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From the Record:
Lender plans layoffs
By RICHARD NEWMAN
Countrywide Financial Corp., the biggest U.S. mortgage lender, is laying off at least 2,500 nationwide, but few if any job cuts are expected in New Jersey, where the California-based firm has 54 loan offices, the company said Thursday.
“In fact, head count in the state could increase with the hiring of new sales and production support personnel,” said spokesman Rick Simon. Most of the cuts are being made in administration and operations, particularly in California, Texas and Arizona, he said.
…
Rival Ameriquest Mortgage Co. closed its 14 New Jersey offices in May when it revamped its business model, laying off more than 200. Nationwide, Ameriquest closed all of its 289 retail offices and eliminated 3,800 jobs, shifting sales work to third parties.
…
Despite the slowdown, lenders continue to hang their shingles in New Jersey, drawn by a resale market that’s humming along — albeit at a lower level — and high-priced housing stock that continues to generate refinancing activity.
The number of individual licensed lenders in the state as of Oct. 1 was 1,314, up from 1,297 a year ago. The number of licensed mortgage loan branches rose in that time to 2,367, from 2,104.
Pulte lays off 800 amid slow housing market
Second-largest homebuilder axes 10 percent of total workforce in 2006.
October 26 2006: 7:04 PM EDT
NEW YORK (Reuters) — Pulte Homes Inc., the second-largest U.S. homebuilder, Thursday said it shed 800 workers in the third quarter, bringing the total number of employees laid off to 1,400, or more than 10 percent of its workforce since January.
http://money.cnn.com/2006/10/26/news/companies/bc.construction.pulte.layoffs.reut/?postversion=2006102619
We are looking to move to the NNJ area. Any thoughts on either Livingston or Montville are much appreciated? We are trying to decide between the two of them.
Is it true that NYC prices were always out of whack with rental basics ( yearly rental * 10-12 times ). Any reason for it?
Livingston is in Essex county; infamous for high taxes to support your Newark-based friends.
Montville Township (pinebrook, montville, towaco) is in Morris Country. Taxes are high as well, but the surrounding towns are much nicer.
Livingston is a bit more “city like” were Montville has more of a “suburban country feel” to it.
I live in Pequannock which is one town away from Montville. If I had the choice of Montville or Livingston, I’d choose Montville. It really depends on where you work as well. The train from Montville to Hoboken is 1 hour. I think the trip on the train from Livingston is a bit shorter.
-Richie
MJ, do the math. in 1996 on a nice block on the upper west side you could’ve bought a 1-bedroom apartment for $225k or rent one for $2000 a month. today it’s $500k to buy, about $2700 to rent.
“We are looking to move to the NNJ area”
Are you smoking crack? If anything, you should move AWAY from this area.
SAS
sp,
Where are you moving from, out of curiousity? There are a lot of nice houses for rent these days (see the article on the blog), you might want to consider that for two reasons — 1) get to know the area and figure out where you want to buy 2) let the market cool further. 12 months from now we won’t be at the bottom but it will certainly be significantly closer.
Also, before moving here, be sure to read this
http://www.taxfoundation.org/research/topic/44.html
and be educated about our tax system.
Another paper on refinancing boom:
http://www.msnbc.msn.com/id/15016057/
The layoffs and business restructuring of the lenders and home builders (Kara excluded) seems so orderly… it’s as if they had these plans in the drawer ready to pull out when “it” finally happened. I bet there were office pools to guess which quarter of which year the plans would actually be needed and I further bet that no one predicted just how long they would have to wait for the slowdown to start.
1996 was more like an exceptional value year, a low in the cycle. How were things in 2000 ( to better reflect the long term trend).
sp Says:
October 27th, 2006 at 1:08 pm
We are looking to move to the NNJ area. Any thoughts on either Livingston or Montville are much appreciated? We are trying to decide between the two of them.
Just FYI:
If you are moving from out of state – I hope you salary/income doubles. Otherwise it is not worth it.
Wow do you think DJIA will go below 12000 today?? or will it wait till monday?
Livingston doesn’t have a train and the nearest train station is in South Orange and gets you into NY in 45 min.
Kentucky is nice (jokes)….get a free plasma
http://www.kentucky.com/mld/kentucky/business/15850595.htm
http://news.bbc.co.uk/2/hi/business/6091576.stm
US economic growth slowed to an annual rate of 1.6% in the third quarter of 2006, its lowest level for three years.
Commerce Department figures showed that the slump in the US housing market was largely responsible for the loss of economic momentum.
The data showed a 17.4% annual fall in spending on new housing.
During the previous three months the economy had grown by 2.6%. Now the rate is at its lowest since the first quarter of 2003, when it was 1.2%.
However, some analysts said that consumer spending, buoyed by a fall in fuel prices, would provide a boost to the economy with some forecasting a growth rate of 3% in October to December.
Below 2% is certainly a negative surprise and suggests that the economy is cooling off faster than anticipated
Michael Woolfolk,
Bank of New York
Analysis: Will the economy help the Democrats?
Lower costs at the petrol pump, combined with strong employment figures led to improving consumer sentiment during October, a survey said.
The index, compiled by the University of Michigan, was at 93.6 in October, up from September’s figure of 85.4.
Voter influences
However, the slump in gross domestic product (GDP), well below Wall Street expectations, comes as a blow to President George W Bush ahead of the US midterm elections next month.
The economy, alongside immigration and the war in Iraq, is expected to be a major influence on voters when they go to the polls.
Political reaction to the figures was swift. Republicans pointed to the sustained rally in key stocks on the Dow Jones index as proof of the US economy’s resilience. White House spokesman Tony Snow told reporters that economic growth would “continue to rebound”.
Treasury Secretary Henry Paulson said the housing boom had been “clearly unsustainable” and the market had “needed to have a correction”.
However Nancy Pelosi, a leading Democrat politician, said that “just because the president looks through his rose-coloured glasses and sees a strong economy doesn’t make it so”.
Another Democrat, Senator Jack Reed, said the growth figures contradicted “the President’s claim that his tax cuts are working”.
Rates relief?
Analysts said the news meant an interest rate rise from the US Federal Reserve was now unlikely to be imminent – with some predicting a rate reduction as being more probable.
