From MoneyWeek:
How the US became a bubble economy
Dr Kurt Richebacher
What is the difference between those housing bubbles of the 1970s and the late 1980s and the US housing bubble of today? There are four decisive differences.
Why is the housing bubble different this time?
First, those past housing bubbles developed in a generally inflationary environment of rising consumer and producer prices. Central banks tightened their monetary reins to fight inflation in general.
Second, those bubbles were pure price bubbles in the sense that house prices rose faster than the general price indexes. There were no major repercussions on the economy.
Third, what the United States and many other countries are experiencing today is completely different from a house price bubble. Rising house prices are used as collateral to finance extraordinary borrowing-and- spending binges that virtually dominate economic growth in these countries. In 2005, consumption and residential building accounted for 92% of US GDP growth.
Fourth, disclaiming that the rapidly rising house prices reflect inflation, the Federal Reserve has readily accommodated them. Rather, it hailed and celebrated the rising prices in a very positive sense as welcome “wealth creation.” The declared intention of the rate hikes since mid-2004 was not to fight inflation, but to normalize short-term interest rates. Policymakers and economists openly invited and encouraged people to prime the bubble and to make as much use as possible of the borrowing facilities it offers.
Last night I was talking to this 32 yr old “real estate investor” who has over 800k in int only mortgage debt and properties which generate negative cash flow. He is in complete denial of the real estate bubble, saying there is no such thing and houses will only appreciate because they are not making any more land argument (must have got that one from Rich Dad Poor Dad) and is not worried…
just goes to show how the other side still thinks…
Is it really any different from the dot com days?
How many armchair stock geniuses did you know?
And before someone launches into a rant about how these asset classes differ, that isn’t the point I’m trying to make.
It’s all about perception and psychology.
jb
From Bloomberg:
ECB Raises Benchmark Interest Rate to 3.25% to Check Inflation
The European Central Bank raised interest rates to keep inflation in check as economic growth accelerated in the 12 nations that share the euro.
ECB policy makers meeting in Paris today increased the benchmark lending rate to 3.25 percent from 3 percent. It’s the fifth such move since early December and was predicted by all 50 economists surveyed by Bloomberg News. The Bank of England kept its key rate unchanged at 4.75 percent.
The bank says it’s concerned the fastest economic expansion since 2000 will stoke demands for higher wages. Credit to businesses and households jumped 11.9 percent, the most since the ECB took charge of monetary policy eight years ago, raising the risk that inflation will accelerate again next year.
Economic growth “has surprised most people in terms of the strength of the upswing and how long this expansion is lasting,” said Silvia Pepino, an economist at JPMorgan Chase & Co. in London. “The ECB is focusing on inflation 18 months down the road. The fact that inflation is temporarily below 2 percent doesn’t change this objective.”
A better question is: will the gov’t bail these people out? I think the answer to that is a yes.
Always comes back to my favorite from Bob Toll, that he has never seen a market turn like this with a good economy, low historic rates and low unemployment. What the hell happens if a recession hits??
JB,
You are right. It doesn’t matter what asset class. It the psychology of the market, greed/fear.
..dont forget about herd mentality.
thatbigwindow,
Exactly right. That was the fear aspect when this market was taking off for a moon shot. Everybody was convinced that they had to buy at any cost. If they don’t buy, they will never have a opportunity. Get in before it’s too late, it will cost another 100k next year,etc…. Now they are all on the boat and the boat is sinking.
There is a good possibility that we’re going to see bailouts, perhaps similar to what we saw during the S&L fiasco. However, the bailout will be limited to key financial intermediaries.
I strongly believe that the there will be no public bailout.
jb
i for one am skeptical we’ll see a continued quick deterioration like the one we’re witnessing now. reason being while there are a bunch of fools getting themselves into risky loans there are 65%+ of people even 5 years ago that owned their homes and had some type of equity built. this means a good portion of folks with the exception of certain very bubbly areas didn’t get themselves into suicide loans. if they sold and inflated property, they bought another inflated property and net net $ didn’t change all that much.
this is just a theory of mine. what would be interesting to see is a comparison of 2000 to 2005 of % of homeowners, tiers of how much equity has been built, median income, etc. my own feeling is we’re in for a slow grind as the boomers cash out and you have these ridiculous prices that can’t be supported by incomes keeping a lid on appreciation. so instead of a 30% correction in short order you’re looking at flat to single digit declines inflation adjusted for a # of years.
