“The problem is that every house on their block is for sale, too.”

From the NY Post (Hat tip Dan):

Town is down on its luxe

In this economy, it’s not uncommon for whole neighborhoods to be on the market. But Rumson, NJ, a leafy bedroom community of 7,200 residents, nonetheless stands out: It has 100 homes for sale — all for more than $1 million.

“The streets are filled with distracting ‘for sale’ signs,” says one resident. “Lots of husbands are hanging out at the bagel deli. They used to be working and now are picking up bagels. There’s a new class of Americans in Rumson: the formerly rich.”

The glut of luxury homes has lent a surreal quality to the town, and weekends find brokers sitting at open houses waiting for buyers that never come. Many of the properties have been on the market for more than a year.

Notable residents include Bruce Springsteen, as well as Goldman Sachs bankers, hedge-fund honchos and retired baseball and NFL stars.

But lately, even this community has felt the pinch of the recession. One resident said the top-rated restaurant in town, David Burke’s Fromagerie, which serves a $42 veal chop, has a waiting list for “Burger Night,” where locals can “enjoy a salad, burger & glass of wine or beer, only $25 per person.”

The impact on real estate has been particularly acute. According to the sales Web site Trulia, there are about 100 homes — excluding private sales, foreclosures and quiet bank sales — on the block for more than $1 million. Expanding to include the homes within one mile, the number jumps to 190.

“People don’t have the money they used to have,” says Richard “Ric” Martel Jr., a broker in the Rumson office of Prudential Zack Shore Properties. “The scenario could be a banker who was making $1.5 million, and now their company went under — like Lehman Brothers or Bear Stearns — or they have seen their comp cut to $750,000, and the house they bought in 2005 for $1.6 million is now worth $1.1 million, and . . . the mortgage is $1.280 million.”

Residents are “still owning nice cars and belonging to beach clubs and country clubs, and they’re asking themselves, ‘Where can I cut my monthly nut?’ The answer is to put their home up for sale.”

The problem is that every house on their block is for sale, too.

This entry was posted in Economics, Housing Bubble, Shore Real Estate. Bookmark the permalink.

47 Responses to “The problem is that every house on their block is for sale, too.”

  1. sas3 says:

    As Beck said, a miracle has happened. First! God’s way of saying “something”.

  2. Fabius Maximus says:

    First

  3. Fabius Maximus says:

    Beaten to the punch.

    As for Beck. One thing you can say is that at least the crowd numbers looked respectable (87,000). The tea partiers looked sad when only a few hundred showed up to those events.

  4. sas3 says:

    Math of for a salary of $750k should easily work out for a 1.6 M house, unless one can’t live within a reasonable budget.

    Of course, if the banker had to get a job of a “project manager” at 100k, things start becoming dicey.

  5. Juice Box says:

    re#4 How about starting over as an Associate? You will find many doing just that now.

  6. Anon E. Moose says:

    Maybe they really weren’t worth $1.5MM/yr, or even $750k… perhaps $100k is being generous. Maybe the proof of their value (or lack thereof) is that the organizations which formerly employed them and relied on their services are now bankrupt and dissolved. The free market working =/= every individual’s earnings always go up (like their house value).

  7. leftwing says:

    Hi everyone, it’s good to be back.

    This one is priceless……

    A friend calls me today and tells me he just won the lottery. Turns out here’s what happened:

    He owns two condos in one of the areas that has been hit the hardest by the downturn – different state but a city name that everyone would recognize.

    One condo is better than the other, by his estimate has a market value of $500k with a tiny, older mortgage against it ($50k).

    He decided to double down in 2007, bought a second, lesser condo for high 3s. He estimates the market value is around $275k, which puts him slightly underwater on the mortgage (he put 20% down). The mortgage is IO.

    Both condos are rented out. He’s never missed nor even been late with a payment. Owns his house up here in a ‘blue ribbon’ town. Solid job, employed long time by the same employer, never financially distressed.

    So…he gets a letter a few weeks back from the holder of the underwater mortgage (Mr Dimon). He is offered, out of the blue, a refi at a much lower rate WITH A PRINICPAL REDUCTION OF $96k.

