. and Mrs. Jones have five children. After taking available credits and deductions, their 2007 taxable income was $95,000, leaving them with a federal income tax liability of just over $16,600. Under the proposal, they would get the full base amount of $1,200. They would also qualify for a children’s bonus of $1,500, bringing their total check to $2,700.
Example: Mr. and Mrs. Senior are retired. As a result of their investment income, the couple paid $4,000 in federal income taxes in 2007, meaning they would get the full base amount of $1,200. They had no dependent children, so there is no children’s bonus.
Example: Mr. and Mrs. Ipo have one child. They were able to retire young but still collect dividends and capital gains from a business they sold a few years ago. The couple paid $19,000 in federal income taxes on that income in 2007. They would therefore qualify for the base amount of $1,200. They would also qualify for a children’s bonus of $300, because they paid at least $1 of federal income tax in 2007 (even though they had no earned income), for a total check of $1,500.
Example: Mr. and Mrs. Withers are lawyers, with a combined income in 2007 of $300,000. They have four children. Their income is too high to qualify for either the base amount or the children’s bonus. They would not receive a check.
How many are us are Mr and Mrs Withers? supporting six people with no break.
[104] Interesting question.
[104] How many between the Withers and the Jones’ and don’t qualify?
Can’t have a weekend thread without big pharma..
Wyeth to managers: Up to 10 percent of workforce to be cut
MADISON, N.J. (AP) — Drugmaker Wyeth is telling its managers that up to 10 percent of the drugmaker’s employees worldwide may lose their jobs over the next three years.
#98:
Let’s use the low number ($700k) for example. A 20% down payment of $140k leaves a mortgage of $560K. The current average rate for a 30 year fixed rate jumbo mortgage is 6.5%, which would require a payment of approximately $3,500 per month.
Include property taxes and insurance for an additional $1,500 per month and you’re talking about $5K per month on your housing without turning on any lights, water, et al.
Based on the lender standard of 30% gross income, your monthly income would have to be $12k. Realistically, with tax withholding the above payment is over 50% of your net income, preventing you from having a consistent good night sleep, let alone saving and investing.
In order to sleep peacefully, the home payment should be no greater than 1/3 your net. By that standard, you would need to make over $200k per year, placing you among to so-called “rich” who are vilified by many in the media and government.
Is it any wonder the housing market doesn’t reflect reality?
I really don’t understand why so many people here are denying that raising the conforming loan limit could prop up the local market to a degree.
Number one, there will probably be fewer distress sales because more homeowners will be able to afford the cheaper monthly payment that comes with refinancing an ARM into a conforming loan rather than a jumbo.
Number two, it will increase affordability for buyers who are on the fence.
I don’t think it will completely reverse the fall in prices, but it will slow it down.
Am I the only one who is upset? Why delay the inevitable fall by creating a dead-cat bounce?
reality is that it’s been raised pernamently and that it is a positive move and will marginally soften the blow. It helps the homeowner who is looking to move up from a smaller home. Now all they have to do is get that first time buyer into an ovepriced cape and they have solved housing.
Inflation, now that’s another story.
Plus the CFC’s and Citi’s from all over the worls will dump their mortgage portfolios to Fanni and Fredi and around this time next year we will bail them out by printing and borrowing. More inflation.
Gold anyone?
99 jam
I didn’t know that about the addresses. I don’t know, public record is public record.
As for the rest of it, thank goodness for sites like that is all I can say. I learned so much about the history of the neighborhoods we were looking at it.
700, 750, 800, 850k
Jam,
$700k purchase
At $140k down, an income of $220k to $280k
$800k purchase
At $160k down, an income of $250k to $320k.
In either of these cases I’d suggest a larger down payment for those with lower income ranges.
So, for someone with an income of $150k, I’d suggest the following down payments.
$700k purchase
Down payment of $325k to $400k for an income of $150k
$800k purchase
Down payment of $425k to $500k for an income of $150k
In both of these cases, these would be move up purchases with significant equity gains as well as additional down payment amounts.
http://jobs.efinancialcareers.co.uk/job-4000000000349825.htm
I wonder if there is a relocation package?
I don’t think we’ll see real decline in home pricing in NJ for a long long time (years).
Why? Because bailouts are an absolute guarentee — whether they come in the form of perversly low interest rates, refinanced loans, tax rebates, or straight cash for speculators.
This will continue to prop pricing artificially above traditional rent and median income levels for years.
How can I buy a house in these conditions?
Signed,
-Ready to Buy
[108] Ok so the only people who should be buying 700K houses with 20% down right now are those making approximately 250K per year.
Have you seen what’s available for 700 in NBergen County. It’s cr*p. I thought people earning over 200K were sitting by their pools sipping drinks like Kerry and Edwards said in the last election!
#77 Two hands here too. First house, 30 year fixed at 15%. Second house, ARM at 12 1/8 and we were thrilled to get it. Our rate adjusted downward over the four years we owned the house. Sold for 45% more than we paid for it. Nice.
I guarantee you that most people shopping for 700k houses make closer to 150k than 250k.
From MarketWatch:
Goldman Sachs to cut global workforce by 5%: report
[112] Thanks grim.
Guess I’m back in the market for a two bedroom cape with oil heat, no central air, no garage on a busy street.
115 jam
You can get definitely get a decent house for 700K, even in N. Bergen County, although it depends what your definition of decent is.
[117] so how do they do it. How!!!!!
[120] Ann I see some of those, but come on you’ve been out there looking didn’t you think you could get more for that kind of money?
re: (118)
More like they did not do any culling last year, so this year they are getting rid of all of the fives on the staff.
#121
They lie about their income on loan applications
#115
Jam,
Who ever said a first time buyer should be able to afford a $700k house?
The concept of “first time buyer” has little to do with the fact that this is your first transaction. The concept of first-time buyer means you aren’t bringing equity from a sale into your next purchase, thus lowering what you can afford.
How many people shopping for $800k homes are first-time buyers?
[121] Yes ok and besides that being a crime in NJ how do they make the payments – they are not all in default.
#109 skeptic: Assuming the new buyers can meet Freddie/Fannie underwriting standards.
