Tue 29 Apr 2008
February S&P Case Shiller Home Price Index
Categories: Economics , Housing Bubble , National Real EstateAccording to S&P Case Shiller, NY Metro Area home prices are down 6.6% in the past year, and down 8.05% from the peak set in June of 2006:
(click to enlarge)
From Standard and Poor’s:
“There is no sign of a bottom in the numbers,” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s. “Prices of single family homes continue to drop across the nation. All 20 metro areas were in the red for the February-over-January reading. In addition, 19 of the 20 MSAs are still reporting negative annual returns. The monthly data show that every one of the MSAs has now declined every month since September 2007, marking six consecutive months. On top of that, remained steep the declines have with eight of the 20 MSAs and both composites reporting their single largest monthly decline in February.”
From MarketWatch:
Home prices fall record 12.7% in past year, Case-Shiller say
The decline in U.S. home prices quickened in February, with prices down a record 12.7% in the past year for 20 key cities, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s. “There is no sign of a bottom in the numbers,” said David M. Blitzer, chairman of the index committee at Standard & Poor’s. Prices in 19 of the 20 cities have fallen over the past year, with prices in all 20 cities falling month-to-month for six straight months. The biggest declines were in Las Vegas and Miami, with declines of more than 20% in the past year. Prices in Charlotte, N.C., are up 1.5%.
From Bloomberg:
S&P/Case-Shiller U.S. Home-Price Index Fell 12.7%
Home prices in 20 U.S. metropolitan areas fell in February by the most on record, pointing to an imbalance between supply and demand that shows no sign of ending.
The S&P/Case-Shiller home-price index dropped 12.7 percent from a year earlier, more than forecast and the most since the figures were first published in 2001. The gauge has fallen every month since January 2007.
Prices will probably keep sliding as foreclosures push even more properties onto the market just as stricter lending rules limit the number of qualified buyers. Shrinking home values have contributed to a slowdown in consumer spending that may already have tipped the economy into a recession.
“We’re going to continue in this abyss for a while,” said Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Inventories are getting worked off but it’s a slow process. Sales and prices will go down.”
Prices dropped 2.6 percent in February from a month earlier, after a 2.4 percent decline in January, the report showed. The figures aren’t adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month-to-month.
The index was forecast to drop 12 percent following a 10.7 percent drop in January, according to the median estimate of 14 economists surveyed by Bloomberg News. Estimates ranged from declines of 12.6 percent to 11 percent.
The group’s 10-city composite index, with a history back to 1987, fell 13.6 percent in the 12 months ended in February, also the most ever.
From Reuters via CNBC:
Home Prices Tumble Again; ‘No Sign of a Bottom’
Prices of existing US single-family homes extended their slump in February, with 17 of the 20 measured regions posting record annual declines, according to the Standard & Poor’s/Case Shiller home price index Tuesday.
The composite month-over-month index of 20 metropolitan areas fell 2.6 percent to 175.94 in February from January, for an annual drop of 12.7 percent.
S&P said its composite month-over-month index of 10 metro areas slid 2.8 percent in February to 190.58, for an record annual decline of 13.6 percent.
Eight of the top 20 metro areas, as well as both composite measures had their biggest monthly declines in February, S&P said in the release.
April 29th, 2008 at 5:51 am
From MarketWatch:
Deutsche Bank, Allianz take fresh write-downs
Deutsche Bank and Allianz, Germany’s two biggest financial groups, both announced further write-downs on Tuesday after the credit crisis worsened towards the end of the first quarter.
Deutsche Bank said it swung to a net loss of 141 million euros ($220 million) in the first quarter, from a profit of 2.13 billion euros a year earlier. It took a total write-down of 2.7 billion euros on leveraged loans, commercial real estate and residential mortgages. The result was the bank’s first quarterly loss in five years.
Allianz, meanwhile, said it will write-down around 900 million euros in the quarter due to the structured product exposure of its Dresdner Bank arm.
April 29th, 2008 at 5:54 am
From the WSJ:
Home Vacancies Set Record
By REX NUTTING
April 29, 2008; Page D6
The share of homes vacant and for sale, an important measure of the nation’s housing supply, set a record in the first quarter in a signal that the glut of homes on the market isn’t improving.
The homeowner vacancy rate, which measures the number of vacant homes for sale, rose to a record 2.9% in the first quarter from 2.8% in the fourth quarter, about one percentage point higher than normal, according to new Census Bureau data. The vacancy rate has jumped nationwide and in cities, suburbs and rural areas since the housing bubble popped. From 1995 until the fourth quarter of 2005, the rate held between 1.5% and 2%.
About 2.2 million vacant homes were for sale in the first quarter, up from 2.1 million in the fourth quarter and about one million more than was typical before the housing bubble burst.
Economists say the rising vacancies indicate that home prices won’t stop falling and home builders can’t ramp up construction until the glut of vacancies can be worked down.
“It’s the worst piece of housing news that we’ve heard in the past couple of months,” said Patrick Newport, U.S. economist at Global Insight. “It means home prices will continue to drop at least for the remainder of the year.”
April 29th, 2008 at 5:58 am
From the Star Ledger:
Corzine looking at targeted toll increrases to meet transit needs
Having scrapped his ambitious plan to attack state debt and fund road projects with big toll increases, Gov. Jon Corzine now is focusing on smaller toll hikes to pay for transportation needs without increasing the gas tax, according to individuals familiar with administration discussions.
While the full details are still being worked out, the goal would be to shore up the state’s depleted Transportation Trust Fund, two people familiar with the planning said. That could be done with far smaller toll increases than the 800 percent over 14 years that Corzine originally pitched in January as part of his ill-fated financial restructuring plan, they said.
The governor is hoping to secure a state budget agreement by June 15 — about two weeks before the constitutional deadline — and immediately begin negotiations on a scaled-down toll plan, said the individuals, who asked not to be identified because the plans are preliminary.
They said Corzine remains opposed to raising the 14.5-cent-per-gallon gasoline tax — the biggest current source of road project funding — because of soaring fuel prices.
April 29th, 2008 at 5:59 am
From NJBIZ:
No Longer an ‘Economic Dynamo’
When it comes to creating private-sector jobs, New Jersey was a laggard in 2007 as compared with neighboring states and the rest of the country, according to a Rutgers University report released last week. Authors of the report say the state’s job growth will not improve this year while the nation enters a “deep recession” and a financial crisis that will be “arguably the worst since the Great Depression.”
New Jersey gained just 3,700 private-sector jobs last year, an increase of only 0.1 percent over 2006. That was significantly lower than the increases in New York and Pennsylvania, which saw private-sector employment gains of 1.2 percent and 0.6 percent respectively, according to the study.
“In terms of job growth, New Jersey fell significantly behind its economic peer states in 2007. The state has lost its role as regional economic dynamo,” says the report, which was titled “Reversal of Economic Fortune” and co-authored by James W. Hughes, dean of the Edward J. Bloustein School of Public Policy at Rutgers, and economist Joseph J. Seneca.
Overall, New Jersey ranked 41st among the states in percentage of private-sector job growth last year, according to the Rutgers report. That was unchanged from 2006. New York ranked 17th, up from 28th in 2006, while Pennsylvania ranked 29th, up from 34th.
The Garden State may have suffered recession-related layoffs earlier than its neighbors because Wall Street job cuts hit back offices in North Jersey first, Hughes said in an interview. He says the state lost 7,900 financial sector jobs in 2007, mostly in the second half of the year.
The entire Northeast will likely falter in 2008, the study says. New Jersey lost 10,500 private-sector jobs in the first quarter of 2008, according to the state Department of Labor and Workforce Development. “That’s a reflection of the national downturn,” says Hughes.
He says the pharmaceutical and biotech sector accounts for about 41,000 jobs in New Jersey, while financial businesses ranging from banks to Wall Street brokerages account for 269,000 jobs in the Garden State. The importance of these sectors to New Jersey puts the state at particularly high risk of layoffs, says Hughes. “We are going to get hit hard,” he says.
Behind the national recession are factors including the bursting housing bubble, the subprime mortgage crisis, growing turmoil in the credit markets and soaring energy and commodity costs, according to the report.
Hughes says New Jersey and the Northeast are feeling a backlash from the lending boom that lasted from 2001 through 2006—a period when “we had cheap global credit, lending standards disappeared, there were record Wall Street profits and great job growth.”
There’s little that Gov. Jon S. Corzine and the rest of state government can do to ease the pain of the recession, adds Hughes. “They are prisoners of forces that may have built up over a 10-year period,” he says.
April 29th, 2008 at 6:59 am
From the NY Times:
Junk Bonds, Mortgages and Milken
Critics who compare the subprime debacle to the bubble in high-yield, high-risk corporate bonds that Drexel helped inflate two decades ago are “people who don’t understand markets very well,” Mr. Milken said. He suggests that “their rationale is that both types of financial instruments are risky.”
