Optimistic on home prices?

From Barrons:

Betting on the House

It’s no secret that U.S. home prices have enjoyed a healthy rebound in 2013 after the nightmarish 33% drop over the previous five years that triggered an orgy of mortgage defaults and wealth destruction. These days, monthly home-price reports regularly show double-digit percentage jumps over the year-earlier period, whether it’s the 13.3% annual increase for September of the S&P/Case-Shiller 20-City Composite Home Price Index or the 12.2% annual rise for October logged by CoreLogic’s home-price index.

Yet, at least some observers question how much longer the home-price recovery can continue. A jump in mortgage rates along with the torrid increases in home prices have hurt transaction volume some. The market has been overly dependent on all-cash buyers such as vulture funds, which earlier this year accounted for about a third of all sales. What will happen when they have eaten their fill? Increasingly, the home-price growth will depend on conventional buyers, who must borrow from a mortgage-lending industry that is still imposing stringent lending standards on new mortgages.

Still, after talking to various industry experts and analyzing disparate data, Barron’s thinks that home-price appreciation should continue for the next three years, albeit at a slower pace than the double-digit increases seen this year.

TO BE SURE, forecasting markets is an unforgiving and somewhat foolhardy task. And experts’ three-year projections for home prices vary all over the lot. Ingo Winzer of Local Market Monitor, which tracks more than 300 U.S. metro markets, is looking for price growth of about 7% over each of the next three years, while CoreLogic, the real-estate statistical firm, expects price increases of 4.7% in 2014, 4% in 2015, and 1.9% in 2016.

For the sake of conservatism, we’re hewing to the middle range, looking for home-price jumps of 5% in each of the first two years and, perhaps, just 3% in 2016, as new construction picks up to bolster supply and more empty-nest baby boomers put their houses on the market to unlock trapped home equity. These projections somewhat mirror those of Moody’s Analytics. “The U.S. is clearly in a home-price up-cycle that has a lot of room to run,” says Mark Zandi, chief economist for Moody’s Analytics.

A constellation of factors revolves around our relatively upbeat forecast on home prices. Upswings in home prices, like the one that has just begun, tend to run in five-to-10-year cycles, due to market inefficiency arising from the inertia of home buyers’ expectations.

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

141 Responses to Optimistic on home prices?

  1. grim says:

    From the WSJ:

    Home Prices Back at Peaks in Some Areas

    Home prices have zipped back into record territory in a handful of American cities, a milestone that comes seven years after the housing bust ravaged the market and the broader economy.

    Values are up more than 13% from their 2007 high in Oklahoma City and by more than 6% in the Denver metro area. Prices are back to all-time highs in 10 of the nation’s 50 largest metropolitan areas, according to a Wall Street Journal analysis of price data from Zillow, an online real-estate information service. Prices are within 5% of their previous peak in San Jose, Calif.; Nashville, Tenn.; and Dallas.

    Prices nationally remain below the highs of the past decade, and many of the cities that have seen the biggest gains largely escaped a boom and bust.

    Home prices in some parts of the country that did experience a bust have benefited from low supplies of homes for sale and historically low interest rates that have boosted prices—and sparked concerns that prices could again be overvalued.

    The figures aren’t adjusted for inflation, but experts say they underscore the uneven nature of the U.S. housing recovery.

    “The main story in a lot of these places is that they didn’t have much of a housing recession. It’s much easier to be back at peak levels when you didn’t have a big boom and bust,” said Stan Humphries, chief economist at Zillow.

    But in those areas that did experience a downturn, he added, “I’m surprised that we are back to peak levels so quickly.”

  2. First, there will be a general deflation. Then, it will all go up in smoke in a supernova of hyperinflation. Then, the civil war will start.

    Smoke ‘em if you got ‘em.

  3. Bitcoins for houses, byatch!

  4. grim says:

    Anyone looking for an econ term paper topic – or perhaps want to publish yourself? Here you go – seldom do we get such a distinct and discrete economic event over such a short period of time. Perfect situation for economic analysis. What will the end result be? Will NJ see employment and participation rate rise as unemployed slackers head back to work? Will NJ see the poverty rate skyrocket?

    From the Star Ledger:

    Thousands of unemployed N.J. residents brace for federal benefits to run out

    Beginning today [Saturday], 1.3 million Americans will see their extended federal unemployment benefits expire.

    Proportionally, New Jersey will take the hardest hit per capita of any state: 90,300 residents will immediately be cut off — about 1 percent of the state’s population, according to U.S. Labor Department data compiled by Democrats on the House Committee on Ways and Means.

    Experts are also worried the New Jersey and U.S. economies could take a hit because consumers will have less money to spend on food, clothes, cars and more.

    “That’s money into New Jersey’s economy that’s now going to be taken out of New Jersey’s economy, which means other people’s jobs will be affected by it,” said Phyllis Salowe-Kaye, executive director of the liberal group New Jersey Citizen Action. “It’s a total domino effect.”

    New Jersey residents looking for work can now receive unemployment benefits from the state for 26 weeks — or about six months. After that, they can receive another 37 weeks under the extended federal benefits.

    But the total will shrink back to 26 when the federal program ends today. Another 89,100 New Jerseyans will lose their benefits during the first six months of next year.

    The federal government’s “emergency unemployment compensation” began under President George W. Bush to help the millions of Americans who lost their jobs in the Great Recession and failed to find new ones in the months they received state unemployment.

  5. grim says:

    3 – sucker bet

  6. Street Justice says:

    4 – I get the sense that a lot of people who were collecting unemployment were holding out for full time jobs paying more than their UE benefit. My prediction is that the unemployment rate in NJ will plummet. Expiration of benefits will push people to finally take that crappy temp job or switch career fields altogether.

  7. grim says:

    7 – Ah, you know, there is a confounding variable that is going to make this analysis more challenging, the increase in minimum wage…

  8. Street Justice says:

    True, I’d forgotten about that…

    I imagine UE unemployment benefits expiration might be the stronger force though.

    7.grim says:
    December 30, 2013 at 8:07 am
    7 – Ah, you know, there is a confounding variable that is going to make this analysis more challenging, the increase in minimum wage…

  9. Fast Eddie says:

    “That’s money into New Jersey’s economy that’s now going to be taken out of New Jersey’s economy, which means other people’s jobs will be affected by it,” said Phyllis Salowe-Kaye, executive director of the liberal group New Jersey Citizen Action. “It’s a total domino effect.”

    Trickle down, phyllis?

  10. Fast Eddie says:

    Experts are also worried the New Jersey and U.S. economies could take a hit because consumers will have less money to spend on food, clothes, cars tats, bling, twinkies and more.

  11. grim says:

    241,000 workers are going to see direct raises due to minimum wage increase vs the 90,000 losing long-term unemployment benefits…

  12. Fast Eddie says:

    241,000 workers are going to see direct raises due to minimum wage increase vs the 90,000 losing long-term unemployment benefits…

    If you’re a small business owner running a tight ship, will you be more apt to generate increased production at the same labor costs? If you now have to raise the minimum wage for your staff, labor costs go up instantly. Will you be hiring any more heads?