“It’s all about perception and psychology.”
ahh…Grim….
You are the man of the hour.
You are correct.
If you can pull the wool over someones eyes, you can squeeze every dollar out of them, while they sit and smile at you.
:)
SAS
I’ve noticed a number of the houses I’ve been keeping an eye on (USR, FL, Wyck area)have gone under contract in the past week. I thought some were lowered pretty decently (20% off 2005 prices) while others were still only like 5% lower. I had a couple lowball offers on some of these, in factI believe I helped drive down these houses to the 20% as I made my offer with an explanation of the housing market. After my offer, the listing prices began to drop and they’d call me every few weeks and let me know they were dropping again and if I wanted to up my offer before they lowered the list price.
I stayed firm and two houses actually came very close to my offers (about $20-40K diff). That may seem like a big diff still, but these were house whose orig list was slightly above $1M and were now in the 700/800’s.
Do you think people reacted to some news reports that we’re at the bottom and decided to buy?
I hope they’re wrong as I’m about to change my name from BergenBuyer to BergenRenter in about two weeks as I plan to forget about buying for at least 6 months and rent.
“my own feeling is we’re in for a slow grind as the boomers cash out and you have these ridiculous prices that can’t be supported by incomes keeping a lid on appreciation. so instead of a 30% correction in short order you’re looking at flat to single digit declines inflation adjusted for a # of years.”
I think there will be a sizeable YoY drop next year (10%) as the excess new construction / flippers / FBs get sqeezed from the market. Once most of the speculators are gone, I think it will play out like you say.
Personally, I don’t believe we’re yet in a buyers market..
From Bankrate:
4 tips for buying a house in a buyer’s market
Now is a great time to buy a house. Prices are falling, and so are mortgage rates. Millions of houses are for sale, and sellers are getting anxious.
That’s one way of looking at it.
Alternatively, you could say: This is a bad time to buy a house. Prices might be lower in a few months. Same with mortgage rates. With more than 4 million houses on the market nationally, and more being added daily, sellers are bound to become desperate. Why not wait them out?
In many places, it’s a buyer’s market in real estate, with sellers outnumbering potential purchasers. The resulting downward push on prices makes buyers happy. But it complicates matters for buyers, too. In some markets, there are too many choices to sort through. Even more bewildering, buyers wonder if they should wait a few months.
“They’re worried that they’re going to buy too soon, and the figures will reduce, and by the time they go through the transaction, they’ll have negative equity,” says Mario Villena, vice president of Homekeys, a Miami-based online real estate brokerage…
Considering the current dominance of psychological factors, I don’t know how anyone can predict how this is going to play out short term.
As long as there are some people out there like TBW’s “investor” there will be suckers for the market. I realize they are now far fewer, but considering where we are, I sure can’t understand it.
Let’s face facts, if you’re a regular here, you probably haven’t been able to figure out what has kept people in the market for at least two years.
To go all Stephen Roach on you, the existing imbalances demand a correction, the longer that correction is postponed, the worse it will be, that’s all I’m sure of.
hey sas or grim
can you explain the sudden surge in the dow over the last few weeks?? do you believe this will continue or is it just some election or hedge fund induced thing?
the housing market is in an obvious downward slide but oil is crashing and the dow is booming
can you give me your thoughts
thanks in advance
I’m not so sure it’s even worth the time to try to “explain” short-term stock movements. Especially in a “Monday morning quarterback”-kind of way.
It’s the kind of scenario where everything makes perfect sense in retrospect.
jb
i think the wait for the overly hyped ‘boomer bail out’ will not take place. they bought more homes, more second homes, did more renovations, increased total sq.ft of their homes. listen to Benny… they cant retire… or dont intend to they are going to live forever. the amount of consultants working for companies trying to find ways to keep them onboard is increasing expodentially.
my sense is NJ boomers are not downsizing, liquidating, moving to florida in masses… they are doing what all of us like to do…stick with what is familiar, stay close to family, listen to bruce, and hope RE taxes dont keep going up.
we are, as a collective, contrarians right? should we not consider all these boomers sticking around, artificially depleting supply on the forecast demographic shift? could mean this bubble moves even slllloooowwweeerrrr.
curious,
Did you read Bernanke’s most recent speech?
The Coming Demographic Transition: Will We Treat Future Generations Fairly?
