Here it is! The first look at pending home sales (contracts) for Northern NJ.
(Source GSMLS, except Bergen- NJMLS)
October Pending Home Sales (Contracts)
——————————-
Bergen County
October 2011 – 549
October 2012 – 648
October 2013 – 735 (Up 13.4% YOY, Up 33.9% Two Year)
Essex County
October 2011 – 262
October 2012 – 275
October 2013 – 445 (Up 61.8% YOY, Up 69.9% Two Year)
Hunterdon County
October 2011 – 89
October 2012 – 102
October 2013 – 128 (Up 25.5% YOY, Up 43.8% Two Year)
Morris County
October 2011 – 296
October 2012 – 386
October 2013 – 483 (Up 25.1% YOY, Up 63.2% Two Year)
Passaic County
October 2011 – 201
October 2012 – 204
October 2013 – 254 (Up 24.5% YOY, Up 26.4% Two Year)
Somerset County
October 2011 – 224
October 2012 – 259
October 2013 – 361 (Up 39.4% YOY, Up 61.2% Two Year)
Sussex County
October 2011 – 93
October 2012 – 117
October 2013 – 169 (Up 44.4% YOY, Up 81.7% Two Year)
Union County
October 2011 – 224
October 2012 – 261
October 2013 – 373 (Up 42.9% YOY, Up 66.5% Two Year)
Warren County
October 2011 – 61
October 2012 – 77
October 2013 – 104 (Up 35.1% YOY, Up 70.5% Two Year)
grim et other shills
Obviously we are going for a new bottom
Sept. Pending Sales… the largest MoM drop since Sept 2001… not 2011… yes, 2001.
MOM NSA in a series with exceptionally strong seasonal variation tends to be highly misleading, and especially so if that series is “noisy” (high month to month variation that isn’t predictive of overall trend).
I prefer to compare year over year to eliminate the seasonal variation, I also prefer unadjusted numbers (I don’t trust anyone), and I like to compare the YOY to previous years (which is the closest we can come to apples to apples without mathematical wizardry).
Yes, it’s “slower” than trying to gauge the market using monthly numbers, but having looked at numbers every week, for something like 416 weeks straight now, I think I’ve got a good handle on how these series typically move, and what an outlier is.
That said, I highlighted numerous times on this blog that September pendings would be VERY IMPORTANT to watch, as I thought they represented the first full month of “mortgage rate impacted” shoppers. That said, combining the seasonality and the impact of higher mortgage rates, I’m not nearly surprised by the numbers, they were significantly better than I had expected.
SEPT PHSI NSA YOY
Northeast – Down 3.1%
Midwest – Up 8.7%
South – Up 2.8%
West – Down 5.2%
US – Up 1.1%
Frankly, I’m surprise that September held up this well. Given the drop in rates, if they hold for a few more weeks, I suspect we’ll see strong numbers on a national level for both October and November.
Recognize that some of the strength in the local October numbers has to do with Sandy – There was very little contract activity in the last 10 days of October last year due to the storm impact. Also, mortgage rates dipped through October from September’s highs.
Fabius Maximus says:
November 3, 2013 at 12:07 am
I liked him until he opened his fat mouth about the freedom tower. He’s overstayed his welcome.
Banksy, my favorite artist ever, just finished his NY residency without the NYPD catching him.
Take a moment to check out the pieces.
http://www.banksy.co.uk/
And you can buy a tee-shirt, to support 5pointz
http://teespring.com/banksyny
4:50 pm sunset today. I really hate DST
I was kinda hoping banksy would get capped tagging on somebody else’s turf.
What sort of nonsense is this?
If 1% per cent is enough to bring housing down then if it does not happen this month it will happen the month the rates go up–as early as 2014. Your cheerleading is criminal if you know crash is around the corner, realtor.
@MMFlint: Today is the Republicans favorite day of the year — wherein they get to turn the clock back & nobody laughs at them.
Thanks for your unbiased opinion.
unbelievable says:
November 3, 2013 at 12:14 pm
What sort of nonsense is this?
