Weekend Open Discussion – Part II

Now Open, Part II!

Prior weekend thread closed due to comment overflow.

————————————————————–
Save the Date!
We’ll be meeting up on Saturday, February 9th in Morristown NJ.
6pm Sharp!
Grasshopper off the Green
41-43 Morris Street, Morristown NJ
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251 Responses to Weekend Open Discussion – Part II

  1. njpatient says:

    pre – I typed up a long response to you but lost it when I hit “submit” after grim closed the last thread.

    Short version: I disagree with you. Will you be at the Grasshopper? I can re-iterate over a drink; right now I’m too tired.

  2. Sybarite says:

    Re: Grasshopper

    6 PM Sharp?

    Will we be dining there or simply imbibing?

  3. Pat says:

    from end of last weekend thread on those Randolph listings:

    http://en.wikipedia.org/wiki/Word_salad_%28computer_science%29

  4. grim says:

    I typed up a long response to you but lost it when I hit “submit” after grim closed the last thread.

    I am so sorry, I had no idea it would do that..

  5. Everything's 'boken says:

    3
    Looks to me more like buffer overun.

  6. pretorius says:

    njpatient,

    Sorry, won’t be at grasshopper. But would appreciate if you could re-type that response when you get a chance.

  7. grim says:

    Will we be dining there or simply imbibing?

    Just drinks. Although there are plenty of restaurants in the area. If anyone wanted to get together before, or do something afterwards, I’m sure we could do something about dinner. Mendhi maybe (did someone say they were closed?).

    Does the time work for everyone?

  8. njpatient says:

    No worries, grim. Was definitely not one of my better efforts, and we’re probably all better off!

    Here’s my favorite from Otteau:
    “some bright spots are emerging. Unsold Inventory declined for the fourth consecutive month and now stands 16% lower than in August, reflecting 12,000 fewer homes on the market.”

    That really IS a bright spot!! I’ll bet it’s the first time inventory has EVER declined from August to December!

    At least there’s this:
    “strategies of ‘waiting until Spring’ are ill conceived as overpricing inevitably leads to extended marketing times and lower prevailing market price levels. Best-Practices for a weakening housing market is to price ‘ahead of the decline curve’ ”

    It must have nearly killed him to write that.

  9. grim says:

    I replied on the other thread, but I’ll paste it here as well..

    Despite the ongoing market decline, some bright spots are emerging. Unsold Inventory declined for the fourth consecutive month and now stands 16% lower than in August, reflecting 12,000 fewer homes on the market.

    So what? How is this a bright spot?

    December inventory is *always* lower than August, which is right in the middle of the peak yearly inventory range.

    According to GSMLS:

    In 2001, inventory fell 14% from August to December.

    In 2002, inventory fell 6% from August to December.

    In 2003, inventory fell 18% from August to December.

    In 2004, inventory fell 22% from August to December.

    In 2005, inventory fell 8% from August to December.

    In 2006, inventory fell 16% from August to December.

    In 2007, inventory fell 16% from August to December.

  10. grim says:

    Given the range of changes we’ve seen over the past few years, the fact that inventory fell 16% from August to December means.. well.. nothing at all.

  11. njpatient says:

    6 pre

    somewhat short version
    Those who were living in NYC and involved in RE during the second half of the 90s will tell you that it was a boom time, not stagnant.
    Also, to reiterate, pointing out that prices rose in NYC and stagnated in Detroit and noting a strong NYC economy and a horrific Detroit one is not in any way sufficient to demonstrate that misguided monetary policy didn’t cause a nationwide RE bubble. Without monetary policy that encouraged people to pile out of one bubble and into the next one, prices may have risen mildly in NYC and plummeted in Detroit.
    Is RE generally more costly in NYC because it has a stronger economy than Det? Abolutely. Was the RE bubble a nationwide phenomenon? Absolutely.

  12. stuw6 says:

    Grasshopper is a good name for a bar where many of us will meet up. If only it was named the Young Grasshopper. Then it really would have been perfect.

  13. njpatient says:

    grim 9; 10

    I had gone back to check your inventory charts before posting re Otteau. I don’t know how he can reference that “bright spot” and keep a straight face. He could as easily have concuded, during the same period, that there is no global warming because NJ became substantially colder.

  14. njpatient says:

    “Does the time work for everyone?”

    works fine for us, but don’t everyone leave after 10 minutes, because I have a tendency to be 10 minutes late.

  15. grim says:

    Maybe he fears a lynching?

    December contracts down 31% year over year?

    Based on contracts, December 2007 has been the worst down month since the downturn began.

    Even worse, the downtrend has been accelerating.

    http://njrereport.com/files/contracts.xls

  16. njpatient says:

    “December contracts down 31% year over year?”

    The numbers do get increasingly shocking.
    2008 is going to be a very difficult year.

  17. lostinny says:

    I don’t know. 6 PM is prime food time. Maybe some snacks at the bar?

  18. Clotpoll says:

    patient (8)-

    “Best-Practices for a weakening housing market is to price ‘ahead of the decline curve’

    It must have nearly killed him to write that.”

    The LODs have gotten it mostly right over the past few months, but I’ll continue to insist that the vitriol hurled toward Otteau is both misguided and undeserved. Why? Because, no matter which way the markets go, HE GETS PAID. It also bears repeating that people like me, who pay him a lot of money, aren’t paying it to him to get told lies. No matter what a RE company says to the public, it tends to want uncooked numbers for its internal purposes.

    Also, his numbers are unassailable. They’re accurate, and they are what they are. There’s no fudging or shell games being played there.

    One can always take issue with his analysis of the numbers, but it has to be admitted that he was one of the first to declare that most NJ sellers were smoking crack…and, he continues to hammer that line home anytime he works a room of agents. I’ve been in rooms full of 50-something, lipstick-smeared, poufed marshmallows stuffed into full-body slimmers who groan loudly when he tells them that they must confront their sellers with the truth. If those scenes weren’t so rich with unintended humor, they’d be extremely uncomfortable.

    I think Otteau sometimes reaches hopeful conclusions simply because he’s a numbers guy. That’s what appraisers are. That’s why- for the most part- they make (or made) lousy Realtors. When the numbers tell him there’s an improvement, that’s what he says. He simply doesn’t have the agent’s on-the-ground experience to give context to the numbers he sees.

  19. Clotpoll says:

    grim (7)-

    “Just drinks. Although there are plenty of restaurants in the area.”

    Locked and loaded, baby. Food tends to interfere with my buzz, so I’m good with the libations.

  20. grim says:

    I’ve been in rooms full of 50-something, lipstick-smeared, poufed marshmallows stuffed into full-body slimmers who groan loudly when he tells them that they must confront their sellers with the truth.

    I’ve been there, he ain’t lyin.

  21. 3b says:

    # 296 Monetary policy, financial innovation, and market psychology are only part of the reason why home prices went up a lot from 2001 to 2006.

    Ah pret these are the main reasons that prices wnet insane. And as far s econoic conditions being good between 1990 through 2000, delusion again on your part.

    The economy did not start coming out of the crapper until around 19955 or so, from the recession in the early 90’s.

    I lived it, you were watching Nickelodeon.

  22. grim says:

    Also, his numbers are unassailable. They’re accurate, and they are what they are. There’s no fudging or shell games being played there.

    There is no better source of real estate data in the state of NJ.

  23. Sybarite says:

    #17

    I agree; 6 is early for drinks with no food in the gut. Will end up tanked in no time. Guess I’ll have to squeeze in a burger or something before then.

  24. BC Bob says:

    Not sure if this was posted;

    “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.”

    “A buyer could borrow $1 billion — not unheard of in the New York City market — a year ago and expect to pay annual debt service of $58 million, Singer said. Today that same mortgage would have an annual cost of $76 million, he said.”

    “That’s assuming you can find the money,” Singer said. “It’s much harder now than it was a year ago.”

    http://www.bloomberg.com/apps/news?pid=20601068&sid=aaK_r.bfo7TI&refer=economy

  25. Confused In NJ says:

    The Berkeley Heights School Board every election, says house prices are up because of the Quality of the Schools, not Alan Greenspan, Vote yes. So B.H. must be insulated from any price decreases.

  26. Clotpoll says:

    BC (24)-

    “A buyer could borrow $1 billion — not unheard of in the New York City market — a year ago and expect to pay annual debt service of $58 million, Singer said. Today that same mortgage would have an annual cost of $76 million, he said.”

    But, according to Pret, this would have no effect on the NYC commercial market.

    Just a little flatness, a little wind coming out of the sails.

  27. Clotpoll says:

    Confused (25)-

    Governor Livingston is one of the most overrated high schools in NJ.

  28. mike says:

    Grim, aren’t you fearful of realtors coming to break your kneecaps? :)

  29. Confused In NJ says:

    Clotpoll Says:
    January 25th, 2008 at 7:34 pm
    Confused (25)-

    Governor Livingston is one of the most overrated high schools in NJ

    Can’t be, School Boards never lie.

  30. bubbles says:

    #25 ahhaha just ask them about “COMPUTER” and not so long gone teacher …but I am not saying NUTZZZINNGGGG ..noo siireeeeeee

  31. BC Bob says:

    “But, according to Pret, this would have no effect on the NYC commercial market.”

    Clot [26],

    Yeah, he also stated that Bear’s hiring was up yoy. Unfortunately, he never provided that link. He passed the baton to JB.

    Did you read this week’s Barrons regarding Archstone? $16B in debt, annual int exp more than $1B, cash flow from opeations at $700M. Burning cash rapidly.

  32. Clotpoll says:

    BC (31)-

    “$16B in debt, annual int exp more than $1B, cash flow from opeations at $700M. Burning cash rapidly.”

    Sounds like a finely-tuned machine of American capitalism. I’m sure they are exploring new synergies and have focus groups meeting frequently to identify fresh ways to turn capital into shit.

  33. PGC says:

    Cramer shilling RE on CNBC
    ROTFL

  34. pretorius says:

    BC Bob,

    Here’s the link showing Bear headcount was higher on November 30, 2007, compared to same time the previous year.

    http://www.bloomberg.com/apps/news?pid=20601010&refer=news&sid=a3UiaWFcpfNM

    Remember back in September you responded to one of my posts by predicting “30-50% layoffs” at Bear? Are you willing to stand by that prediction today?

  35. pretorius says:

    Clot 26,

    What are you talking about? Commercial real estate companies are getting low 5s rates on $100 million mortgage these days.

    http://www.ggp.com/Company/Pressreleases.aspx?mode=view&prid=400

  36. pretorius says:

    Clot,

    We’re in agreement. Archstone really is a finely-tuned machine of American capitalism.