Although some adverse effect of population aging on future per capita output and consumption is probably inevitable, actions that we take today, in both the public and the private spheres, have the potential to mitigate those effects. One such action would be to find ways to increase our national saving rate. If the extra savings were used to increase the nation’s capital stock–the quantity of plant and equipment available for use by workers–then future workers would be more productive, ameliorating the anticipated effects on per capita output and consumption. Alternatively, using extra saving to acquire financial assets abroad (or to reduce foreign obligations) would also increase the resources available in the future.
By saving more today, we can reduce the future burden of demographic change. However, as any economist will tell you, there is no such thing as a free lunch. Saving more requires that we consume less (to free up the needed resources) or work more (to increase the amount of output available to dedicate to such activities). Either case entails some sacrifice on the part of the current generation. Consequently, a tradeoff exists: We can mitigate the adverse effect of the aging population on future generations but only by foregoing consumption or leisure today. This analysis is simple, but it shows why the coming demographic transition has economic implications that go well beyond the effect of aging on the federal budget.
Looks different to me:
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Time to buy now Greater Fools, so I can pick up a nice foreclosure property at pennies on the dollar.
“That was the fear aspect when this market was taking off for a moon shot. Everybody was convinced that they had to buy at any cost. If they don’t buy, they will never have a opportunity. Get in before it’s too late, it will cost another 100k next year…”
Was looking at some older listings last night (2003 timeframe), and to see how people SUBSTANTIALLY overpaid for properties was unreal.
You had some houses assessed at $995K, and closed at $1.2M and other houses assessed at 575K closing at $1.2M as well.
The latter house was obviously listed at an ultimate “Wish Price” and a Greater Fool actually stepped up and dropped the $1.2M. Idiots. The house should have closed about $800K max (accounting for bubble-fied prices).
Herd mentality indeed, some of these “owners” are insane, and I hope to see them at auction.
Jim,
The AARP survey don in 2004 asked boomers when they will retire. It found many expect to work well into there 70’s. It also found many of them would like to job share and that is what has been projected as the future for boomers at demographic conferences I have attended.
Off topic but I found this mashup to be interesting. It made the NY times on the 1st. It tracks “bash and builds” (teardowns) in Montclair.
http://www.baristanet.com/2006/09/montclair_nj.php
Give it up already, you bubble heads!
There is no bubble.
The fed will not allow that to happen.
If anything the prices will remain steady until inflation catches up.
Your wishing for something that will never happen!
The economy is great and people are making more money that ever, give it up!
grim, yep, i read benny’s comments. very concise. very true. makes me think of an old West Wing episode where a group of 12 year olds suggested they should have voting rights since the goverment was selling off their future living standards.
so are you agreeing with me? bo boomer move-along in NJ?
dave
that is ‘no boomer move along in NJ?’
There is no bubble.
The fed will not allow that to happen.
Can you explain to me what the Fed will do?
jb
The fed will lower interest rates again and keep the economy going until inflation catches up and salaries catch up and it will all equal out…
Skep-tic,
I agree with you. We will see a quick and significant drop followed by a grinding down over a longer period of time. This is a fairly standard pattern for bubble bursts to follow and I don’t expect this one to be much different.
Richard,
While you make a good point about earlier buyers having some insulation, don’t forget that a good number of early buyers have “cashed out”(really borrowed against) their equity to fund more new cars, boats, plasma TV, vacations and second/vacation/spec. homes in the face of stagnant wages.
“Everybody was convinced that they had to buy at any cost.”
Yes, and they were convinced that they in turn had to convince others to do the same. My wife and I were told “with your credit rating, why do you want to rent instead of buy?” I still rent – an affordable Victorian home – and take extended weekend trips with the $450 a month I would have had to save for the property taxes if I owned the house. My neighbor owns, used his mortgage ATM card a few times which doubled his payments – can’t even run the filter most likely due to not being able to pay the electric – yet he would be the first to look down at me and say “Oh, you rent…we own our place.” The majority of people are fooling themselves with home ownership. I always knew it, this site proved it.
meant to say: my neighbor put in a new pool and hasn’t been running the filter.
The fed will lower interest rates again and keep the economy going until inflation catches up and salaries catch up and it will all equal out…
Ok, so you agree there is a bubble, even if you don’t call it that. For the sake of argument here, let’s just say that we both agree that Prices are out of synch with Wages.