I do not think we are going too see a scenario where virtualy all new mtgs originated will be sold to Freddie/Fannie.
I was also under the impression that Freddie/Fannie have recourse with the loans they buy from lenders, in that they can force the original lenders to buy the mtgs back, if for example fraud was discovered, or other certain criteria failed to be met.
I really do nto see how these new increase in limits will help housing, it looks like window dressing to me, nothing more.
GS ANOUNCEMENT 25-Jan-08 09:38 am
Goldman Sachs announces that they have discovered two rogue traders who have by passed their risk management systems and have a secret trading gain of around $18.6 billion. Both of the 26 year old janitors have been given honorary Princeton PhDs in mathematics and have been moved from the furnace room in the basement to corner offices on the trading floor. When interviewed, Jean Paul Arristide, the only janitor identified so far, admitted that his cousin who worked for Societe Generale in Paris, had emailed him from a trading station and as a joke showed him how to enter orders. Mr. Arristide began playing on a trading computer on the graveyard shift during his breaks, taking the opposite positions to his cousin. Mr. Arristide thought he was just playing around and did not realize that the trades were actually being executed. “I was just trying to annoy my cousin by doing the exact opposite…as a kind of funny joke!” “Then I would email him that he was, how do you say… une tete de pee-pee stupide.. a stupid d*i*ck head!” “Je m’appologise..c’est dommage.”
A spokesman for Goldman explained that they have yet to identify the second roque trader who is thought to be hiding in the duct work of the HVAC systems in their New York head office.
In a separate news release Goldman indicated that the profits from the unauthorised trading would be added to the bonus pool for 2008. “It is a good start to the year, and we would like to thank Mr. Arristede for his fine janitorial work.”
[125] not a first time buyer. Second time. I’m sitting on my equity from my first sale – that’s my downpayment.
“This will continue to prop pricing artificially above traditional rent and median income levels for years.”
Funniest statement that I’ve viewed since reading that the fed is vigilant in their fight against inflation.
#121
my guess is that people who make around $150k who buy $700k houses do some combination of the following:
1. parental gift(s)
2. ARM
3. little savings
4. cut out most discretionary spending (no going out to eat/bars, no vacations, no buying expensive clothes and other non-essentials).
There are plenty of low income people who spend 50% of their income on housing (usually rent) and get by. Upper middle class people do it too.
grim –
I think the raise of the jumbo limit will help housing. When combined with endless interest rate cuts, bailouts, and refinacing it will artificially inflate.
I don’t think a full correction will be politically viable. They won’t let it happen
[131] You are probably right, you have to learn to live all over again.
#114 They dropped before, they will drop again, you need to calm down, and take a deep breath, all real estate markets correct, and this one is and will continue to.
As far as decent houses for 700k, I am starting to see some decent houses for sale at 500k, and by the way still sitting, and still more than I am willing to pay, and they will continue to decline in price to.
#131
You’re right… and they’re the hard working middle class. Our system will protect these people at every turn… espeically if they’re spending 50% of their income on housing
#131,
I agree. 40-50% of take home income seems to be the norm.
take a look at your neighboorhood. Everyone who works for a salary by what they do you can pretty much estimate what they make. then take a look at their mortgage amount add taxes and maintance and I bet you’ll come very close to the 50% of take home number.
122 jam
Oh yeah, I definitely wanted MORE for the money. : )
#132 They won’t let it happen.
They cannot stop it. Also buyer psychology has changed, gee you can lose money in real estate.
#98 Here’s a simple rule that worked for me: If I could pay the mortgage and my other expenses AND save AND had an amount left over equal to the mortgage payment, then I could afford the house. If I couldn’t I didn’t take out the loan.
126 jam
I don’t know, having two people working, each making a 100, which isn’t that high for NJ, could do it. We’ve all screwed ourselves by having both parents working though.
#138 They cannot stop it.
I agree that the myth is starting to break. But memories are short. If they can turn the market slightly with these tactics, and get a bunch of newcomers to buy… this will flatten out, then go up… only to really pop years from now…
131 skeptic
Actually the more money you make, the less dangerous it is to spend more, percentage wise, on your house.
The cost of the other stuff (clothing, food, gas, cars) doesn’t necessarily go up with your earnings.
I am tempted to buy a place after the events of the last few months. My reasons:
1. Inflation. I’m not finacially savvy enough to keep the value of my down payment money ahead of the inflation I see coming. I’m also afraid of what rents are going to look like in five years.
2. Rates are getting really low and rents are high. The breakeven looks closer than it’s been for a long time after these rate cuts.
3. The fear of foreclosure or being trapped in an underwater house isn’t so great anymore due to all the bailouts and loan forgiveness programs, elimination of the tax on forgiven debt, etc.
Question?
1. Will FED reduce rates again next week since they overreacted this week ?
2. Why do Europeans expect US fed to Fix the world markets and they are not reducing their rates?
“I don’t think a full correction will be politically viable.”
ready,
Politics are not the final arbiter. What hasn’t our govt already f%cked up? If you are wishing upon a star, for DC to bail you out, you the 2008 version of the Bayonne Bleeder.
#143 Rents are High.
I don’t know where they are high compared to home pricing. Case in point –
I just placed a $310K bid on home in hunterdon country that was listed for $344. They rejected and would not negotiate.
Then, they rented the place for $1700!!!
At $1700 in a declining market, I’m making much more on savings than spending $2300 (after tax rebate!) on a $344K home.
#142
Ann– I completely agree. The higher income you are, the less of a percentage of your overall income goes to food, fuel and (hopefully) clothing. You have more discretionary income available, which many opt to spend on housing in the last 10 yrs. I personally think that for many people on this board, it is unrealistic to expect to buy a home that you will be happy with in the tri-state area if you hold yourself to traditional notions like 2.5 times annual income or 28% of gross earnings (much less net earnings). The people you are competing with in the market are not observing these metrics.
http://www.europac.net/externalframeset.asp?from=home&id=11574
The future of New York and Wall Street. Great stuff. Petter Schiff.
Assuming true what do you think will happen to NNJ housing?
It seems to me that we are finally in the make or break year. If there is not a serious decline in house prices locally this year, it is not going to happen. At that point, if sub-5% loans are available, with inflation running close to that level, making the cost of money essentially free, what should hold you back from buying?
