Weekend Open Discussion – Part II

Posted on June 7, 2008 by grim

Now Open, Part II!

Prior weekend thread closed due to comment overflow

——————————————–

Save the Date!

New Jersey Real Estate Report Get Together
June 14th, 2008 at 5pm
The Brass Rail
135 Washington St
Hoboken, NJ 07030

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166 Responses to Weekend Open Discussion – Part II

grim says:

June 7, 2008 at 8:11 am

From the Philly Inquirer:

Economic Headache

The nation’s employers shed 49,000 jobs last month, and the unemployment rate jumped to 5.5 percent in May – the highest rate since October 2004.
The increase in the unemployment rate was the largest since 1986, the U.S. Labor Department reported yesterday.

As payroll declines continued, the snapshot of business conditions showed a deeply troubled economy, with job opportunities dwindling in a time of continuing hardship in the housing, credit and financial sectors.

The workforce – people at work and people wanting to work – is getting larger, at a time the number of jobs is declining. That makes the job hunt more difficult for all seekers, including recent college graduates.

They were among 828,000 new entrants into the job market who couldn’t find jobs in May. With them, the workforce grew to 154.5 million, up 577,000 from April, even as payrolls have declined for five straight months.
…
Included in May’s unemployment statistics are a thousand truck drivers at Jevic Transportation Inc., in Burlington County, who lost their jobs May 19 when Jevic, long a transportation leader, abruptly shut its doors.

About 55 newspaper staffers in northern New Jersey lost their jobs with Gannett Co. Inc.

Pharmaceutical companies, large and small, also cut or announced plans to cut their workforces.

Last month, Merck & Co. Inc. said it would eliminate 1,200 sales jobs, but would not specify how many would be lost at its pharmaceutical and sales-marketing headquarters in Upper Gwynedd Township. And tiny Genaera Corp., of Plymouth Meeting, said it would lay off a third of its workforce.
njrebear says:

June 7, 2008 at 8:13 am

N J from Realtor.com

http://www.realtor.com/homevalues/#NEXHASHlat=37.78808138412046&lon=-93.8671875&zoom=4

Average Listing Price: $493,701
Average Sale Price: $467,068
Average Estimate: $417,793

Average Days On Market: 115
Active Listings: 109,332
Median Listing Price: $725,000
Pat says:

June 7, 2008 at 8:20 am

http://www.cfo.com/article.cfm/11521022/c_11519590?f=home_todayinfinance

Philly Papers Default on Debt Payment
A flagging media company is gripped by a cash flow problem.
njpatient says:

June 7, 2008 at 8:28 am

Oh well, no GTG for me. I get to host the in-laws instead. Woo-hoo.
rhymingrealtor says:

June 7, 2008 at 8:31 am

Grim,

Did it say on the last thread the GTG was only 5-7PM?

Thanks

KL
sas says:

June 7, 2008 at 8:49 am

had the GTG been finalized?

Grim, you going to make an offical announcement?

how about it Grim, quit doing yoga headstands & get back to work!!

ha ha… just kidding

:)
SAS
sas says:

June 7, 2008 at 8:51 am

very interesting article out of Russia.

“Russia blames U.S. for global financial crisis”
http://tinyurl.com/5xckkb

SAS
grim says:

June 7, 2008 at 8:53 am

From the WSJ:

Recession Fears Reignited
By KELLY EVANS and KRIS MAHER
June 7, 2008; Page A1

The likelihood that the U.S. is in a recession appeared to increase Friday, following weeks of hopes that the country might be skirting one.

Unemployment rose sharply and payrolls shrank for the fifth consecutive month. The economy news came on a day that oil surged to record prices, the dollar weakened and the Dow Jones Industrial Average plunged nearly 400 points. The deteriorating job numbers led markets to scale back the odds that the Federal Reserve will boost short-term interest rates this fall to ward off inflation.

The jobless rate posted its largest one-month gain in two decades, rising to 5.5% in May from 5.0% in April, the Labor Department reported Friday. Payrolls, measured by a separate survey, fell by 49,000 jobs last month, bringing the tally of job losses so far this year to 324,000.

The rise in unemployment has been accompanied by higher food and energy prices, pushing up the “misery index” — the sum of the unemployment and inflation rates — to around 9.4, the highest level since the recession of the early 1990s apart from a one-month blip in 2005.

The unsavory prospect of rising unemployment and crude-oil prices — plus recent signs that the housing market has yet to stabilize — dashed lingering hopes that lower interest rates and fiscal stimulus were sufficient to help the U.S. economy right itself. “I’ve been convinced that the unemployment rate was headed toward 6%, but I didn’t expect to get halfway there in one day,” said Jay Mueller, economist and portfolio manager with Wells Fargo Advantage Funds.
grim says:

June 7, 2008 at 8:57 am

Oh boy…

From the WSJ:

Countrywide Friends Got Good Loans
Mozilo Sought, Received
Better Rates for Some;
Problems for Fannie Mae?
By GLENN R. SIMPSON and JAMES R. HAGERTY
June 7, 2008; Page B1

Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo.

These borrowers, known internally as “friends of Angelo” or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide’s mortgages, say people familiar with the matter.

One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama’s campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee. Another was Franklin Raines, a onetime Clinton administration budget director, who left Fannie Mae amid an accounting scandal in 2004.

There is nothing illegal about a mortgage firm treating some borrowers better than others. But if Fannie Mae officials received special treatment, that could cause a political problem for the government-sponsored, shareholder-owned company.

Its code of conduct, a spokesman said, “requires the disclosure of potential conflicts of interest and prohibits acceptance of substantial gifts, including loans with preferential terms, from an organization seeking to do business with the company without prior review and approval by the company.” The spokesman said the code has been in effect since the early 1990s.

As for Countrywide, “I think it is potentially an accountability and internal controls issue,” securities lawyer John Olson of Gibson, Dunn & Crutcher said. A comparison of the Fannie Mae officers’ terms with interest rates prevailing when they got their loans raises the possibility Countrywide gave them preferential terms. But it’s impossible to tell for sure from public documents. An array of other factors also can account for lower-than-average rates, including a borrower’s income, total assets and credit score; how big the loan is compared with the home’s value; and how many “points” a borrower may have paid upfront in order to get a lower rate.

One former Countrywide executive said the mortgage lender, the nation’s largest, sometimes granted “moderate” concessions on rates for customers whose loans were handled by Mr. Mozilo or other top officers.These loans were reviewed by others at the company, the former executive said, and occasionally Mr. Mozilo had to be told the terms he had promised someone couldn’t be granted.
sas says:

June 7, 2008 at 9:03 am

another MTA fare hike in NYC?
I still think a monthly metrocard is a good deal for those who live in manhattan. For those who come into manhattan for jobs and such…your getting screwed.

“Fare chance of transit hike – Mike”
http://tinyurl.com/4ga4x2

SAS
sas says:

June 7, 2008 at 9:10 am

“You’re fired, 1,200 OTB workers told”
http://tinyurl.com/3g4fvv

SAS
verypatientwife says:

June 7, 2008 at 10:15 am

When searching for homes online I find titles very amusing in order to capture attention-

If you want to live like a president:
http://www.forsalebyowner.com/listing/5DAB0
chicagofinance says:

June 7, 2008 at 10:52 am

clot:
You want Gartman? Here is a 5 minute video.
Go to bottom…..
http://www.cnbc.com/id/25005583
bairen says:

June 7, 2008 at 11:41 am

This is a gorgeous house in Bernardsville. I was in it last summer (out of our price range). It’s a 5 bdr 3.5 bath renovated colonial with a big extension built on the back of it. It’s now 879k. I think it was only a bit more then that last year. Don’t now if thi is a resale since then.

http://www.realtor.com/search/listingdetail.aspx?ctid=12252&mnp=38&mxp=37&typ=7&sid=80c42230dbdf4ed6bc3b15c972ebb2ff&lid=1098026325&lsn=3&srcnt=4#Detail
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June 7, 2008 at 11:41 am

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kettle1 says:

June 7, 2008 at 11:43 am

Cindy

regarding your post in the last thread about my “information assimilation” epiphany…..

what you described is exactly my point. Now do not take this the wrong way, i am not putting anyone down……

But people like Grim and many of the other regulars on this board knew something was rotten in denamrk YEARS before the bubble actually burst and while the average joe was still convinced that home prices only went up. The bursting of the bubble has forced the people you just described to accept the nature of reality…. that homes prices DO go down.

There was ample information available to anyone who cared to look for it that would have suggested that housing was going to bust. I am not suggesting anyone knew exactly when, but they knew what would happen before it did. the people you describe in Cali now know what happened, AFTER it has already occurred.

Society as a whole could not process the available information fast enough to understand what was coming, even if a small group of individuals could. It takes a critical mass (i.e enough of the average joe’s) within the population, that comprehends the implications of historical and realtime data to act instead of eing acted on. With regard to the housing bubble, the society has been ACTED UPON by market and social forces instead of society being the source of action and ACTING upon the market and social structure to steer towards a desirable outcome.

