Uh-oh, they just HAD to say it

From the St. Louis Fed:

The Recent Boom in House Prices: Why Is This Time Different?

The current housing boom is the first nationwide boom since the postwar era not driven by increased demand for owner-occupied housing.

House prices have been appreciating across U.S. cities since 2012. Traditionally, rapid appreciation has been localized in areas with rapid economic growth and/or migratory flows. This time, things appear to be different. According to the Zillow Home Value Index, house prices have risen in many areas with slow growth (i.e., Detroit or Memphis). This essay analyzes the recent housing boom and explains why this episode differs from previous ones.
A simple way to dissect the recent housing boom is to summarize the movements in house prices across representative U.S. cities or, more precisely, metropolitan statistical areas (MSAs). The first column in the first chart shows the appreciation of the composite index for the 2012:Q1–2013:Q1 period. The other columns show the appreciation across low, middle, and high market tiers. The median house price for each city is also listed.

The first chart highlights some important features of the housing boom. First, the boom was relatively uniform across the country. Second, most cities experienced significant appreciation, ranging from 5 percent to 25 percent. Interestingly, some cities with the largest house price declines during the 2007-09 financial crisis (e.g., Las Vegas, Los Angeles, Phoenix, and San Diego) appear to be leading the recovery. The argument could be made that the low house prices eventually made them attractive to buyers, but improvements in the local economy could be the major driver in some of these markets. Also of interest is that the greatest appreciation across all cities occurred in the low tier of homes. Traditionally, this is the niche market for “first-time buyers.”

The two largest housing booms in recent history (post-World War II and the 2000s) were fueled by price increases in the low-tier market segment. Both booms were partially driven by improved lending conditions that resulted in a boom in home prices and homeownership—not only in starter homes, but also in other submarkets. The underlying driver of the current boom seems to be different.

The combination of the uniform decline in homeownership across most age groups—particularly first-time buyers—and increasing home prices across all tiers suggests private and institutional investors have been profiting from current mortgage market conditions. Since 2006, the national homeownership rate has declined from 69 percent to 65 percent. This shift from owner-occupied to tenant-occupied housing has increased rental prices across all cities. The increased rental prices and the expectation of future capital gains have encouraged investors to purchase single-family homes in the low and middle tiers and generated a new housing boom. These observations suggest the current housing boom is the first nationwide boom since the postwar era not driven by increased demand for owner-occupied housing. The current episode could solidify the idea that housing booms can be driven entirely by investors.

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

118 Responses to Uh-oh, they just HAD to say it

  1. Fast Eddie says:

    This time, things appear to be different.

    The newest member previously known as the “three biggest lies” list.

  2. Fast Eddie says:

    Yeah, things are different, all right. The ones with the biggest b@lls and smallest brains list their house slightly above the price they got duped for hoping to find a bigger dupe to bail them out.

  3. grim says:

    Not even January yet and I’m hating the snow, bah humbug.

  4. Fast Eddie says:

    You notice that the plus 65 crowd are the only ones that can buy a house. Years of equity and a long term strategy based on a set of rules will do that for ya. The current rules consist of some chimp named Bingo telling you that we’re insulated and it’s a great time to buy. Can you imagine how many folks took advice on the biggest financial move of their life from some nail technician? And people wonder why some of us rage over having to compete with these numbskulls?

  5. Fast Eddie says:

    The combination of the uniform decline in homeownership across most age groups—particularly first-time buyers—and increasing home prices across all tiers suggests private and institutional investors have been profiting from current mortgage market conditions.

    What’s it called? The amoeba effect? No first-time buyers, no move-up buyers. I used to think my current home was aimed more towards the first tier purchase crowd. Since it’s such a “competitive” area we live in, my price tag rises by the month. I guess it’s that gap thingy between the haves and have nots. Oh well, better buy now or be priced out forever.

  6. Comrade Nom Deplume, a.k.a Captain Justice says:

    Clot-style prediction to get anon stiff

    http://www.cnbc.com/id/101277591

  7. Fast Eddie says:

    Please tell me that they’ll find those m’fers today that killed that guy. I feel so sorry for his wife and family. It’s sickening. I think profiling is the only way and I’m not sorry to say it. The crime stats in the surrounding West Essex towns are probably worse than they want to report.

  8. Phoenix says:

    $300,000 is the number you get when you take a 20,000 house in 1960, leave it the way it is for 50+ years and calculate it’s price increase by 1500%.
    Now eddie, let’s try the same thing with a 300,000 dollar house today. Same 1500% increase, that house should now sell for 450 MILLION.
    Now go this morning right away and buy all the green shagged crapshacks you can find and sit on them for the next 50 years.
    You will be rich beyond belief.
    All someone 65 y/o ever had to do was get a job with a pension, buy a house in a decent neighborhood, avoid divorce (capital killer), bag his lunch and drive the same old car for 15 years at a clip, and stuff a couple of bucks in an S&P 500 account.
    You have now reached the point where the law of diminishing returns takes effect.
    http://en.wikipedia.org/wiki/Diminishing_returns

  9. grim says:

    You notice that the plus 65 crowd are the only ones that can buy a house.

    Other way around, the current 65 plus crowd tends to own a house at this point in time.

    We’re so far into this that we simply can’t take the timescale out of the equation, and we can’t exclude the fact that we get old pretty fast.

    Today’s 65+ crowd were the 55+ crowd in 2004 – when the market was very bubbly. More plausible that the 55+ crowd purchased before that period, with the typical 65+ probably having purchased in their 40-50s.

    We need to be cogniscent of the impact to today’s demographic numbers given the dislocation of buyers during the recession.

    The current crop of 35yo owners – did they buy 10 years ago during peak, when they were 25? Probably not likely, instead what we see today is the lower age groups under-represented compared to if the bubble/bust had never occured.

