October home prices dip

From First American CoreLogic:

From Inman News:

Home prices decline for 3 months in a row

October home prices fell for the third straight month, according to an index maintained by mortgage data aggregator CoreLogic.

The 3.93 percent year-over-year decline in the CoreLogic Home Price Index was significantly greater than the 2.43 percent slip registered in September, and left home prices down 30.2 percent from their April 2006 peak.

Excluding distressed sales, national home prices were down 1.5 percent in October 2010 compared to a year ago, with a 20.9 percent decline from peak.

From HousingWire:

Home prices down for third straight month: CoreLogic

Home prices declined 3.93% in October from the previous three months, the third straight report of declines as any hope for a recovery in early 2011 begins to fade, according to data from CoreLogic.

Prices slipped 2.8% in September and 1.1% in August. CoreLogic’s Chief Economist Mark Fleming said without the artificial support of the government, the housing market continues to show signs of weakness.

“When you combine these factors with high shadow and visible inventories, the prospect for a housing recovery in early 2011 is fading,” Fleming said.

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

221 Responses to October home prices dip

  1. grim says:

    From Dow Jones:

    Fitch: RMBS Loss Severities To Rise 5% To 10%

    Distressed residential mortgage-backed securities are expected to suffer even more amid higher foreclosure expenses and weakening home values, according to Fitch Ratings.

    Home prices fell in the third quarter as the expiration of the federal first-time home-buyer tax credit weighed on values, according to recent data. Meanwhile, securities backed by home loans have continued to see their performance deteriorate, though the rate of serious delinquencies in RMBS may be nearing a plateau.

    Fitch said Thursday that loss severities on distressed RMBS, which have been stable for more than a year, are likely to increase an additional 5% to 10% from current levels. Prime loans currently have loss severities of 44% while Alt-A and subprime loans have rates of 59% and 75%, respectively.

    The rating agency projected a 5% to 10% decline in national home values in 2011.

  2. grim says:

    From HousingWire:

    Higher loss severities on foreclosures will push servicers to short sales in 2011: Fitch

    Loss severities are expected to increase between 5% and 10% on residential mortgage-backed securities in 2011 as loss mitigation costs and foreclosure expenses go up, according to Fitch Ratings. This, analysts said, will push servicers to short sales.

    The loss severity, or the percentage of principal lost when a loan is foreclosed, on prime mortgage loans is currently at 44%. This, according to Fitch, will increase to between 49% and 54% in 2011. For Alt-A loans, the current 59% loss severity should increase to between 64% and 69%.

    Currently, the loss severity on subprime loans is 75%, but Fitch predicts it will increase to 80% and 85% by the next year.

    Fitch Managing Director Diane Pendley said the answer for some lenders is a short sale.

    “Servicers are increasingly turning to less costly alternatives to foreclosure such as short-sales,” Pendley said.

    Recovery rates on short sales are usually 10% higher than foreclosures. Pendley said servicers are also reducing the amount of payments they advance to securitization trusts from delinquent borrowers, particularly on subprime loans. In November, Fitch said, servicers advanced only roughly 60% of delinquent subprime loans, down from 90% at the beginning of 2009.

  3. grim says:

    From Bloomberg:

    Congress Passes $858 Billion Tax-Cut Extension, Sends to Obama for Signing

    The U.S. Congress passed an $858 billion bill extending for two years all Bush-era tax cuts, sending the measure to President Barack Obama for his signature.

    Before the House voted 277-148 for final passage on the tax-cut agreement, members defeated an amendment crafted by some Democrats to express their displeasure with the bill and especially with a Republican-backed estate-tax proposal.

    Enough Democrats voted with House Republicans to accept the deal that Obama negotiated with congressional Republicans who gained scores of seats in last month’s election. Republicans said the bill would provide certainty about tax rates and would create jobs.

    Failure to pass the bill would “cause grave economic harm and possibly send us back into a double-dip recession,” said Representative Eric Cantor, a Virginia Republican who will become majority whip in January.

    “Wonderful,” said Representative David Obey, a Wisconsin Democrat who is retiring after 40 years, as he left the House floor for one of the last times in his career. “Just what we need: further exacerbate income inequality in this country.”

  4. Mike says:

    Good Morning New Jersey

  5. freedy says:

    Recover,, “2014” maybe

  6. grim says:

    What does “recover” mean?

    1) Prices return to peak?
    2) Prices stop falling?
    3) Prices stopped falling, but are showing an improving trend?

  7. xroads says:

    prices return to peak and increase %10-20 per year FOREVER!

  8. Mike says:

    Prices return to peak?! Not in our generation. Maybe if Tony Soprano gets in the mortgage business.

  9. An especially gruesome morning in oblivion.

  10. Funny login at ZH right now:

    “Relax. This might take a bit. Someone was shorting silver futures.”

  11. xroads says:

    grim
    have prices returned to normal(whatever that is) vs. income?

    and for the record I heard it the other day. Now is the time to buy! I met a 55ish year old excavator on a job and thats what he told me. hurry! He’s trying to get his 28 year old kid into a house and get this he tells his kid do it now before I retire so I can help you with payments if needed. so hurry up buy a house you can’t afford? I don’t get it

  12. Neanderthal Economist says:

    Ooh poor florida and az. We get 25% correction and they get 80%. Someone chose the wrong state to live. Can you say ‘proximity to manhattan’?
    Told you guys its different here. But you don’t listen.

  13. 30 year realtor says:

    Normal? To me normal is a transaction level. Who cares what the prices are.

  14. 30 year (13)-

    Welcome to the new normal, my friend.

  15. veets (12)-

    NJ will catch up with AZ and FL. Our current method of dealing (or, not dealing) with reality just means the pain will come much later and be dragged out over decades.

    No one will be spared.

  16. -WS axes 80K in 2011.

    -Eventually, the tax code is pared down, and mtg. interest is no longer deductible.

    What would one- or both- of these two occurrences do to RE prices in NJ?

  17. Neanderthal Economist says:

    Real problem is nj has too much money. 3 decades of having med income 2x national avg has built up personal assets in the tri state area. If home prices ever go back to 3x med income, everyone would go out and buy three of them. Then were right back to where we started. Stuff is just more exspensive here.

  18. Neanderthal Economist says:

    Grim 6 good question.
    To me 1 is ‘recovery’.
    2 is ‘stabilized’.
    And 3 is ‘stabilized at lower levels with return to historically normal growth’, aka ‘new normal’.

  19. safe as houses says:

    #16 Lamar

    “-WS axes 80K in 2011.

    -Eventually, the tax code is pared down, and mtg. interest is no longer deductible.

    What would one- or both- of these two occurrences do to RE prices in NJ?”

    Trigger a rebound! especially in blue ribbon towns in North Jersey. :D/ off sarcasm

  20. safe as houses says:

    #6 grim

    For me prices stop falling would be stability

    Prices rising along with inflation and/or income growth(hardy har har income growth) would equal recovery.

  21. Mr Wantanapolous says:

    All time nominal highs will never be taken out. However, real highs can be violated with high inflation. How about inflated food/energy costs in combo with no/little wage inflation. In this case, you may not be able to afford to heat/cool your home, drive to work or put an affordable meal on the table. Oh, I forgot, rising property taxes. One should be very careful what one wishes for.

    Veto,

    Down “only” 25%. Back in 2005 when I stated at least 30-40% off, nominal, 95% of this board thought I was delusional. Now we are cheering since we “only” lost 25%. Why don’t you give me your $ to manage. If the benchmark is down 35% and I “only” lose 25% of your capital, you will probably be jumping for joy.

    It’s amazing, at least to me, how smart individuals attempt to rationalize huge losses.

  22. Nomad says:

    Who actually pays the servicing costs on a home where the owners are no longer paying the mtg or maintaining the property?

    Does the mtg servicer shell out $$ for the forced place insurance, lawn maintenance, electric bill etc and if so, how do they get reimbursed for this?

    When the bank or lending institution has sold off a pool of these mtgs and the pool heads south, I assume it is the owner of the CMBS (perhaps another bank or hedge fund) that takes the hit correct? If this is accurate, then who in the food chain is trying to slow down the foreclosure process in order to milk the situation for fees and who wants to slow down the process to avoid the hit to the balance sheet? If the mtg servicer/ bank no longer owns the loan, their balance sheet does not take the hit from the foreclosure – their only incentive not to foreclose is all the inflated fees correct?

  23. reinvestor101 says:

    >>xroads says:
    December 17, 2010 at 6:42 am

    prices return to peak and increase %10-20 per year FOREVER!<<

    Yep. That's the damn ticket. I hope Santa leaves that under my tree. I can't wait until I can start flipping again. I'd love to see the stinking buyers lined up begging me to buy my damn house and out bidding on another.

    That would be heaven.

  24. Mr Wantanapolous says:

    50.5,

    I’m hoping that Santa signs me to a Cliff Lee contract, to pitch for the Yanks.

  25. Shore Guy says:

    “WS axes 80K in 2011.”

    Fewer bidies with whom to spread the wealth means bigger bonuses for those who remain and, thus, those who are left will be able to spend more on luxury goods. Good news for high-end retailers, travel folks, and dining establishments.

