National asking prices continue to rise (not so much here)

From the WSJ:

Report: Asking Prices Bode Well for Spring Sales

A report out Thursday says that strengthening asking prices for homes point to higher sales prices as early as June, which would be a welcome turn for the beleaguered sector.

Asking prices nationally were 0.5% higher in April than in March on a seasonally adjusted basis, said Jed Kolko, chief economist for home-listings company Trulia. Similarly, seasonally adjusted asking prices rose 1.9% over the quarter. Compared with this point last year, however, home price tags have only risen 0.2% nationally.

“When we look back years from now and try to figure out when the turnaround in prices actually happened, September 2011 is the time when prices look like they stabilized,” Mr. Kolko said.

The market may stabilize but it has a long way to go to reach pre-bust housing prices. As of February, the S&P/Case-Shiller indexes showed home prices dropping to new post-bubble lows. The 20-city composite index is hovering near late-2002 levels.

Trulia’s report tracks the most recent listing-price data in the largest 100 metro markets and takes into account comparable property types for a more apples-to-apples comparison. Month-to-month and quarterly data are seasonally adjusted to discount the typical springtime bump in prices. It also records year-over-year rent changes.

“It’s been a strong few months for housing, but some of that was frontloaded” during the winter months, when home construction and sales picked up because of unseasonably warm weather, Mr. Kolko said.

On the tenant side, rents have risen a more robust 5.6% nationally, according to Trulia, driven by job growth and a tightening rental supply in several markets. Would-be buyers are also being deterred by strict lending standards.

From Forbes:

Rising Home Prices: Coming to a Market Near You

Nationally, housing prices have bottomed and are on the rise. Asking prices on for-sale homes were 1.9% higher in April than one quarter ago. A 0.5% month-over-month rise in April, on top of month-over-month price increases in March and February, makes for three months in a row of rising asking prices, after adjusting for typical seasonal trends. In fact, prices have been stable or rising for the past eight months, except for a dip in December 2011. This marks a new milestone: asking prices were 0.2% higher in April than a year ago. Before April, prices were still falling year-over-year.

Even within a metro area, neighborhoods have their own price and rent trends. This month we looked at trends within five large metros: New York, Los Angeles, Chicago, Washington DC and the San Francisco Bay Area.

In the New York area, prices rose year over year in Brooklyn, Manhattan and Staten Island, while declining in the rest of the region. But rents rose everywhere – both in the City and suburban areas.

New York City Area
Borough or County Y-o-Y % Change in Asking Price Y-o-Y % Change in Rent
Brooklyn 2.4% 5.7%
Manhattan 1.1% 6.8%
Staten Island 0.8% *
Hudson, NJ (Jersey City) -0.2% 7.7%
Queens -1.6% 7.1%
Bronx -1.7% 4.7%
Nassau, NY (Long Island) -2.1% 4.5%
Bergen, NJ (Hackensack) -3.0% 2.0%
Westchester, NY -3.1% 3.4%

This entry was posted in Economics, Housing Recovery. Bookmark the permalink.

147 Responses to National asking prices continue to rise (not so much here)

  1. Bystander says:

    Another employee was escorted out the door in tears this morning. Full time VP only hired 6 months ago. Queue up some more fluff pieces, Grim. Not sure who is crazy enough to buy in this market. Simply can’t be enough job stable and credit worthy folks around to drive up prices in this area. If I still have a job in the fall perhaps I’ll peek around.

  2. 3b says:

    They can ask higher, whether people pay is another story.

  3. Sima says:

    I think that right now the employment market is bleak in NJ – as in totally dead.
    My spouse is looking for a contract job and all of sudden in the last 2 weeks is not seeing new listings and the phone is not ringing. (I think Gary said the same for his field).
    I’m not seeing any activity or “under contract” signs on For Sale properties in my town.
    I’m just not seeing signs of a recovery…..

  4. chicagofinance says:

    Hoyo!
    KANSAS CITY, Mo. — New York Yankees manager Joe Girardi says closer Mariano Rivera has a torn right knee ligament, an injury that could potentially end his career.

  5. Essex says:

    Taxes are “the” issue. It’s been said over and over again. I don’t see any short term solution, but rather a long slog for those who bought in their respective towns. No one is immune. I also see a continued contraction of the jobs that once dominated NJ’s economy. Much like the telco bust that bled jobs from the state, pharma is now in a similar mode. We’ll see how it all plays out. For now, we’ll stay put. Quietly festering.

  6. Mike says:

    Good Morning New Jersey

  7. grim says:

    From the NYT:

    That New Foreclosure Tsunami? Still Waiting

    For at least the last six months or so, a lot of people were talking about a “new wave” of foreclosures threatening to smother the U.S. housing market in gloom once again.

    The reasoning was that because of the “robo-signing” scandal, and the subsequent foreclosure freezes, a huge number of foreclosures had been put on pause, and that the banks would eventually have to deal with their delinquent borrowers, and foreclosures would re-start in a big way.

    According to data released this week by LPS Applied Analytics and CoreLogic, the waters are still relatively calm: no big waves on the horizon just yet.

    LPS’s March “Mortgage Monitor” report shows that while foreclosure inventory remains near-historic highs, and newly started foreclosures are up 8.1% on a monthly basis, they’re still 31.1% below where they were in March 2011. Delinquencies are down 8.8%. The number of borrowers who are either in foreclosure, or 90 days behind on their mortgage payments is down, too, by 6.7%.

    CoreLogic’s monthly foreclosure report, released Tuesday, has similar results.

    March of this year saw 69,000 completed foreclosures, compared with 85,000 in March 2011, CoreLogic said. Delinquency rates remain unchanged, at their lowest levels since July 2009, in the thick of the financial crisis. And in some of the most troubled markets for foreclosures in the past, like Nevada, Arizona and California, delinquency rates are actually improving, a promising sign for the stability of those markets.

    “What we’re seeing so far in the data, it doesn’t amount to a flood. There are regional bursts of activity here and there, but not that wave of foreclosures that people were expecting,” said Herb Blecher, senior vice president at LPS Applied Analytics.

    “We may have plateaued at a level of foreclosure activity that we’re not likely to exceed,” said Rick Sharga executive vice president of Carrington Mortgage Holdings.

    Of course, things could get worse. With millions of potentially troubled loans in the so-called “shadow inventory,” a big wave could always hit.

    But for now, it’s fairly calm waters. Leave the Dramamine at home.

  8. Essex says:

    The new mantra — thank you sir may I have another…

    http://www.youtube.com/watch?v=qdFLPn30dvQ

  9. grim says:

    From HousingWire:

    Freddie Mac mortgage modifications down as fewer loans go delinquent

    Mortgage servicers modified roughly 14,000 Freddie Mac-guaranteed home loans in the first quarter, less than half the 35,000 workouts one year ago as a new program begins.

    Modifications dropped every quarter since the peak in the middle of 2010 at 50,000, according to the GSE earnings release Thursday.

    Some of the decline in modifications is due to fewer loans entering serious delinquency and fewer borrowers eligible for HAMP. Freddie reported $72.8 billion serious delinquent loans in the first quarter, down from $82.1 billion in the same quarter last year.

    But much of the decline is due to the launch of the Standard Modification, which became mandatory for servicers on Jan. 1 and has yet to age long enough to show results. The program, announced in September, allows servicers to reduce monthly principal and interest payments by 10% for borrowers deemed ineligible for HAMP.