146 Ready to Buy:
I’m afraid that that $1700 in rent today is going to be $3000 soon. A fixed PITI (well, mostly fixed) of $2300 could be a bargin after a few years.
“area if you hold yourself to traditional notions like 2.5 times annual income or 28% of gross earnings (much less net earnings). The people you are competing with in the market are not observing these metrics.”
true, but many have standards that are too high. for instance, “the town I live in must have excellent schools”
I went to a blue ribbon high school. my wife went to an average non-prestigious high school. Guess what? She is more successful than I, and has a masters..
skep-tic [149],
It seems to me that we are finally in the make or break year. If there is not a serious decline in house prices locally this year, it is not going to happen.
Yup.
MS and Goldman Both Cutting People Loose:
http://www.dealbreaker.com/2008/01/post_682.php#comments
I think those big bonuses last year were “wait and see” severance packages.
Skep-tic 149 says: “At that point, if sub-5% loans are available, with inflation running close to that level, making the cost of money essentially free, what should hold you back from buying?”
Ummm, the declining wage might hold you back.
Also, the inability of people to save doesn’t help much either.
No matter what the interest rate is, the conforming/non-conforming loan requires a downpayment of 10-20% and a credit score in most cases that is 700+. Ask all of your buddies how much money they have saved, or what their credit score is. Now tell me again, how does the FNM conforming limits turnaround the real estate market?
I’m just glad I drive a 95 Civic, have perfect credit and plenty of savings/investments to boot.
Most of my peers are up to their eyeballs in debt, drive 20-30K cars (many lease) and have more money invested in IPODs than in their 401K or for their childrens’ 529s. This, plus the declining wage, is what needs to change before housing turns around.
Clot, KL, Grim, RE professionals-
How big a jump (guestimates are fine) percentage-wise does inventory rise after the Superbowl?
Bonus question, do you feel like the RE market in NJ is being affected more by the fact that the Giants are in it this year?
JM
#154: Most of these new upper end cars you see on the road are leased. The perception of wealth is sadly only a perception
153 only the begininng much more to come
re: (153) I posted this earlier Goldman did not cut the bottom fivers last year, so don’t take this a sign of weakness, betting against them is akin to shorting Goolge.
36
And for when even TV doesn’t do the trick, doctors recommend Clotpoll message board postings.
maybe goldman is claiming that they are cutting the worst performers as opposed to layoffs because they don’t want the premium on their unemployment insurance to be affected.
Sometimes I don’t understand the mindset on this board. A 1950’s cape or ranch, even if it’s got 3 or 4 bedrooms and 1-1/2 to 2 bathrooms and is perfectly adequate to one’s needs, is a POS. A “decent” house in NBC is a million dollars. And yet there’s also snark about the stainless/granite/great room/bridal staircase set.
So why don’t some of you good folks tell me what some of the features are of what you think a “decent” house would have…and how your view differs from the McMansion set.
#149/152 skeptic/gary: I think you guys are way to pessimistic. With all that has unfolded over the last year or so,and all that continues to unfold, to think that somehow housing will be saved from a decline, is to me truly amazing.
If that happens it will be a first, and I for one do not see that happening.
You need good credit, you need a down paymt, you need a job,a nd you need to be in a hosue that is affordable, whether fixed mtgs are at 5% or 6%, housing prices are not afforable now, for teh typical first time home buyer, its as simple as that.
Plus the bloom is off the rose as far as real estate being the sure fire way to riches, the buzz is gone.
I believe there will be excellent deals to be had this year into 09, with the final bottom coming in early 2010.
Then of course once we are at the final bottom we will be flat for at least 5 years or more (last itme it was 10 years).
“I don’t think a full correction will be politically viable. They won’t let it happen”
You must believe in the perpetual motion machine, alchemy and the fountain of youth.
What you are positing is not actually possible.
#154
Stu,
Seems to me the declining wage in the face of otherwise high inflation is a argument for locking in your fixed costs by buying a house.
I agree that the inability of people to save is problematic— however, if lack of downpayment turns out to be the root cause of continued decline in the housing market, how long do you think it would take a Democrat congress and president to authorize Fannie and Freddie to ease the spigots once again?
Debt levels have been rising among Americans for 30 yrs. It is possible that we have reached a plateau, but I do not see a widespread willingness to reduce consumption to the degree necessary to reduce debt. Americans are accustomed to a certain lifestyl and consider many luxuries to be necessities and have proven repeatedly that they would rather go into debt than cut back.
GSMLS tops 32,000. Duck and cover.
#161 Jill: We have had thi discussion before, but here goes again.
A 1950’s Cape with 3 or more bedrooms and 1 to 2 baths, that has been maintaiend and updated over the years (and by updates for example would mean that at least the house have circut breakers and not a fuse box), is perfectly adequate, and fine.
It becomes a POS when it has not been touched in years,a nd the owners demand soem insane price for it. It becomes a POA not becasue of its style or its age,but do to the fact that it was never maintained.
That at least is my definition of POS.
#164 skeptic: One of the primary motivators to buy over the last few years has been IMO, the belief that it was the road to instant riches.
If that belief is gone, than much of the incentive for a lot of people to buy is gone as well.
The more that the government tries to prop housing up, the shakier it becomes, the old they can’t give these things away theory.
Jill,
I don’t know about the others, but I get appalled when somebody lists their house for over 700K and they only have a 1 car garage. I don’t care what town your house is in – 700K + should buy you a space for 2 cars and a bike or two – maybe a snow blower. I also believe that if you’re listing a house for over 500K – again, I don’t care what town you’re in – central air and an eat-in kitchen should be part of the package. it seems to me that there should be some basic amenities that come with a certain price tag.
Jill (161)-
The POS cape is a sort of Schadenfreude stimulant/enhancer/accelerator, if you will.
I bet something in the above sentence gets this moderated.
“Seems to me the declining wage in the face of otherwise high inflation is a argument for locking in your fixed costs by buying a house.”
And what would deflation be an argument for?
Jill # 161: I completely agree.
#164 skeptic: At some point the spigots run dry; I think we are just about there.
Call it a “cabbage-smelling, dank POS”. Feels even better.