If 1% per cent is enough to bring housing down then if it does not happen this month it will happen the month the rates go up–as early as 2014. Your cheerleading is criminal if you know crash is around the corner, realtor.
Another housing crash is inevitable. It has been a cadaver on life support for close to five years.
When it will collapse, who knows. What I do know is that the next collapse will be cataclysmic.
Arsenal will not win anything this year. They are still a bunch of Piers Morgan milquetoast little boys who will fold in the crunch. Even if they did win, I would not accept a beer from gluteus.
Classic.
http://nypost.com/2013/11/03/bernie-goetz-i-wasnt-high-when-i-fired-away-in-1984/
“Bernhard Goetz insists he was definitely not stoned when he opened fire on four teens three decades ago.
‘What an odd question! Of course not!’ Goetz told The Post in an exclusive interview when asked if he was high during the infamous 1984 subway bloodbath. ‘I shouldn’t have said, “Of course not,” ’ he added. ‘But to perform as good as that, with shooting, I don’t think you could do it stoned,’ he said . . . “
From the Record:
Cash deals making up bigger share of market
To buy a home, you need a mortgage, right?
Not necessarily. Cash deals now account for a much more significant share of residential real estate deals, as the market continues its slow recovery.
In fact, analysts at Goldman Sachs recently estimated that more than half of housing purchases nationwide in 2012 and 2013 have been cash deals — compared with just 10 percent in the easy-credit days of 2005. RealtyTrac, a California company that follows the housing market, found a similar percentage of cash buyers.
Closer to home, numbers from the New Jersey Multiple Listing Service show that 25 percent of Bergen County sales have been in cash in 2012 and so far in 2013, according to broker Robert Abbott of Abbott & Caserta Realtors in Ho-Ho-Kus. That’s up from about 11 percent in the housing-boom days of 2006.
Cash buyers have helped get “the market slowly moving and getting up to speed again,” said Dennis Decina, a Re/Max agent in West Milford.
The rise of cash is being driven by a number of factors. One big one is that it’s a lot harder to get a mortgage than it used to be. That has shut many households out of home buying, leaving people with cash to take a bigger share of the market.
…
If you’re wondering who has hundreds of thousands — or more — in cash to spend on a home, the answer is: more people than you might expect. Some of the buyers are investors; others are repeat buyers who are using the proceeds of a previous sale to buy in cash, and still others have the incomes or family wealth to afford to pay cash.
Carolyn Altieri recently bought a Mahwah town house with $430,000 in cash, proceeds from the sale of her Rockland County home.
“I just didn’t even want the hassle of a mortgage,” said Altieri, who works in human resources. Having no monthly housing expenses beyond her maintenance fees and property taxes “is a great feeling.”
In a cash deal, buyers usually have to prove that they have the funds, which they can do by giving the seller’s agent a bank or brokerage statement.
“A lot of people who are buying $4 million houses can afford to pay cash,” said Bob Funabashi, an agent with Terrie O’Connor Realtors in Saddle River.
Investors make up a growing share of the market; they often use cash to buy homes and rent them out, or to renovate and flip. “I think people who have cash are feeling it’s safe again to invest in real estate,” said Valerie White, a Re/Max agent in Oakland.
Vikki Healey, a Maywood broker, said she has been working with an investor who is using the money in his individual retirement account to buy properties.
Investors are especially active in places where they can scoop up properties for under $200,000 — which does not include New Jersey, Blomquist pointed out.
Another group of cash buyers are business owners, real estate agents say. Since business owners can’t show regular paychecks, it’s harder for them to prove their incomes and qualify for mortgages under today’s tight credit standards.
Other cash buyers are retirement-age people who are selling their big family homes and using the proceeds to buy smaller places.
Whoever the cash buyers are, sellers really like their offers, since there’s no chance the deal can fall apart.
“Cash offers are the ones that get picked,” said Amy Werner of Terrie O’Connor Realtors in Wyckoff.
“Cash deals now account for a much more significant share of residential real estate deals, as the market continues its slow recovery.”
Hmmm… I guess what some call a recovery, others would call a radical market shift. Escalating cash deals should put downward pressure on prices, right?