  10. Comrade Nom Deplume, a.k.a Captain Justice says:

    [5] grim

    I recall the immediate period in South Africa after the end of apartheid. Jo’burg was turning into Camden and carjackings were especially popular.

    Maybe it’s a remembrance for Mandela. Such a crime spike for that reason isn’t unprecedented.

  11. Phoenix says:

    And eddie,
    I forgot something. The house bought in 1960 was a NEW house then, turn key and ready to go……….

  12. Comrade Nom Deplume, a.k.a Captain Justice says:

    [8] Eddie

    I always profile. And not by color. Plenty of white dirtbags.

    anon, yes, I know, I’m a racist. Bite me.

  13. Fast Eddie says:

    grim,

    I read your post twice and I’m still trying to figure it out. lol! What Phoenix said is the absolute truth. The 65 year old crowd is exactly the reason why they can buy a house. They bought when m0rons didn’t outnumber normal people. They saved, bought and held the house for 30 plus years and weren’t held hostage by a double mortgage called property taxes. Let me say this again: This is not a normal market. We are in a structural financial crisis.

  14. Fast Eddie says:

    Phoenix,

    Absolutely! I couldn’t agree more. Anyone buying a house today without 20% down and some heavy wood in reserve is suicidal.

  15. Fast Eddie says:

    Nom,

    I tried for years to meet in the middle socially, politically and otherwise. Events and attitudes have worn my patience.

  16. grim says:

    14 – The length of the downturn and the dislocation of buyers during the run up changed the overall demographic picture to the extent that you can’t simply compare age brackets on a historical basis without taking into account that dislocation.

    Example – Buyers bought younger than they might have during the run-up, they were “pulled forward”. If you looked at the demographics during the run up, you’d be surprised by the number of younger buyers and younger move-ups relative to earlier periods. During the downturn, something different happened, younger buyers turned off, and move up buyers stalled, this again changed the demographic picture, going from an excess of younger buyers to an absence of younger buyers. In addition, during the downturn, the mean length of homeownership started to skew longer than pre-bubble (I’m seeing estimates it went from 5-7 years to 10-11+ years). So now in addition to the dislocation of the younger first timers, and move ups, you have a set of “locked-in” who aren’t selling when they otherwise would have.

    All in all, any analysis that looks at ownership by age or FT buyer age over the past 20 years will be horribly skewed by these demographic shifts.

  17. Street Justice says:

    You can clearly see what locations “gun murders” occur in….

    http://www.nj.com/crime/index.ssf/2013/04/new_jersey_homicide_map_2013.html

    8.Fast Eddie says:
    December 17, 2013 at 7:47 am
    Please tell me that they’ll find those m’fers today that killed that guy. I feel so sorry for his wife and family. It’s sickening. I think profiling is the only way and I’m not sorry to say it. The crime stats in the surrounding West Essex towns are probably worse than they want to report.

  18. grim says:

    Gang bangers are victims, don’t you all understand that? They are a product of OUR system, it’s only fair that they be given preferential treatment, extra social support, more love and hugs and cuddles.

    The decriminalization of crime continues in NJ, everyone is a victim. Think I’m being facetious? From this morning’s Philly Inquirer:

    N.J. bill would limit job applicant criminal checks

    Over the objections of business groups, a bill that would bar employers from checking a job seeker’s criminal history during the application process was advanced Monday by an Assembly committee.

    Republican lawmakers opposed the bill, which cleared the Labor Committee by a 6-3 vote along party lines. An identical bill has yet to be taken up by Senate lawmakers.

  19. grim says:

    Unintended consequence? Ex-convict inmigration to NJ SOARS! Employer out-migration from NJ … SOARS! Having a criminal record no longer a deterrent to potential criminals, crime SOARS!

    Awesome! Let’s all hug now!

    Why exactly do criminals get better treatment than taxpayers in this state?

  20. grim says:

    By the way, I bet $50 bucks that the car-jacked Range Rover was found in the garage/drivway of an abandoned home in foreclosure. Anyone want to take the other side of that bet?

    Did anyone see the photos of the Range Rover being towed away? I think I counted 3 houses that were boarded up in the immediate proximity.

    Again – Why is there a concerted effort to stall and delay foreclosures in NJ?

  21. Essex says:

    The wheels are coming off people….let’s all sing!

  22. Fast Eddie says:

    grim,

    Understood. They’re locked in because that can’t sell. They’re f.ucked. I understand about the skewed numbers (duration, demographics, etc.) which was due to the warped lending standards during the runup. It wasn’t normal then and these fluff pieces about price appreciation are bullsh1t. The only ones who are holding the cards are the ones who bought pre 2000 or thereabouts.

  23. Essex says:

    I am not 100% when we do get our big payday down the road if we will move. Crap it’s nuts out there. Maybe it is smarter to stay put, send the kid to the private school of our choice and just bite the bullet. I mean to move based on a ‘town’ when that is a complete unknown is a big gamble with real $$$ potential.

  24. grim says:

    Understood. They’re locked in because that can’t sell. They’re f.ucked.

    Yeah, sure, but this number isn’t as big as you think, and it’s declined substantially as this set of “owners” has been purged by REO, Short Sale, and Deed in Lieu.

    Next is the set of fucked from an underwater perspective, but don’t need to sell. If the current mean ownership length is 11 years, someone who purchased in 2008 isn’t expected to be back in the market until 2020 … not 2014. Ok – so what – made a stupid decision and are currently underwater – why does this equate to blowing up? Why are you lumping this group with the group above?

    The bigger set is the folks who have equity, and can sell, but won’t. Perception plays a big role here. Uncertainty about the economy, uncertainty about jobs, perception that they’d be losing out, selling cheap, etc etc. DO NOT DISCOUNT THIS.

    If you asked me the #1 reason that the bubble burst, every single time I would answer – Perception changed, psychology changed, this was the reason, everything else is secondary.