  26. JJ says:

    Wonderful morning building has free breakfast and my MI got bought out by a Canadian bank and my dream house keeps falling in price and within a year or two will be in my grasp. America is great.

  27. Mr Wantanapolous says:

    JJ [26],

    Hopefully, 2011 will rival/beat 2010. Cheers.

  28. JJ says:

    As strange as it sounds the 1990s stunk for me investment and work wise the 2000’s and beyond were great. I got my first big promotion of my career on 10-1-2001 and I was lucky it was approved and announced before 9-11. I always do best when the markets are mess.

    Now please Mr. Housing Market Crash Hard.

    BTW shocking today how low rates are on bank bonds, Nearly all Citi, BAC and MI bonds well below 6%, considering in 2009 they hit 16% an amazing turnaround

    Mr Wantanapolous says:
    December 17, 2010 at 8:34 am

    JJ [26],

    Hopefully, 2011 will rival/beat 2010. Cheers.

  29. chicagofinance says:

    Didn’t pret say that Bear Stearns is hiring?

    Lamar Asperger says:
    December 17, 2010 at 7:19 am
    -WS axes 80K in 2011.

  30. Shore Guy says:

    Several years ago, when I first found this blog, I figured that by this spring Mrs. Shore and I would pick up an occasional-use house sometime by spring 2011. What we had not considered was the way policymakers would go out of their way to counteract gravity and reward/protect the imprudent.

    As things stand now, I doubt we will buybefore 2012-13. There is just no compelling reason to do so and prices continue to slide.

  31. chicagofinance says:

    Albani: are you going to the Mecca tonight with the same tix…….

    to quote LJ: “F- y’all”

  32. Neanderthal Economist says:

    21 wantan. If im rationalizing, you are sensationalizing. Do the math. When home prices triple in 6 years, a 20% haircut doesn’t even make the owner blink. But keep convincing yourself that nj re melted down worse than az so that you can justify an eternity in renter’s prison.

  33. Neanderthal Economist says:

    21 bc I think you mean real highs will never be taken out but nominal will due to inflation.
    Btw ignore my gratuitous sarcasm in 32. You deserve more respect than that.
    Yes 25-30% is a huge mthrfckng discount.
    Back to me hole now.

  34. Juice Box says:

    Off to Denver for some well deservered RnR today. Super low car rental prices at the airport, starting at $12 a day. I may be the only person skiing this week. I’ll send in a report on condo and chalet prices. My guess is 60% off.2006 highs.

  35. Confused In NJ says:

    22.Nomad says:
    December 17, 2010 at 8:10 am
    Who actually pays the servicing costs on a home where the owners are no longer paying the mtg or maintaining the property?

    In my developement, no one. A house close to me originally serviced out of Chicago lies fallow with interior damage from burst pipes last winter, after owners walked away. It’s next door neighbors cut the grass gratis, just to keep it looking decent next to their property. Two years ago a financial institution in Chicago called me asking me to contact the owners on their behalf which I refused to do. Never understood how they arrived at my telephone number or thought I would front for them?

  36. Schrodinger's Cat says:

    35 confused,

    at some point an accidental fire might be more convenient for the neighbors.

  37. Schrodinger's Cat says:

    Mortgage firms are pressing the Federal Reserve to curb homeowners’ right to invalidate loans based on flawed documents — a right consumer groups say is one of the few weapons borrowers have to battle unfair lending.

    Consumer groups and industry lawyers say a rule under consideration by the central bank would make it harder for borrowers to exercise their right of “rescission,” which forces a lender to relinquish a lien on a mortgaged property. They said the number of rescissions has grown in recent years as a result of the foreclosure crisis and allegations that mortgage documents were fabricated or processed improperly.

    Ken Markison, regulatory counsel at the Mortgage Bankers Association, said the change would save lenders money.

    http://www.bloomberg.com/news/2010-12-16/fed-mortgage-recission-plan-sparks-fight-between-lenders-consumer-groups.html

    Handling fraudulent loans is so much cheaper and more efficient when you don’t have those pesky resources available to the debt slaves!!!

  38. veets (33)-

    The bloodletting hasn’t even begun in NJ yet. The only people that have been wiped out so far are the poor, the dumb and the new money.

    Wait until the pain hits the Haughtyvilles. It will, I promise you. I’m seeing the beginnings of it now.

  39. make money says:

    Albani: are you going to the Mecca tonight with the same tix…….

    ChiFi,

    My next door neighboor wants to give 5x face value. Hottest ticket in town…
    This aint the Jets. That being said, going with my 5 yr. old daughter. She has no idea how lucky she is.

  40. Schrodinger's Cat says:

    Shocking!!!

    “Moody’s Investors Service has today downgraded Ireland’s foreign- and local-currency government bond ratings by five notches to Baa1 from Aa2. The outlook on the Baa1 rating is negative.” (-from yesterday)

  41. make (39)-

    The Dolans will do something to fcuk this up. Count on it.

  42. cat (40)-

    Just think of the mirth that will ensue when the ECB starts issuing their own toilet paper.

  43. “E-Bonds”. Has a nice ring to it.

    Backed by the full faith and credit of a zombie continent, well under the thumb of its soci@list overlords…what could possibly go wrong here?

  44. Can someone calculate the value of the full faith and credit of, say, half a million unemployed, tax-evading Greeks?

  45. yo'me says:

    The extension for unemployment benefits that is part of the compromise tax deal is good news for many of the unemployed, but it won’t provide aid to anyone who’s been out of a job over 99 weeks.

    As we’ve explained previously, the extension worked out by President Barack Obama and congressional Republicans only lets unemployed workers continue to draw benefits for up to 99 weeks, it doesn’t extend the duration of the program beyond that point. Those who have exhausted all currently available benefits — so-called 99ers — won’t be granted an extension.

    That’s a concern because the number of 99ers may be increasing. The number of people who have received their final payments from extended-benefits programs this year through the end of October — the most recent month for which data are available — is over one million, and that number has been steadily increasing. Separately, the Labor Department reported that nearly 10% of the unemployed in the third quarter of 2010 — more than one million people — had been out of a job and looking for work for about two years or more. Meanwhile, initial claims for unemployment have been trending lower recently, but the biggest surge came in early 2009. The peak of 643,000 claims in a single week came in March of last year, 89 weeks ago. Anyone still unemployed since that peak is likely to run out of benefits soon, if they haven’t already.

    http://blogs.wsj.com/economics/2010/12/16/unemployment-extension-wont-help-99ers/

  46. make money says:

    The Dolans will do something to fcuk this up. Count on it.

    Kettle,

    Stop hating and let a brother enjoy a ball game. Amare understands that making NY a winner will make him a king and if he wins a ring then he automaticly becomes a legend. LeCon will regret this, as he can never turn Miami into NYC. Never.
    Just like the Jets can never be the Giants and the Mets can never be the Yankees. Hunday will never be a BMW. Never.

  47. Neanderthal Economist says:

    38 lamar I think I speak for the wider group when I say your predictions, and the confidence in which they are delivered, scare the sh!t out of me.
    Often I pray that your daily freebasing of mishe’s funny papers has caused you to lose all sense of direction.

  48. Schrodinger's Cat says:

    make 46

    ???????

  49. 30 year realtor says:

    #38 – Have to agree with Lamar. Market is weak. No signs of improvement and multiple reasons for market to get worse. I anticipate a huge influx of inventory as we enter the new year. Inventory will continue to grow as Spring approaches, both REO and conventional properties. Rising interest rates will put additional downward pressure on pricing.

    Every day I receive calls from new wanna be real estate investors. They all tell me how “this is the time to buy”. Problem is it comes out as; “this is the time to buy?” They all want me to confirm their genius and I refuse!

  50. Unexpected HEHEHE says:

    Anybody see this:

    CNBC Anchor Should Consider Sleeping With One Eye Open

    http://dealbreaker.com/2010/12/cnbc-anchor-should-consider-sleeping-with-one-eye-open/

    Never knew Mark Haines had it in him

  51. The real investors who want NJ property are still on the beach, sipping fruity drinks. Every 4-5 months, one of them will give me a call and let me know the Red Stripes are cold, the conch fritters are crispy, the breeze is nice and the water is warm.

    There will be plenty of time for the buzzards to get the tasty bits here. Patience is golden.

    Most of the hot-to-trot “investors” out there right now can’t give you the definition of cash-on-cash return, positive cash flow, capital improvements or vacancy factor. They will be carried out on their shields just like all other kinds of weak, early, dumb and dead money.

    When the buzzards show up, we’ll know it’s full-on oblivion.

  52. 30 year realtor says:

    Someone told me earlier this week that there will be a 40%+ property tax increase in Paterson. Tried to confirm this but have so far been unable to.

    Can you imagine the impact on the market (if there is one) in Paterson? This town is coming like a ghost town…

  53. 30 year realtor says:

    With regard to the earlier questions about foreclosure and maintenance of abandoned homes: Upon default servicers use a service to determine occupancy on their mortgage assets. Lenders have the right to “property preservation” and will secure and winterize abandoned homes, if they can identify them. Servicers want to identify and secure (including winterization) and maintain abandoned homes before fines and damages increase their exposure to already high expenses of property preservation.