    “The implementation of the non-HAMP standard modification also negatively impacted the number of completed modifications in the first quarter of 2012, as servicers have had to transition borrowers to the new modification initiative and borrowers now need to complete a trial period before receiving the final modification,” Freddie said in its first quarter financial filing.

  10. grim says:

    From Bloomberg/BusinessWeek:

    U.S. Home Ownership Returns to Earth

    For anyone who owns a home, the past six years have seemed anything but normal. Nationally, home prices are down some 35 percent in that time, and in some cities the drop was almost double that figure. Even with some recent signs of improvement, the housing market is likely to bounce along the bottom for a long time.

    Yet in one sense, we’re returning to normal. The home ownership rate in the first quarter of 2012 fell to 65.4 percent. It is now at 1997 levels, 3.6 percentage points below the peak reached in the bubble years—and coming closer to what you might call a natural rate for the U.S. economy.

    The share of U.S. dwelling units occupied by owners was remarkably stable from 1900 through 1940, in the mid-40 percent range. Then it jumped to 55 percent in 1950, and to the 60-plus percent level starting in the 1960s. World War II veterans and their families bought homes, and policy legislators encouraged this by actively promoting housing, lavishing such tax breaks on owners as the mortgage interest deduction. The home ownership rate was relatively stable again from 1970 (62.9 percent) to 1990 (64.2 percent).

    As we all know, the ranks of homeowners swelled in the 2000s. Money flooded the market until the rate peaked at 69.4 percent in 2004. The bubble burst two years later. “The way we got to nearly 70 percent was to call a lot of people who had no equity in their homes ‘homeowners,’” says Richard Green, director of the Lusk Center for Real Estate at the University of Southern California.

  11. grim says:

    Interesting leading indicator, we don’t hire folks to babysit trucks and warehouses unless we’re moving more goods…

    From Reuters:

    Online jobs index rises in April: Monster

    A monthly gauge of online labor demand in the United States rose in April, with more jobs available in the transportation and warehousing sector, the operator of a job search website said on Friday.

    Monster Worldwide Inc, an online careers and recruiting firm, said its employment index gained 2.1 percent to 146 points last month from 143 in March. The index also edged up 0.7 percent from 145 a year ago.

    The index saw annual growth in 14 of the 20 industries and 17 of the 23 occupations monitored last month.

    Among industries, the transportation and warehousing sector saw the most growth compared to a year ago, gaining 27.3 percent. On the flip side, public administration continued to see steep declines and was down 17.3 percent.

  12. Mike says:

    Open a five year cd with $1,000,000 at this Florida bank and get a Mercedes http://finance.yahoo.com/news/free-mercedes-with-that-bank-account.html
    Hey I’m only the messenger

  13. borat the dictator says:

    Hi fivee

  14. grim says:

    I’d like to see what the early withdrawal fee on that one looks like, do they send a repo man?

    It’s an interesting model though, pay all the interest up front as a car, no actual cash return on the funds. Talk about catering to impulse buyers with some free cash. Not surprised they haven’t found a sucker yet though, the deal stinks.

    My worry would be the FDIC insurance limits, since this kind of offer just reeks of bank failure.

  15. Comrade Nom Deplume says:

    [16] grim,

    My thoughts exactly. It also violates the idea of deferring income, though lately accelerating it to avoid Obama seems to be in vogue.

  16. Mike says:

    16 they’ll be charged a $3,000 withdrawal fee as well as the cost of the Mercedes when it was new. With four qualified benificiaries you can cover the FDIC limit.

  17. grim says:

    They’ve literally turned “saving” into credit-based consumption, since the “CD” is really just a loan against the future interest, paid out in the form of a car.

    Kudos, only in America can we find this level of financial innovation.

  18. Mike says:

    18 Actually I believe it would be three qualified benificiaries to get the 1 mil coverage

  19. can i AX a question? says:

    Grim, could u post the tel of mortgage broker u recommend?

    Also, do u have any general views on basement renovations?

    Thanks,

    Mr Ax.

  20. grim says:

    First Valley – (908) 231-7390 – Tell Kandy I say hi

  21. can i AX a question? says:

    Many thanks. I’m following your advice and ax them about refi. Will make sure to mention you.

  22. grim says:

    Basements? Usable basements are hot right now in NNJ, unfinished of course. Why? So they can be finished after closing (and without permits), adding usable square footage without the corresponding tax hit.

    Ideally, look for good ceiling height (anything closer to 8 feet finished is ideal, under 7 starts to become a real challenge). Clear ceiling is important, otherwise you’ll have a ton of bulkheads (bump-heads), making the space even smaller. Moving pipes isn’t cheap.

    Don’t finish for a year or two after being in the house. Why? You’ll find the gremlins and fix them in the first two years, and you won’t need to tear walls and ceilings apart to fix them later.

    I’m a fan of the building sciences approach to basements, because the model is predicated on expecting high levels of moisture. Realize that this approach doesn’t meet, or violates, code in many locations.

    Generally, you’ll always have moisture issues in a basement that is totally under grade. It’s the norm, not the exception. Expect mold, and don’t do anything to encourage it. Mold resistant drywall instead of plain old drywall, mold resistant lumber (blue or treated) instead of pine, capillary breaks at concrete junctions instead of concrete to lumber joints, etc.

  23. grim says:

    Talked to someone who had very good results using one of the new mini-split systems with a high-efficiency dehumidifier for the basement. I believe the way these things work is they can vary the fan speed to run very low, and keep the coils cool enough to pull the moisture out of the air, without pushing cold air into the rooms (common with the older mini split systems, or window ACs) or pushing hot air into the rooms as is common with stand alone dehumidifiers (which in the summer usually result in trading a cool and moist basement for a hot and slightly less moist basement).

  24. Brian says:

    24 –

    After ripping out moldy, soggy drywall and studs out of my basement that were installed in the 80’s, I really believe basements that are fully under grade have no business being finished. Especially on an older home.

    First, my grandparents home and now mine. I’ve been burned twice.

    Unless you also completely waterproof the OUTSIDE of the foundation also. I really believe you are just putting mold food in your basement.

  25. gary says:

    Jobs – 115,000; UE – 8.1%

  26. gary says:

    Unemployment @ 8.1% – I guess more people are dying, not looking, not counted, executed or simply that the Administration will tell the proletarians hope and change is working. Take your pick.

  27. grim says:

    26 – In many places even a waterproofed foundation won’t help. All you need is already humid air infiltrating a cool basement and you’ll get a high humidity to encourage mold growth. Put some drywall up on wood slats against an uninsulated foundation, and you are good to go. Add some wood paneling and carpet right over the slab for good measure.

  28. gary says:

    Arthur Levitz on Bloomberg radio this morning basically stating that Wall Street is still cutting jobs and the recession is still bleak. All in all, 115,000 is a p1ss in the ocean and we know those are part time retail, food service and bullsh1t jobs.

  29. JJ says:

    There are jobs out there, really good ones in fact. Trouble is firms are trading up in a weak job market. Two of the jobs headhunters contacted me on in the last two months I knew both the people who had the jobs. One was fired outright the other is being forced out neither has a job to go to and both will take big paycuts. Both firms are willing to pay the same or more for the new hire. So it was not about saving money. Both firms want stars with current jobs. They are trading up for same price.