And he says junk bonds, or those rated below investment grade, “have little in common with mispriced subprime mortgages,” which he says are the real culprits.
“Having financed several of America’s largest home builders, I know a few things about the housing industry,” Mr. Milken said. “What happened to housing was not a failure of securitization, but rather a disastrous lowering of underwriting standards and other unfortunate practices.”
Criticizing securitization — the slicing and dicing of debt that he helped popularize — is “like condemning scalpels because a few unqualified surgeons have injured patients,” he said.
April 29th, 2008 at 7:01 am
#2
“It’s the worst piece of housing news that we’ve heard in the past couple of months,” said Patrick Newport, U.S. economist at Global Insight. “It means home prices will continue to drop at least for the remainder of the year.”
Am I missing something here? How is it bad news that prices are falling? Is it better to be so highly leveraged you are eating rice and ramen 3 times a day?
April 29th, 2008 at 7:10 am
#4
“There’s little that Gov. Jon S. Corzine and the rest of state government can do to ease the pain of the recession, adds Hughes. “They are prisoners of forces that may have built up over a 10-year period,” ”
How is that bad news? Corzine wanted to raise tolls 800% over a 14 year period and the legislature’s pork barreling and smoke and mirrors budgets are on the verge of bankrupting NJ. The less those greedy grubbers do, the better off we are.
April 29th, 2008 at 7:24 am
From CNBC:
Housing Price Drops: New England Is NOT Home, Sweet Home
Tomorrow the folks at S&P/Case Shiller will report the monthly prices in the nation’s top ten and top twenty metro markets.
Every time I report these numbers I get any number of critics arguing that the fall in home prices is really concentrated in only a few large cities in the nation, most of them in California and Florida.
…
The median price of a home in Massachusetts, and I’m not just talking about Boston, fell more than 10 percent in March from a year ago. “The last time prices declined by more than 10 percent was in December 1990, the nadir of the early-1990s housing crisis,” says the report. That downturn was fueled by the banking failures in the 1980s, but this time the finger is pointed squarely at foreclosures.
April 29th, 2008 at 7:25 am
Those Who Know and Those Who Don’t
http://seekingalpha.com/article/74547-those-who-know-and-those-who-don-t
A little tidbit on builders stock. MM
Here we go again: another big difference of opinion between those who think they know what is going on and those who actually do.
In one camp are equity traders, who keep claiming to see a bottom in all manner of markets. The other group includes those on the ground, who have to deal, first hand, with the ugly fallout from a plethora of bursting bubbles.
April 29th, 2008 at 7:30 am
From Pharmalot:
Wyeth Lays Off Another 1,200 Employees
You read it here first. The drugmaker last Friday notified employees that still more jobs are going, a Wyeth spokesman confirms. This follows an announcement last month that 1,240 sales positions would be eliminated as part of what Wyeth execs are calling ‘Project Impact.’
April 29th, 2008 at 7:43 am
From Bloomberg:
Homebuilders Turning Into Small Caps as Slump Cuts Value by 67%
The worst housing slump in 70 years erased 67 percent from the market value of homebuilders in the Standard & Poor’s 500 Index, turning the companies into small-cap stocks.
Centex Corp., the nation’s biggest builder by sales, is valued at $2.62 billion, a quarter the size of the largest company in the Russell 2000 Index. Home developers in the S&P 500 have a total market value of $16 billion, down from $49.2 billion at their peak in January 2006 and less than Kroger Co., the biggest U.S. grocery chain.
“They went through the laundry and got shrunk,” said Stephen Lieber, who oversees $11 billion as co-chief executive officer of Alpine Woods Investments in Purchase, New York. “It’s gone beyond an inoperable business situation and turned into an economic crisis.”
April 29th, 2008 at 7:51 am
“Deutsche Bank, Allianz take fresh write-downs”
That CAN’T be true!! bi and S&P said there’d be no more writedowns!!
April 29th, 2008 at 7:57 am
My question fioor the realtors and RE bulls outhere:
HOW do one find fair market price of a house in an enviroment, where there is no offers on a house and: last sale resulted in Foreclosure 7 month!!! after the sale.
Obviously I would discard the last sales price. Bank which owns property agrees with me.
Bank is listing it 13% below last selling price. Previous sale was in 2007 for 269K. before that it was sold in 2000 for 119K.
I do not know if house has being remodeled- it looks like it might have being but right now it is in pretty bad condition.
So whats fair price?? Do not tell me whatever I want to bid - Obviously I want to bid 0. Taxes also doubled since 2000 - they are now 7500$ (On a 239K listed price house, crazy is’nt it?)
P.S. 5% compound appreciation since 2000, yields 175K. at 175K this hopuse PITI+PMI+Insurance payments will b the same as newer apartment rental in the area. Funny - houses in the area right now are renting for LESS than comparable Sqft apartments.
April 29th, 2008 at 8:12 am
“Wall Street job cuts hit back offices in North Jersey first, Hughes said in an interview. He says the state lost 7,900 financial sector jobs in 2007, mostly in the second half of the year.”
[4]
Do these count for WS job losses or are they part of California’s total?
April 29th, 2008 at 8:12 am
Bloomberg:
KB Home’s Broad Says Home Prices May Drop Another 20%
http://www.bloomberg.com/apps/news?pid=20601087&sid=aNGtHO1tbzng&refer=home
“I don’t think we’re anywhere near a bottom in housing,” Broad told Bloomberg TV at the Milken Institute Conference in Beverly Hills, California.
April 29th, 2008 at 8:17 am
“It’s gone beyond an inoperable business situation and turned into an economic crisis.”
[11],
What bubble?
April 29th, 2008 at 8:21 am
“Corzine looking at targeted toll increrases to meet transit needs”
It outrageous that the tolls on GSP and Trunpike HAVE NOT increased in many years. What is the government waiting for? Let raise the tolls now!!
April 29th, 2008 at 8:23 am
How about the fact that nobody is reading Star-Ledger?
15. The Star-Ledger of Newark, N.J., 345,130, down 7.4 percent
http://ap.google.com/article/ALeqM5iD52BVPLxH_ba3UVP5TXAJeGAQ2AD90AU14G0
April 29th, 2008 at 8:24 am
Here’s the latest missive from Bill Gross:
http://tinyurl.com/55udbg
The part toward the end is the most intriguing, as he’s now openly calling for mortgage balance writedowns, then refinance- at below-market rates- via FHA, in order to stabilize home prices and stave off asset deflation serious enough to take down the whole economy.
April 29th, 2008 at 8:27 am
Al (13)-
Why the hell do you want to buy this place…at any price?
Sounds like the bottom just fell out of that area. Why be the crash test dummy who gets to find out how far things can drop?
April 29th, 2008 at 8:28 am
BC (14)-
I think this stat is what Pret might term an “outlier”.
April 29th, 2008 at 8:28 am
I don’t understand why a toll increase is somehow more equitable or palatable than a gas tax increase.
Toll increases disproportionately affect those who have no choice but to drive the toll roads, while those who don’t see no increase at all. North/South commuters will bear the brunt while East/West commuters get away scot free.
Of course, you could argue the same for a gas tax increase, long-distance commuters get hit disproportionately, even more so with an increase.
Either way, lower income residents take get hit harder.
Screw everyone over, do both.
April 29th, 2008 at 8:30 am
grim (22)-
Please, Guv, give me another reason to leave this s&*thole.
April 29th, 2008 at 8:32 am
NJ’s transition to complete welfare state may be complete by 2015 or so.
Nobody left but the ultra-rich and ultra-poor.
April 29th, 2008 at 8:33 am
Heres a novel idea.
Reduce the cost of rail transit to encourage greater ridership. Economies of scale in rail will improve to erase shortfall. Need to repair/widen roads will lessen leaving more money to be invested in non-road related transportation infrastructure. Oh yeah, there is an environmental benefit as well.
Good idea? Nah! Lets build more roads. Driving is much more fun!
April 29th, 2008 at 8:35 am
Stu (25)-
Please keep your good ideas to yourself. Or, if you decide to take it to Trenton, present it as a graft-and-inefficiency-riddled boondoggle.
April 29th, 2008 at 8:36 am
welfare state , now you have it.
April 29th, 2008 at 8:37 am
Heres a novel idea.
How about we let our roads and bridges deteriorate to unsafe level so people have no choice but to take the train?
April 29th, 2008 at 8:37 am
perhaps we can employ ourselves to properity .. lets hire more state and locals.
April 29th, 2008 at 8:39 am
I’m going to argue that the loans weren’t bad at all, “expectations” and “assumptions” were the problem.
From Bloomberg:
Countrywide Reports $893 Million Loss From Bad Loans
Countrywide Financial Corp., the mortgage lender that Bank of America Corp. plans to buy, reported a third straight quarterly loss as late payments and home foreclosures escalated.
The net loss equaled $893 million, or $1.60 a share, compared with a profit of $434 million, or 72 cents a share, in the year-earlier period, the Calabasas, California-based company said in a statement today.