    Look at these rent increases!

    http://blog.case.edu/james.chang/2006/11/22/hoboken_archstone_hudson_park_outrageous_rent_increases

  37. kettle1 says:

    HEHE

    Regarding your link for the closed thread

    It looks like Mr Mathew Simmons and i agree on a few points. As stupid as some people may think it is, a lot of my future plans take that into consideration. while i may not be able to predict the exact date of a given oil fields peak, there is no question that we are at the top of the curve, the only questions are how long can we stay at the top of the curve, and how fast are we going to come down

  38. kettle1 says:

    since we talk finance here on occasion, i will also say that i also walk the walk in my finance strategy, mind that is indeed a long term one. a sample of a few ETF’s

    PHO
    PBW
    GLD
    UCR
    MID210
    SPR006
    SPWR

    and of course various mutual funds stacked heavily against the US

  39. kettle1 says:

    look forward to meeting some of you clowns at the counter party ;)

  40. gary says:

    Answer: 18-1

  41. BC Bob says:

    Pret,

    I get it, you pull 8 months of data, previous to the date which I made my statement. Like the Church Lady would say; “How convenient”

    Did you arrive in NY on a turnip truck? Hirings in the first 3 quarters of 2007 are inconsequential. The s*it hit the fan in the 4th quarter. Don’t bactrack on me, the first 8 months of 07, when my statement was made in 9/07. Flawed data mining at its best.

    The press indicates over 10% have been let go at Bear. Friends, inside at Bear, and also enemies indicate that the net effect is presently closer to 20%. Severance packages do not count as terminations.

    There are floors that were wiped out at Bear; MBS, fixed income trading, structured credit/finance, marketing, securities lending, operations, risk arb., etc.. If you don’t believe me, arrange a vist. As a matter of fact their prime brokerage business is steadily declining. I know many hedgies that are fleeing like wild fire. Hard to believe but DB moved ahead of Bear in the PB business.

    I will stand by what I said in 9/07 going forward, please don’t cherry pick my statements. When the smoke clears Bear, if it is still standing, will have 8-10K employees. In addition to this, I also stated that the other would option be a takeover. You somehow forgot to mention that. The damn stock is off 60% from its high. Yet, nobody can take advantage of it because they are technically bankrupt[Citi,MS,Merrill,UBS]. Lewis is the only interested party, and he’s getting his #ss kicked.

    “Lehman, which eliminated 2,450 jobs last year, said today it’s cutting 1,300 positions at a subsidiary that makes home loans. Bear Stearns cut 1,550 jobs last year,[EDIT: 2007, equal to 10%] Merrill cut 1,000 and Morgan Stanley got rid of 900 positions.”

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHPBhz66H9eo

    “Bear Stearns, which had previously announced plans to cut 900 jobs, now intends to cut an additional 650, according to an internal memo obtained by the Associated Press. The total job cuts this year represent about 10 percent of Bear Stearns’ workforce.”

    “The outplacement firm Challenger Gray & Christmas calculated in October [EDIT: 07] that 42,404 financial jobs had been cut in New York this year, nearing the record of 51,854 set in 2001.”

    http://www.portfolio.com/news-markets/top-5/2007/11/28/Bear-Stearns-Cut-Jobs

  42. BC Bob says:

    JB,

    #41 in moderation. Too many links?

  43. schlivo says:

    “For the next segment on our Right Pricing! Strategy, register to attend our 2008 Spring Workshop Series next month.”

    Grim, will you be attending to report real-time as you did at the last workshop? That was brilliant!

  44. BC Bob says:

    “Archstone really is a finely-tuned machine of American capitalism.”

    Pret,

    Pick up this past weeks Barron’s.

    $16B in debt, annual int exp more than $1B, cash flow from opeations at $700M. Burning cash rapidly.

  45. BC Bob says:

    Pret [34],

    I’m stuck on the NJTP, in JB’s moderation.

  46. RentinginNJ says:

    I had a conversation with someone at work today about buying a home. As I do, the individual felt prices were still too high, but at the same time, interest rates are very attractive right now.

    From a purely hypothetical academic point of view, we were wondering if it was possible to design a financial instrument which would basically lock-in today’s interest rates (doesn’t need to be perfect) on a 30 yr fixed mortgage.

    One though was to short the 10 yr treasury to an extent that any gains could be used to buy down points if interest rates rise on the 30 yr. fixed.

    Again, this is just for sh1tz and giggles, but is there a way to construct a position to ‘lock in’ today’s rates for next year?

  47. njpatient says:

    Clot/grim re otteau

    I don’t doubt you, for the most part. Some of my dislike is wholely irrational and is the fault of my former agent who, in late 2006, would constantly cite Otteau for the specific proposition that now was a perfect time to buy and the general proposition that I was an ignorant twit.
    Some of it is not entirely irrational: he does seem to have a fairly long record of “it’s a good time to buy” type statements.
    I think he’s clearly got an unbeatable handle on the numbers, and I’m far happier with the industry listening to him than Yun or Lereah or Barb Corcoran, but his interpretation of the numbers is often a bit odd (witness the inventory conclusion).

  48. njpatient says:

    Frankly, I can’t participate in half the conversations on this board, so I have to settle for haranguing Otteau.

  49. kettle1 says:

    for anyone interested….

    shell has officially acknowledged that they expect oil supplied to peak by 2015. that is not nearly as far away as some people would like to think

    http://www.shell.com/home/content/aboutshell-en/our_strategy/shell_global_scenarios/two_energy_futures/two_energy_futures_25012008.html

  50. rhymingrealtor says:

    Clot,

    Well there ya go, one more thing we have in common, on an empty stomach is the only way I like to drink. I’m a cheap date.

    KL

  51. kettle1 says:

    a comment on shells letter ( not mine but i agree)

    From an economic point of view, demand can never exceed supply over time. The “market” will respond with increasing prices for the commodity in shortfall, until demand and supply will balance. Of course, that is theory and surely leaves some folks out in the cold who would like their demand satisfied. If one thinks a bit further about this statement, when supply can no longer “keep up” with demand, that implies a rather large increase in price, limited only by the cost of the available alternatives, including Fossil Fuel sources that are difficult to obtain. Since the cost of the alternatives tends to increase along with the market price of energy, it’s likely that we will be due for some rather large increases in energy costs, as well as major disruptions of all sorts.

  52. Clotpoll says:

    pret (36)-

    Nice try. Your evidence is dated, and there is ample evidence within the thread that indicates attempts to increase rents met stiff resistance. How did this play out? Did this property’s vacancy factor rise? Hard to tell, since the thread was last updated in December, 2006.

    Once would suspect, given Archstone’s current tenuous cash position, that this kind of strongarm tactic probably wasn’t prudent.

    From your article:

    “Even some residents argue that the “luxury” condo is not really that great. No significant improvements have been made to the building. There were past incidents of water pressure loss and a mice infestation.

    Obviously, the management really wants to squeeze as much as money as possible out of the renters. It is true that residents can take their business elsewhere, but does this mean we should surrender without a fight? It is true people can advertise the fact that the management operating Hudson Park are liars and are willing to charge expensive rental leases, but there will always be people willing to afford those prices. Yet, Hoboken is not New York City. It is not Chelsea, Soho, or the Upper East/West Side.”

    Further:

    “They are more interested in high turnover than retention.”

    I guess retention might’ve been the better choice.

  53. Clotpoll says:

    pret (35)-

    A 5-year I/O to a top-shelf outfit is not exactly what I’d call an industry-standard rate right now:

    “One of the new loans is a five year interest only loan in the amount of $150 million, which will bear interest at a fixed rate of 5.05%.”

    Let’s see Archstone get that same deal on Monday.

  54. Clotpoll says:

    kl (49)-

    “I’m a cheap date.”

    There was a time in my life when hearing a woman make this kind of statement represented an invitation, a challenge and a threat, all rolled into one.

    Those days have long since passed. I am now bitter and enfeebled.

  55. Clotpoll says:

    patient (46)-

    The statement about the 16% inventory drop from Aug-Dec was just plain sloppy. Bad job.

  56. RentinginNJ says:

    I’m really upset that Otteau is playing games with seasonality..

    JB,
    I was just about to make a very similar post after reading Otteau’s write-up, but you beat me to it.

    I remember making a very similar statement last year (as a “bright spot”) and I declared shenanigans then.

  57. RentinginNJ says:

    since we talk finance here on occasion, i will also say that i also walk the walk in my finance strategy, mind that is indeed a long term one. a sample of a few ETF’s

    Kettle,

    Also long PBW
    Please check out my post “Alternative Energy – The Next Bubble” on the Yahoo finance message board for PBW. I would be very interested in your feedback.

  58. RentinginNJ says:

    off

  59. RentinginNJ says:

    italics off

  60. ithink-ithink says:

    “Wow. The basics: mortgages were at 5.75 percent last week, Monday a holiday, Tuesday markets stunned by the Fed’s 0.75 percent cut; mortgages early Wednesday morning fell to 5.375 percent(!), wholesale rate-locking Web sites crashed in an hour, mortgages back up to 6 percent(!!) by Thursday noon. Citibank wholesale raised its rates nine separate times in 24 hours. ”

    “The new mortgage limits, $625,000 for Fannie and $750,000 for FHA, will be intercepted by a 125 percent-of-median-prices lid in each Metropolitan Statistical Area. Out of 156 MSAs in NAR’s database, only 20 will benefit. In my home MSA, Boulder, Colo., the city has a home-price median near $550,000, but the whole MSA is $367,000, hence a new Fannie/FHA limit (maybe — not final) of $460,000 is an undetectably minor help.”

    http://www.mortgage101.com/partner-scripts/inman.asp?ID=65907

  61. ithink-ithink says:

    italics on!

  62. ithink-ithink says:

    loi… off.

  63. ithink-ithink says:

  64. ithink-ithink says:

    ha!

  65. kettle1 says:

    renting,

    i am lazy can you hook me up with a link?

  66. kettle1 says:

    renting,

    forget about the link request, google is your friend :)

    Regarding that post…

    you have some good points. I do expect to see excess and poor allocation accumulate in the market. However, i would question how much longer the US can get away with inflating bubble after bubble. Regardless of whether or not you accept the idea of peak oil, it would be wise to consider that companies such as shell and toyota are making public statements about the inversion of supply demand curves in oil occurring in the next 5- 10 years, while at the same time there is solid data suggesting that it has already started. The Shell document i linked even goes so far to say that “oil and gas” not just oil will no longer meet demand (gas = natural gas). We have no choice but to start moving to other primary energy sources because a reduction of oil supply from the current level will not even allow for the current energy demand. I would also note that in shells paper they discuss 2 models for what happens after oil peaks, he scramble and the blueprint. realize that the scramble represents resource wars! i am not suggesting mad max, but iraq could be just the beginning. given most governments current attitudes i do not know how much of a chance a blueprint scenario would have.

    link to rentings post
    http://tinyurl.com/2brb4s

  67. NNJJEFF says:

    Can somebody repost the link to bergen county recent close sales? I believe Ann posted that link.

    Much appreciated.

  68. grim says:

    Nice piece from Rob Gebeloff at the Ledger

    Are New Jersey Home Prices Falling?

    Not to be a tease, but when that question comes up, I have to admit: I don’t know for sure. Pin me down, I’d say “probably.” By how much? That gets tricky.

  69. kettle1 says:

    grim, i dabble in GIS will take a look afte baby kettle goes down for mornong nap

  70. Confused In NJ says:

    Oil depletion doesn’t stop our dysfunctional government from putting a Hummer/Suburban/etc in every driveway. No one listens to Ralph Nader, until the oil is all gone.

  71. Frank says:

    #67,
    great read, now I can tell where the poor people live and where to stay away from.

  72. Frank says:

    #41,
    Bear is hiring like crazy, the were calling me all week, asking me to come over with a large package.