Now, you say the Fed is going to let inflation run higher, in effect creating wage inflation in the economy, to bring wages up to the level where the fundamentals support prices.
Fantastic, so your saying home prices are going to decline in real terms until they fall to a level where fundamentals support them.
We’re not really on different pages here.
jb
The only real difference between our viewpoints is that you feel the decline will be largely due to inflation, a decline in real prices, where I believe declines will be some mix of nominal declines in the short term along with real declines in the long term.
jb
truth –
if you scenario plays out and inflation and salary’s do catch up with home prices, it would be considered a decline because housing would have had to remain flat for the entire time that was happening, which in turns means it was dropping since it was not keeping up with inflation.
I also firmly believe there will be no bailout for the homeowners who are stuck but I do believe there will be bailouts for the financial instituations who pick up the tab anyway for the govt’s mess with the deficits and those institutions are covering the carte blanche blank checks the govt writes at whim which adds to our sad deficit scenario (over 9 trillion and counting)No bailouts for people like you and me but bailouts for the financial institutions in store. Wait and see.
Yea – give it up everybody – I have already did so – DO NTO BUY A HOUSE UNTILL PRICES ARE MAKING SENSE.
Right now it is impossible to by a positive cash flow property ANYWHERE in the country….
People With My education were always considered MIddle Class – salary in the 68-75K range. Right now it buys nothing in NJ… Not even run down Converted Studio Apartment…. ( plug in interest, HOA fees and Taxes and there is nothing under 2200$/month). Driving over 60 miles is not an option – plug in commuting costs, and loss of 3-4 hours a day…
I will stay at my work for 2 years, renting my crappy apartment (still 1200$), save some money.
After that if nothing changes I will dop as truth says: I WILL GIVE UP, F%$% New Jersey I am moving out.
It’s not like North East New Jersey is a nice place to live anyways – it’s like huge getto….. (Yes I did move to NJ after living for years in the West (Colorado, Utah, Washington State, it is my first job after college, I love my job and I hate NJ)
Of course, there are some issues with the inflation argument.
1) The markets will not allow inflation to run rampant without being compensated for them. Thus, if the Fed drops rates and keeps inflation elevated, there is a good change bond yields will need to rise to compensate investors for the losses of inflation. When bond yields rise, so will mortgages. While the Fed can get away with a little inflation, alot of inflation is an entirely different scenario.
2) Realize that the last bubble burst saw both real and nominal price declines during a period of falling mortgage rates. Dropping mortgages rates doesn’t mean greater sales in all cases.
jb
“Truth,” please buy now (particularly in the neighborhoods I’m looking).
Thanks.
Hot out of the fryer..
Trans fats in the fire as Jersey joins fray
It’s official. New Jersey has joined the food fight.
Today, state Sen. Ellen Karcher (D-Monmouth) said she will follow New York City’s lead and is going to introduce legislation to ban trans fats from the Garden State’s restaurants.
…
On the heels of the flap over fois gras — New Jersey Assemblyman Michael Panter recently proposed banning the gourmet food — Deborah Dowdell, president of the New Jersey Restaurant Association, has just about had enough.
While you make a good point about earlier buyers having some insulation, don’t forget that a good number of early buyers have “cashed out”(really borrowed against) their equity to fund more new cars, boats, plasma TV, vacations and second/vacation/spec. homes in the face of stagnant wages.
I know a couple in their early 50’s who bought a place in West Caldwell in 1983 for ~$75K. They’ve made one $30K family room addition since.
They now have a mortgage balance of $350K and have the attitude that “the house has saved them every time!”
Their kids are just going into the college years. How are they ever going to retire?
Don’t these people have anything better to do than create stupid laws? Why don’t they tackle real issues
ugh makes me want to vomit
The Kara Homes (NJ homebuilder) bankruptcy rumors have been confirmed, see the post below this one on the main page.
jb
Curiousd, I completely agree.
Buy now, with one caveat: reasonably. This way you can cash in later, & I mean muuuch later. That is unless you’re a Boomer at the younger-end of the bracket or in need of retirement accounts because you didn’t save yet. Get out now & start renting or do the multi-generational-housing thing that immigrants do to pass the house down. & by immigrants I mean the Ellis Island-WWI-WWII kind who are rolling over in their graves that this American dream is dying too.