Countrywide’s latest loss may feed investor concern that Bank of America will reduce or cancel its January offer to acquire the nation’s biggest mortgage lender for about $4 billion in stock. U.S. foreclosure filings jumped 57 percent and bank repossessions more than doubled in March, according to data vendor RealtyTrac Inc.
Bank of America, the nation’s second-biggest bank by assets behind Citigroup Inc., said April 21 that the sale remains on course for completion in the third quarter.
…
The mortgage company posted a $703.5 million loss for all of last year, the first in 30 years, because of higher loan losses and writedowns of securities backed by home loans.
Provisions for credit losses were $1.5 billion in the first quarter, compared with $925 million in the preceding quarter and $158 million in the year-earlier period. Results included $441 million of impairment charges tied mostly to home-equity securitizations.
Foreclosures doubled to 1.64 percent of unpaid principal in February from 0.8 percent a year earlier at the servicing unit, Countrywide said on March 13. Home loan payments more than 60 days late declined to 7.44 percent of unpaid principal in February from 7.47 percent in the previous month, the company said in the same report. It has since stopped issuing monthly updates on overdue loans.
April 29th, 2008 at 8:41 am
Clotpoll (24): NJ’s transition to complete welfare state may be complete by 2015 or so.
Nobody left but the ultra-rich and ultra-poor.
Clotpoll; Not to worry, History Channel say’s Game Over 12/22/2012 anyway.
April 29th, 2008 at 8:42 am
grim (30)-
They should put Tangelo’s black box in the Smithsonian.
April 29th, 2008 at 8:42 am
confused (31)-
As in, in the end we’re all dead?
April 29th, 2008 at 8:44 am
Calling it a ‘Black Box’ is giving it too much credit, it wasn’t much more than a stack of NAR press releases inside a Hawaiian Tropic carton.
April 29th, 2008 at 8:44 am
(32)-
On second thought, maybe just put Tangelo himself in the Smithsonian.
Kinda like what the Russians did with Lenin. Hell, John Q won’t even have to pick up the embalming tab. He’s friggin’ preserved for eternity already.
April 29th, 2008 at 8:44 am
“More on Catching the Bottom in Housing”
http://www.oftwominds.com/blogapr08/RE-bottom2.html
April 29th, 2008 at 8:45 am
We haven’t had a good Mozilo bash here in quite a while.
Refreshing!
April 29th, 2008 at 8:46 am
Stu Says:
April 29th, 2008 at 8:33 am
Heres a novel idea.
Reduce the cost of rail transit to encourage greater ridership. Economies of scale in rail will improve to erase shortfall. Need to repair/widen roads will lessen leaving more money to be invested in non-road related transportation infrastructure. Oh yeah, there is an environmental benefit as well.
Good idea? Nah! Lets build more roads. Driving is much more fun!
When I got to NJ I was amazed how expensive rail/trais were. The whole idea of a mass transit is to be SIGNIFICANTLY cheaper than commuiting by a car.
While it may be the case for people commuting to NYC, if you commute by train within NJ it is a lot more expensive than car, even with 4$/gallon gasoline high car insurance and maintenance on a car.
P.S. I love trains - nothing can beat service to Washington DC - last snowstorm my wife’s airline tickets got cancelled, we just hopped into car, got to metropark station, bought tickets and in 20 minutes she was on her way to DC.
Tickets - same price as airlibne tickets, not missing meeting in DC - priceless.
April 29th, 2008 at 8:49 am
now whereelse could you get such a refreshing view of life, but in NJ.
Plenty to do and enjoy.
April 29th, 2008 at 8:49 am
BoA is going to have no choice but to jettison the Countrywide brand if they move forward with this deal.
April 29th, 2008 at 8:50 am
Al,
Work backwards:
If you think the house would be worth X when completed, (let’s use $175K) and you estimate it would cost $40K to repair (always add 10-20% above your estimate for a real number)…
So you think it would take 45-50K ish to make the house worth what you would pay $175K for, offer $120K or so…
This takes NOTHING into consideration about RE price degradation, etc… but at least it’ll give you a firmer footing on where you can pitch numbers…
(and don’t forget repairing and remodeling is hard work…we have a 200 year old house…it wasn’t finished in the first 200 years, and it certainly won’t be finished by us…!!!)
April 29th, 2008 at 8:52 am
Light at the end of the tunnel? Hope? First signs of real change in NJ?
From the AP:
Two NJ towns with building problems considering sharing, merging
It took the fall of communism in East Germany to bring together East and West Berlin. Uniting New Jersey’s two Berlins might take nothing more than mold in a municipal building.
Camden County’s Berlin evacuated its municipal building two weeks ago because of a mold crisis. Community officials are talking about putting up a new shared town hall with neighboring Berlin Township — or even merging entirely eventually.
Berlin Township Mayor Phyllis Jeffries-Magazzu told the Courier-Post of Cherry Hill that a merger is a possibility in the future. Her town closed its decaying municipal building in 2006.
April 29th, 2008 at 8:54 am
From MarketWatch:
Falling home prices remain a threat, Pimco’s Gross says
Policymakers — but not the Fed — need to act quickly to prevent falling home prices from sparking a “ruinous” deflation in asset prices, wrote Bill Gross, managing director of Pimco, in his monthly letter. Further rate cuts from the Federal Reserve would do more damage than good, he said. “The better alternative is to initiate a limited mark-to-market write-down of private mortgage debt as envisioned in the Dodd-Frank congressional proposal combined with government-subsidized loans at below market rates,” he said. Pimco manages about $750 billion in assets.
April 29th, 2008 at 8:56 am
Clotpoll Says:
April 29th, 2008 at 8:27 am
Al (13)-
Why the hell do you want to buy this place…at any price?
Sounds like the bottom just fell out of that area. Why be the crash test dummy who gets to find out how far things can drop?
I am true believer that the good deals are to be had when markets are in turmoil, nobody really knows what is going on, and, more importantly, I need a bigger place. I can see myself living in that house for 5-10 years after I fix it up a bit.
Rents are high, I have dog - limited number of rentals + non-refundable one time fee (from 500$ to a 1000$) and 50$/month pet fee’s really adds-up,
Add on mandatory!!! health club membership and other fee
s like breathing of the “apartment complex’s air” fee - it kind of add’s up. My current place is ok, by it is small, only one bedroom - hard to do with 1 year old and a dog.
I might rent a house in the area instead - they are offered for rent at 400-500$ cheaper than 2 bedroom apartments.
Funny part - EVERY block has a house for sale. Some two or three. Ridiculous. Most people do not need to sell though as they are still asking 2005 prices +10%, and never reduce their price. I wonder at what point will realtors start feeling costs of maintanance of a listing, and decline overpriced listings??
April 29th, 2008 at 8:56 am
Ok I am gone for now, will be back in the evening.
April 29th, 2008 at 8:58 am
“need to act quickly to prevent falling home prices from sparking a “ruinous” deflation in asset prices,”
[43],
Bill, we know where you sit. Shut up and take a beating or trade out of your position.
April 29th, 2008 at 8:59 am
Greetings from Miami
The amount of new construction down here is amazing. I knew a number of condos have been built, but an incredible amount are still under construction. Almost every building down here has a crane on top and a giant banner advertising sales. I can’t imagine how long it will take to work though the inventory.
When I checked into my hotel, I actually got upgraded to a condo (no charge). I’m blogging from my kitchen with the granite countertops and stainless appliances. The bellhop told me that this was a condotell, where the rooms are actually owned by private investors and rented by the hotel. The condo I’m in was actually supposed to be lived in as a residence. The plan for my building was supposed to be half residential condo half hotel, but there are just too many empty condos down here. Well, at least I get something nice out of this mess.
April 29th, 2008 at 9:02 am
From Standard and Poor’s:
Steep Declines in Home Prices Continued in February 2008 According to the S&P/Case-Shiller® Home Price Indices (PDF)
April 29th, 2008 at 9:03 am
grim (40)-
What? No colorful Countrywide kiosk in every BofA location, staffed with bright, attractive loan officers?
April 29th, 2008 at 9:10 am
Al (44)-
“I wonder at what point will realtors start feeling costs of maintanance of a listing, and decline overpriced listings??”
When the repo guy is putting the hook into the Benz or Beemer and the agent can’t hoof it to the parking lot, because he’s stuck on the phone, fighting with Capital One.
I’ve been wondering about this for over a year now. I certainly can’t afford to maintain marketing on listings that don’t sell…and I like to think of myself (at least on good days) as somebody who will survive this mess. A few months ago, I even took to rejecting listings of my other agents when they brought in stuff that had no chance of selling. I lost a couple of agents, but I notice they aren’t exactly lighting it up in their new offices.
April 29th, 2008 at 9:10 am
My favorite stupid comment today was a newspaper article that said the low income earners won’t be spending their rebate checks in the retail stores as it is either going to cover outstanding bills or higher food and energy costs. Then they state the higher earners will however be buying the coach pocketbooks and taking vacation with their checks.