  73. grim says:

    From the Press of Atlantic City:

    December home sales down 26% in county

    Just 134 homes were sold in Atlantic County in December, a drop of 26 percent from the year before and a level not seen since the last time the real estate market hit bottom in 1993.

    According to figures from the South Jersey Shore Regional Multiple Listing Service, December’s sales are down 54 percent from the 289 houses sold in the same month in 2004, when the real estate boom was near its peak.

  74. SAS says:

    This Sundays “60 Minutes” should be interesting. They are doing a segment on the subprime mortgage crisis & showing an interview with Saddam Hussein before his hanging.

    Worth watching..

    SAS

  75. Frank says:

    boy is it ugly out there….

    “So how big are the bargains? Single-A and double-A-rated home-equity loan paper that matures in two to four years is now changing hands at 22-32 cents on the dollar, reflecting a decline of 2-3 cents since last week, traders said.”

    http://www.securitization.net/article.asp?id=1&aid=7915

  76. Bubble Burst says:

    Why do certain realtors representing buyers like me not own up to the fact that prices are coming down and fast? We were thinking about a house last summer that has come 20% in six months. In hindsight, we would have lost the value of our hard earned down payment that fast. This is also in a great town on the mid-town direct train line that is “not suppose to lose value.” I don’t feel like they are working for us by not acknowledging that it was either over-priced or that it was a good thing we waited. Why is that? Who are they really working for?

  77. grim says:

    Why do certain realtors representing buyers like me not own up to the fact that prices are coming down and fast?

    I’m not sure who said it, but it sums it up very well.

    “They’ve been drinking their own kool-aid.”

    I don’t feel like they are working for us by not acknowledging that it was either over-priced or that it was a good thing we waited. Why is that? Who are they really working for?

    If you feel an agent isn’t working for you, why are you working with them?

  78. Commercial Real Estate Consultant says:

    #77 Bubbleburst – Who are they really working for?

    Answer: Themselves

  79. Commercial Real Estate Consultant says:

    The realtors will soon realize that it will be easier to convince a seller to lower their price than have a buyer raise their price.

  80. njpatient says:

    “until the oil is all gone”

    Problem arises far before then

  81. Bubble Burst says:

    Also, to continue my mini rant, I am tired of hearing certain realtors, especially the ones on TV that say that you shouldn’t try to time the market (like the one from NYC on the Today show). Well, we had an historic run-up in prices fueled by a credit bubble that has burst. The fallout has just begun. To me, they have no credibility by saying that. If you want to own a home and have good credit and a downpmt, the recommendation should be to wait until the falling knife of home prices ends and all of the excessess (inventory, defaults) are out and the market adjusts to the brave new world of tightened credit standards. Those are all changes that will take themselves time to work out and will have a material impact on prices. This may become a self fulfilling prophecy, but it may mean that we get to the bottom sooner which would be good for everyone (except maybe the sellers) that will be chasing the market down.

    I am sure we will hear on 60 minutes on Sunday, that this is a great time for buyers, etc. Please!! Get real!

  82. Bubble Burst says:

    We will probably make a change, but we have already been through a number of realtors and we have yet to come across someone who we feel is working for us.

  83. njpatient says:

    52 clot
    You’re right on this point. Wish I could help.

  84. Bubble Burst says:

    Speaking of bubbles, my 18 month old daughter is asking me to blow bubbles right now which she loves. How fitting! Even she knows that bubbles burst! I am not kidding!

  85. spam spam bacon spam says:

    I’m baaaaaaaack…I’ve been busy making deals and now I need help :)

    I’ve been given a solid, “cash literally placed on the table” opportunity to receive a capital investment of “100%” of my small business. (from an employee.) I would retain my original 100%; so we both would end up with 1/2 of 200%. (A major capital infusion would allow us unprecedented opportunities to grow/buy a building/etc.)

    My questions are:

    1. Does anyone know of a good business accountant I can use to get a true valuation of my business?
    The angel investor has his own that will be coming down to look at my books, but I need one commissioned by me to balance his…
    (My accountant just quit on 12/31/07, and her office is more bookkeeping than business valuations, anyway). The AI will be using Bond, Andiola & Co.

    2. Any words of advice? I’m nervous & excited…. :)

  86. Pat says:

    When my daughter was 4, I’d read her blog posts from here in the morning while she ate her cereal. She asked many questions.

    One evening, I was told that she had loudly and adamantly told her daycare teacher that houses were bursting.

  87. Pat says:

    Spam, that’s great. A little scary, but a lot exciting.

  88. Bubble Burst says:

    You got to start them young!

  89. spam spam bacon spam says:

    Commercial real estate gurus:

    I found a bldg that is not for sale, but the current tenant is going out of business.

    The bldg is not being maintained (roof leaks in several areas onto retail diplays; the taxes are high (70K/year).

    I’m interested in approaching the owners (in FL) about selling.

    I’m hoping the prospect of a cash burn for upfitting for a new tenant, the carrying costs of the taxes/utilities and the fact that they bought a zillion yrs ago might make them receptive to selling…

    How does one approach an owner and convince them to sell?

  90. spam spam bacon spam says:

    Thanks Pat!

    Duh! I knew about SCORE and SBDC since forever ago, and completely forgot!

    Duh!

    (You my hero…)

  91. Tim says:

    I have been reading this blog for many years.
    Now I need some help because I think this is the best place to get it.

    My Inlaws have a paid off house in Pompton Plains NJ on 3/4 of acre and plan to sell in a year or two. They were told by an appraiser that everybody is doing this and they should too.

    Tear down there 3 bedroom cape and put up a very large Prefab Mcmansion. I dont think this is wise and they could end up losing everything. CAN I GET SOME ADVISE HERE SO I CAN PRINT IT OUT AND SHOW THEM

    Thanks for the help

    PS: my take on it is that if he is lucky may make an extra 100k but I dont think its worth the gamble, with the much higher property tax and carrying cost.

  92. scribe says:

    From the WSJ:

    January 25, 2008, 1:48 pm
    Where Will Fannie/Freddie Changes Be Felt?

    There are 19 metropolitan areas where the economic-stimulus package’s changes to the conforming loan limits would likely have an impact, according to this analysis from the Stanford Group Company, a Washington, D.C.-based financial services company.

    As Stanford points out “No one will know for certain how this will work” until the legislative language is finalized. For their analysis, they used median home-price data from the National Association of Realtors and exluded markets where the existing median home price was $334,000 or less.

    Of the 19 metros that Stanford lists, seven are in California. Here’s what they came up with:

    (Five Columns)

    Metropolitan Area
    Median Home Price (Q3 07)
    Median Home Price x 1.25
    Proposed New Limit
    Increase Above Current Limit

    New York-Northern N.J.-Long Island,N.Y./N.J. $476,100
    $595,125
    $595,125
    $178,125

    Edison, N.J.
    $391,800
    $489,750
    $489,750
    $72,750

    Newark-Union, N.J./Pa.
    $459,700
    $574,625
    $574,625
    $157,625

    http://blogs.wsj.com/developments/2008/01/25/where-will-fanniefreddie-changes-be-felt/

  93. Bubble Burst says:

    Scribe,

    Good info. Thanks for the post!

    Will the increase be enough to make an impact?

  94. spam spam bacon spam says:

    Tim Says:

    Tell your in-laws to ask the appraiser to show them his own deals that he’s done just like this.

    If it’s such a great idea, the appraiser would be doing it himself.

  95. Tim says:

    Plus , I dont think appraisers are very talented to begin with. I think anyone can be an appraiser. They have no idea what a house is worth. There like Zillow.

  96. grim says:

    I’m not quite sure how you can simulaneously say ‘you can’t time the market’ then say ‘it’s a good time to buy’ (which implies market timing).

    Standard Realtor doubletalk for ‘please buy today’.

  97. pretorius says:

    Clotpoll 52,

    I’ll give you that one. I could’ve produced stronger data.

    But probably you could’ve tried to show that Archstone’s revenue sufferred from their aggressive tactics.

    The evidence does show that it didn’t. I checked the company’s operating metrics going back to 2006, and revenues grew at least 5.5% each quarter (compared to same q previous year) between 1Q06 and 2Q07. Clearly, whatever Archstone is doing is working.

    These big apartment companies use fancy yield management systems to maximize revenue. When they raise rents significantly, they’re very confident they’ll quickly get a new renter in place at the higher rent if the current one leaves.

    I’m going to pick up Barron’s today. But I think Archstone will grow into its debt service coverage thru rent growth at existing buildings and new revenue from all the new developments opening soon.

  98. pretorius says:

    BC Bob 41,

    The data in the link I posted compares 11/30/07 headcount to 11/30/06 headcount. These figures incorporate the first rounds of layoffs.

    Regarding Bear, a little bit of digging reveals that most of their layoffs are in southern California, not New York.

    http://www.ocregister.com/money/strong-layoffs-reported-1690495-edd-mortgage

    That’s an interesting comment by Challenger Gray & Christmas though. I’m going to try and get that report.

  99. Confused In NJ says:

    Jan. 26 (Bloomberg) — Three New York agencies sued Goldman Sachs Group Inc., Citigroup Inc., JPMorgan Chase & Co. and 23 more underwriters for allegedly helping Countrywide Financial Corp. to defraud investors.

    New York’s city and state comptrollers and their pension funds added the securities firms, two accounting firms and Countrywide officers and directors as defendants in a federal securities-fraud lawsuit filed against the home lender in August.

  100. BC Bob says:

    “These figures incorporate the first rounds of layoffs.”

    Pret,

    I doubt it. Too soon.

    Also, My statement pertained to the total # of employees. I don’t remember breaking it down geographically. WS is global, at least to me. London is the king, at this point, CT is home to the hedgies and IB is moving eastward. Presently, the street is a mixture of apartment buildings, empty condos, a trading floor with approx 75% less employees, as compared to peak, and high end retail. What does that indicate regarding the financial capital of the world?

    Come downtown some day. I’ll take you on a tour and buy you a drink. Also, I’ll bring you over to the NYMEX, a once vibrant floor of energy, metal and softs traders. Presently, approx 90% less floor activity as compared to peak. The bldg will eventually be turned into apts/condos.

  101. grim says:

    From Reuters:

    Stimulus plan may lead to higher mortgage rates

    A key element of the stimulus package aimed at jump-starting the ailing U.S. housing market may have the unintended consequence of raising mortgage rates, said analysts studying the plan.

    federal proposal to increase the size limit on loans eligible for purchase by mortgage finance giants Fannie Mae and Freddie Mac has unsettled traders in the $4.5 trillion market for bonds backed by the “conforming” mortgages.

    Increasing the eligible loans to $729,750 from $417,000 would change the characteristics of mortgage-backed securities, leading traders to exact a premium for increased interest-rate risk.

    Borrowers with large, jumbo loans are more likely to refinance since their savings are greater for each incremental drop in rates than for a smaller loan. The loans will taint the bonds since traders don’t initially know the make-up of the securities known as “agency” MBS.

    Higher mortgage rates would make it even harder to unload already high housing inventories and existing homes on the market, delaying any housing recovery and potentially extending the U.S. economic slowdown.

    Potential damage to the “to-be-delivered” (TBA) market — the most actively traded agency mortgage market where investors can buy bonds before they are actually created — prompted Wall Street dealers to call a special meeting with the Securities Industry and Financial Markets Association at 3:30 p.m. Friday, market sources said. A SIFMA spokeswoman would only say the group is in ongoing discussions with its members.