    He’s spent a bunch of time checking it out – working assumption for a while was that it was a scam. Long story short, it’s for real. The explanation the bank offered for the reduction: We are mandated by the government to hit a certain number of workouts across four states. We are behind in this state and your loan type (IO) and the decline in the value of your residence made you a candidate.

    Nothing else. No income/asset checks or thresholds. No missed payments. No negotiation.

    Talk about mixed feelings. I’m elated for my friend; thoroughly disgusted from a social/policy perspective; and ROFLMAO that the group of lefties who so often have their hands reaching into my pocket are digging into their paycheck to surprise an upper middle class guy with an unexpected nearly $100k just so Fearless Leader can claim success in making his numbers.

    Can’t wait until I’m out of here. I used to just mean the State but I really think I’m heading back overseas. 7th grade this year, and counting!

  8. Juice Box says:

    Lol Good Times! Brian Williams lays the Muslim question Obama….too damm funny.

  9. sas3 says:

    “… just so Fearless Leader can claim success in making his numbers.”

    Good for your friend. Parts of the system are broken, but you place 100% on the program and nothing on the sloppy bank (or they calculated that this loan mod is “safer”?).

    S

  10. gary says:

    The problem is that every house on their block is for sale, too.

    According to the last thread, not in Ridgewood! In fact, they have 5 offers over asking price on a $739,000 house. In Ridgewood, they are 5 years behind everyone else. In fact, they just passed a town ordinance that says the calendar shall be the year 2005 until the end of time.

  11. gary says:

    “People don’t have the money they used to have,” says Richard “Ric” Martel Jr., a broker in the Rumson office of Prudential Zack Shore Properties. “The scenario could be a banker who was making $1.5 million, and now their company went under — like Lehman Brothers or Bear Stearns — or they have seen their comp cut to $750,000, and the house they bought in 2005 for $1.6 million is now worth $1.1 million, and . . . the mortgage is $1.280 million.”

    Now, if they can only find a way to move that house 50 miles north, the asking price will go up to $1.875 million and will have multiple offers over asking within 2 hours of being listed.

  12. gary says:

    Now, if they would only create a weekly sitcom about cavemen, my life would be complete. :o

    http://tinyurl.com/36x6ngw

  13. leftwing says:

    S3

    This situation can’t happen without social experiments in redistribution. Hard to break something that doesn’t exist.

    Funny you say ‘safer mod’. That’s one of the first things I mentioned, too. If the bank is so concerned about hitting quotas the next level is the % of successful mods and yes, my buddy is probably a good bet since he was never at risk of defaulting to begin with.

    Unbelievable. In an effort to jam out money to satisfy government quotas an upper middle class, financially stable family in one of the wealthiest counties in America is handed a check for $100k. This country is beyond broken. It’s the start of a free for all.

    Starve the beast.

  14. sas3 says:

    leftwing, similar problems happen when there are quota requirements. From local speeding tickets to drug busting to identifying potential terrorism targets (petting zoo, anyone). Folks that are the right place at the right time are lucky. Probably one shouldn’t read too much into it. Far bigger “lucky breaks” have occurred — e.g. AIG contracts honored at 100 cents on the dollar.

    “This country is beyond broken.”
    Where will you go?

  15. Final Doom says:

    wing (7)-

    When I get out of this jerkwater of a country, I’m never looking back.

  16. Final Doom says:

    wing (7)-

    I also hope your pal doesn’t discover in a few months that his FICO has taken a 120-pt hit.

  17. Final Doom says:

    Actually, I have excellent credit…and I’d trade 120 FICO points for a 100K principal reduction any day.

  18. sas3 says:

    leftwing #13,

    There is a chance that the bank may get into trouble if it is using money to save “struggling home owners” to bail out a “rental property”. Wouldn’t primary residence clauses be there somewhere?

    Your friend shouldn’t probably blow the 100k on celebrations till all the i’s are dotted and all the t’s are crossed. He should also probably stay under the radar till all the paperwork is done.

  19. Mikeinwaiting says:

    Doom is that a fact, brother just got a refi from gov. They sent him the deal ,very good credit, plenty of $, great job, never late on anything. 750 k house, in upper end town. He didn’t need it but took it as it was a great deal.