    This is kinda like I see someone underprice a seat in the third row aisle for a game I already have tickets to and I have worst seats. I buy the better seats quickly then sell my worse seats.

    Jack Welch I love. Yesterday he told a working womens group that women on wall street groups and mentoring for women are like special victims units. Women should not want to be the victim, they should just do their job, get it noted in review and move forward. Also said There are no work life balances just work life choices, you want to cut out of work on time and have time with kids, that is your choice, but why you are home playing with building blocks dont be suprised when someone else gets you promotion, you made your choice. It is not a balance, it is one or the other.

  30. JJ says:

    I sent Arthur an email yesterday on something. I still have my Levitz couch from the 1990s he really did make some good cheap furniture in his day.

    gary says:
    May 4, 2012 at 8:37 am
    Arthur Levitz on Bloomberg radio this morning basically stating that Wall Street is still cutting jobs and the recession is still bleak. All in all, 115,000 is a p1ss in the ocean and we know those are part time retail, food service and bullsh1t jobs.

  31. gary says:

    JJ,

    There are jobs out there, really good ones in fact.

    Sure… one solid position for 125 qualified applicants.

  32. Mikeinwaiting says:

    Grim 13 you were saying something on warehousing & transportation.

    THE EMPLOYMENT SITUATION — APRIL 2012

    Nonfarm payroll employment rose by 115,000 in April, and the unemployment
    rate was little changed at 8.1 percent, the U.S. Bureau of Labor Statistics
    reported today. Employment increased in professional and business services,
    retail trade, and health care, but declined in transportation and warehousing.

  33. Mikeinwaiting says:

    A little more color to the employment picture.

    The number of persons employed part time for economic reasons (sometimes
    referred to as involuntary part-time workers) was essentially unchanged in
    April at 7.9 million. These individuals were working part time because their
    hours had been cut back or because they were unable to find a full-time job.
    (See table A-8.)

    In April, 2.4 million persons were marginally attached to the labor force,
    essentially unchanged from a year earlier. (The data are not seasonally
    adjusted.) These individuals were not in the labor force, wanted and were
    available for work, and had looked for a job sometime in the prior 12 months.
    They were not counted as unemployed because they had not searched for work in
    the 4 weeks preceding the survey. (See table A-16.)

    Among the marginally attached, there were 968,000 discouraged workers in April,
    about the same as a year earlier. (The data are not seasonally adjusted.)
    Discouraged workers are persons not currently looking for work because they
    believe no jobs are available for them. The remaining 1.4 million persons
    marginally attached to the labor force in April had not searched for work
    in the 4 weeks preceding the survey for reasons such as school attendance
    or family responsibilities. (See table A-16.)

  34. 3B says:

    #31 gary: according to the details 350K dropped out of the labor market in April.

  35. ricky_nu says:

    hey – I used to have a broker provide info on the website shown below – did they shut that thing down?

    http://nj1.xmlsweb.com

  36. Brian says:

    39 –

    You mean everything’s fine and really it’s all normal?

    WTF will we all complain about then? It’s our right as NJ citizens to complain about how bad stuff is.

  37. JJ says:

    I personally know a few working Moms who got canned got good severance took time off and only jobs offered were such a pay cut that between train, car, daycare etc. they just gave up looking. I also know a few guys 55+ who got let go and after three years of looking has called it a day. My favorite guy got canned in 2009 at the age of 44 after a divorce he took his half of divorce money, his severace bought a house down at shore, rents it out in summer and has roomates in the winter and partied right through every extension of unemployment, he is like yep one day I guess I will go back to work, maybe remary but just having too much fun. I know a few teachers who milked the system called in sick all the time were bad teachers who quit after NYC teacher ratings being published gave them so many headaches, they were all late 30s early 40s with 10+ years and kids anyhow. The reason they were lazy NYC teachers is they did not want to work in first place. If I was let go, I guess between RE investing and stock/bond trading I could make 300K a year. Would I be counted as out of workforce. I mean I am getting money. I have a few neighbors who do that. We cant keep counting people like the guy at the shore as unemployed. They dropped out. Sure if someone went to him and said, hey shave and shower you can have your 250K job back I am sure he would take it, but he aint looking.

    3B says:
    May 4, 2012 at 8:52 am
    #31 gary: according to the details 350K dropped out of the labor market in April.

  38. grim says:

    Mike – going through the numbers, definitely not what anyone wanted to see today. Last two months did see some strong upward revisions though, not that it really makes this months data any better. The rate just isn’t high enough to make a big dent.

    I found the unemployment for college degree holders 25 years and older pretty interesting, it’s sitting at 4% right now. I would have thought this number would be higher.

  39. Shore Guy says:

    Just fork over the land. We’ll take care of it. Don’t you worry. we will manage it as well as the State’s finances, we assure you:

    An Oasis, Once Gilded, Now Greened
    http://www.nytimes.com/2012/05/04/arts/doris-dukes-farm-hillsborough-nj-opening-to-public.html?google_editors_picks=true

  40. JJ says:

    Green shoots to me, higher chance of QE3 and company profitability is better when firms run lean. If someone is heavy into stock and bond market this is good news. Employers overhiring, brings inflation, lowers profitability and eventually leads to massive lay-offs down the road.

    I have a job, last thing I want is firm bringing in tons new people to find out that in 2014 we have to significantly cut headcount. Lets all do a little more with less and have better job security. However, for people looking this is a toxic nightmare. Also with obama care and lack of clarity on fiscal policy, taxes and who is next president bringing in a lot of staff prior to January 2013 is risky.
    Shore Guy says:
    May 4, 2012 at 9:00 am
    Green shoots:

    http://www.cbsnews.com/8301-500395_162-57427812/u.s-hiring-slows-sharply-with-just-115k-jobs-added/

  41. grim says:

    I see a Green Shoot – The +115K print includes a 15k reduction in Government jobs.

  42. gary says:

    3B [38],

    That’s the number the administration doesn’t want highlighted. The Snooki society recently known as America only responds to quick visuals and one line sound bites written in texting language. So, the unemployment rate will “miraculously” be under 8% come November. Once the Annointed One is re-elected, he will then change his name to Caligula and announce that a horse is now one of his main advisors. Oh wait… he already has Joe Biden.

  43. grim says:

    48 – You didn’t see the press release? Snooki has been replaced as the NJ state spokesperson by the leather lady from Nutley. The hag makes Angelo look pale.

  44. Shore Guy says:

    How many jobs do we need to add each month just to keep even with the natural growth of the number of working-age people in the nation? Between discouraged workers who (while not employed) are not counted and those people who are filling multiple part-time jobs (each one counted as a job), the job figures are not positive.

  45. All Hype says:

    Geeze, look at the labor force participation rate. Our centrally managed economy is glorious!!!

    http://www.zerohedge.com/news/people-not-labor-force-soar-522000-labor-force-participation-rate-lowest-1981

  46. Shore Guy says:

    Grim,

    I have cordovan shoes that are a lighter shade than her tan.

  47. grim says:

    50 – I believe the last estimate I saw was +125K monthly

  48. 3B says:

    #43 I found the unemployment for college degree holders 25 years and older pretty interesting, it’s sitting at 4% right now. I would have thought this number would be higher.

    I bet if they broke it down by age group, the number would be much higher the younger the college grad is, may also be the case on the other end of the age spectrum.

  49. 3B says:

    #50 150k A month is what most economists agree on.