  13. JJ says:

    tons of dual income folks with child care expenses where one got laid off and they are milking unemployment forever. The full 99 weeks!!!!

    If you commute to NYC and pay LIRR or Metro North and Subway and pay for ten hours a day childcare even a 125K a year job makes no sense to go back to if you can get unemployment and spouse still works. Plus that second income is taxed at almost 50%. Mix in folks with a free early retirement and folks who are holding out for a field that no longer exists or a job they feel is worthy of them and you will find very few folks are unemployed longer than 26 weeks who are actually looking and willing to accept anything

  14. grim says:

    tons of dual income folks with child care expenses where one got laid off and they are milking unemployment forever. The full 99 weeks!!!!

    I know a couple of folks in this camp that were doing this, and weren’t hiding the fact at all, in fact they bragged about how savvy of a move it was. Given what I’ve seen of the current cost of child care in NJ (On average $250/child per week) – toss in 2 preschool kids and a wife that earned enough to collect the max unemployment, but not necessarily throw off any additional income after taxes and child care … and it sure looks like a damn savvy move to me too.

  15. Street Justice says:

    JJ – I know people in both the “early retirement” camps and the “holding out for dream job” camps.

    The “holding out” folks are now forced to face reality. They will probably have to start their careers over.

    Personally, if you have a working spouse w/ healthcare benefits, this is really an opportunity for them. They could start over and do anything really….people in this sutation shouldn’t look at it as a bad thing.

  16. JJ says:

    Too bad I am soo damm good looking and smart that I never collected a dime of unemployment or severance in my life.

  17. Fast Eddie says:

    tons of dual income folks with child care expenses where one got laid off and they are milking unemployment forever. The full 99 weeks!!!!

    And we’re supposed to believe that the housing market is for real and on the mend in Haughty North Jersey?

  18. grim says:

    17 – Add in 2 and a half years of no mortgage due to foreclosure – seems like we are the suckers…

  19. Fast Eddie says:

    18 – Don’t tell Michael, he’ll blow a gasket.

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

    [16] JJ

    And modest. You forgot modest.

  21. zieba says:

    I know a few couples who are doing the same. What’s surprising is how willingly they share their decision to do so.

    milking unemployment is the middle’s new “killing it.”

  22. Ragnar says:

    It’s all fun and games until someone actually has to pay back the debt piling up with most of the world living beyond its means. Sometimes it makes me wish I could live in ignorant bliss like so many other freeloaders and Nobel prize winning economists.

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

    [14] grim

    A few years ago, I did the math and calculated the break-even range for an unemployed spouse with a day care age child at $36-42 an hour.

    I had a neighbor in the Brig who was unemployed for most of the time I lived there. His wife didn’t entertain a thought about going back to work until after their benefits ran out, they put on a new roof, and their daughter still went to horse riding and took piano the entire time. I learned later that he was borrowing heavily from Bank of Mom & Dad to cover the PITI.

  24. JJ says:

    True I am Modest. Humble too. In fact so Modest I am an amazing Modest person. In fact I am humble and modest I should tweet and blog about it all weekend. .

    Comrade Nom Deplume, a.k.a Captain Justice says:
    December 30, 2013 at 9:51 am

    [16] JJ

    And modest. You forgot modest.

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

    [22] Ragnar

    “It’s all fun and games until someone actually has to pay back the debt piling up with most of the world living beyond its means.”

    I used to decry the trend toward the federalization of everything as a perversion of the vision of our founders. But, as a result of this, there may come a day when certain states are more fiscally sound than the Feds, and in a position to flex that muscle. When that day comes, things will get interesting fast.

  26. grim says:

    “It’s all fun and games until someone actually has to pay back the debt piling up with most of the world living beyond its means.”

    Won’t it be especially ironic when it’s the lenders, and not the debtors, who are left to pay? (Though in reality, we all know that neither of them will be responsible for paying it back …. it will be the uninvolved, those on the sidelines who took no part … who will pay).

  27. grim says:

    From MarketWatch:

    Pending home sales tick up in November

    Pending sales of homes ticked up in November, the first gain in six months, signaling that upcoming activity may rise, the National Association of Realtors reported Monday. The index of pending home sales increased 0.2% last month to 101.7, slightly above a 10-month low of 101.5 in October, but down from 103.3 in November 2012. “We may have reached a cyclical low because the positive fundamentals of job creation and household formation are likely to foster a fairly stable level of contract activity in 2014,” said Lawrence Yun, NAR’s chief economist. Also, buyers are becoming accustomed to higher mortgage rates and pricier properties, economists say. Although higher mortgage rates have taken a bite out of housing-market activity, Yun said sales in 2013 will be the highest in seven years. Pending sales typically close within two months. An index reading of 100 equals 2001′s average contract activity level.

  28. Fast Eddie says:

    …Also, buyers are becoming accustomed to higher mortgage rates and pricier properties, economists say.

    It’s lazy stup1dity like this statement that makes one want to heave and laugh at the same time.

  29. unbelievable says:

    grim the shill:

    Pending Home Sales Plunge At Fastest Pace Since April 2011
    http://www.zerohedge.com/news/2013-12-30/pending-home-sales-plunge-fastest-pace-april-2011

  30. Fast Eddie says:

    I had a neighbor in the Brig who was unemployed for most of the time I lived there. His wife didn’t entertain a thought about going back to work until after their benefits ran out, they put on a new roof, and their daughter still went to horse riding and took piano the entire time. I learned later that he was borrowing heavily from Bank of Mom & Dad to cover the PITI.

    Too many on this blog balk when I state that many of the “big hat, no cattle” crowd are two paychecks away from pre-foreclosure. Then, we’re entertained by the cheerleaders attempting to justify otherwise. It’s funny how all the anecdotal stories I’m reading today seem to confirm the obvious.

  31. Fast Eddie says:

    unbelievable [29],

    Hope and change, NAR style.

  32. 1987 Condo says:

    Well, they are building 2 brand new houses that supposedly will go for $700,000 around the corner from me and the same builder supposedly bought the house across the street from me (untouched 1959 ranch) for $250,000 and is going to blow it out into a 4bdr colonial..so I’ll see local pricing this spring.

  33. Ben says:

    Too many on this blog balk when I state that many of the “big hat, no cattle” crowd are two paychecks away from pre-foreclosure. Then, we’re entertained by the cheerleaders attempting to justify otherwise. It’s funny how all the anecdotal stories I’m reading today seem to confirm the obvious.

    Eddie, I’ve seen plenty of couples milk the unemployment system. They aren’t in a bad financial position. They look at it as a free $600 a week or a 2 year paid vacation.