  20. Mikeinwaiting says:

    No principle write down IO to fixed.

  21. sas3 says:

    Doom, where will you go?
    Some sheikdom with low tax rates?
    Europe? (those are major league xenophobes and are also socialists)…
    BRIC? (plenty corruption and xenophobia [definitely in India — may be others too])? Some 100 acre “nation” on high seas?

  22. Al Gore says:

    Jim Willie on the LBMA, “They closed the doors. I think their done. Hedge funds raiding the LBMA for physical delivery.”

    http://www.youtube.com/watch?v=GZ2swdKWbHE&feature=player_embedded

  23. sas3 says:

    Jamil, see this poll and rejoice and the effectiveness of smear campaigns by your ilk.

    See Q24 here: http://nw-assets.s3.amazonaws.com/pdf/1004-ftop.pdf

    A majority of Republicans believe that President Barack Obama “sympathizes with the goals of Islamic fundamentalists who want to impose Islamic law around the world,” according to a survey released on Monday.

    A full 14 percent of Republicans said that it was “definitely true” that Obama sympathized with the fundamentalists and wanted to impose Islamic law across the globe. An additional 38 percent said that it was probably true — bringing the total percentage of believers to 52 percent. Only 33 percent of Republicans said that the “allegation” (as Newsweek put it) was “probably not true.” Seven percent said it was “definitely not true.” The rest (eight percent) either didn’t know the answer or didn’t read the question.

  24. Final Doom says:

    sastry (21)-

    Chile. Cheap, gubmint debt 6% of GDP, SQM has Asia’s nuts in a vise, and the soccer is top-notch. National team also just hired Bielsa to a new contract, so they will be good going into the next WC cycle.

    I’m thinking a nice little pied-a-terre in Valparaiso, right on the coast. The local 11 are good, and it’s a quick drive to Santiago for the big games.

    Plenty of fish to eat…and lots of good wine from the Maipo Valley. Doesn’t suck, if you ask me.

    Next question?

  25. Final Doom says:

    sastry (23)-

    He acts like a goddamned Muslim Manchurian Candidate. Why so surprised that the mouth-breathing element actually thinks he is one?

  26. Final Doom says:

    What terrrorist nation are we appeasing today?

  27. Final Doom says:

    al (22)-

    Would love to get BC’s take on that.

  28. grim says:

    Anyone want to trade short sale war stories?

    I got one that’ll top anyone.

  29. Mikeinwaiting says:

    Pray tell Grim?

  30. Mikeinwaiting says:

    Clot you sure about that credit hit?

  31. grim says:

    From Fierce Biotech:

    Paper: Roche mulls ‘massive’ worldwide job cuts

    Is Big Pharma due for another layoff? That’s what the Swiss newspaper Sonntag is reporting, saying that Roche is putting the final touches on a global job-cutting plan. Sources tell the paper that a decision is expected at a scheduled management meeting this week. Roche itself tells Reuters that no layoff news will come that soon.

    Sonntag’s sources say that at a recent management meeting, Roche officials discussed “massive” job cuts across the company’s pharma division. The cuts would hit sales and marketing, R&D, manufacturing and management. “This will not only concern a few hundred people but many more,” one source tells the paper. “And the job cuts will not be made in one single country but on a worldwide scale.”

  32. grim says:

    No worries, no Roche jobs in Jersey.

    They were all cut in June:

    http://lwd.dol.state.nj.us/labor/lwdhome/warn/2010/0210warn.html

    HOFFMAN-LA ROCHE INC. STATEWIDE 6/30/2010 500

  33. Mikeinwaiting says:

    Grim 32 not to worry. We are close to NY prices only go up.

  34. grim says:

    #29 – The wound hasn’t quite festered enough yet.

  35. Al Gore says:

    31.

    Grim,

    I know Shering Plough has some layoffs planned.

  36. Mikeinwaiting says:

    Juice 35 I’m all over it, pouring another glass.

  37. Mikeinwaiting says:

    Grim been looking at some bikes for my fat a**. Cruiser with at least 7 gears for Vernon hills?