    “The amount of money that investors are willing to pay for agency mortgages (bonds) could be lower if these loans are TBA deliverable and so mortgage spreads could widen,” said Ajay Rajadhyaksha, co-head of U.S. fixed income strategy at Barclays Capital in New York, who will listen to the SIFMA meeting by phone.

    Mortgage rates would rise for the “vast majority” of agency-eligible borrowers, he said.

    MBS paying low interest rates have been hurt in recent days amid expectations the addition of many jumbo loans will boost supply in those coupons, analysts said. As much as $500 billion in jumbo loans could qualify, according to Barclays research.

    “The street is on high alert,” one mortgage trader at a New York-based primary dealer said in an e-mail.

    “When you start throwing a lot of jumbos into a pool you spoil the fungibility of the collateral,” said Linda Lowell, a mortgage market veteran and principal of Offstreet Research LLC. “That has made the market as liquid as it is. Home owners have benefited from lower mortgage rates.”

  102. BC Bob says:

    A junior trader responsible for $7B in losses? Can’t wait to read this book.

    “NEW YORK (MarketWatch) — Jerome Kerviel, the Societe General trader blamed for a massive fraud which cost the French bank $7.1 billion, was taken into custody Saturday, news reports said. Kerviel was brought to police headquarters in Paris for questioning by financial investigators, who had also searched his apartment earlier, according to reports from the French capital.”

  103. pretorius says:

    BC Bob,

    The reason why downtown is changing is because residential real estate there is worth a lot more today and New York’s finance industry has been migrating to midtown for years. Doesn’t indicate that New York’s finance industry is evaporating.

    Downtown office space is being converted to residential use for good reason. It is worth $600 per square foot as office space but $1,000 per square foot as residential space (rough #s).

    It makes sense to buy the office building for $600 per square foot, spend $200 converting it, and sell it for $1,000.

    Meanwhile, midtown office space is worth $1,000 per sf. So you don’t see office-to-residential converstions there, but you see plenty of new towers being built that are leased up when they open. Some examples include the New York Times Building and the Bank of America Tower.

  104. HEHEHE says:

    Pret,

    I’d take that Archstone 5% figure with a grain of salt. In Hoboken they raised rents close to 20% in 2006 which was just prior to this deal. Essentially they padded the rent statistics to look more profitable than they actually were so that the LBO deal would have less problems re financing.

  105. BC Bob says:

    Poole was the lone Fed dissenter this week. If he is ever elevated to become Chairman, please wake me up. It’s a long,long read. I’m sure most will be bored out of their wits. What the hey, no football tomorrow. Must read for those that were questioning inflation and the subsequent effects on the economy.

    “Stable Prices, Stable Economy: Keeping Inflation in Check Must Be No. 1 Goal of Monetary Policymakers”

    By William Poole and David C. Wheelock:

    “The Great Depression illustrated how deflation can wreck a financial system and economy. The Great Inflation, by contrast, showed the destructive power of inflation. Inflation began to rise in the mid-1960s. Political pressure for low interest rates, combined with the common view among economists that a moderately inflationary monetary policy would boost economic growth and raise employment, gave policy an inflationary bias.”

    “But subsequent economic performance discredited the notion that higher inflation could produce faster employment or growth. If anything, the data indicated just the opposite. As inflation rose still higher and became more variable, the average growth rate of the U.S. economy slowed, and business cycle fluctuations became more pronounced.”

    http://www.financialsense.com/fsu/editorials/urban/2008/0125.html

  106. grim says:

    From the Burlington County Times:

    Builders League forecast for ’08: Negative growth

    The Builders League of South Jersey hosted a forum yesterday on the 2008 housing forecast for New Jersey, and the outlook was grim.

    More than 150 New Jersey-based homebuilders, remodelers and contractors attended the event at the Clarion Hotel and Conference Center on Route 70.

    The keynote speaker was Patrick O’Keefe, a development consultant and one-time chief executive officer of the New Jersey Builders Association.

    “I can’t stand here and tell you that housing markets in New Jersey have reached bottom,” O’Keefe said.

    “We can be assured that 2008 will, at best, be a year of tepid economic performance,” he predicted. “Under the best of circumstances, certain sectors, and ours is among them, will experience negative growth, the equivalent of a recession. The questions are how deep, how long and how are we going to address it?”

    “We realized six or eight months ago that it doesn’t have much to do with our price,” he said. “It’s 100 percent the buyer coming to the reality of the value of their resale.

  107. BC Bob says:

    Pret [105],

    Downtown has changed for three reasons only;

    -Worldwide Globalization of the markets, changing flows
    – 9/11
    -Technology

    You have thousands of floor traders that are suddenly, over the last 2 years, out of a job. Bloomberg recognizes this. Unfortunatey, you don’t.

  108. njrebear says:

    Countrywide credit tightening.

    https://www.cwbc.com/ContentManaged/files/SoftMarkets.pdf

    Countrywide soft market [RISK] category-

    Category 4
    Atlantic Atlantic City, NJ
    Cape May Ocean City, NJ

    Category 3

    Middlesex Edison, NJ
    Monmouth Edison, NJ
    Ocean Edison, NJ
    Somerset Edison, NJ
    Bergen New York-White Plains-Wayne, NY-NJ
    Hudson New York-White Plains-Wayne, NY-NJ
    Passaic New York-White Plains-Wayne, NY-NJ
    Mercer Trenton-Ewing, NJ

    >>
    Soft Market Category 4 loans: Maximum financing will be reduced by 5%

    Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if
    the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.

    source – Bakersfield bubble

  109. Orion says:

    Grim (67)

    I must be a real sick puppy ’cause I’m actually studying the chart.
    Thanks for the link.

  110. grim says:

    From Countrywide:

    Soft markets report:

    https://www.cwbc.com/ContentManaged/files/SoftMarkets.pdf

    For Countrywide Purchase Loans:

    Soft Market Category 4-5 loans: Maximum financing will be reduced by 5%

    Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.

    For Countrywide Home Equity Loans:

    Soft Market Category 5 loans: Maximum financing will be reduced by 10%

    Soft Market Category 4 loans: Maximum financing will be reduced by 5%

    Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.

    Category 4
    NJ – Atlantic
    NJ – Cape May
    NY – Nassau
    NY – Suffolk
    NY – Dutchess
    NY – Orange

    Category 3
    NJ – Middlesex
    NJ – Monmouth
    NJ – Ocean
    NJ – Somerset
    NJ – Bergen
    NJ – Hudson
    NJ – Passaic
    NJ – Cumberlong
    NY – Bronx
    NY – Kings
    NY – NY
    NY – Queens
    NY – Rockland
    NY – Westchester

    Category 2
    NJ – Warren
    NJ – Burlington
    NJ – Camden
    NJ – Gloucester
    NJ – Essex
    NJ – Hunterdon
    NJ – Morris
    NJ – Sussex
    NJ – Union
    NJ – Salem

  111. 3b says:

    #102 BC Bob Give it up, for you own sanity. I too have offered to take young pret on a tour of lower Manhattan.

    The amount of rental and units for sale that are on the market down there is huge, not to mention the stuff that has nt even come on the market yet.

    Such as the old Chemical Bank building at 20 Pine street, and 77 Wall St a 20 year old office building (former home of Dresdner Kleinworth) also being converted to luxury condos, and up and down every street down there.

  112. 3b says:

    #100 pret Regarding Bear, a little bit of digging reveals that most of their layoffs are in southern California, not New York.

    A little bit of digging? What does that mean?

    I do not need to dig, I have a good friend of mine at Bear at their big complex in Whippany NJ.

    And he tells me the layoffs there have been deep and are ongoing, so its not just at some obscure Bear subsidiary in sunny Cal.

    Of course what would he know, he only works there, you on the other hand sis a little digging, whatever that means.

  113. 3b says:

    #93 Tim:They were told by an appraiser that everybody is doing this and they should too.

    Everybody is doing it? I think those days are over.

  114. BC Bob says:

    3b,

    It’s comical how someone, outside of the industry, actually believes that WS is/will not take an employment hit. I guess Bloomberg is not plugged into WS anymore? In the meantime, I have stacks of resumes on my desk from individuals who were making big $ and have no place to go. It’s actually sad listening to their stories.

  115. 3b says:

    #41 BC Bob: Our young pret is in deep,ddep denial, it goes aginast his entire belief system that NYC is special.

  116. chicagofinance says:

    Of all people I received this link from my Mom’s husband….

    Fifteen key economists, policymakers and strategists weigh in on a week of volatility and economic turmoil.

    http://www.newsweek.com/id/104334/output/print

  117. 3b says:

    #116 BC Bob: its absolutely incredible. he was going with this silliness in the summer, when things were just getting really ugly.

    But now we are almost into Fed of 08, and even after all that has hsppened he is still deluding himself with this nonsense that Wall St layoofs will be modest at best.

    In a word he has to be insane.

    Even my old Goldman is laying off, they can couch it in what ever terms they want, but they are laying off, which was always a last resort for them (at least in my day)

    And the Citi saga of layoffs is just getting started, and on and on it goes. And through it all our young precious pret is in complete denial.

  118. 3b says:

    #22 grim Regarding Otteau, except for his August/Decemeber compariosn regarding decrease in inventory.

    I thought this report was the most honest if you will and sobering report (for sellers and realtors) that I have read since you started posting them.

  119. Sean says:

    re: (116) BC Bob not that long ago Wall Street cut about 60k jobs from 2000-2002 right after the dot com bubble burst. Many of those that were cut from the Investment banks and Brokerages mulled around for a while thinking they could get back into the biz. Some that I knew hung around the NYC area and became bartenders or took other service jobs to pay the bills in the hopes of getting back in. In many cases new jobs at the banks never materialized and many moved on to other careers, including my own brother who had a great job on the floor of the NYSE.

    Same will happen this time only there will be allot of additional pain since back in 2000-2002 many of these bankers rented apts in NYC rather than owning. It is different this time. The condo glut is hitting now and the inventory is going to skyrocket like crazy over the next year.

    Reminds me of this clip…..

    http://www.killerclips.com/clip.php?id=67&qid=573

  120. Confused In NJ says:

    William Poole hasn’t learned that in the “Land of the Blind”, the “Sighted Man is No Longer King”, rather, “He’s burned at the Stake as a Heretic”.

  121. Clotpoll says:

    pret (99)-

    “But probably you could’ve tried to show that Archstone’s revenue sufferred from their aggressive tactics.”

    Connect the dots, Pret. Barrons already established that Archstone is bleeding cash. Next, we have evidence that tenants in one of their properties hate living in it and discovered that Archstone uses ham-handed rent increases in other properties they own.

    A leopard can’t change its spots. And, frankly, I’m not interested enough to find out how much treating their tenants like crap has eroded their cash position. At the end of the day, loss is loss.

  122. njpatient says:

    CK interior design center (kitchen remodeling place) abruptly out of business in the Short Hills Mall? Such a thing would never happen in Bergen!

  123. Confused In NJ says:

    Jan. 26 (Bloomberg) — Merrill Lynch & Co. Chief Executive Officer John Thain said the outlook for U.S. consumer spending is worsening and interest-rate cuts won’t stem a slump in house prices.