The UK-based Centre for Economics and Business Research (CEBR) said it expected US growth would be revised up slightly but that the picture remained “one of a controlled economic slowdown”.
“Weak GDP figures will likely give the markets something to worry about, although on the other hand, they will raise expectations that the next move in interest rates will be down,” said CEBR senior economist Jonathan Said.
In the US, the data also caused a surprise.
“Below 2% is certainly a negative surprise and suggests that the economy is cooling off faster than anticipated,” said Bank of New York strategist Michael Woolfolk.
“But it is certainly in line with the Federal Reserve’s story that a moderation in growth will help core inflation come back down into its comfort zone in the mid term.”
Latest figures show that annualised economic growth in the UK is 2.8%, while it is 3.4% in the eurozone.
“Microsoft profits beat estimates”
http://news.bbc.co.uk/2/hi/business/6089752.stm
I was a little surprized by this. MSFT is a 900lb gorilla.
Anyone care to comment?
SAS
another good bit:
“Housing slump batters US economy”
http://news.bbc.co.uk/2/hi/business/6091576.stm
SAS
Just an observation regarding the media and all the bubble talk. I do think buyers are reading and absorbing the fact that home prices are out of sync with fundamentals and have become unaffordable for first time/most buyers. I don’t think sellers are reading or absorbing anything!! They have there fingers in their ears and are chanting My house is worth$$ my house is worth $$$ my house is worth$$$ while stomping their feet.
Anyone else see this?
KL
We are looking to move to the NNJ area. Any thoughts on either Livingston or Montville are much appreciated? We are trying to decide between the two of them.
For now, neither.
1)In all seriousness, you should think really hard about moving here in the first place. Like previous comments said, unless your salary is doubling, it’s probably not worth it financially.
2)I would rent for a while first. No reason to buy something that is going to drop in value.
good observation KL.
:)
SAS
“Wow do you think DJIA will go below 12000 today??”
I’m beginning to think it’s made of teflon.
“I don’t think sellers are reading or absorbing anything!!”
Like buyers, I think they are also waiting to see what happens going forward, and will hold out as long as their individual situations permit.
SAS:
Missed that gold window, bid a little low on the ETF. Some analysts predict spot gold going to 540 on declining demand from a consumer slow down.
rhymingrealtor Says:
October 27th, 2006 at 2:14 pm
Just an observation regarding the media and all the bubble talk. I do think buyers are reading and absorbing the fact that home prices are out of sync with fundamentals and have become unaffordable for first time/most buyers. I don’t think sellers are reading or absorbing anything!! They have there fingers in their ears and are chanting My house is worth$$ my house is worth $$$ my house is worth$$$ while stomping their feet.
Anyone else see this?
It is not that – it’s just there are two types of sellers: the ones who put their house on the market in hope to get rich – they do not have tosell so they will hold onto their properties, And people who HAVE TO sell. The latter have a price which is either set by their mortage/HELOC or by Price of the homes at their new location. So they are very ofter forced into holding off until tey are going into BK or FC. I think the situation will sort itself out thruogh banks foreclosure auctions… The rate of foreclosures is already skyrocketing and the MAin body of HELOC’s and ARMS are still far from resetting – in 2008 – the most of them.
So they sellers probably understand the market trends, they are just either not willing to sell because they can as well stay at their home, or they can not sell low without going through BK or FC and both of these are very slow and lengthy.
I recently put 5k down on a central NJ townhouse with the remainder of the 10% deposit due 1 month later. The cancelIation period has ended. I am having second thoughts given the state of the market. As stated in my contract If I default by not sending the remainder of the 10% deposit the seller has a right to keep the money already received. Defaulting will cease the contract. My question is what can I expect as far as my credit rating goes. I am not sure If I will take this route. Just weighing by options. My stockbroker from Florida told me of people who were not showing up for closings and giving up their deposits. Things must be pretty bad down there. Thanks in advance.
I think they are both reading, the question is “what they are reading”? If they are reading their local paper, they are hearing:
Most buyers are reading is how it is such a great time to buy. Several people have told me how, in retrospect, I was smart to wait, but now is the time to jump in with prices falling. Of course I disagree. However, many buyers simply can’t afford to make a move, even if they wanted to, so the market slows.
Most sellers are reading how the slump is just a hiccup. Don’t worry; by spring that pesky excess inventory will be worked off and everything will return to normal.
in regards to the stock market, there’s a ton of liquidity still looking for a place to invest; housing is no longer seeing investments so naturally other places like the stock market will; earnings overall look pretty good particuarly the business capital spending; tech sector appears to be on a cyclical rebound and big caps finally seem to be coming back in vogue. and all this on very lackadasical interest (unlike the irrational exhuberance of 1999-2000).
note only 50% of american families even have anything in the stock market so don’t confuse the two.
hey Al next time close your bold comments!
I thought I did
but it did not work
By the way once this happened is it possible to close the bold by myself?
“there are two types of sellers: the ones who put their house on the market in hope to get rich – they do not have tosell so they will hold onto their properties, And people who HAVE TO sell.”
Al, I don’t think it’s quite so black & white. There are are certainly sellers as you describe, but there are many other types of discretionary sellers in between such as someone who would “like to” sell to downsize or upsize but doesn’t “have to”. They are currently hearing predictions from the mass media that the an improvement will occur in mid-2007. Why give in now?
The carry forward of text formatting from previous posts must be a bug in this software. It should reset automatically after each post. Al, I shut off bold on my previous post with “” – without the spaces of course.
It got stripped out:
I shut off bold on my previous post with “(/v)”
using the correct brackets.
It got stripped out:
I shut off bold on my previous post with “(/b)”
using the correct brackets.
SP: Montville and Livingston are different. If you plan on working in NYC, Livingston is significantly closer. Livingston is also an upscale suburban community (very livable, but expensive). Montville, forgive me, is more in the sticks. It’s very nice, but further out.
Essex and Morris counties both have good schools, and yes, Essex has high taxes (though not just because Newark is there). There are pluses and minuses to both. I can’t speak to Montville’s surrounding areas, but if you’re going to look in Livingson, you can also look in similar areas — Short Hills, Summit, Chatam, Florham Park, and the western half of West Orange.