I stringly supect that if you look at history you will find very few events where a large group of people or a society are able to assimilate information fast enough to be the actors instead of the acted upon.

my point from the other night was also given the effects on the internet and increasing complexity of the world, that the odds of large groups or societies being the actors is quickly decreasing. While the Grim’s of the world will always exist and may understand what lies over the horizon, it is rare throughout history that 1 man or a small groups can influence an entire society.
kettle1 says:

June 7, 2008 at 11:51 am

Cindy,

to put this into additional context of the housing bubble consider some of the regulars on this board… I believe that at least 2 or 3 sold their homes or dumped RE assets as they sensed that the end of the party was near due to the information they were seeing.

Some people in certain fields will have general advantages in processing and assimilating information. I will probably be more aware of certain tech info and able to assimilate it quicker then say Clott. While clott is more aware of RE data and can assimilate quicker. The main idea of my little manifesto the other night was that the identifying characteristic of the individuals who who can acquire/process/assimilate the increasing rate of information are the ones who can understand what the know, what they dont know, and then proceed to acquire the needed knowledge in order to understand or process current information as well as new data.
BC Bob says:

June 7, 2008 at 11:53 am

Chi [13],

DG touched on a point that nobody is paying attention to. The credit crunch is playing a huge role in the vicious up moves in these markets. Hedgers are not getting the financing required to hedge their future production/deliveries. It was evident in the wheat market, rice market and it is occuring in crude now. The backward contracts have been moonshots. Normally, in major bull markets, the market is in backwardation. A record move, $10, yet the market is in contango? April ’09 contract higher than July,’08, on a limit move up? Alarms are going off, at least to me. This is unprecendented. If I was a producer I would be selling the crap out this,locking in this price. That’s their businees, hedging their future production. They are not speculators. However, their hands are now tied. The banks are not lending, on a comparative basis. Major, major problem.
kettle1 says:

June 7, 2008 at 11:59 am

Cindy

if i can offer 1 last example….

Peak Oil/Energy

A small group of people has been rasing red flags for years on peak energy, since the late 70’s actually. and they have been correct the entire time. The general public is now becoming aware of the issue but this is because the issue (peak oil) is acting upon society and forcing them to see the consequences. Look at the post on my blog regarding exponential growth. Given we ( humans) almost always consume resources at an exponential rate and have been doing so with oil, it is to late to act. the problem is that it consuming resources at exponential rates means that you will use the second half of an available resource 3-5 times FASTER then you did the 1st half. If we had acted by the late 80’s we could have has very little disruption in a conversion to non-oil energy sources. But now that we have reached a point were we are being forced to act the only question is what level of disruption will we see. ranging from driving a little less to mad max. with the most likely result being in the middle, but that still mens that millions will starve and we could see countries collapse.
sas says:

June 7, 2008 at 12:06 pm

Cindy,

Propaganda is to a democracy, as violence is to a dictatorship.

Fortune 500 spends billions on advertisements…
and the govt (not only the Bush Admin) spends billions in propaganda disinfo??

Its to keep Joe 6 pack and Sally soccer mom dumb and stupid and easily manipulated, controlled, and stay on the central foreign banks (banks mostly out of England) treadmill with debt.

Real estate is just one example.

The rabbit hole goes alot deeper than most want to admit.

Thats why when I go through the toll roads, as I drive through them I say “that doesn’t exist, now where is McDonalds!!”
haha…

yup,
SAS
BC Bob says:

June 7, 2008 at 12:08 pm

JB [1],

217K ceated by B/D, 42k of those in construction! It’s a total charade. I still can’t get anybody from BLS, I mean BS, to pinpoint, for me, the location of these fictitious jobs. Our real unemployment rate is well over 10%.

Is there anybody on this blog that works for the BLS or knows anybody there?
sas says:

June 7, 2008 at 12:08 pm

hugh, why is my comments waiting moderation?
SAS
kettle1 says:

June 7, 2008 at 12:12 pm

HEHE,

Regarding the Bakken Formation….

While bloombergs information as reported is accurate you might want to read this ( a detailed analysis of the real potential and history of Bakken)
http://www.theoildrum.com/node/3868

Note this bullet point from the conclusion:
7. The Bakken potential resource, while large by US onshore field standards, will have only a minor effect on US production or imports. Using 2006 US imports and consumption for comparison, the Bakken undiscovered resource of 3,649 million barrels of oil, if subsequently discovered and fully developed, would provide us with the equivalent of six months of oil consumption or 10 months of imports, spread over 20 or more years. In reality, the reserves developed are likely to be many times smaller than this value.

8. The October 2007 production rate of 75,000 BOPD amounts only 0.4% of US oil consumption, or 0.6% of imports.

SO while Bakken is a very real resource, it is not the panacea it is made out to be, and if we were smart and planned for the future, we might consider saving some of our larger continental oil deposits for a rainy day instead of trying to suck them dry as fast as possible.
alia says:

June 7, 2008 at 12:16 pm

sybarite, last thread: yes, yes they are. they claim proudly that they “hire during downturns” … though i’m still on hubby’s case to take his last mcse … it’s good to have the resume all shiny and bright.
Cindy says:

June 7, 2008 at 12:16 pm

Kettle – I am in no way disagreeing with you. I DO agree with you. There are folks we have the privilege of conversing with every day who are knowledgeable beyond my scope in a myriad of areas (yourself included!) I say so/ think so every time I read this blog.

I was speaking to NJ vs. CA. and how folks there have not dropped their prices because they are not surrounded by the obvious as I am here… When I said “personal experience has a way of accelerating the learning curve”…

I was also thinking of the folks who used up equity…having messed up once – I learned my lesson years ago…but it took personal experience.

Prices have dropped here because it is all so “in your face.” Sellers here really have no choice. It just sounded like many there are frustrated that the sellers in NJ “don’t get it.”
rhymingrealtor says:

June 7, 2008 at 12:24 pm

Kettle,

At the risk of sounding stupid.. I will confess as I have here before. I was under contract to purchase in Dec 05″ I was a realtor then as I am now. I got caught up in the last real estate bubble because we bought late eighties and saw our home become worth less than we owed or in our opinion “worthless”. Our financial situation changed while living there and we were foreclosed upon, as selling was not an option. I became a realtor for 2 reasons, help support our household and knowledge. So here I was in contract as I said in dec 05 when I decided to really dig deeper into what was happening in the real estate market, deeper than what was in front of me as a realtor. I found this site and am very grateful to have dodged that bullet. Clot, is also in the business but – I may be mistaken but I think- he realized the imminent crash in late 06. Sometimes you have to listen really hard to hear the train coming when there is so much noise around you.
KL

KL
Cindy says:

June 7, 2008 at 12:24 pm

BC Bob – I printed out the Engdahl article (Friday #306) and I am TRYING to understand where it leads…Since the banks want secrecy and the proper regulation was not put in place from the get-go.

“Last year, the Chicago Mercantile Exchange set up a federally regulated, exchange-based market to trade CDS’s. So far, it hasn’t worked. It’s been boycotted by banks, which prefer to continue their trading privately.” Oh great…
alia says:

June 7, 2008 at 12:26 pm

njgator, last thread: if we make it, we would be bringing our 4 yr old and 2 month old.
kettle1 says:

June 7, 2008 at 12:33 pm

CIndy,

Sorry ( sheepishly shrugs) i misunderstood your comment…..

KL,

We all miss or misinterpret information from time to time. The point is that you recognize deficiencies and try to educate yourself. we are all guilty at some point
HEHEHE says:

June 7, 2008 at 12:39 pm

Kettle,

Not arguing with you, just saying from an investment perspective many of those small operations are going to be very profitable with oil above $100 and with the instability in other parts of the world.