  25. Essex says:

    I think that so-called safe towns are now under duress. If a guy can get capped at the Short Hills Mall then does that affect the percerption of Chatham? I dunno.

  26. grim says:

    In addition, we’ve demonstrated here numerous times – The percentage of underwater owners who also become delinquent increases as income/socioeconomic position decreases.

    Highest percentage of underwater *and* delinquent exist in Newark, Irvington, Paterson, Camden, etc etc. These are the folks who could not afford to overpay.

    Lowest percentage of underwater *and* delinquent exist in Short Hills, Saddle River, Harding, Chatham, Westfield, Ridgewood, etc etc. These are the folks who could afford to overpay.

    The difference between these groups is not small, between the best and worst performers this number likely approaches 1000%, and this is on a pure percentage basis. Comparing by volume, the numbers are even further apart – I could easily construct two equally sized groups showing a difference of 100x.

  27. Fast Eddie says:

    The bigger set is the folks who have equity, and can sell, but won’t. Perception plays a big role here. Uncertainty about the economy, uncertainty about jobs, perception that they’d be losing out, selling cheap, etc etc. DO NOT DISCOUNT THIS.

    I have no argument there! :)

  28. 1987 Condo says:

    Stay Put makes sense….if I compare my property tax bill of about $700 -$800 a month for my 4 bedroom home to rentals in nearby Verona for 2 bedrooms, they are over $3,500 a month in some circumstances:

    http://www.highlandsathilltop.com/verona-verona/the-highlands-at-hilltop-highlands-at-hilltop/

  29. Essex says:

    29. The gamble comes with the schools. Hoping that your child can make a go of it socially and academically is a risk when you move. If you pay up and send them to a private school, you can always change schools if that one isn’t delivering.

  30. Phoenix says:

    “The bigger set is the folks who have equity, and can sell, but won’t.”

    The “I’m not giving my house away, cause I don’t have to.”
    They saved, bought and held the house for 30 plus years and weren’t held hostage by a double mortgage called property taxes.”
    Yes eddie, back then you got a job in a factory, worked there for 30 years, gold watch, pension and lifetime bennies. If you had a college degree you were really sitting pretty.
    Also, a big part of your “double mortgage property taxes”– legacy costs. Look at Detroit, for others to be sitting pretty today, the younger crowd is providing the fuel.
    Until the tank runs dry…………

  31. Street Justice says:

    Newark Demographics…measured from 1960 – 2000

    http://www.nj.com/newark1967/demographics/

  32. grim says:

    32 – The neighborhood where the jacked rover was found is called Weequahic.

    Did you know that in the 1950s – Weequahic High School was considered one of the best schools in the US – graduated the highest number of students who went on to become PhDs … in the entire United States.

  33. Ragnar says:

    My wife totaled my 2007 Lexus ES last weekend (she was fine – ran off the road into a low rock wall 100 yards from our house). I just bought a 2014 Audi A6 3.0T, and it’s a great car. During my weeklong search I test drove 4 different brands: BMW 528, 535 and 328GT, Lexus GS, and Mercedes E350. I actually test drove the BMWs the longest, maybe I was waiting for a spark, but to me they all felt too big and heavy, and the 6 cylinder didn’t seem more powerful than the 4 turbo. I didn’t get a sense of luxury in any of them, nor did I feel much sportiness. I wanted to like them, but I didn’t. Normal 3-series don’t have enough back seat room, so I didn’t try it. The Merc E350 surprised me by actually feeling a bit more fun than the BMW, and I was seriously considering it. The problem is that during the week I saw too many drug dealers’ moms driving this car. The Lexus GS felt like a toy compared to the BMW and Merc, and anytime I pushed it it had to drop two gears, clunk, and then start shrieking. A large car like this needs more low-end pull. My last test drive was the A6. That new 3.0 supercharged six was by far the best engine I drove, and was able to just make the car go without getting too excited about it. 8 speeds and 4WD, plenty of low end grunt. Good comfort, yet pretty good feel. I’m still figuring out the extensive amount of gadgetry on it. This should be good for the next 7 years, then maybe I’ll give it to my daughter for college.

  34. Bystander says:

    Fast,

    I can echo that most of buyer mix is skewed towards older crowd. I have been shocked that the mix is 70% 50+ crowd to 30% 40 and under. At 40, I am competing against near retirees for 550k dumps with 10k taxes. Insane. I see a tremendous build up of inventory in CT. Nothing went down late summer/fall and winter is dead. Not sure who will pay more come spring. My latest contact with recruiter was a job with 5+ years @managing, large global projects and proper certs and ed- pay? 52/hr but you get paid every Fri. Freakin joke out there.

  35. 1987 Condo says:

    #34…that A6 engine is impressive, I believe it even gets better MPG than the engine in the A4.

  36. Ragnar says:

    Now at Weequahic High School, only 37% meet basic proficiency in math. Language proficiency has improved to over 70% lately. Maybe inspired by Obama – can talk but cannot count.

  37. Fast Eddie says:

    Bystander,

    If you’re not 100% committed, then you don’t make the move. Plain and simple. What’s wrong with getting paid weekly? I don’t follow.

  38. Street Justice says:

    33 – It’s fascinating to look back into the state’s history and try and understand why and where we are today. The state of NJ definitely has it’s economic, social and corruption problems, but they aren’t insurmountable. I hope more people’s eyes are opened so that they can understand them.

    Plenty of people say they will run to another state in order to be “more free” but, I enjoy being in the thick of it. When the kids are older and I have more free time, I wouldn’t mind getting involved and trying to make it better.