  50. grim says:

    Just for reference, the jobs graph from CR:

    April Jobs

  51. All Hype says:

    Shadow of John (28):
    I did not know they allowed Umpa Loompa’s to leave the chocolate factory.

  52. JJ says:

    That is not a real person, just an FBI aged progession of what Snookie will look like in 20 years.

    All Hype says:
    May 4, 2012 at 9:22 am
    Shadow of John (28):
    I did not know they allowed Umpa Loompa’s to leave the chocolate factory.

  53. Shore Guy says:

    “I did not know they allowed Umpa Loompa’s to leave the chocolate factory.”

    Post of the day.

  54. Brian says:

    I’m not a big fan of Sean Hannity but, it was satisfying to watch him “debate” or (talk over whatever) an OWS organizer:

    http://www.theblaze.com/stories/hannity-rips-apart-occupy-organizer-in-tense-segment-get-your-ass-out-of-bed-and-get-to-work/

  55. JJ says:

    Ten year at 1.9% today, no place to hide. Seven week run of interest rates straight down. Amazing, someone who closed on a home 7 weeks ago might actually be considering refinancing today.

  56. gary says:

    Is there any investment at all where I can get a locked in 3% (approximately) return? Anything? Anywhere?

  57. xolepa says:

    (24)
    Grim,
    I have some issues with that document. Mostly dealing with the suggestion that clay be placed adjacent to the exterior foundation walls. Clay compresses easily – think of one of your favorite childhood play pieces. As such, it can sink and spread horizontally leaving a downward slope against the foundation. Many excavators (they know, not the builders) when given the opportunity ($$) will backfill clean crushed stone against the foundation wall. If there is a perforated and screened channeling system at the bottom of the footers, any water going toward the foundation will sink straight down – and out of harm’s way. The biggest determinant in assessing a basement’s vulnerability to water intrusion is the length of the roof overhang. Otherwise, the article is quite spot on. Nothing new though for the past twenty years, except the use of rigid foam against the interior wall. I don’t believe the article stated the differences between closed cell and open cell foam. One traps and holds water while the other repels it. Foam can become soggy toast.

  58. Mike says:

    Gary, If you are going to Ohio anytime soon you can get a 10 year CD 3.00% APY at this bank https://www.waynesavings.com/rates/rates.aspx?selected=depositRates

  59. The Original NJ ExPat says:

    A tale of one house, emblematic of the NJ real estate cycles.

    This house is a 1965 Colonial, 4 bed, 2.5 bath, just under 2000 square feet. It was part of a new mountain top development that consisted of about 20 houses in Rockaway Township. ~10 houses, including this one, on the high side of the street were nearly identical Colonials with attached garages on level 1/4 acre lots except for the fairly steep front lawns and drives leading down to the street. Across the street were 10 new Ranches on steep lots with garages under the main level, all houses 1965 new construction. I grew up in this house, the first two transactions are my parents buying and selling:

    1965 $24,000
    1985 $126,000
    1988 $206,000
    1996 $195,000
    2000 $245,000
    2005 $442,000
    2009 Lis Pendens
    2011 Couple divorces and wife becomes the “owner” for $1

    A couple years ago RealtyTrac listed the approximate judgement at around $745K but apparently the lady is still living there rent-free. I’m guessing nobody’s paying the $9K tax bill either.

  60. xolepa says:

    (62)
    Got 401K/IRA money? I know a credit union in NYC that is paying 3.1% no terms. All insured. You have to be my kind, though.

  61. gary says:

    xolepa [66],

    What kind is your kind? LOL!

  62. gary says:

    Actually, a dividend ETF or high dividend equities are about the only thing I can think of to get at least some return. Even broader, an index fund will work.

  63. xolepa says:

    It’s Eastern European ancestry related. They can exclude and do. With a name of Gary, if true, they may not take the bait. Overall assets are approaching $1billion.

    There are many credit unions around. They offer the best values. Many have services rivaling and even exceeding those offered by banks, national and local. Affinity FCU is an example.

    disclaimer: I used to be the CofB of one of these over twenty years ago. No pay, totally voluntary work.

  64. The Original NJ ExPat says:

    My new portfolio favorite LyondellBasell Industries NV (LYB), a specialty chemical company that is making out like a bandit due to the low price of Natural Gas. 2.3% yield now, quite a bit higher when I bought a couple months ago.

  65. JJ says:

    Highest risk free rate for a short term bond is an I-Bond from the Fed that pays 2.20% through October 31, 2012

    Next would be highest tier bonds of junk that are on positive credit watch moodys or SAP, soon as they hit investment grade, bingo. Investment grade corporate bond funds cant buy them till they hit investment grade. Can get like 6.5%

    Bank Trups can get you up to 8% and some are even low A rated

    Kicker Munis, callable munis trading near par with a high coupon can get you 4% and usually they are called with a year which is a bummer. But still 4% tax free for a bond that is most likely 1-2 years duration.

    Ally Bank 5 year FDIC insured CDs have a very low penalty if you cash in bond early. You cant get 5 year rate and still have option of getting money back anytime. Unless you cash it in within 3 months you are golden.

    gary says:
    May 4, 2012 at 10:13 am
    Is there any investment at all where I can get a locked in 3% (approximately) return? Anything? Anywhere?

  66. Mike says:

    68 Gary, You asked for a locked in rate. No guarantees with those.

  67. The Original NJ ExPat says:

    I-bonds aren’t risk free because the interest is paid in USD.

  68. The Original NJ ExPat says:

    Anybody think Trevor Hoffman is out throwing today?

  69. JJ says:

    Well you are free of default risk, free of interest rate risk as they adjust for inflation and you get to defer the tax on the interest till you cash them in and if you use them for your kids higher education Usually you pay no tax on interest. Plus are free from liquidity risk as you can cash them in anytime get back what you paid plus accrued interest. Yes folks Jesus may have chicken wings with me tonight and the UD could go bankrupt too. But with Ibonds you can sell anytime so it is not like you will be blindsided by a US default. Plus on treasury website you can withrawl anytime. No need to wait for the market to open.

    Catch is interest rate is only 2.2%

    The Original NJ ExPat says:
    May 4, 2012 at 11:13 am
    I-bonds aren’t risk free because the interest is paid in USD

  70. gary says:

    Mike [72],

    I hear ya but 10 yrs on a CD? I guess a small piece of pie wouldn’t hurt there.

  71. Pete says:

    JJ,

    Currently I have down payment money in high yield savings and reward checking accounts, but I’m not getting 2% in either. Would you say it is safe for me to put a chunk (or most) of that down payment money in I-bonds instead? Thanks.

  72. JJ says:

    A CD is a very low fixed rate. Odds are inflation will be higher than the CD rate and almost a sure bet since that is taxable interest. A ten year CD like a Ten year Treasury bond is a guaranteed loss.

    This is why retirees buy junk like GMAC, Bank of America, Ford, Bonds, they need to eat. Unless they get at least 6% they are eating into principal at too rapid a rate that by the time yields rise it wont matter. Oddly Junk will do well if rates are rising that means economy is doing good and less BK. But MBS, T-bills and long term munis and investment grade bonds will have zero defaults when economy recovers and rates rise but the price of those bonds will absolutely plumet.

    gary says:
    May 4, 2012 at 11:27 am
    Mike [72],

    I hear ya but 10 yrs on a CD? I guess a small piece of pie wouldn’t hurt there.