“In fact, analysts at Goldman Sachs recently estimated that more than half of housing purchases nationwide in 2012 and 2013 have been cash deals — compared with just 10 percent in the easy-credit days of 2005.”
Kind of counter-intuitive, right? At 5-6% interest rate AND higher prices, 10% of sales are cash, but at 3-4% interest rate AND lower prices 50% of sales are cash. Could it be that 50% of current sales are at cash because the purchasers are, shall we say, “motivated”, to get out of cash? Oddly, I don’t yet see a day-to-day frenzy on the street to get out of cash. Maybe a completely different set of buyers?
Escalating cash deals should put downward pressure on prices, right?
I don’t know, I’m not sure anyone has looked at this. To a wide swath of sellers, “it is all cash at closing” still rings true, and dropping the price for a cash buyer simply makes no sense. Why? Cash buyers still inspect, cash buyers still appraise, and cash buyers can nickle and dime the home inspection with the best of them (frankly, a much bigger issue than appraisal in my book). Cash buyers above the $1m tend to be much more emotively motivated to make a deal difficult, and almost always need to feel that they’ve “won” (sorry, nicest way I could put that) to make it to closing.
Also, to some extent (to me anyway), cash buyers seem to be a signal of confidence in the market, which might push the equation the other way.
[13] expat,
I think it is a confluence of unrelated sets of buyers. In addition to investors and flippers, you have strategic defaulters who banked $$, and hand sitters like me who accumulated cash. In my case, we had the proceeds from our sale plus sideline cash. We didn’t see the need to pay for the use of money we didn’t need in order to purchase, and this house fits the criteria for a mini-Nompound so if we borrow for a property, it will be ski or beach.
[13] expat,
And nothing personal but I’m glad you are on the Cusp of Doom, provided it is sports related. But I’m not a greedy Bostonian; I’d love to see Philly and some smaller markets get titles.
15 – From what I’ve seen personally, here were the groups that typically fell into the cash buyer category:
1) Downsizers who are flush with cash from selling their larger homes
2) Middle aged families who recently liquidated their parents estate and are using inheritance to fund an upsize (sell two houses to buy one)
3) Relocates from even higher priced markets (this includes abroad)
4) Builders
Cash buyers in West Milford? WTF?
WTF…we can’t say WTF in our posts anymore?
If was the MILF in Milford.
I never realized “Voulenteer” fire and ambulance squads recieved cash awards and retirement benefits. Apparently, its commonplace.
Newton residents to vote on ambulance award program
Posted: Nov 03, 2013 11:42 PM EST
By BRUCE A. SCRUTON
bscruton@njherald.com
NEWTON — While Newton doesn’t have a town office election on Tuesday’s ballot, town voters will be asked to confirm a Town Council vote to establish a Length Of Service Award Program for the town’s ambulance service.
State law requires a referendum when a municipality sets up a LOSAP, a hybrid retirement/savings incentive for people to join and remain active in a municipality’s volunteer emergency service organization.
The council’s action came in January after a public hearing, but because there was no general election this past spring for town offices, the referendum is being held this fall. Click here to read Newton’s LOSAP ordinance.
The town has had a LOSAP program for the fire department for several years. This new LOSAP came at the request of the ambulance squad as a benefit to joining the squad.
Tenafly in BC is hot hot hot for SFH cash buyers…
Just in the past 30 days, of the 13 closed sales, 9 were cash, 70%. No other town in all of Northern NJ (with a reasonable amount of closed sales) even comes CLOSE to the ‘fly (Closter looks to be second at around 55%).
$325k – Cash
$390k – Cash
$400k – Cash
$565k – Cash
$647k – Mortgage
$670k – Cash
$772k – Mortgage
$1.075m – Cash
$1.145m – Cash
$1.335m – Cash
$1.350m – Cash
$1.85m – Mortgage
$3.3m – Mortgage
(I’ve excluded Saddle River’s astounding 100% cash sales figure since only 3 homes closed: $875k, $2.3m, and $6.375m.)
This month’s highest cash price paid was for a house on Margo Way in Alpine, $7.5 million, cash, $1.3m under the asking price of $8.8m.