    “The problems in the credit market are spreading, they are spreading to the consumer sector,” Thain told a panel at the World Economic Forum’s annual meeting in Davos, Switzerland. “We are likely to see another wave of problems on the consumer-credit side.”

  124. BC Bob says:

    confused [125],

    Exactly. I didn’t have much time yesterday to respond to various post regarding the “stimulus” package and lower rates.

    Too many confuse lower rates with corresponding, increasing credit. As the fed lowers, credit is becoming tighter and tighter. Credit is the final arbiter not a 50-100 basis point cut. The fed does not really care about John Q. Their sole concern is their charter banks, their constituents. As the fed lowers the banks will continue to hoard cash. They are staring at years of reparations regarding their balance sheets. The feds goal is to get the yield curve back to a positive slope, steepen as much as it’s possible. That’s the game plan, not John Q’s zero down, neg amort, 80/20, piggyback loans, teaser rate, ninja’s, etc… It’s impossible to clear out the s*it with the creation of more s*it. A new game plan has been instituted. Even the monkeys on the career-builder commercial understand this.

    Throw interest rates out the window. It’s all about credit. The only winner, a prime buyer putting down 100-150k on a 500k house. The red carpet will be rolled out. How does the bubble reignite in an environment of falling rates. It doesn’t, the only answer is to recreate 2003-2006 credit conditions. Not happening.

    I think I’m turning Japanese, I really think so.

    The stimulus package? $150B, a spec of sand on the beach. Picture BB taking a piss on a raging inferno. Hopefully, he has a ton of beers in his system.

  125. frank says:

    #114,
    bear fired all the losers last week, now they are hiring like crazy.

  126. Orion says:

    CORRECT: Tyson To Eliminate 1,500 Of 2,400 Jobs
    By MarketWatch
    Last update: 4:26 p.m. EST Jan. 25, 2008

    13.26, -0.23, -1.7%) said it will cease beef slaughter operations at its Emporia, Kansas, beef plant in the next few weeks, resulting in the elimination of 1,500 of 2,400 jobs. Affected workers will continue to be paid and receive benefits for 60 days, and the company will work with affected employees to discuss other employment opportunities within the company. The Emporia plant will continue to be used as a cold storage and distribution warehouse and will process ground beef. Tyson, a Springdale, Ark., meat company said it estimates an industry-wide beef slaugther overcapacity, relative to available cattle, of 10,000 to 14,000 head of cattle per day. Shares of Tyson Food recently traded down 15 cents, or 1.1%, at $13.34. (An item published earlier incorrectly said Tyson would cut 1,500 to 2,400 jobs.)

  127. Essex says:

    Wyeth to cut 5,000…or 10%….NY TIMES Bidness Section today.

  128. afe says:

    Grim,

    I haven’t been able to get a password to the forum you posted earlier this week. Would you or others have an address for
    mls 2478974? thanks.

  129. njpatient says:

    “I’m not quite sure how you can simulaneously say ‘you can’t time the market’ then say ‘it’s a good time to buy’ (which implies market timing).”

    Darn skippy.

    Oh, and I’ll second your earlier point that if your realtor isn’t properly representing you, get another one. There are good ones out there, though I may have doubted that before Mrs. patient introduced me to this blog. Now I just have to hope one of the good ones is still in business in the winter of ’09, when I get back in the water. Actually, my hope is that, by then, the bad ones will have gone belly up and I’ll find a clot/rhyming/rich without too much trouble.

  130. grim says:

    afe,

    5 Wilde Hollow

  131. grim says:

    Actually, my hope is that, by then, the bad ones will have gone belly up and I’ll find a clot/rhyming/rich without too much trouble.

    Why not a grim? I’m feeling left out.

  132. lostinny says:

    133
    If you were licensed in NY I’d beg you to be my agent.

  133. njpatient says:

    #99 pretorius

    “I checked the company’s operating metrics going back to 2006, and revenues grew at least 5.5% each quarter (compared to same q previous year) between 1Q06 and 2Q07.”

    This is worthless. Presumably you’re aware that profits citywide cratered in the fourth quarter? Also, I’d note that their 3rd quarter financials are publicly filed. Why did you skip over them? Is it becauses NOI for third quarter 2007 fell from third quarter 2006?

    Do yourself a favor and look at their 11/27 8-K and think about it for a moment.

  134. njpatient says:

    100 pre
    “Regarding Bear, a little bit of digging reveals that most of their layoffs are in southern California, not New York.”

    Couldn’t find where it says that, although I doubt the OC Register has a handle on terminations in NY.

  135. njpatient says:

    103 grim
    fascinating. Never thought of that, but it’s obvious in retrospect.

  136. njpatient says:

    pre
    “New York’s finance industry has been migrating to midtown for years.”

    Really? Why have major corporate law firms been migrating downtown then?

  137. njpatient says:

    pre
    “Downtown office space is being converted to residential use for good reason. It is worth $600 per square foot as office space but $1,000 per square foot as residential space (rough #s).

    It makes sense to buy the office building for $600 per square foot, spend $200 converting it, and sell it for $1,000.

    Meanwhile, midtown office space is worth $1,000 per sf. So you don’t see office-to-residential converstions there”

    As soon a you neglect to include the value per sf of midtown residential, this example becomes useless.

  138. Shore Guy says:

    # 20 “must confront their sellers with the truth”

    What a quaint notion, the truth.

    # 75 I just KNEW Saddam was responsible for something. If it was not WMD, it must be the housing mess. I wonder if NAR is going to get sent to Gitmo.

    About the inventory “reduction,” another thing aside from the very good points made avove re. the handling of the numbers. The reduction in inventory also likely reflects the losss of homes being offered by the “heck, if I can get this price I will move” crowd. Theywere not particularly interested in selling but would if they made a killing on the property. If so, that should mean the among the remaining sellers there is a greater proportion whoi are looking to get out (for whatever reason) and should be motivated to deal, especially in light of declining prices and fewer qualified buyers.

    # 86 “we both would end up with 1/2 of 200%.” That is a creative way of looking at it.

    # 104 “A junior trader responsible for $7B in losses? ”

    And they thought he was just taking an extra long time fetching coffee.

  139. Shore Guy says:

    # 103 “where investors can buy bonds before they are actually created”

    What a country.

  140. afe says:

    thanks grim!

  141. Shore Guy says:

    There HAS to be a special place in hell for someone like this.

    http://www.app.com/apps/pbcs.dll/article?AID=/20080125/NEWS/80125054

    No prison time was given to a former bank president who admitted stealing from the collection plate at a Union County church.

    [snip]

    …He served as a trustee and sang in the choir.

    [snip]

  142. njpatient says:

    120 3b
    “Regarding Otteau, except for his August/Decemeber compariosn regarding decrease in inventory.

    I thought this report was the most honest if you will and sobering report (for sellers and realtors) that I have read since you started posting them.”

    As the resident Otteau-detractor, I nevertheless agree.

  143. pretorius says:

    Njpatient 135,

    Can you give a link to that 11/27/07 8-k? I can’t find it.

    -Pretorius

  144. njpatient says:

    “Why not a grim? I’m feeling left out.”

    Are you representing? I couldn’t remember. I’d like a grim to carry around in my briefcase for emergencies, frankly.

  145. pretorius says:

    Njpatient 139

    “As soon a you neglect to include the value per sf of midtown residential, this example becomes useless.”

    I don’t know what you’re saying. Can you elaborate?

  146. njpatient says:

    147 pretorius

    you said downtown residential was $1000 per sf and commercial was only $600. Therefore commercial went to midtown, becauses in midtown commercial is $1000. That demonstrates nothing unless the spread is different.

  147. pretorius says:

    njp, still don’t know what you’re saying. What his your point?

  148. njpatient says:

    ….and in case that’s still not clear enough, we can’t calculate whether the spread is different becauses you didn’t give the number for midtown residential.

  149. njpatient says:

    I guess it wasn’t clear enough.

  150. njpatient says:

    145 pretorius

    I’m more than a little shocked that in your apparent line of work and with your apparent background, you don’t know where to find a corporation’s publicly filed financial disclosure.

  151. grim says:

    Are you representing?

    I am.

  152. hughesrep says:

    #108

    I skipped that Builders League of South Jersey meeting Friday, I’m a member.

    Normally I wouldn’t associate with any group that would have me as a member, but I would like to have seen the difference in the attitudes this year vs. last.

    Some of the builders active primarily in South Jersey, PA, and Delaware are teetering on the edge.

  153. 3b says:

    #138 CLeary Gottlieb is going to mid-town from down town.

  154. njpatient says:

    “grim Says:
    January 26th, 2008 at 5:56 pm
    Are you representing?

    I am.”

    WOOHOO!

  155. spam spam bacon spam says:

    Shore Guy:

    It makes (made) sense.

    I respect u and am interested in what u think.

    I’m sharp in certain areas, but have never dealt with an Angel Investor before, never valued my business, and certainly never dealt with someone (the AI) who has a boat bigger than Catena’s. :) (Makes Catena’s look like an inflatable Zodiak…) This guy can outmaneuver me in his sleep. He made the highest profit ever recorded for a refinery sale. I’m sweating… (a little ;)

    So….his suggestion is that “buying in at “50%” gives me some investment capital, but really doesn’t provide a huge infusion of cash. 50% is ‘playing around'”

    Buying in at “100%” is a serious chuck of cheese and can really propel us forward.

    BTW-He’s done his homework and said he wished all deals were like this. Said our reputation is outstanding. (Made me proud :)

    So…still sound crazy?

  156. spam spam bacon spam says:

    *chunk.

    chunk of cheese.

    Chuck is what my stomach wants to do everytime I think about this.

  157. pretorius says:

    Njpatient,

    Seriously I can’t find the 11/27 8-k. Can you link to it?

  158. Clotpoll says:

    spam (158)-

    Cowboy up.

    Look at it this way: no matter what happens, you’re going to learn an invaluable lesson.

  159. Pat says:

    spam, we were at a little place near Quakertown today – kind of deceptive. Old Bethlehem Rd.

    A nice wrinkled lady was watching for us. A little hard of hearing, I think, but somebody I’d go hang with and suck dry for info if I ever had a free Thursday. Definitely not the crumpets type.

    We watched her son giving about ten girls a lesson. Too bad nobody markets to the boys and scouts. Lots of money flushed there.

    We were quiet and stood between two stinky ponies who were just hanging out and demanding attention. The guy kept waving and shouting to my daughter to sign up, or maybe he was saying, “Get ON!”

    We walked back to our car through one of the stables and I couldn’t believe it when I saw first place ribbons from Devon there.

    Those folks were really nice.

  160. spam spam bacon spam says:

    Hey Pat…

    That’s very near me. My trail ass’n holds their meetings and cocktail party at the Quakertown Gun Club.

    I’m just getting my husband to ride. I don’t know what it is about guys/boys and horses. He said he’s given up any shred of manlihood to do this. :)

    US Pony Club (USPC) has a tetrathalon where you ride (jumping), swim, run and shoot a gun. That’s too fun for a kid, boy or girl.

    The olympic riders (jumping & dressage) are almost always men.

    The bottom of the sport, (the beginners and near-beginners) is FLOODED with girls/women…the men stay and move up, whereas the majority of girls stay in the lower ranks. You really need muscle to handle the highest level horses. And that’s why I think men do really well.