  34. grim says:

    From the NAR:

    http://www.realtor.org/sites/default/files/reports/2013/embargoes/phs-12-30-illtratatb/phs-11-2013-pending-home-sales-12-30-2013.pdf

    Pending sales in the Northeast, unadjusted, year over year, up 0.7%

    Only plunging going on is in the bubbly West Coast markets, down 11.3%. This is what dragged down the national aggregate numbers to -4%. Given the volatility in the index…

    Shocked that ZH failed to mention this…

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

    [33] Ben

    “A two year paid vacation”

    Took the words right out of my mouth.

  36. xmonger says:

    #33 “milking it/killing it on unemployment”

    Max fed benefit rate in NYC $375
    Fed Taxes 33%
    NYS Taxes 7%
    Effective net weekly benefit $225

    Also time limited, the most recent period of fed benefits (job loss this year) was about 14 weeks max.

    Much better to go on stamps, section 8, medicaid, etc. It’s a life long and covers all your bases.

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

    I came home from Utah a few days ago to see lights on, and cars in the driveway, at a rehabbed foreclosure that had been on the market for nearly two years. This was a house that I gave serious consideration to, but I could not justify buying it due to the weird layout and some other issues I noted with the rehab. It was strange seeing the house lit at night.

    I was a bit surprised because my neighbor told me that the buyers would not be there until the summer. She was led to believe that the buyers will use the house as a summer residence only, and will winter in Florida. As bucolic and pleasant as this area is, it is a strange place to “summer” unless you have a reason to be in the area.

  38. 1987 Condo says:

    #36. NJ pays like $550 a week

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

    [36] xmonger,

    I take issue with yr fed tax calc. Unless there is a working spouse who is pulling down over seven figures, there is no way you could have an effective federal tax rate of 33%.

    If both spouses are on unemployment, then you have an effective federal tax rate of probably between zero and 5%. If only one spouse is on unemployment, which seems to be the suggestion in your example, then you are likely looking at a effective federal tax rate based on the salary of the earning spouse in order to get anywhere near that federal tax rate. And if they are paying tax at 33%, I doubt they very much care about unemployment insurance.

  40. xolepa says:

    (36) Unemployment is exempt from state taxes. At least, that is the case in NJ

  41. Michael says:

    30- Eddie, you seriously are out of touch with reality. Please tell me who isn’t going to be screwed if they lose their job. That’s what you are saying with your two pay checks away from oblivion mentality. It’s not rocket science. No income = screwed.

    If everyone saved two or three years worth of mortgage payments our economy would crash. We don’t live in the 1950′s. It’s 2013 and this is how the economy works. If you lose your job and can’t afford your house, you sell or foreclose on it. Another person comes and takes advantage of your situation. If the prices didn’t crash in the last 5 years in Bergen county, they are not crashing anytime soon with all economic data starting to point upwards. Snap back into reality my friend.

  42. xolepa says:

    …and do you know in NJ you can legally collect UI and severance at the same time.

    FYI, I collected UI once in my life. I was 19 years old working at the old Westinghouse plant in Edison as a summer job, when they closed down the plant for two weeks. Mandatory vacation for all except those who wanted to work doing inventory. Since it was mandatory, I by then qualified for 1 week UI pay. Whooppee! My buddy at the plant , also summer help did inventory for 1 week. Obviously received no UI. He called himself the sucker after I told him the good news.

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

    This example is a pretty good microcosm for what will happen nationally.

    http://www.cnbc.com/id/101301451

    Hope And Change. You voted for it, you got it.

  44. xmonger says:

    #39. Yeah, this is for the scenario that was being raised i.e. two previous high earners, one taking off to milk the system.

    Fed Rates 2013
    10% on taxable income from $0 to $17,850, plus
    15% on taxable income over $17,850 to $72,500, plus
    25% on taxable income over $72,500 to $146,400, plus
    28% on taxable income over $146,400 to $223,050, plus
    33% on taxable income over $223,050 to $398,350, plus
    35% on taxable income over $398,350 to $450,000, plus
    39.6% on taxable income over $450,000.

    Anyway, you get the idea. It’s not a lot of money, before or after taxes.

  45. JJ says:

    10% on taxable income from $0 to $9,075, plus
    15% on taxable income over $9,075 to $36,900, plus
    25% on taxable income over $36,900 to $89,350, plus
    28% on taxable income over $89,350 to $186,350, plus
    33% on taxable income over $186,350 to $405,100, plus
    35% on taxable income over $405,100 to $406,750, plus
    39.6% on taxable income over $406,750.

    As you can see most men mid career easily are in the 33 percent tax bracket without a spouse working.

    Remember, it is paycheck, bonus, dividends, interest, capital gains, rental income all in.

    Most richer towns a working spouse will throw you into the 39.6 bracket nowdays

  46. Fast Eddie says:

    If everyone saved two or three years worth of mortgage payments our economy would crash. We don’t live in the 1950′s. It’s 2013 and this is how the economy works.

    Ladies and gentlemen of the jury, I present to you, exhibit A.

  47. unbelievable says:

    Last month’s September 2013 NE sales were up 5.9% YOY. This month sales are up .7%–back to last year and the situation is much worse elsewhere.

    Surprised the grim failed to mention this.

    The only people who see strength in this numbers are shills.

  48. Michael says:

    Eddie, honestly how much lower do you want houses to go. Houses usually go up every year as long as there is inflation. When you have houses go down for 5 years, you have to also account for how much they should have been going up in the equation. What I am getting at and you fail to understand, is that houses really are at a great price right now in haughty nj towns. They have had their huge drop. In 2004 , try to find a house in wood cliff lake or some other haughty north jersey town at 600 or 700 thousand. Ridgewood was selling cap cods for 600,000 back in the bubble. Now you can get houses on the upper side of Ridgewood for 800,000!!! That’s not a deal for you? This house would have been going for 1.4 in 2005. I don’t know why you think it’s going to go lower. Right now in my area of wayne, you can get houses (viscaya/pines lake) for 800,000 that were going for 1.3-1.4 million. Come on Eddie, another 50% drop and ghetto people will be able to move up to nice neighborhoods.

  49. xmonger says:

    #45 BTW, for the accountants in the room, diff in my table vs JJ:

    Mine is 2013 Married (filing jointly) and JJ’s table is 2014 filing single.