    If the mortgagor can rescue the house from foreclosure (never gonna happen because they already decided to walk) they get the bill for additional costs. If the property is foreclosed the mortgagee eats the additional costs, unless they can sell the home for more than was owed (lol).

  54. Orion says:

    When BO signs the bill today, who will be opening the Chateau D’Yquem?

    …and it’s BFF!

  55. Libtard In the City says:

    “who will be opening the Chateau D’Yquem?”

    Jamil?

  56. Unexpected HEHEHE says:

    Poor newborns don’t know the debt slavery they are being born into.

  57. Shore Guy says:

    A new twist on the concept of original sin

  58. Schrodinger's Cat says:

    Shore,

    if there was even justifiable uprising over odious debt……

  59. still_looking says:

    grim,

    remember the house on east saddle river rd. listed by frank king.

    Now listed by Marron Gildea. just curious about the price, etc. Any ideas?

    sl

  60. safe as houses says:

    Face it, most of us are just kicking the can, hoping to stay cash flow neutral, or to slow the burn rate down enough to come out of this mess solvent. On the last few streets I’ve lived on I think at least 1/4 of the homeowners are underwater, and that’s if they put 20% down. Could be even higher if they put down less or played the cash out equity game, and I’m not even factoring in improvements and repairs.

  61. still_looking says:

    and no, I am *not* looking to buy it! :)

    sl

  62. Schrodinger's Cat says:

    if there was EVER

  63. still_looking says:

    BTW,

    Good day today. After MIL racked up over $150 in over the limit minutes on the cell phone we have been supplying her for the past 6 yrs (the phone she has been using to trash us to others with) I called her today to tell her to find a new plan that I am booting her off ours.

    Cut.off.

    Felt nice, I must say.

    sl

  64. Schrodinger's Cat says:

    Sl

    Happy holidays!!!!

  65. make money says:

    http://www.tshirtsiwant.com/product_info.php?products_id=9365

    I should make evening news if Knicks win and JD let’s me wear this.

  66. JJ says:

    Nouriel Roubini Purchases $5.5 Million Manhattan Condo, City Records Show

  67. Outofstater says:

    #63 Sl – YES!!! Congrats!! Way to go!!! Really. Your MIL will slowly learn that it takes two to be manipulated and you ain’t playing that game anymore so she needs to go find some other victim. Just continue to be completely neutral and not respond to her insanity. Proud of you!

  68. JJ says:

    Build America Bond Program Set for `Reincarnation’, Mica Says

    God Bless Free Market Capitalism.

  69. make money says:

    Why did you pay MILs phone bill in the first place? I buy a small gift here and there, pick up a dinner tab often and always send flowers for mothers day. It all ends there.
    Introduce her to Metro PCS.

    ps. Wifey is all extactic on loosing weight. She is really into her looks now.
    Either she’s having an affair or she really misses the Amex card.

  70. Schrodinger's Cat says:

    Make,

    It’s an affair, but ignore that and enjoy the side benefits you get :)

  71. Schrodinger's Cat says:

    At least the other guy is picking up the AMEX bill she’s running up!

  72. Doyle says:

    ps. Wifey is all extactic on loosing weight. She is really into her looks now.
    Either she’s having an affair or she really misses the Amex card.

    Make: Either way, who cares right?

  73. Mr Wantanapolous says:

    “ps. Wifey is all extactic on loosing weight. She is really into her looks now.
    Either she’s having an affair or she really misses the Amex card.”

    Make,

    Bring her to the Knick game. Maybe Woody will get a woody?

  74. JJ says:

    Woody owns Jets, Dolans own Knicks, when she hits 120 give me a call and she can sit with me in the front row. Two 5 foot nine hot blondes to right of me at game and a pretty hot brunette behind me at last game. Only rich men and hot women belong in row one. I think I read that somewhere in my PSL agreement. Maybe if she gets really hot when Sanchez once again throws ball into stands I can introduce her

    Mr Wantanapolous says:
    December 17, 2010 at 12:43 pm

    “ps. Wifey is all extactic on loosing weight. She is really into her looks now.
    Either she’s having an affair or she really misses the Amex card.”

    Make,

    Bring her to the Knick game. Maybe Woody will get a woody?

  75. Neanderthal Economist says:

    JJ
    Roubini knows what is coming. Smart guys like him and Buffet say one thing and do another. Got to follow the money not the headlines.
    On another note what the heck is a reincarnated BAB anyway? Sounds hindu.

  76. Unexpected HEHEHE says:

    Amen, buy now or be locked out forever.

  77. Mr Wantanapolous says:

    “Woody owns Jets, Dolans own Knicks”

    JJ,

    Woody Allen you dolt.

  78. Mr Wantanapolous says:

    JJ,

    First row seats at Meadowlands Stadium suck. Basketball/Baseball, a different story.

  79. A.West says:

    Bumper year at my office, helping people invest globally, bonus multipliers kicked in.
    Locked in 4.5% 30yr, paid down mortgage so now 50% loan to value. Soon I’ll be borrowing more cheaply than the US govt.
    In a few years, local property tax will be bigger than my mortgage payment.
    Next couple of years I’ll get to keep more than 50% of my income after taxes and pseudo-taxes. Still, I’d be happy to have the whole company move to a low-tax, lower cost of living state.
    So overall, things are going well. I wish things were going as well for most on this forum.

    I’m like the anti-JJ, I didn’t have interesting times in high school, college, no stories about girls, no crushed valor, no big rolodex of friends and contacts to help me get jobs. I just worked at living with integrity, investing in my mind and knowledge, in and out of school, and have been diligent at finding new and better ways of applying that to global investing.

    The best present I can offer any of you is this advice: read or reread the novel “Atlas Shrugged”.

  80. ricky_nu says:

    38 – re: haughtyvillee towns – i have seen it already – several houses in town bought at peak at $2.6mm, people are puking them up at 1.7-1.9mm, that a nice chunk of change to lose……

  81. still_looking says:

    Cat,

    Thanks!! :)

    sl

  82. safe as houses says:

    #81 ricky nu

    Capes, splits, and older colonials can be had or 30% off or more in haughty towns (if you look and don’t mind ripping out wallpaper and repainting). With a 15% down payment the PITI and PMI is about the same as renting a similar house.

  83. Juice Box says:

    Just got an email from Chase pimping for the Jets game this weekend looks
    Like Woody will be buying up allot of empty seats again.

  84. still_looking says:

    Out of stater 68 and make 70

    Sometimes ‘sl’ stands for ‘slow learner’

    But eventually I catch on…

    sl

  85. Mr Wantanapolous says:

    “Soon I’ll be borrowing more cheaply than the US govt.”

    A.West,

    You should be, good faith and credit is a greater risk.

  86. still_looking says:

    Westy, 80

    I *love* that book – around pp 800 or so it gets a bit weird but the overall book is great.

    Besides, what woman wouldn’t look up to such a strong, principled, diligent and empowered lead character…. even if she has an odd first name? :)

    sl

  87. ricky_nu says:

    safe 83 – yes agreed, the entire spectrum is off by 30% or so.

  88. Mr Wantanapolous says:

    SL [85],

    In this game, the tortoise is the winner.

  89. Home prices will continue to decline until generation Y is able to afford all costs associated with owning a home. Then they will stabilize and eventually start increasing in value according to their median pay increase.

  90. chicagofinance says:

    From Mushnick:

    Department of “Can’t Make This Stuff Up”:
    1) Dwight Gooden was advertized as the “Celebrity Bartender” on Tuesday at the opening of a restaurant co-owned by Carlos Beltran .

  91. safe as houses says:

    #88 ricky_nu

    Like this 1 in Madison at 395k. Feb 07 i couldn’t find anything in that town below 500k, and almost everything between 500 and 550k was on the tracks, along 24, or next to the high tower lines and need at least 60k or more to be liveable. This one is near the tracks by Fairly d!ckinson. Has to be at least 25%, probably over 30% off the peak. And interest rated are lower too. Looks like it has a newer roof and siding too.

    http://www.realtor.com/realestateandhomes-detail/35-Shadylawn-Drive_Madison-Boro_NJ_07940_M57830-28168

  92. JJ says:

    A West – Never once in my entire life did I use a connection or a head hunter to get a job. My current job I applied on line on the internet and did not know a sole in the company, two before NY Times ads. I don’t even do a nice resume. Bottom Line I am most qualified. I also paid my own way through school, did not take out student loans and paid rent to my Mom and chipped in for utilities, bought my share of food, did home repairs and chores. No free ride here. I also never once sold a single thing to a friend or business connection. I don’t like CPAs, Realtors, Life Insurance, Financial Planner, Stock Brokers, Car Salesmen, something shady about shaking down friends, family and neighbors for money. Either do it for free or don’t do it.

  93. Mr Wantanapolous says:

    “Home prices will continue to decline until generation Y is able to afford all costs associated with owning a home.”

    Romeo [90],

    In addition to this, boomers better get the message quickly; boomers outnumber Gen Y by approx 2-1. Sell? Sell to whom?

  94. did not know a sole in the company

    Have to remember this one… Fish or the bottom of a shoe?

  95. Schrodinger's Cat says:

    Finally! There Is A Gold-Dispensing ATM In America
    Mamta Badkar | Dec. 17, 2010, 1:58 PM | 750 | comment 2

    gold atmYou can track the spread of gold fever across the world by following the gold-dispensing ATMs.