So when is Bush going to have Israel do Iran? I’ve heard he’s going to wait until he’s sure Obama is going to win and then have it done as he’s certain Obama won’t do anything.
Laurie says:

June 7, 2008 at 12:56 pm

Interesting ideas floating around here…it’s too hot outside on the east coast to go anywhere so here we sit with our puters humming….so here’s anecdotal evidence of having no clue as to what’s going on in R/E…28 Ackerman Pl here in Mahwah is due to go to the auction block in a week…today I walk the dog past the house which has never been for sale and take a good look at it. The house is beautiful, lots of upgrades…and to top it off the owners had their brand new BMW parked on the street so ALL the landscapers and workers could do a huge front yard makeover. The truck was full of thousands of $$’s of planting material. This would be one thing f their yard looked like crap but the yard is already beautiful…people…pay your mortgage!!!!
Laurie says:

June 7, 2008 at 1:00 pm

Tom Re:post 298 open weekend thread 1…house was NOT the one right behind my friends as I discovered when I did a dog walk by…see above for what the owners have been up to…
alia says:

June 7, 2008 at 1:15 pm

anecdata (ok, this is queens, not nj, but still): the “termite rowhouse” that the owner paid 650k for three years ago, and had been trying to sell for 750k, appears to be reduced to 647k (and rumor is the owner is a big name manhattan realtor)…the for sale sign is gone but they’re using the exact same language and description in the flyer…

friend has signed the contract for a house. (i know, i know.) original ask, 599k. had an offer, buyer couldn’t get financing. took it off market, then relisted 2 weeks ago at 579k. friend’s lower offer (560ish) accepted.
alia says:

June 7, 2008 at 1:23 pm

30: oh yeah, the ac is in the window and life is good. ;>… and kettle, i think you’re right. it reminds me of the whole “tipping point” idea. one reason we don’t have a tv is to cut down the amount of (spurious) information we are bombarded with. i get easily overwhelmed. :*)

i would throw something out there about trust. numbers are so easily manipulated, and a lot of people are afraid of them so don’t trust their own understanding of them. they (think they) need others to tell them what the numbers mean. and if they have nars telling them one thing and grims telling them another… they honestly can’t tell the difference, they don’t know who to trust. so they say, “well, we’ll just wait and see” and by the time they “see” it’s too late.
jmacdaddio says:

June 7, 2008 at 1:29 pm

I found a NJ rail advocacy blog run by a guy who tells is like it is:

http://www.nj-arp.org/blog/

It’s got a bias towards the northern part of the state. I never knew how lousy train service was in NJ outside of the Northeast Corridor line.
schabadoo says:

June 7, 2008 at 2:12 pm

The house next door finally sold.

What I find interesting about it is that two identical houses were built on a subdivided lot. The first one sold last July for $495k.

I bet the 2nd went for $50k less. That’s got to hurt.
Cindy says:

June 7, 2008 at 2:28 pm

alia – “tipping point” Kettle “critical mass” Cindy – “accelerated learning curve.”

There just comes a point where the truth can no longer be denied. Kettle is so correct in pointing out that very few have the foresight to make a correct projection.
Like you said alia, there is so much information coming straight at you.

(I still cannot assimilate the information re CDS’s and I have the paper right in front of my face!)

There just is no better teacher for me than personal experience. I have owned homes before that just sat there, a home that went down…I have second mortgaged a home and lived to regret it…that’s just how I learn. I am trying to do better.

With more and more foreclosures here, I think people just got to a point where they found it acceptable to ask for less. Eventually there simply is no denying that your place isn’t worth what you used to think it was – other wise – you just get out of the market. Hopefully, NJ will hit a critical mass – tipping point soon as well.
kettle1 says:

June 7, 2008 at 2:41 pm

If i may fall back to my usual crazines…

The housing bubble is essentially warm-up. expected bubble cycles to come faster and hit hard now. i.e 2 or 3 years between cycles as opposed to 10. AT the same time behind many of the bubbles (business cycle) is what may be THE driving cycle and that is oil. Gas prices are a somewhat secondary issue as food production is completely dependent on cheap oil in our modern farming system.
You might also want to consider how you would react if you have to deal with rolling blackouts or fuel rationing. i do not expect either in the next year, but they are not far off.
And like housing, when the government tries to price control or ration gasoline, you will see nose bleed prices and it will be 70’s gas lines X2. not due to available supply but because price controls and rationing of gas nearly always causes artificial shortages.
kettle1 says:

June 7, 2008 at 2:42 pm

I second cindy,

as has been said many times i have learned more from this blog then i have from almost any other source. I have learned things i didnt even realize i didnt know.
kettle1 says:

June 7, 2008 at 2:46 pm

OT,

i thought this was interesting

http://climate.rutgers.edu/stateclim_v1/images/nj_temp.jpg
kettle1 says:

June 7, 2008 at 2:54 pm

conspiracy theory???
U.S. Corporate Media Blackout On Bilderberg Meeting
http://prisonplanet.com/articles/june2008/060708_media_blackout.htm

(sorry, my “tabloid” link for the day)
kettle1 says:

June 7, 2008 at 2:58 pm

whatis bilderburg

http://en.wikipedia.org/wiki/Bilderberg_Group
Cindy says:

June 7, 2008 at 4:16 pm

Anecdotal from Brad Maske – Weekly real estate radio show KMJ

Here’s his happy thought for you all..we are now at 2003 prices. People ARE buying houses…houses they can afford. Banks/brokers will verify, verify, verify but if you have the money – you can probably find what you want. The inventory is projected a year out more or less. He said they started to see sales pick up last month – 2% yoy but it will be even better this month (May.) No exact figures given.

(This is all without government intervention…the prices fell, people can afford the houses…the houses are selling.)

This is for the Central San Joaquin Valley..
Confused In NJ says:

June 7, 2008 at 5:02 pm

December 20, 2012 is not far off.
Frank says:

June 7, 2008 at 5:13 pm

My neighbor keeps hiring illegals to do his house work, what can I do to stop it?
Frank says:

June 7, 2008 at 5:23 pm

If you want to sell, keep dropping your price.

http://www.nytimes.com/2008/06/08/realestate/08njzo.html?ref=realestate
Frank says:

June 7, 2008 at 5:27 pm

Manhattan is still seeing bidding wars.

“Gregory Hall, a Corcoran broker, listed a 1,000-square-foot co-op on 71st Street between Columbus Avenue and Central Park West for $1.095 million in mid-April and quickly had six people bidding, two for the full asking price and four above.”

http://www.nytimes.com/2008/06/08/realestate/08deal1.html?ref=realestate
bairen says:

June 7, 2008 at 5:32 pm

Kettle1

Your aguments on peak oil are one of the reasons I think we’re better off staying in North Jersey then fleeing to mcmansion land in Texas or North Carolina. If we wait till next year we should be able to buy a renovated 3 bdr 1.5 colonial with a walk up attic within walking distance of a train in a town we really like for less then 400k. (I’ve seen some listed for 450k right now)

If we live in mcmansion land in Charlotte or Austin and have to commute 50 miles a day each and drive as a family 600 miles a week, any savings in housing would be eaten up by gas and energy prices. Figure $500 to $800 a month in gas instead of $150 or so living in Berkley Heights or Summit. If one of us is working in NYC the increased salary would easily more then offset the price of the train ticket. We might even be able to go down to 1 car.
Clotpoll says:

June 7, 2008 at 6:18 pm

Pat (3)-

Isn’t one of the Toll brothers an owner of the Phila Inquirer? Didn’t he also leave Toll Bros to get into the media biz?
Clotpoll says:

June 7, 2008 at 6:22 pm

kl (25)-

I think you have my “awakening” to the oncoming housing disaster pegged about right. Late ’06-ish, it started becoming apparent this wasn’t going to be a minor correction in a continuing bull market.

Wish I could remember better, but to me, the past two years have felt like 25 years.
Pat says:

June 7, 2008 at 6:26 pm

Bruce Toll, vice chairman of Toll Bros., is also chairman of Philadelphia Media Holdings L.L.C., which owns The Inquirer, the Philadelphia Daily News and Philly.com.
Pat says:

June 7, 2008 at 6:28 pm

Bob gets his shorts on.
Pat says:

June 7, 2008 at 6:30 pm

Bob, I know you like to party in your shorts, but hope you kinda sorta listen to dumb chicks who dance on bars and warn on the shiny stuff.
afe says:

June 7, 2008 at 8:12 pm

Frank Says:
June 7th, 2008 at 5:13 pm
My neighbor keeps hiring illegals to do his house work, what can I do to stop it?

Frank-

Offer to do his housework for free.

afe
jafo says:

June 7, 2008 at 8:56 pm

To Kettle et al, on learning curves and energy markets.

I agree that as available information approachs infinity, that the limit on decision performance becomes processing capacity.

However, I think for many average people that the real limiting factor is their expectations and adherence to social norms. I have seen more than a a few smart folks selectively ingnore information or discount the probability of events to rationalize their emotional desires. Any market or problem space where subjective judgement is a factor is a exposed to this behavior. This is most consumer or individual action driven markets, and many “institutional” markets where complexity requires even the most capable info processors to ignore or collapse certain factors.

Conversely, there folks who are intuititive “pre-cogs” that sense imbalances or approaching inflection points ahead of available information or their anaytical capabilities.

I agree the world is in for a near term energy shock – be it do to demand/production imbalances or currency/finanical dynamics.

However, I do not think a substantial reduction in living standards for developed countries or slow collapse are realistic outcomes.

My opinion is the problem will solve itself through reversal of globalization (emerging markets lose production cost advantage due to trans port costs and thus reduce demand), development of traditional or new energy sources, or all out war.

I really do not see US excepting the end of suburbia or regression to mean global living standards for large segments of population while having the most powerful military in history of world and 5,000 nuclear weapons.

I know some will say that despite these assets American is impotent as evidence by Iraq.

However, to date the US actions have been with kid gloves compared to behavior or British or Roman empires.