  38. Al Gore says:

    Look at this _sshole Kenyan trying to play off the teleprompter failure as a sound issue. We are so f_cked with this assclown puppet in there.

    http://www.realclearpolitics.com/video/2010/08/30/obama_hit_with_technical_difficulities_while_bashing_bush.html

  39. Mikeinwaiting says:

    Now now Al don’t get the progressives here in a snit.

  40. Mikeinwaiting says:

    Al we go from one assclown to another, yes we are f**ked.

  41. Fabius Maximus says:

    #39 Al

    Were you waiting for dance steps?

    http://www.youtube.com/watch?v=knhErtMjC8k

  42. still_looking says:

    C’mon, grim…. share! Every now and again I get to listen to this acquaintance or that about “how easy it is to buy at a sheriff’s sale” and “you can pick up houses for pennies on the dollar.” and “should I join Realty Trac cuz you can profit from foreclosures…ya know…”

    Most don’t even know what a county clerks office is let alone how to do a title search…

    I just smile and say, “oh sure! of course you can!

    sl

  43. Sas3 says:

    #26, by drinking alcohol, letting his wife wear normal clothes, by baptizing his kids, by killing more AQ members than W did, by (half heartedly) supporting gay marriage?

    The right have a lot in common with the Islamic extremists. The difference is only in facial hair and the type of planes they fly:

    American Taliban: How War, Sex, Sin, and Power Bind Jihadists and the Radical Right…
    http://www.amazon.com/American-Taliban-Power-Jihadists-Radical/dp/1936227029

  44. SG says:

    China’s Central Bank Chief Gov. Zhou Xiaochuan Rumored To Have Defected

    Chinas Central Bank Chief Gov. Zhou Xiaochuan Rumored To Have DefectedRumors have circulated in China that People’s Bank of China (PBC) Gov. Zhou Xiaochuan may have left the country. The rumors appear to have started following reports on Aug. 28 which cited Ming Pao, a Hong Kong-based news agency, saying that because of an approximately $430 billion loss on U.S. Treasury bonds, the Chinese government may punish some individuals within the PBC, including Zhou. Although Ming Pao on Aug. 30 published a report on its website indicating that the prior report was fabricated by a mainland news site that had attributed the false information to Ming Pao, rumors of Zhou’s defection have spread around China intensively, and Zhou’s name has been blocked from Internet search engines in China.

  45. still_looking says:

    Nikkei down 3.55% at close.

    sl

  46. leftwing says:

    I don’t disagree other places have their problems and that graft has existed as long as human interaction.

    On departure I select a more homogenous nation. Lived in both Austria or Switzerland, could head back easily. Social norms in countries where populations are 95% alike can inhibit behaviors that lead to self destructive individual and government actions. It does come at a cost to certain individual ‘freedoms’. Once the final nail is in the coffin here hindsight will reveal that the expansion of individual ‘freedoms’ that subsequently became ensconced into ‘rights’ was a large part of the downfall.

    Also, these nations are rather straightforward in the social contract with their peoples. You can like it, or not, but you can reasonably evaluate if the terms are suitable for you. The social contract that used to be the United Stated has been shredded. For most of last century we have lurched from one carnival barker to another while their partners have worked the crowd picking our pockets during the show.

    The bottom line is becoming clearer and more simple. The huge advantage the United States held over other countries for its citizens in basic and tangible aspects of life (e.g. financial opportunity and security) no longer exists. Many of the intangible advantages (personal freedom, diversity) either have become liabilities as they have been taken to an illogical extreme or they were chimera to begin with. If I want great Italian food or paella I’ll cross the Alps or Pyrenees on a day trip.

    It’s kind of sad on one hand but uplifting on another. I’ll take great memories of the emotion and pride that the concept of America held. Growing up in a Rockwell-esque small town where leading the 4th of July parade as flag bearer was a big deal it is hard not to. On the other hand, it took a lot of guts for my forebears five generations ago to pick up from a not uncomfortable and very familiar existence because they saw the writing on the wall and a place with a better opportunity for their offspring across the ocean. I’d be letting them down if I don’t seriously consider the same when confronted with the same set of facts.

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