    Germany was the first to install a gold ATM, followed by the U.A.E.. These machines dispensed gold coins and gold bars of one, five and ten gram denominations.

    Now PMX Gold LLC, has placed a Gold To Go ATM at the Town Center Mall in Boca Raton, Fla.

    Investors can now go over to the mall and get .999 Credit Suisse gold bullion bars, minted gold American eagle coins. Each machine carries 320 gold bars and coins and automatically monitors and updates gold prices.

    PMX has a money back offer too. If within 10 days of the purchase you have a change of heart, you could return the gold bar or coin and with price fluctuations you stand to make a profit or a loss. So, choose your dates wisely

    http://www.businessinsider.com/gold-dispensing-atm-boca-raton-gold-to-go-2010-12#ixzz18Omz6PaI

  96. Schrodinger's Cat says:

    The state of Arizona has sued Bank of America Corp , alleging that the bank has consistently misled consumers about its home loan modification process, a source familiar with the situation said.

    The lawsuit, filed on Friday by Arizona Attorney General Terry Goddard, accuses Bank of America of violating the state’s consumer fraud act, according to a draft copy of the lawsuit obtained by Reuters.

    The state also says Bank of America violated a consent judgment over its loan servicing, and is seeking a $25,000 penalty per violation, according to the lawsuit.
    -Reuters:

  97. #93 – I also paid my own way through school, did not take out student loans…

    Be fair, Faber College was so much cheaper back then… and you were a legacy, they always get breaks.

  98. make money says:

    Just hired some help. They’re going through her phone records now and home computer tomorrow. Need to make sure whats got into wifey…
    Her dad will put her on the first plane to Ulqin.

  99. #97 – FTFA Arizona is seeking $25,000 per violation of the consent decree, and up to $10,000 for consumer fraud breaches, the lawsuit says. It also asks that Bank of America pay restitution to customers

    Certainly has the potential to do some damage. Can’t find any estimates of the numbers BAC currently has in AZ that might be affected.
    I’d expect to see this settled before hand though.

  100. Schrodinger's Cat says:

    Make

    Need to make sure whats who got into wifey

  101. Schrodinger's Cat says:

    Make,

    Relax, a quick little affair or two is what makes great marriages last!!! It re-ignites the excitement.

  102. Schrodinger's Cat says:

    Make

    How do you track her if she uses a disposable cell phone and a throw-away e-mail account for side activities?

  103. Zhang Fei says:

    Question for jj:

    The federal deficit commission mentioned something about eliminating the tax exempt status of municipal bond interest. Is this a pipe dream or something that is actively being considered? It would be a real head-scratcher if muni bond interest became taxable, but BAB somehow got resurrected.

  104. make money says:

    How do you track her if she uses a disposable cell phone and a throw-away e-mail account for side activities?

    She’s not a janitor. Just a housewife. Plus it’s not nice to have wife jokes. First you make me suspect and then you make it a definite thing. Are you married?

  105. Schrodinger's Cat says:

    Make,

    Sorry, Feeling a bit impish today ;)

    She probably just got hooked on the endorphin rush of a good workout.

  106. #104 – Stop getting him all worked up! It’s probably nothing more than she got in shape to feel better about herself.

    ….. she doesn’t use FB, does she?

  107. Schrodinger's Cat says:

    I dated 2 women at the same time once.

  108. Neanderthal Economist says:

    Re: 105
    JJ. I would bet you money that zhang fei works for chinese govt.

  109. Neanderthal Economist says:

    Ok so mortgage rates up pushes home prices down. Simple as that right?
    nien. If mortgage rates are up, its because of inflation. And yes that inflation is also going to push home prices higher.
    Sooo not only do you get a 10% mortgage but you also get todays prices or higher while rental rates keep climbing as well.
    I think we are all outsmarting ourselves.

  110. Schrodinger's Cat says:

    Neanderthal.

    we have had inflation going on for the last 80+ years. of the available data, inflation has been continuing over the entire 25 year period yet during this same period there has been a consistent inverse correlation between home prices and mortgage rates.

    you also forget that general inflation that DOESNT inflate incomes acts to reduce purchasing power. So until we see wage inflation, you actually have a double negative effect. Available income for PITI is decreasing due to a loss of purchasing power while at the same time cost of living are increasing and consuming a larger % of income

  111. JJ says:

    That is a pipe dream. But even if they did it this would not be retroactive.Plus would be a huge boom to secondary pricing of existing tax exempt bonds. Could be like many years ago they got rid of bearer bonds and they never forced a recall of existing bearer bonds.

    BABs are actually a good thing, the last version the US Govt was too generous with how they set it up. If done right with less of a US subsidiary the fact the interest income is taxable would make it a win win.

    I still think in some shape or form BAB will come back. Right now there is a buyers strike in munis to force the govt’s hand.

    Zhang Fei says:
    December 17, 2010 at 2:49 pm

    Question for jj:

    The federal deficit commission mentioned something about eliminating the tax exempt status of municipal bond interest. Is this a pipe dream or something that is actively being considered? It would be a real head-scratcher if muni bond interest became taxable, but BAB somehow got resurrected.

  112. JJ says:

    My buddy was the best at it, he would date up to three or four girls at once and then when it became too much he would just throw a party and invite every girl he was dating and it would be a huge fight and then it would be a clean slate, all the girls dumped him. It saved him three or four “dinner dates” to discuss with four separate girls why he was breaking up. He also always invited 2-3 new prospects to the party, that way when they saw the three girls fighting over him they wanted him. He could unload and restock at same party. His parties were always great, he also invited a few extra girls and more importantly strippers and girls into girl/girl action. Even if you did not hook up, watching two hot girls hook up is always fun.

    Schrodinger’s Cat says:
    December 17, 2010 at 2:55 pm

    I dated 2 women at the same time once.

  113. Neanderthal Economist says:

    Cat. Inflation effects wages and home prices. The only question is to what degree. But let’s not get bogged down in details.
    Assume positive correlation for all of the above in the range of .5-1.0. And then assume cpi of 8%.
    Even if home prices and wages increase at 4 or 5% under these conditions my original point still stands. Higher prices mixed with higher payments.
    Again. We are outsmarting ourselves.

  114. Schrodinger's Cat says:

    Neanderthal,

    unfortunately wages are decreasing or flat at best. Cost of living is increasing. Even if everything else is flat increases in rates decreases the price of homes.

    if you have data showing incomes increasing i would be interested in seeing it.

  115. BlindJust says:

    Neanderthal
    I thought the housing component of CPI was rent and owners’ equivalent rent. This is why CPI was tame while home prices weren’t during the bubble. CPI could be 20% w/ home prices reflecting the inverse.

  116. Mr Wantanapolous says:

    “If mortgage rates are up, its because of inflation.”

    Veto,

    Assumption or fact? Been sniffing around the bond pit lately? The vigilantes may be telling us that we are heading in the direction of the PIGS? They may be also telling us that Bergabe actions are simply pissing in the wind; a gargantuan failure. Unfortunately, loss of confidence, higher rates, does not result in higher RE prices.

    You may be outsmarting yourself, common sense trumps economics 101.

  117. Confused In NJ says:

    Besides ensuring national paralysis, such swings would be bad for investors and financial markets, which abhor political risk. Peter Schiff of Euro Pacific Capital, who predicted the housing-fueled crash (and made an unsuccessful bid for the U.S. Senate this year), is among the skeptics who fear that Washington isn’t owning up to the problem.

    Schiff said he favors ending long-term unemployment benefits because he says they prevent Americans from taking low-paid jobs. “Nobody wants to tell the truth and say that lower paying jobs are here to stay,” he said. “One way or another, America is going to be poorer. Basically, we’re doomed.”

  118. A.West says:

    Sorry JJ, I made an assumption without evidence. Glad you hear that you’re good at what you do, whatever that is. I hold a grudge against the people I’ve met who have brag that “it’s who you know not what you know” because they invariably knew very little.

  119. Thundaar says:

    Sun National Bank ditching $87 million in bad loans……taking a $25million dollar loss…

    VINELAND, N.J., Dec. 15, 2010 /PRNewswire-FirstCall/ — Sun Bancorp, Inc. (Nasdaq: SNBC) reported that it has completed the sale of $87 million of commercial real estate loans to a group of investors. The loans had a book balance of $77 million and included $68 million of non-accrual loans. Net proceeds totaled $54 million and Sun expects to incur a loss of approximately $25 million after expenses and commissions in the quarter ending December 31, 2010 resulting from the sale.

    http://www.prnewswire.com/news-releases/sun-bancorp-inc-announces-loan-sale-111918879.html

  120. JJ says:

    Considering both my parents were immigrants with eight grade educations and my father died with no insurance leaving my Mom with four kids to raise and in poor health herself not only did I not know anyone but we were dead broke.

    I think too many people today assume people in charge no someone or have connections. I think the people with connections who go to good schools with a silver spoon in mouth make it to VP or so very quickly. But once you break 35 and no one cares where you went to school or who your dad was the kids from the school of hard knocks take over. I was broke in HS and College, most of my good stories are between 22 and 34 when I was single and had a job where I blew 100% of income on having fun. I don’t regret not saving a nickle my first 12 years working.