You can close in 30 days rather than 60, 90. I see lots of older people putting their winter sweaters on bc they won’t negotiate down. I tried with cash but forget it. 80% of homes on market have no contract and average DOM is over 45. We have reached an impasse again bw what people think homes are worth and reality.
23. –
Are you seeing more than normal volume of mid and lower tier cash buyers? If so, any way to tell if they are more institutional investors or individual buyers?
Parking at JFK… any recommendations?
Best Stock Market Since 1997 Seen With S&P 500 Momentum
http://www.bloomberg.com/news/2013-11-04/best-stock-market-since-1997-seen-with-s-p-500-year-end-momentum.html
Cash sales typically cluster in the low and high ends. Investors at the low end and wealthy at the high. Cash sales do take place in the middle but with far less frequency.
My REO clients favor owner occupants which generally means financing. Putting a property in attorney review today. REO client is accepting $165,000 offer with renovation loan over cash offers in the mid $150’s.
Joyce. Their public lots are reasonable and the skytrain is extremely convenient. Last time I parked there (about 2 years ago), it was $10 per day. I just checked and it is now up to $18. Newark is like $24 per and you still have to walk about a half a mile to the monorail and pray that it’s working. I think the garage by terminal C is now $27. $18 a day isn’t horrible if it’s a short trip, 4 or less days. If it was any longer, I would consider taking a cab, or public transport to JFK (which isn’t too bad actually). Last time I used a private lot at LGA (Budget car rental), my car was pretty much destroyed.
Thanks, Libtard. From the very quick search I did the other day, yes there are private lots for $10+ vs at the airport for $18. Basically, I was just wondering if parking away from the airport was worth it.
Joyce there are some cheaper lots off of Lefferts blvd, but you take your chances. I would park at the Airtrain lot and pay the $18 per day. These days I do car service to/from JFK. I don’t want to waste a half day picking up family etc so I send a car for them. If you can stand mass transit, take the train or the shuttle buses. You could even take the ferry or the bus then hop in a cab in Midtown. The fare is set to $52 flat fare (plus tolls) for any Manhattan location. I have taken a cab from JFK to the Ferry terminal on the west side and hopped on a Ferry across the river.
Newark is like $24 per and you still have to walk about a half a mile to the monorail and pray that it’s working. I think the garage by terminal C is now $27.
Parked in the long term deck (at $27/day) the other morning and had to walk from the deck to Terminal C (surprisingly, there is a walkway) because the monorail was not working, what a complete pain in the ass. They told me I could have waited for the shuttle, which was expected in a half an hour.
I have free parking at Newark and I don’t use it because you have to wait forever for the shuttle bus. It is tough to unload, kids, luggage etc out into a cold parking lot then wait a 1/2 hour or longer for a bus.
The long term lots on the south side of Newark used to be only $6 a day, but somebody has to pay for the World Trade Center…
Thanks
[28] 30 Year – Why? Is holding the “Thin White Line” of banking? Financing adds to the industry, Cash purchases take away?
My REO clients favor owner occupants which generally means financing.
Thought HUD prohibits sales to investors
BTW, I’m all for cash RE purchases. We would finally have a free market in something if RE financing was outlawed. I’d gladly take the equity loss on my home to see it happen across the board.
Newark…use ABC everytime. But get the coupon online first. I’ve probably parked there 40 times. The only problem I ever encountered was when the dispatcher thought I said terminal b when I said c.
We would finally have a free market in something if RE financing was outlawed.
How so? I’m pretty sure that the typical economist would argue the exact opposite of this. Without financing, you’ll have an incredibly illiquid market, and one that goes directly against many of the core “free market” principals, large pool of willing and able sellers *and* buyers, low barrier to entry, freedom of choice, etc. Oh, and outlawing mortgages is anti-free market from the lender’s perspective.
Wouldn’t the market just liquidate at lower (much lower) price points? I’m not in favor out outlawing RE financing, but without several explicit and implicit govt guarantees… it (financing RE purchases) would happen less frequently and require insance underwriting standards as compared to now. I’m thinking like 50% down and 2x income ratios
grim says:
November 4, 2013 at 1:11 pm
We would finally have a free market in something if RE financing was outlawed.