    I would think the SMART guys would pick a sport where there are an overwhelming number of girls (makes it easy to get a date when you are the only one of 3 or 4 guys among 70 girls), the girls tend to have money (think Georgina Bloomberg), they wear skin tight clothes (breeches), and the sport DEMANDS a HUGE amount of muscle, so we’re ALWAYS begging for a knight in shining armour to help us hold a stallion, load a bale of hay, carry a bag of feed, etc…

    Do you happen to remember their names?

  161. spam spam bacon spam says:

    I just lost whole reply to you, Pat.

    grrrrr. :)

  162. spam spam bacon spam says:

    oh, it’s there :)

  163. spam spam bacon spam says:

    Clot [160]

    a prefix makes all the difference.

    Look at it this way: no matter what happens, you’re going to learn an invaluable lesson.

    Not true.

    I’d agree, though, that it could be a very VALUABLE lesson.

    Whatever happens, we’re ready.
    I’ve spent years getting this thing rock solid and now here it is…

    Wish me luck dude. And a hellofalotta deodorant.

  164. Sean says:

    re: (143) He was a banker and he was used to stealing and getting off scott free.

  165. Seanhttp://njrereport.com/index.php/2008/01/25/weekend-open-discussion-part-ii-7/#comment-152426 says:

    NAR has been busy down in the Beltway.

    Here they are bragging about their lobbying for increasing conforming loan limits.

    http://www.realtor.org/press_room/news_releases/2008/stimulus_package_must_include_loan_limit.html

    Although the news media has been hyping the stimulus rebate checks arriving any day now in a mailbox near you, I have yet to find the drafted bill of what the actual bailout not the imagined one will look like.

    We will see allot of activity on Wednesday as Congress has scheduled hearings this week after what will be an interesting State of the Union address on Monday. The back rooms of Congress will be busy as our legislators scramble to add pork to this stimulus bill.
    Hopefully some of the expert speakers invited to testify will scold Congress on creating a bailout before fixing the lending industry.

    Make no mistake about it by the time this legislation hits the floor for a vote it will have a subprime bailout, and we could end up with another trillion in taxpayer guaranteed mortgages refinanced from junk, as Congress allows a refinancing of the liar loans that will clear the remaining junk off of the investment banks books.

  166. John says:

    Re Bear, pre 2008 they only could get the already identified dead wood off their books which under Warn act had to be done by the last day of October.

    Two weeks ago Bear did their second round of bloodletting and lots of people got let go. They actually did shouldertapping one day and you were out the door.

  167. dinra says:

    details on 2423447….seems like it was sold.

  168. gary says:

    Take a good look at this link. Read the link carefully. This is an archived link… a snapshot. Go ahead, click on the link and notice the prices listed of these homes. This is just a few years ago.

    Read those prices carefully. One way or another, I’m going to win this war and some how, some way I’m going to shake some sense into buyers and snap them out of this unprecedented brainwashing that the RE industry has unleashed.

    It’s sickening; and my desire to take back the territory that was seized by these charalatans has not diminished in the least.

    Look at those prices carefully and tell me if you have any doubt that a fleecing of epic proportions took place.

    Use that web archive link for any realtor listing sites you can think of and read the listing prices from ’98, ’99 or 2000. Disgraceful.

    http://web.archive.org/web/19990429144222/century21turi.com/list.htm

  169. Clotpoll says:

    spam (164)-

    Went to the OED on “invaluable”. Stand by my usage:

    in·valu·able (in val′yo̵̅o̅ ə bəl)

    adjective

    extremely valuable; having value too great to measure; priceless

    You say tomAto, I say tomahto. Let’s call the whole thing off.

  170. grim says:

    dinra,

    Not sold, expired.

  171. Pat says:

    Spam: Joanne Moore.

  172. dinra says:

    Grim,

    It would interesting to see the Mt. Olive listings with min 4BR 2BA that sold in the last 2 months. Looks like most of it were at a very reduced sale or got pulled out.

    I would like to see the OLP, LP, SP, DOM, Address

    thanks.

  173. Confused In NJ says:

    Star Ledger Section 2 page 3 has good article “Feds were enablers in subprime mortgage crisis” by Nicholas Bagley. Full article link below. Essentially the Treasury Department OCC pre-empted several states laws in 2005 which were attempting to regulate predatory lending and minimize it’s effects on State Investment Funds.

    http://www.law.nyu.edu/pubs/magazine/autumn2005/documents/p98_102a.pdf

  174. Secondary Market says:

    just catching up on the posts here this morning; i’ve been apartment hunting in philly all weekend. of all the great threads, #167 stands out, as Yo La Tango is one of my all time favorite bands and have seen them many times at Maxwell’s in hobo.

  175. Confused In NJ says:

    Michael Mandel, columnist, BusinessWeek: “The housing market is in free fall, and home-equity loans, which many people used as piggy banks, are becoming more expensive and harder to get. … A squeeze on consumer credit could bring even irrepressible shoppers to a halt. But there’s a surprising force that could keep the bottom from falling out … the $3.5 trillion health and education job machine. … What people don’t realize is that health and education combined make up the single largest source of jobs in the USA, employing … about 20% of the total workforce. What’s more, government funds support many of these jobs … making them less subject to the business cycle. The hidden danger now is that fading tax revenues may cause state and local governments to cut back on their funding …a double whammy that could send the economy into recession.”

    Interesting, 20% of workforce is Health & Education?

  176. pretorius says:

    Interesting article titled “New York vs. New Jersey” in January 2008 edition of Real Estate New Jersey magazine.

    NJ real estate execs are wondering why so few firms are moving jobs from Manhattan to New Jersey when rent gap between 2 places continues to widen. Taxes, state incentives, and cultural trends are some of the explanations.

    http://www.renj-digital.com/renj/200801/?u1=texterity

    I believe the biggest reason is cultural. New York-based firms know they need to stay in Manhattan to attract the best and brightest. Today, these workers prefer to live and work in urban neighborhoods. Hudson County is the only part of NJ that benefits from this trend, which helps explain why home prices are holding up better in Hudson than in suburban parts of NJ.

  177. Salty Steve says:

    We will be going to an open house today at:

    41 Fieldstone, Hanover, NJ 07981
    MLS ID# 2446299

    It was purchased in 2005 for 540k and is currently listed at 540k AND is unoccupied.

    We are thinking of putting a bid in, but aren’t sure if the house will eventually be foreclosed on and we should wait?

  178. 3b says:

    #179 pret: I believe the biggest reason is cultural. New York-based firms know they need to stay in Manhattan to attract the best and brightest.

    Give it a rest young pret.

  179. grim says:

    Steve,

    The listing states it’s a corp relo.

    I don’t see any indication that the property is in any stage of forclosure. I’m going to doubt it’s even late on a loan. Mortgage records show a single purchase loan at $350k.

  180. Salty Steve says:

    Grim,

    Thanks… You really hit the spot with this website.

    We’re going to hit the open house 30 minutes before the end and see how many people signed in. Somehow, we’re also going to try to figure out if any of the signatures are agents…

    enjoy your Sunday!

  181. Sean says:

    Complex Financial Trades Worry Economy Watchers

    Few interesting points from the article.

    In a letter published in Investment Outlook, Gross, the PIMCO managing director, warned that the swaps market represents a “bank of shadows” largely because it operates without anyone watching.

    “Credit default swaps are perhaps the most egregious offenders” of all derivatives, Gross wrote. “Throw in an embarrassed regulatory network consisting of the Fed and Congressional watchdogs asleep at their post, and you have a recipe for credit contraction — a run on the shadow banking system.”

    The market for all of the side bets, called credit default swaps, exploded from $6.4 trillion in 2004 to at least $43 trillion at the end of 2007, far surpassing the total value of the debt markets, according to the Bank for International Settlements.

    http://www.washingtonpost.com/wp-dyn/content/article/2008/01/24/AR2008012403274.html

  182. Frank says:

    NJ RE market is waking up from the winter sleep, inventory is by 1500 this week and my neighbors house had 10 showings since Friday.
    It’s a great time to sell at a low ball price!!!

  183. 3b says:

    Lots of open houses in River Edge today!!

  184. JBJB says:

    Anecdote of the week. We were at a birthday party for my wife’s uncle last night in Midland Park. Her Aunt & Uncle have lived in the house for 35 years and are on the verge of retirement and are trying to sell their house and trade down to a townhouse. They listed the place back in November and have not had a single offer. By my calculation, the place is overpriced by at least 75k, and needs a 50k investment to modernize and update to 2008 standards. They have taken decent care of the house, but the kitchen, bathrooms, windows, HVAC, etc, are all dated by 20-25 years.

    The sad part is that her uncle is actually waiting for the house to sell before he officially retires, and would probably lower the price to get it done but his “real estate savvy” children with help from the realtor are telling him to not lower the price as everyone wants to live in the Midland Park/Ridgewood area.

    I really felt sorry for the old chap.

  185. Shore Guy says:

    # 157

    Thanks for the kind words. That said, you should not rely on any advice given by me or anyone else who does not complete knowledge of the terms of the proposed deal and knowledge of the law relating to the proposed business arrangement.

    So, my first piece of advice is to spend some money on a very good lawyer. Not just anyone, but someone who has experience with such deals and, in the best case, one who has substantial experience with your industry.

    Find the most successful people you know and ask them who they use as business lawyers. Meet with 3 or 4 of those lawyers and get recomendations from them on who to meet with. It may cost you a few thousand dollars but, my philosophy is, it is better to spend money up front to identify the pitfalls etc. than it is to get involved in something and then discover the problems.

    Just one thought, though, from your earlier post. There is never more than 100% of any physical entity. The entity may grow bu 100%, thus doubling its size, but there is never more thaqn 100% of it. If you are willing to give up 50% in the interest of achieving financing, business advice, etc., so be it. Just dont think you still have 100% of anything.

    Related to that, whenyou talk tothe lawyers, think about ways of structuring a partnership or corp. agreement that may involve different classes of stock with different voting privileges. It may be that you can strike a deal that leaves you in control but you take out less profit until the capital infusion brings your investor a certain ROI. There are dozens, maybe hundreds, of ways of structuring a deal that benefit you, and a like number that work to your disadvantage.

    Don’t allow yourself to be overly impressed with his boats, cars, planes, etc. Like when dating, focus on what matters, not baubles. If one’s prospective spouse is wealthy, with all the trappings, but they are a calculating, coniving, untrustworthy person, what does the money matter — one is likely to end up in a miserable situation. It is sometimes better to forego an opportunity if it is not the right one. Your opportunity may be right, and it may not be. I have no idea; however, you should know — throughthe benefit of clear-headed advice from experts — before you agree to anything.

  186. Kelly says:

    Does anyone ever go to the Irvine Housing Blog – similar to this but based in OC. I notice they are able to find out both the original purchase price and the HELOC’s taken out against the house over the years. It is really interesting seeing all of the short sales out there. Does anyone know if that type of info is accessible here? Or is that info accessibility state-regulated? It would be interesting to see how some locals used their houses as second incomes.

  187. Shore Guy says:

    189 Related to that, is there any way to find out the “true” selling price of NJ properties – the sales price minus any cash back at closing or other such concessions to buyers that reduce the true cost of buying a property?