    A.West says:
    December 17, 2010 at 3:58 pm

    Sorry JJ, I made an assumption without evidence. Glad you hear that you’re good at what you do, whatever that is. I hold a grudge against the people I’ve met who have brag that “it’s who you know not what you know” because they invariably knew very little.

  121. make money says:

    Phone records seem clean. Could it really be as simple as freezing the credit line…

  122. JJ says:

    Marshall & Ilsley Bonds Soar to Record After Bank of Montreal Acquisition
    By Tim Catts – Dec 17, 2010 2:55 PM ET

    Damm, I hate diversification. I know MI would be bought out. But when I bought around 35k of the bonds I stopped as that is around my limit for one company. I curse you ChiFi, without you I would have at least dropped 100K. But maybe next time you will save me from a monster loss.

  123. BlindJust says:

    JJ –
    As do I. I’ve been 100% invested in Latam equities since Nov ‘2008. When I discussed this w/ my Fin Planning prof, who has a Madison Ave practice, he told me I needed to see a psychologist.

  124. BC (74)-

    Not unless she’s 12 years old and Chinese.

    “Bring her to the Knick game. Maybe Woody will get a woody?”

  125. JJ says:

    Blindjust, I am still recovering from the beating I took in March 2009 when I told everyone to buy C, AIG, BAC, GMAC bonds on this site as they were risk free and backed by US Govt and paying between 16-30% YTM.

    Just don’t tell your wife about the portfolio, women should not worry about such little details when their is a roast in the oven.

  126. I will watch the Knick game tonight if Willis Reed promises to come limping out of the tunnel.

  127. westy (80)-

    Shit. And all this time, all I’ve been doing is trying to perfect my system of betting European soccer underdogs, trying to increase my capacity for whiskey and working on building a giant cache of ammunition.

    My kids still sorta like me, though.

    “I just worked at living with integrity, investing in my mind and knowledge, in and out of school, and have been diligent at finding new and better ways of applying that to global investing.”

  128. chicagofinance says:

    JJ……you backstabber……’tis the season punk!

    93.JJ says:
    December 17, 2010 at 2:00 pm
    I don’t like CPAs, Realtors, Life Insurance, Financial Planner, Stock Brokers, Car Salesmen, something shady about shaking down friends, family and neighbors for money. Either do it for free or don’t do it.

  129. chi (91)-

    Great. The world’s first cocaine restaurant.

    “Department of “Can’t Make This Stuff Up”:

    1) Dwight Gooden was advertized as the “Celebrity Bartender” on Tuesday at the opening of a restaurant co-owned by Carlos Beltran .”

  130. Mr Wantanapolous says:

    “I will watch the Knick game tonight if Willis Reed promises to come limping out of the tunnel.”

    Clot,

    Glory Days.

    http://www.youtube.com/watch?v=B9Qy0AXa7N4

  131. jj (93)-

    You sell us a line of bullshit here every single day.

    “I also never once sold a single thing to a friend or business connection.”

  132. make (99)-

    Do they do honor killings in Albania?

  133. make (125)-

    Nothing involving women is simple. Keep digging.

  134. chicagofinance says:

    The end is nigh……

    My 4 yo son is watching hockey. It is the Rangers (Blue) vs. the Coyotes (Red and White). He asks which team is New York? I say the blue team. He looks at the other team and says “are they from Coca-Cola?”

  135. Neanderthal Economist says:

    Cat. 116 Its an imaginary inflation scenario not talking what’s happening in reality right now with deflation/disinflation. Just making the point that higher rates and low prices come with a third consideration, aka a wildcard.

  136. chi (138)-

    Tell your kids Janet Gretzky had the Coyotes +160.

  137. veets (139)-

    I think your wildcard is that there will still be no interested buyers.

    “Just making the point that higher rates and low prices come with a third consideration, aka a wildcard.”

  138. chi (138)-

    Opened your card today. Where’d you rent the kids in the photo? ;)

  139. JJ says:

    Nope, I sold to companies via RFPs and stuff, but I don’t shake down friends who work at companies to get in. I can win an RFP

    Lamar Asperger says:
    December 17, 2010 at 5:08 pm

    jj (93)-

    You sell us a line of bullshit here every single day.

    “I also never once sold a single thing to a friend or business connection.”

  140. Neanderthal Economist says:

    119 Wantan.
    Just an assumption.
    And i don’t worry about vigilantes yet. We still have a good 3-4 bailouts before they can do any real damage. But yes indeed under your scenario of no inflation and higher rates real estate prices would probably go to one dollar.

  141. jamil says:

    Tomorrow interesting date as Congress vote to make US officially 3rd world country. Dream act, aka no s*x predator left behind, provides mass-amnesty to every 3rd world parasite, willing to come here. Only requirement illegal entry and ability to claim being under 30 years old. Fraud encouraged.

    Glad the priorities of this congress are in order.

  142. Mr Wantanapolous says:

    Veto [144],

    Nah; only 40-50% off. That’s why I have my boots on, I’m not waiting to buy at the dollar store.

  143. Neanderthal Economist says:

    Lamar as a sidelined buyer its difficult to get motivated by one dollar home prices when mortg rates are 80%. Compound interest is a real b!tch.
    Plus its weird when closing costs are greater than price of home anyway.

  144. Neanderthal Economist says:

    40-50% would be a nice number no matter what the rates are doing.

  145. Neanderthal Economist says:

    Chi where the f is my xmas card?

  146. Neanderthal Economist says:

    Don’t mind me folks just trolling through tonight. It gets cold and lonely under this bridge.

  147. Orion says:

    It is BFF, after all:
    Appalachian Community Bank, FSB, McCaysville, GA with approximately $68.2 million in total assets and $76.4 million in total deposits was closed. Peoples Bank of East Tennessee, Madisonville, TN has agreed to assume all deposits excluding the Cede & Co. deposits.
    (PR-273-2010).

    Chestatee State Bank, Dawsonville, GA with approximately $244.4 million in total assets and $240.5 million in total deposits was closed. Bank of the Ozarks, Little Rock, AR has agreed to assume all deposits.
    (PR-272-2010).

    The Bank of Miami, National Association (N.A.), Coral Gables, FL with approximately $448.2 million in total assets and $374.2 million in total deposits was closed. 1st United Bank, Boca Raton, FL has agreed to assume all deposits excluding the Cede & Co. deposits.
    (PR-271-2010).

  148. veets (147)-

    Our version of American hell will feature hyperinflation, civil unrest, repudiation of odious debt…and the need to set the prime rate at about 80%.

    Unfortunately, Tall Paul will be dead by this point.

  149. Wow. The banks taking possession of these fresh BFF victims sound like they could be future BFF victims.

  150. Here’s some happy news to take us into the weekend. How do you rate San Francisco GO bonds, jj???:

    “After months of delays, the San Francisco controller’s office announced Thursday that it expected the city to pay $4.4 billion to provide municipal retirees and their dependents with lifetime health benefits. The city has set aside $9.7 million to cover the costs.

    In an interview, Benjamin Rosenfield, the city’s controller, said that the situation would be worse if the city had not enacted changes that went into effect last year. New city employees must pay 2 percent of their salary into a health care trust fund. Requirements to receive lifetime coverage were also tightened.

    But Mr. Rosenfield said tens of thousands of employees are still entitled to lifetime coverage, and they pay nothing into the fund.

    To put the $4.4 billion liability in perspective, San Francisco has borrowed $2.6 billion through general obligation bonds in its entire history.”

    http://globaleconomicanalysis.blogspot.com/2010/12/retiree-health-care-to-cost-san.html

  151. Schrodinger's Cat says:

    Lamar

    SF only needs something like an annualized 30% rate of return to cover existing obligations.
    Hell, do they even make it 5 years on 9.7 million???

  152. Schrodinger's Cat says:

    Lamar

    for perspective the state of Idaho has a STATE budget of 2.3. Billion.

    SF is in the hole for almost twice the state budget of Idaho

  153. chicagofinance says:

    draw your own conclusions…….

    WSJ
    NY REAL ESTATE RESIDENTIAL
    DECEMBER 18, 2010
    Housing Hope From ‘Dr. Doom’

    By CRAIG KARMIN
    Nouriel Roubini, the New York economist whose warnings of a housing collapse earned him the nickname “Dr. Doom,” may be feeling better about the market these days. He just plunked down $5.5 million for an East Village penthouse loft, public records show.

    Mr. Roubini’s purchase price was down about 25% from the peak asking price in September 2008, according to StreetEasy.com.
    The three-bedroom triplex just purchased in the East Village by Nouriel Roubini features a cantilevered steel staircase, seen above in the rear.

    Mr. Roubini, who teaches at New York University, warned in 2006 that overstretched borrowers defaulting on their mortgage loans would unleash a housing bust and deep recession.

    His own credit status appears sound. Mr. Roubini took out a $3 million mortgage for his new East Village property, and earlier this year he borrowed another $600,000 against his TriBeCa loft, according to public records.

    Mr. Roubini declined to comment. The listing broker, Richard Orenstein of Halstead Property, also declined to comment.