How so? I’m pretty sure that the typical economist would argue the exact opposite of this. Without financing, you’ll have an incredibly illiquid market, and one that goes directly against many of the core “free market” principals, large pool of willing and able sellers *and* buyers, low barrier to entry, freedom of choice, etc.
out = of
Wouldn’t the market just liquidate at lower (much lower) price points?
This makes a number of assumptions about sellers that I wouldn’t be comfortable making.
I suspect that if something like that ever did take place, the headline stories would not be about lower prices at all, but would be more like the following:
1) Owners essentially locked in place “forever” – Current owners unable to sell or move. Entire generations “imprisoned”. You get the point.
2) Inventory almost entirely evaporated as sellers are unwilling to take losses, or are unable to financially bear losses. Who cares if prices are low, there are no longer any homes to buy.
3) Huge blocks of vacant homes, still owned, but not being sold or rented. Irrelevant to #2 above, they will never make it to market due to their owners unwillingness to sell. Why would anyone who owned outright ever sell into this market?
4) Massive losses on existing mortgage portfolios due to declines in the value of collateral, huge numbers of owners walking away, massive bank bailouts, massive GSE bailouts.
Prices? Who cares about prices.
I think the private mortgage market would be more than willing to write mortgages without government backing at a quarter or half point higher than the current market rate.
The problem is, I would argue that the GSE’s creation of an incredibly liquid mortgage market is much more important to the functioning of the industry than it’s guarantee is, and that’s what we’d lose.
If Phony & Fraudy didn’t exist, the banksters would create some other sort of gubmint-backed risk-free garbage can for all the shit paper that would get generated anytime a normal financing market metastasized into a casino of excessive risk and leverage.
The problem right now with the US necronomy is that it is 100% certain that any normal financing market will- at some time or another- become an enormous, fraudulent bubble.
The problem right now with the US necronomy is that it is 100% certain that any normal financing market will- at some time or another- become an enormous, fraudulent bubble.
Would you trust the current crop in Washington to attempt to revamp the secondary mortgage market? Can you imagine the money grab that it would turn into? Lobbyists would have free reign to write the legislation around it (since no idiot in Washington is smart enough to comprehend that market), and the mortgage industry would legislate itself in the best position possible, reap all the rewards, and I *GUARANTEE* we will still be left holding the bag. It would make Obamacare look like a resounding success. If you like your mortgage, you can keep your mortgage.
You think these dopes are capable of coming up with anything better than the current GSE structure?
Grim – Legislation is already there in the pipeline to create a new government agency modeled on the FDIC which supposedly has bi-partisan support. If passed the aberration of the long long loan 30-year mortgage would go away, there would no longer be a fixed interest rate. I am imaging a new loan standard say a 10-year loan with a floating rate.
The housing market would crash overnight.
They will continue to punt on this for infinity. Name of the real game is inflating our debts away, there is no other direction available the output gap is just too large.
IMO if financing did not exist, housing prices would drop significantly. There would be few buyers (who could afford it?) and tons of sellers. Lots of supply and limited demand causes price to drop as competition increases. Though, the rental market would go through the roof!
Though, the rental market would go through the roof!
Would be vaporized as well, hundreds of thousands of owners would turn into landlords overnight. Why sell and take a loss when you can just rent it out instead.
Of course, it will never happen. But such a dramatic shift would absolutely cause a ton of short term pain for many of the market’s stakeholders.
47 – You talking about the QM/QRM in Dodd Frank?
No Corker’s Bill – “FMIC” Mutual Securitization Company
Already locked and loaded for an implosion. The FMIC will be insuring everything out there no matter what a steaming pile of waste the underlying home or homeowner is. And a minimum timeline of the year 2022 before a wind down of existing GSEs can even be feasibly be studied by the GAO.