I hate being in GenX, it’s the worst end of the stick on the biggest generation gap ever. The Boomer generation is starting to retire & still having kids. & those kids will grow up with GenX’s kids. Those two diverse-overprotected-autistic-allergic-pill popping age brackets combined with new immigration, may make Boomer-like profits possible in 30 years from now on a house last updated & outdated from waaaay back in 2007. “Eeeww, oh.my.gawd! granite counter tops, how wanna-be-classic tacky!”
There’s nothing else to depend on as far as gov’t savings/retirement/SS. The way all markets are being manipulated my 401ks mean just as little. & as Tip O’Neil said, “All politics is local” & the money behind it all has gone global (there goes my hopes for immigration helping any.) It’s all another Boomer-Ponzi scheme like S&Ls, SS, credit, refi, ARMs, etc… they work on emotions & easy-fix-lotto-dreams, like home ownership or college.
Gen X will be the first generation unable to vote (even en masse!) to prevent history & mistakes from repeating, reaping no reward, infact, will take a step backwards & history really won’t care because it’s such a small group. The sitcom Family Ties was backwards: Alex P. Keaton ended up being the analytical-mod-hippie & the parents are concrete-heartless-powertie-suits.
The current threshold is that DINKs with a combined 100Kish income might be able to get in to a single-family-stand-alone-house with a quarter acre. If you’re not doing better than that then forget about the dream of home ownership, you’ll end up renting-to-own a $400K condo otherwise.
The markets won’t correct unless we “keep it real” or better yet, keep it simple stupid. Accurate values must be realized so credits/debts are forced to decrease across boomer assets & maybe if the scrounged savings/incomes of GenX can afford them… until then, peter continues to get robbed to pay all.
If I want to buy I will base it on whether or not I can rent it out for a positive or worst case scenario a break even cash flow .That is not going to happen for a long time because the fundemantals do not support the traditional buying and being able to rent it out and not come out with a negative cash flow. Until that happens its dangerous to buy no matter what. We have not factored in the loss of jobs that are going to come due to cut backs in construction, realtors, mortgage brokers and all related service industries.That too is coming . Dont be fooled by the stock market as most of the buying is institutional buying and the small man in the street is not buying that much.Institutional buying can be very manipulative . Our dollar has no business being so high with the current trade imbalances , inflation needs to be checked and incomes are not rising so there is no basis whatsoever for the real estate market to stop its free fall until and unless the fundementals make sense and that is not going to happen for a long long time and you better believe it.
JB et. al.,
Also, we got into this mess by through inflationary monetary policy that sought to inject liquidity into the economy and cheat the recession that should have resulted from the dot com crash. Instead of getting channeled into business investment, most of the liquidity sloshing around the economy got soaked up by residential real estate. While it wasn’t the Fed’s intention for this to happen, it met the Fed’s short-term desire of staving off recession.
The moral of the story is that using monetary policy to affect the economy in a very specific way is like trying to do brain surgery with a sledgehammer. While it would be nice to inflate wages, while leaving consumer prices and asset prices untouched, how could you really accomplish this?
ithink,
agreed. and family ties…that’s just deep.
here’s to the long,rocky road ahead. my boss always says each generation has their set of problems. this will be ours i suppose.
all of this happens while the ‘3rd arm of society’ (peter drucker…after capitalism and goverment comes social/civil structure which binds groups) fails miserably. when’s was the last neighborhood party you went to?
keep thinking…i’ll stay curious.
>
you cannot really accomplish this. You are right. Money will shift from those people who are highly leveraged like homeowners who took loans and spent their equity and recent investors holding the cat in the bag. The shift will be to the rich and powerful banking institutions and rich families who will rake it in. ( almost like the crash of 1929 when the rich became more rich) Figures dont lie and the kind of monetary policies implemented will take its toll, its only a matter of time.
Gen X will be the first generation unable to vote (even en masse!) to prevent history & mistakes from repeating, reaping no reward, infact, will take a step backwards
Interesting thing happened a few weeks ago. I was at a company-wide mandatory training class sitting at a table with people from different areas of the company. One person (a baby boomer) stated that he was really concerned about the cost of health care in retirement. A person from HR brushed aside his concerns saying. “Don’t worry about it, Baby Boomers have all the political power in the country. We will just vote for the changes necessary to make sure that we are taken care of”. Offensive as it may be, she was probably right.
