Thu 14 Aug 2008
From Bloomberg:
U.S. Foreclosures Increase 55%, Bank Seizures Rise to Record
Bank repossessions almost tripled in July and U.S. foreclosure filings increased 55 percent from a year earlier as falling prices cut homeowner equity, accelerating the housing decline, RealtyTrac Inc. said.
Bank seizures rose 184 percent, the most since reporting began in January 2005, the Irvine, California-based seller of foreclosure data said today in a statement. More than 272,000 properties, or one in 464 U.S. households, got a default notice, was warned of a pending auction or were foreclosed on. Nevada, California and Florida had the highest rates.
“It’s getting worse,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in an interview. “The number of properties that have been foreclosed on by the banks and still haven’t sold is the highest we’ve ever seen.”
Total filings rose 8 percent from the previous month to 272,171, just shy of the record 273,001 set in May, said RealtyTrac, which has a database of more than 1.5 million properties. Through July, 775,244 properties were owned by banks, compared with about 445,000 for all of 2007 and about 224,000 in 2006, Sharga said.
From the AP:
US foreclosure filings surge 55 percent
The number of homeowners stung by the dramatic decline in the U.S. housing market jumped last month as foreclosure filings grew by more than 50 percent compared with the same month a year ago, according to data released Thursday.
Nationwide, more than 272,000 homes received at least one foreclosure-related notice in July, up 55 percent from about 175,000 in the same month last year and up 8 percent from June, RealtyTrac Inc. said. That means one in every 464 U.S. households received a foreclosure filing last month.
From Reuters:
Home foreclosure filings up 55 pct in July
U.S. foreclosure activity in July rose 55 percent from a year earlier as a slump in once-sizzling housing markets forced yet more borrowers to default on their mortgages, according to a monthly report.
…
That means one in every 464 U.S. households received a foreclosure filing in July, the firm said. Bank repossessions (REOs) rose 184 percent year-over-year. Default notices were up 53 percent, and auction notices rose 11 percent.“The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale,” James Saccacio, chief executive of Irvine, California-based RealtyTrac, said in a statement.
RealtyTrac now has more than 750,000 properties in its active REO database, or about 17 percent of the inventory of existing homes for sale reported in June by the National Association of Realtors, RealtyTrac said.
From the Star Ledger:
Bergen County pair charged in multimillion-dollar mortgage fraud
Two Bergen County men were arrested Wednesday and two co-conspirators were being sought in what authorities said was a multimillion-dollar mortgage fraud and property-flipping scheme involving rental properties in Paterson, according to the Record newspaper.
A 25-count indictment charges Gerald Carti, 61, of Oakland; Frederick Ugwu, 51, of Saddle River; Renford Davis, 37, of Paterson; and Amer Mir, 39, of Jersey City with conspiring from 2002 to 2005 to obtain millions of dollars in mortgage loans for unqualified borrowers to purchase homes at inflated prices, according to the Hackensack-based newspaper.
Carti, a loan officer and shareholder of Pine Brook-based U.S. Mortgage Corp., was arrested at his home. Ugwu, who bought and resold properties in and around Paterson, surrendered to the FBI in Newark. They appeared in Newark before U.S. Magistrate Judge Patty Shwartz, who set bail at $1 million bond each, secured by various properties.
Ah. 2nd
Do we have any new data in brigadoon :)
From the Star Ledger:
N.J. Lottery sales rise as economy turns down
The economy may be down and gas prices up, but people with dreams found enough dollars to purchase more New Jersey lottery tickets in the past year than during the previous 12 months.
Lured by the hope of striking it rich, players spent $2.53 billion on state lottery tickets in the year that ended June 30, $18 million more than the same period in 2006-07, or an increase of 0.7 percent.
Lottery officials are not sure what caused the slight increase in sales. It could be the larger jackpots in the Mega Millions game when there is no top prize winner and the money is rolled over to the next drawing. It could be the fact that a week of sales was lost in 2006 during the state government shutdown.
Or it could be, as some experts believe, that people are playing more during economic hard times and hoping they’ll solve their financial problems by hitting the jackpot.
From the Record:
New Jersey foreclosures up 11 percent
Foreclosures in New Jersey rose 11 percent from July 2007 to July 2008, RealtyTrac said today . Nationally, foreclosures were up 55 percent, RealtyTrac said.
One in every 751 households in New Jersey was in some stage of foreclosure in July, compared with one in every 464 nationwide, RealtyTrac said.
Cindy-
Today’s pension fund article, by Mike Morgan. He gets right into Calpers:
http://tinyurl.com/6yl9an
From the Star Ledger:
Foreign investors are slow to buy U.S. real estate, survey finds
o much for all the chatter about foreign investors flooding the U.S. housing market and snapping up bargains left and right.
Although the weakening U.S. dollar and declining home values were supposed to prove an irresistible combination for international home buyers, so far the script hasn’t quite played out that way.
According to the National Association of Realtors, 26 percent of Realtors who participated in a recent survey said they worked with at least one foreign client between May 2007 to May 2008. That’s down from 32 percent in the previous survey.
“The decline in foreign home buying could reflect the general downturn in the U.S. housing markets,” the NAR wrote in its 2008 Profile of International Home Buying Activity. “Foreign buyers — like U.S. buyers — may be waiting for home prices to continue to decline in order to purchase a property at a lower price.”
“Some foreign buyers may be reticent to invest in a U.S. property until they are assured that their investment will ‘pay off.’”
The study was based on responses from about 4,000 Realtors who work with international real estate investors.