Well If you can wait untill 2007 without suffering finantially you do not have to sell.
It’s fairly black and white in my opinion: you have to sell if keeping your house putting you in serious finantial geopardy:
such as carrying two mortages and not able to rent second house near costs (due to job relocation/or buying second home before selling yours). Loss of a job – without income you can not make the ends meet.
The only grey area – if you have substantial savings and lost your job – if you can wait, avoid payments and force yourself in FC. This way you do get free rent for almost a year. Or you can sell if buyer will show up. So for this people it might be grey area. For everybody else – it is very simple.
yea you ruin you Credit history but Credit history was the biggest Joke in the last 5 years anyways. Now people buying homes two years after foreclosures….
– now I do not know the law In NJ, but in California you can walk away from the Mortage and all Default debt on your primary residence and banks can not go after your other assets – you only wil owe IRS taxeson the difference for hat home will sell and what you still owe.
Anybody Who just “would like to” downsize or move up – do not have to sell.
http://money.cnn.com/2006/10/27/real_estate/Zillow_accuracy_subject_of_complaint/index.htm?postversion=2006102714
Zillow home ‘values’ rile consumer group
Alleged inaccuracies in home estimates on the Web site result in a complaint to the FTC.
Zillow is placing the American dream of homeownership at risk for countless working families,” said NCRC president John Taylor.
Relying on inaccurate appraisals can hurt consumers in several ways, the NCRC’s Taylor said. If the estimate is too high, home buyers may overpay, convinced they are getting a more valuable house for less. They may buy a home supposedly worth $300,000 for $250,000, for example, when, in reality, it’s only worth $220,000.
I think NCRC is really worried about lower estimates :)
Navistar:
What kind of contract did you sign? Or I should ask, why would the seller care when you pay your downpayment? He normally wouldn’t get anything until closing. ???
You aren’t defaulting on anything but a private contract. Taking out the mortgage has an effect on your credit score, but whether you lose a deposit in a private transaction shouldn’t have any affect.
The home in South Plainfield is in a bit better area that the condo.
but condo is newer – So i’d say location/age about even.
In any case, the sellers that have to sell will continue to drive prices down and their houses will be the new comps for appraised values.
Looking to move to NNJ – either Livingston or Montiville. To answer some questions from others, we are moving from Boston. I wished we could rent but are likey to buy which is a long story. I hear Livingston is nice but hear W. Orange is rapidly declining. Just concerned that the same might happen to Livingston.
Promice that the last one – the example of th Starter: home in NJ – it i bout 1 1/2 hours south of NY no traffic…..
http://www.forsalebyowner.com/show-listing.php?currentlySearching=1&iListingID=20726447
I love the decription:
Handyman Special – Great affordable starter home in desirable East Brunswick across from Farrington Lake. Large yard with newer oversized detached one car garage. Lot is large enough to accomodate large addition. Full basement and attic. Why buy a condo when you can own a house?
Price:315K firm…
Check those pictures out – it’s run down to a point that they won’t even show you inside of the house. Outside also look like #$%^
I think the idea that there are lots of sellers out there who are just fishing for a high price and are indifferent as to whether they ever actually sell is overstated.
the only way this would work is if you pocketed the money and rented or moved to a cheaper area. not many people are willing/capable of doing either of these.
not saying that everyone is desperate to sell, but I think if you’ve got your house on the market, you are not indifferent
First Time Buyer:
Thanks for the response. I am dealing with a new home builder delivery is in spring 2007. They required 5K at signing and the remainder of a 10% deposit within 30 days. They are holding my check for 5K (Looks like it has not been cashed as of today) The cancellation period has ended. The remainder of the 10% down payment is due soon but I still have not cut that check. Just apprehensive about this market. I would rather lose 5k than the potenial downside in the value of this home. Once I cut a check for the remainder of the 10% I am afaid I am in for good. I did get some good incentives plus a price cut off OLP that are equal to about 20% off OLP but I am still apprehensive since the pricing appreciated by almost that much since they first went on sale. So basically I am back to phase one pricing of spring 2005. I would just like to know of any possible repercussions that I could face especially with my credit rating. Thanks
SP: See my other message.
West Orange’s property values are going down, but that’s true of every place in the county and state. West Orange is NOT declining in the sense of livability. It’s very livable, much of its upscale (lovely Whole Foods just opened), good schools.
If you’re moving from Boston, you may not like how far Montville is from the city.
Have you considered Montclair? You can rent property there until housing bottoms out. Lovely town. Very civilized
Hey jay I am not arguing that house prices will drop – it will just take a while – AFTER last bubble in NJ houses in 1998 costed LESS in NOMINAL value – (thats less in absolute dollar value in 1998 ) than in 1988. So it took mopre than 10 years to get to the same price in dollars. How much of a loww it was counting inflation – well at least 25%.
But as an example of ridiculous prices see my post of handyman special above. Funniest part is that right now a lot of people will pay MORE for it that some newer ready to move in houses are going for because they don’t even check the prices – they hear handyman special and think they are getting a good deal. Its almost like for some sellers they need to tear their hose and reck it a bit and sell it as handyman special.
I know the surrounding towns of Montville. Lincoln Park is right next to Montville. It makes me laugh that Lincoln park has high taxes and houses are so over priced. Yet theres no Highschool there your kids have to go to Boonton Highschool. Montville is ehhh nothing to jump for joy over. Livingston is not that great either. The schools are average there not the Harvard of schools as some may tell you.
Again if you are going to be commuting to NYC figure out how much more it will cost you to commute fromthe 2 areas. Bergen county has nice areas also. People rule out Bergen county becuase the don’t thnk the can afford it. Like i said on previous post if it cost you an extra 300 to commute from say montville well thats another 60k you have to play with if you move closer. granted 45 min commute isnt horrible but if I worked in the city I would want to be as close as I can and hae a shoert commute. i mean i dont know Bergen co that well but with people moving urther and further away it make it seem really expensive and not that great a place to live. If you can afforf Montville than you can afford bergen county and i am sure there are plenty of greaqt schools there.