  73. JJ says:

    Trouble is you can only do 20K a year and the first six months you are locked in. Safest you could do is sometype of GMAC CD with a low penalty for breaking it if you find a house. However, you need to keep 10% completely liquid as you need to put that down pretty quick if you buy a house. The remainder you have till closing to come up with.

    Pete says:
    May 4, 2012 at 11:35 am
    JJ,

    Currently I have down payment money in high yield savings and reward checking accounts, but I’m not getting 2% in either. Would you say it is safe for me to put a chunk (or most) of that down payment money in I-bonds instead? Thanks.

  74. Juice Box says:

    Seems like the fate of the entire State of California hinges on the Facebook IPO and the income taxes that will be paid to the State’s coffers.

    http://www.bloomberg.com/news/2012-05-04/california-can-t-wait-for-facebook-to-boost-coffers-muni-credit.html

  75. 3B says:

    #62 gary: You don’t need it. As you will be taking the house buying plunge soon!!!!

  76. Juice Box says:

    Put everything you got into the Facebook IPO, it’s a guaranteed winner.

  77. gary says:

    3B [81],

    Still, I’m not gonna take all the kitty and put it down on the house. Investments need to be part of the equation. :)

  78. homeboken says:

    Does anyone else share my opinion that Facebook will not exist in 5 years? The core business is social networkin that is determined by the fickle nature of teens and young adults. Unless they begin producing some fee based services I don’t see them surviving the next fad that comes along and takes over.

    First it was Newsgroups, then AOL/Netscape etc. then Myspace, then Facebook, then ????

  79. Juice Box says:

    homeboken – once the insiders sell their 137 million shares does it even matter anymore?

  80. Shore Guy says:

    “the income taxes that will be paid to the State’s coffers.”

    The blasted Franchise Tax Board (what a strange name) always has its hands inmy pocket.

  81. zieba says:

    Xolepa,
    I’m very interested in the NYC credit union you mentioned earlier. The Polish&Slavic FCU does not offer anything this competitive. Care to share?

  82. Shore Guy says:

    “Newsgroups, then AOL/Netscape etc”

    Someone help me out here. Back in the early 80s, there was a hybrid mail delivery service where one would dial into a server, draft a letter, it was printed and mailed from a location close to the recipient.

  83. Juice Box says:

    Shore you are that old to remember morse code telegraph?

  84. Comrade Nom Deplume says:

    [80] juice

    I expect this to happen: first, some of these folks will decamp to Nevada b4 they cash out. Second, FTB us gonna go after them for evasion. Third (possible but unlikely), Nevada intervenes to block the FTB.

  85. JJ says:

    I remember the reorg area sometimes on tender offers due in Chicago at midnight or something throwing a clerk on a plane for a mad rush to window by midnight, then back again to NY. Getting the Checks to Fed by Midnight, Stock powers mad rush. Used to be more fun, now you just push a button. Pretty much automation caused the loss of all the non-degreed jobs.

    Juice Box says:
    May 4, 2012 at 12:17 pm
    Shore you are that old to remember morse code telegraph

  86. 3B says:

    #83 gary: I know that, just messing with you.

  87. JJ says:

    After the San Fran EarthQuake disconnected all phone lines with new york only ef hutton had a dedicated telegraph, the folks with Merril accounts lost their shirts as they could not trade out of a sell off. Hutton Despised Merril. In fact when his Daughter Dina Hutton wanted to take up acting he said it would soil and disgrace the Hutton name if you were an Actress. Old Edward Francis Hutton was a smart guy told his daughter her stage name should be Dina Merril as he would love it if she would go out and disgrace the Merril name. Dina Merril is still alive at 86 and a great actess and she is still ruining the Merril name to this day.

    Juice Box says:
    May 4, 2012 at 12:17 pm
    Shore you are that old to remember morse code telegraph?

  88. Shore Guy says:

    Juice,

    Actually, yes. Back in the day I learnt Morse code and constructed a working telegraph system. I also learnt how to program computers on punch cards, in the evenings, after killing dinosaurs

  89. Comrade Nom Deplume says:

    [90] redux,

    If I were Zuckerberg, I’d move to New Hampshire first. They tax cap gains (at a low rate) so they’d have an incentive to defend against the FTB.

    $390 million? For that kind of cash, its worth the fight. NH would lawyer up for a fraction of that.

  90. Shore Guy says:

    MCI Mail?

  91. Shore Guy says:

    Rut ro:

    http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/05/04/businessinsideryahoo-did-not-go-thr.DTL

    Yahoo’s board has a very hard decision to make today: whether or not it can live with having a CEO who, for the past dozen years or so at least, allowed people to mistaken believe he had a computer science degree when he in fact does not.

    If Yahoo fires that CEO, Scott Thompson, it will have to name a fourth CEO in under a year.

    If it doesn’t, the board will be essentially telling the industry and the company employees that it is OK to lie.

    In one particularl way, Yahoo’s board only has itself to blame for the mess.

    That’s because the way the board hired Thompson was very unorthodox: it did it without the help of an executive recruting firm, the kind that usually fully vets candidates before recommending them.

    In fact, according to All Things D, Thompson actually “cold-emailed” his way into the job.

    snip

  92. 3B says:

    For some they apparently are not aware that it is 2012, not 2005!!! The dump, I mean “gem” listed below can be yours for 399K. It is under 400K so ok it’s 2008!!

    Has not been touched it appears from the pictures since it was built in 1947!!! And with a delightful tax bill of $10,400.00 per year.

    gary bring your check book, and hurry, hurry!!!!

  93. JJ says:

    Beastie Boys’ Adam Yauch dies of cancer: reports

    Adam Yauch, a founding member of the Beastie Boys, a hip-hop group that rose to popularity in the 1980s, has died of cancer at age 47, according to media reports. Yauch had been in treatment for cancer since 2009. Along with fellow members Adam Horovitz and Mike Diamond, New York’s Beastie Boys broke out with the 1986 album “Licensed to Ill,” with featured “No Sleep Till Brooklyn,” among other hits

  94. Juice Box says:

    Yahoo is still around? That Dinosaur company should have gone out of business when Netscape went under.

  95. chicagofinance says:

    Abe Vigoda lives!

  96. Mike says:

    Shore Can You Translate? –. — — -.. .- ..-. – . .-. -. — — -. -. . .– .— . .-. … . -.–

  97. Brian says:

    97 –

    Yahoo’s CEO is old school. He has brass balls.

  98. chicagofinance says:

    FB has a comprehensive database of personal information. It is Google tracking you, except FB knows everything about you. The worst part is that people willingly offer up their entire life to Zuckerberg….and he is a sociopathic narcissist……this will all end in Orwellian fashion. That said, the stock is going to be hyper-priced to oblivion, but also unfit to be shorted. Stay away at all costs until people calm down. The way you can play FB is to buy the other companies investors are selling right now to make room in their portfolios for FB.

    homeboken says:
    May 4, 2012 at 11:54 am
    Does anyone else share my opinion that Facebook will not exist in 5 years? The core business is social networkin that is determined by the fickle nature of teens and young adults. Unless they begin producing some fee based services I don’t see them surviving the next fad that comes along and takes over.

    First it was Newsgroups, then AOL/Netscape etc. then Myspace, then Facebook, then ????

  99. Libtard in the City says:

    “The way you can play FB is to buy the other companies investors are selling right now to make room in their portfolios for FB.”