With its survivial at stake, I believe these gloves will come off. America, and Americans, are a country defined by their life sytle more than common culture, ethnicity, or values.

So pray algea that secret oil, or cheap shale is real, otherwise prepare not for “peak oil” but global thermo-nuclear war.
chicagofinance says:

June 7, 2008 at 9:06 pm

Cindy Says:
June 7th, 2008 at 7:51 am
Fri. – Chicago#286 – Thanks for the Thaler piece.

C: did you see the video? It may not appear, so you should reload. It is almost verbatim what grim and I saw, but it was given at a different venue….
Pat says:

June 7, 2008 at 9:07 pm

Yes, war is the most likely outcome.

However, there are emotional connections in play using current technology, which will provide power balance to interpreters. Decision makers will be hobbled.
jafo says:

June 7, 2008 at 9:07 pm

make that secrete oil, too many drinks and a reliance on spell checking:)
Clotpoll says:

June 7, 2008 at 9:36 pm

jafo (55)-

Most quality RE sales training emphasizes that a great deal of attention be paid to a very predictable trait of human decision-making: people make major purchases based upon emotion…then use facts to justify the emotional decision they just made.
jafo says:

June 7, 2008 at 9:55 pm

Clotpoll at 59

Yes, many folks may decisions from the lymbric system – be they joe 6 six pack, ivy educated bulge bracket traders/fund managers, or academic enconomists and washington policy makers.

Financial markets are an interesting case study, as perception is able to shape reality much more than lets say engineering or sceneses. Especially when a perception is shared, in belief or at least adherence due to social pressure.

George Soros has actually commented on this. I am always weary of any argument that appeals to authority, credentialism, or concensus rather than logic and data. The worst are those that have the trappings of logic, but closer examination reveals the rules are fluid and driven by conclusions rather than vice versa.
bairen says:

June 7, 2008 at 9:58 pm

# jafo

Buffet loves to say “Be fearful when other are greedy, and greedy when others are fearful”.
bairen says:

June 7, 2008 at 10:04 pm

Does this surge in oil remind anyone of the energy shortage and surge in prices for California? I believe Enron was involved in that one.

Why can investment banks make predictions on oil going up to a certain amount without being forced to reveal their positions? Me thinks many of the IBs are loading up on future contracts, then using scare tactics to drive up the price by announcing oil i going to 150 or $200. When oil is in the $150 to $200 range I wouldn’t be surprised it the IBs load up on puts, then start announcing oil is way overpriced and come up with some BS rational to justify their new positions. Oil drops, the IBs sell/exercise their puts. Maybe it’s the only way they can quickly recover some of their mtg losses.

IB = Investment Banks
mikeymike says:

June 7, 2008 at 10:09 pm

Can someone provide address, history, dom and tax info on mls #2807640? Much obliged!
jafo says:

June 7, 2008 at 10:12 pm

Bairen

I think this is a pump and dump, regardless of long term supply/demand outlook. I am especially skeptical of GS predictions, given their reputation for front running clients and recent history of shorting re/sub prime while talking up housing market.

Oil is a commodity with highly inelastic demand curve, as all of the peak oil analysis concludes.

Hence, with enough capital/leverage you can fleece consumers of this commodity by driving up price.

Even George Soros, who made his 1st billion in commodities, says that financal institutions are bigger players than real consumers and producers.

Bottom line, energy should be at least transparent and as regulated as equities, given its the life blood of global economy.

My opinion is propriety trading should not be allowed, as it adds no value and creates enormous potential for speculation/manipulation.

Agency/flow trades should provide sufficent liquidity, without leveraged prop positions.
Tom says:

June 7, 2008 at 10:14 pm

I’m not a RE professional but I’ve been keeping my eye on the market for some time now. I did work for a couple .com’s and saw a lot of strange crap during the tech bubble.

I just put up a post about my thoughts on house prices and where I think they should be, that I’ve been working on.

There are people in the real estate sector here, and with more experience than me so I’d appreciate any feedback on my assessment. I’m new here and don’t know who everyone is yet but I’m going to single out Clotpoll as someone whose opinion I’d really like to hear.

I also improved the blog look and feel. I’m going to try and get those changes over to the foreclosure listing part of the site as well as some enhancements soon too.
bairen says:

June 7, 2008 at 10:29 pm

#64 Jafo,

i think there’s Pump and Dump going on to. I wonder if the clowns in DC will actually launch in investigation. Nah, let’s focus on the alleged steroid habits of baseball players who retired last decade.
Greg says:

June 7, 2008 at 10:29 pm

The rising cost of natural gas and heating oil will also act to keep a lid on RE prices. Nat gas has gone up 400% since the 1990’s and will probably keep going higher. I know for a fact there are some large older homes in Bergen County where the cost to heat & cool the place exceeds the property tax & mortgage payments combined.
bairen says:

June 7, 2008 at 11:00 pm

I think it is getting more and more likely that new suburban mcmansions will get either abandoned or chopped into apartments like the old victorian mansions did when energy and taxes made them unsustainable for single families. High driving, heating and cooling costs, combined with increase in food will kill them off better then any Green policy a government can come up with.

Also rising food and energy is nothing new to mankind. We have been living since WWII in an unusual period of cheap food and energy. We are simply going back to the historical norm.
bairen says:

June 7, 2008 at 11:08 pm

If gas stays at $4 a gallon, what do you think Orlando’s and Las Vegas’ future looks like?

I’m thinking it doesn’t look too good unless their is a surge in income to help offset the high energy costs.
bairen says:

June 7, 2008 at 11:14 pm

Looks like I’m puling a njpatient and talking to myself.
Tom says:

June 7, 2008 at 11:18 pm

If gas stays at $4 a gallon, what do you think Orlando’s and Las Vegas’ future looks like?

I’m thinking it doesn’t look too good unless their is a surge in income to help offset the high energy costs.

For people that haven’t cashed out the equity in their homes, they can take out a line of credit. Let’s say they have $400k in equity they can borrow against. That’s 100k gallons of gas they can buy. More if you can get quantity discounts.

They resell that at $3/gallon making $300,000. Then hope there’s some sort of bailout :)
Tom says:

June 7, 2008 at 11:41 pm

Looks like I’m puling a njpatient and talking to myself.

bairen, I’m all out of serious talk and apparently the only other person left here. You might be better off talking to yourself.
Clotpoll says:

June 7, 2008 at 11:51 pm

Tom (65)-

Tried to post the following on your blog, but it was marked as spam, because there were more than 1,000 characters in the post:

“Your take on the further price drops required to restore some kind of equilibrium is roughly similar to Bill Gross’. However, I don’t see sellers in this market coming to a decision to take down prices en masse for the public good. Much more likely we get a big chunk of whatever decline remains at a point where a large segment of rather desperate sellers collectively reach the conclusion that they- for whatever reason- need to get out, and get out fast. When a bunch of sellers realize all at once that a loss today is better than a bigger loss tomorrow, we’re on the way to seeing a return of adequate deal flow.

Of course, when all the sellers rush for the exits, many find the exits are barred shut. If we are in for another 30%-ish drop in prices, we may well get half of that in one fell swoop during this “rush for the exits”. Gapping supply/demand imbalances- just as in any lightly-traded, fairly illiquid market- will ensure nasty downward volatility.

In my area, I’m noticing more sellers willing to price to market and fewer sellers willing to tolerate excessive days-on-market in order to obtain a fantasy price. These are hopeful developments, as it signals the “need to sell” crowd is on the rise, and the “want to sell” crowd may be moving to the sidelines.”
Tom says:

June 7, 2008 at 11:55 pm

Yeah, I came across the same problem myself when I was trying to reply to a comment yesterday.

I’ve only played around with roller a little bit in the past and I need to tweak the configuration. I manually had let your post through.
Everything's Hobroken says:

June 8, 2008 at 12:07 am

‘Pump and Dump’

I heard the MS analyst regarding July. His argument was based in reported drastic changes to inflows in the ‘pipeline’ from the mideast and low domestic inventories heading into the travel season.

This really has nothing to do with whether there is manipulation or not, just reflects a concern that decreased flow has foreseeable effects.
BC Bob says:

June 8, 2008 at 1:18 am

“Bob, I know you like to party in your shorts, but hope you kinda sorta listen to dumb chicks who dance on bars and warn on the shiny stuff.”

Pat,

I go to work in my shorts, party in my shorts, cheer my team on in my shorts and blog in my shorts. I went to my tailor today and said one hem up. That said, I never met a “dumb” chick who dances on bars. However, I have met many smart ones that have. As a matter of fact, I met a Jersey Girl that can tap dance with Chuck Prince. She told me she’ll meet me next Sat., at the Brass Rail.
BC Bob says:

June 8, 2008 at 1:34 am

“Of course, when all the sellers rush for the exits, many find the exits are barred shut.”

Clot,

AH, all the elephants trying to get out of the same door together?