JB,
You left out an important component of the “inflate away the housing price problem.” There is no upward pressure on wages. Simply put, the current political climate is one where rising wages are considered a dangerous and negative thing. Both political parties seem in general agreement on that, and external factors (outsourcing, offshoring, China and Japan’s willingness to absorb our debt and keep their currency from rising etc.) also serve to prevent rising wages.
patient homebuyer,
See yesterdays post. We had a short dialogue on the recent market movements.
SAS
Richard: You are forgetting that even many who purchased 5 years ago or more, and I know many who purchased 10 and 15 years ago, well guess what many have been using their house like an ATM, additions, new kitchens, expensive cars, 2 to 3 vacations a year, the list is endless. Plus I know many that have used their equity to pay for their childrens colleges. So this thing is much bigger than just those who purchased in the last 3 years or so, or those who used toxic financing etc.
From Marketwatch:
Fed’s Plosser says more rate hikes may be needed
The newest Fed bank president said that it is premature for economists to talk about rate cuts and said that more rate hikes might be needed in coming months to combat inflation. Charles Plosser, an academic who took over the reigns at the Philadelphia Federal Reserve Bank earlier this year, said he is much more concerned that inflation could spiral out of control than he is about a sharp slowdown in economic growth. Plosser said the economy is on “firm footing” and the slowdown underway in the housing sector is not unwelcome. “Recent developments in the real economy may be suggesting that lower interest rates are called for, but I do not believe that is the case,” Plosser said. He said the Fed was in danger of losing its inflation-fighting credibility. “So, if unacceptably high rates of inflation persist or public confidence in long-run price stability seems to diminish, then additional monetary policy may be necessary,” Plosser said.
While I agree with his comment on housing, I’m surprised he made it.
Seems that there are a few at the Fed who don’t believe that keeping home prices elevated is a prime concern.
jb
there is not a doubt in my mind that boomers will pass the buck. there will be a combination of major tax hikes and a SS/Medicare phase-out based on year of birth. I’m just hoping that total tax burden remains below 50% of income
“Don’t worry about it, Baby Boomers have all the political power in the country. We will just vote for the changes necessary to make sure that we are taken care of”. Offensive as it may be, she was probably right.
That’s assuming the voting machines aren’t rigged, which is a major assumption, IMHO.
Truth,
You’re right, there is no bubble. History will show that it has burst. The only question now is the time frame/consequences. Hasn’t the fed already done what you have proposed??? If they move again, what are the inflation implications?? Ask Japan about lowering rates to prop up RE.
>
Lowering interest rates will be a very temporary fix if at all it will have any effect. Maybe more houses will be sold temporarily but the problem will be aggrevated and will come back to haunt the economy. The basic fundementals are not there and interest rates must go up to curb inflation and there is grave danger of us entering into a recession. Talking about Japan, they went down as low as 1% interest but that did nothing to prop us the real estate market. It is 16 long years now since the bubble burst there and there is no activity in sight as yet in the real estate sector to speak about.
I for one can say among my friends and I that do get into that 100k area, we’re all informed and staying away from real estate purchases. There is nothing to have pushed up the fundamentals so that people should be paying 5X median income for a home. Patience…
Looks like everyone is getting more comfortable with the new format (judging by the # of posts)
Looking at moody’s chart only 5% in Edison,NJ?
Thats not that much of a price drop… as it its around 15,000 for a 300,000 dollar home… Which covers rent for a year… hmmm
who is moody?
October 5th, 2006 at 11:14 am
Yea – give it up everybody – I have already did so – DO NTO BUY A HOUSE UNTILL PRICES ARE MAKING SENSE.
Right now it is impossible to by a positive cash flow property ANYWHERE in the country….
People With My education were always considered MIddle Class – salary in the 68-75K range. Right now it buys nothing in NJ… Not even run down Converted Studio Apartment…. ( plug in interest, HOA fees and Taxes and there is nothing under 2200$/month). Driving over 60 miles is not an option – plug in commuting costs, and loss of 3-4 hours a day…
I will stay at my work for 2 years, renting my crappy apartment (still 1200$), save some Wow u hit the nail on the head.. I worked as a contractor in Houston and Colorado. But came back to NJ due to my family.. and man do I HATE every minute of it. Inflated prices on insurance, homes, dining, entertainment.. Yes NJ is a ghetto anywhere near NY or north jersey. The nice places cost a fortune and is out of reach. The people in NJ are so rude even nj transit workers are a**holes. I have NJ but I need to be with my family and my mom is to old to leave her state job to move with me.