    Perhaps why Apple sunk back to their pre-blowout earnings report low?

  100. gary says:

    By the way, in case anyone really gives a f*ck, the percentage of adults working or looking for work fell to the lowest level in more than 30 years. Would this still be Bush’s fault or is it now Romney’s fault?

  101. homeboken says:

    Gary – It doesn’t matter, just make sure you tell everyone you know that it is NOT Obama’s fault.

  102. JJ says:

    I saw Beastie Boys with Run DMC on the “Together Forever” tour in 1987 at MSG . Amazing concert. Metal Detectors, massive chair fight and lots of muggings. People taped knives behind seats at game the day before. Playas were all there. I went with my buddy who was a bouncer at Webster Hall who was like six foot three inch two fifty, he goes lets invite the big bouncer to come with us as it might get rough. So we brought like a six foot seven inch bouncer with us. I sprung for his ticket on my friends advice. OMG it was madness in there. Beastie had girls in cages and a full bar on stage throwing beer at people in stands, big 40- on 40 chair fight almost cleared out every chair on the basketball court. So wild. Public Enemy also played. One of best concerts every. I was sooooo Dope back then. I was OG with lots of street cred. Only six foot two inch 200 pound guy at concert with two bodyguards. But then again I was like only white boy there. But with bronx street cred and I went to school with one of the guys in Run DMC I had heavy heavy street cred.

  103. Mike says:

    106 xolepa You are eligble to bring in family members. We’re related by this blog?

  104. Double Down says:

    Keeping a basement dry isn’t hard, just run a regular dehumidifier in the furnace area. There’s no discernible heating or cooling effect from the unit since the basement stays 68 degrees 365 days per year.

    Buy a $10 combination thermometer/hygrometer to monitor temp and humidity.

    Skimping a few dollars on electricity to give up hundreds of usable square feet is pound foolish and penny wise.

  105. gary says:

    homeboken [108],

    It’s those millionaires and billionaires fault. Not the group that was at the White House correspondants dinner, they feel your despair. It’s just the ones that don’t like fairness.

  106. Shore Guy says:

    Mike,

    That was a long time ago. Something about a fern?

  107. Mike says:

    Shore It says “Good Afternoon New Jersey”

  108. Brian says:

    111 –

    Until groundwater pours in through a rising water table because of a hurricane. Fuk that. My basement is finished in the sense that a cement block college dorm room is finished. Nothing that’s not made of metal or concrete allowed anymore.

    Television in the corner, Kegerator, mini fridge, two old school aluminum lawn chairs, and a weight bench.

    No more moldy drywall thank you very much.

  109. JJ says:

    I know someone on their board, they dont get paid and she has the IQ of a small paperclip.

    xolepa says:
    May 4, 2012 at 1:40 pm

    (87) http://www.selfrelianceny.org/

  110. chicagofinance says:

    oversimplified and creating a pattern where there is none…….detritus….

    Juice Box says:
    May 4, 2012 at 2:32 pm
    FaceBook and Google gone like Myspace gone in 5 years?

    http://www.forbes.com/sites/ericjackson/2012/04/30/heres-why-google-and-facebook-might-completely-disappear-in-the-next-5-years/

  111. 3B says:

    #18 JJ Guy buys a house, and now he believes the bottom might be in. Not that surprising, human nature. And I agree prices have corrected dramatically (as they should have) and the landscape for buying has improved substantially; of course if you do not count out of control property taxes in our area.

    As a disclaimer I am looking, and I still think prices are going to continue to fall.

    One house I am following will I believe have another price decrease in the next 2 weeks. If they drop it by the amount I suspect they will, than I will put in my bid, and see what happens. Then rinse and repeat as necessary.

  112. Double Down says:

    “Until groundwater pours in through a rising water table because of a hurricane.”

    After your first hurricane, you’ll know if your basement walls/floor leak or not.

    If they don’t, drywall away.

    If they do, sell the house.

  113. gary says:

    You know, we always called each other good fellas. Like you said to, uh, somebody, You’re gonna like this guy. He’s all right. He’s a good fella. He’s one of us.: You understand? We were good fellas. Wiseguys. But Jimmy and I could never be made because we had Irish blood. It didn’t even matter that my mother was Sicilian. To become a member of a crew you’ve got to be one hundred per cent Italian so they can trace all your relatives back to the old country. See, it’s the highest honor they can give you. It means you belong to a family and crew. It means that nobody can f*ck around with you. It also means you could f*ck around with anybody just as long as they aren’t also a member. It’s like a license to steal. It’s a license to do anything. As far as Jimmy was concerned with Tommy being made, it was like we were all being made. We would now have one of our own as a member.

  114. JJ says:

    Ten-year yields have fallen for a seventh straight week, the longest string of declines (or gains in price) since the depths of the U.S. credit crisis at the end of 2008.

    Yields on 30-year bonds have declined for a fifth week, also the longest run since 2008.

    Five-year yields have fallen for seven straight weeks as well, their longest run since one ending in June 2011,

    WOW who would have thunk seven weeks ago that bond yields would collapse. People at work were refinancing again for like the tenth time.

  115. JJ says:

    Bought some stock today. The world is coming to an end. Had a bond called on Wed and just could not stomach buying another bond today at these rates. Well I will tip toe into stocks. Ben is going to force me into stocks and housing just like he planed. The man is an evil genius. 50/50 FCNTX and FLPSX to chicken to deal with guessing on individual stocks considering I never expected a mini sell off right after I got a bond called.

    Ten year ended crazy low today, considering jobs numbers were not that and no big Europe news today.

    chicagofinance says:
    May 4, 2012 at 2:57 pm

    oversimplified and creating a pattern where there is none…….detritus….

  116. JJ says:

    Williams: Low Rates Won’t Last Forever

    Friday, May 4, 2012

    By Gary Siegel

    Monetary policy accommodation will end at some point, not soon though, Federal Reserve Bank of San Francisco President and CEO John C. Williams said Friday

    This is shocking news!

  117. xmonger says:

    #116. Haha… this work things gets in the way of reading ahead. (sorry for the repost)

    Facebook sucks ass. Linked in is right behind.

  118. jcer says:

    [121] my parents have owned their current home for 25 years, no basement leaks, it was 10 years old when they bought it, no signs of ever having water penetration in the basement. It’s not that simple last year after having a finished basement for 20 years water came in. My advice is if it doesn’t seem like there is an issue drywall away but I would use greenboard and mesh tape, that way if you get water it won’t mold, i’d also advise tile vs. carpet or even worse wood! You almost always need a sump pump and appropriate plumbing as well, be prepared for it even though it could take many years to occur, there is no such thing as a basement that doesn’t let some water in at some point. Usually only during extreme weather but it is better to be prepared. My parents only got a little water but it destroyed carpet, drywall, molding….it would have been a few bucks if it was done in a more water conscious way as there was not that much water.

  119. JJ says:

    My parents house growing up had a dry basement, although there was plenty of penetration going on with my gfs when they were not around.

    jcer says:
    May 4, 2012 at 4:36 pm
    [121] my parents have owned their current home for 25 years, no basement leaks, it was 10 years old when they bought it, no signs of ever having water penetration in the basement. It’s not that simple last year after having a finished basement for 20 years water came in. My advice is if it doesn’t seem like there is an issue drywall away but I would use greenboard and mesh tape, that way if you get water it won’t mold, i’d also advise tile vs. carpet or even worse wood! You almost always need a sump pump and appropriate plumbing as well, be prepared for it even though it could take many years to occur, there is no such thing as a basement that doesn’t let some water in at some point. Usually only during extreme weather but it is better to be prepared. My parents only got a little water but it destroyed carpet, drywall, molding….it would have been a few bucks if it was done in a more water conscious way as there was not that much water.