Call it Fannie 2.0
OT Humor alert
If anyone is looking for a Christmas gift for Spine Snapper, I figure this will serve him quite nicely. Notice the Twinkies.
http://www.mancrates.com/crates/zombie-annihilation
Coming to a theater near you:
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Parked at the long-term lots about 4 weeks ago…..in Sunday stinking-early-AM and out Thurs AM…….$78! I had temporary plates and felt paranoid about leaving my car at any place but one of the PA lots…….NEVER AGAIN!
Juice Box says:
November 4, 2013 at 12:51 pm
The long term lots on the south side of Newark used to be only $6 a day, but somebody has to pay for the World Trade Center…
1. “I’m pretty sure that the typical economist…” – key word being typical.
2 Illiquid market – I contend the market would become _rapidly_ liquid. I can point to dozens of internet stocks that remained HIGHLY liquid because of margin calls (elimination of financing).
3. Large pool of willing and able buyers and sellers – Large price movements will create large buying and selling pools – It works just as well on the way down. Every true homeowner is still in the game and lower prices tend to attract true buyers I’m told. That’s exactly what we’re seeing right now in cash purchases.
4. Barrier to entry. The barrier to entry of high price would drop, that’s the point. It’s also a barrier to exit and there would be many more motivated “exitters”.
5. “Outlawing mortgages is anti-free market from the lender’s perspective. “Oooh-hoo-hoo, you really grooved that one down the middle. Do you really want me to swing?
How so? I’m pretty sure that the typical economist would argue the exact opposite of this. Without financing, you’ll have an incredibly illiquid market, and one that goes directly against many of the core “free market” principals, large pool of willing and able sellers *and* buyers, low barrier to entry, freedom of choice, etc. Oh, and outlawing mortgages is anti-free market from the lender’s perspective.
Current owners are always able to unload their house for cash. They can sell it, or stop paying their mortgage and taxes and pocket that money instead for a few years. If they want to answer the margin call by continuing to pay for an under-performing asset, that’s their prerogative too. If the federal government called an audible and decided they were going to stop supporting a price floor, the banks and equity owners would react quickly and inventory would not be a problem.
1) Owners essentially locked in place “forever” – Current owners unable to sell or move. Entire generations “imprisoned”. You get the point.
2) Inventory almost entirely evaporated as sellers are unwilling to take losses, or are unable to financially bear losses. Who cares if prices are low, there are no longer any homes to buy.
Not if they had to keep the loans. A 30 year mortgage is a ridiculous instrument to hold unless you have a greater fool to sell it to almost immediately. At what fixed interest rate would you lend a trusted friend or relative even $20,000 amortized over 30 years? Remember, principle is half recouped around year 22.
I think the private mortgage market would be more than willing to write mortgages without government backing at a quarter or half point higher than the current market rate.
Speaking of securitization…
“Private equity group Blackstone will offer investors a novel security this week, backed by cash flow from more than 3,000 foreclosed homes across the United States that it bought and converted into rental properties.”
https://twitter.com/RobertJShiller/status/397377395847471104
2 Illiquid market – I contend the market would become _rapidly_ liquid. I can point to dozens of internet stocks that remained HIGHLY liquid because of margin calls (elimination of financing).
Not nearly similar enough asset classes to draw the comparison you are trying to.
3. Large pool of willing and able buyers and sellers – Large price movements will create large buying and selling pools – It works just as well on the way down. Every true homeowner is still in the game and lower prices tend to attract true buyers I’m told. That’s exactly what we’re seeing right now in cash purchases.
My position is that this will create even smaller pools of buyers and sellers. Have you seen the balance sheet of the average American household? They can barely scrape up a down payment, you expect them to buy a house in cash? Your model would require home prices to fall somewhere on the order of 90%, which would make just about 60% of all homeowners underwater, and would make the prospect of selling almost unfathomable to the other 30%. Smaller pool of buyers, smaller pool of sellers. Remember, you said elimination of mortgages.
4. Barrier to entry. The barrier to entry of high price would drop, that’s the point. It’s also a barrier to exit and there would be many more motivated “exitters”.
Lower prices don’t reduce the barrier to entry when the cost is an elimination of financing entirely. Home prices will be just as out of reach. Motivated exitters? Not without widespread mortgage default.