Yes, you are free to enter. Beware, the exits are tricky. The masters will allow entry, exit at your own risk.

Sell? Sell to whom? I don’t have any buyers in my Rolodex, only sellers!

It’s gonna be a long walk home.
Tom says:

June 8, 2008 at 1:50 am

I go to work in my shorts, party in my shorts, cheer my team on in my shorts and blog in my shorts.

Congrats Bob, now everyone will expect you to look like this
bairen says:

June 8, 2008 at 2:03 am

BC Bob,

What kind of shorts? Bermuda or Boxer? Are you wearing them to the GTG so I can recognize you?
D says:

June 8, 2008 at 7:06 am

BC Bob (# 78) sounds like Hotel California!
NJGator says:

June 8, 2008 at 8:26 am

Excessive School Administrator Contracts are not just for Abbott Districts:

Super perks: Morris taxpayers foot the bill for superintendents’ big benefits

Harding Superintendent Dennis Pallozzi is retiring this June, one year before his five-year contract expires, but he’s sacrificing none of the rewards he was to have received for sticking it out to the end.

When Pallozzi announced in 2006 that he would retire a year early, the school board agreed to grant him perks reserved for the final year of his contract. Assuming Pallozzi cashes in 88 sick days — the number he had accrued as of May 30 — the district’s leader for the last decade will walk out with some $51,500. That’s $17,000 more than he should have gotten because he is leaving a year early.

This extra benefit is in addition to Pallozzi’s annual contractual perks: 7 percent of salary — $13,111 this year — deposited into a tax-sheltered annuity, $8,000 in premiums for life insurance, a $6,600 annual allowance for business travel and no-cost medical, dental and prescription coverage. In each of the last three years, he has also cashed in 15 unused sick and vacation days, and if he does that again this year, he would receive a lump sum payment of about $11,700.

Including his $187,000 salary, which rose by 6.9 percent this year, Pallozzi’s final year payout will top $278,000. And beginning July 1, he will start collecting a $112,200 annual state pension

http://www.dailyrecord.com/apps/pbcs.dll/article?AID=/20080608/COMMUNITIES/806080344
SG says:

June 8, 2008 at 8:33 am

Downsizing the American Home

During the housing bubble, KB Home priced out first-time homebuyers by building bigger. Its new, more modest model provides a glimpse of what the return of the housing market may look like.

In some cases KB is even using the same façades from the go-go years and then shrinking the house that lurks behind them to be half as deep – and about half as expensive. “If I had to write a headline for housing, it would be back to basics,” says Broad. “The right thing to do is just what KB is doing: build starter homes that compete with rentals.”

KB Home offered a program called “price protection” that guarantees that if the price of your model falls before the closing, KB will lower your price to match it. Result: The Murkeys got a discount that dropped the price from $246,000 to $213,000.

The houses themselves are being radically downsized to meet buyers’ budgets. At the peak of the last boom, in 2006, KB’s customers craved cathedral ceilings, formal dining and living rooms, and fancy wrought-iron railings on windows and balconies. Today’s buyers, KB found, are willing to trade size and amenities for far lower prices. But they’re extremely specific about what they want to keep. Buyers welcome houses half as big as the models that reigned at the peak, as long as they offer plenty of bedrooms. They also don’t miss the formal living and dining rooms if KB provides a “great room” combining the two in one open space that includes a generous-sized kitchen.
HEHEHE says:

June 8, 2008 at 8:39 am

I have a suggestion for the next GTG after Hoboken: Belmar!

http://video.google.com/videosearch?q=belmar&hl=en&sitesearch=#q=guidofistpump&hl=en&sitesearch=
Essex says:

June 8, 2008 at 8:40 am

I like how the world is rapidly changing, but man it is painful for the outlying areas. When we bought we bought close to work (less than 3 miles to my job — and about 7 to my wife’s) and we bought small. Not tiny mind you, but a 3/2. We have one child and don’t plan on another. We can catch a bus to NYC at the base of the hill that we live on….life is good.
Essex says:

June 8, 2008 at 8:41 am

P.S. I can walk to restaurants too! I am a car buff so I won’t bail out of the car ownership game…in fact just doubled down and bought a new one…but I like to option to not drive and in fact ride my bicycle to work a couple of times a week. I have motorcycle endorsement and could go that route too. Ah……
Essex says:

June 8, 2008 at 8:41 am

Welcome to the New Austerity.
HEHEHE says:

June 8, 2008 at 8:42 am

Future of Middle America:

Gated Communities and no man’s land.
HEHEHE says:

June 8, 2008 at 8:49 am

“3. Maybe Last Year Was Opposite’s Year?

Interesting Bloomberg story this morning points out that investors who who followed the advice of analysts of brokerage firms and banks lost 17% in the past year, twice the loss posted by the Standard & Poor’s 500 Index. Even following the advice of the top-ranked brokerage analyst in Institutional Investor’s annual survey, cost investors 17%, according to the data compiled by Bloomberg.”

http://www.minyanville.com/articles/dollars-ecb-sp500-brcm-broadcom-wmt/index/a/17463
SG says:

June 8, 2008 at 8:53 am

Lakeland Bus fare increase

For a third time in three years, Lakeland is raising passenger fares, the company confirmed last week.

Effective June 16, fares to and from Manhattan will increase by an average of 8.26 percent.

Commuters within New Jersey will endure a 5.14 percent increase.

Just 14 months ago, Rockaway Township-based Lakeland raised passenger fares to and from New York City by an average of 7.4 percent, and fares on trips within New Jersey by 5.4 percent. Lakeland raised fares on buses heading into New York City by 9 percent in July 2005.

The latest fare increase was expected.

Bus drivers and other workers received a new contract in May featuring a 23 percent raise over four years, a jump that company controller Greg Mazzarisi said at the time would almost certainly require a fare hike.

The union, in an open letter to passengers last Thursday, countered that the previous two fare increases happened while worker salaries were frozen.

Mazzarisi, a day earlier, elaborated that soaring fuel costs also were a factor.

The union shot back that Lakeland receives a fuel subsidy from NJ Transit.

Workers also told passengers that no fare increase should be instituted without the approval of NJ Transit, which has a contract with Lakeland.
SG says:

June 8, 2008 at 8:55 am

Upside of rising gas prices?

Pennsylvania drivers, long a target of Morris County derision, may decline if one analyst’s prediction holds up.

James Hughes, dean of Rutgers University’s Bloustein School, is theorizing that homebuyers will be less inclined to buy houses in northeastern Pennsylvania and other rural areas — like way out in Warren and Sussex — a long drive from corporate centers.

The cost savings involved in buying a remote property will have to be weighed against the steadily increasingly drain at the gas pump, Hughes said Friday.

Hughes noted that the surge in northeastern Pennsylvania housing development, which Hughes dubbed “New Jersey West,” occurred when gas prices were relatively low. Driving to work 50 miles or farther each way, five days a week, and saving $100,000 or more on a big house was perhaps a smart choice when gas was relatively cheap.

That dynamic has changed, perhaps permanently, he mused.

Similar sentiments were expressed last week by Robert J. Peluso, president of the Parsippany Area Chamber of Commerce.

Peluso said he has heard from people with long eastbound commutes looking to relocate to Parsippany in order to shorten their drive and save money.

Parsippany, to be sure, is not known for being especially mass transit-friendly, though Lakeland Bus Lines is a viable driving alternative for Manhattan-bound commuters. The guess here is that this would be a great time to be selling a home within walking distance of an NJ Transit station, particularly in eastern Morris County.
SG says:

June 8, 2008 at 9:00 am

Affordable housing comes before panel

Senate plan amended to match Assembly’s
Saturday, June 07, 2008

The Senate Budget and Appropriations Committee will take up its own version of a sweeping affordable housing proposal Monday, one that has been amended to make it identical to a plan moving through the Assembly.

Lesniak had originally wanted to keep some form of the so-called “regional contribution agreements” that have allowed wealthier towns to meet their low-cost housing obligations by paying to have housing built in poorer towns. The amended version would end that practice.

The Assembly bill (A500) is expected to receive a floor vote on June 16. Lesniak said the Assembly bill will be combined with his legislation when it reaches the Senate. “The important thing is to get it through (both houses) before the break,” he said. The Legislature will recess for the summer on June 30.

The Roberts-Lesniak legislation is designed to reshape New Jersey’s 20-year affordable housing effort. It would use $20 million of the $80 million to $120 million the state and municipalities hope to raise through a fee on the new commercial development for affordable housing in urban areas, Lesniak said.

The bills would create five zones: the Meadowlands, Fort Monmouth, the Highlands, the Pinelands and Atlantic City. Towns within four of the zones could transfer no more than 50 percent of the housing they are required to provide to a neighboring town. Only the Atlantic City zone would be permitted to exceed the 50 percent cap because of a large demand for affordable housing in the area.
SG says:

June 8, 2008 at 9:02 am

Housing report hints of hope

Could the tide finally be turning?