Wait high income earners don’t get checks only low income earners that have all time record amounts of debt and sky high fuel and food costs. I mean it is nice to help out the poor and lower middle class and I support that but to claim this will cause a huge spending at the retail stores is nuts.
April 29th, 2008 at 9:12 am
Clot,
The wheels will fall off the Man U bus this week. Barca will score and go through on the away goal rule and West Ham will pull a draw out on Saturday.
April 29th, 2008 at 9:15 am
Realtors can last a long time, my friend the ex-realtor quit in 2007 along with everyone else who became a realtor in the 2002 to 2006 period. He says now in his Century 21 office it is all owners, older pros who have made a killing the last ten years who can afford to wait is out and part time housewife realtors who have a husband to support them. Every 25-45 year old realtor who supported a family on that income has bailed out of his office. My friend made zero his last six months as a realtor in the first half of 2007 and made almost 200K in 2006, that is a heck of a cliff to fall off. The older realtors say this is a cycle and should be done in 3-5 years, yea like my 42 year old friend with 12 and 14 year daughters and a part time working wife can go five years without a paycheck!
April 29th, 2008 at 9:18 am
PGC (52)-
That’s a bold statement. I think Barca’s ultra-tactical diagonal/horizontal stuff gets blown apart, Barca doesn’t score and Ronaldo bags 1-2 goals. SAF won’t hold back this time; it will be EPL pace-and-power from the first whistle.
West Ham…you may have a point there.
Got to like Chelsea now over Liverpool. I think the Reds will fold under the pressure.
April 29th, 2008 at 9:20 am
Don’t pit affordable housing
Tuesday, April 29, 2008
BY MICHELE S. BYERS
Everyone knows it’s expensive to live in New Jersey and that housing costs are through the roof. For more than 20 years, our state has been trying to provide affordable housing. It’s an important public goal, one that we ought to be able to figure out. Unfortunately, new rules put out by New Jersey’s Council on Affordable Housing will pit housing needs against clean water, open space and other environmental quality needs of our citizens.
The thing I don’t understand is why the same folks who don’t want affordable housing in suburbs, supporting Mc-Mansions on 5 acre lots. Isn’t that environment destruction to extreme?
I feel all politicians have botched the housing issue. The need for housing is not just for lower income class, it also exists for middle income. The issue is Builders are not building smaller size, high density houses, for which there could be some environmental incentive.
April 29th, 2008 at 9:20 am
# 2 from the other thread:
“People who are facing foreclosure due to job loss, medical bills, death of a family member, etc, those types of cases I do feel sorry for.”
I have heard a bankruptcy judge speak and he said that in nearly every case he has ever seen the people who enter bankruptcy “because of” a job loss, medical bill, or some other event had in reality pushed their finances to the brink so as to allow any unexpected event to push them over the edge. Although the prticiular event may have triggered the bankruptcy it is not in fact the cause; the cause is overconsumption, with the “triggering event” just the last in a long line of events leading to an easy to predict fall.
April 29th, 2008 at 9:20 am
John (53)-
Cycle? Cycle of what? Prices?
I don’t give a damn what the prices are. All I care about is deal flow.
And, this cycle is so damn nasty, because all the short sale business that could be getting done is being preempted by people who can now flip their keys back to the bank with little-to-no consequence.
April 29th, 2008 at 9:24 am
According to the S&P Case Shiller HPI for the NY Metro Area (Commutable), prices are down 8.05% (nominal) from the peak set in June 2006.
April 29th, 2008 at 9:27 am
Clot,
I wonder if Realtors will eventually realize that defending high home prices is having a negative impact on ‘deal flow’.
I don’t think it will ever happen. Mainly because most Realtors I know drank their own Kool-aid and are now finding themselves long and wrong.
April 29th, 2008 at 9:28 am
Earlier today, I heard a story on the radio about a woman who was a medical secretary who ran up $21,000 in credit card debt. She states that there is NOT ONE purchase that did not need to be made and they were all made “just to survive.”
I would wager that Mrs. Shore and I earn many multiples of this woman. And, although there are some months that we might put $20,000 or more on a card or two, we would never allow as much as $2,000.00 to carry over to another month.
Do we as consumers have any grip on what “is needed to survive”? I suspect that many people here grew up in post-war suburbia in the ’60s and 70’s and that were most people transported back to those houses, cars, and amenities, we would see ourselves as poor.
I suspect that this belief that we SHOULD be able to have X or Y has fueled the run-up in home prices.
April 29th, 2008 at 9:30 am
I just did a search and here is the Judge, his name is and, as Dave Barry would say, I am not making this up, Ninfo.
http://www.careprogram.us/
April 29th, 2008 at 9:34 am
# 57 and 59 BINGO. As long as the pace of sales is good, RE agents can make a buck. I have seen many RE agent-owned homes on the market and it looks like many agents tried to make the leap from agent to mogul.
April 29th, 2008 at 9:38 am
# 25 First, the railroads do not run to the RIGHT soccer fields
Second, One does not look stunning steping out of a train car the same way one does steeping out of an Escalade.
April 29th, 2008 at 9:38 am
Homebuilders seek Tax Break for Buyers to Halt ‘Recession’
The Washington builders’ group’s chief economist, David Seiders, says the housing slump has pushed the economy into a “mild recession.” The trade group has been pushing aggressively on Capitol Hill for legislation, such as a temporary tax credit for home buyers, arguing that doing so could stem the housing downturn.
“Measures that stimulate consumer confidence in the housing market, push the fence-sitters into the ring and put a floor under house prices can successfully halt the drag that housing is exerting on the national economy, and help stabilize financial markets at the same time,” Seiders said in a statement.
Fitch Ratings said in a conference call Tuesday that the housing sector is likely to continue to contract throughout 2008, and could worsen further in 2009 if the economy slides into a sharp recession.
The ratings agency said low mortgage rates, cheaper home prices and government proposals to aid the ailing industry will not be enough to spark a turnaround.
“Despite a few steps in the right direction, U.S. housing remains mired in a steep cyclical decline, with more pain likely for U.S. homebuilders through 2008,” said Fitch homebuilding analyst Robert Curran.
April 29th, 2008 at 9:39 am
Shore Guy (60):
“Do we as consumers have any grip on what ‘is needed to survive?’”
The parents of the Gen ‘Y’ers were spoilers. The ill effects of this are now coming out.
Have a kid and go to ‘Buy Buy Baby’. The name of that store alone should be banned. See what needless krapola parents are buying for their kids.
When I was protesting the double digit tuition hikes back when I was in college, I would say that less than 1 in 10 kids were paying for their own schooling. And this is Montclair State College I’m talking about.
If you want your children to learn the value of money, you have to let them spend some of what they earned. Allowance is the devil. I never had it and I will never give it.
April 29th, 2008 at 9:41 am
John (51),
I totally agree, I was hoping to buy a new road bike with my check but lo and behold will not be receiving one. The limit for singles is $75K for the full amount and the phase out ends at $87K, right?
Also, just the vent a bit, a 27 year old friend of mine who lives in a crap house in Jackson that they over-paid for just bought a new Acura RDX at an interest rate of, get this, 18.5%! I guess the ‘05 Explorer just wasn’t cutting it anymore. Her credit must be abysmal. With one child already and another on the way at the end of summer this purchase sure seems like a wise investment! Did I also mention that the house in Jackson was the only house she and her husband even looked at before they bought? They made an offer as soon at they saw it. I can’t blame them though, they negotiated a great deal. Asking was $349K and they stole it for $347K……
April 29th, 2008 at 9:44 am
From yesterday’s thread:
Those among us who earned too much to qualify for a tax rebate check should thank the little people whose work-derived income was taxed at a higher rate than your capital gains.
Thanks to people who actually contributed to the economy through the creation of goods and services [presumably] enabled the Shore Guys of the world to pay 15% on money made from money that was made from money.
April 29th, 2008 at 9:45 am
Moody’s Downgrades 388 Alt-A RMBS Classes; Warns on 254 Aaa-rated Tranches
First, subprime. Next, Alt-A.
The red pens at Moody’s Investors Service are now, officially, running low on red ink. After downgrading 1,923 subprime RMBS classes between Monday and Tuesday of this week — including numerous previously Aaa-rated tranches — the hits to Aaa-rate RMBS just kept coming on Wednesday.
The agency downgraded another 510 classes from 64 additional subprime deals, according to calculations by Housing Wire, and then got busy cutting up Alt-A securities — to the tune of 388 classes downgraded from 75 different Alt-A deals. IndyMac figured prominently into the Alt-A downgrades, with a full 46 of the 75 issues downgraded tied to the former Alt-A powerhouse.
Moody’s also warned of pending downgrades to a stunning 254 different Aaa-rated Alt-A tranches, worth well into the hundreds of billions of dollars.