5. “Outlawing mortgages is anti-free market from the lender’s perspective. “Oooh-hoo-hoo, you really grooved that one down the middle. Do you really want me to swing?
If a lender wants to lend with no government guarantees, why should they not be provided that opportunity?
Not if they had to keep the loans. A 30 year mortgage is a ridiculous instrument to hold unless you have a greater fool to sell it to almost immediately.
While we’re at it, let’s just go ahead and eliminate the corporate debt market too, lending makes the price of plants and machinery unnecessarily high… I hear average duration of issuance in 2013 was something like 14 years, so half idiots are idiots too I suppose.
At what fixed interest rate would you lend a trusted friend or relative even $20,000 amortized over 30 years? Remember, principle is half recouped around year 22.
Perhaps from the borrower’s perspective.
But from the lenders perspective, cumulative cash flows equal principal by approximately the midpoint of the mortgage, 14-16 years.
grim – In my lifetime there were brand new houses that cost under $20K in NJ and Rutgers was $2600 all in per year when I was a Freshman in 1977 (including room and board). You can inflation adjust all you want but then worked and now is severely broken. I graduated with no loans and earned my entire cost of education times two my first year working. I saved and bought a condo at 2 x income after one year working. Yes, with a mortgage. I’m using extremes to illustrate the irrational exuberance that still plagues the market. Nominally perhaps a recovery occurs if you continue to measure in shrinking dollars, but, as Gary opines, leaving taxes and wage increases out of every conversation is just ridiculous. I was just playing devil’s advocate to stimulate thought in the extremes. I would be super-thrilled if the government just pulled out of home and college loans. Nom bought. I’m reiterating my call of a new top (so long as you measure in gold).
In the end, the only ones of us holding anything of value will be holding gold and silver.
Better be able to defend it when the time comes…
@HolaBrody: “I almost started crying, and called my mom.” – Woman who learned she could get health care for $24/month. http://t.co/BY6xBymEIf
@BarackObama: “No one deserves to be denied health care because of politics.” —President Obama #OFASummit
Re:#66 – Anon – President Double tap.
http://www.slate.com/blogs/business_insider/2013/11/03/double_down_obama_said_he_s_really_good_at_killing_people.html
Why are people talking about outlawing mortgages? Let people lend against assets if they want – it’s been done for thousands of years. Might as well outlaw car loans as well. What needs outlawing is government guarantees and government insurance, explicit or implicit, for financial institutions. Mortgage interest deductions as well. Then people might find out the market rate for mortgage interest and home prices, without all the subsidies and state manipulation.
Some (of the anon persuasion) might argue that the fair solution is to replace traditional private home ownership, and instead replace it with “housing insurance” where you buy insurance for access to an amount of square feet and bathrooms per your family, and then the government will insure that you don’t lack adequate housing. This will ensure that all families have access to affordable housing, and the government will run the whole thing much more efficiently than individuals and agencies do now, and everyone can enjoy the same sense of security that people in government housing projects do now.
why are you trying to argue with grim. He is a shill. No stats can prove or disprove anything so any negative number becomes positive. His stats of course show that buying a house is a great idea.
I read what he wrote earlier and laugh. If prices are going down the sky will fall. This is the same practice and argument of TBTF. If I can make a buck then I am on my own. If I stand to lose a buck then the gov should intervene to save me. We have been spending trillions to save a part of the economy and the people who are associated with it instead of spending them to other more productive sectors. No wonder you find the existing lending scheme great. You are morally bankrupt.
—————here starts grim—————————
1) Owners essentially locked in place “forever” – Current owners unable to sell or move. Entire generations “imprisoned”. You get the point.
2) Inventory almost entirely evaporated as sellers are unwilling to take losses, or are unable to financially bear losses. Who cares if prices are low, there are no longer any homes to buy.
3) Huge blocks of vacant homes, still owned, but not being sold or rented. Irrelevant to #2 above, they will never make it to market due to their owners unwillingness to sell. Why would anyone who owned outright ever sell into this market?
4) Massive losses on existing mortgage portfolios due to declines in the value of collateral, huge numbers of owners walking away, massive bank bailouts, massive GSE bailouts.