Go ahead…try it.
“I bet something in the above sentence gets this moderated.”
Nah. You didn’t say “c*cktail”.
#171 tbw ALL the new condos athat wer built next to the Knights of Columbus Hall on Kinderkamack are available for sale and or rent, including the so called historic house.
#163 –
between the years of 2001 and 2006 housing increased over 130%. This was due not entirely, but mostly to purely POLITICAL manupliation of the markets (not the perpetual motion machine…although that may be a future invention) Here were the manipulations –
#1 Alan Greenspan’s reduction of interest rates to nearly 0%!
#2 NRA’s intense lobbying to permit crazy mortgage practices, and promotion that “real estate never goes down”
3b– that is a good point– the urgency to buy is gone and probably won’t be back for some time. But we have also just in the last 6 months entered a period of don’t touch real estate with a 10 ft pole. Cheaper mortgages and more flexible sellers may mitigate the crash mentality and bring buyers out. I think we would all prefer an environment of fear because that is where the real bargains would happen
A decent house to me is when I can walk through the place and actually believe I can live in said house without realistically having to correct anything immediately that may potentially harm my family all for a price based on debt-to-income calculations with humans of the planet earth taken into consideration.
This also means not having to wear a gas mask upon entry to shield the “cabbage-smelling, dank” stench invading my nostrils.
#170
deflation would mean do not take on debt or buy anything– but what is the evidence that deflation is a risk?
#158 Sean As a former Goldman employees for many years, I can tell you they have made their share of mistakes over the years.
However, if they are cutting people, then all may not be well there. When I was there,grant it,it was still a partnership cutting employees was a last resort, however now that it is public, that may be different.
I do find it funny this almsot cult like obsession that people seem to have with Goldman.
#167
You make a good point… The markets may be see thru the proping up. But, they’ve manipulated this in the past. We just have a long way to go before a full correction.
#172
3b– maybe so, or maybe we pull out of Iraq and then Congress has another $80b a month to play with
#181 But they’ve manipulated this in the past.
I have never seen it manipulated in the past, if by manipulation you mean they some how prevented large price declines.
#183 – see #176
“Finally, upping loan limits for Fannie and Freddie will help only borrowers in the best financial conditions. In addition to limits on loan size, the GSEs have strict requirements for income verification and down payments that most subprime borrowers cannot meet. Wealthy home buyers in states like California, Florida, and New York will find it easier to get a loan, but without a functioning secondary market for subprime mortgages, borrowers with poor credit, no money for a down payment and little to no equity are still stuck.”
http://www.minyanville.com/articles/Fed-fre-fnm-kbh-FHA/index/a/15668
Readytobuy 176
“between the years of 2001 and 2006 housing increased over 130%.”
Where did this happen?
And if national organizations (Fed, NAR) are to blame for the rapid rise in home prices, why did home prices go up a lot in booming US cities like New York but remain stagnant in failing cities like Detroit?
#175 3b: really?? ALL of them??
What about a few steps past that development, that river edge tower condo complex with the underground parking…are they still available?
Why did prices “remain stagnant in failing cities like Detroit?”
Because prices should have been dropping like a rock during that period in those places, and you know it.
Jill (161)-
“And yet there’s also snark about the stainless/granite/great room/bridal staircase set.”
Someone else addressed the POS Cape one, I’ll try this one.
I think the snarkiness comes from the flipper/HGTV mentality that everyone needs these to make a home worth living in. In some homes, I think these are great options and really look amazing.
On the other hand, I also think there are other less expensive options Corian counters/white refrigerators/less dramatic architecture (read expensive) designs.
The LOD’s, who I’m a card carrying member, get up in arms about the mania around housing from the last several years. That includes the some of the trends in remodeling and design.
JM
#186 you’re right — all real estate is local (except for now I guess) but 130% is a nationwide average.
#186 one more point —
Detroit??? Detroit has been in deep trouble for years. I agree that there’s not much the fed can do about that… or Camden for that matter.
165 Clotpoll Says:
January 25th, 2008 at 12:02 pm
GSMLS tops 32,000. Duck and cover.
What do you mean??? Total lostings ?? Where NJ??
When I was in India, I noticed that regardless of most peoples level of wealth, the homes had very few belongings in them. It made smaller homes appear larger and much more liveable.
Then again, I also saw more mopeds with four people on board than mopeds with only one driver.
I’m not sure what this means really, but I tend to see beauty in simplicity. This is why I must immediately run out and purchase an Iphone, and a plasma TV and an automatic garage door opener, etc. :P
We just replaced our dishwasher, it was old and underperforming.
Our new dishwasher, like the old one, is white.
Stainless steel can kiss my ***.
Ok a 3 bedroom split in Glen Rock for $850K with 1 1/2 baths and 15K in taxes is not a macmansion.
There’s one split in another town that was bought in 2006 for 650K and is now listed for 850K – not a macmansion.
I think both these houses at 700K at best but someone – some bright individual is going to buy these for 20K under asking and brag about the deal he/she got.
The only advantage of the SS dishwasher is that is doesn’t stain or discolor. As cool as I think a stainless interior on my dishwasher might be, I refuse to entertain my guests inside of it!
Pre,
“between the years of 2001 and 2006 housing increased over 130%.”
HOBOKEN
Pre,
“between the years of 2001 and 2006 housing increased over 130%.”
HOBOKEN
MONTCLAIR as well!
Stu #197,
Perhaps but that alone isn’t worth (to me) the extra cost. Now if the SS dishwasher came with complimentary maid service to load and unload the dishes into and out of the dishwasher for a year, I’d consider it.
I agree Sync.
My white-interiored dishwasher, recently replaced since the old one was pretty much dead (had to be 25 years old), is dreamy!
My best home investment was a plumber-grade snake.
That $50, must have saved me $1,000s already.
if you hold yourself to traditional notions like 2.5 times annual income or 28% of gross earnings (much less net earnings). The people you are competing with in the market are not observing these metrics.
This has been true for the past few years, but will it last?
When houses become commodities; investment vehicles that secondarily provided shelter, the attitude toward spending an oversized share of your income on housing was understandable (although a losing bet).