So my advise for commuters is dont rule out Bergen county think how much you will spend commuting and think if its really worth it . to me Ind rather spend a little more and be closer to N Y C if I was commuting. Plus from what I have heard cost of commuting is going up. So that will be more money you waste on far commutes.
Yea You have to always plug the cost of the commute in. I even go further – I add amount equial to 1/2 of the salary/hour to my calculations – so if you are making 30$/hour and commuting 2 hours – thats in my opinion worth additional 30$/day. I know it seems a lot but I was so much happier when I was commuting only 5 min to work compare to now – 30-45 minutes.
I know you can’t put a price tag on the commute stress and lost time with you loved ones, but you can at least try…
Plus Watch gasoline prices soar up after the elections.
BW Article. How timely !!!
http://www.businessweek.com/magazine/content/06_45/b4008063.htm?chan=top+news_top+news+index_top+story
Boom! Bust! Boom?
Check the history of housing busts. Some areas bounce back more strongly than others
Slide Show >>
Housing has gone from a sure thing to a complete muddle. Median prices fell nationwide for a second straight month in September, the first time that has happened since 1990, according to a report on Oct. 25. Homeowners don’t know whether to sit tight or bail. They have no idea whether they’re experiencing the beginnings of a deep bust that will leave a permanent hole in their wealth, or a small hiccup.
There’s a lot to learn from history. While national downturns in home prices are rare, we have plenty of experience with busts in local markets. Remember, many regions that have been strong in recent years, such as New York, Boston, and Los Angeles, were mired in slumps in the early or mid-1990s. People who bailed out of them at the bottom are still kicking themselves or blaming their ill-informed spouses.
How common is this boom-bust-boom pattern? Over the past three decades about 40% of housing busts in big metro areas have eventually been followed by strong recoveries. That’s according to a BusinessWeek analysis of inflation-adjusted housing prices. In an additional 15% of markets, prices adjusted for inflation barely got back to their previous peaks after 15 years. In the remaining 45% or so of markets, prices adjusted for inflation were still down a decade and a half after their pre-bust peaks.
The disparity between winners and losers was striking: Among the winning markets, the average inflation-adjusted gain after 15 years was 43%, while among the losers the average inflation-adjusted loss was 19%.
How do you know if your own local market is the kind that will snap back or the kind that will languish indefinitely? One key factor is the ease or difficulty of building new homes. Places where new home construction is a long and expensive process, such as Boston and San Francisco, tend to experience big price movements, both up and down. “Restricted supply leads to more volatility in prices,” says Edward L. Glaeser, a Harvard University economist who has studied big-city housing markets.
Glaeser isn’t ready to predict where prices are headed market by market, but the cities with tight housing do usually boom again after a bust. In places such as Atlanta and Houston, by contrast, price cycles are usually mild, because the supply of housing is flexible. Traditionally, flexible markets have gone through booms and busts only when there was a wrenching change in demand, such as during the oil-patch roller-coaster of the 1980s.
If the supply-side analysis is correct, it has scary implications for markets like Miami, Phoenix, and Las Vegas, where prices have zoomed in the past several years. Because it’s easy to keep up with rising demand by building housing in those areas, they never experienced soaring prices — until the past few years, that is, when prices seemed to rise out of line with fundamentals. Speculation appears to be the culprit. Regarding Las Vegas, Harvard’s Glaeser says: “I cannot believe that this stuff is remotely sustainable.”
Looking at the supply side’s effect on boom-and-bust behavior isn’t the usual way of assessing housing prices. The more common approach is to determine, by measures such as price-to-income ratios, which markets seem to be overvalued and which undervalued, and then assume they will converge toward fair value. Moody’s Economy.com Inc. (MCO ) has a projection of house prices out to 2015 that shows most of the biggest 10-year gains in apparently cheap markets such as Pittsburgh, Nashville, Houston, St. Louis, and Austin. The forecaster projects small gains for expensive markets including San Diego, Los Angeles, Las Vegas, New York, and Washington.
Economy.com’s approach is consistent with textbook economics. But it would have done a bad job of predicting what happened in the past 10 years, wherein the pricey got pricier and the cheap cheaper. For example, even though Houston has had a long stretch of healthy growth, it’s so easy to build homes there that inflation-adjusted prices are still 19% below their 1983 peak.
With apologies to the mainstream, the truth is that supply considerations can cause markets to diverge from what seem to be the fundamentals for a long time, perhaps permanently. One explanation for this is the “superstar cities” concept developed by economists Joseph E. Gyourko and Todd M. Sinai of the University of Pennsylvania’s Wharton School and Christopher J. Mayer of Columbia Business School. They argue that certain cities — Boston and San Francisco, say — benefit from a winner-take-all phenomenon that separates them from also-rans. People all over the world want to own homes in Boston and San Francisco, and the supply is limited. As worldwide wealth rises, there is a bidding war for homes there. No such luck for, say, St. Louis. In fact, according to the authors, the gap between prices in San Francisco and the national average doubled between 1970 and 2000.
In an era of globalization, cities with international reputations can get an edge over blander neighbors if they’re perceived as scarce commodities. For example, Nashville, as the capital of country music, has at least the potential to convert its fame into wealth, says Gleb L. Nechayev, an economist at Boston-based Torto Wheaton Research, a unit of CB Richard Ellis. Miami developers have parlayed the city’s international fame into booming sales of condos to Latin Americans and Europeans. But while the uniqueness phenomenon may help growth in those cities, it won’t necessarily keep prices up, because it’s easy to build: Witness the current glut of Miami condos.
What makes the housing supply inflexible in markets like Boston isn’t necessarily a lack of land. Far more often, the cause is regulatory constraints like minimum lot sizes. “There’s a pretty strong correlation between volatility [of housing prices] and regulatory constraint,” says Stephen Malpezzi, a housing economist at the University of Wisconsin School of Business. Glaeser says that because of zoning regulations, the density of housing in many metro Boston communities is actually lower than in growing areas of the supposedly wide-open Southwest. “In Wellesley [Mass.], they should be building apartment buildings around the train stations, but it’s all single-family housing,” says Richard K. Green, a finance professor at George Washington University.