  188. Shore Guy says:

    From the Irvine Housing Blog:

    Purchase Price: $615,500

    Purchase Date: 12/10/2004

    Address: 112 Stepping Stone, Irvine, CA 92603

    1st Loan $488,784
    2nd Mtg. $122,196
    Downpayment $4,520

    Humm, purchased a home for 615.5 and put down less than one would put down on a $15,000 car. I know that nearly 3/4 of 1% downpayment is some serious dough, but………

  189. Kelly says:

    This is a great one from the Irvine Housing Blog

    So lets walk through the mortgage history of this property and see just how bad HELOC abuse can get…

    * 7-20-2001 The house was purchased for $397,000 with a first mortgage of $317,600 and a downpayment of $79,400.
    * 11-07-2001 HELOC for $48,000 taking out over half of downpayment.
    * 8-26-2002 Refinance for $360,000.
    * 11-26-2002 HELOC for $29,000
    * 11-26-2002 HELOC for $71,000
    * 6-18-2003 HELOC for $56,000
    * 6-18-2003 HELOC for $100,000
    * 6-1-2004 Refinance for 517,500 –probably paid off HELOCs at this point.
    * 10-22-1004 HELOC for 89,900.
    * 4-21-2005 Refinance first mortgage of $624,000
    * 4-21-2005 Refinance second mortgage of $156,000. Total debt of $780,000 at this point.
    * 9-12-2006 Refinance first mortgage of $948,750.
    * 9-12-2006 Refinance second mortgage of $189,750. Total debt of $1,138,500. No HELOCs

    So there you have it. This homeowner went to the housing ATM 8 times over a 5 year period and pulled out $820,900.

    What is the numbers that someone posted – 70% of NJ people make less than $100K – huge Heloc’s would explain all of the Hummers, BMW’s and Mercedes I see at the Garden State Plaza. It is probably just as bad around here.

  190. Shore Guy says:

    # 192

    Kelly,

    Don’t you know, soon $300, or $600, or $ 1,200 checks will be raining down like rain, making everything better.

  191. Kelly says:

    I did not see this posted yet – from the Record

    http://www.northjersey.com/realestate/Desperate_owners_turn_to_short_sales.html

    “Anna, a Bergenfield woman who bought her Cape Cod, no money down, for $445,000 two years ago. Now, in a much slower market, her real estate agent says she’d be lucky to get $380,000. …In addition, her interest-only mortgage started out with reasonable monthly payments, but she realized the payments would rise soon to unaffordable levels…
    She recalled her work to fix up the house — she added a fence and renovated the kitchen. But she decided a short sale was the right choice because at least “I’m not just waiting for a foreclosure…”

    She buys a house – no money down, pays a teaser rate – probably took out a Heloc for the fence and kitchen. Renting from the bank.

  192. Kelly says:

    Shore Guy – the thing that gets me is that if you have negative equity in your house you do not own your house – not even a portion. You are not losing money and you should be thanking your lucky stars for a short sale. These people deserve the negative consequences of foreclosures and should have to forfeit their checks/rebates. We are already bailing them out enough – plus they are getting a bonus to boot.

  193. Confused In NJ says:

    192. Ponzi couldn’t have done better. One could make a comfortable living juggling HELOC’s. I guess the Government should bail this person out, as they obviously had no Anti-HELOC education. Maybe the “No child left behind Act” needs to require this type of education.

  194. Quandry says:

    A post from yesterday made me think of a game.

    Asking Price v. Accepted Rent

    I’ll go first,

    Clark Twp. 2006 Asking: $439K Monthly Rent: $1700+Utilities

    Bonus: Year 2, same rent month to month.

    Any takers?

  195. Frank says:

    NJ housing market is on fire!!!! people are waiting in line to see my neighbors house, I smell a bidding war, just like the good old days. Boooooooya!!!!!!

  196. lisoosh says:

    spam –

    Having been through partnership negotiations in the past, I’d like to second Shores advice.

    I would also point out one other thing – make sure you and this investor are on the same page regarding the direction you want to take the business in and how you want to grow it. It sounds like this is your baby, will you be comfortable with outside involvement and will you be OK with accepting someone elses wishes?

  197. njpatient says:

    ‘Soosh and spam
    “I would also point out one other thing – make sure you and this investor are on the same page regarding the direction you want to take the business in and how you want to grow it.”

    This is vital – who will control decision-making?

  198. Kelly says:

    Also from the Record article

    “Another short seller, a Lodi woman who asked not to be identified by name, owes $620,000 on her two-family house, which she bought in 2006. She’s a saleswoman who works on commission, and got a so-called stated income mortgage — one where the borrower is not required to offer proof of income. She said the mortgage broker encouraged her to overstate her income to qualify for the loan.

    But when her commissions slowed down, she found she could not afford the monthly payments of $6,100, even with her tenant’s rent check… “I’m partly to blame,” the homeowner said. “I should have known better.” But she thinks the lender should have known better, too: “I should never have been able to get that loan, and I’m sorry I did.”

    Shorter version – the mortgage broker suggested I lie, so I did. No long-term consequences for me, just have the bank and the taxpayers should bail me out.

    A story we will hear over and over again.

    They have a realtor in the article who bought an income rental and now has to do a short-sale. What will his consequences be? Probably none.

  199. BC Bob says:

    “I smell a bidding war, just like the good old days.”

    Frank,

    Problems with your olfactory nerve?

  200. pretorius says:

    Just checked out a suburban condo I sold last spring.

    Buyer is a flipper who painted the living room and put it on the market for 25% higher that he paid me.

    Asking price now 5% lower than he paid.

    I have no idea what this guy was thinking. His equity has been wiped out and he’s bleeding $2000 per month.

  201. lisoosh says:

    For BC, 3b and Pret:

    “Financial crisis could cost London 20,000 jobs

    As many as 20,000 City jobs are likely to be wiped out by the financial crisis, according to one of the first comprehensive forecasts of the toll on London’s economy.”

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/27/cnjobs127.xml

  202. lisoosh says:

    203, Pret

    The guy was thinking “Real Estate can only ever go up”, just like the other sheeple.

    Your example is perfect – a flipper selling to a flipper. Encapsulates the entire Real Estate market fiasco of the last few years.

  203. pretorius says:

    Lisoosh,

    Forecasts are often wrong. Several people who post frequently on this site predicted massive Wall Street layoffs during the 4th quarter. These predictions proved wrong.

    The suburban condo I sold was my primary residence for a couple of years. It was my intention to hold it for 2 years then sell for a tax-free profit, so I guess you could say I flipped it.

  204. Shore Guy says:

    # 195 You are preaching to the choir on that point.

    # 198 THe market on fire? Maybe like Dresden at the end of 1945. The smell may just be the chared remains of the RE bubble smoldering across the state. Well, that or a release from one of the refineries.

  205. BC Bob says:

    Pret [206],

    C&G has reported that we have already reached the same # of losses, financial jobs in NY, as the bust in 2001. I’m not sure how you calculate it, but we just finished the last quarter of 08. When you cherry picked my statement regarding Bear you convenientely forgot to add that I also stated that jobs losses on WS would rival/probably exceed 2001. In addition to this, I stated that when the smoke clears there would be 30-60K jobs cut at Citi. Why don’t you reiterate your statements. If you have actively been trading your convictions, you would be getting slammed.

    OK, you’re the expert. Tell me what depts, WS jobs, will be expanding. Better yet, let me know what depts are not facing the ax. Do me a favor, off the top of your head, not google.

  206. BC Bob says:

    “But last week, as markets worldwide gyrated, lower-level bankers braced themselves for bad news. Bank of America, whose profit fell 95 percent last year from mortgage-related exposure, has said it would pare down its trading and investment banking operations and cut more than 1,000 positions. Citigroup has also laid off investment bankers in recent weeks and has said it would cut 4,200 jobs, with more expected to follow. Morgan Stanley said Thursday that it would cut 1,000 operational jobs, and Merrill Lynch was expected to reduce its staff.”

    “With a recession looming, the deal-making and underwriting environment is looking stagnant. Banks are cutting costs and taking a hard look at their head counts. All these developments do not bode well for bankers’ chances of landing another job anytime soon.”

    “Wall Street firms are downsizing considerably,” said Leah Peskin, a recruiter at Cromwell Partners. “It will be a hard year for many of those who get downsized.”

    http://www.nytimes.com/2008/01/27/business/yourmoney/27kim.html?_r=1&ex=1359176400&en=635f53c3df269f30&ei=5088&partner=rssnyt&emc=rss&oref=slogin

  207. BC Bob says:

    Cromwell Partners:

    Areas of expertise include:
    -Investment Banking, M&A
    -Capital Markets, Research, Sales & Trading
    -Alternative investments
    -Investment management
    -Commercial and consumer banking, finance, and credit
    -Financial management, operations and technology
    -Sales and marketing
    -Legal and compliance

    Pret vs one of the top financial services search firms in the world?

    Pret vs Bloomberg?

    Pret vs Mark Faber?

    Where you wagering your Super Bowl $?

  208. pretorius says:

    BC Bob,

    BC Bob,

    “Tell me what depts, WS jobs, will be expanding.”

    Citi is hiring aggressively for Citi Equity Principal Strategies. This is a recently-launched hedge fund.

    The real estate portfolio manager started a few days ago, in fact.

    I’m not saying Citi headcount is growing overall. But plenty of groups on the Street are hiring today.

    By the way, I couldn’t find the Challenger Gray report about New York finance layoffs. Could you post the report? Their # seems way to high though. Do you believe it?

  209. Outofstater says:

    #204 Lisoosh – Thanks for the link. Interesting piece there on SocGen too. So, were they humbled by something ingenuous or something ingenious?

  210. BC Bob says:

    “Citi is hiring aggressively for Citi Equity Principal Strategies. This is a recently-launched hedge fund.”

    Pret,

    Come on, you have to do much, much better than that. Great they are starting an in house hedge fund. What a few hundred jobs? Let me guess, distressed assets? They have reported 17k cuts last year and 4.4k cuts this month. How many are gone that are not reported?

    C&G, post # 41. No, it doesn’t seem too high. Believe me, I take no satisfaction in this. I could be next. However, I’m not delusional/blind to what is occuring right on the street where I sit.

  211. gary says:

    Answer: 18 – 1

  212. Clotpoll says:

    BC (210)-

    Pret can only be puffing this hard because he has skin (and lots of it) in a losing proposition. More and more, he cherry-picks, uses old stats, challenges us to search for minutiae that signifies nothing and generally dismisses the current state of affairs with an ignorance that defies common sense. His resposes are oblique…sort of a “broken record” of the worst kind. Downturns become “cooling” or “flatness”; Hindenburg-type disasters prompt him to demand we document the flaming zeppelins in painstaking detail.

    Well, Pret, there are 1,000 Hindenburgs on fire. That means they’ll momentarily blow up. Or, to use my latest analogy, Wil E Coyote has run off the edge; he’s over the canyon now, legs spinning.

    I don’t need to go to Google to tell you what will happen next.

  213. Pat says:

    Hi, Clot. What’s the difference between a short sale and one subject to court approval?

    Is that always Ch 7?

  214. Pat says:

    I have three listings back on this week from last year, down 20k, and court approval.