We can’t help but wonder what the Federal Reserve is now holding on its books, given the amount of Aaa-rated securities that have been cut in the past three days alone. One thing is ominously certain for the financial markets, however — the write-downs are far from over.
April 29th, 2008 at 9:47 am
Received an opt out notice from my Citi Business Card yesterday. Mind you, it doesn’t really apply to me since I have never made a credit card interest payment in my life, but…
1) Default rate is now 29.99%
2) Minimum Finance charge is now $5 or 3% (whichever is larger).
3) Late fees and other similar miscellany is now $39 and is treated as a finance fee.
4) Foreign transaction fee now 3%.
Now I have excellent credit and usually don’t pay attention to this stuff, but these numbers seem outrageous. It may be time to invest in Visa?
April 29th, 2008 at 9:47 am
# 47 “The amount of new construction down here is amazing. I knew a number of condos have been built, but an incredible amount are still under construction. ”
I was in Miami and Lauderdale about two weeks ago and witnessed it myself. It is amazing, the pace of building down there. I too stayed at a condotel, oceanfront with about 60′ of wraparound balcony. The price was less than I pay for business travel to manl locations with far worse weather and far less pretty views.
About Miami, perhaps someone can put a finer point on this but I recall readintg that on an average year people buy about 2,500 new condos in Miami, but there are or soon will be completed about 50,000 new units.
It might be a trend that NJ towns buy their lower income folks a condo in Miami and tell them to move. Might be less expensive than paying Patterson to take them in.
April 29th, 2008 at 9:49 am
All this talk about finding “the bottom” just means that some people are going to get screwed…
April 29th, 2008 at 9:52 am
I’d love to see a cartoon of a house, in a toilet, with a little cartoon Realtor pointing up at the sky and saying “Look, a bottom!”
And in the next frame, zoomed out, you see, well, someones bottom, hovering over strategically.
Crude, I know. Is there an artist in the house?
April 29th, 2008 at 9:54 am
# 67
Touche, except in the case of me and Mrs. Shore, about 95% or more of our income comes from our business ventures. We work our @sse$ off and earn every dollar we bring in. The other morning, Mrs. Shore was at work at 7:30 to serve breakfast to her staff as part of employee appreciation day and, like most nights, was in the office until 9:30 p.m.
There may be some here sitting pretty clipping coupons on bonds, or from trades on equities; however, that is not me. All of my capital is at risk every day and if I do not keep my clients I do not eat. If I do not add clients, I do not grow.
Consequently, I do in fact resent misspending on the part of government and the bailing-out of people who make really bad decisions.
April 29th, 2008 at 9:56 am
bcamp111: Not sure if you’d consider an off-the peg Ultegra-equipped bike, but this is a killer deal:
http://www.bikesdirect.com/products/kestrel/rt700_blk.htm
Sub $2k. Was considering it as my first non-metal-framed ride. (Or maybe I’ll keep saving for a Litespeed Ghisallo.)
Not getting a rebate check, either. Not complaining. I save approx $1200/annum in NJ Transit fare alone, just by cycling to work. Industry crafts its own rewards.
April 29th, 2008 at 10:00 am
From Bloomberg:
GMAC Posts $589 Million Loss on Home Lending Woes
GMAC LLC, the auto and home lender that General Motors Corp. sold to a private equity group, posted a $589 million loss in the first quarter and said it may not make a profit until next year.
The Detroit-based company, which reported a $305 million loss a year earlier, said in a statement that the latest results included a loss of $859 million at its Residential Capital LLC mortgage unit. ResCap recorded a $910 million loss a year earlier. GMAC’s auto finance business earned $258 million, compared with a $398 million profit last year.
“It’s a crazy quarter, not just for them, but virtually everybody in mortgage lending,” said Mirko Mikelic, a money manager at Fifth Third Asset Management in Grand Rapids, Michigan, before results were released. “The news from mortgage reports such as foreclosure and delinquency rates continues to be bad.”
April 29th, 2008 at 10:03 am
“And in the next frame, zoomed out, you see, well, someones bottom, hovering over strategically.”
JB,
My vote goes to Gisele.
April 29th, 2008 at 10:04 am
From MarketWatch:
U.S. April consumer confidence 62.3 vs 65.9 in March
April 29th, 2008 at 10:04 am
Richard Simmons has been looking for bottoms for years and loving it!!!!
April 29th, 2008 at 10:06 am
67: Okay, so as a really, really, really rich (and really, really, really virtuous) guy, you don’t benefit mightily from the recent (i.e., Bush era) transition from progressive taxation to more regressive sorts?
The crumbs thrown to those receiving rebates do not in any way compare to the sort of largess thrown at machers.
You know that, but still thought it was funny to demand thanks.
You’ll find a greater source of government mismanagement in the tax codes than in an election-year handout to the working classes, objectionable as the latter may be to some. But then you might also find a greater benefit to yourself in those codes.
Sure, live in a house without mirrors. But don’t complain when you step outside looking the fool.
April 29th, 2008 at 10:08 am
does anyone have a list of all the write downs so far, or know where to find one?
April 29th, 2008 at 10:10 am
Price declines appear to be accelerating, not bottoming, according to the S&P Case Shiller HPI for the NY Metro Area:
YOY price change
Feb 07 -0.91%
Mar 07 -0.91%
Apr 07 -1.56%
May 07 -2.35%
Jun 07 -2.94%
Jul 07 -3.21%
Aug 07 -3.37%
Sep 07 -3.62%
Oct 07 -4.08%
Nov 07 -4.51%
Dec 07 -5.31%
Jan 08 -5.60%
Feb 08 -6.62%
April 29th, 2008 at 10:11 am
“does anyone have a list of all the write downs so far, or know where to find one?”
I’m sure they’re written down somewhere! ;)
April 29th, 2008 at 10:22 am
Jamey, what the heck are you talking about. Those who earn more than 99.5% of population are not complaining about the check. My problem is I am not rich, my pos crap house has over 8k in taxes and our state taxes are high that combined with my 3 kids threw me into AMT this year and caused me not to get a rebate check. The income amounts needed to qualify should have been adjusted based on cost of living and amount of kids one has. In realty a rather wealthy person for Albama is getting a check while someone at that same income in the NYC area who takes his ten year old car to Pathmark with coupons powered via no-name gas is not getting a check. Only the private equity cowboys are getting away with paying 15% taxes the normal middle of the road VP who makes 200K a year is getting taxed to death and has tons of expenses. The 200k to 500K crowd pays the lion share of taxes in the US. The really rich have tax advisors, set up trusts or corporations or uses cap gains and genrous T&E deals or money losing investments to save on taxes, that costs money to set up and is not worth it at 200K plus low man on the totem pole have no say in how compensation is paid. The get their checks bend over and write out rebate checks to the subprime crowd.
April 29th, 2008 at 10:35 am
BTW what is the big deal about rice? I hate rice and I could live with out eating it, why don’t they just eat cheap potatos or pasta. Those asian countries are just way to nutso for rice.
April 29th, 2008 at 10:38 am
According to the S&P Case Shiller HPI for the NY Metro Area (Commutable), prices are down 8.05% (nominal) from the peak set in June 2006.
Grim,
He’s numbers are very conservative as it’s plain to see that the 5 boroughs, NNJ and LI have taken a double digit haircut. DOes he own anything in these necked of woods?
April 29th, 2008 at 10:40 am
does anyone have a list of all the write downs so far, or know where to find one?
Kettle,
Ask BI. He’s the axpert on writedowns. In two years, I hope you’ll be able to count to a trillion.
April 29th, 2008 at 10:43 am
“And in the next frame, zoomed out, you see, well, someones bottom, hovering over strategically.”
As disguisting as it may be, My vote goes to Mozzillo.
April 29th, 2008 at 10:48 am
As disgusting as it may be, My vote goes to Mozzillo.
The real question is, “Is Mozilo’s bottom bronze like the rest of him?”
You may now return to eating your early lunch…
April 29th, 2008 at 10:49 am
# 79
I agree that there is a lot to complain about inthe tax code. But just because there is, we as a nation should not use that as an excuse to throw borrowed money at the middle and lower earners. I for one would not object to a debet-reduction surtax ONCE WE HAVE THE DEFICIT ELIMINATED. Interest on our debt is a milstone on every taxpayer and our posterity. Posterity — remember when politicians thought about that and not just their own posteriors?
Nevertheless, as someone who pays taxes to about half the states, and a number of foreign governments, and who is responsible for both halves of the social security tax, and who will likely never see a dime in return for those payments, I reserve the right to point out the absurdity of borrowing money to distribute to people who as a whole have negative savings and as a rule spend too much just so they can go out and spend some more.
Were it a cheap election-year ploy, maybe I could ignore it; but, this is an expensive ploy that flies in the face of what the nation needs in order to promote longterm economic strength.