According to the report, foreign investors who actually made the leap and bought property in America seemed to favor southern and western states, and were more inclined to pay cash for their properties — 40 percent, compared with just 7 percent of domestic homebuyers.
More than 25 percent of the estimated 150,000 to 190,000 sales to foreign buyers were in Florida. Other states popular with foreigners were California, Texas and Arizona..
The typical foreign buyer bought a single-family home for $297,400 with the intention of using the property as a vacation home. Foreign buyers purchased properties that cost an average of 36 percent more than domestic buyers, and 14 percent of properties purchased by foreigners cost $750,000 or more, according to the findings.
Hey Pat, you still around?
Was wondering if you had the name of that Indian restaurant in Bucks County.
From the Star Ledger:
Newark receives a $45M boost
Newark received a $45 million bailout from New Jersey taxpayers Thursday in return for accepting the state designation as a “distressed city,” which brings tight spending limits and state oversight of hiring and finances.
The special infusion of aid for the state’s largest city will head off what otherwise would have been a property tax increase of almost $800 for the typical Newark household, said Michelle Thomas, Newark’s acting business administrator.
Since taking office in 2006, Mayor Cory Booker has issued stern warnings about the city’s fiscal crisis. The city trimmed its payroll in 2007 by 380 employees through layoffs and buyouts. Booker has also signed off on more than $1 million in pay hikes through executive orders.
Thomas said since 2006, Booker has trimmed the city payroll by 453 people, cut the city budget by $52 million and boosted revenue from payroll taxes and other sources by millions of dollars.
[7],
Another theory/wish/hope/dream from the bulls, blown out of the water.
“Greenspan sees house price bottom in 2009: report”
http://news.yahoo.com/s/nm/20080813/bs_nm/usa_economy_greenspan_dc
OK, AG, which call is it? What has changed in 2 weeks besides record foreclosures?
“July 31 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are “nowhere near the bottom” and the resulting market turmoil isn’t showing signs of abating.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a4jioRRKzw5s&refer=worldwide
Back to dead man walking.
“Is the U.S. Economy Safe?”
“What Banks And The Government Are Not Telling Us About 2009—The Next Shoes You Hear Drop May Be Very Loud Ones”
“The U.S. banking system is essentially insolvent. The Treasury, Federal Reserve, FASB, and Congress are colluding to keep the American public in the dark for as long as possible. They are trying to buy time and prop up these banks so they can convince enough fools to give them more capital. They will continue to write off debt for many quarters to come. We could have a zombie banking system for a decade.”
http://www.thecuttingedgenews.com/index.php?article=685
(6) Clot
Thank You…I think. “For the most part, the pension problem is totally out of sight. It’s long term, down the road for most people. And with any good Ponzi Scheme, the alarm won’t go off until it is too late. When we finally wake up and realize Wall Street raided the pension funds, it will be too late and the boys and girls with the money will be long gone.”
Also, mine is a defined benefit program (they take it from my check and the district matches the funds.) Turns out, I read a bit on the PBGC - Pension Benefit Guarantee Corp. - defined benefits aren’t covered by this FDICish organization. Because “defined contributions plans - by contrast and definition - are always “fully funded.” Thus Congress saw no need to provide insurance protection for participants.”
CalPERS retirement benefits are guaranteed by state law. But this state is headed for bankruptcy….Here’s the kicker Clot, I am only relying partially on CalPERS - I also taught for 12 years in Oregon so the other portion of my retirement will be coming from STRS - Oregon Teachers Retirement. Won’t that be fun.
Like I said -I need to pay off my 1150 sq. ft. house and plant a garden in the flower beds. The utility bills are pretty low and I can bike anywhere I need to go. Ah, retirement!
Frifteenth!
BC (12)-
He is so brain-addled, I think the first thing that comes to mind is what comes out his mouth.
Either that…or Bill Gross told him to quit talking about any type of stabilization in housing markets. The bailout gravy train only continues as long as things stay in free fall.
Cindy (14)-
‘Because defined contributions plans - by contrast and definition - are always “fully funded.”’
Fully funded, as in: the money is actually, physically there? Or, fully funded, as in: our models tell us that the money will be there, for the foreseeable future?
(17) Oh no, I think it is as in: We took the money out of their checks and gave it to CalPERS to manage so of course everything is okay.”
I am a pretty spry old broad. I can see myself teaching another 10 years. No, I don’t want to - but I will if I have to.
Clot [16],
My hunch, this is exactly why Paulson {John} is paying him. Try to goose the markets, big John can short more?
CPI and initial claims numbers come out at 8:30. Initial claims was at an astounding 455K last week. Market expects 435K, I expect 470K :)
From the BondBuyer:
Mass. Panic Over Ballot?
Referendum Could Eliminate Income Tax
Massachusetts could lose its largest revenue stream if voters in November approve an initiative to eliminate the state’s income tax, which brings in roughly $12.5 billion to the commonwealth’s coffers.
http://www.bondbuyer.com/article.html?id=200808133GJLGQV6
Stu (21)-
Always safe to go with the Armageddon call.
#7 grim,
The problem here is that places like Europe and the Far East have their own credit crunch and I assume will not lend on overseas property especially in the US. Unless foreign nationals are paying cash, the LTV requirements from the US lenders is around 40% after they have had all orifices inspected.
I’m tired of the word, Armageddon.
Gottendamerung. That’s the ticket. Much classier…not as fundamentalist.
Consumer prices surge more than expected, with 5.6% annual inflation rate highest since ‘91; weekly jobless claims slip to 450,000.