    Mr. Roubini’s personal real-estate activity doesn’t necessarily means he thinks the U.S. economy is in the clear. He recently told The Wall Street Journal that economic growth was close to “stall speed,” too slow to keep unemployment from rising and housing prices from falling further. He put the chance of the U.S. slipping back into recession at 40%.

    Still, real-estate people in New York were quick to seize on his purchase as a healthy sign for the local property market.

    “Even the most bearish think our market has nowhere to go but up,” said Frederick Peters, president of Warburg Realty Partners.

    “Dr. Doom is a little late to catch the bottom, but there’s still plenty of upside at this point.”

    Ever since much of his dire forecasting came true, Mr. Roubini has become one of the world’s most recognizable economists. He has been in demand as a speaker and consultant, often shuttling around the globe to advise central bankers and finance ministers. Born in Istanbul, he was raised in Iran and later lived in Israel. He received his doctorate in economics from Harvard University.

    It’s not clear whether the purchase of his new apartment means he is planning to sell his loft on Leonard Street, though some brokers are already speculating about it.

    Last year he told the Sunday Times of London that he thought the loft was worth $2 million around the time of the market’s top but about 10% to 20% less than that at the time of the interview.

    The apartment was famous for Mr. Roubini’s parties, which drew hedge-fund managers and models and occasional coverage in the gossip columns.

    He’ll have more room to host in the new property, which is about 3,600 square feet, according to StreetEasy.com. The three-bedroom triplex has a cantilevered steel staircase, 13-foot ceilings on the second floor and a wrap terrace.

    Write to Craig Karmin at craig.karmin@wsj.com

  154. Roubini is a dumbass bagholder.

    Wait until he gets a taste of oblivion.

  155. safe as houses says:

    #158 lamar

    The man looks like he did a heloc on one property to get the down payment and possibly some renovation money for another. Isn’t that called the momentum of money?

  156. Confused In NJ says:

    158.Lamar Asperger says:
    December 18, 2010 at 1:13 am
    Roubini is a dumbass bagholder.

    Wait until he gets a taste of oblivion

    Or he may be a 12/21/2012-er saying, “What The Hey”, might as well enjoy time left! Amazing how much College Professors are paid today?

  157. Mike says:

    Number 151 Dam I had a CD with Appalachian over 3.00%

  158. grim says:

    3 more after those:

    Community National Bank, Lino Lakes, MN
    First Southern Bank, Batesville, AR
    United Americas Bank, National Association, Atlanta, GA
    Appalachian Community Bank, F.S.B., McCaysville, GA
    Chestatee State Bank, Dawsonville, GA
    The Bank of Miami, National Association, Miami, FL

  159. Schrodinger's Cat says:

    Lamar,

    The San Fransisco health care liability of 4.4 billion is greater then the entire state budget of 34 of 50 states!

    The unfunded portion of about 3.5 billion is greater then the annual budget of about 30 of the 50 states. How do i short SF????

  160. Schrodinger's Cat says:

    I cant do math .

    The unfunded liability is about 4.39 billion and hence still greater then the annual budget of about 34 of the 50 states.

  161. confused (160)-

    Or, the Roubinator has decided he wants to be holding a giant mortgage that he can pay down almost immediately when they hyperinflation hits.

    If I could get any sniff of when the hyperinflationary collapse is gonna hit, I’d lever up and buy as much RE as I could borrow against.

  162. Neanderthal Economist says:

    “the Roubinator has decided he wants to be holding a giant mortgage that he can pay down almost immediately when they hyperinflation hits.”

    Yep. Its coming folks. Higher prices with higher rates. Much higher.

  163. Nomad says:

    Higher prices with higher rates? What if unemployment remains high and those with jobs continue to see small, if any wage increases?

  164. Neanderthal Economist says:
  165. Neanderthal Economist says:

    “What if unemployment remains high and those with jobs continue to see small, if any wage increases?”

    Nomad, Under CPI inflation, a loaf of bread will rise in value even if wages stagnate.
    I dont see how or why houses would react any different.
    With the flippers and ninjas loan waitresses flushing from the system, housing remains a necessity. People will drop cable, vacations, fancy cars and dinners out so they can pay mortgage.
    Dont forget that homes are made of lumber, concrete and copper commodities. Not to mention smaller, more practical sf homes are in short supply in NJ. How much farther down in price can they really go under those conditions?

  166. Nomad says:

    Unemployment has to start to drop and income needs to go up. Given the current economy, rising rates alone will continue to hinder the housing market. The school of thought to inflate our way out of the current economic problems is in my opinion, a mirage.

  167. Neanderthal Economist says:

    Most people are making more on unemployment than they would if they took a job.
    Just dont see how that is going to help home prices go up.
    Fact is that 85-90% of the population is employed. The 10-15% unemployed probably werent reliable home buying candidates to begin with.
    Historically speaking, roughly 60% of population owns homes. And they are typically the highest earning, most employed 60% – probably because of the larger capital requirements. So, considering all the social safety nets, unemployed might not really matter all that much unless it starts going above 20% for many years.

  168. Neanderthal Economist says:

    One thing that i believe would really help to bring prices back in line with historical norms is if they start turning some of these newer mcmansion neighborhoods into 2-family duplex homes and sell them for $300-400k each. Most of them are 3,000-4,000 sq ft plus basements and garages can be finished to expand living space.
    That would solve two supply problems at once, oversupply at the higher price points and the undersupply at the lower price points.
    This is not my own novel idea, has been joked about by others in past here but as economy gets worse, it becomes a more realistic.

  169. Mike says:

    Nean Number 172 I’t’s a good idea but The attidude among the neighbors will be “not in my backyard”

  170. Nomad says:

    Employment situation will not recover for some time. Just look in your own backyard. Big pharma will continue to shed jobs in 2011 and beyond. From what I have read, Wall Street will too. Large companies can operate just fine with a much smaller labor force. I remember my first gig in a large company – thought at least 1/3 if not more of the employees were not needed. Small companies taking up the slack you say? They don’t need as many people either – by default, they run leaner.

    On the mfg side of things – more and more will go abroad and now it is not just China that makes things. With other parts of the world building a mfg base, China is not the exclusive low cost provider.

    Health care costs and a multitude of things continue to increase the economic burden on our country not to mention our debt. In a climate of rising interest rates, how can we afford to pay for all of our debt? Taxes, perhaps but that 60% you are talking about are going to have to dig deep into their pockets to cover all the costs for themselves and the other 40% that are not paying.

    You make some good points but in the end, unless employment levels and wages start to increase, in my opinion, things will not improve. Perhaps some global event will change things in ways that we cannot currently imagine but sans such an event, not sure how we can fix things.

  171. Neanderthal Economist says:

    Good points. More robots and computers = less jobs for people. Maybe we can program some of these computers to pay down more debt.

  172. Neanderthal Economist says:

    ATMs have stolen millions of american jobs. Where is the outrage?

  173. Dissident HEHEHE says:
  174. Dan says:

    Testing from apple store on iPad. Wow are laptops in trouble!

  175. Mr Wantanapolous says:

    “People will drop cable, vacations, fancy cars and dinners out so they can pay mortgage.”

    Veto,

    What planet have you been on? It’s been the exact opposite for those that have been forced to choose. You think they are going to struggle to get their head above water and sacrifice their right to consume?

    http://money.cnn.com/2010/04/15/news/companies/consumer_debt_payments/index.htm

  176. yo'me says:

    A common person that is able to pay rent at $1800 a month,will be not much difference if buying a house for less than $300K with a property tax of $6K equalling to about $2,000 / month.Consider the tax deductions that can add up instead of taking the standard deduction 0f $11,400 for married filing jointly.

    Interest payed first year for a mortgage of $240K at 6% interest is $15,505 add $6k for property tax add travel/mileage deduction ,books,conferences,uniforms applicable to work,if applicable.$30k in deduction is easy.This is paying almost the same as rent.

    An unemployed that can’t pay rent will not be able to pay mortgage.Upside ,the homeowner buys 2 years of roof over his families head.Compare that to a renter that missed rent payments.

  177. NJCoast says:

    Shore Guy-

    This is the only holiday show you’ll get from Bruce at the AP boardwalk this year.

    http://www.youtube.com/watch?v=9tvcAmNlv80

  178. Ben says:

    What’s sad is Mr. Roubini somehow makes enough money to buy a 5.5 million dollar condo by charging tens of thousands of dollars to give speeches in which he claims “oil will not go above $40 in 2009 or “gold cannot reach $1400. Maybe $1100 at most”. He set up a nice con. He had the NYT profile him giving him false praise for supposedly making all types of predictions that came true. It gave him instant credibility and somehow people give him credit for something they’ve never actually verified themselves. Roubini never made any great calls. It’s pretty easy to be right when you claim something will go up in one interview and say the exact opposite in another.

  179. Ben says:

    All these people getting foreclosed on still have their cable and internet service. They have their iphones and blackberries. Hell, they even still drive a Lexus. They don’t care. In fact, they stop paying their mortgage/taxes entirely because it provides them with a temporary period in which they can continue to live their lifestyle they’ve grown accustomed to. It’s pretty easy to live large for 2 years when you default on your debt payments.