Two new snapshots of the New Jersey housing market seem to suggest the worst of the decline may be over.

A report by East Brunswick-based research firm Otteau Valuation Group shows April home sales increased from the March level — the first time that has happened since 2005 — in what may be a sign market has bottomed out.

At the same time, a report released by the Mortgage Bankers Association yesterday showed although home foreclosures and late payments continued to set records across the country during the first three months of the year, fewer New Jerseyans were falling behind on their mortgages and losing their homes.

“It will be a couple of more months before we can say for sure if the housing correction has ended and the market is in recovery mode, but there are a growing number of indicators which suggest the housing market is no longer worsening,” said Jeffrey Otteau, president of the Otteau Valuation Group.
SG says:

June 8, 2008 at 9:08 am

Ready, set, sold!

Need to sell your house now and don’t care about the price? You might want to try a real estate auction.

With the housing market still in the doldrums, more and more people are turning to auctions to sell their homes, experts said.

In fact, real estate auctions are the fastest growing segment of the auction industry, increasing 46.6 percent between 2003 and 2007, according to the National Auctioneers Association.

“It blows away any other sector,” said association spokesman Chris Longly. “The numbers of growth we’re seeing, particularly in residential real estate auctions, is staggering.”

“The great thing for the seller is they know, when the hammer comes down, it’s a serious buyer who has done their due diligence, and they are ready to go,” said Todd Umbenhauer, a Sanford Alderfer real estate broker.

Even property developers are turning to auctions to sell homes. Last month, the Kalian Companies, developer of the Carriage Park at Lawrence active adult community in New Jersey, auctioned a number of condominiums in the development. Bids started as low as 50 percent of the original asking prices.
SG says:

June 8, 2008 at 9:11 am

Auctions an alluring option

Steve Gouge thought his chance to own a prime slice of the Jersey Shore was going, going, gone as prices at a posh oceanfront condominium complex passed the $1 million mark.

But the tide turned in the real estate market.

Builders got hammered — and auctioneers got out their gavels.

Real estate auctions increased 5.3 percent in 2007, generating $58.4 billion in revenues. Since 2003, property auctions are up 39 percent, according to the National Auctioneers Association, a trade group based in Overland Park, Kansas.

“Auctions are the perfect market for pent-up buyers who have been waiting and waiting,” Gouge said.

He set his sights on a unit at The Pointe at Moore’s Inlet in increasingly gentrified North Wildwood, where Beazer Home Corp. brought in auctioneer Max Spann Jr. to sell off properties to the highest bidder.

Gouge and 1,000 hopefuls headed to the May 4 auction, held at the Borgata in Atlantic City. He brought with him a certified check for $10,000, a list of eight condos he thought he and wife would enjoy and a willingness to sign a sales contract immediately following the auction.

He didn’t get this first choice — or his second — as early bidders raced past the price threshold he had set for himself.

But his patience paid off. Gouge bought a three-bedroom oceanfront unit with hardwood floors, granite counter tops, stainless steel appliances, keyless entry and a bevy of other sizzle features.

The asking price: $899,900.

Gouge’s winning bid: $550,000, plus a 10 percent buyer’s premium for a total of $605,000.
SG says:

June 8, 2008 at 9:17 am

3 Economic Crises

Housing bubble. Prices from 2000 to 2005 rose 160% nationwide. In many cases housing became unaffordable to most Americans. As housing prices continued to rise, mortgage lenders become more lax and started making more sub-prime loans. They believed that the lender would never default because as long as house prices continued to rise, the mortgage holder could refinance their loan to make the payments, even if they had no other income. In 2006 housing prices began to weaken and currently home prices are in free fall around the nation.

Home prices will likely continue to fall. Like all bubbles, prices will go to extremes on the downside before the end of the slide in prices. In Japan, its real estate market rose 210% from 1979 to 1991. Then prices declined from 1992 to 2004 giving up all of its gains! Prices of real estate in Japan currently sells for less than it did in 1979! The U.S. real estate market peaked at 160% in 2006. Given the experience in Japan and the Great Depression, prices are likely to be soft for the next ten years.
SG says:

June 8, 2008 at 9:19 am

Sean O’Toole’s got the details on California foreclosures

O’Toole, 40, founded the website ForeclosureRadar.com last year. The site, he said, lists every default, auction and foreclosure in California. Such information is crucial to investors seeking properties to buy, and before Internet listing services such as ForeclosureRadar.com emerged in recent years, the information often required a personal visit to county records offices.

Rather than join the rush of those mining for gold in distressed real estate, O’Toole has set himself up as Levi Strauss once did. Instead of selling jeans to prospectors, though, he is selling foreclosure data to would-be buyers.

ForeclosureRadar.com has about 1,000 clients who pay $50 a month for access to the database, O’Toole said. Along with investors, subscribers include real estate brokers and local government officials who use foreclosed-home data for such tasks as locating stagnant swimming pools for mosquito abatement, he said.

The site, which O’Toole started with his own money, is on track to be profitable by 2009, he said.

A former Silicon Valley entrepreneur, O’Toole got the idea for the site when the volume of foreclosures grew so large that he couldn’t quickly track them by going to county offices or hiring others to pull records. He figured investors and real estate brokers would be eager for online records covering all counties in California. The site allows users to search foreclosures by cities, ZIP Codes and street names.
SG says:

June 8, 2008 at 9:21 am

From Connecticut.

Foreclosure proceedings double, but numbers remain low
By Hoa Nguyen

The number of foreclosure proceedings initiated in Greenwich in the first four months of this year nearly doubled from the same period last year, according to a foreclosure database company.

Since the start of the year, 62 properties in Greenwich were the subject of foreclosure proceedings, up from 34 during the same period last year, according to RealtyTrac, an Irvine, Calif.-based company that specializes in foreclosure data.

The near doubling of foreclosure activity in town was more dramatic than in the state as a whole, which saw a 15 percent increase for the same period, and the country, which saw a 60 percent increase, according to RealtyTrac.

“This cuts across the board,” RealtyTrac’s vice president of marketing, Rick Sharga said of foreclosures. “This isn’t something that happens to financially challenged people, it doesn’t happen to people who are wild speculators, it can happen to everyone.”

Foreclosing on a home can take months and is many times averted by the property owner catching up on payments, renegotiating the loan or selling the property before more drastic measures, like auctioning off the home.

This year more homes are entering the advanced stages of foreclosures compared to last year, according to RealtyTrac figures.
grim says:

June 8, 2008 at 9:24 am

From the NY Times:

Tales From a Slow Market

“BY July 1, it’s definitely over,” declared Elaine Pruzon, a top Short Hills real estate agent, urging clients to list homes sooner rather than later in the spring, traditionally the optimal sales period. “You don’t want your house sitting out there into the next season, and the next.”

After all, Ms. Pruzon might have added, there are already thousands of homes around the state that have been on the market since before Christmas, or since school started last year — even since last July 1.

With the inventory of unsold homes remaining at record levels in New Jersey, and the burst of spring sales in March and April reportedly modest, the number of sellers waiting six months or more for a buyer is still on the rise, market analysts say.

Hopes are being smitten and profits slashed across the board, by all accounts — affecting homes both large and lavish, small and spare.
Cindy says:

June 8, 2008 at 9:40 am

Chicago (56)

Couldn’t load the video but as you know I throughly enjoyed “Nudge” and have “The Design of Everyday Things” on my to do list.
Orion says:

June 8, 2008 at 9:59 am

Anyone here been federally stimulated yet?
Not me.
jamil says:

June 8, 2008 at 10:01 am

kettle #19:

“Peak Oil/Energy
A small group of people has been rasing red flags for years on peak energy, since the late 70’s actually. and they have been correct the entire time.”

Hmm..Just like the “peak coal” people who started to predict peak coal in 1800s in England? One day they might be right, but it does not mean that have been correct the entire time.
jamil says:

June 8, 2008 at 10:28 am

kettle #23

About Bakken..

There are conflicting estimates how much oil can be recovered from Bakken. Most studies are assuming “current technology”. However, technology is getting better all the time so nobody knows how much oil can eventually be recovered, especially as oil gets more expensive.

I doubt that oil drilling methods and technology had reached their ultimate capacity (come to think of it: If the government confiscates oil company profits and threatens nationalization, it probably has reached its peak).
3b says:

June 8, 2008 at 11:08 am

#94 Gouge’s winning bid: $550,000, plus a 10 percent buyer’s premium for a total of $605,000.

He still paid too much.
afe says:

June 8, 2008 at 11:10 am

Anyone have selling price on the following GSMLS listings (a couple were listed a while ago):

2443094
2463797
2462380
TIA
grim says:

June 8, 2008 at 11:42 am

2443094 – Still active
2463797 – Under Contract
2462380 – Expired
afe says:

June 8, 2008 at 11:47 am

Grim-

Too good. Thank you!
jamil says:

June 8, 2008 at 12:02 pm

btw, how the post numbering goes here?
Does people see the numbers in the same way or does everybody have an own numbering view (because some posts are in moderation etc).