  50. grim says:

    Northern NJ Pending Homes Sales (Contracts) for November posted numbers wildly better than the NAR “Northeast” region:

    November Pending Home Sales (Contracts)
    ——————————-

    Bergen County
    November 2011 – 523
    November 2012 – 543
    November 2013 – 627 (Up 15.5% YOY, Up 19.9% Two Year)

    Essex County
    November 2011 – 226
    November 2012 – 235
    November 2013 – 335 (Up 42.6% YOY, Up 48.2% Two Year)

    Hunterdon County
    November 2011 – 77
    November 2012 – 82
    November 2013 – 113 (Up 37.8% YOY, Up 46.8% Two Year)

    Morris County
    November 2011 – 278
    November 2012 – 301
    November 2013 – 349 (Up 15.8% YOY, Up 25.5% Two Year)

    Passaic County
    November 2011 – 158
    November 2012 – 165
    November 2013 – 219 (Up 32.7% YOY, Up 38.6% Two Year)

    Somerset County
    November 2011 – 172
    November 2012 – 161
    November 2013 – 251 (Up 55.9% YOY, Up 45.9% Two Year)

    Sussex County
    November 2011 – 87
    November 2012 – 89
    November 2013 – 128 (Up 43.8% YOY, Up 47.1% Two Year)

    Union County
    November 2011 – 234
    November 2012 – 236
    November 2013 – 294 (Up 24.6% YOY, Up 25.6% Two Year)

    Warren County
    November 2011 – 64
    November 2012 – 60
    November 2013 – 94 (Up 56.7% YOY, Up 46.9% Two Year)

  51. unbelievable says:

    By the way “bubbly” WEST numbers are similar to last months numbers. This months US Pending Home Sales index for US is DISMAL due to NORTHEASTnumbers.

    Shocked the shill forgot to mention this.

  52. Fast Eddie says:

    Michael,

    Flat salaries for 13 years and personally, my property taxes are up 67% over the last 10 years which is DOUBLE the rate of longterm inflation. I’ll use my tax increase as a baseline. Houses went up 87% in our area and dropped approximately 20% from peak. Theoretically, we have another 5% to 7% drop to go but remember, property taxes are going nowhere but up. All this on two incomes. We will drop another 10% to 12% in price over the next 3 to 5 years. By the way, how deep underwater are you?

  53. grim says:

    51 – How do you figure? The Northeast was the best performer in November (year over year, unadjusted – the only set of numbers anyone should be looking at in this report).

  54. grim says:

    SAAR is garbage, take a month’s worth of data, seasonally adjust it, and annualize it? Why try to take a one month datapoint in a highly volatile series and attempt to forecast the next year based on that?

    Month to month unadjusted is useless unless you understand the seasonal variations in each specific region and compare the month over month change against last years (or historical) change.

    That said, the only numbers that are useful at face value are the unadjusted year over year.

    Go back and read 8 years worth of posts on the PHS numbers, the only numbers I’ve ever looked at, or talked about, are those.

  55. JJ says:

    Wait if your property values rose 87% and then fell 20% that is a 67% rise in value.

    Property taxes are based on home values. So if you are saying your property taxes rose 67% and your home rose 67% in effect your taxes rose zero percent.

    Congratulations

    Fast Eddie says:
    December 30, 2013 at 11:55 am

    Michael,

    Flat salaries for 13 years and personally, my property taxes are up 67% over the last 10 years which is DOUBLE the rate of longterm inflation. I’ll use my tax increase as a baseline. Houses went up 87% in our area and dropped approximately 20% from peak. Theoretically, we have another 5% to 7% drop to go but remember, property taxes are going nowhere but up. All this on two incomes. We will drop another 10% to 12% in price over the next 3 to 5 years. By the way, how deep underwater are you?

  56. grim says:

    Theoretically, we have another 5% to 7% drop to go but remember, property taxes are going nowhere but up

    According to CoreLogic out this morning, NJ statewide home prices are up 5.2% in the past year, and NY Metro up 9.6%. (both figures including distressed sales).

    Dropping 5-7% will bring us back to this time last year, does that change the situation at all?

  57. unbelievable says:

    53

    The reason for the decrease from US September YOY -2.2% to US November YOY -4% is the staggering NE monthly decrease of almost -30%. We are back in 2012 numbers for NE. This is what you should be looking at this report–not that you did not look at –just forgot to mention.

  58. 30 year realtor says:

    The end of December is supposed to be dead time in the real estate business. In the last 10 days I have received offers on 4 different listings and multiple offers on 2 of the 4. Showings have been very active over the holidays.

  59. unbelievable says:

    48

    “Over the long run, the housing market doesn’t work unless the median house costs around 2.5x – 3x the median income. In the past we used wages from a job, but now we’ve devalued wages so much we have to use household income, but the equation still more or less works. At historic interest rates, with a 30-year conventional mortgage, you can afford to buy a house that costs about 3x your annual income, and no more.

    So what’s the median household income in the US? About $49,000? So the median house price should be between $122,500 – $147,000. A brief Google search shows the NAR trumpeting a national median sale price in August of about $200,000. So around 4x median income. And that’s a national average, which means it doesn’t take into account regional differences, which make all the difference.

    The point is, house prices have to fall between 30% – 40% before most people can make the payments on a conventional loan to buy them. The only reason prices are as high as they are is that institutional investors are buying them, subsidized by the government in a number of ways, and people have been getting phony mortgages they’re never going to pay off.

    How much of a “wealth effect” do people feel when their house is worth 40% less? There goes all the meaningful “wealth” most Americans have. If you bought your house in the past 14 years, odds are you’re really underwater, whether you know it or not.”

  60. Anon E. Moose says:

    Re: [59];

    Nationwide statistics are worthless. I’ve tried to play the geographic arbitrage game — it only works for a rare few who can develop a clientele in high-cost areas like NYC or NNJ, but live and work elsewhere. If your job requires routine appearances here, the commute from Ohio to NNJ kills the deal.

    Besides, of course the median house will be more than 3x the median income — poor people don’t buy houses at any price. Compare the income of homeowners to the median house price for a more useful statistic.

  61. cobbler says:

    [60]
    Not even of the whole set of the homeowners, but only the ones of the working age (retirees don’t normally buy houses for which they need to take out a mortgage).

  62. unbelievable says:

    60,61

    Historically the ratio was 3x which took into account both homeownership rates and retirees.

  63. unbelievable says:

    grim the skill banned the word skill and now I have to use the word skill until of course the word skill is banned too. hahaha brave new world

  64. unbelievable says:

    60

    why don’t you compare and let us know what you find.

    Millburn Estimated median household income in 2011: $148,505 (it was $130,848 in 2000)
    Millburn Estimated median house or condo value in 2011: $1,043,177 (it was $529,600 in 2000)

    Millburn is high ownership rate area ~95%

    Read more: http://www.city-data.com/city/Millburn-New-Jersey.html

  65. grim says:

    I didn’t ban shill, try again

  66. grim says:

    The city-data url is banned, we had a troll/bot who would post links over and over.

  67. Carlito says:

    schill?

  68. Carlito says:

    nope, not banned….boys, behave…

  69. Fast Eddie says:

    unbelievable,

    Stop trying to use logic, only fuzzy math and fuzzy numbers are allowed!

  70. Fast Eddie says:

    Michael,

    Is using 2.5x to 3.x income still count as a measurement for house ownership or is that 1950s economic models?

  71. grim says:

    70 – Average house in NJ in 1950 was probably under 1500 square feet, and only had 3 bedrooms and 1.5 baths. You didn’t have air conditioning, or a dish washer.