  180. Neanderthal Economist says:

    Wantan,
    This article is focusing on short term anomolies instead of the bigger trend. Its mostly referring to the people who shouldnt have been allowed to buy anyway, and this is part of the process to flush them from the system and they know they will never buy again so they are defaulting as fully as humanly possible.
    Besides, since when do you rely on cnn money to do your research?
    In hyperinflation scenario that is coming, home prices and rates will climb higher every month, as a home will be nothing more than a diversified commodity etf with physical delivery. It will be the renters, who’s leases increase at astronomical rates, and who cant secure a mortgage, who will fully understand what it means to be ‘upside-down’ on renting.

  181. make money says:

    Anyone have the link to that you tube video when mexican driver picks up CEO, CFO, and marketing managers as day laborers. I want to send it to someone.

  182. Mr Wantanapolous says:

    Veto[184],

    That depends on one’s definition of a trend. You are envisioning a short term hiccup, My contention is this is the beginning of a secular trend. I am referring to the 25% that are underwater. To suggest they are foregoing consumer spending to pay their mortgage while their arm explodes, their asset continues to plummet and carrying costs increase is hideous.

    Your scenario, hyperinflation, can only be induced thru a complete collapse in the currency and a total lost confidence in the US . Hyperinflation is the result of currency induced cost push rather than demand cost pull. The value of money becomes worthless. I thought you stated your were scared sh#itless of Clot’s scenario? Based on your post, hyperinflation, you are in the same boat.

    I am not arguing the possibility of thus taking pace. However, instead of anticipating the possibility of hyperinflation inflating the value of 4 walls and a roof you would be served better to bend over and kiss your arse goodbye.

  183. Mr Wantanapolous says:

    Oh Canada!

    “Cheap money is not a long-term growth strategy,” Carney said. “Low rates today do not necessarily mean low rates tomorrow. Risk reversals when they happen can be fierce: the greater the complacency, the more brutal the reckoning.”

    http://www.windsorstar.com/business/Consumers+warned+brutal+reckoning+ahead/3972687/story.html

  184. Dissident HEHEHE says:

    Roubini called the housing bubble and the subsequent solvency problems that would result for the banks. Aside from that call he’s been wrong on practically everything else. Moreover his proposed solution to the problems resulting from the housing bust was a bunch of Keynesian junk.

  185. Neanderthal Economist says:

    BC. Im not suggesting that (hyper) inflation would make homeowners rich. Id consider owning a defensive move since the winner will be determined by who loses less.
    And yes. Im still renting.

  186. Dissident HEHEHE says:

    Higher rates + 18-20% functional unemployment + increased lending standards + shadow inventory + current underwater homeowners +current lack of savings(though its increasing) + secular shift away from viewing home ownership as a get rich quick scheme = at least a decade of lower housing prices.

    The moves they are making to prop up asset prices will have some continued impact on stocks and other liquid assets but all they can do with housing is hope to slow the drop. You can look at the period of 2000-2007 as a failed attempt to commoditize housing.

    Hyperinflation could happen in the US but you need some sort of political event in order for that to happen. The mere printing of dollars while every other central bank is doing the same isn’t enough to trigger it in my opinion. Maybe if we lose some military conflict to the Chinese.

    I think people are reading way too much into Roubini moving up. I am sure he just needs more room for the co-eds.

  187. Mr Wantanapolous says:

    Veto[189],

    You don’t win by losing. If you want to get defensive, and protect against your scenario, get out of dollars.

    With hyperinflation your asset would be priced in a worthless currency. Who cares if you paid 100K and the asset is now worth $1M in a devalued currency? The real value may plummet versus a stable foreign currency and/or tangibles.

    Also, history indicates that hyperinflation is joined at the hip with social/political upheavals, wars, commodity/food shortages, currency meltdowns, etc.. This is not a scenario which you want to experience.

  188. dan says:

    Yo,

    Where in planet Jersey are you buying this mystical/livable 300k house with less than $6k in taxes?

  189. Mr Wantanapolous says:

    Veto,

    Why devise a strategy to lose less? Why not jump on a secular trend?

    Latest Fed Beige Book;

    “Agricultural conditions were generally favorable, with several Districts reporting yields nearing historic highs. Agricultural sales to off-shore buyers increased … The Chicago, Minneapolis, and Dallas Districts reported large to record-setting yields for certain crops. Agricultural prices continued to climb, boosting farm incomes … higher grain prices were raising feed costs for livestock producers. Nonetheless … even with higher feed costs, margins for livestock producers remain positive. Strong global demand and tight supplies pushed cotton prices to near historic highs for growers … San Francisco noted that reductions in overseas yields, combined with the lower value of the U.S. dollar, are helping boost domestic farm sales.”

  190. yo'me says:

    As I have said,a common person.Most posters here are probably in the 500K market.Here is a sample in edison,middlesex county,Walking distance to the train station.

    http://www.zillow.com/homedetails/29-Holly-Pl-Edison-NJ-08817/39066209_zpid/

  191. Neanderthal Economist says:

    BC, The best offense is strong defense. I used this strategy to keep my portfolio flat in 2008. ive also been increasing those gold positions you originally helped turn me on to as a hedge plus some. Thats working out pretty well but not putting all my eggs into that basket either. Agg is great too but the problem is that agg has short shelf life so its hard to invest in etfs without getting @ss-raped on the spreads, fees and futures contracts, unless you are practically day trading it and unfortunately i already have a day job.

  192. yo'me says:

    China and Inflation: A Higher Currency Stems Inflation
    Saturday, 18 December 2010 09:20
    The NYT reported that inflation in China is higher than its leadership’s targets. It might have been worth noting that a higher valued currency helps to lower inflation.

    This is for two reasons. First, insofar as inflation is driven by excess demand, a higher valued currency will reduce exports (it makes them more expensive for foreigners) and thereby bring demand more in line with potential output.

    A higher valued currency will also make imported items, like food and oil, less expensive. This will directly reduce inflation.

    For some reason China is apparently not considered this obvious path for addressing its problems with inflation.

    Dean Baker

  193. Neanderthal Economist says:

    Yo’me isnt edison 60% asian?
    At that rate, you can’t even claim diversity.

  194. yo'me says:

    Nearby towns,Metuchen in the middle of edison,highland park and new brunswick.You can find about same home price but property taxes will be more without the tax base.I don’t know if it is 60% but asian kids are more achiever than others.I guess that is a plus to have your kids hang around.

  195. dan says:

    Maybe because I don’t need this kind of “normal” I haven’t looked at Edison.

    EDISON – A township man was arrested on Thanksgiving and charged with fatally shooting a 25-year-old Edison resident earlier last week, Middlesex County Prosecutor Bruce J. Kaplan and Edison Police Chief Thomas J. Bryan announced.

    Luis Padilla, 27, of Edison was charged with murder and possession of a handgun for an unlawful purpose in the death of Kevin Meisnest, who was killed in his Casey Avenue apartment on Nov. 23.

    An investigation by Detective Frank Varga of the Edison Police Department and Sgt. Eleazar Ricardo and Investigator Michael Daniewicz, both of the Middlesex County Prosecutor’s Office, determined that Padilla went to a relative’s home in Brooklyn, N.Y. after he allegedly shot and killed Meisnest.

    Padilla was brought to a precinct station in Brooklyn at about 10:30 p.m. on Nov. 24, and was charged at about 10:30 a.m. on Nov. 25.

    Bail was set at $1 million in New Jersey by Superior Court Judge Dennis Nieves, who said the defendant must post the full amount before he can be released from custody.

    Padilla currently is being held in New York but will be extradited to New Jersey, authorities said. No date for an extradition hearing has been set.

    Police began the investigation after receiving a phone call at 10:37 a.m. on Nov. 24 from Meisnest’s employer, who was concerned when Meisnest, a tow truck driver, failed to report for work.

    Edison police met the employer at Meisnest’s apartment, went inside and found Meisnest had been shot to death.

    Authorities said that Meisnest appeared to be the victim of multiple gunshot wounds.

    Investigators are asking anyone with information about the case to call Detective Varga of the Edison Police Department at 1-732-248-7400, or Investigator Daniewicz of the Middlesex County Prosecutor’s Office at 1-732-745-4018.

    Read more: http://njtoday.net/2010/11/29/edison-man-charged-with-murder/#ixzz18VuQXQo9
    Tell everyone to get New Jersey News from http://WWW.NJTODAY.NET

  196. dan says:

    Another good neighbor? Yeah, I’ll try another normal town…….

    MIDDLESEX COUNTY — An Edison man accused of abandoning a toddler Sunday in a gas station restroom off Interstate 95 in Delaware has now been charged with murder.

    Dwayne Jackson, 25, is being held in Middlesex County Adult Correction Center in North Brunswick in lieu of $2 million bail on a murder charge and $750,000 bail on endangering and kidnapping charges.

    Details of the murder charge were not immediately available.

    But authorities in Rockland County, N.Y., investigating the murder of a woman whose charred body was found in a park there Monday, said she is the mother of the 20-month-old baby girl.

    Jackson has been identified as the father of the toddler.

    The dead woman has been identified as Patricia Belizaire, 24, according to a law-enforcement source, the Journal News of Westchester County, N.Y., reported. Her daughter is Hannah Jackson. Efforts to contact Belizaire’s family were unsuccessful Thursday night.

    Investigators in Rockland County, Middlesex County and Delaware are involved in the probe into her slaying and the kidnapping of the girl.