Not Armageddon, but it doesn’t exactly smell like roses either.
#25 - Gottendamerung - I’m personally fond of Ragnarok, where even the gods die.
CPI up .8% in July; 5.6% yoy. Biggest increase in 17 yrs.
Be careful Tosh.
Your Dungeons and Dragons is showing.
#29 - ssssh! I’m a cool kid now!
Stu (26)-
We should just think in terms of 10:
- 10% inflation
- 10% jobless rate
Any talk by the gubmint is probably lies and spin.
Got gold?
The real estate terrorist scourge has absolutely ruined the vehicles that most of us traditionally use for retirement. At this point, it is unwise to assume that traditional investments or pension plans can be relied upon.
When I look at investing in the most basic sense, absent of financial alchemy, my question is whether investment is going to pay me cash back right now and not be reliant on someone else coming along and agreeing to buy it from me for more than I paid. (Terrorist activity has ruined that game).
For me, the best retirement investment I can make is in a small business that sells something anchored to the everyday wants and needs of people (i.e. the real economy); preferably something passive that does not require a lot of active management while generating cash flow every day. Laudermats and car washes are good examples of these sorts of businesses. A good business of this sort can pay one in perpetuity. I think many people are going to come to this view.
Cindy Says:
August 14th, 2008 at 8:21 am
I am a pretty spry old broad. I can see myself teaching another 10 years. No, I don’t want to - but I will if I have to.
#11 BC Bob: Yeah saw that. Why can’t the old geezer go softly into the night.
When Volcker stepped down, he faded away for many years, so as not to upstage Greenspan.
Too bad Greenspan does not have the same class. He still demands to be the center of attention.
I have to believe every time he speaks it must infuriate Bergabe.
#25 I like the word “Doomed.” It has a nice post-Apocolyptic nuclear holocaust feel to it where everyone will be sitting in the rubble of an ash-strewn world wondering what happened.
#32 Clot
Got Groceries?
45million for newark,,
picked the pocket of the NJ taxpayer again.
whats next?
#16:Either that…or Bill Gross told him to quit talking about any type of stabilization in housing markets. The bailout gravy train only continues as long as things stay in free fall.
So I geuss he forgot what Gross told him less than 2 weeks ago.
“For me, the best retirement investment I can make is in a small business that sells something anchored to the everyday wants and needs of people (i.e. the real economy)”
50.5,
Stop making sense. We may have to upgrade you to 75.75?
There is an article in today’s FT about how second mortgage holders are blocking the FHA bailout since they get nothing as part of the bail out package. They have to agree to give up the lien on the property and get nothing back in return.
(33) So reinvestor - Do you think I should quit teaching and open a car wash? I’m more inclined to go with PGC @ 36 and open a fruit and vegetable stand in my front yard.
Just yank up the lawn and go for it…
#33 - Laundromats and car washes are good examples of these sorts of businesses.
I think the recent utility costs for both of these (esp. the laundromats) may be seriously eating into any profits.
From MarketWatch:
Consumer prices jump 0.8% in July
U.S. consumer prices jumped a greater-than-expected 0.8% in July, marked by big increases in energy, food, clothing and cigarettes, the Labor Department reported Thursday.
The core consumer price index, which measures retail-level inflation after excluding volatile food and energy inputs, rose 0.3% for the second straight month.
Coming in much worse than anticipated, the pair of red-hot inflation readings seem certain to swell the chorus of critics urging the Federal Reserve to raise interest rates to quell inflation.
Economists had predicted that the seasonally adjusted CPI would rise 0.5% and that the core CPI would increase 0.2%, according to a survey by MarketWatch.
Consumer prices are up 5.6% in the past year, the biggest year-over-year increase since January 1991. The CPI has surged at a 10.6% annualized rate in the past three months.
The core CPI has risen 2.5% in the past year, the biggest gain since January. The core rate’s rising at a 3.5% annual rate in the past three months.
The CPI rose 1.1% in June, with the core rate up 0.3%.
Cindy Says:
August 13th, 2008 at 9:02 pm
Chicago - Any idea if Calpers knows what they are doing?…Can you hazard a guess?
C: don’t worry about CalPERS…..seriously…don’t even give it a second thought…
“45million for newark,,
picked the pocket of the NJ taxpayer again.
whats next?”
I know. We should build a giant polo stadium next to the Prudential Center. Lord knows, that Newark residents can’t survive on ice hockey alone.
Blame it on the short sellers.
http://1.bp.blogspot.com/_8rpY5fQK-UQ/SKJRZntGs8I/AAAAAAAACy4/aItBIO4XLzw/s1600-h/loss812.png
Cool chart BC!
Did GS not participate in the shenanigans or have they just not revealed it yet?
[22] Another Mass. tax revolt. I love it.
This income tax issue has been simmering for years when Cellucci imposed, and promised to roll back, a “temporary” hike from 5% to 5.5% but never did. I recall also that toll booths were supposed to come off the Turnpike when the bonds were paid off–this occurred in the 90’s but the booths stayed, and I think there was a referendum then to eliminate them, which failed (going on memory here).
Fact is, Mass. cannot survive without some form of income tax; the referendum, if sustained, would paralyze the state and cause utter chaos in its finances. The unspoken goal is to play a game of chicken with the legislature. The referendum could force the legislature to reduce the current tax in a preemptive strike. That would acheive its goal, and is actually the preferred outcome. Reason why is because an initiative of this sort doesn’t handcuff the legislature—the General Court (as the lower house is called) can introduce new legislation to counteract the referendum. Only a constitutional provision ccould prevent the legislature from repealing the referendum (should it pass) and reinstituting the taxes that the voters just repealed. But the referendum forces, if they don’t get a preemptive strike, are also hoping to force the legislature into doing just that and giving their opponents a huge club with which to bash them at election time.