So, yes, I think a little thanks are in order to those of us who are footing the bill. Not to recognize that the payments are being made on someone else’s back reaks of a feeling of entitlement that is at the root of our economic ills.
April 29th, 2008 at 10:55 am
#64 SG: Well if it is a “mild” recession, than why do we need another special tax break to pump housing?
April 29th, 2008 at 10:57 am
Some news from trenches:
I wanted to put an offer on REO. I was pre-approved from Local NJ bank.
Bank has DECLINED my pre-approval and said that they only want to see pre-approval from Major bank - like Wasington mutual , CITI or Bank of America with my offer.
Right now I am going through pre-approval with BoA - I am being put on hold while they are checking info out - like my checking and savings account balances!!!
Thats just for the pre-approval!!!
They said: 10% down minimum - they will give no loans in NJ loans for less than 10% down. I can still get an ARM but 10% down is a must.
Also - they did likemy 775 average credit score. Did not like car loan! Liked no credit card debt.
Definatelly huge difference from last year pre-approval where all I gave them is my SSN, and desired price range and my salary number. Last years they e-mailed me pre-approval withing 5 minutes.
I am starting to think that by the time I will actually go for closing there will be some @nal probing involved. And all I am asking for is a very moderate 240K loan.
April 29th, 2008 at 10:57 am
Make check out subprime crisis on wikipedia I believe there is a tally of the writedowns.
April 29th, 2008 at 11:01 am
I just heard that South Brunswick schools are cutting teachers…one per grade level due to decreased enrollment. I’m suprised as I thought that is a growing area. Maybe they lost one kid per grade level and are using that as an excuse to ditch teachers and cut expenses.
April 29th, 2008 at 11:02 am
U.S. Banking System on the Fritz
http://www.minyanville.com/articles/dollar-US-savings-debt-banking-income/index/a/16937
The adjustments were enough to assure that the current $300 billion in bank write-downs (debt destruction) will eventually be more like $1 trillion rather than the more sanguine numbers published by Wall Street along with the cries of “the worst is over” by “those that benefit the most”.
April 29th, 2008 at 11:09 am
X-underwear said:
“I’m suprised as I thought that is a growing area. Maybe they lost one kid per grade level and are using that as an excuse to ditch teachers and cut expenses.”
In regal Montclair, although enrollment is declining, we have decided to go forward with the construction of a new $37 million dollar elementary school. Additionally, the BOEs original budget increase was 5.6%. Of course, we don’t get to vote on it.
April 29th, 2008 at 11:11 am
Al that is good news, they should check the credit records and require 10% down. My friend is housing shopping now and was told to stop leasing her car as that is a red flag for getting a mortgage. She is turning it in at leases end. To be honest if you can’t even afford to buy a car shouldn’t that be a bit of a negative indicator when you are talking about loaning out a 1/4 of a million dollars. Back in 1992 when I was REO shopping the good places were cash only deals and the one place I did buy wanted 10% within 48 hours and required me to put down 25% which was not too hard considering home prices had completely collasped so that 25% down was not that much money in 1992.
April 29th, 2008 at 11:13 am
# 93 Is there any move in that area towards home schooling or private schools of one type or another?
April 29th, 2008 at 11:18 am
The 200k to 500K crowd pays the lion share of taxes in the US.
Most tax benefits start to go away actually at 150K limit. Our family just crossed the limit and my taxes went 5 times more compared to last year. In fact, when we did calculation, At present, it is more economical from my wife to stay at home than to work. The money spent in Day Cares, Summer Camps, Taxes, Baby Sitting etc… take huge chunk out.
April 29th, 2008 at 11:30 am
It is funny - rich people in this country enjoy best tax lawyers and 15% capital gain tax.
Middle class - the ones who has their money in 401K - they are paying full share as their 401K distributions upon retirement are treated as income…
If you ask me 15% capital gain tax is the biggest donation given to rich people.
April 29th, 2008 at 11:31 am
Stud(not) Says:
In regal Montclair, although enrollment is declining,
I love Montclair but never plan on owning there due to the out of control taxes….top 10 in state
April 29th, 2008 at 11:42 am
Al
We are having a similar experience. We are working with JP Morgan Chase since they are tied in with my wife’s employer who offers a decent mortgage assistance program. My wife’s employer will loan you 15% down, interest and payment free for six years (you can make payments if you want). The forgone interest is considered taxable income. Up until this year, the bank writing the primary loan only required 5% down, with the 15% frome her employer. They now insist on at least 10% out of pocket, they would prefer 15%, want perfect credit and no outstanding debt. They also insist the primary be less than 417K. We have 20% in cash to put down but were considering making use of the employer benefit since it’s essentially a free loan for six years. However, if you leave the company you have to pay off the second loan in 120 days. We are weighing this financing vs a typical 20% down, 30 yr fixed deal. We have gotten the pre-approval on the first scenario but haven’t talked to a bank about the typical route yet, I’m guessing the experience will be similar. Anyway, we will not be making any offers for a while so it probably doesn’t really matter.
Long story short, it’s getting real, real tight out there which should acclerate price delcines. We are going to eventually buy, and are essentially waiting for the bottom (or as close as possible). At some point, it seems prices will come back to normal but financing will not be readily available, that should be interesting. If you are truly interested in buying at some point, make sure you have all your financial ducks in a row ahead of time and you should be able to find a good deal.
April 29th, 2008 at 11:43 am
On Fox TV few minutes ago,
Swat police team action in Parsippany NJ. It seems some shooting happened. The school supposed to be have been closed. The action is on Kingston Road in Parsippany.
April 29th, 2008 at 11:46 am
PARSIPPANY, N.J. - Police have converged on a home on Kingston Road in Parsippany after reports of a shooting.
News 12-New Jersey reports dozens of homes are evacuated and the Lake Parsippany School and two day-care centers are closed. The cbale channel says police have gathered outside one home.
Police have not released any information.
A message on the school district’s Web site said due to a “police situation” the school is closed and students would be bused to another elementary school for classes.
April 29th, 2008 at 11:50 am
To all home sellers mired in debt…
Cash is King! I’m digging in my heels. I’ve got plenty of cash and will ride it out in my rental. I’ve got over 40% downpayment for a home in my price range. I only plan to use about 20-25% for my home, the rest will sit in a rainy day fund. I will wait it out and slowly buildup a bigger cushion. Should have close to 50% by the end of the year.
Sorry. Just had to let that out as I checked GSMLS and we’re approaching 36k in inventory and prices for the ones that are sitting are still ridiculously high. Some of these homes I’ve seen sitting around for over a year. It is now almost May and spring selling season sure is looking like it is a washout.
April 29th, 2008 at 12:00 pm
“More capital hikes and dividend cuts (are) coming as our credit deteriorates and forward earnings decline,” [Morgan Stanley] analysts led by Betsy Graseck wrote in a report. “We think we are only in the third inning of the credit cycle and expect this credit cycle will be worse than (the slump in) 1990-91.”
I saw a gas station this morning with the price for regular at $3.47. The news now is dominated with food shortages, truckers protesting fuel prices convoy style, inflation, credit deterioration and job layoffs. Sounds almost apocalyptic, doesn’t it? But, thank goodness we’re insulated here in Northern Jersey as I’ve been told numerous times by professional members of the National Association of Realtors.
Did you know that Bergen County’s population is growing by 10% per year? And did I tell you that it’s very competitive here? And did you know that in towns like North and West Caldwell the party never stopped and houses are selling at the same rate as in 2005? A professional realtor told me that just two weeks ago.
April 29th, 2008 at 12:03 pm
Anyone have any info on the validity of Homes.com?? I entered “recent sales info” for my immeadiate area and I was SO surprised to see the closing prices they have listed there…they just seem so incredibly high..could this be a real estate site that has its own agenda…the POS by my house sold for …what?! Could this be right? If it is right than the realtors are pricing houses by the comps in the area..and according to this site houses are selling…
April 29th, 2008 at 12:04 pm
http://www.maltzauctions.com/real_estate_detail.php?ID=381071
ok so a 45 acre small house for sale in bankruptcy in NJ, says you can bid but does not give a price, how much would you bid for something like this?
April 29th, 2008 at 12:07 pm
As they say in the subprime loan that 417 is 487 for buyers.
April 29th, 2008 at 12:09 pm
Last Spring agents were telling me prices in Somerset Hills area were going to soar as Verizon moved employees to the area. Well it’s now 1 year later and listing prices are down 10 to 20%.
As lending standards tighten and food and energy increases housing prices have just begin to circle the drain.
Any predictions on what month on the Schiller index we will see double digit YOY declines?
April 29th, 2008 at 12:10 pm
Does anyone have general idea of Construction cost for 2600 sqft (4 br, 2.5 bth + bsmt) Single Family Colonial house in CNJ area?
April 29th, 2008 at 12:11 pm
Some good reasons to live in NJ
The first officially recorded baseball game in history was played at the Elysian Fields, Hoboken, New Jersey, with the New York Base Ball Club defeating the New York Knickerbockers with a score of 23-1. Alexander Cartwright formalized the rules and umpired.