  120. Juice Box says:

    JJ – 100 Thompson Avenue, Babylon Village, NY 11702

    Opening bids starts at 1.1 M was appraised at 3 M

    Killer is the taxes $58,833 + Village Taxes of $6,724

    http://www.maltzauctions.com/auction_detail.php?id=177976

  121. can i AX a question? says:

    Grim,

    Grim,

    do you do consulting work re: basement? Your advice above has been more valuable than most provided thus far by contractors. Wife is running with this project and, very unfortunately, willing to pay with my hard earned $$$$

    Let me know and I can provide additional details.

    Mr. Ax

  122. AG says:

    2,

    Grim,

    I just fired my mortgage guy. I pay for a service not BS. If you cant pull through then they can f_ck off. I could pay it off in cash.

  123. Neanderthal Economist says:

    Ok update on house purchase: uberinspektor sends over a 70+ page report identifying more defects than the owner ever knew about. There must be $25k of suggested fixes. Sellers are beside themselves, they say they need the weekend just to read through it. Oh boy.

  124. Shore Guy says:

    “It says “Good Afternoon New Jersey”

    I told you it has been a long time. At least I saw the “fern” in afternoon.

  125. Shore Guy says:

    “This is shocking news!”

    I also hear that it is expected to get dark tonight, followed by light tomorrow. Oh, and Franco is still dead.

  126. Shore Guy says:

    Gary,

    Is 122 something from a local town council orientation meeting?

  127. chicagofinance says:

    Have you been convinced by the value of the Uberinspektor?……….SPEAK I SAY!

    Neanderthal Economist says:
    May 4, 2012 at 5:56 pm
    Ok update on house purchase: uberinspektor sends over a 70+ page report identifying more defects than the owner ever knew about. There must be $25k of suggested fixes. Sellers are beside themselves, they say they need the weekend just to read through it. Oh boy.

  128. Neanderthal Economist says:

    Seeing is believing chi… i owe you guys a beer.

  129. Shore Guy says:

    NE,

    And now that the sellers have a copy of the report, they have to disclose the issues to other potential buyers, no?

  130. Neanderthal Economist says:

    I think you’re right shore but realtor is dual agent so she hasn’t made that clear to me. Im not getting much advice from the agent unless i ask her something very specific, in which case she answers truthfully. And my attorney is good but is busy and doesnt have much time to chit chat about negotiation strategies so i feel like im flying solo here but from what ive heard buying agents dont give much advice after attorney review ends anyway, they just keep pushing to close the deal. Not sure if thats true or not.

  131. Mike says:

    Shore 134 That’s pretty impressive

  132. chicagofinance says:

    WSJ
    THE SATURDAY ESSAY
    May 4, 2012, 6:08 p.m. ET
    Renting Prosperity

    Americans are getting used to the idea of renting the good life, from cars to couture to homes. Daniel Gross explores our shift from a nation of owners to an economy permanently on the move—and how it will lead to the next boom.

    By DANIEL GROSS

    In the American mind, renting has long symbolized striving—striving, that is, well short of achieving. But as we climb our way out of the Great Recession, it seems something has changed.

    “The Great Gatsby,” the pre-eminent American novel of financial ambition, overextension and downfall, offers a revealing vignette about the great American obsession: real estate. The narrator, Nick Carraway, can’t afford to buy in the rarefied Long Island world inhabited by Gatsby, and by Tom and Daisy Buchanan. But he can afford to rent. “When a young man at the office suggested that we take a house together in a commuting town, it sounded like a great idea. He found the house, a weather-beaten cardboard bungalow at eighty a month, but at the last minute the firm ordered him to Washington, and I went out to the country alone,” he notes. “I had a view of the water, a partial view of my neighbor’s lawn, and the consoling proximity of millionaires—all for eighty dollars a month.”

    In the American mind, renting has long symbolized striving—striving, that is, well short of achieving. But as we climb our way out of the Great Recession, it seems something has changed. Americans are getting over the idea of owning the American dream; increasingly, they’re OK with renting it. Homeownership is on the decline, and home rentership is on the rise. But the trend isn’t limited to the housing market. Across the board—for goods ranging from cars to books to clothes—Americans are increasingly acclimating to the idea of giving up the stability of being an owner for the flexibility of being a renter. This may sound like a decline in living standards. But the new realities of our increasingly mobile economy make it more likely that this transition from an Ownership Society to what might be called a Rentership Society, far from being a drag, will unleash a wave of economic efficiency that could fuel the next boom.

    While downgrading the place of ownership in the American psyche may sound like a traumatic task, the cold, unsentimental fact about the American dream is that Americans never really owned it in the first place. For the past three decades, especially, consumers haven’t so much bought their quality of life as they’ve borrowed it from banks and credit card companies. And since the Great Recession, Americans have been busy rebuilding their balance sheets and avoiding new financial encumbrances. When American consumers can’t—or won’t—borrow to purchase the goods and services they’ve come to consider part of their standard of living, how does the economy get back on its feet?

    The answer lies in consumers following the example of corporations—that is, becoming more efficient. The reaction to extended leverage and foolish borrowing isn’t to stop consuming and buying; it is to consume and buy more intelligently. That’s what the Rentership Society is all about. And it starts at home. Literally. Housing is the biggest single component of consumption in the U.S. economy and the source of much of our present misery. According to the Bureau of Labor Statistics, the typical consumer spends about 32% of his or her budget on shelter. In the last decade, that generally meant borrowing a lot of money to take “ownership” of a home.

    The vast mortgage-political-financial complex, for a variety of reasons, valued homeownership as a good in its own right. Democrats saw the extension of credit to people on the lower end of the income scale as a matter of social justice; Republicans thought homeownership would make people more bourgeois. Banks and Wall Street firms salivated at the fees mortgages could generate.

    So, during the boom, the homeownership rate grew steadily, peaking at a record 69% in 2006, according to the Census Bureau. But those gains were short-lived and came at a truly massive cost: a huge mortgage bust, expensive bailouts of Fannie Mae and Freddie Mac, an overhang of millions of foreclosed properties and falling home prices. Ownership-boosters failed to note that homes purchased in 2005 and 2006 with no-money-down, interest-only mortgages weren’t really bought. They were simply rented until the “owner” flipped them or walked away from the mortgage. Far from strengthening low-income neighborhoods, this destabilized them through the inevitability of foreclosure.

    In the post-bust climate, renting has emerged as a much more economically efficient way to pay for housing. A one-year lease represents a far less onerous financial obligation than a 30-year mortgage. It’s difficult to get into too much financial trouble as a renter. The homeownership rate has fallen from its peak in 2006 to 65.4% today. The foreclosure crisis, which has caused millions of Americans to turn over homes to lenders, is responsible for much of this decline. What’s more, given the weak labor market and higher lending standards, more Americans today have a difficult time scraping together the required down payments.

    For an increasing number of Americans, though, it simply makes more sense to rent these days. According to Moody’s, by late 2011 it was cheaper to rent than to own in 72% of American metropolitan areas, up from 54% a decade ago. And the more people who do it, the more socially acceptable and desirable it becomes. The decline in the ownership rate means that about three million more households rent today than did at the height of the bubble.