Metsies tied for first!
Lennar sweetens the commission pot
http://www.bizjournals.com/southflorida/stories/2008/08/11/daily33.html
“There is even more good news for cash-starved brokers: For every new home prospect registered at a Lennar community, the introducing agent will get a $50 gas rebate card.”
I honestly believe we have had the schnitzel. Went 100% cash back in May, transfered entire portfolio to a credit union and registered deposits so they are fully covered by NCUA insurance (but who knows). Planning to eat greenbacks in retirement or burn for heat.
Have a friend in Tampa who bought in 2006 for 385K (asking was 415k). Identical house across the street now asking 285k. Glad it can’t happen in NJ.
ChiFi:
Daniel Murphy for president!
And ChiFi:
In return for the advisor advice for my buddy, here is my gift to you:
New: Depeche Mode “The Singles 86-98″ MP3 Album download for $4
Today only, the Amazon MP3 Store offers downloads of Depeche Mode’s “The Singles 86-98″ for $3.99. That’s the lowest price we could find for this 21-track, DRM-free album, released in 1998. (iTunes charges $9.99.) Amazon MP3 Downloader is required.
Stu: cool! I need Only When I Lose Myself…
BOOOOOOOOOOYAAAAAAAAAA
http://www.nypost.com/seven/08142008/photos/sports085.jpg
STu 53
the single is on bittorrent for free. and you dont need amazon….
OT: [any advice?]
We are looking for a memory foam mattress - just not ready for the “Tempurpedic” price.
I know BJs sells one online and we’ve seen other imitators, too.
Anyone have any experience with price, quality, delivery and service?
Thanks in advance.
sl
“bittorrent for free”
How dare you ;)
Limewire anyone?
Nom, 48
regarding Mass tax revolt:
I fall into the camp of “why not” . Forcing the state to live with a limited budget is not the end of the world. why is such a horrible thing to force the state to spend less? The majority of state governments , including Mass are grossly bloated.
And the whole issue smacks or hubris, in that if the people wantr the tax gone, the politicians are suggesting that they know better, “trust us the taxes are good for you”
stu,
dont touch limewire,
go to the pirate bay (ARRRRRRGH)
www . thepiratebay . com
WELCOME, INFLATION
Even if fed raises rates right now, INFLATION will persist - in manufacturing costs inflation just trickling down to consumer - we are about to see 2-3%/month consumer goods inflation.
So far manufacturers were eating the costs and delaying passing them down to consumer - normally from commodity (raw materials) to final consumer product you have 3-4 “steps”, each step has to roll out price increases to increase price of the final product.
In my industry all “steps” are rolling 3-8% price increases every 1-2 month now. It is about to hit consumer.
Have fun - fed rasing rates will do absolutelly nothing for at least 6-7 month.
The price increases machine is rolling.
Funny though - So far there is no wages pressure - jobs are few and people are happy to hold onto them.
So inevitable consumer spending will crush (in real terms). It does seem that american over - consumerism is coming to an end by fundamental market forces..
Frostwire is better, lighter and less prone to viruses.
6 Clot
Thanks for that article.
Laudermats and car washes are good examples of these sorts of businesses. A good business of this sort can pay one in perpetuity. I think many people are going to come to this view.
Did you ever owned either??
I had a friend who owned 2 Laudermats - it is pain in the ass - people constantly wreking washerd/dryers, you have to always clean, every once in a while some idion will try to get cash out of money machine/or change from washer-drier thousands of dollar in damages, and so on.
Remember - people who use Laudermats do not care for washers/driers as it is not theirs.
Utilities costs are actually not a big deal, biggest expense is Liability insurance and rent.
I know what I’m doing with Limewire. No shared folders and I never launch anything that looks suspect. I will try your advice on the others though since I hate Java!
P.S> Cleaning well-baked in chewing gum from drier’s walls is pain in the a$$.
Credit to Crossing Wall Street:
From its peak in 1980, if the price of gold had kept pace with total return of the Wilshire 5000, today gold would be worth over $21,000 an ounce.
Cindy
I hope your pension is there for you when you do retire. I think pensions here will disappear and only people smart enough to invest in other retirement options will be able to survive on their savings.
Been off on staycation this week but
“This is the beginning of the “liquidate at any cost stage.”
http://www.minyanville.com/articles/greeks-goat-fannie-fnm-liquidation/index/a/18497
More about Gold:
$10,000 invested in gold at it’s peak in 1980 would’ve resulted in a return of approximately $10,750 today. The same $10,000 invested in 1980 in the S&P 500 would’ve resulted in a return of approximately $270,000 today.
#48
I don’t believe Mass can’t survive without and income tax. NH does it. There are so many worthless state employees in Mass making a ton of money with lifetime pension/benefits.
In my humble opinion, all USD dollar holdings will be trashed and deemed worthless. Just think what hyper inflation will do to your 401K when a loaf of bread and a gallon of milk cost $250K.
Rubble collapsed in the 90’s, it can happen russia was a super power debtor nation.
Putin turned them around and now they’re a credito nation and back to their old ways picking on Georgia and setting up concetration camps. In two days they’ll take over Tbilisi.
Putin’s thesis was how Russia can use it’s energy to rise and dominate Europe.