    And this house fit a family of 5. If you had two boys, they shared a room, two girls, shared a room, whole family shared a full bath.

    Are you sure we’re comparing apples to apples when we compare back to the 1950s? I suspect the average American is buying much more house these days, and that is pushing the limits.

    Given all of the above, that house still cost 2.4x the median household income at the time.

    What is the ratio when we compare national median income to a median home price of a 3/1.5?

  72. grim says:

    Sorry, wrong, average new home size nationally in 1950s was 938 square feet. No, I’m not talking about the size of the master bath, that was the entire home…

    http://www.npr.org/templates/story/story.php?storyId=5525283

    So given the fact that the average house has more than doubled, why should the income to house ratio be the same as 1950?

    Unfortunately, Moore’s law doesn’t apply to houses.

  73. grim says:

    Not to mention if you purchased a home in NJ in the 1950s, you were paying on average, 42% more than the median home price nationally, which actually isn’t far off from what it is today. So don’t make it sound like houses were cheap in the 1950s either.

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

    Eff up royally, retire with fat gov pension.

    http://www.cnbc.com/id/101301813

    Funny, I don’t hear any Occupy-types calling for her pension to be revoked.

  75. joyce says:

    I know the ratios are off the historical trend. That being said, do the figure below include all income or just wage income?

    unbelievable says:
    December 30, 2013 at 12:40 pm

    Millburn Estimated median household income in 2011: $148,505 (it was $130,848 in 2000)
    Millburn Estimated median house or condo value in 2011: $1,043,177 (it was $529,600 in 2000)

  76. unbelievable says:

    71

    Aren’t you tired to make this argument again and again?

    Who compared with the 50s? There were two recent bubbles 2002-07 and 2012-now. Unless you believe during 1994-2002 and 2008-11 people lived without air conditioning in 2 bedrooms.

    Look carefully at the 2000 numbers
    Millburn Estimated median household income in 2011: $148,505 (it was $130,848 in 2000)
    Millburn Estimated median house or condo value in 2011: $1,043,177 (it was $529,600 in 2000)

    Arguing daily for bubbly merchandise, aka shilling, works great– no one has the time for daily rebuttals

  77. Michael says:

    64- You are misinterpreting those statistics. Millburn is old money. They don’t show income because they didn’t make their money, they already had it. So your statistics mean nothing. Your equation doesn’t follow logic.

    I’ll have post some more responses when I get a chance.

  78. grim says:

    You might want to get correct data before you base your argument on it.

    Median sold home price in Millburn in 2000 wasn’t $529k, it was $707k.

    Feb 2000 – Average sale price – $935,912 (16 sold)
    Mar – $668k – 27
    Apr – $656k – 14
    May – $874k – 21
    Jun – $665k – 43
    Jul – $742k – 33
    Aug – $655k – 38
    Sep – $572k – 30
    Oct – $798k – 18
    Nov – $717k – 26
    Dec – $653k – 9

    Median asking price during this time period was $893k.

    The 2011 data is close though, I’ve got $1.096m

  79. JJ says:

    Also people were not show offs in the 1950s. Today folks are uppity.

    Case in point after Sandy the original owner of the 1955 split next door visited really old lady came with her two “sons” who were in their 60s.

    Anyhow my neighbors house is 70×100. Odd house as it is a corner house and where garage went is a den and other side of house has a carport only one in neighborhood.

    She tells story her husband was a rich dentist. She bought house new in 1955 for $14,000. She paid $500 extra to have where garage was to go converted to an office and a carport added so he could park car. Now mind you home was only 1,500 square feet. He is a dentist and in that 1,500 square feet he had his business and raised a family. The old lady told us her husband was richest in neighborhood.

    Now I told this a few weeks ago but still find it amazing the richest guy in town lived in my house next door. 1,500 foot split with a 60×100 lot. Mr. Breakstone of Breakstone Cottage Cheese fame. So he paid 13,500 for my house on 60×100 with the garage and no carport in 1955. Now you might think it was a starter home as he was the Breakstone heir. Nope he is actually on the CO of a 10×10 bumpout to made the kitchen eat in. His son also graduated highschool in town.

    Both of them owned the homes till they retired and moved on.

    These folks had pride. The old women who showed up in the huge Mercedes with her two sons after Sandy was worried “her” house did not survive Sandy. She made her two sons a few weeks after Sandy drive out from city to make sure her house was ok. My neighbor bought the house in 1982 as a newlywed. He is a CPA. But check this out he raised three kids in house and runs CPA practice out of where dentist office used to be.

    So on top of houses being cheap back them folks bought small houses. Think of bewitched and other 60s shows where dad is an executive they live in starter homes.

    My block growing up had doctors and lawyers yet plots went from 40-100 t0 60-100. Most bought homes newly married and never moved.

    grim says:
    December 30, 2013 at 2:08 pm

    70 – Average house in NJ in 1950 was probably under 1500 square feet, and only had 3 bedrooms and 1.5 baths. You didn’t have air conditioning, or a dish washer.

    And this house fit a family of 5. If you had two boys, they shared a room, two girls, shared a room, whole family shared a full bath.

    Are you sure we’re comparing apples to apples when we compare back to the 1950s? I suspect the average American is buying much more house these days, and that is pushing the limits.

    Given all of the above, that house still cost 2.4x the median household income at the time.

    What is the ratio when we compare national median income to a median home price of a 3/1.5?

  80. grim says:

    Shitty 3/2s were going for $500k in Millburn in 2000…

    Just adjusting for inflation, we’re talking shitty 3/2s going for $675k today.

  81. Juice Box says:

    JJ – The whole point of moving out of the city in the 1950s was to show off.

  82. grim says:

    Adjusting the year 2000 $707k median sold price for inflation brings us to $957k today.

  83. grim says:

    Also, the census bureau has Millburn’s household income at $173k for 2007-2011 (ACS Survey date range) – not the $148k you mention. By the way, if you look at the quintiles – 44% of Millburn households have an income of over $200k.

  84. chicagofinance says:

    Millburn is the first full blown upper middle class community on the train line into NYC. Rush hour is 35 minutes…..bullsh!t it is old money…..pure NYC financial sector money on the margin…..AND the margin is what drives prices…..

    Michael…..have you ever read one book in your life….just curious….or just the paper and sundry tweets from Kanye….

  85. chicagofinance says:

    This is awesome…..especially having lived in Chicago…
    http://www.youtube.com/watch?v=6erKc3769_0

  86. unbelievable says:

    78

    I stated my source.
    If all else fails, doubt the numbers….
    The NAR numbers are, everybody knows, rock solid.