Unless you are a doctor… nj is out of peoples price range.. And where the fuk does all our property tax money go to!?!??!
money.
After that if nothing changes I will dop as truth says: I WILL GIVE UP, F%$% New Jersey I am moving out.
It’s not like North East New Jersey is a nice place to live anyways – it’s like huge getto….. (Yes I did move to NJ after living for years in the West (Colorado, Utah, Washington State, it is my first job after college, I love my job and I hate NJ)
Easy there killer..
Whoa!! Block911 needs a chill pill. Although I do agree with him. Imo, NJ is in a death spiral where salaries in general are not keeping up with the cost of living here. The exodus has begun according to some previous posts.
Just saw an interesting note on Limbo. It has ceased to exist, the parrot has died. Catholic babies can go to heaven now, before Baptism.
Look at how easily a concept can go *POP*
Now, how can we get NJ over the hurdle and back on the right track? If one old dude in a dress can send millions of souls to heaven, there must be a mental fix for NJ.
“Catholic babies can go to heaven now, before Baptism.”
Happy to hear my pagan babies can go to heaven.
Thanx Pat!
Just don’t try to feed them trans-fat fries or fois gras.
jb
block911,
I have to admit. I agree with you.
SAS
Block911,
I don’t think you should calm down one bit. You’re not alone in either your situation or your anger.
While I don’t really disagree with much of what Block911 says, I also can’t resist saying don’t let the door hit you on the way out.
B-911,
Lifelong jerseyite and I hate to admit, I can’t argue your point. Maybe a little extreme but you have expressed some very valid points. In the past, I traveled extensively. You came from some beautiful areas with good, caring people. It must be culture shock for you.
There are still plenty of good things about NJ, well, ok, maybe 4 or 5 good things. But anyway, NJ is heaven-on-earth compared to a place like Los Angeles. Constant smog, consant traffic thanks to 1000’s of unemployed actors, writers, director-wanna-bes, if you don’t drive a Boxster or M5 you are a nobody, earthquakes, police chases preempt 4 hours of tv every day, and people actually think Jay Leno is funny. Oh yeah, and this is what you get for $800k http://guests.themls.com/view_photo.cfm?mlsnum=06-101643 As bad as NJ is, at least I know people around here will tell me EXACTLY what they think of me. God bless this state, I am sticking around to help make it better.
Article appeared in businessweek on line “Hopeful Glimmers in the Housing Slump”
http://realestate.aol.com/article/_a/hopeful-glimmers-in-the-housing-slump/20060927162909990002
“I am sticking around to help make it better.”
Man, you will be working to the day you die.
Because if anyone sticks around this area, that is what you will be doing.
I would rather enjoy my old age.
SAS
SAS, I’ve thought about that, retirement in old age, and all. I’ve watched both types of retirees for the last 15 years or so, and I’m a people-watcher. The happier ones have all been the ones who worked, if able.
It may be just those I’ve been in contact with. My mother-in-law, for example, recently retired at about 84 or 85. Not quite sure how old. But she only worked about 35 hours a week, at a job she loved. Now, for the last year or so, it’s just not the same for her. She’s thinking about going back, but for less hours..maybe only 30 or so a week. She goes and hangs out at her old job, just to see how things are.
At my specific company, retirees have been welcomed for a long time, and it has benefits for everyone. The experience and work ethic of the Age 65 to 80 crowd is unbelievable. Don’t laugh about PC skills, either. They have what the PC skills group doesn’t.
There is a great pool of employees out there, and many want to work. New Jersey has an option for the next 20 years there (until this state is again attractive for the young ones).
No doubt the bubble is bursting. I was fortunate, got married and bought a 2 BR/2 BA condo for $250K in Hoboken in 2000, sold it for $320 and bought another in 2003 for $420, got divorced and sold last spring for $610, which was a good 40-50K less than prices in 2005. If that’s not a bubble there is no such thing as bubbles.
What will really be interesting is next spring during the “peak season” with all that builder inventory sitting and even more sellers in panic mode. All of these people aren’t going to be in position to refinance their ARM’s, especially if the economy tanks. I think this thing could get messy quick, 20% drops from today to next year would not surprise me in the least.