If I presented you with a commodity that “never goes down” and for every $100 extra you paid per month, it would return $200 (a 15%YOY return after leverage) appreciation, you can see why many people were incentivized to stretch their budget as much as possible.
Now that houses are again primarily a place to live again and a mortgage payment is again a significant long term monthly expense rather than a highly lucrative investment, how many people will still be willing to pay 50% of their income toward a mortgage?
Jam:
That is exactly my point. What do you do if you have a growing family and aging parents and would like a four bedroom to accommodate kids and frequent overnight guests? Four bedroom homes are in the 900s in BC. Not Mcmansions. My parents bought a 4 bedroom colonial in a nice neighborhood in the 80s for 80grand. Wages have not gone up the same percentage and the housing prices. Yet we’re in this downturn and I’ll reiterate what I said yesterday – many “nice” BC homes are priced 100-150k MORE today than they were in the Spring of 2007. Yes, they are not selling – but WHY are realtors signing up homes at these prices?
That Schumer is hilarious:
“Her fellow New Yorker, Senator Charles Schumer, the No. 3 Democratic leader, said his goal is to win approval of additional unemployment benefits for laid-off workers. “It’s the most effective way to move the economy forward,” said Schumer, 57. ”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aO.jqVQfglQA&refer=home
#187 tbw: Yes all of them, and they have been since the summer, can’t sell them, can’t rent them.
The castle condo one of the regular units is still for sale. The other 3 either sold or rented, don’t know, but there are people living in them.
The penthouse unit also rented, do not what it rented at, but they were asking $6300 a month at one point, but hey NYC sky line views, (on an exceptionally clear day, if you peer hard enough you might be able to make out the spire of the Empire State building.)
On another note you will be proud to know that we know have the 3rd highest property taxes in Bergen Co.
#203 RentinNJ
You’re right on the money. But… We all feel this (that “a home never goes down”) because it’s the buzz in the media.
What I don’t understand is this – Housing HAS gone down before this crash. Any people…very “smart” people…. totally ignored this.
What is to say they won’t ignore it again? Soon.
#203 rent: how many people will still be willing to pay 50% of their income toward a mortgage?
Not to mention how many will be permitted to with the much tigher underwriting requirements for mortgages.
#192 bubbles: I believe the gsmls covers central and western NJ, (possibly the shore too, not sure) as opposed to the njmls which covers north Jersey.
So the gsmls is showing 32000+ plus properties for sale in those areas, and its only the end of Janaury.
#203
It’s tough to tell the degree to which people bought primary residences as investments during the past few years.
Mostly, I think people buy houses when they get to a certain point in their lives (married with children). I still think the investment angle is very secondary for most people when it comes to a primary home.
Right now, people are afraid of losing money. If you eliminate this fear and if people start to believe that prices will just stay flat, I think you would see sales rise despite the fact that prices are still high.
Between 2001 and 2006, home prices doubled in some places, like Hoboken.
But nationally, home prices increased somewhere between 50%-75%.
Census Bureau says 51%
OFHEO says 66%.
I believe the 130% figure was plucked from thin air.
re: the rules for gse’s buying a mortgage
(sorry if already addressed, but if it was, i missed it)
are they limited to buying mort.’s with 20% down, or can they buy loans with less down?
if they can buy with less down, is the rate higher?
people still need pmi?
is there a debt to income ratio that they are limited to?
and what’s the cutoff for credit score?
#207 We all feel this (that “a home never goes down”) because it’s the buzz in the media.
I never felt that way, I lived through the last down turn.
As far as smart people ignoring some did, some did not.
Over the last few years the phrase its differetn this time was teh usual response. Funny however, because any time I asked why it was different this time, I could never get an answer, or if I did get an answer the answer was BECAUSE, and this from supposedly smart people.
It’s tough to tell the degree to which people bought primary residences as investments during the past few years.
Mostly, I think people buy houses when they get to a certain point in their lives (married with children). I still think the investment angle is very secondary for most people when it comes to a primary home.
Somewhere I saw a statistic saying that nationwide 25% of housing units were bought buy investors in the past 5 years……
I might be wrong – as I do not have a link.
#210 skeptic; You make a good point, but i still believe for many it was the road to easy riches, and for others it was get in now or be priced out forever, which was a favorite comment of realtors and the media.
That fear of being priced out forever is gone, and the belief that it is the road to riches is gone. I belive this will have a major impact on buyer psychology, and what they are willing to pay, assuming fo course they can qualify.
“This was due not entirely, but mostly to purely POLITICAL manupliation of the markets”
ready,
HUH? How about monetary policy and the greatest credit bubble in our history?
#178 gary: One of my favorites from when I was looking for my first house. We looked at a house that reeked of body odor, I mean stomach churning body odor.
The master bedroom was in the basement (bizzare), and as we toured the cozy kitchen, I was nearly sickened when I saw a pair of sweat sock soaking in a pot in the kitchen sink; I am still traumatized from this.
#211 I stand corrected…(I was looking at local NJ markets) but this is still terrifying:
http://en.wikipedia.org/wiki/Image:Shiller_IE2_Fig_2-1.png
#177 I think we would all prefer an environment of fear because that is where the real bargains would happen.
And I do not think that fear has dissipated, and in fact will only increase as the year progresses.
Ugh! One of my co-workers just asked me if finally bought a house because now it’s a great time, isn’t it?
Durn it.
…if WE finally bought..
Pretard,
New 2BD/2BA place in Hoboken was 250K in 2000, I know because my then girlfriend and I bought one!!!. We sold that in 2003 for 320K. Bought a new one in 2003 for 420K with the profits. Sold it for 630K on our own when my wife and I got separated in 2006. Our neighbors who sold a similar unit six months later for 700k, there’s was slightly larger and had city views. We had a partial view of the Empire State building.
130% is a pretty accurate number.
HEHEHE,
We’re in agreement about Hoboken, as I wrote in #211.
Separately, stop slurring people with rude names.
Glad for your profit.
Do you really think the dancing will keep going forever?
It’s tough to tell the degree to which people bought primary residences as investments during the past few years.
It’s not black & white.
But I would bet that speculation on the future direction of the housing market played into most purchase decisions, even if most purchases weren’t made for purely investment reasons.