    Jackson has also been charged by police in Newark, Del., with a count of first-degree reckless endangering. Authorities said Jackson left the girl at a Shell service station on South College Avenue in Newark, Del. She was found crying in the locked room.

    The child had been living with her mother in North Brunswick, authorities said. She is in the custody of Delaware authorities.

  197. safe as houses says:

    What’s Australian for pos? this makes fast Eddie’s postings seem cheap.

    http://www.domain.com.au/Property/For-Sale/Terrace/NSW/Crows-Nest/?adid=2008696268

  198. schabadoo says:

    Maybe because I don’t need this kind of “normal” I haven’t looked at Edison.

    Wow, all of that in a town of 100k people? Those wackjobs over at CNN must’ve missed that when they ranked Edison so high on their ‘most livable’ list.

    Must be why everyone fled Scarsdale in 1980…

  199. chicagofinance says:

    WSJ
    FOOD & DRINK
    DECEMBER 18, 2010
    The Hangover Helper

    Gooey, salty, meaty and cheesy, mega-omelets save the day

    By STEVE GARBARINO

    Every city has a hairy-tongued pride over its culinary cure-alls for hangover rejuvenation, but few locations boast as many heavenly dietary “treatments” as New Orleans, where feeling happy-crappy in the dawn hours is something of the norm.

    The city’s indigenous fare is salty, saucy, greasy, briny and fried: hangover staples. Options are endless. You can go for fried beignets and cafe au lait or greasy-spoon biscuits and sausage gravy. The many takes on eggs Benedict often include lump crab meat, fried oysters, sauteed catfish, shrimp, and boudin and andouille sausages. Other locals make lunch their breakfast, opting for roast-beef po’boys slathered in mayo and beef “debris.”

    But true hungover foodies, from all over the world, know that there’s only one special place to go in New Orleans for a gustatory mega-protein dish that tops them all—designated particularly as the destination to hit after a hoo-hah such as New Year’s Eve, Fat Tuesday or a Saints playoff win. After mixing champagne with gin fizzes—and Sazeracs—I too once followed the streetcar route uptown to this Hangover Helper Mecca. On a hard-partying holiday binge—self-loathing, still in black tie, Vaseline memory, pounding cranium, stomach empty—I landed a coveted counter stool at the Camellia Grill, and ordered its piece de resistance: “The Chef Special”.

    The column-fronted diner has been famous since 1946 for this chili-meat-cheese omelet, served with a side of fries, downed with a stomach-lining vanilla shake. Its yum-factor defies hyberbole: just read the recipe. Whether its ingredients actually provide a cure matters not. It is comfort food at the highest level.

    Many nutritionists and dietary studies maintain there are no absolute food ingredients, preparations or specific meals that will keep the blood vessels in your head from expanding (headache) or small intestine from choking (nausea), in treating or reducing an alcohol-induced hangover. We’ve all heard the routine advice: “Rehydrate.” And: “Drink lots of water.”

    Yet eggs contain large amounts of cysteine, an amino acid that helps neutralize and break down the hangover-inducing toxin acetaldehyde in the liver. And of course, hot peppers, a common egg accomplice, contain salicylates, a compound that is also the basis of aspirin.

    And then there’s fat. Billy Waite, a co-owner of the New York gastropub the Brooklyneer, said: “Bacon contains a lot of amino acids, which helps replenish depleted neurotransmitters. To me, it’s all about pleasing the synapses.” While his establishment provides many of the requisite hangover suspects—deviled eggs, bread-and-butter pickles, Old Bay-seasoned peanuts—Mr. Waite remains resolute about bacon’s healing power. “Bacon is nature’s Prozac.”

    Mr. Waite is one of legions of foodies who know better than to listen to doctors’ orders: A steaming, buttery omelet—with salty meats, melted cheese and a heap of chili con carne—provides a one-two-three punch of psychological, visual and olfactory comfort. Not to mention it tastes terrific. Make one of the tastiest of them all at home (see recipe), or consider our formidable “morning-after” omelet nominees (below) from hangover hostels all over the States. Dig in.

    THE CHEF SPECIAL
    Serves 1

    3 eggs
    ½ cup diced potatoes, boiled until tender
    ½ cup diced onion
    ½ cup diced ham
    ½ cup diced bacon, cooked
    ½ cup diced turkey
    1 slice Swiss cheese
    1 slice American cheese
    5 ounces cooked chili

    WHAT TO DO:

    1. Put eggs in a blender and mix on high until mixture is almost white.

    2. Toss potatoes, onions, ham, bacon and turkey onto heated grill pan and sauté for 30 seconds.

    3. Pour eggs over all, adding cheese on top of egg and ingredients, gently rolling eggs over into pillow shape. Let cook for 2 minutes, or until firm.

    4. Place omelet on large plate and cover with chili.

    Suggested: Serve with heaping mound of French fries on the side.

    —Recipe from the Camellia Grill, New Orleans (open New Year’s Day)
    Write to Steve Garbarino at Steve.Garbarino@wsj.com

  200. dan says:

    Actually Schab, we mentioned on the blog that the writer of the CNN piece was Indian and coincidentally but probably with no bias ha Edison just happens to have a large Indian population.

  201. Mr Wantanapolous says:

    Veto [196],

    Ag ETF’s? I didn’t propose this; don’t go near it. Forget about day trading. Just get on board the Ag train/Bergabe trend. LaSalle St and W Jackson Blvd are partying like its 1999. Do a silver/soybean bull spread analysis. Then sit down and take a few Advil’s.

  202. yo'me says:

    Good morning affluent NJ

  203. yo'me says:

    A state you want to live with the affluent for homes under 300k and taxes less than 6K.Those affluent towns just keeps on increasing their taxes to keep you out.Keep on dreaming for Dream Town,NJ

  204. Beans in the teens, baby! 2011 wil be the year the wheels really start to fall off!!!

  205. Gotta be long anything in which Bergabe has accidentally stimmed runaway inflation.

    Unfortunately, this category includes no leveraged assets of any kind.

  206. Ben says:

    “Roubini called the housing bubble and the subsequent solvency problems that would result for the banks. Aside from that call he’s been wrong on practically everything else. Moreover his proposed solution to the problems resulting from the housing bust was a bunch of Keynesian junk.”

    Roubini started talking about the housing bubble in late 2006. The only reason he did so was because his friend, Nassim Taleb starting talking about it. Roubini simply mirror’s Nassim’s calls and takes credit. Besides, he was so late to the housing bubble talk that he deserves no credit at all. He talked about it in late 2006. That puts the so called wizard of economics a year behind bloggers like grim. Yet, the NYT turned him into a rock star.

  207. Neanderthal Economist says:

    Mortgage rates vs NJ home prices.
    See chart: http://www.scribd.com/full/45642383?access_key=key-o0i1c57nduyma7vmp9z
    Take a look what happened in 1975-1982 when mortgage rates doubled from 10% to 19%? You would think home prices would tank in that scenario.
    But instead, inflation kept prices growing at a strong rate.

  208. Neanderthal Economist says:

    Also interesting to see that both the 1980’s bubble and the 2000s bubbles coincided with a drastic lowering of rates. Makes you wonder if we can produce another monster home price bubble by lowering mortgage rates from 4% to 1%…

    See chart: http://www.scribd.com/full/45642383?access_key=key-o0i1c57nduyma7vmp9z

  209. Mike says:

    Neanderthal Number 213 Ah the good old days I remember my Parkway tax free munis at 10.5% tear in the eye

  210. make money says:

    Ben,

    I agree 100%. If it wasn’t for Paulson and his HF, good old folks at Magnetar and the similar crooks the bubble would have popped in late 2005. Roubini would have missed the whole think like everyone else on the street. Grim is a better economist. Wanta actually sold in 2005 and is just now putting on his boots. he shoudl have pencilheads job.

  211. chicagofinance says:

    Taleb? Taleb is a useless bag of sh!t…seriously….the Roubinator is the orignal; Taleb is the derivative hairy ape….and I think that the Roubinator has completely blown it on the updraft. Bottom line: Roubini nailed the call (timing and magnitude) on the way down….Taleb nailed the hirsute thing….

    Ben says:
    December 19, 2010 at 9:53 am
    Roubini started talking about the housing bubble in late 2006. The only reason he did so was because his friend, Nassim Taleb starting talking about it. Roubini simply mirror’s Nassim’s calls and takes credit.

  212. Roubini is a tool. Lost all respect for him a couple years ago. The model-chasing thing is pathetic.

    Now, he is just another Krugman-like dolt who does not sense the enveloping oblivion.

  213. Punch My Ticket says:

    Those Giants are a really class outfit. From the NYTimes blog …

    “3:40 P.M. |Giants 31, Eagles 10

    The Giants are well on their way to seizing sole possession of first place in the N.F.C. East. Boss caught an 8-yard touchdown in the back of the end zone to put the Giants up by 31-10 with 8:17 to play, capping a 47-yard scoring drive after recovering a loose ball that was not really a fumble.”

    “4:26 P.M. Eagles 37, Giants 31, Final”

  214. Neanderthal Economist says:

    Make. Wanta is not an economist. He’s just a neumatist with a level 3 etrade account and a penchant for farm crops.

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