I noticed often that people refer to the incorrect post number, but maybe it is correct according to their own view?
kettle1 says:

June 8, 2008 at 12:15 pm

Jamil, 101

I agree 100%, thats why a continuous evaluation of new data must be pursued. I am not extensively read on the english peak coal calls of the 1800’s but do know some of the basics.
From what i do know, they peak coal calls could have been correct if the UK and the world had not switched to oil and other petroleum products as a primary fuel source.
If you look at the current situation w/ regard to oil, the historic data to date have continued to support peak oil. The catch, and the point that p[people often miss, is that peak ANYTHING, ( oil, coal, BMW’s) is not an event with a set date. Peak resources are a function of the rate of consumption. You will have peak anything, and the timing of the peak depends on your consumption model. WHat mean is that almost all human societies consume at exponential rates, so you are guaranteed a peak, its jut a question of when. the only way to avoid a peak is to consume resources at a controlled linear rate.
Next time i have any amount of free time and can find the data i may try to model the 1800’s UK coal supply, demand.

Also the reason we are very close to the peak ( most people who study peak oil agree that you cannot determine the exact peak until after you pass it) is that the rate of global consumption has grown substantially in the last 2 -3 decades. If china and india were not industrializing then peak oil could be another 100 years out. It will happen its just a matter of when.

Also consider that every country that has experienced local peak oil ( meaning that they were net producers and are now net consumers due to their oil supply dropping precipitously, like indonesia and the US), has seen a very rapid drop in production once they peak. This will most likely be the case in global peak oil as well. When we peak, the drop will not be slow and steady, the data show a bumpy plateau (which current data suggests we may be in currently)followed by a rapid decline, sort of similar to dropping down the backside of a bell curve, with a long asymptote
kettle1 says:

June 8, 2008 at 12:17 pm

Question for the RE types…

How does the cost to build new compared the purchase price of a pre-existing home assuming the 2 are highly similar ( i.e sqft, layout, lot size, location, etc)?
kettle1 says:

June 8, 2008 at 12:24 pm

Bairen 48,

I dont know if i should be honored, or if i should be apologizing.

Just remember that i am not nearly as omnipotent as i might like everyone to believe…. :)
jamil says:

June 8, 2008 at 12:24 pm

kettle: #109

“timing of the peak depends on your consumption model.”

Yes, but not only that. Other factors affect when the peak happens. Say, oil at $40 and 1990’s technology and you may have a finite amount of oil, but oil at $100 and next-generation oil drilling technology means that the amount of recoverable oil is much, much higher. Hence, it is nearly impossible to predict peak oil.

There are plenty of recoverable oil in the US, depending on congressional regulations, technology, and price of oil.

btw, grim: My bakken comments are in moderation (103).
kettle1 says:

June 8, 2008 at 12:46 pm

Jamil,

you may be forgetting an additional barrier. EROEI.

You may have a billion barrel of oil reserve somewhere, but if it takes 500 million barrels of oil (energy wise) to extract that billion, then you only have an effective reserve of 500 million.

I agree with you that there are many factors involved and some of those are very fluid. Also do not forget that a super giant field on the order of cantarel in mexico or gahwar in Saudi has not been found since the late 70’s early 80’s. For the last decade new finds have not even come close to keeping up with growing consumption.

And remeber i am not saying we are going to run out of oil. As you pointed out, there will always be oil somewhere, but you get to a point where the cost of extraction is too high to run a civilization off of it.
kettle1 says:

June 8, 2008 at 12:49 pm

jamil,

i also disagree on prediction. You cannot predict a date, but you can model consumption based on current an near term expectations and have a good guess. Similar to global level weather modeling. We cannot say exactly when something will happen, but we can model and predict the large scale trends realitivly well
kettle1 says:

June 8, 2008 at 12:53 pm

Jamil,

I dont have links to back this up so take it for what you will, but i ave seen estimates that if we were to drill every available and projected oil reserve in US territory, then we would have 5 – 10 years of oil self sufficiency, depending on what assumptions you make for potential reserves.

what are you suggesting there is plenty of oil for? the US to be self sufficient? Not in any long term manner, and the major oil companies agree with me. Shell, Total and Exxon have all put out reports agreeing that the US cannot be oil self sufficient in the long term, or at this point.

Might i suggest you look at this chart
http://upload.wikimedia.org/wikipedia/en/c/c5/US_Oil_Production_and_Imports_1920_to_2005.png
kettle1 says:

June 8, 2008 at 12:56 pm

might i also suggest you look at this chart,

http://upload.wikimedia.org/wikipedia/commons/5/58/Hubbert_US_high.svg

it shows hubberts (founder of peak oil hypothesis, worked for the oil companies))

Notice that real production has closely matched the predicted production!
Fiddy Cents on the Dollar says:

June 8, 2008 at 1:14 pm

The Saudis keep saying there’s plenty of oil beneath their sands. Yet they have not released any verifiabe numbers on their reserves in 20 years. Society of Petroleum Engineers has extrapolated data from various sources and their predictions are not quite so rosy.

The aggressive water injection techniques have seriously depleted the large Ghawar field. There have been no new discoveries in that area since the 70’s.

What do you think is going to happen when the Saudi wells start to seriously decline and none of these other world reserves are ready to take up the slack?
sas says:

June 8, 2008 at 1:39 pm

“Official 2008 Bilderberg Participant List”

http://tinyurl.com/4go6wz

SAS
sas says:

June 8, 2008 at 1:43 pm

I wonder how many at the 08 Bilderberg mtg in Chantilly, Virginia are in violation of the Logan Act?

http://tinyurl.com/t3msz

SAS
HEHEHE says:

June 8, 2008 at 1:48 pm

There you guys go with your Peak Oil hijacking!

You need to also consider the fact that the internal demand in oil producing countries is largely increasing. The result is less available oil for export which further impacts price.

In the long run I think oil recovery technology will improve but it certainly will not improve to the level that will prevent an overall peak and decline.

In the short run, say 20-30 years, there’s going to be a mad scramble to find the alternatives fuels necessary to maintain a standard of living that this country is used to having but each year the jerkoffs running this country keep doing nothing about it and make what would be a controllable problem an inevitable crisis.
Fiddy Cents on the Dollar says:

June 8, 2008 at 2:01 pm

The Energy Policy of this country seems to be…..Increase dependency on fossil fuel (without serious research into alternatives) and buy this fuel from the people that hate us the most.
NJGator says:

June 8, 2008 at 2:04 pm

Can someone with GSMLS access please provide the address for 2519720 in Glen Ridge?

Many thanks.
sas says:

June 8, 2008 at 2:12 pm

lol, this is classic.

“What are Barack Obama Accomplishments in the Senate?”
http://tinyurl.com/4m6nyc

SAS
Tom says:

June 8, 2008 at 4:09 pm

“What are Barack Obama Accomplishments in the Senate?”

Classic! Chris Matthews is great!

Obama, like most other senatorial candidates, missed a lot of votes in congress because they were out campaigning. Obama and Clinton were 2nd and 3rd in absences from what I remember seeing a while back and I don’t remember the order. 1st went to some guy that had cancer.

That’s the one thing I didn’t like about Obama and to a lesser degree Clinton. Don’t just tell me what you’re going to do. Show me what you’ve done that would make me believe what you say. Should have spent more time proving he’s a good lawmaker rather then talking about it. He should have waited to run for president but people were saying he had “momentum” now and should capitalize on it. Momentum can be a bad thing if you’re heading in the wrong direction.

I don’t know that I like McCain now but I did in the past. He seems to be towing the party line more after the whipping Bush gave him last time. It seems like someone convinced him to get on board to appeal to the republican base and he’s not the same guy.

The old McCain I believe could have broken down party walls and brought this country together and he has a record of doing that. I always thought the old McCain did and said what he believed was right, not what his party thought. I don’t get the same feeling now.

I liked the McCain that Bush was attacking not the McCain that Bush is supporting.
Tom says:

June 8, 2008 at 4:10 pm

ugh toeing not towing
Laughing all the way says:

June 8, 2008 at 4:24 pm

Been out of the mix for awhile, living it up in Bucks County! Not really, actually; we haven’t spent many weekends here due to weddings, visiting family, birthdays, work, etc.

(Sadly, wont be able to hit the GTG next weekend. Wife will be out of town on travel, and i’m too much of a loser to show up alone.)

At any rate, we’re 2 months in and getting closer to START the buying process. Our $ will go further out here … problem is, the market here doesn’t seem as decimated as NJ. Not hearing about a lot of foreclosures in the good neighborhoods, and prices haven’t fallen as far.
Sybarite says:

June 8, 2008 at 4:43 pm

125

What about commuting costs? Do you and your wife work locally?