At this stage in the slump, restricting the supply of housing may sound like a good thing. It’s not. Sure, it can make current owners richer by increasing the scarcity value of their homes. But it’s murder on first-time buyers. And in the long run, it’s bad for the local economy. As Glaeser notes, companies tend to migrate away from areas with costly housing to avoid paying the higher salaries needed to compensate employees for their home costs. He notes that between 2003 and 2005, high-cost Massachusetts lost 0.3% of its population, more than any other state. “The economy cannot grow unless the population grows, and the population cannot grow without new housing,” he wrote in a May paper.
Thinking long term is hard when you see for-sale signs springing up everywhere. But there are plenty of places where sitting tight may be the best thing to do.
Navistar,
The only consequences to you is forfeiting the deposit(s) if you walk away. The trick about deposits is that it serves as an emotional bind to a property and potential buyers are less likely to walk away. The real question is…do you really want to buy the house knowing what is happening in the market?
October 29, Black Tuesday – 1929
I think this will be October 31st Black Tuesday – 2006.
Happy Halloween!
-Sapiens
If they havent cashed it yet cant you put a stop payment?
everything closed lower today. aye chiuaua dont look now but the foundation is cracking.
KL,
I agree, it seems like buyer psychology has shifted much rapidly than seller psychology.
jb
Well, I don’t look so nuts after all!
http://www.plenglish.com/article.asp?ID=%7BEBA55617-2676-4091-ABBC-20650EB6FEE1%7D&language=EN
-Sapiens
Hmm our president buying land abroad…..
getting ready to be exiled out of the country when riots begin??
Spelunker Says:
If they havent cashed it yet cant you put a stop payment?
Yes I guess I could. I guess that would be considered a defaullt???, or would I be better off having the check bounce? I guess I just need to make up my mind if I want this property.
To Navistar
If you are having this much doubt – go and talk to you builder:
Say “I am getting ready to walk out on my home – I am worried that the price I got is not fair anymore and see if they will budge a bit more – they are not blind and they know that they might have to sell it even cheaper in the spring plus cost of marketing it all over again can be quite high.”
So i’d try to negotiate the price down befoe walking out and see what do they have to say…
Yes, number one without a doubt is figure out if you want the place or not.
And if your cancellation period expired I believe you can not get your initial deposit back – even if you try to cancel that check they can go to court and get the money from you.
Read all paperwork you have signed very carefully.
“If they havent cashed it yet cant you put a stop payment? ”
Pretty sure that would be a violation of the contract.
For the buyer, it’s almost certain that you’ll be better off financially forfeiting a 5% deposit. Maybe you can threaten cancellation and renegotiate the price? I doubt the seller wants to find a new buyer in this climate.
Hmmm maybe let them try and go after it. Call their bluff for a bit. If they bring it to court then pay. Otherwise pull out if not interested.
I have a question on foreclosures –
Are the $600B foreclosures for 2006 spread across the whole year or are they scheduled for Dec, 2006?
2008 Buyer Says:
October 27th, 2006 at 1:52 pm
Livingston doesn’t have a train and the nearest train station is in South Orange and gets you into NY in 45 min.
Kentucky is nice (jokes)….get a free plasma
Kentucky is nice! No joke. I grew up in Lexington & loved it. Wish I could move back. Or to Louisville. Looking at today’s USA Today, guess I will have to retire down there. By 2040 NJ will look extremely overcrowded.
I am just wondering if all that is lost is that initial 5K deposit or the balance of the 10% deposit that was due 30 days later. Is there anything you can site at this point to get you out cleanly. Read that contract, waters and al are right.
For the buyer, it’s almost certain that you’ll be better off financially forfeiting a 5% deposit.
My 5K deposit is much less than 5% of purchase price. The question is can they come after me for the 10% due. My contract indicates that default will dissolve the argreement but any monies recieved will not be returned.
LOL…the only thing I know about Kentucky is Jack Daniels…and he’s alright with me!!!
Spelunker Says:
October 27th, 2006 at 4:50 pm
Hmmm maybe let them try and go after it. Call their bluff for a bit. If they bring it to court then pay. Otherwise pull out if not interested.
Horrible Advice – if you did sign a legal contract you will 100% loose the case, so the builder will hire a lawyer to go after you and you will be responsible for [paying the lawyer’s fee’s as well as owther legal fee’s.
In addition court judgement against you will not help you on get new job, promotion on existing one and so on including credit history.
If you have any assets e.g car – they can go after it as well…
Never a good idea to go to court with no chances of winning…. Legal fees will surely be higher than 5K you have apidso far and may be even higher that 10% of house costs…
2008 Buyer Says:
October 27th, 2006 at 4:57 pm
LOL…the only thing I know about Kentucky is Jack Daniels…and he’s alright with me!!!
I take that as an insult. JD is from Tennessee.
You need to get some Knob Creek or Makers Mark.
Well Lets say it this way – my friend is from Kentucky, his father’s home burned down last year… TO rebuild it from scratch – costed them mere 38K.
His farther is 55, he had to ask all of his relatives to chip in since him wife did not have job for 10 years (not for the luck of trying – no education, not willing to relocate there is just no jobs where they are living. And I believe they just can not afford to relocate – their income last years was something like 8000$ for 2 people – wellfare benefits )
His farther mining company where he had worked for 15 year closed 10 years ago and went BK so they do not have to pay a pension to their workers….
The car insurance in their area is higher that in NJ by about 30%. (because of very high rate of stealing cars there)
And My friend’s Family is Average in that area..
Every time he talks to his Family he gets depressed…..
Granted this is in the rural area and “high” priced homes are running at 50K with about one acre of land.
Still like Kentucky???
Want to move there??
When I drove cross-country a few years ago, the most beautiful state I passed through was Kentucky. If I had to move out of NJ, I would move to Kentucky in a Makers Mark minute.
Al Says:
October 27th, 2006 at 5:07 pm
Well Lets say it this way – my friend is from Kentucky, his father’s home burned down last year… TO rebuild it from scratch – costed them mere 38K.