  215. Ann says:

    #68

    Here is the link for closed Bergen sales, it updates every week (usually Sunday night or Monday). Hope this is what you were looking for!

    buyinginbergen.com

  216. rhymingrealtor says:

    What needs to be noted about the California ATM house is, in California you can only bankrupt on your first loan without recourse. Only first mortgage’s are non-recourse loans in CA.

    KL

  217. dinra says:

    Anybody looking in Montville….Especially the townhouses in “Changebridge At Montville”…the fee 360$ per month is on the higher side. Anybody lowballing and succeeded?

    2466169

  218. bubbles says:

    #198 Frank, what are you smoking?/ I want some!!!:)))

  219. gary says:

    Go ahead and take a look at this link. You may not see the pictures but look at the prices and read the descriptions. It’s a disgrace. Do you feel a little appalled? I bet you there’s hundreds here lurking that’ll click on this link and want to puke. A Nantucket colonial in Ho Ho kus for $489,900. Read them all. Go ahead… get sick.

    http://web.archive.org/web/20000618204239/www.marron-gildea.com/hotlots.htm

  220. chicagofinance says:

    pretorius Says:
    January 27th, 2008 at 4:37 pm
    BC Bob,
    Citi is hiring aggressively for Citi Equity Principal Strategies. This is a recently-launched hedge fund.

    pret: sorry for the drive-by shooting….but I have a Citi employee client using SB, and the SB coverage guys are trying to stuff his pockets with all manner of Legg Mason, SB, & Citi in-house product. His reaction….you have got to be kidding me…there is no f-ing way I touch anything run by these guys…..AND THIS GUY IS AN MD-LEVEL EMPLOYEE?!?!?!?

    I would almost guarantee that it is going to be just as hard to staff that shop as sell the product. As a result, it is going to be staffed by n’er do well and assorted “can’t quite cut the mustard” types….like those Goldman 5%-ers

  221. frank says:

    #222,
    I wish I was smoking, but I tell you what I see, the NJ RE market is taking of. I have never seen so many people looking for a home.

  222. verypatientwife says:

    Out looking today at some open houses in the somerset county area and just my observation, I couldn’t believe how many others were out looking. In just one house (15 minutes)…5 couples/families walked in. People are out looking but not sure what their intentions are as far as buying. Again, just sharing my observations for the day.

  223. Clotpoll says:

    Pat (217)-

    A short sale could be proposed as part of a liquidation (7) or re-organization (11 or 13) bankruptcy. Anytime a house is being sold in a bankruptcy proceeding, it’s always subject to court approval. However, a short sale can also be done without a bankruptcy being involved. In those cases, the short sale listing will only mention “subject to lender approval”.

  224. Clotpoll says:

    wifey (226)-

    Lookers look. Buyers buy. Attending an open house is not a signal of a sure-fire intention to buy.

  225. Kelly says:

    Anyone see 60 Minutes tonight – about the Mortgage meltdown with the focus on Stockton, CA – some prices down 70% from peak and still buyers are holding back and expecting them to fall more. Of course tons of stated income, no money down lowns with teaser rates. Here is the link

    http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml

  226. Clayton says:

    I did see the 60 Minutes piece. I was surprised by the second couple they interviewed. They were basically saying “We knew what we were doing with the loan, but have just decided to stop paying because the value of the house is falling.” I didn’t get the sense that they couldn’t make the payments, they were just choosing not to.

    I guess it isn’t fraud, but certainly questionable from an ethical standpoint.

  227. schabadoo says:

    I guess it isn’t fraud, but certainly questionable from an ethical standpoint.

    They seemed very entitled and not the least bit embarrassed about breaking their contract.

  228. Confused In NJ says:

    The 60 minute piece, is a sad commentary on our Country. Fraud appears rampant throughout Corporate America. Our Government acts as an enabler to facilitate the Fraud. The people abrogate their own moral & ethical responsibilities, because they realized they are caught in a Fraudulent System anyway. One wonders what step on the Democracy Life Cycle we are at? Our leaders need to be held to the highest standards. The fish stinks from the head. If the Leader is corrupt, those being led, will be corrupted.

  229. BC Bob says:

    “The bookies have got the Super Bowl match up they wished for.”

    “The current betting action, as reported by online sports betting giant sportsbook.com, shows that 83 percent of the betting on the point spread has been on the Giants and 17 percent on the Patriots. Expect this number to be much closer to 60-40 in favor of the Patriots by kickoff as generally only the really serious bettors get their money down more than a week before the game is played. Every sportsbook manager will tell you that 95 percent of the action booked on a sports contest comes on the day the game is played.”

    “Chris David, sports editorial director for the online sports betting information site VegasInsider.com, says the bookies are praying for an unlikely New York Giants win: “The books have a lot of bad long-term positions. The Patriots opened up as 4-1 favorites and have been the worst long-term result since the start of the season. The Giants were 200-1 in Week 2, and there have only been a handful of bets on them. So the bookies really need the Giants.”

    http://www.bloomberg.com/apps/news?pid=20601093&sid=aDj0.ZhDBOWA&refer=home

  230. Frank says:

    I love the the 60 minutes piece, borrowers were smart, I wish I have taken out a subprime loan in Stockton, CA, it’s like going to AC with some else money. The dummies were Merrill, Bear, Citi and other Wall St. firms. I hope this nightmare continues for a while, because I got a lot of put options, a lot. When are they going to start a repo tour in NJ?

  231. bubbles says:

    230 and 231 ….the segment covering CA was sad story of “irresponsible buyers” situations. I do to certainly question lack of morality on paying of ones obligations.

    235 “tours will probably start with spring sales rush” :))).

  232. bubbles says:

    sory 231 and 232 …my bad :((

  233. Shore Guy says:

    # 227 “I couldn’t believe how many others were out looking. In just one house (15 minutes)…5 couples/families walked in. People are out looking but not sure what their intentions are as far as buying. ”

    Perhaps they are downsizing from homes that were too large. Perhaps they are looking to snatch up a real deal. Perhaps they are looking for an inexpensive way to spend a day and get decorating ideas.

  234. Salty Steve says:

    #227

    Yeah… I agree we were out looking in the Morris county (Hanover Township) area and there were a ton of open houses. We late-attended one in Hanover and there were 5 people who signed in ahead of us.

    ..Not sure how many were “lookers”, but we were there to scope out for a buy.

    I tend to think that if mortgage rates can hang below 5.5 30yr fixed through the spring, that might help bring on a semi-normal selling/buying season.

  235. Bloodbath in Winter 2007 says:

    # Salty Steve Says:
    January 27th, 2008 at 11:43 am

    We will be going to an open house today at:

    41 Fieldstone, Hanover, NJ 07981
    MLS ID# 2446299

    It was purchased in 2005 for 540k and is currently listed at 540k AND is unoccupied.

    We are thinking of putting a bid in, but aren’t sure if the house will eventually be foreclosed on and we should wait?

    Many factors at work that you didnt lay out – how is your renting situation, do you need space, do you have 20%, etc – but im of the opinion that right now, the smart move – across the board – is to wait.

    Unless, of course, you feel like this is a house you will stay in 10+ years … then, who cares if the house ‘loses’ 60k in paper value in 10 months when your neighbors sell?

  236. Bloodbath in Winter 2007 says:

    Been busy and just spent the last hour catching on up Thurs-Sun. Meaningless comments:

    * Nothing like a good BC/Clot/Pret pissing match to pass the time. Fun stuff.

    * Someone mentioned a friend with ‘real estate savvy kids’ who told their uncle not to lower the price. At this point, you should have pointed them in the direction of this blog. I do it all the time.

    * My silly friends. One in Va bought recently (i lobbied hard against, it), and one actually just signed papers last week for a place in Brooklyn. I am certain they will need a jumbo loan, as they only have 10% to put down. And considering they will have JUST MISSED the low jumbo loans, the best case scenario will be that the board rejects them. My friend and her husband used to both walk to work, now they will have to commute, plus pay a mortgage.

    * The blog is blowing up and more and more names are showing up here, which is great (Grim – why not do google ads?). Knowledge is power, people, and the wealthy of information available here should be applied to all future real estate purchases. This board helped me get out of a flip just in time, and I’ve now been on the sidelines for 16 months, stacking the chips and waiting to pounce on a great deal.

  237. njpatient says:

    225 frank

    If you got the cr@p beat out of you, you’d be invisible.

  238. DINJ says:

    Could someone help me out with a history on GSMLS # 2431712?

    Thanks in advance!!

  239. njpatient says:

    “I guess it isn’t fraud, but certainly questionable from an ethical standpoint.”

    Why?!? I find this position ludicrous. Would the bank behave otherwise if the shoe were on the other foot?!?
    Does the bank forgo a perfectly legal 20% profit because they feel ethically challenged?
    Ridiculous.

  240. njpatient says:

    “* Nothing like a good BC/Clot/Pret pissing match to pass the time. Fun stuff.”

    I’m hurt.

  241. Confused In NJ says:

    Jim Grant calls it an invitation to fraud. “You apply to a bank, or a mortgage broker for a loan. And you would fill out a form. And you would say, ‘I have an income of, oh, $400,000 a year.’ They say, ‘You do? Fine. Just sign right there.’ And they would nod, and because they were being paid, not by the veracity of the information, but by the consummation of the deal. The lending office would say, ‘Ah. You have verified this?’ ‘Why, yes, we have.’ And the lending officer would say, ‘Great. So do I,'” Grant says.

    “And he got a cut, too?” Kroft asks.

    “Yes, oh, yes. Everyone gets a cut,” Grant says.

    Almost all of the people involved in the transactions made huge amounts of money, then passed the risk onto someone else. Instead of keeping the dicey loans in their own portfolios, the big banks and giant mortgage companies that originally underwrote them, resold the mortgages to big New York investment houses.

    Firms like Bear Stearns and Merrill Lynch sliced the loans into little pieces and packaged them up with other investments, then sold them to their best customers around the world as high-yield mortgage-backed securities, turning sows’ ears into silk purses, all with the blessing of rating agencies like Standard & Poor’s.

    “At every step in the way, somebody has his or her hand out, getting paid. And everyone, for the time, is happy. The broker got paid. He or she was happy. The lending officer, ditto. The rating agencies got paid for passing judgment on these securities. They, too, were pleased, and their stockholders were happy. And on and on. And it would never end, except that it did,” Grant says.

    Regardless of whether or not the current Government typed a bypass law legalizing the aforementioned, it is still Fraud. The end investor lost money based upon fraudulent activities. Grant left out one key piece of the Fraud, the Government who facilitated it. The Government’s roles was sometimes overt like nullifying the Glass-Steagall Act or prempting State Laws against predatory lending and sometimes covert like senile Greenspan abandoning his regulatory responsibilities. Those involved are the poster children for restoring Alcatraz.

  242. Imus says:

    #241: The jumbos will go right back down. How is that apple stock?

  243. 3b says:

    #226 frank:NJ RE market is taking of. I have never seen so many people looking for a home.

    Lots of lookers, does nto mean they are buying, and more importantly they need to qualify for the loan. Everything old is new again.

  244. 3b says:

    #207 pret: Not wrong young pret, just early.

  245. 3b says:

    #199 frank:Stop yourself. Don’t mae me have to call you grasshopper too.

  246. bruiser says:

    Lots of people looking, and lots of sellers refusing to lower their prices. So does that mean “more lookers, but still no sale” is a moral victory?

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