Come to the GTG anyway! Lots of us showing up solo.
Frank says:

June 8, 2008 at 4:56 pm

jamil,
Bail out is coming soon.

“Lawmakers Seek Shortcut In Negotiating Housing Bill”

http://www.washingtonpost.com/wp-dyn/content/article/2008/06/06/AR2008060603816.html
Pat says:

June 8, 2008 at 6:24 pm

Laughing, I found your dream home.

“All offers accepted.”

They’re not even going to counter. ;)

http://tinyurl.com/4javgk
Pat says:

June 8, 2008 at 6:28 pm

Did you go do a drive by on 95 Colonial…Sheriff’s sale on the 12th?
lostinny says:

June 8, 2008 at 7:27 pm

I cannot believe what I paid for gas today- 3.91 a gallon. Yes I should have filled up last week but I didn’t so I was on E. $46 for a Honda Civic. What does it cost to fill an SUV?
jamil says:

June 8, 2008 at 7:57 pm

I rented a SUV last weekend. I had reserved smallest car possible, but they gave me SUV (apparently, nobody wanted to take SUV so they made forced free upgrades).

It was over 50 bucks to fill it (half-tank). Next time I refuse to take it..
bairen says:

June 8, 2008 at 8:05 pm

#130 lostinny,

My crossover has a 15 gallon tank and I refill whenever it drops to 1/4 to 1/3 a tank. I only gas up every 1.5 to 2 weeks. (I drive about 750 miles a month)

One of my friends down in Tampa just turned in his Envoy for the mazda crossover because of the price of gas. He loves the SUV ride but not the gas guzzling.
bairen says:

June 8, 2008 at 8:13 pm

I really want to recapture the lifestyle I had in Sydney, Australia. I lived in a suburb that had both a train and bus routes within 1/2 mile of our place. I could walk to 1 organic grocer and 2 regular ones, dozens of restaurants, a few doctors, a park, etc.

We had 1 car that my wife took to work since her company was in a corporate park. I took the train to work, when i quit to become a house dad I walked or took the train and bus everywhere.
Tom says:

June 8, 2008 at 8:22 pm

Does anyone know where I can find data for the house price to income ratio for Bergen County?

I updated my blog posting on Where should house prices really be and how did they get so high? with a price to income chart for Bergen County. But I don’t have the corresponding county specific data for what the actual census data to chart.
Tom says:

June 8, 2008 at 8:28 pm

Duh! I just realized I can calculate those values myself from the data I have.

Rich,

I interpolated house prices off of your SFH, Condo, THSE chart so I my numbers are possibly off a couple thousand here or there. Would you mind sharing some of some data so I can increase the accuracy in my chart? If so email me at info@my site’s domain.

From the data I have now the house price to income ratio spiked in BC as well. The 2008 number though is 90% of the 2007 number.
Essex says:

June 8, 2008 at 8:35 pm

133…there is a place for sale down the street from me….you would have most of that….!
PGC says:

June 8, 2008 at 9:12 pm

I have discoved one of Dantes rings. It is Sesame place in 95deg heat on a Saturday. Today was not much better, but the kids had a blast.

Interesting sign of the times was a Wendys coverted into a vets office.
Tom says:

June 8, 2008 at 10:22 pm

Did everyone melt?
Pat says:

June 8, 2008 at 10:25 pm

http://www.msnbc.msn.com/id/25009827/

Amid housing mess, a new boom is starting
Laughing all the way says:

June 8, 2008 at 11:34 pm

What about commuting costs? Do you and your wife work locally?

We got lucky – wife in sales so her company pays all her gas bills. And she’s smart about beating the system – makes sure to fill up on Fridays so we have gas for the weekend on the company dime.

I started an e-business and so far i’ve been lucky with it. Got a car free from her parents and only drive it once a week, maybe twice.

oh, but i will say this about Bucks – the gas expensive as hell. the closest gas station is at 4.19. it has gone up at least a buck since we moved here. i usually drive 6 miles into NJ and pay about 25 cents less.

Still – at some point, this gas crises is going to start having a serious impact on ife for the middle class.
Tom says:

June 8, 2008 at 11:47 pm

Pat,

Don’t feel too bad for banks that are selling prices below what their judgment was for.

Remember this. When you first get a mortgage, the majority of your payments are interest, the banks fee for lending you the money. Just because you didn’t pay down the equity doesn’t mean the banks interest in the property hasn’t gone down.

In NJ and in some other states, when a property is foreclosed, the senior lienholder takes precedence. Junior lien holders such as home equity loans, second mortgages, mechanic’s liens, pretty much everything except tax liens go bye-bye.

Now, the bank owns a property and is selling it. Who do you think they’re going to want you to get a mortgage from?

It’s not great for them but it’s better than nothing, which is what the homeowner got.
njpatient says:

June 9, 2008 at 12:28 am

this has been sub-optimal.
Tom says:

June 9, 2008 at 1:03 am

There’s an interesting post on the NJ HELOC Blog that first looked like a sympathetic foreclosure story but might be a case of fraud by people that attended a local “real estate training” course.

Some of you here have access to different information and maybe with more eyes looking at it we can find out more?
HEHEHE says:

June 9, 2008 at 7:25 am

Stagflation, Oil Prices Through The Roof, And Now This:

http://www.dailymail.co.uk/news/worldnews/article-1021825/Son-Evel-Kneivel-jumps-24-trucks-beat-fathers-record.html

It really is the 70’s all over again!

I think leisure suits should be mandatory at the GTG.
HEHEHE says:

June 9, 2008 at 7:41 am

Lehman Brothers will raise $6 billion of capital to cover $2.8 billion second-quarter loss

http://biz.yahoo.com/ap/080609/lehman_brothers_capital.html

Ninth inning my @ss!
BC Bob says:

June 9, 2008 at 7:47 am

he [145],

Ninth inning of an extra innings marathon, probably 24 innings.
BC Bob says:

June 9, 2008 at 7:53 am

“I think leisure suits should be mandatory at the GTG”

he [144],

Maybe we should reconsider the location. Move it to the Odyssey, Brooklyn?

http://www.youtube.com/watch?v=DSwEwisjgZw&feature=related
kettle1 says:

June 9, 2008 at 7:54 am

since people like to toss a little dirt at the candidates here is some on McCain

http://www.jedreport.com/2008/06/brutal.html
SG says:

June 9, 2008 at 7:57 am

Making the cut: Five signs that it is time to trim the asking price on your house
kettle1 says:

June 9, 2008 at 8:01 am

liesure suits?????

http://tinyurl.com/2xke95

sounds good to me
kettle1 says:

June 9, 2008 at 8:04 am

OOPS

Gas hoarding eyed as cause of Dartmouth apartment fire

http://tinyurl.com/6egbyk

DARTMOUTH — A couple tried to beat the high cost of gasoline by hoarding it in their apartment, but the plan backfired when fumes ignited, causing a fire that displaced residents from eight units in the complex, officials said.
sas says:

June 9, 2008 at 8:05 am

“Giant Calif. land partnership files for Chapter 11-15,000-acre Calif. real estate business files for Chap. 11; Public pension is main investor”

http://tinyurl.com/3vw837

SAS
sas says:

June 9, 2008 at 8:07 am

McCain part of “Keating 5”

SAS
HEHEHE says:

June 9, 2008 at 8:36 am

BC,

Good to have you back. I have a BBQ to go to Saturday but definately plan on making an appearance at the GTG.
HEHEHE says:

June 9, 2008 at 8:48 am

Kettle,

I’ll ask again, when are we bombing Iran or having Israel do it for us? Seems with Hezbollah’s moves in Lebanon and the “peace talks” between Syria and Israel that Iran is getting cut off. Syria becomes Hezbollah’s sole benefactor and they get Lebanon as their puppet state. Hezbollah gets to continue their anti-Israel rhetoric and occassional border incursions, because we all know revolutionaries can’t actually govern unless they have a boogie man to point their swords at for causing their people’s ills.

Iran gets cut off and several nuclear tipped bunker buster bombs for their nuclear facilities.

I’ve been wrong about many things but it seems interesting that so many countries have been adding to their oil reserves of late and major exporters such as Russia and Saudi Arabia can’t find additional oil to export.

I am a firm believer in Peak Oil and I could be wrong but I think there appears to be a lot of interesting things going on of late.
Beachfront Dream says:

June 9, 2008 at 8:57 pm

Chicken Little,

Be what your blog entries are, the sky isn’t falling. The best homes priced competitively and exceeding in presentation value are not only selling, but drawing multiple offers. The POS’s sit. Your “Comp Killers” are overpriced POS that were purchased in the boom, way too high, and remarketed within too soon a window. Viola, comp killer. Big f*ck*ing deal, who could NOT have seen that coming?

Keep renting. By the time your followers reenter the market, mortgage rate will have risen and they’ll be priced out again. Wah.

BTW, I have no idea what ramen noodles taste or look like nor will I ever.
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