  39. grim says:

    34 – Last time I test drove the Audis, I test drove two A5’s – the 2.0T and the 3.2, both were auto. I couldn’t believe how anemic they drove. The whole time the salesperson was yapping from the back seat about how sporty it was, and how much power there was. I couldn’t help but think about much faster and nimble my pedestrian Subaru Legacy (2.5T manual) was in comparison. Hell, I think my 3.0 liter BMW X3 SUV had a better 0-60 time than those two. I was not impressed at all (I think one of these was even the “Sportline” trim – not sure if that makes any difference at all).

    Likewise, I’ve had a few 5 series loaners – I will agree that the 528 is an absolute dog to drive, terrible, that motor is way too small. Driver’s machine? Not so much.

  40. Street Justice says:
  41. grim says:

    Speaking of underwater – from Marketwatch:

    Nearly 800,000 fewer properties underwater

    In the third quarter, 791,000 more residential properties have returned to positive equity, CoreLogic said Tuesday. That still leaves nearly 6.4 million homes, or 13% of properties with a mortgage, that are in negative equity. Nevada had the highest percentage of mortgaged properties in negative equity at 32.2%, followed by Florida (28.8%), Arizona (22.5%), Ohio (18.0%) and Georgia (17.8%), CoreLogic said. Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth.

  42. JJ says:

    What does this mean Remove Moisture protection for crawl space and install new – visqueen – 6 mil?

    Looked it up Visqueen is a fancy name for a plastic sheet like you use for painting, except a bit more thick.

    So the inspector puts a note I should do this in crawl space and gave me money. But where the heck does it go. On the beams to cover insulation? On the walls? On the flood?

    Also why do I need it? It seems pretty common this Visqeen, but no clue what pupose it serves in a crawlspace under the main level of a split.
    Do you guys use Visqeen out in NJ?

  43. grim says:

    42 – If this pace continues – in the next year to year and a half – the level of underwater borrowers will fall to pre-bubble levels. In the past 12 months, 4 million borrowers crossed over into the equity column (or became non-borrowers through other means), leaving only 6 million remaining.

  44. JJ says:

    Boy the Lexus is a complete piece of junk if a low wall totaled it.

    I saw a picture last week of an old lady who drove her buick into two parked cars, jumped a curb, went through a three foot high brickwall and plate glass window and ran over 15 people and took out several registers in a crowded trader joes store.

    The Buick was in showroom condition. No joking, I saw pictures. Buicks are pretty amazing cars.

    True story and old italian lady from NJ was once visiting Italy around 80 years ago and during a three point turn back into the tower of Pizza, which was renamed the leaning tower of Pizza.

    Ragnar says:
    December 17, 2013 at 9:17 am

    My wife totaled my 2007 Lexus ES last weekend (she was fine – ran off the road into a low rock wall 100 yards from our house). I just bought a 2014 Audi A6 3.0T, and it’s a great car. During my weeklong search I test drove 4 different brands: BMW 528, 535 and 328GT, Lexus GS, and Mercedes E350. I

  45. JJ says:

    Well with refinancing dead. Unless the market crashes again the folks underwater will
    1) Go BK/Die or Sell
    2) short sale/loan modification etc.
    3) Pay down mortgage from other source 401K loan etc. to get equity to refinance
    4) Long Slow grind of month after month slowing paying principal with each loan payment.

    You cant stay underwater forever.

    grim says:
    December 17, 2013 at 10:01 am

    42 – If this pace continues – in the next year to year and a half – the level of underwater borrowers will fall to pre-bubble levels. In the past 12 months, 4 million borrowers crossed over into the equity column, leaving only 6 million remaining.

  46. Street Justice says:

    I’m not a construction expert, but I did stay at a Holiday Inn last night.

    I think, if you were finishing a basement, you would install the plastic sheeting in between the framed wall and the concrete basement wall. This way, moisture that naturally weeps from the concrete never meets with organic materials like wood and drywall where mold can grow. It is essentially a vapor barrier.

    43.JJ says:
    December 17, 2013 at 9:58 am
    What does this mean Remove Moisture protection for crawl space and install new – visqueen – 6 mil?

    Looked it up Visqueen is a fancy name for a plastic sheet like you use for painting, except a bit more thick.

  47. Michael says:

    I know you look at 300,000 as nothing in terms of value today, but back in 1960, 300,000 was as insane as 450 Million seems to you today. Inflation is a bitch!! You think in 1960, they ever thought people would be worth over 50 billion dollars. Wrap your head around that. With the advent of billionaires, 300, 000 is nothing when looking at the new socio-economic groups created at the top.

    “$300,000 is the number you get when you take a 20,000 house in 1960, leave it the way it is for 50+ years and calculate it’s price increase by 1500%.
    Now eddie, let’s try the same thing with a 300,000 dollar house today. Same 1500% increase, that house should now sell for 450 MILLION.”

  48. grim says:

    43 – JJ – Some old guys call poly sheething Visqueen – kind of like “Scotch Tape” for any clear tape.

    He really just means 6 mil poly.

    What is stapled up there now? I assume when you go in the crawlspace and look up, you don’t just see the insulation.

  49. Michael says:

    48- Remember you are talking 50 years!!!! In 2075, if the currency doesn’t start over and you factor in inflation (periods of hyperinflation must be included esp with all this money being printed up), it would not surprise me at all to see houses going for 300 million on the regular. Of course 300 million will be worth jack sh-t.

  50. grim says:

    I think, if you were finishing a basement, you would install the plastic sheeting in between the framed wall and the concrete basement wall.

    I’d suggest skipping the vapor barrier – installing R-10 or greater Owens Corning Foamular 250 tight fitting, from floor to sill, wrapping over the sill plate, up and into the rim joists. Construct standard stick frame walls in front (or go steel stud), no insulation, 1/2 rock (about 3/4″ off the floor). Use 1/8th inch foam sill plate barrier under all framing that touches the floor. Total will be R-13 when you factor the dead space, R10 Foamular, and wall-board. Back fill the rim joist area with fireproof rock-wool insulation as a fire-break, as the Foamular is flamable (or just use all rockwool for the rim joist, but the rigid foam is better).