The first intercollegiate football game in history was played in New Brunswick, New Jersey on November 6, 1869, with home team Rutgers University defeating Princeton University 6-4. Rutgers University is considered “The Birthplace of College Football.”
The properties in the United States version of the board game Monopoly are named after the streets of Atlantic City.
The four-mile (6 km) long Boardwalk in Atlantic City was the world’s first boardwalk and is still its largest.
April 29th, 2008 at 12:15 pm
Al (91)-
Welcome to the brave new world of mortgage finance.
April 29th, 2008 at 12:17 pm
grim (59)-
“I wonder if Realtors will eventually realize that defending high home prices is having a negative impact on ‘deal flow’.”
I really now believe that no Realtor understands anything until a hook is sunk into his car bumper.
April 29th, 2008 at 12:20 pm
I noticed at open houses last spring at least 10% of the open houses I went too were agents of big firms trying to sell their own home.
Is that trend continuing this year? Is that normal to have so such a large percentage of houses being listed by the owner/agent.
April 29th, 2008 at 12:26 pm
33.Clotpoll Says:
April 29th, 2008 at 8:42 am
confused (31)-
As in, in the end we’re all dead?
History Channel (H.C.) showed 1. Mayan Calendar ending 12/22/2012, 2. Current Pope as last Pope listed from 13th Century, 3. Numerous etc. Conclusion was 12/22/2012, “Game Over”. Was an interesting show. Made me stop thinking about outliving my money. It will really hurt the Port Authority Police, who were looking forward to retiring on their $200K O.T Pensions, with Full Medical. Us Peon Private Sector folks have less to loose. The H.C. date probably coincides with the upcoming brewing Food & Energy Wars.
April 29th, 2008 at 12:30 pm
Clotpoll Says:
April 29th, 2008 at 12:15 pm
Al (91)-
Welcome to the brave new world of mortgage finance.
Hey it is still better than “IPOTEKA” (Lending) the russian way. Banks in Moscow are lending money at 30% interest (official inflation I bel;iebe is at 12% - dollar /ruble did not change in a year - actually dollar was 30 rubles 3 years ago - now I think it is 24).
Funniest part - if you do nto pay your loan they are not only throwing you ont he street but will aslo send a loan-sharks to make sure that you are broke and dirt poor, thery will take not only your car, but also your TV, clothes and other personal belongings.
Thats the “Lending Soviet Style” - technically illegal, but even biggest russian banks are doing this.
April 29th, 2008 at 12:31 pm
#40 Grim,
What made me laugh is that analysts were expecitng countrywide to earn 2 cents a share. Instead it lost $1.60 a share.
Analysts are as clueless as economists.
April 29th, 2008 at 12:33 pm
“Analysts are as clueless as economists.”
bairen,
Carnival barkers.
April 29th, 2008 at 12:38 pm
Actually that is also lending USA style, the moment you come out of bankruptcy you get credit offers left and right because for the next seven years you can’t wiggle out of debt via bankruptcy and stuff like your primary home, tools, primary car etc. are fair game to snatch.
April 29th, 2008 at 12:40 pm
Laurie [106],
Their objective is to present data in a manner that maximizes their ability to extort and bilk as many as possible for as much as possible. Period. Do your own research and find all sales not just those presented to you. Also remember that you, the buyer, set the price not the sales associates and not the sellers.
Take comparative sales for similar houses in the area that you’re interested before the bogus run-up in prices began, which is roughly 1999, and calculate an appreciation of roughly 4% annually. This is the true market value, not the laughable nonesense the house pushers and their “clients” are trying to exhort.
April 29th, 2008 at 12:40 pm
BOA is doing the CFC deal come hell or high water the bad news today is a good opportunity to buy below par high yielding CFC bonds. Go BOA!!
April 29th, 2008 at 12:42 pm
So, the Fed is expected to make a 1/4 point cut. Who wants to bet they make a bigger one in an attempt to get some bit of a bounce in the market, regardless of how shortlived? And if they do, what is the consensus, 1.75 greenbacks to the Euro?
April 29th, 2008 at 12:44 pm
John Says:
April 29th, 2008 at 12:38 pm
Actually that is also lending USA style, the moment you come out of bankruptcy you get credit offers left and right because for the next seven years you can’t wiggle out of debt via bankruptcy and stuff like your primary home, tools, primary car etc. are fair game to snatch.
I have very little experience with collection agencies in US - do they break your legs if you do nto pay - and rub you broken bones together to make sure you did not hide any valuables from them??
April 29th, 2008 at 12:46 pm
Shore Guy Says:
April 29th, 2008 at 12:42 pm
So, the Fed is expected to make a 1/4 point cut. Who wants to bet they make a bigger one in an attempt to get some bit of a bounce in the market, regardless of how shortlived? And if they do, what is the consensus, 1.75 greenbacks to the Euro?
I would not be surprised to have no cut at all.
Rate is already below official inflation. more rate cuts will greatly accelerate 200$ oil and destroy economy a lot more surely than credit crunch.
April 29th, 2008 at 12:51 pm
#124 regarding rate cuts
We need a Paul Volker.
Instead we get a Paulie Shore.
April 29th, 2008 at 12:53 pm
140: bairen
How can CFC miss their earnings estimate by $1.60!! and still be up on the day. The street must have real faith that this BOA deal is going to go through.
April 29th, 2008 at 1:00 pm
This is funny. This house is put on Craigslist for $649900. And the details say, they had offers at $689,900. Why the heck you didn’t sell it than !!!
http://cnj.craigslist.org/rfs/658155178.html
We are listing the house the same as recent listing with realtor as this is a good market price.Was $689,900 (we have had offers exceeding listing price)
We will entertain all offers from pre approved buyers. Somebody is going to get a great deal on this house but you have to come look and see for yourself.
April 29th, 2008 at 1:09 pm
#122, Let’s hope the Fed grows some B*lls and does nothing and signals that increasing rates are coming soon. But the way they have acted so far, they won’t be content until 25% of the free world is starving and oil is at $150.
April 29th, 2008 at 1:23 pm
[107] John:
http://www.maltzauctions.com/real_estate_detail.php?ID=381071
ok so a 45 acre small house for sale in bankruptcy in NJ, says you can bid but does not give a price, how much would you bid for something like this?
What would you bid….
If you knew it was on a major highway…I’m talking MAJOR highway, tons of truck traffic, a major thoroughfare to the western part of the county/state.
and is in the Highlands Planning Area with a Land Use Capability of “Conservation Environmentally Constrained Subzone”…
April 29th, 2008 at 1:24 pm
So, the Fed is expected to make a 1/4 point cut. Who wants to bet they make a bigger one in an attempt to get some bit of a bounce in the market, regardless of how shortlived? And if they do, what is the consensus, 1.75 greenbacks to the Euro?
Shore,
I’ll bet with you. Grim can hold on to the funds. Since you’re a big time rich guy we’ll make it 100K minimum.
What you say?
April 29th, 2008 at 1:28 pm
I think 50bps with a we are done speeech and some inflation comments with we are ready to jump back in and raise is necessary if their is inflation is a good thing.
we are getting 25bps and a no change next time speech why we wait and see. It is a good thing food and energy costs are not counted as inflation.
April 29th, 2008 at 1:29 pm
Can someone please give the information on MLS#: 2511317.
How long has it been listed.
When did the seller buy and how much did the seller pay.
Street address?
Thx,
CC
April 29th, 2008 at 1:34 pm
Houses are not selling my friend listed her ho ho kus house last week. Realtor threw a realtor only open house (as if a customer would be turned away), had good turn out but resulted in no leads Then realtor showed it to the one and only customer she has and that was it, then friend asked if she would do a open house and realtor said maybe another open realtor open house. Friend said that is ok after you do a regular open house at least once. Friend knows open houses are not always successfull but feels you should at least get one open house with a realtor. Sounds like realtor don’t want to sit in empty open houses or pay for expensive ads when no homes are selling but that creates a catch 22 of even lower sales. Sad thing is spring selling season is over in four weeks.
April 29th, 2008 at 1:35 pm
The Great Bond Insurance Cover-Up
http://www.moneyandmarkets.com/Issues.aspx?The-Great-Bond-Insurance-Cover-Up-1707
Our nation’s largest bond insurers are collapsing as we speak, but Wall Street’s leading rating agencies are covering it up while regulators look the other way.
April 29th, 2008 at 2:00 pm
Zeitgeist…
From an Email sent by GSMLS:
Lender Owned has been added as a choice for the Listing Type field for all property types. This choice should only be used when the lender has completed foreclosure on the property.