Inflation wipes all debts, and allows you to start over.
hey,
can we get a NJ tax revolt going? cutting off the states funds and forcing them to cut the fat is the only real change is going to happen!
For the political guru’s how do you pull that off in NJ, which union leaders and mob boss’ need to be paid off to make this happen?
USA could emulate Russia and repudiate all foreign debt.
What a liberating feeling!! Wipe the slate clean!
Strange market today.
Economic reports were pretty bleak, yet financials are rallying.
Crazy! As usual.
From the August edition of the Journal of Financial Planning.
“While it is true that many Americans are overworked and that you have to treat yourself occasionally, self-gifting is more prominent today because of advertising pitches to buy things ‘becuase you deserve them’. You also deserve to live out a retirement that doesn’t include regular helpings of Alpo.”
Marshall Loeb, MarketWatch, writing about Gregory Karp’s book Living Rich by Spending Smart
Re101 back to the ground. Nah laundramat or car wash and most small business are very very competitive. Most also are cash business - you can not trust your peer citizens these days that would be another thread.
Real story: my boss had to shut down his laundramat because wife and daughter rrefuse to work 100 a day there. Conclusion is that it’s easier to make money in corp american so if you have a 9-5 job better hang in there as long as possible.
#33
Re: tempurpedic question.
Check out abed.com
Have had one for about the last 5 years and very satisfied.
#75 Stu: Bizzare!!
Fiddy,
first we need some leaders with real vision, not including vision of lining their own, and their friends pockets at all costs.
While i disagree with the way putin may do things,i can appreciate his vision and drive to create a brighter future for russia. I might prefer having putin as the leader of the US as opposed to Shrub and friends
gary,
gold is a tool not just an investment. at times it can act as an investment and at others a store of value etc. The hard part is understanding the shiny stuff well enough to know how to use it and when. I do not know enough except to know that i do not know enough….. oh well that’s the the first step right?
#76
While I understand the feeling that many people have to justify to themselves the long hrs they work, I really do not understand how buying a bunch of crap achieves this. Doing this just chains you down.
Stu, 3b,
i think that at this point, the banks and the government are heavily manipulating the markets and that we wont see logical/rational behavior again until they lose control.
heck, less oil was pumped then expected and russia is playing with matches next to a major supply pipeline. yet the oil markets barely even flinch. very unusual indeed.
“New Jersey foreclosures up 11 percent”
With all this gloom and doom, foreclosures are up only 11% in NJ. That’s great news.
It looks like NJ RE is weathering this storm just fine despite what read on this blog.
Re101: now there is a hack out of this small business thing, which I’ll only share it when I meet and trust you as a friend. Until then good luck with your RE business :)
#77 & #33
Conclusion is that it’s easier to make money in corp american so if you have a 9-5 job better hang in there as long as possible.
Frank [83],
I’m perplexed at the still mind-numbing prices that I’m seeing. It appears as though just about everywhere nationwide is getting hammered except Northern NJ. I’m still seeing near peak prices for anything deemed desireable in a decent town. If you’re think I’m full of it, call a realtor and ask them to show you a bunch of houses this weekend.
New Jersey foreclosures up 11 percent
Foreclosures in New Jersey rose 11 percent from July 2007 to July 2008, RealtyTrac said today . Nationally, foreclosures were up 55 percent, RealtyTrac said.
One in every 751 households in New Jersey was in some stage of foreclosure in July, compared with one in every 464 nationwide, RealtyTrac said.
I hate to agree with Frank - but based on this data NJ is faring a lot better than USA in general.
So NJ Is Immune - however what it is doing is creating additional insentives for me to move. (and other young people which do not work in NYC).
SO good luck NJ in becoming the first state of Rich and Poor - Castles and Ghettos.
Middle class (75-150K family income) are being pushed out.
I only wonder once most of the state is either foreighner’s enclave, ghetto’s or rich people towns, why would any buisnesses still stay here?
75- Stu
“U.S. stocks rose for the first time in three days after regulators loosened restrictions on Fannie Mae and Freddie Mac to help revive the mortgage industry.”
Hmm…you have lost 80% of your capital because of unwise investments in a highly de-regulated environment. And the answer to recovery - more de-regulation.
I think chinese torture would soon be replaced by Bernanke Torture.
#86 Al: Slower in NJ, but it is coming. Clot can tell you how awful things are in his neck of the woods in NJ, and it is moving in closer every day.
Al, where are you going to move to, west coast? Just curious and good luck.
In 2007, in the United States of America, the poverty threshold for a single person under 65 was US$10,787; the threshold for a family group of four, including two children, was US$21,027.
http://en.wikipedia.org/wiki/Poverty_line
#86 AL
Middle class (75-150K family income) are being pushed out.
Kettle1:
Market manipulation? I hope so.
Re: Bucks County
For those of you who have already moved or are thinking about it, would you get my email from Grim? I have lots of questions re: home pricing, entertainment, taxes, schools, etc.
Thanks!
Long post….
Russia and Georgia: All About Oil
http://tinyurl.com/5mhhoy
In commenting on the war in the Caucasus, most American analysts have tended to see it as a throwback to the past: as a continuation of a centuries-old blood feud between Russians and Georgians, or, at best, as part of the unfinished business of the Cold War. Many have spoken of Russia’s desire to erase the national “humiliation” it experienced with the collapse of the Soviet Union 16 years ago, or to restore its historic “sphere of influence” over the lands to its South. But the conflict is more about the future than the past. It stems from an intense geopolitical contest over the flow of Caspian Sea energy to markets in the West.