    It’s tempting to view the rise of rentership as an economic step backward. Renters can’t build up equity, and they have less control over their living standards than owners. Renting is generally seen as something you do when you’ve failed as a homeowner or are not yet ready to be one. But I’d argue the rise of rentership is a sign of a system adapting—albeit too slowly—to new realities.

    The U.S. economy needs the dynamism that renting enables as much as—if not more than—it needs the stability that ownership engenders. In the current economy, there are vast gulfs between the employment pictures in different regions and states, from 12% unemployment in Nevada to 3% unemployment in North Dakota. But a steelworker in Buffalo, or an underemployed construction worker in Las Vegas, can’t easily take his skills to where they are needed in North Dakota or Wyoming if he’s underwater on his mortgage. Economists, in fact, have found that there is frequently a correlation between persistently high local unemployment rates and high levels of homeownership.

    Home builders and property owners have caught on to the economic opportunity presented by the move toward rental. Fannie Mae and Freddie Mac have become reluctant owners of more than 200,000 properties thanks to the foreclosure crisis, working through the backlog, one painstaking foreclosure sale at a time. But in February, Fannie Mae said it would put up for sale some 2,490 homes as a package, asking for $321 million. The Wall Street Journal reported that an assortment of real estate companies and private-equity investors were considering making bids. The presumption was that these sophisticated investors would turn the homes into rental properties. No less a sage than Warren Buffett told CNBC in February that he’d love to buy “a couple hundred thousand” single-family homes for rentals.

    The depressed home-building industry has also shifted gears to adapt to the new reality. Housing starts for multifamily units have risen sharply since 2009, according to the Census Bureau. In 2011, whereas single-family housing starts fell 9% from the year before, starts of structures with five or more units were up 60%. In the first quarter of 2012, starts of multifamily housing structures were up another 27%, while single-family starts were up only 16.7%.

    What’s more, the builders of these structures increasingly intend to rent them out. In 2007, only 62% of the housing units in buildings with two or more units were built for rent. In 2009, 84% of the units in such buildings were built to be rented. In 2011, 91% of the units in such structures were aimed at the rental market.

    And the rising popularity of rentership is hardly contained to the housing market. Indeed, it has spurred the creation and growth of innovative businesses in a number of other realms—particularly those that cater to America’s cash-strapped, credit-wary youth.

    Take cars. The Bureau of Labor Statistics says that private transportation—owning and running a car—is the second largest cost for a typical American household, accounting for 16% of expenditures. Factoring in finance costs, depreciation, repairs, insurance, taxes and gas, AAA calculates that an owner of a midsize sedan who drives 15,000 miles a year spends $8,588 a year on his car.

    Enter auto-sharing firm Zipcar. Founded in 2000, it grew by focusing on cities and college campuses. It uses information technology to manage its fleet, and control access—people get cards that let them into garages where cars are kept and into the cars themselves. Users in New York pay a $60 annual fee and then $8.75 per hour on weekdays and $13.75 per hour on weekends—no extra charge for gas or insurance or miles. As the U.S. economy contracted, Zipcar went into hyper-growth: from 225,000 members in 2008 to 650,000 members and 9,500 cars in November 2011. Zipcar, which went public in 2011, has had success in the predictable big cities like Boston, New York and San Francisco, but its vehicles can also be found on 350 college campuses and in smaller cities like Providence, R.I., and Portland, Ore. Large rental agencies like Enterprise and Avis have responded by rolling out similar services.

    Or take textbooks. College textbooks are, in effect, rental goods. Students buy them at retail, use them for four months, and then resell them to the campus store or a used-book dealer. In 2010, the U.S. college-textbook market was worth about $4.5 billion, according to the American Association of Publishers. But why buy textbooks when you can spend less and rent them? Chegg.com, founded in 2001, has raised more than $200 million in funding and is aiming to displace the college bookstore. An undergrad can buy an economics textbook new for, say, $263. At Chegg.com, she can rent a hard copy of the same book for $94 for 180 days, or an electronic copy for $128 for the same period. As more students come to campus with Kindles, Nooks and other e-readers, the more efficient consumption of college textbooks is likely to grow rapidly.

    Rent the Runway, another Rentership Society business, has likewise found a foothold on college campuses. The company was started in 2009 by Harvard Business School classmates Jennifer Hyman and Jennifer Fleiss. Ms. Hyman has called the company “the Netflix for fashion.” As with Netflix, customers open accounts and then pay for the temporary use of goods sent to them through the mail. A Thread Social Poppy Sweetheart Dress (retail price: $365) rents for $50. Accessorize with Crislu Crystal Tear Earrings (retail $96, rent for $20). In business for less than two years, Rent the Runway has raised $31 million in venture capital, attracted one million customers and is turning a profit.

    All these models involve more sharing than American consumers are typically accustomed to doing. But the culture is changing. Consider how quickly the attitude of consumers toward housing has changed. And I’m not just talking about the rising incidence, popularity and acceptance of home and apartment rental. At the height of the boom, people believed their homes generated cash by serving as a source of home equity credit, or by returning profits when they were sold. Today, not so much.

    But thanks to another postrecession business, efficiency-seeking homeowners have come to realize that their homes can still generate cash. Airbnb, founded in August 2008, is dedicated to the promise that lots of people are willing to earn money by renting out a room in their home and that lots of people are willing to save money by crashing in strangers’ abodes rather than in motels or hotels.

    Only in America could entrepreneurs rapidly transform couch-surfing into a high-tech business worth more than $1 billion in the space of 36 months. With over 100,000 listings available in more than 16,000 cities and 186 countries, it’s a real business. It has booked over 5 million nights. In July 2011, Airbnb raised $112 million from venture-capital firms Andreessen Horowitz, DST Global and General Catalyst. But the real value of Airbnb isn’t necessarily what profits it brings to investors. Rather, it’s the cash it puts into the hands of homeowners. That cash is not enough to turn around the economy. But it’s part of a sea change in how people view the true value of their property and how they role of ownership in their lives as a whole.

    Finally, perhaps, Americans are absorbing a piece of wisdom not from Gatsby, but from Thoreau: “And when the farmer has got his house, he may not be the richer but the poorer for it, and it be the house that has got him.”

    —Mr. Gross is economics editor at Yahoo Finance. This essay is adapted from his new book, “Better, Stronger, Faster: The Myth of American Decline and the Rise of a New Economy,” which will be published Tuesday by the Free Press.

    A version of this article appeared May 5, 2012, on page C1 in some U.S. editions of The Wall Street Journal, with the headline: Renting Prosperity.

  133. Mike says:

    Security Bank, N.A. in Florida is 23rd Bank Failure This Year

  134. Mike says:

    Chicago 142 How true, nobody owns anything, in the very end the Grim Reaper comes like a thief in the night and takes it all

  135. Mike says:

    Great line also: “And the more people who do it, the more socially acceptable and desirable it becomes.”

  136. Thank you for another informative website. Where else may just I get that type of info written in such an ideal method? I have a venture that I am simply now operating on, and I’ve been on the look out for such information.

  137. Cecil Grass says:

    May be a scary time to do so, but with all of the foreclosed homes in NJ reaching such record lows, buying is at least worth a look now if you’re lucky enough to have a stable job situation. Buy low right?

Comments are closed.