April 29th, 2008 at 2:03 pm
First Newark, Now The Hamptons:
http://www.nypost.com/seven/04282008/news/regionalnews/copper_crooks_hit_hamptons_108467.htm
April 29th, 2008 at 2:11 pm
John Says:
April 29th, 2008 at 1:28 pm
I think 50bps with a we are done speeech and some inflation comments with we are ready to jump back in and raise is necessary if their is inflation is a good thing.
we are getting 25bps and a no change next time speech why we wait and see. It is a good thing food and energy costs are not counted as inflation.
John,
Bergage has never disapointed the street and gave them exactly what the futures said he would. It’s 25BP now and that’s exactly what he’ll deliver. The twist is gonn abe that it’s not unanimous. Thats all.
This stimulus package is definitively gonna stimulate. It’s gonna stimulate Inflation. This is a dangereous precedent they have set as its now a direct way to put cash in consumers hands as opposed through the rate cuts which takes time to run through th eeconomy.
In Sept this year the morons in Washington under Bush and Paulson will put together another bigger and better stimulus package and this will send oil up to 150-175 range and Gold back to $1000+ levels.
We will blame everything on subprime, chinese, and the friggin Indians.
April 29th, 2008 at 2:14 pm
Can’t blame the Mexican’s anymore when they can’t afford to live here!
April 29th, 2008 at 2:17 pm
Could have sworn that the last two fed decisions were not unanimous as well with last meeting having 2 dissenters.
Bergabe will cut by .25 and nothing else new. Same language and all. He wants to keep what few options remain open. He is almost shooting blanks. Will also mention the tax rebates and a wait and see on their impact.
April 29th, 2008 at 2:24 pm
#135 Grim
Does this mean you can now count (or list) all the REO’s in BC going forward?
April 29th, 2008 at 2:27 pm
RentinginNJ,
I recently moved from NYC (Brooklyn) down here to South Florida (Ft Lauderdale). I check out this site almost daily, as I was orgininally thinking of purchasing a house in Maplewood back in 2006 (so glad I didn’t).
You have NO IDEA how bad the market is down here… real estate and the general economy. I’m so thankful I didn’t buy here when I moved. For $1800, I have a single family house with our own swimming pool, private yard, in a nice neighborhood. Perfect for me, my partner and the dog! My landlord paid $450K for this place in 2005… which is now worth (at best) $300K. $450K in Flordia = $9K in taxes; insurance… forget about it… at least $5-$8K/year b/c of hurricanes.
The big issue here, IMO, is that the locals can’t afford these places, even at discounted rates, because the jobs in South Florida don’t pay well or are non-existent! And, secondly, the 2nd homeowners are done buying. That market has dried up given what’s going with inflation. So that leaves the foreigners, who are keeping Miami going to some extent (Russians in particular).
It’s a crazy place down here! I can’t wait to get back to the Northeast… but continue to rent! I have never been so proud of any decision I made as I am with not having gotten sucked into that whole housing upward spiral!
April 29th, 2008 at 2:29 pm
ok, my grammar and spelling was pretty bad in that post. bear with me, i was multi-tasking!
April 29th, 2008 at 2:35 pm
Any idea why home prices here in northern NJ have not been coming down as rapidly as other parts of the country?
I’m a bit perplexed, though I suppose we didn’t have quite as huge of a surge of new building like those places. The price increases between 01-06 were staggering, though. Houses that were worth 150K in 2001, peaked at around 450K+ in 06. Now they are down in the 350-375K range, but that is still way high compared to rents (~ $1200/mo.) and median incomes (65K).
April 29th, 2008 at 2:43 pm
The question in NNJ is whether prices will come down or rent will go up? Speculate all you wish, no one really knows what will happen.
April 29th, 2008 at 2:45 pm
Keith Says:
April 29th, 2008 at 2:35 pm
Any idea why home prices here in northern NJ have not been coming down as rapidly as other parts of the country?
I’m a bit perplexed, though I suppose we didn’t have quite as huge of a surge of new building like those places. The price increases between 01-06 were staggering, though. Houses that were worth 150K in 2001, peaked at around 450K+ in 06. Now they are down in the 350-375K range, but that is still way high compared to rents (~ $1200/mo.) and median incomes (65K).
There are few overstatements - prices were higher than that in 2001, rents are higher than 1200 now - try finding decent 3 bedroom apartment for 1200?? In addition if houses did came down to 350-375K range from 450K+ - it is wopping 22% decline in just one year. Just wait ont more year and in the same 22% will apply - 350K house will be sold for 280K.
Low enough for you?
April 29th, 2008 at 2:47 pm
19 clot
Jeebus. If I didn’t know better, I’d think Gross had a buncha money tied up in MBS.
April 29th, 2008 at 2:50 pm
Would anyone else care to answer Keith’s question in post #143?
April 29th, 2008 at 2:52 pm
[i]There are few overstatements - prices were higher than that in 2001, rents are higher than 1200 now - try finding decent 3 bedroom apartment for 1200?? In addition if houses did came down to 350-375K range from 450K+ - it is wopping 22% decline in just one year. Just wait ont more year and in the same 22% will apply - 350K house will be sold for 280K.
Low enough for you?[/i]
I do see 2 bedroom apartments going for $1200 quite frequently. Three bedrooms are usually ~$1500.
Good point about the monster 22% decline, but still, salaries in this area have barely budged since 2000, while housing prices are still more than double what they were in 2000.
April 29th, 2008 at 2:53 pm
Off Topic: How the heck do I italicize text here? I see that the [i] [/i] tags don’t work…..
April 29th, 2008 at 2:55 pm
“” are the tags here
April 29th, 2008 at 2:56 pm
My post did not work like expected. may be this will > = tag
April 29th, 2008 at 2:58 pm
From Bloomberg:
More Subprime, Alt-A Mortgages May Head `Underwater’
About half of subprime and Alt-A mortgages made in 2006 and 2007 may be “underwater” or close to it by midyear, putting about $800 billion of debt at greater risk of default, according to Barclays Capital.
Subprime loans that exceed the value of the related homes jumped 5 percentage points to 19.8 percent in the fourth quarter, and may reach 26 percent if property-price drops continue at the same pace, New York-based analysts Ajay Rajadhyaksha and Derek Chen wrote in a report yesterday. Such Alt-A loans, a grade better than subprime, would grow to 23 percent from 16.3 percent.
Many of the loans are in areas where prices are falling faster than the U.S. average, so the size of the shift is underappreciated, the Barclays analysts wrote. The odds that a borrower will default, saddling lenders and bond investors with losses, rises when a homeowner owes more on a property than it can sell for, they wrote.
“Mortgage loans are moving underwater at a very sharp pace, far more than suggested by aggregate home price data,” they wrote.
April 29th, 2008 at 2:59 pm
Keith,
Use instead of [] for italics. And you’re exactly right about the salaries as a ratio to house prices. It proves beyond a doubt that it was all a lie, all a scam and I constantly ask realtors other than those who post here, to give a plausible explanation how that’s possible.
And they won’t explain it because it can’t be explained unless they’ve come up with a new set of laws to replace the ones Newton established a long time ago.
April 29th, 2008 at 3:00 pm
italics - use the greater than and less than signs.
April 29th, 2008 at 3:00 pm
kieth
use tags instead of []
April 29th, 2008 at 3:01 pm
kieth use
April 29th, 2008 at 3:02 pm
use the greater then and less then symbols, not brackets…..
April 29th, 2008 at 3:03 pm
Thanks!
April 29th, 2008 at 3:04 pm
And you’re exactly right about the salaries as a ratio to house prices. It proves beyond a doubt that it was all a lie, all a scam and I constantly ask realtors other than those who post here, to give a plausible explanation how that’s possible.
And they won’t explain it because it can’t be explained unless they’ve come up with a new set of laws to replace the ones Newton established a long time ago.
Yep, something has got to give.
April 29th, 2008 at 3:04 pm
grim clott anyone,
can someone tell me what the home equity market is looking like. An elderly family member here in NJ may need to either sell or pull a home equity loan for living expenses. They are in a nursing home and the home is completely paid for with no outstanding debt.
April 29th, 2008 at 3:08 pm
OT, but amusing. And a good reminder, that no matter how big our problems, somebody has it worse:
http://news.yahoo.com/s/nm/20080423/od_nm/witchcraft_dc;_ylt=AsLVVNtFvNUUt_Z9AzsjBKis0NUE
” P*nis theft panic hits city..
” KINSHASA (Reuters) - Police in Congo have arrested 13 suspected sorcerers accused of using black magic to steal or shrink men’s p*nises after a wave of panic and attempted lynchings triggered by the alleged witchcraft.
Purported victims, 14 of whom were also detained by police, claimed that sorcerers simply touched them to make their g*nitals shrink or disappear, in what some residents said was an attempt to extort cash with the promise of a cure.
…
“I’m tempted to say it’s one huge joke,” Oleko said.
“But when you try to tell the victims that their p*nises are still there, they tell you that it’s become tiny or that they’ve become impotent. To that I tell them, ‘How do you know if you haven’t gone home and tried it’,” he said.”
April 29th, 2008 at 3:09 pm
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