His farther is 55, he had to ask all of his relatives to chip in since him wife did not have job for 10 years (not for the luck of trying – no education, not willing to relocate there is just no jobs where they are living. And I believe they just can not afford to relocate – their income last years was something like 8000$ for 2 people – wellfare benefits )
His farther mining company where he had worked for 15 year closed 10 years ago and went BK so they do not have to pay a pension to their workers….
The car insurance in their area is higher that in NJ by about 30%. (because of very high rate of stealing cars there)
And My friend’s Family is Average in that area..
Every time he talks to his Family he gets depressed…..
Granted this is in the rural area and “high” priced homes are running at 50K with about one acre of land.
Still like Kentucky???
Want to move there??
Hmmm…doesn’t sound too different than Paterson or Passaic. Just a different type of poverty.
The only riots I see are those in France, where muslims burn 112 cars every night:
http://www.timesonline.co.uk/article/0,,3-2414175,00.html
And burn a few commuter busses too:
http://www.theage.com.au/news/World/Youths-set-passenger-bus-alight-in-Paris/2006/10/23/1161455635343.html
yea Al, i agree it was a bad idea to walk out although i would not consider what i said so much advice as much as it was a thought. However, i really dont think there will be much traction in getting the builder to revise his contract to a lower price now that he has a contract. Not a horrible idea though.
Wow…I really know nothing about KY….the Derby at least
rhymingrealtor Says:
October 27th, 2006 at 2:14 pm
Just an observation regarding the media and all the bubble talk. I do think buyers are reading and absorbing the fact that home prices are out of sync with fundamentals and have become unaffordable for first time/most buyers. I don’t think sellers are reading or absorbing anything!! They have there fingers in their ears and are chanting My house is worth$$ my house is worth $$$ my house is worth$$$ while stomping their feet.
Anyone else see this?
KL
That’s exactly what these grubbers are doing are like the aftermath of all Bubbles will all realize there is mnot more hope and panic at the same time starting in january. Spring 2007 will be a MASSACRE!
I am looking forward to watching mass pyschology and panic.
BOOOOOOOOOOOYAAAAAAAAAAAA
Bob
Get ready for another boring miserable weekend Grubbers….
Keep clinging to your dream…It will become a nightmare in the spring.
Watch and learn.
Bleed”em Dry
Bob
2007 Spring Housing Massacre coming to a town near you.
Can’t wait to watch this collapse unfold. Many of these greedy grubbing sellers had a chance to bail before the big panic. This is what greed does to many.
Going to learn very quickly the meaning of ‘ILLIQUIDITY” AND ITS DISADVANTAGES IN A PANIC.
Housing Massacre
Booooooooooyaaaaaaaaa
Bob
HEHEHEHHEHEHEHE
Any realtors want to give a honest assessement of the “grim” situation in Real estate Lalalaland?
KL the only honest realtor. does she have an email or website to visit.She deserves your business.
BOOOOOOOOOOYAAAAAAAAAAA Spring 2007 Housing Massacre!
Bob
From Bloomberg:
Ingersoll-Rand Profit Falls; Bobcat Equipment Slumps
Ingersoll-Rand Co., the maker of Bobcat backhoes and Thermo-King refrigerated trucks, posted lower profit in the third quarter and said the U.S. housing slump will hurt results this year.
…
he results trailed analysts’ estimates. Sales of Bobcat excavators and utility vehicles fell more than 20 percent, hurt by an “unexpectedly severe deterioration” in compact equipment purchases in North America and distributors that cut inventories. That offset gains in other units such as climate control.
“Bobcat really got whacked, and it’s a key market for them,” said Eli Lustgarten, an analyst with Longbow Research in Washington who rates the shares “buy” and doesn’t own them. “They also see softness in security from residential construction weakness.”
The company, run from Montvale, New Jersey, expects to cut some jobs, and the extent of the reductions is unclear, spokesman Paul Dickard said.
Holy cow. The Bob endorses a Realtor (TM).
We must be near the end. I’ve just changed all my timeframes. Gotta go do recalcs.
“Latonya Barbery, a medical assistant in Old Bridge, N.J., said she has looked for a home for the past 18 months but found them still too expensive. ‘They’re asking too much for these little shacks,’ she said in an interview with The Associated Press.”
YOU GO GIRL!
# Seneca Says:
October 27th, 2006 at 5:08 pm
When I drove cross-country a few years ago, the most beautiful state I passed through was Kentucky. If I had to move out of NJ, I would move to Kentucky in a Makers Mark minute.
you know when I drove through Iowa I had the same feeling. Nebraska – that place depressd me and I was just driving through…
Comment by Sammy Schadenfreude
2006-10-27 14:45:48
“Latonya Barbery, a medical assistant in Old Bridge, N.J., said she has looked for a home for the past 18 months but found them still too expensive. ‘They’re asking too much for these little shacks,’ she said in an interview with The Associated Press.”
This is probably the clearest signal yet of the sea-change in popular perception. LaTonya the medical secretary has seen the light and is refusing to be suckered into the “now is the best time to buy” snake oil.
Be afraid, NAR. Be very afraid.
housing bubble blog
rhymingrealtor Says:
October 27th, 2006 at 2:14 pm
Just an observation regarding the media and all the bubble talk. I do think buyers are reading and absorbing the fact that home prices are out of sync with fundamentals and have become unaffordable for first time/most buyers. I don’t think sellers are reading or absorbing anything!! They have there fingers in their ears and are chanting My house is worth$$ my house is worth $$$ my house is worth$$$ while stomping their feet.
Anyone else see this?
KL
KL,
This is exactly what I’m seeing & what I commented to a colleague the other day. How can the disparity be so large? One group keeps up w/local reports w/the polar opposite in a completely different direction in most cases? A lot of ying, no yang.
I’ve lost listings due to being frank & expect to see more of the same.
Whatever. I’m not ready to devote $$$ to a property that’s going nowhere.
AS
jb,
Did hits on the site go up in the last couple of days?
Say a $700k house goes to $600k
By the time the market hits the bottom, you’ll spend upwards of $100k in RENT in this area just waiting for the discount.
Seems like the real game is….buy when you need to. Life doesn’t wait.