    This allows for breathability of the structure, and some very slow inward permeability of moisture to allow for drying. WALL VAPOR BARRIERS WILL NOT FIX A DAMP BASEMENT!

    I believe this is standard “Building Science” style construction – which may or may not meet code in your jurisdiction.

    Hey, some inspectors want poly on the warm side of the insulation, essentially making the whole wall and insulation structure a vapor trap, go figure. Code is not in-line with best practices in this case. Vapor barrier is intended to keep the moisture in the living area from entering the wall cavity and condsensing on the cold foundation, not the other way around (which is more likely in our area).

  51. JJ says:

    All I see in installation when I look up to ceiling in crawl space. That is all I had pre-sandy. What a disgusting mess when I had to rip the stuff down after Sandy as it was underwater and cold, wet and moldy.

    I re-mediated the subfloor, mold etc. Dried it out fans and humidifiers and after three months when I was sure it was mold free put R-30 instalation back up. Paper against ceiling and pink side facing down. That is it. I did same in attached garage the wall facing house.

    So you are saying. I should get this Visqueen, they sell big rolls in HomeDepot, run it across beams and get my staple gun and staple it up.

    When I did Den which is slightly below ground we just threw up installation and sheetrocked was I supposed to do it there too? Of course that is too late to fix. .

    grim says:
    December 17, 2013 at 10:08 am

    43 – JJ – Some old guys call poly sheething Visqueen – kind of like “Scotch Tape” for any clear tape.

    He really just means 6 mil poly.

    What is stapled up there now? I assume when you go in the crawlspace and look up, you don’t just see the insulation.

  52. Fast Eddie says:

    Michael,

    With all do respect, you sound like the little girl in the AT&T commercial who claims to be competing for cutest kid. lol! A house today at $300,000 will be worth approximately 1.3 million in 50 years from now. Stop the silly sh1t already.

  53. Simon says:

    If a 1960 $20,000 house is worth $300,000 today then in 50 years the 300,000 house is worth 4.5 million not 450 million.

    I know you look at 300,000 as nothing in terms of value today, but back in 1960, 300,000 was as insane as 450 Million seems to you today. Inflation is a bitch!! You think in 1960, they ever thought people would be worth over 50 billion dollars. Wrap your head around that. With the advent of billionaires, 300, 000 is nothing when looking at the new socio-economic groups created at the top.

    “$300,000 is the number you get when you take a 20,000 house in 1960, leave it the way it is for 50+ years and calculate it’s price increase by 1500%.
    Now eddie, let’s try the same thing with a 300,000 dollar house today. Same 1500% increase, that house should now sell for 450 MILLION.”

  54. Street Justice says:
  55. Bystander says:

    Fast,

    The question about committment goes back to the IBs and FIs committment to employees in metro area. I just interviewed a test mgr. yesterday. He is consultant at my IB now but last day is Friday. When did he find out? Two days ago.. and this was after he was told they were going to extend him 8 months a week earlier. Another guy was given same treatment. There are more investments in employees, only cost cutting projects with flippant end dates. Btw, the weekly pay was “a benefit” according to recruiter

  56. Richard says:

    Its interesting to read about Weequahic history, a POS cape there probably was much more expensive than a SOHO townhouse or 10 acre field in Bergen. First time I’ve looked up the details of Blockbusting too.

  57. Michael says:

    54- I’m sorry, I was going off of Phoenix’s math. I didn’t take the time to do the math because it is besides the point. What matters is that inflation is a part of our economy. That’s my point. Crap houses will be worth millions 50 years from now. Although, if hyperinflation does kick in, 450 million is in fact quite a possibility. Minimum wage is almost at 10 dollars an hour, which 15 years ago was not a bad wage, since 5 dollars an hour was the minimum. Looking at a house for 20,000 in 1960 and crying about how it is now 300,000 with no work done to it, is pointless. You are forgetting that 20,000 was a lot of money back then. What was the pick 6 lottery jackpot back then 50,000? Now you are looking at jackpots worth 600 million.

  58. Happy Renter says:

    [20] “Why exactly do criminals get better treatment than taxpayers in this state?”

    Because we consistently elect libtard legislators beholden to the government-dependent class, which happens to overlap substantially with the criminal class.

  59. xmonger says:

    #34. Great choice and congrats, but I would add that a Cadillac CTS should have been on your short list as well.

  60. anon (the good one) says:

    in terms of racism, my question would be what compels you to describe some criminals as animals. while a Connecticut mass murderer of children is described as tragedy.
    only difference is skin color, but your visceral reaction is different.
    murdering children doesn’t create the same hysterics on this site as when an apparently Newark resident commits a crime.

    @BillMoyersHQ: There have been 27 school shootings since Newtown. http://t.co/iUC33Ob52V

  61. Phoenix says:

    thanks simon I went zero crazy.

  62. joyce says:

    Is the value of all the paper “assets” that the mortgages back still held at par?

    grim says:
    December 17, 2013 at 8:36 am

    Why is there a concerted effort to stall and delay foreclosures in NJ?

  63. grim says:

    64 – I really don’t think it is an unwillingness to realize losses on behalf of the banks that’s the issue here.

    At this point, most lenders have taken their lumps, and set expectations around losses, loss reserves, etc. I think they are more interested in clearing this crap off their books, but they can’t do it.

  64. grim says:

    Look at the sheer volume of REO in the non-judicial states as evidence of this.

    In the past year, Florida has foreclosed/REO’d 100,000 properties versus NJ’s 3,000.