How many conversations between Realtors® and clients took place over the last few years that went something like this:
“I know $xxxx per month is a lot (50% of your income), but if you don’t get in now, you may never get in”
Or
“I know $xxxx per month is a lot, but don’t worry, because your house will go up and then you can refinance”
Stainless steel appliances and granite counters are fine for the trendy McMansion crowd, I feel that in my 1925 Colonial home, the butcher block counters and white appliances are a much better fit.
3b [217],
Yummy!
#216 How about monetary policy and the greatest credit bubble in our history?
How is this NOT political. Manipulation of our monetary policy was political. Unless I’m missing something.
Ready to buy,
Not that chart again! Don’t know how consistent the data is when looking across 3 centuries. I’d like to see Shiller extend it back to, say, 1776. That would be interesting.
Here’s a chart for NJ. Sorry it doesn’t go all the way back to 1800s, but shows a couple cycles.
https://njrereport.com/files/nj_ofheo.xls
#226
I did much research on this, and agree. Butcher block is great if you’re ok with the “worn look”.
Soapstone can also be found in NJ for a reasonible price.
This one house we looked at 2 years ago in Fair Lawn had a horrible floor plan on the first floor with small hallways and ugly old carpet. The living room was on the 2nd floor because the prev owner took down the bedroom walls to open it up. The backyard was 100% concrete. They wanted over $480,000 and you could barely fit 2 cars in the driveway
I am sorry I must have misspelled.
In the early 1900s people would buy land and build their own house on it. Some would buy the house plans from Sears.
#231 tbw:Those days are over!!
#220 Pat: Just tell him/her there is an even greater time coming, what with prices dropping, and continuing to drop;that usually shuts them up,and then you get the look.
#229
boy… still has not come down though…
“Manipulation of our monetary policy was political. Unless I’m missing something.”
ready,
Are you skeptical? Are you saying the Fed is not independent? Politics tampering with monetary policy? Don’t they f#ck up fiscal policy enough? If you are correct, bend down and kiss your #ss goodbye.
from house panick ..if posted b4 sory :(
UPDATE: Bailout Bernanke didn’t know about rogue trader, panicked 3/4 point cut now seen as glaring mistake. So, will Bernanke fix his error now?
WE ARE RUN BY CORRUPT INCOMPETENT MONKEYS
Congress should immediately call Bernanke in for questioning, and open an investigation into the Fed’s behavior since 2001
This latest glaring market-induced mistake should be corrected immediately. The technical sell-off on Monday that had day trader Bernanke panicking on Tuesday is now being reversed, and so should this rate cut.
What is most shameful and scandalous for the Fed is that Societe Generale had informed the Bank of France about what was going on on Monday, YET THE FED AND THE BANK OF FRANCE DID NOT COMMUNICATE, so the Fed went ahead and put in their market stop-loss order on Tuesday morning before the market opened. If they had known the truth, there’s NOW WAY IN HELL THEY WOULD HAVE MADE THIS GLARING MISTAKE. NO WAY.
Ben Bernanke should resign, the Fed should be investigated, and this 3/4 point mistake should be reverse post-haste. And if you believe Bernanke made a historic mistake, you might want to think about getting long.
Fed didn’t know about SocGen trades on Monday – Revelations spur market to reassess central bank’s intentions in a new light
The Federal Reserve was not aware that Societe Generale was unwinding trades in Europe on Monday that had been amassed by a rogue trader at the French bank, a Fed source said Thursday.
Some observers, citing Societe Generale’s sensational announcement, say the Fed’s dramatic policy remedy may have been too much too fast.
Why the Fed, which usually keeps in contact with the world’s central bankers, wasn’t aware of this when Bernanke held his emergency policy meeting remains an unanswered question that might dog officials in coming days.
Longer-term, if the Fed was spooked into making an emergency rate cut this week on the back of what was just technical selling, it could further undermine market confidence in Bernanke.
18 – 1
“The Federal Reserve was not aware that Societe Generale was unwinding trades in Europe on Monday that had been amassed by a rogue trader at the French bank, a Fed source said Thursday.”
[238],
BS.
Man the tape’s bad again, lousy hedge funds and speculators at it again.
they got this moron doug palmer , mayor of
trenton on bloom.
he’s a guy who wants more out of this rebate from the feds.
trenton a town that could be plowed under and nobody would know the diff, except the state employees.
Looks like the Senate wants their pork too.
Road resurfacing, nutrition assistance, state relief and infrastructure investment.
http://news.yahoo.com/s/bloomberg/20080125/pl_bloomberg/aojqvqfglqa_1
While they are at it they should add a few duckets in their Stimuls plan for the unborn who will be paying for this mess.
yall got to call the hope hotline for your bailout package.
“yall got to call the hope hotline for your bailout package.”
Do they still have the incorrect phone number posted?
phone # correct , but ans. in india.
Hey, where is that guy who always brags about how he is getting rich off of his Apple stock? DOH!!!!!!!!
From Reuters:
Banks may need $143 bln more capital: Barclays
Global banks may need to raise up to $143 billion in additional capital to offset possible losses on securities backed by the beleaguered bond insurance industry, Barclays Capital analysts said in a report on Friday.
These “wrapped” securities are vulnerable to be downgraded after the insurers’ own credit ratings were lowered due to heavy losses from their subprime mortgage exposure.
Any downgrades on “wrapped” securities would hit bank capital in two ways — lower their market value and raise the capital requirement for owning riskier securities, Barclays analysts wrote in its weekly European credit research report.
Bc #240
big BS. I agree.
Why isn’t ECB lowering rates though..I mean at least a quater point.
249.make money Says:
January 25th, 2008 at 2:29 pm
Bc #240
big BS. I agree.
Why isn’t ECB lowering rates though..I mean at least a quater point.
Inflation, according to Bloomberg.
Why isn’t ECB lowering rates though..I mean at least a quater point.
Inflation, according to Bloomberg.
What’s that?
“Why isn’t ECB lowering rates though..I mean at least a quater point.”
make,
Their rates are at 4%. They feel that rates, at this level, are accomodative not restrictive. They are not in panic mode, like the Dead, I mean Fed Heads. Inflation is running above their target. Mysteriously, we don’t seem to be experiencing that problem.