  87. unbelievable says:

    “House Prices: It appears house prices – as measured by the national repeat sales index (Case-Shiller, CoreLogic) – will be up about 12% or so in 2013.
    Read more at Calculated Risk

    New York times: How long the frenzy can continue is anyone’s guess. Too many high-end units coming to market at the same time could lead to a softening. “Buyers are not going to be irrational in their purchases,” said Shaun Osher, the chief executive of the brokerage firm CORE in Manhattan. “I think there will be a pushback to price-per-square-foot numbers that don’t meet the quality or location of the product.”
    ——
    Real average hourly earnings rose 1.1 percent, seasonally adjusted, from November 2012 to November 2013. The increase in real average hourly earnings, combined with an unchanged average workweek, resulted in a 1.1 percent increase in real average weekly earnings over this period.
    ———–
    no bubble here, no siree …. ”

    Don’t cry if you buy now due to shills and you are underwater in a couple of years.

  88. unbelievable says:

    With rents continuing to rise more slowly than prices, buying a home is becoming less affordable relative to renting.

    http://www.forbes.com/sites/trulia/2013/12/04/asking-prices-soar-higher-than-rents/

  89. clotluva says:

    80. Grim

    Not only looking at inflation, but the price:income ratio doesn’t factor in mortgage rates.

    I know everyone on this board is savvy enough to realize this, but as an example, in the year 2000, the average 30 year rate was around 7.5%, whereas now it is 4%. A $400K loan at 7.5% over 30 years results in total payments of $1.2mm whereas at 4.0% it is $875K.

    So, while a 2.5:1 price-to-income ratio might have been the norm in higher interest rate environments (closer to 10%), it is arguably overly conservative with rates <5%.

    All other things equal, someone who could afford a $400K mortgage in 2000 (@7.5%) should be able to afford a $600K on in 2013 (@4.0%). Prices know this.

    And, Fast Eddie, I know this doesn't factor in out-of-control taxes, the laughable state of inventory, the increased uncertainty/volatility in employment, stagnant salaries, etc…

    I'm definitely not a shill, schill, skill, or even a skrill, but I think price-to-income is a crappy metric, and the "2.5 x income" affordability addage is as relevant now as the "you can never go wrong investing in education" one. Just ask this guy:

    http://www.businessinsider.com/law-grad-working-retail-2013-12

  90. unbelievable says:

    “Adjusting the year 2000 $707k median sold price for inflation brings us to $957k today.”

    Oh yeah? and what about the income? Isn’t that get to be adjusted? what a skill…

  91. Juice Box says:

    re: # 89 – re: “price:income ratio doesn’t factor in mortgage rates.” It doesn’t factor in stupid either. I would love to see the pick a payment, teaser option arms come back in fashion along with fog a mirror. It would be nice to unload my house in a few years for a cool 40% gain on some 30 something unsuspecting Hipster Schmuck who went to law school but could only get a job stocking shelves who now has worked his way up to assistant manger at the local supermarket while his pregnant girlfriend lives in his mom’s basement continually complaining everyday they need more space. I can see the next generation mortgage huckster now sliding the paperwork to sign across the desk suckering in those who need to move, but have delayed family formation for the last decade to pay off massive school loans. It can all be yours is for a cool monthly payment of only $2,000 a month….just pick your payment and sign here….

  92. grim says:

    90 – Don’t pin that one on me, blame the Fed if you don’t like the inflation.

  93. Anon E. Moose says:

    Re [87];

    No crying here. I bought the bottom in 2012. Bubbles? Blow, baby, blow!

  94. Fast Eddie says:

    It’s not a normal market. With the rock bottom interest rates and slim pickings, you would think the prices would be near 2006 levels. Flat salaries, flat job growth, no savings, decoupled property tax extortion, f.ucked bag holders, no inventory and pom-pom waving is the current state of the housing market in this neck of the woods.

    G0d only knows how out of control I would be if I didn’t have a few buckets worth of equity. It was nuts in 2000 when I was looking for this current home but at least taxes didn’t make you p.uke. Those of you who justify it are not long term money managers or investors…. sorry to say it. If I was a potential first time buyer today, there is no f.ucking way I would take the plunge. I would invest the down payment and rent.

  95. Fast Eddie says:

    Juice Box [91],

    Written like a pro! Very nice. :)

  96. Anon E. Moose says:

    Con’t [93];

    Quick, someone buy me this bumper sticker:

    http://bit.ly/1cht7EU

  97. grim says:

    91 – From a few days back, from MarketWatch. Guy isn’t even in charge yet and he is already making policy decisions…

    Housing to benefit from Watt leading FHFA: analysts

    The housing market will benefit next year as Fannie Mae and Freddie Mac’s regulator gains a new chief in Mel Watt, who has announced a delay to plans to increase certain fees, analysts said Monday.

    Watt, to be sworn in on Jan. 6 as director of the Federal Housing Finance Agency, will delay increasing fees charged by mortgage buyers Fannie FNMA and Freddie FMCC . In a recent note, he said he wants to “evaluate fully the rationale for the plan,” and how it would impact access to credit and costs, among other factors.

  98. JJ says:

    That would make your return around negative 30% if you pulled out of stock market.

    Anon E. Moose says:
    December 30, 2013 at 4:03 pm

    Re [87];

    No crying here. I bought the bottom in 2012. Bubbles? Blow, baby, blow!

  99. Anyone who is buying into anything other than bitcoins, shiny or .223 right now is a sucker.

  100. grim (97)-

    I’m pretty sure Mel Watt is one of the four horsemen of the apocalypse.

  101. xolepa says:

    Hey guys. i.e. Mr. Ed,
    Low inventory is not unheard of and it has happened many times before. E.G:

    late 1985 – early 1986. Tried mightily to find a single family in my price range in western Somerset County. Less than half-dozen houses were for sale that were priced in $180-220 range. This included Bridgewater-Branchburg towns.
    1991-1992. Looking to upgrade to bigger 4br colonial. Once the market collapsed the bargains were scooped up immediately as there were no prop-ups at the time. You had to sell fast and buy fast to get the bargains. After the big sell-off nothing left except $600k upscale horse farms.

  102. xolepa (101)-

    That’s all over now. Hunterdoom is only for MS-13 and 99ers now.

  103. GTFO while you still can, xolepa. It’s all people on food stamps driving Range Rovers.

  104. Juice Box says:

    re # 97 – Grim Here is my oddball prediction for 2014. There will be some kind of legislation introduced to make FICO scores illegal just like what is now happening for background checks for employment. Gotta rally the troops for the midterms in November after all 435 seats in the US House and 33 seats in the US Senate are up for grabs.

  105. chicagofinance says:

    To counter Michael’s meth fueled lunacy, I live in mid-central hoity-toity-ville in a cul-de-sac …..25 houses and 1 sale in 7 years……we have 3 rentals, a lis pends, several empty houses owned free and clear, and a zombie mosquito infested- broken gated, tarp roof covered – weed factory…next to a $1.1M bought at the top of the market- seething upside down, why don’t I live in Rumson biatch…..