Prices? Who cares about prices.
Someone mentioned “no mortgages” and grim argues against it ad nauseum.
There is no way my friend to make homeowners whole. That bird flew away. Wealth has been transferred to other hands. Even if they get some cash from selling they will spend it to survive. If they sell now low or later high they will still be close to poverty. So spare us your concern for the owners.
re# 69 – re: “shill” Grim needs no defense so I will just say you are misguided, he hosts this blog/forum out of his own curiosity into the machinery of the housing market and has become an armchair expert on housing. He isn’t talking his book other than perhaps one day some Jersey distilled whiskey that is his latest venture.
Anyway your analogy of TBTF? The question of TBTF starts and ends down in DC not here. We have no inputs other than the occasional vote in November.
I also don’t think Grim is doing anything more than hosting an open blog and posting articles and information allowing others to form opinions even subversive ones. It is the comments from the peanut galley that make this place tic. You would be surprised the breath of knowledge you will encounter here. Stick around if you aren’t are bore.
Bourbon is more of a focus than real estate at this point, but really, why wouldn’t it be?
grim – Anybody who understands amortization (and I know you do) also knows that what you refer to as a half idiot is actually less than a quarter idiot. But I like this tidbit. How about 14 year mortgages, no government guarantees, 20% down payments and no second mortgages or refis? Now that sounds more like an infrastructure that favors home ownership. I might even soften on the no refis restriction so long as all refis are 10 year loans. I think even our modern-day idiots can see how continually moving a 10 year finish line out perpetually is stupid, whereas they’re obviously incapable in that regard when it comes to 30 year instruments. Yeah, and take the mortgage interest deduction away on refi just to drive the point home to the ultra-dim.
While we’re at it, let’s just go ahead and eliminate the corporate debt market too, lending makes the price of plants and machinery unnecessarily high… I hear average duration of issuance in 2013 was something like 14 years, so half idiots are idiots too I suppose.
[73] cont’d. Yeah I like that plan I just came up with. You want to go back to a tax deductible 14 year mortgage after realizing what an idiot you were to refinance into a 10 year teaser ARM? Fine. Sell your house and move, then you are allowed to start over with a new tax deductible 14. There’s your inventory.
I find bourbon to be more valuable than gold or silver in an apocalypse. At least the bourbon is useful.
[75] brian,
That’s why I’m stockpiling booze and bullets, not bullion.
Just defriended a guy on Facebook who went to an uber elite college near my alma mater, and who was one that would argue in a fair way, even if we could both look at a clock and disagree on the time. But it was quite apparent that he and his echo chamber in what he called the afrocentric community was deluded beyond belief and reason, and their bilious hate was incredible to witness. These were people who would label you a hatemongerer for saying hello in the morning.
We joke and gang up at times on anon, fabius, and cobbler, and a few other travelers of the left side of the river. But they are well-mannered Tea Party members compared to this guy’s crowd of FB friends. Like Occupy with a bad attitude.
I thought about keeping him on as a FB friend if for no other reason than to be able to identify proper targets for elimination if TSHTF. They were that scary. But I’m getting too old for shiite like that.
[75] brian,
And the booze and bullets are useful if the world DOESN’T end. Either way, its a party.
[77] Nom – I just read your whole post and was confused at the end so I went back to re-read. I read “defriended” as “defended” the first time.
Taj Mahal bringing da blues to Count Basie Theatre tonight. Amazing.
plume (77)-
You’re just another white devil.
Watch this while it still exists: http://www.youtube.com/watch?v=GEAGdwHXfLQ#t=1453
Channel 4 reporting a guy in body armor is shooting up the Garden State mall with an AK.
definitely picked the right mall, that place is banged out open to close.
FYI — Is anybody else showing the wrong time for the entries on these pages
#84 — The last post — says time is 11:39pm.
1010 WINS just said it was 11:11pm. I checked my computer time, it says the same thing as WINS.
Is
Dammit, these a-hole nut jobs shooting things up are just keeping the cost of ARs and ammo up. It’s pissing me off.