This struggle commenced during the Clinton administration when the former Soviet republics of the Caspian Sea basin became independent and began seeking Western customers for their oil and natural gas resources. Western oil companies eagerly sought production deals with the governments of the new republics, but faced a critical obstacle in exporting the resulting output. Because the Caspian itself is landlocked, any energy exiting the region has to travel by pipeline – and, at that time, Russia controlled all of the available pipeline capacity. To avoid exclusive reliance on Russian conduits, President Clinton sponsored the construction of an alternative pipeline from Baku in Azerbaijan to Tbilisi in Georgia and then onward to Ceyhan on Turkey’s Mediterranean coast — the BTC pipeline, as it is known today.
The BTC pipeline, which began operation in 2006, passes some of the most unsettled areas of the world, including Chechnya and Georgia’s two breakaway provinces of Abkhazia and South Ossetia. With this in mind, the Clinton and Bush administrations provided Georgia with hundreds of millions of dollars in military aid, making it the leading recipient of U.S. arms and equipment in the former Soviet space. President Bush has also lobbied U.S. allies in Europe to “fast track” Georgia’s application for membership in NATO.
All of this, needless to say, was viewed in Moscow with immense resentment. Not only was the United States helping to create a new security risk on its southern borders, but, more importantly, was frustrating its drive to secure control over the transportation of Caspian energy to Europe. Ever since Vladimir Putin assumed the presidency in 2000, Moscow has sought to use its pivotal role in the supply of oil and natural gas to Western Europe and the former Soviet republics as a source both of financial wealth and political advantage. It mainly relies on Russia’s own energy resources for this purpose, but also seeks to dominate the delivery of oil and gas from the Caspian states to the West.
To further its goals in the Caspian, Putin and his protégé Dmitry Medvedev – until recently the chairman of Gazprom, the Russian state gas monopoly – have enticed (or browbeaten) the leaders of Kazakhstan, Turkmenistan, and Uzbekistan into building new gas pipelines through Russia to Europe. The Europeans, fearful of becoming ever more dependent on Russian-supplied energy, seek to build alternative conduits across the Caspian Sea and along the route of the BTC pipeline in Azerbaijan and Georgia, bypassing Russia altogether.
It is against this backdrop that the fighting in Georgia and South Ossetia has been taking place. The Georgians may only be interested in regaining control over an area they consider part of their national territory. But the Russians are sending a message to the rest of the world that they intend to keep their hands on the Caspian Sea energy spigot, come what may. This doesn’t necessarily mean occupying Georgia outright, but they will certainly retain their strategic positions in Abkhazia and South Ossetia – for all practical purposes, daggers aimed at the BTC jugular. So even if a cease-fire is put into effect, the struggle over energy resources – sometimes hidden and stealthy, sometimes open and violent – will continue long into the future.
#85 gary: Well in my Blue Ribbon close to NYC train town, I am seeing most listings sit for months, and all the 500k and 600k listings are moving to 400K’s and 300K’s.
In fact Rich was kind enough to help me with a listing in my town the other day, and the house sold for 430K, and is now listed by a realtor at an asking 359K. Short Sale)
Assuming it sells for 359k that is over a 20% hit in a little more than 2 years, and of course the lower it sells for the bigger the hit.
More importantly the final sales price of that house now becomes the new comp for houses in that particular neighborhood, as the houses all all basically the same.
65 Stu, don’t hate java it is a combination of the developers who wrote the app and the poor state of the windows JDK, on Solaris java applications work well provided you have enough memory. Also some large number of websites are powered by java and it is quite good for this use.
“Russia and Georgia: All About Oil”
“United States and Iraq: All About Oil”
Isn’t it kind of hypocritical to fault Russia for their actions in Georgia while we continue to occupy Iraq for exactly the same motive?
45 mill for newark,,, watch as trenton,passaic,, paterson, camden ,
they will come to the water hole.
Trapped in SQL querying class. thank god for wireless internet.
and no ,, you can’t have the katz em’s
Amazon is great for MP3 downloads. Not restricted files and you dont need the downloader, just click the ‘easy download’ button and it goes right to your desktop. 89 cents per song.
“$10,000 invested in gold at it’s peak in 1980 would’ve resulted in a return of approximately $10,750 today. The same $10,000 invested in 1980 in the S&P 500 would’ve resulted in a return of approximately $270,000 today.”
Gary,
In 2000 it cost approx 40 oz of gold to buy 1 dow. Today is costs approx 14.5 oz of gold to buy 1 Dow.
OK jcer.
Java in Windows and on the MacOS sucks!
Better? ;)
In my college days, I did some programming on a Sun Solaris workstation that was just slightly smaller in size than my refrigerator. Two years later, the machine was twice as powerful and about the size of a cereal box.
Would anyone happen to have a history on MLS # 2811803 in Tenafly, NJ? Maybe an address too? Thanks!
Gary (85) and Al (86),
Thanks for the support, I have been saying this all along on this board but some RE agents want-to-be like Clotpoll called me stupid and dumb for insisting that the NJ RE market is just fine.
Stu,
“Russia and Georgia: All About Oil”
“United States and Iraq: All About Oil”
Isn’t it kind of hypocritical to fault Russia for their actions in Georgia while we continue to occupy Iraq for exactly the same motive?
both are accurate. I dont see it as “faulting” russia for the actions in georgia, just putting things into context.
We are seeing the beginning of the new phase of a struggle that has been going on for centuries. The struggle to control energy sources. WWII solidified the primary spheres of influence and those spheres are no longer valid, hence the new struggles to redefine spheres of influence.