    However, my rent is up for renegotiation in two months, so I expect to get my a%% handed to me……AS IT SHOULD BE….you live by the sword, you die by the sword…..

    Juice Box says:
    December 30, 2013 at 3:56 pm
    while his pregnant girlfriend lives in his mom’s basement continually complaining everyday they need more space. I can see the next generation mortgage huckster now sliding the paperwork to sign across the desk suckering in those who need to move, but have delayed family formation for the last decade to pay off massive school loans. It can all be yours is for a cool monthly payment of only $2,000 a month….just pick your payment and sign here….

  106. clotluva says:

    94. Fast Eddie

    That’s why I’m still renting in the city… But I stand by my point that the price-to-income metric is pretty nebulous without looking at rates (and all the other factors you mentioned).

    But talk about bubbles…rents on 2brs in Manhattan are now cheaper than many parts of Brooklyn.

    Fast Eddie says:

    December 30, 2013 at 4:09 pm

    It’s not a normal market. With the rock bottom interest rates and slim pickings, you would think the prices would be near 2006 levels. Flat salaries, flat job growth, no savings, decoupled property tax extortion, f.ucked bag holders, no inventory and pom-pom waving is the current state of the housing market in this neck of the woods.

    G0d only knows how out of control I would be if I didn’t have a few buckets worth of equity. It was nuts in 2000 when I was looking for this current home but at least taxes didn’t make you p.uke. Those of you who justify it are not long term money managers or investors…. sorry to say it. If I was a potential first time buyer today, there is no f.ucking way I would take the plunge. I would invest the down payment and rent.

  107. unbelievable says:

    The following data is from usa. com. I think doubting this data borders to unethical almost shilling. Unless you prefer grim the shill not publicly available data (no links offered)

    Glen Ridge
    Median Household Income: $160,511 at 2006-2010—51.94% increase since 2000,
    Median House Price: $605,700 at 2006-2010—128.83% increase since 2000, rank
    Ridgewood, NJ
    Median Household Income: $143,229 at 2006-2010—37.34% increase since 2000,
    Median House Price: $705,000 at 2006-2010—82.08% increase since 2000
    Chatham
    Median Household Income: $44,928 at 2006-2010—19.01% increase since 2000
    Median House Price: $177,100 at 2006-2010—86.42% increase since 2000
    Westfield
    Median Household Income: $51,620 at 2006-2010—14.10% increase since 2000
    Median House Price: $224,400 at 2006-2010—68.22% increase since 2000

    10 year cpi increase due to inflation is 24% so the data shows that household income barely followed or trailed inflation, housing prices not so much, or taxes, etc

  108. xolepa says:

    Clot,
    They’re easy pickings once they start turning around at the end of the cul-de-sac.

  109. unbelievable says:

    As for the argument that prices are high because of low rates:

    Because wage appreciation has failed to keep pace with home value appreciation, once rates rise and the illusion of affordability driven by smaller monthly payments disappears, the market will be left with homes that could potentially be too expensive to afford on the typical median wage.

    http://www.forbes.com/sites/zillow/2013/04/16/high-home-price-to-income-ratios-hiding-behind-low-mortgage-rates/

  110. grim says:

    109 – Thoughts?

    http://njrereport.com/blog/wp-content/uploads/2013/11/13774875-large.jpg

    The challenge with looking at simple median is that you lose the detail – what do you see in this data?

  111. xolepa says:

    (109) Rates will rise only with expectations of a better economy, In today’s times, I would expect expectation should= reality. So it will be a wash out. Higher rates and more money on the table. Don’t see it happening until bro moves on. If we have higher rates and an economy going nowhere, we will return to the happy days of Jimmy Carter. He offered plenty of hope and change. Remember the picture of him, his wife and daughter walking down PAve waving arms on inauguration day? NYT had the biggest payday in circulation ever the day after. Idiots. That thing about hope and change, doesn’t it get repeated once a generation? Sort of like Germany in the early 20th century.

  112. Fast Eddie says:

    clotluva,

    I get what you’re saying. There are so many factors. But the Billy Ray Valentine method of analysis is all that is needed to know that this isn’t a normal market. Until all deterrents are lifted, this market will not approach normalcy.

  113. Fast Eddie says:

    “Current affordability is almost entirely dependent on low interest rates, and there’s no doubt that rates will begin to rise in the next few years. This will have an undeniable effect on demand for housing, as home buyers will have to spend more of their incomes to buy a home. Home values will have to either remain stagnant while incomes catch up or, quite possibly, home values will have to fall in some markets.

    Any questions?

  114. unbelievable says:

    111

    “Mortgage rates are not set by people emotions. Mortgage rates are set by the bond market as money will go where it is treated best. If rates on treasuries rise rise then mortgage rates will rise, and no amount of borrower despair will keep them down (case in point, the run up to the peak in rates in the early eighties). So mortgages are the tail and Treasuries are the dog that wags them. Now what could make Treasuries rise in yield? I’m not talking about a rise spurred on by economic growth, that would be great, and is a possibility. But we have to look at the fact that rates are cyclical and the cycle is very likely near an end. When othe final low is in and I’m not positive it is, it is likely that rates will rise for 10-15 years, not in a straight line, but relentlessly like the tide. So let’s say China decides they don’t like us anymore and unloads much of the gazillions of $ worth of our bonds they own, rates will go higher and in a hurry…. Bad things in the financial markets tend to happen with more speed than good things, fear is a stronger emotion than greed. Stocks rise slowly but fall in crashes, rates grind lower but tend to spike higher….. I hope I’m wrong but I could see rates return to the 2008 levels [6.5%]….At that point the same payment that supports a $1,000,000 mortgage will only support a $541,000 mortgage, a pretty significant decline. Now maybe incomes will rise enough to offset wherever the rate rise takes us, but that would require a pretty big jump in income don’t you think?”

  115. unbelievable says:

    110

    Aren’t you tired with the same old the rich are coming? The effect of your graph can easily happen if everyone with $125K and above got a $2-3K raise over 5 years (they did) and did not move (they did not). This shift should have been expected for the higher incomes due to inflation. For the middle and lower incomes not so much. Take off the shilling eyes.

  116. grim says:

    IMHO – Rapid rise in mortgage rates will directly result in a significant reduction in the supply of existing homes as owners will be reluctant to sell. Why? Because it means taking on a much higher interest rate. Instead, owners will expand, remodel, etc … anything but sell.

    Given the ferociousness of the refi market, I wouldn’t be surprised to hear numbers like 20-25% of the entire US housing stock being in this “locked in” scenario.

    Would I trade my sub 4% mortgage for a 6.5% mortgage on a more expensive property? Nah, I’ll just drop a second level on, the payback will be better (Not at all sure what I’d do with 4800 square feet).

    Follow on impact will be an increase in the value of the overall existing housing stock as small properties are expanded and remodeled instead of being handed to new owners.

    If you thought inventory was low now, you’ll not like this scenario at all.