  65. Fast Eddie says:

    Bystander [56],

    I’ve been in the position myself. As a contractor, I’ve had them approach me at 4:00 on a Friday and tell me the contract ended. A lot of people are just f.ucking dogs. In every aspect. I have respect for only a select few but regardless, I still try to smile and give others the benefit of the doubt.

  66. It is the end of days.

    Prepare accordingly.

  67. JJ says:

    Nice ADP note to tell your employees tax rates for their January 2014 bonuses.

    Federal 25.00% , SS 6.20%, Medicare 1.45%, Medicare 2.35% earnings for single earning more than $200K and for married filing joint earning over $250K, NYS 9.62%, NYC 4.25% NYC residents only

    The 2014 Caddie CTS is a real nice ride. I saw it at the dealership on Saturday. But it is getting pretty pricey as there is no bare bones version. It comes with a lot of options standard.

  68. nwnj says:

    I don’t know who you’re quoting but good lord you’re dumb if you can’t see the difference between the two crimes.

    anon (the good one) says:
    December 17, 2013 at 11:20 am

    in terms of racism, my question would be what compels you to describe some criminals as animals. while a Connecticut mass murderer of children is described as tragedy.
    only difference is skin color, but your visceral reaction is different.
    murdering children doesn’t create the same hysterics on this site as when an apparently Newark resident commits a crime.

    @BillMoyersHQ: There have been 27 school shootings since Newtown. http://t.co/iUC33Ob52V

  69. joyce says:

    I’m sure the banks are in a better position today than a few years ago; they’d had to be. And with ZIRP, QE, mbs purchases maybe the real toxic stuff is 99% cleared from their books.

    grim says:
    December 17, 2013 at 11:37 am
    64 – I really don’t think it is an unwillingness to realize losses on behalf of the banks that’s the issue here.

    At this point, most lenders have taken their lumps, and set expectations around losses, loss reserves, etc. I think they are more interested in clearing this crap off their books, but they can’t do it.

  70. joyce says:

    When a property is REO’d, does that mean it’s been sold to another party and bank took the accounting loss (if any)? Or does that just mean the bank “bought it back” at auction and listed it for sale? I thought Florida was judicial (at least somewhat); remember they had ‘robo-signing’ courthouses for a while. They called them Rocket Dockets.
    Let me add, I completely agree with you that foreclosures are the solution not the problem. I just don’t like to see some people get railroaded potentially if they wish to contest anything.

    grim says:
    December 17, 2013 at 11:40 am
    Look at the sheer volume of REO in the non-judicial states as evidence of this.

    In the past year, Florida has foreclosed/REO’d 100,000 properties versus NJ’s 3,000.

  71. Juice Box says:

    Grim – Essex county has at least 4 Car Jacking on average weekly. It only makes the news when gun play is involved.

    Some recent numbers for the last decade or so on Car Jacking, each and every year Essex County is the epicenter with about 2/3 of all Car Jacking taking place there.

    https://dspace.njstatelib.org/xmlui/handle/10929/16102/browse?value=Criminal+Statistics+-+New+Jersey&type=subject

  72. nwnj says:

    This is my favorite Newark carjacking story, what a real genius, must be a kin of anon.

    Reynolds admitted he was in a stolen BMW, driven by an accomplice, as it pulled up behind a 2008 Porsche 911 Turbo on Bloomfield Avenue in Newark. Reynolds pulled out a .38-caliber handgun and ordered the driver out of the Porsche, according to the criminal complaint.

    The driver of the Porsche did as he was told and fled the scene, stopping to tell a passing police officer what had happened.

    Reynolds’ accomplice sped off on Bloomfield Avenue, but Reynolds could not drive the Porsche and stalled the 480-horsepower, six-speed engine, U.S. Attorney Paul Fishman said last year.

    Police approached and Reynolds ran, but he did not get far.

    http://www.nj.com/essex/index.ssf/2013/04/newark_man_sentenced_to_55_mon.html

  73. Phoenix says:

    India has their panties in a bunch….
    http://www.marketwatch.com/story/india-retaliates-in-row-over-diplomats-arrest-2013-12-17
    “That reaction may look outsized in the United States, but the case touches on a string of issues that strike deeply in India, where the fear of public humiliation resonates strongly and heavy-handed treatment by the police is normally reserved for the poor. For an educated, middle-class woman to face public arrest and a strip search is almost unimaginable, except in the most brutal crimes.”
    Some animals are more equal than others.
    http://www.theglobeandmail.com/news/world/treatment-of-arrested-indian-diplomat-in-new-york-called-barbaric/article16002630/

  74. Statler Waldorf says:

    Not all “gun murders” were bad. This one from Newark: “Karlando Roberts was shot to death by police when they allegedly found him holding a knife and stabbing his father-in-law.”

    In fact, is that even a “homicide”? Brings into question the accuracy of those crime stats.

    ===========================================
    You can clearly see what locations “gun murders” occur in….

    http://www.nj.com/crime/index.ssf/2013/04/new_jersey_homicide_map_2013.html

  75. grim says:

    Got Caste?

  76. grim says:

    72 – Only bought back, nothing more. From a reporting perspective, REO is terminal, after which any information on inventory becomes scattered, etc. Some public, some not, some easy to find, some not. Many look at the GSE & HUD REO inventories as proxies.

  77. chicagofinance says:

    The longest you should keep an Audi is about the 6-7 year range. You will sorely regret the decision otherwise. German cars are not Japanese cars. The exact same reasons that interested you in this car, and viewed the Lexus as a toy, are almost purely inverted in correlation regarding reliability, aging gracefully, and cost to repair. Consider Audi ownership akin to a petulant girlfriend whose great in the sack. It gets exponentially more expensive to maintain the longer it goes on, and at some point it outlives its usefulness…..

    Ragnar says:
    December 17, 2013 at 9:17 am
    I just bought a 2014 Audi A6 3.0T, and it’s a great car.