Bailouts?
From Soros;
“Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the U.S. Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realize that the Fed may no longer be in a position to do so.”
OUCH.
I was buying my favorite Crest fresh mint in the stand-up bottle at Walmart last week.
A guy standing behind me with two other adults shopping for deodorant said, “ExPLETive dELETED, somebody should do something about ExpleTIVE
Walmart charted $4 for deodorant.
The natives are getting restless.
Eek…sorry about those posts!
Realtor to Clients: Drop Dead.
http://www2.tbo.com/content/2008/jan/23/bz-get-realistic/
TbW (233): Not just the plans, the entire house, rail-shipped to the site:
“A few weeks after the order was placed, two boxcars containing 30,000 pieces of house would arrive at the nearest train depot. A 75-page, leather-bound instruction book told homeowners how to assemble those 30,000 pieces. The book offered this somber (and probably wise) warning: “Do not take anyone’s advice as to how this building should be assembled.”
The kit included 750 pounds of nails, 22 gallons of paint and varnish and 20,000 shingles for the roof and siding. Sears estimated in 1908 that a carpenter would charge $450.00 to assemble Modern Home #111, The Chelsea.”
http://www.oldhouseweb.com/stories/Detailed/10423.shtml
There’s a Sears house around the corner from me in Leonia. I found out the house’s origin from the gent who bought my ma’s condo in NEPA — his grandfather bought and built the Sears cottage. Small world.
Guess who’s monthly expenses these are.
Oh to be rich and talented.
$156,116 in mortgages on three homes (including his $20 million mansion on Miami Beach’s Star Island), plus $31,299 in homeowners insurance;
$110,505 for vacations;
$26,500 a month for child care;
$24,300 for gas;
$17,220 for clothing;
$12,775 for food;
$10,065 for electricity;
$10,000 for temporary child support;
$10,000 for alimony;
$6,730 for dry cleaning;
$5,000 for car payments;
$3,345 for phone bills;
$2,305 for pets;
$1,610 for lawn and pool maintenance;
$1,495 for cable TV
$24,300 for gas
jet fuel?
re: (258) Shaq
The forgot the 40k petty cash for strippers
“$2,305 for pets;”
[258],
Simple solution to save 2K a month. Hire Michael Vick.
Simple solution to save 2K a month. Hire Michael Vick.
Can’t do that. He’s busy.
Britney …
99 Jam
I bet most public officials don’t put their homes under their own name anyway. Have you tried using the database to find any politicians?
If you have, then I stand corrected.
#260 Sean
You are correct.
“The forgot the 40k petty cash for strippers”
Is that where the divorce is coming from?
Is that where the divorce is coming from?
I think she got caught flipping RE with his money.
Jan. 25 (Bloomberg) — Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, said it may fire as many as 5 percent of its employees, or 1,500 people, over the next few weeks to weed out underperformers.
“As we do every year, we are reviewing the performance of the bottom 5 percent of our people and some number of them will be leaving the firm,” said Lucas van Praag, a spokesman for the New York-based company. “In most years we ask a significant percentage of that 5 percent to leave.”
Apply this methodology to Congress and maybe things would improve!
grim: what is a em for you?
#238 These Fed guys and their Congressional ilk have more veils than an overweight belly dancer. Problem is we can see through them and it ain’t pretty. It’s fun to watch all the stories swirl around though. Wonder who’s really behind this latest theory.
[264] Deeds and mortgages are filings which must be accurate or it is a crime. Unless the person purchased in the name of an LLC or some other entity his/her name would be listed.
Years ago you could file your Deed with the consideration listed as $1 you cannot do that anymore – unless of course you actually paid $1 for the house.
I have searched the data base for certain public figures and have gotten out the information. To answer your last question. Hey, is it always accurate (I don’t know), but it has been accurate for the searches that I have done.
Stocks are down again – another 0.5% cut next week???
Than there will be place for 3 more an we are at 0……
What is going to happen than??
Sarkozy Pledges to Use French Bank for Protectionism.
We need a bank, that makes money, and can be used to protect us.
my email is
jamesbednar at gmail dot com
Ohh yes – I want my 0% HELOC!!!
grim:
i sent you a em on the NJ mess at the hospitals.
enjoy
Case in point, my parents bought their colonial from the estate of the original owner who died in 1973. When they were newlyweds they bought a 40 by 100 plot of land in 1909 and saved enough money by 1923 to leave their brooklyn apt and to buy a house from the Sears Catalog to be built on their plot. They lived there for 50 years until the mother passed away. The godless flippers who bought it cared little about the history so all the orignal deed, purchase information and tax maps from 1909/1923 I kept along with a handwritten letter from 1974 from one of the original owners sons telling us the history of the house and wishing my mom and dad good luck in raising their children in the house that brought them so many nice memories. My family had the house 30 years. Not many two owner 80 year old houses hit the market. The flipper is still sitting on it and has it rented till the market comes back. My brother and I check the listings each week hoping he does a short sale so we can buy it back cheap!
thatBIGwindow Says:
January 25th, 2008 at 1:46 pm
In the early 1900s people would buy land and build their own house on it. Some would buy the house plans from Sears.
bubbles (238)-
Bullshit.
The SoCon meltdown/unwind represented, I think, this decade’s version of LTCM in Bernanke’s pea of a brain.
Of course, the best Homer…er, Ben could do is pull a Greenspan when push came to shove.
SocGen, that is (277).
Those damn designer jeans again…..
Queens man killing time wins $800G
by The Associated Press Friday January 25, 2008, 1:55 PM
Sammy Zabib was getting an earful from his girlfriend for forgetting to buy her a pair of designer jeans she spotted in an Atlantic City casino boutique last weekend.
“She was mad,” said Zabib, a 42-year-old limousine fleet manager in Astoria, Queens. “We had an argument. More than one.”
They’re not arguing anymore; on a return trip to pick up the jeans and end the grief this morning, Zabib won nearly $800,000 playing a slot machine.
He got up at 5 a.m. and drove three hours south to Atlantic City, arriving at the Borgata Hotel Casino & Spa a bit before the boutique, Whim, opened at 10 a.m.