Today, it doesn’t mean sh*t if you bought your house in 1980 for $35k
or $50k. (30% difference)
That difference now is the price of a new car.
ch914
700k * .70 = 490K (30% reduction)
700k * .60 = 420K (40% reduction)
The difference is 210K – 280K.
…and you were saying what??
Lotta complaints about bad realtors. Don’t just gripe, log a complaint at: http://www.state.nj.us/dobi/remnu.shtml
Further to that, write a letter outlining the treatment you received to the agent’s broker AND CC: THE AGENT. Note that you’ll never make another purchase or list a home w/that broker due to the treatment you received from that agent AND WILL TELL ALL OF YOUR FRIENDS AND FAMILY ABOUT IT. That will bring the house down (no pun intended…really).
It’s great to blow off steam on a blog, but it really doesn’t rival the satisfaction you’ll get from making the specific idiot agent uncomfortable in the knowledge that someone is on to them AND IS ACTIVELY REPORTING THE MISTREATMENT.
Until the public PROACTIVELY COMPLAINS these clowns will continue to “do business.”
NO I DON’T GIVE A DAMN ABOUT GETTING YOUR BUSINESS. BUT I AM SICK OF THE GENERALIZATIONS & AM DOING MY PART TO EITHER DISPEL THEM OR ASSIST IN MAKING MISERABLE AGENTS LIVES UNCOMFORTABLE.
I’m a Realtor & I approve this message. :)
there is a blog on nj.com where a few first time buyers are complaining about their new CRAZY loans. everybody is trying to figure out who got the short end of the stick on their 80/20 loan. complaining that none of this was ever explained to them. The mortgage broker has now walked into the blog and is offering his services to bail some of these souls out.
a few of these people have no idea what they even got into in the first place.
it really is amazing how quickly people sign just to get the house. oh the frenzy that was this bubble.
Any homeowners living along the Main/Bergen line — I’m wondering about quality of life in homes near the rail. If you live near the tracks, or near a gated crossing, please let us know if it’s something you cope with or if it’s a non-issue.
I read there were a lot of complaints about train whistles in the Glen Rock/Ridgewood area in 1999-2001. Did that problem get resolved or did you just learn to live with it?
I see the next bubble…
The Bush klan will purchase a 98,842-acre farm in northern Paraguay, between Brazil and Bolivia.
Will the rich dirtbags who conspired to get us into this mess follow suit?
Site traffic has been pretty consistent over the past two weeks. I haven’t really seen a big jump. However, this site is not yet ranked highly on the search engines, so I wouldn’t have expected to see a big jump based on the news stories.
jb
thanks
Arrogance and greed running wild leaves many in despair.
The biggest bubble in history is going to end badly.
There is talk on some websites that the GDP number might be a mistake. It seems a correction could result in a much steeper decline.
Anyone knows about what’s happening? Is this for real?
it really is amazing how quickly people sign just to get the house. oh the frenzy that was this bubble.
I agree, I mean come on now I am sure it was all outlined in those magically fun things terms and conditions.
I used to work a job with people who bought ads for 1 year in the phone book (ok now were all done snickering at me) they claimed they did not understand a things in the contract, first they tried called up and said why am I still being charged for the add its been 13 months now. I would advise them that we are allowed to extend the phone book up to 15 months and I advised where it was is the terms and conditions that they agreed to it. Customer would say I never agreed to that. I would say well you did signed a contract with us its clearly stated in the terms and conditions.
Customer: Well no one reads the terms and conditions. ME: Actaully I do. Becuase I do not want any surprises.
Hey if you dont read contracts or terms and conditions or ask to explain the loan in full than really whose fault is it. They could put in there if you miss one payment you will have to run around Mid town Manhattan in a chicken suit and by law you would have to. LOL
And I am real tired of hearing these people cry about how there mortage was not explained to them.
Over the passed 2 years I talked to many different mortage companies and asked them to explain interest only, they advised its good to have just incase you cannot make the full payment for a few months here and there, but that you should be making principal and interest payment.
I guess I felt it nesessary to talk to reputable places such as banks and I hate to say it but a few realtors mortage companies.
I was also told about these 1% loans that would adjust after 1 year or 2 years to whatever the market rate was so my payment could increase substantially. I have heard my share of exotic mortages and most places adivsed going with a 30 year fixed, unless I knew I planned on moving after 3,5 or 7 years.
Maybe I got lucky with all the poeple I spoke with, but again I have to wonder about all these people, just signing and saying yeah I know I know I have read it I know whats going on. Even if the mortage company told them very little they could have read in the contract how it worked.
But yes lets all feel sorry for these people.
Come one how are we supposed to believe that you had no idea that your 2 year adjustable mortage would go up in to years, or if you paid interets your pricnpal would never go down??? I mean these are the same people who offered astronomical prices for homes and waived there right to have the home inspected. Its called they did not care they just wanted in and would do anything to get in. Well I thought I would sit on the property for 2 years and make a large profit.
Well thats a risk that you took so again why are you crying about it. People are not willing to budge on price becuse a lot think they deserve a big profit. Hey I could gone for one of these who ha loans and tried to make a profit. I didnt..why??? Simple I knew eventaully the market would crash and I was not willing to risk losing tons of money.
The saying goes History is doomed to repeat itself and gee wait I think it is….
I guess people have had the green eye diseas the past few years, luckily I was born with green eyes so I guess thats why I didnt get greedy :)
Well keep it real my Bubble Bloggers. For all the people who dislike bubble heads and Lowballers
You just hate us casue your not us, your a chump who overpaid for there shack of a home.
2007 will begin the New era of 50-60% price cuts on homes and if you don’t like it than sit in your overpriced house forever while we all by bigger ones for half the price you jidiots paid
geez Homer i tell people about a thirty to forty percent haircut and they look at me like i have three heads. If they hear your fifty to sixty percent well…. 1692 witch hunt for you .
1692 witch hunt for you
See this is what I don’t understand people are asking 90-100% plus for what the fair market value of there home is. So who is really the ones with 3 heads. Its sure as heck not us Splunke
Just wait, the longer the seller and realtor procastinate and try to make the market magically come back, the worse it will be in the end. The bigger(in this case more overpriced) they are, the harder they fall or in the case of the market the harder and more the crash.