    That new 3.0 supercharged six was by far the best engine I drove, and was able to just make the car go without getting too excited about it. 8 speeds and 4WD, plenty of low end grunt. Good comfort, yet pretty good feel. I’m still figuring out the extensive amount of gadgetry on it. This should be good for the next 7 years, then maybe I’ll give it to my daughter for college.

  78. chicagofinance says:

    whose great = who is great

  79. joyce says:

    78
    Grim

    Therefore, is it possible that a large number of those REOs are still on the books at par? Is the volume of sales in Florida et al 100x times that of NJ?

  80. Nicholas says:

    This year I bought a house and I am in the “under 40 crowd”. As far as I could judge given the data that was available to me, earlier this year was as opportune a time to buy a home as possible. If the numbers are right, 2013 probably was the bottom for housing in the MD area but only time will tell.

    After talking with friends/family I’m not sure that my peers are in a position to buy at this time having blown all available cash on just getting by for the last 6-8 years. I hear their hard-luck stories but they fall on deaf ears because in my mind it the wounds are self-inflicted. Too much television and electronics have dulled their ability to critically think and to lift themselves out of the stupidity that rules their lives.

    1. Yes, the under 40 crowd isn’t thinking about buying homes.
    2. No, I don’t want to hear your hard luck story when you have a LTE enabled smart phone and you have to get back home to watch the new episode of breaking bad.

  81. xolepa says:

    (79) respectively disagree, cases in point:

    My first bought car was a 1980 320i – sold it with 347k – still running at the time. engine was rebuilt

    owned 1992 5 series station wagon – sold it with 248k. still running fine. only had to replace 1 engine coil

    still have 2004 x3 with 198k. looks brand new especially underneath the chassis. no signs of rust – had to replace some pollution control hoses and a radiator part. only regular maintenance otherwise

    son still drives 2000 3 series 152k. a/c does not work now but original clutch and everything else is fine

    I still have my 2003 5 series 138k. nothing touched but regular maintenance. car still sounds and rides like new. This car was rated as the highest scoring model ever by CR. does have a sticky thermostat but no big deal

    My wife has the newest car – a 2011 3/x series, I do hate that they took away the dipsticks. typical german arrogance.

    BTW, I have been a member of the BMWCCA since 1980.

    As to the Audi, good luck with that. It’s an embellished VW. Just like GM and Ford with their upmarket models. The Audi/VWs are notoriously designated as the worst cars to work on. Ask me how I know. Got room in that engine bay?

  82. xolepa says:

    Oh, forget to mention the e30 M3 that I sold 15 years ago

    15 years ago my sons stated: Daddy, this car is too small.

    1 year ago sons asked: Why did you ever sell that car?

    Besides the M1, that car is still the most sought after in the past 50 years

  83. POS cape says:

    79 Chi-fi

    Having owned a Porsche some years back, I would agree with that.

  84. Street Justice says:

    Did you watch the video in the CNN link I posted today? Nancy Grace and her local NYC affiliate swear this is such a nice area and this sort of thing never happens in Short Hills.

    Carry on sheeple, you’re in no danger.

    73.Juice Box says:
    December 17, 2013 at 11:57 am
    Grim – Essex county has at least 4 Car Jacking on average weekly. It only makes the news when gun play is involved.

  85. Comrade Nom Deplume, Guardian of the Realm says:

    Sounds like Clot is doing some writing for CNBC for the holidays.

    http://www.cnbc.com/id/101269736

    I had to post. It it was so clot-like

  86. Street Justice says:

    Heart of Stone, a documentary by Beth Toni Kruvant, focuses on Weequahic High School’s decline from 1950’s when it graduated more PhDs than any other high school in the country to one of Newark, NJ’s most crime ridden schools. Principal Ron Stone wears a bulletproof vest and inspires the students, including gang members to graduate and go to college. He partners with the Jewish and African alumni association to help the current students. The only remaining connection to the Jewish community is Bragman’s Delicatessen and Restaurant at 393 Hawthorne Avenue.

    http://en.wikipedia.org/wiki/Weequahic,_Newark

    33.grim says:
    December 17, 2013 at 9:17 am
    32 – The neighborhood where the jacked rover was found is called Weequahic.

    Did you know that in the 1950s – Weequahic High School was considered one of the best schools in the US – graduated the highest number of students who went on to become PhDs … in the entire United States.

  87. chi (79)-

    Specious analogy. You can’t f^ck a car. ;)

  88. xolepa says:

    I have pictures of my parents with friends in rowboats on Weequahic Lake. The setting looked idyllic. Everyone was happy.
    I remember taking the bus down Springfield Ave with my mother (she was then about 23 years old! ) Christmas season to shop at Bambergers near what is now the Prudential area.. Snow, laughter and joy.

    What a different, different world.

  89. plume (87)-

    You know it’s turning to shit when even CNBC starts working the doom angle.

  90. joyce (81)-

    You would reel if you saw how much the failed paper behind all that shit RE has already been dumped on the Fed.

    And, natch, it’s the Fed who turns shit into gold by valuing it at par.

  91. chicagofinance says:

    But a car can really f^ck you good. ;)

    Spine Snapper says:
    December 17, 2013 at 2:23 pm
    chi (79)- Specious analogy. You can’t f^ck a car. ;)

  92. chicagofinance says:

    clot: I don’t know whether you saw this?

    chicagofinance says:

    December 16, 2013 at 11:16 pm

    Actually, I think “clot” is known NJ blog bias as middle aged men with breasts, dyed chest hair, tinted glasses and purple stained teeth……

    chicagofinance says:
    December 16, 2013 at 9:31 pm
    In Chicago there is known newspaper bias in reporting of high school sports. If a player is described as athletic, it means “african-american”. If a player is described as having a lot of skill, it means “white”.

  93. JJ says:

    Cadillacs, Lincolns Too, Mercurys and Subarus.