#95 Stu: Like McCanin’s comment yesterday, regarding a new cold war, with Russia, where he said nations in the 21st century do not go around invading another nations, except of course he forgot to add the U.S.
OT:
I am not from these parts, so please excuse my ignorance.
While growing up, how do you decide between becoming a Yanks/Mets fan or a Giants/Jets fan?
“some RE agents want-to-be like Clotpoll called me stupid and dumb for insisting that the NJ RE market is just fine.”
Frank,
I’m not a RE agent. However, you can toss me into this category.
#103 Support? The NJ market is not fine. Foreclosures are up, prices are down and will continue to drop.
I agree that it is not as bad in NJ,as in other areas of the country, but it will get there.
There is no magic potion that will prevent it.
The underlying economic fundamentals for the NY/NJ area are dismal, and that is and will continue to affect housing prices here.
“While growing up, how do you decide between becoming a Yanks/Mets fan or a Giants/Jets fan?”
Victorian,
Most cases; parents and/or older siblings. However, it could also be the cheerleaders outfits; Dallas Cowboys. Then again, whomever is on top when you become interested.
Every time I check into this blog for some good healthy information (like I used to get) all I get now is how bad everything is. I feel like I want to slit my wrist after reading this thing. You guys bark about all the issues going on in the worst states in the country, NJ isn’t one of them. You bark about how foolish it is to buy a home and how nobody can get a mortgage. In 10 years all the nay sayers and renters are going to wish they bought in ’08 and ’09. In my Monmouth county market area inventory is down and sales are up, listings that are priced right are selling. I think we all agree that market conditions have made the buying and selling process a bit more difficult but please know closings are happing every day and buyers and drawing up contracts every single day and in 10 years from now they will see the equity build.
“I am not from these parts, so please excuse my ignorance.
While growing up, how do you decide between becoming a Yanks/Mets fan or a Giants/Jets fan?”
A lot is based on where we all originally lived. I grew up in Merrick, Long Island so I naturally became a Met/Jet fan since both played at Shea which was a bit closer than the Bronx.
Then there are the bandwagon fans who love a winner and choose the Yankees for this.
Giant fans are a strange bunch. They tend to be very blue collar and really appreciate the game. They don’t cheer very loudly though.
Jets fans are more like British soccer fans. They need little excuse to riot and will cheer for their team even when they are 1 and 14. Forget blue collar, the fan base is strikingly similar to the crowd you see in the local OTB. Ever notice on the news that when someone gets arrested, they so frequently are wearing Jets garb?
An easy comparison would be like comparing the Packers to the Raiders.
#110 AAG: Things are really bad. I cannot help it if you are in denial.
Where is the upside to buying right now in NJ? What are the economic prospects for NJ going forward? In a word, they are grim.
And just what makes you believe a buyer will see equity built in 10 years? Sounds like the hupe of a realtor to me.
#112 Should have said sounds like the hype of a realtor to me.
“please know closings are happing every day and buyers and drawing up contracts every single day and in 10 years from now they will see the equity build.”
AAG,
Sure there are buyers. There were also buyers of dot com from the peak to the bottom. There will be buyers all the way to the pits. Nothing new here.
Everyone thought Roubini was wrong two years ago as well.
Turns out, he was just about the only one who was right.
I get the feeling that Frank and AAG are Giants and Yankees fans.
#112 3b: What goes up comes down its real basic. I agree NJ has some challenges but so does every state and every country in the world and I’m sure you even have some things in your life that could be better, I know I do. The point is all of this is a cycle what is bad then becomes good again. Look at oil up to 150 back down to 115 and as a result we have Boone Pickens and other eyes open and all over the issue as a result. If you look for bad you will find it. If you look for good you will find that too.
AAG, while I agree this site is gloomy it should be known that while NJ is faring much better than the rest of the country we are still hurting and as long a home prices are out of line with incomes there is a potential for a drop, even now as we speak home prices can be higher because of low interest rates. As interest rates rise which they will as more banks get out of residential home lending and the GSE’s encounter more difficulties It would not surprise me to see 8% mortgages again. This will put pressure on prices, high NJ property taxes will put pressure on prices, higher unemployment and reduced pool of qualified buyers will again put pressure on home prices. Why would reversing the very things that caused the upswing in prices not cause the inverse to happen? The process will be more gradual but prices will and are dropping it may very well take until 2010 to hit bottom but even when prices are fall .5-2% per month which seems small, yoy is like 20%-30%. NJ has a boatload of problems that will eventually catch up with it. so while people on this board think the sky is falling it probably isn’t but I do tend to agree tough times are ahead and many/most people will need to tighten their belts, reduce spending etc. If homes weren’t selling at all it would be a house apocalypse or Detroit but that doesn’t change the fact that sales are slow and there is a big potential to lose money on a purchase.
#110
I agree - there is a lot of doom and gloom on this board, but I think it’s a sign of the times. You’ve got many folks on here contributing ideas / perspectives from various backgrounds, where the overall consensus is that it’s a bear market. You have to take that into consideration. They’ve been spot on for the year that I’ve been monitoring the board.
These aren’t the happy 1950’s - you’ve got crappy politicians, poor fiscal management, wars, real inflation, and unhappy Mets/Jets fans leading to a dismal outlook overall. There is no doubt that things will turn around, as they always do, it just may take a little time.
Well said jcer.
Message from Sallie Mae I received today:
“Loans helped pay for college. Now shopping can help you pay down the loans.”
Makes perfect sense to me.