In his pocket was a photocopy of a picture of the jeans that his girlfriend, Anna, printed out for him, just to make sure there would be no screw-ups.
With some time to kill, he sat down at a Brazil Slingo slot machine and started playing, betting $4 a spin for about an hour.
“I was just trying to kill time until the store opened so I could get her those jeans,” he said. “Then the machine stopped working. I didn’t know why, so I called security. They came over, took a look at it, and said, ‘You won the jackpot!'”
He called Anna, who started screaming.
“She wasn’t mad anymore,” he said with a laugh. “She’s waiting for me at home now.”
After receiving his payout, Zabib completed his mission, buying the pair of “7 For All Mankind” jeans — Dojo style — that Anna had wanted so badly.
“I don’t know much about them,” he said. “They look like normal jeans.”
“They’re the hot brand right now,” said Borgata spokesman Michael Facenda. “They go for $149 a pair.”
So far, he doesn’t know what he’ll do with his newfound riches.
“Maybe buy her some more jeans,” Zabib said.
patientwife,
That’s not the first segment Nightline has done on “foreclosure tours.”
They did another one a couple of weeks ago about a psychedelic “foreclosure bus” that was making the rounds in Stockton, CA.
http://www.abcnews.go.com/Nightline/RealtyCheck/story?id=4041552&page=1
From Newsday:
NY officials expand suit against Countrywide Financial
New York authorities announced Friday that they have expanded a class-action lawsuit against Countrywide Financial Corp., the beleaguered mortage company.
The expanded suit now includes 26 different financial companies that had dealings with Countrywide. The announcement was made by state Comptroller Thomas P. DiNapoli, New York City Comptroller William C. Thompson, Jr. and the New York City Pension Funds.
“Countrywide’s underwriters had a duty to investigate whether Countrywide was acting honestly,” DiNapoli said. “Investors lost millions, and New Yorkers lost their homes. We can’t sit idly by.”
From Bloomberg:
CIBC May Have $2.63 Billion Backed by SCA
Canadian Imperial Bank of Commerce probably has $2.63 billion in U.S. subprime investments guaranteed by insurer Security Capital Assurance Ltd., which lost its AAA rating from Fitch Ratings, Blackmont Capital analyst Brad Smith said.
Canada’s fifth-largest bank, which has already announced $3.2 billion in writedowns on its subprime investments, faces additional costs from insurer downgrades, Smith said in a note today. Fitch yesterday cut its rating five levels on Hamilton, Bermuda-based SCA’s XL Capital Assurance and XL Financial Assurance. Moody’s Investors Service and Standard & Poor’s are also reviewing their rankings.
“If this proves correct, the Fitch downgrade and rising probability of Moody’s or S&P following suit could accelerate additional losses,” Smith said in an interview. Smith, who rates the stock “sell”, didn’t estimate losses.
Jill –
A 3/4 bedroom ranch/cape or split which hasn’t been updated since 1975 at $150k would be a great starter home or fixer upper.
The same house at $550k is a POS.
As for the stainless steel/granite thing.
In a million dollar mansion, they fit.
In a badly rehabbed 1950’s ranch, where corners were cut at every turn and they are included in a weird little corner of the kitchen and used as a reason to overprice by $100k, they don’t.
258-
taking a wild guess – Shaq?
JM
176 Ready
I agree with all of that. What I disagree is the idea that that manipulation can be carried on indefinitely (the “perpetual motion machine”). It can’t.
John #276: Man oh man would I love to have one of those Sears kit houses. Some people lust after money or power or designer clothes…I lust after tapered columns and dining rooms with beamed ceilings and plate rails and built-ins around green tiled fireplaces.
My next door neighbor had a montgmery ward catalog house. My old block I grew up in had around 5-10 catalog houses.
With Sears doing so crappy maybe Lampert will start putting those blueprints back in circulation.
Kettle, good read:
http://www.texasmonthly.com/2008-02-01/feature2.php
“if national organizations (Fed, NAR) are to blame for the rapid rise in home prices, why did home prices go up a lot in booming US cities like New York but remain stagnant in failing cities like Detroit?”
186 pre
Isn’t the obvious response that without the artificially low rates and absent the propaganda, prices in Detroit would have plummeted rather than stagnating?
“#186 you’re right — all real estate is local”
maybe, but a credit bubble is worldwide.
276 / 286,
1900’s Sears kit home with theoriginal assembly plans sold in River Vale back in June.
Before I could schedule a return visit it was under contract. Just as well as it was directly on River Vale Road.
“I believe the 130% figure was plucked from thin air.”
211 pre
probably. I disagree with you more often than not, but having real numbers with which to disagree is far better than not.
I grew up in a Sears kit house. I have always regreted that I wasn’t in a position to buy it from them. They moved to another house in 1978 and rented the Sears one out for 11 years. In 1989, they sold it to the tenants for $130,000. I pass by it often and still wish I had been able to buy it although it has a shared driveway that probably would have driven me nuts.
Njpatient 290,
Monetary policy, financial innovation, and market psychology are only part of the reason why home prices went up a lot from 2001 to 2006.
Another part was local economic conditions. Booming economies in New York and London explain a lot of the home price outperformance compared to cities like Detroit and Tokyo.
In addition, home prices around here were flat from 1990 to 2000, despite solid economic growth during most of that period. 2001-2006 was the upleg part of a long cycle. NJ home prices rose 5% across the last cycle, an increase that is in line with fundamentals.
Too much hyperventilating about the Fed and NAR on this board, and not enough attention paid to the importance of local economic conditions or real estate cycles.
“HUH? How about monetary policy and the greatest credit bubble in our history”
BC – I assumed that was what Ready meant by “political”, but maybe that’s wrong.
Stumbled on this while searching for homes on CL:
Look at the real estate section under north jersey. Use Randolph as search criteria. You’ll find a bunch of listings of all the same description:
$784500 Outstanding Home, New York Style, In a Quet Development. (Randolph, NJ) img
Click on one and look to the very bottom of the posting – fine print. You may have to enlarge the font to read it. Strange stuff! I only checked about 3 of the 10 or so postings, but each is different.
I figured some of you may get a kick out of it.
#297
Bizarre.