    Blondes dont like BMWs. I heard it in a song

  94. Fast Eddie says:

    xolepa [90],

    Same memories growing up in Jersey City. I remember spotless streets, mom and pop clothing and furniture shops and luncheonettes with mahogony boothes and moldings. These same neighborhoods now look like war zones. What is one to expect about particular stereotypes when you hear about homocides and carjackings? You want to change perceptions? Change your neighborhood first.

  95. JJ says:

    Only once in my 450sl with top up ever. It is no wonder Germans only have one kid each. My old Pymouth with Bench seats man on man.

    Best when I took auto class for a few years as apparently the guidance counselor thought it was a good fall back one of the kids in class car a big old American car we took the seat tracks from another car attached it to floor so front bench seat could go right against dashboard, we took off headrests than changed hinge so top of seat could lay flat esentially creating a bed. Then we blacked out windows. Thing was like a $200 dollar car. But then you take a six passenger four door full sized American car from early 1970s man on man you have a love machine

    Spine Snapper says:
    December 17, 2013 at 2:23 pm

    chi (79)-

    Specious analogy. You can’t f^ck a car. ;)

  96. Fast Eddie says:

    chicagofinance [94],

    The term, “Athletic Quarterback” is used by NFL analysts on a regular basis and we as viewers know exactly what it means.

  97. Street Justice says:

    No wonder people were p1ssed off and rioted in 1967 in Newark….

    Generally, “blockbusting” denotes the real estate and building development business practices yielding double profits from U.S. anti-black racism; aggravating, by subterfuge, the white home owners’ fears of mixed-race communities to encourage them to quickly sell their houses at a loss, at below-market prices, and then selling that property to black Americans at higher-than-market prices. Given then-standard banking criteria for mortgage-lending, black people usually did not qualify for mortgages from banks and savings and loan associations; instead, they recurred to land installment contracts at above market interest rates to buy a house — a racist economic strategy eventually leading to foreclosure.[2] With blockbusting, real estate companies legally profited from the arbitrage (the difference between the discounted price paid to frightened white sellers and the artificially high price paid by black buyers), and from the commissions resulting from increased real estate sales, and from their higher than market financing of said house sales to black Americans.[2] The documentary film Revolution ’67 (2007) examines the blockbusting practiced in Newark, New Jersey in the 1960s.

  98. xolepa says:

    (100) I don’t think so.

    A lot of black people in Newark made killings by buying directly from scared or aging whites during the mid 60’s and later. I know, as that happened to my maternal grandfather. The old man was just too stubborn to sell at the right time.

    Right time=early sixties.

  99. 1987 Condo says:

    100-101….need to determine the role of realtors during that period, may have been a profit motive. I know the issue was discussed in my home in the early 70’s as I believe it was more “prevalent” or at least overt….

  100. chi (94)-

    I can beat the crap out of you with just one of my manboobs.

  101. chicagofinance says:

    For Fast Eddie & Clot:
    Former Governor Brendan Byrne, an 89-year-old who is considered the dean of New Jersey public affairs, often quips that when he dies he plans to be buried in Hudson County so he can remain active in Democratic politics.
    http://www.bloomberg.com/news/2013-12-17/mystery-safes-in-jersey-city-reawaken-tales-of-corruption.html

  102. I think redlining and blockbusting should both be legal.

    Caveat emptor, bitch.

  103. BTW, Fulop can kiss my monty white ass.

    He’s no better than the scum he replaced.

  104. joyce says:

    98

    The truth continues to come out: any more man on man love stories, JJ?

  105. Happy Renter says:

    [107] “NRA hit by Anti-Defamation League over comments about Fulop and gun control”

    Years ago I picked up my first firearm from the FFL guy who ran a small business out of his home (I had ordered it online and had to have it shipped to someone registered with a federal firearm license). He handed me some papers related to joining the NJ Pistol club and the NRA and then talked about how important the Second Amendment was to him as a jew, and how America is the only country in which people have the right to arm themselves as a protection against state-sponsored abuse.

    Back then I wasn’t really thinking along those lines, but over the years I see the wisdom in his thinking.

    I suppose the bogus “anti defamation league” would have said that he was “out of line.”

  106. joyce says:

    Happy,

    Has the Southern Poverty Law Center declared them a hate group yet?

  107. Comrade Nom Deplume, a.k.a Captain Justice says:

    [110] Joyce,

    I remember a few years ago watching an interview of Potok at the Southern poverty Law Center, during the Boy Scout flap. He was asked what constituted a hate group and he said “any group that doesn’t hold the same views that we do” or something pretty darn close to that. The response of the interviewer suggested that he was taken aback by that answer, but he never really pressed it. I was absolutely thunderstruck by that response. I thought surely this is going to catch some flak.

    Some time later I went online to try to find the transcript. It was on MSNBC at that time so I looked there. I found a transcript that sounded pretty similar, for an interview with the same person around the same time. I could not find the line about groups being hate groups because they differed from SPLC politically. But I found this gem from Potok in an interview with Tingles:

    ” Well, let me say for starters that our—when we name groups “hate groups,” that has nothing to do with any allegation of criminality or some kind of measure of expected violence. It‘s purely about ideology. ”

    The really curious thing about the interview however was the fact that the interviewer never pressed Potok on whether the Boy Scouts were a hate group. It seemed pretty clear from the SPLCs description that they should be but the interviewer seemed to avoid the question, and Potok certainly never raised it.

  108. Southern Poverty Law Center is a great place for self-loathing jews to work out their issues.

  109. The only real threats to our country are the gubmint, the bankster welfare queens and the entitlement class.

  110. Essex says:

    112. I like working things out under a big busty Aryan with a soft spot for Hebrews.

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  114. Painhrtz - Disobey! says:

    Thanks gator, stu and moose.

    Indian it is

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