  117. grim says:

    115 – Stick around for another 8 years and we’ll see who is right – my track record is pretty good. Yours?

  118. xolepa says:

    One prospect perhaps not talked about much that could affect Mr. Ed’s position on low inventory is that homeowners in the past few years have refinanced to historically low mortgage rates. Why should I bother to sell if my PITI, which includes an annual tax bill of $17k be lower than a lot of modern 2/3br apartments in my area. Most newer 2bedrooms in Somerset/Hunterdon area are $2k monthly+. Why should I sell? The same for the multis. Why try to upgrade when the refi gave you an extra grand a month?

  119. clotluva says:

    113. Fast Eddie

    I fully support the theory that if low rates have helped prop up home prices (which I believe has been the case), then rising rates should help lower them – provided other ‘market stabilizers’ (like never ending foreclosure processes, government backed loan modification programs, etc) aren’t put in place.

    But as Clot says, expect our elected leaders to create policies that result in the worst possible outcome for the productive class.

  120. unbelievable says:

    116

    I don’t think that all owners have your perseverance, or age, or ability to keep with raising taxes, or ability to maintain income or job. How narrow-minded…

  121. clotluva says:

    116 Grim.

    I agree intuitively about rising rates causing a decrease in inventory (at least initially), but on the other hand, a lost job, or an empty nest that comes along with a tax bill approaching $20k per year, would certainly motivate me to sell rather than to expand.

    Expanding a house is like inviting the tax assessor to double your taxes.

  122. grim says:

    120 – I suppose that comment illustrates exactly where we differ – you view the US in an uncorrectable tailspin, I do not. I think the armageddonist viewpoint that has been so prevalent here is absolutely 180 degrees incorrect, and I’ll bet against it every time.

  123. xolepa says:

    (122) You’z da man. Each and every time. Damn, I admire you for your perseverance. Daj bozhe zdorovya. (that’s not a literal translation)

  124. I fall into the uncorrectable tailspin camp and await the collapse.

  125. If Janet is yellin, you must be sellin.

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

    Spine Snapper says:
    December 30, 2013 at 4:30 pm
    xolepa (101)-

    That’s all over now. Hunterdoom is only for MS-13 and 99ers now.

    Great. Time to call up the militia and rig the Delaware crossings with dynamite so the cancer can’t spread west (which it can easily, if it hasn’t already, but hey, bridge standoffs are fun).

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

    [122] grim,

    I don’t consider myself an armageddonist but we insure against storms and fires and other possible yet unlikely events, don’t we?

    Insurance: Better to have it and not need it . . .

    Hmmmm, I wonder if there is such a thing as zombie economy insurance? Market niche?

  128. Michael says:

    122- grim, I have yet to find one Armageddon soothsayer in history stand correct. Here is a little tip for those thinking the end is nigh…..you are not the first to predict this and you will not be the last. You all share one thing in common, you are never right. No one can predict the end. When it does happen, no one will see it coming…that’s a guarantee.

  129. Michael says:

    Chi finance- I was born and raised in northern nj. Essex county is old money. Some of this old money might still work but they still came from money. You will not find many first generation wealthy living in short hills or Essex county in general. Maybe my perspective is off but this is what I see.

    Full blown upper middle class? Dude, short hills bleeds money. It’s one of the wealthiest zip codes in America. I don’t know what your definition of upper class or upper middle class is. Till then, I choose to disagree with you.

    “Millburn is the first full blown upper middle class community on the train line into NYC. Rush hour is 35 minutes…..bullsh!t it is old money…..pure NYC financial sector money on the margin…..AND the margin is what drives prices…..”

  130. Michael says:

    Lol I love this discription of short hills on urbandictionary from the viewpoint of the youth.

    http://www.urbandictionary.com/define.php?term=Short+hills

  131. Michael says:

    Yea, it’s ranked as the 67th most expensive zip code in the u.s. because it’s only upper middle class. Please!!

    Ranked 67
    07078, Short Hills, NJ
    1951846 11.9 168 77

    http://www.forbes.com/special-report/2012/1016_zip-codes_rank.html

  132. Michael says:

    55- jj, exactly!!!! He doesn’t mind that his property went up in value but he is upset that his property taxes now went up. That’s like complaining about paying taxes on your bonus. You can’t have the best of both worlds. Your property value went up, then you have to pay more taxes. You don’t like it? Well then sell your house and buy a lower valued home. It’s really not that complicated.

    “Wait if your property values rose 87% and then fell 20% that is a 67% rise in value.

    Property taxes are based on home values. So if you are saying your property taxes rose 67% and your home rose 67% in effect your taxes rose zero percent.

    Congratulations”

  133. Street Justice says:

    Unbelievable needs to be made to understand the widening income gap. There is no middle class and nobody making a 125k median income is buying anything in the Milburn area. 125k is nothing. A peasants income.

  134. The Original NJ ExPat, cusp of doom says:

    I don’t know what’s funnier, Michael’s continued demonstration of his dearth of knowledge in all things financial or the wasted words of the people here who actually think a stone can absorb, process, and store knowledge. I’m thinking Michael might just be a Wayne Valley HS student, definitely not Wayne Hills.

  135. Michael says:

    135- I’m not the one claiming real estate is 50% overpriced, that millburn is a middle class town, or the end is nigh. Guess I’m an idiot.

  136. Michael says:

    134- well said!

  137. Phoenix says:

    134 SJ,
    Thanks for calling me a peasant. Guess I’ll put on some black face paint and run over to Nom’s house tonight. Suicide by Plume.

  138. chicagofinance says:

    Read WTF I wrote you attention deficit plebe! I didn’t write Short Hills….and check the function train sched in terms of the sequence of towns….
    http://www.njtransit.com/pdf/rail/R0040.pdf

    Also I said ON THE MARGIN…..do you even care what that means?

    Michael says:
    December 30, 2013 at 10:39 pm
    Full blown upper middle class? Dude, short hills bleeds money. It’s one of the wealthiest zip codes in America. I don’t know what your definition of upper class or upper middle class is. Till then, I choose to disagree with you.

    “Millburn is the first full blown upper middle class community on the train line into NYC. Rush hour is 35 minutes…..bullsh!t it is old money…..pure NYC financial sector money on the margin…..AND the margin is what drives prices…..”

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

    [138] Phoenix,

    It’s a long run. Drive instead. That way, I get to be Humongous and keep your gas after I dispatch you.

    I’ll be quick and merciful.

  140. mk tote bag says:

    TIGERS 8, ATHLETICS 6 DETROIT ― On a night of desperation, dispute and finally, delirium, Max Scherzer and the Detroit Tigers kept their season alive by the slimmest of margins. A tying home run, helped along by a couple of fans in right field. A full-count pitch with the bases loaded that was low and inside but became strike three when the batter swung. A line drive down the line with the bases still full ― foul by a few feet. During a relief outing to remember, Scherzer escaped a m