Fact:
“New Jersey foreclosures up 11 percent”
Characterization:
“That’s great news. It looks like NJ RE is weathering this storm just fine despite what read on this blog.”
Compulsive lurker here who rarely has anything intelligent to add, except to say that some characterizations are sufficiently tiring to warranet a little groaning.
How one characterize a fact, intelligent person can differ. A debate about whether a 11% foreclosure increase is a good thing or bad thing seems fundamentally pointless. A debate about what one should expect based on the 11% foreclosure increase fact is more fruitful, and that I leave to the experts to whom I so benefit from in the last 3 years.
I only note that, the definition of “immune” has gone from “no foreclosure here” to “foreclosure holding steady” to “foreclosure only going up 11%” in the time span.
That’s some immunity.
The only problem is that you can’t pass your 9-5 along to your kids if you die. You can’t sell your 9-5 either. As a matter of fact, your 9-5 is under threat by outsourcing,right-sizing and etc.
I’ve always prefered to deploy my talents to benefit me directly. I prefer to either rise or fall on that basis. To be sure, it’s risky but if you choose the right sort of small business and have the management skills to run it, the rewards can great.
Laundermats, while expensive to start, are solid businesses in my view particularly if you can combine them with some other business like a dry cleaners. Of course, it ain’t “glamorous”, but that’s not required to make money. Child care is a business that’s a pain in the azz, but I don’t know of any child care provider suffering other than from overwork. Welfare to work requirements leave some of these guys in a situation where the state is actually paying the provider, but again one does not to go that route, there’s enough money to be made just dealing with regular working folks. I know a guy who’s tied to the “green revolution” and sells an organic product that averages $ 3,000-5,000 a pop and has people lining up to buy the product. The economic slowdown has not affected him whatsoever.
I just think the idea of investing in most stuff being touted nowadays, whether it’s gold, energy stocks and etc is based on the shaky premise that someone else will come along and pay more than what you paid. That model is under threat and I’m not willing to risk my retirement on it. I look at investing in more basic terms; if I put my money in, I want near-term reasonably predictable cash return. There are few things that provide that other than a well run and positioned small business anchored to everyday wants and needs.
NJl$rd Says:
August 14th, 2008 at 11:05 am
Re101: now there is a hack out of this small business thing, which I’ll only share it when I meet and trust you as a friend. Until then good luck with your RE business :)
#77 & #33
Conclusion is that it’s easier to make money in corp american so if you have a 9-5 job better hang in there as long as possible.
BC Bob,
The gold thing: I understand your point, but I just don’t see it as an investment. An insurance policy, perhaps, but not a long term investment.
110 Why buy when you can rent for half of a mortgage and avoid this state’s criminal level of property taxes? Even net of deductions renting is far less expensive and you avoid paying for up keep.
The end of easy lending and exotic negative am mortgages will eventually cause prices to fall to levels that represent people’s ability to pay. You can’t have 500k average prices in northern jersey on 65k average income forever.
“I get the feeling that Frank and AAG are Giants and Yankees fans.”
Stu,
Me also.
Duckweed, 11% is good vs. the National average but I would hardly characterize it as “Good News”, it is like saying bob lost both legs and I only lost one that is good news, well it is compared to bob but the compared to the guy who didn’t lose any extremities I am screwed. It really means there will be downward pressure on real estate prices and tighter lending but not nearly as much as say Florida or Nevada, where resale properties are already at 2003 pricing and foreclosures are at 2001 pricing, they are almost at the end of the tunnel.
Yes this can be a gloomy board,
but i dont think anyone here is suggesting the end of the world. the debate is whether the storm we are starting to pass though is a category 1, 2, 3, or 4.
I think cat 3 or 4, but there are a number of opinions here so take your pick.
remember the bad things dont go away just because you ignore them. understanding and preparation are the best response to unfavorable conditions.
115- Stu
“I get the feeling that Frank and AAG are Giants and Yankees fans.”
Hey!! I am a Giants and Yankees fan :). My reason were for becoming a Yankee fan - Mariano Rivera.
Giants - As BC said, the Jets sucked more than them when I got interested.
And - The sky is falling!!
3b,
You’re seeing listings drop from the 600K range to 400K range? Do you have any MLS#s in mind? Just asking because maybe I’m only getting what the realtors want me to see. Thx.
toshiro_mifune Says:
August 14th, 2008 at 8:59 am
#33 - Laundromats and car washes are good examples of these sorts of businesses.
I think the recent utility costs for both of these (esp. the laundromats) may be seriously eating into any profits.
I gotta believe that those costs can be passed on without any diminution
in the demand for the services.
“Look at oil up to 150 back down to 115 and as a result we have Boone Pickens and other eyes open and all over the issue as a result. If you look for bad you will find it. If you look for good you will find that too.”
AAG,
You are talking about a product that is in demand worlwide, while supplies are dwindling.
The RE bubble was a charade, fueled by senseless lending and greed/fear. That said, if a product, in demand, can fall 30% how far can an asset fall which is overpriced/overbought, where the underlying fundamentals do not support it in any way, shape or form?
re:#106 “While growing up, how do you decide between becoming a Yanks/Mets fan or a Giants/Jets fan?”
I am a Yanks and Giants fan while my younger brother is a Mets and Jets fan. The main difference between us is he was dropped several times on his head as an infant.
Victorian,
Come to a Jet game some time. If the game blows, the antics of the drunks can fill the void left on the field.
The joy of being a Met fan is falling for the “Gotta Believe thang,” and then watching them blow it almost every time in the 23rd hour.