I mean what is everyone just taking a break this year? Ehhh yep 2006 is a nice year to take a break from the housing frenzy. We will start back up in 2007…
Come on people gimme a break. Do you really believe that the market is at the end of correcting itslef from the last bubble? No there is no correcting from the last bubble, again stupidity there is no fixing studpidty. The prices where they were in 2000 were perfectly fine and affordable.
I mean come one how can a realtor in the same thought say that the prices are being adjusted from the last bubble and a sentence or so later say the prices of homes never drops??
See this is why so many realtors are in trouble they have no selling skills nor do they have any skills to lie or bend the truth. During the bubble they could have said that this hosue has arms growing out of the walls and sellers would have not paid any thought to it and said ok sold.
It dont work that way anymore either learn how to sell or go back to your job as a jiggle muffin. I have had realtors insult me for buying large furniture I have had realtors say well you dont buy a home for size you buy it to own… Thats it let me downgrade my space from my apartment. I want to spend 300K on a house that 1100 square feet and has 5 bedrooms and 1 bath and needs renovation.
Thats a big reason realtors have problems selling homes cause they can’t give you a good reason to buy a home with bedrooms the size of closets.
I know many place that the same types of homes sold for the same price fromn 1997-2002 in NJ. So if this bubble never happened of course the prices would correct themselves to make up for the last bubble…HAHA, just like prices never go down.
2 words for Realtors..Welfare Cookies
This guy is a fu*king moron. I can’t believe he is serious? This joe is pretty bold.
http://www.forsalebyowner.com/show-listing.php?currentlySearching=1&iListingID=20726447
SAS
for some crazy reason… I got a chuckle out of this post:
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If I think thats funny, its a sign a spend way too much the RE blog. he he…
SAS
that really is amazing.
I got a new job in Parsippany (contract position for a year) and am contemplating a move to around that area since I hear the commute on 287 is horrendous. I rent in North Brunswick (Exit 10 off 287), and used to take the bus to NYC for work. Now I gotta drive.
Any suggestions where I could look around within a 10 mile commute? Am looking for a 2 bed 2 bath to rent in the
I mean…
Its a sign that I spend too much time on this RE blog is I think the word “worry” written 100x is funny.
Man…
he he…
SAS
“within a 10 mile commute”
say again.
you want to commute from where to where?
SAS
# CH914 Says:
October 27th, 2006 at 7:34 pm
Say a $700k house goes to $600k
By the time the market hits the bottom, you’ll spend upwards of $100k in RENT in this area just waiting for the discount.
Seems like the real game is….buy when you need to. Life doesn’t wait.
Today, it doesn’t mean sh*t if you bought your house in 1980 for $35k
or $50k. (30% difference)
That difference now is the price of a new car.
Can you please give me 15K if it doent’ matter???
Also the payments at after 25 years:
35K house: total payments 68,130
50K house: total paid 101,118.00
so the difference is a lot bigger – 33K.
So do not tell me that there iis no difference… If theere ws no difference than seller would have no problem selling lower.
“By the time the market hits the bottom, you’ll spend upwards of $100k in RENT in this area just waiting for the discount”
I would bet the farm…
Your house will do down 100k in value before anyone spends 100k on rent.
SAS
And also I am not watng for the 100K discount or market hitting bottom – if I buy at today’s priced I will have no money left for savings/emergencies/vacations/new clothes(yes 300$ jeans – fortunately my company requires buisness casual which is a lot cheaper than Jeans)
What are the chances of sellers will pulling the rug under other sellers by listing in November? November as in two months before the “spring come back”.
Homer:
Not to take up too much of your time, but in your opinion, which of these women, if any, is the least responsible for the situation they are in?
1.
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk0NSZmZ2JlbDdmN3ZxZWVFRXl5Njk4MzUzNiZ5cmlyeTdmNzE3Zjd2cWVlRUV5eTM=
2.
http://online.wsj.com/article/SB115517452814031758.html?emailf=yes
3.
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXkzJmZnYmVsN2Y3dnFlZUVFeXk2OTcyNTQ0JnlyaXJ5N2Y3MTdmN3ZxZWVFRXl5Mw==
Just curious for another opinion. You said you can’t fix stupidity, and I think of it as bad habits or learned behaviors that are hard to fix. So I want to compare your thoughts to mine.
Thanks,
Pat
‘they say’ thats actually a good time to buy
The truth is that supply considerations can cause markets to diverge from what seem to be the fundamentals for a long time, perhaps permanently.
One explanation for this is the “superstar cities” concept developed by economists argue that certain cities – NYC, Boston and San Francisco, say — benefit from a winner-take-all phenomenon that separates them from also-rans. People all over the world want to own homes in NYC, Boston and San Francisco, and the supply is limited. As worldwide wealth rises, there is a bidding war for homes there. No such luck for, say, St. Louis. In fact, according to the authors, the gap between prices in San Francisco and the national average doubled between 1970 and 2000.
Any suggestions where I could look around within a 10 mile commute? Am looking for a 2 bed 2 bath to rent in the
Lots of rentals in Parsippany
An update on the latest of the lowball offers, $ 400,000 on a 459,000 this was by the way ( not that it makes much difference ) 200,000 cash 200,000 mtg, -Answer after 2.5 days of waiting ….
No , seller will not take and will not counter offer. Buyer will have to go higher! Hopefully he wont!
But… buyer is getting discouraged. Wants to buy will probaly over pay.
KL
oooops excuse the spelling its late – or early —
KL
supply considerations can cause markets to diverge from what seem to be the fundamentals for a long time, perhaps permanently.
One of the classic signs of a bubble is talk of new paradigms and new realities. People use these when they don’t have a rational explanation for what is occurring. These are the same people who told us in the late 1990’s that P/E ratios don’t matter anymore. During the early 1990’s, cities like Boston, San Fran & New York suffered the biggest drops in housing prices. Were these not “superstar cities” then? What about Tokyo Japan? Property values there have dropped by 80% over the last 15 years. Tokyo is no St. Louis.
Granted, people will pay a premium for a New York City address, but that doesn’t mean the rules of economics don’t apply.
RentinginNJ,
“One of the classic signs of a bubble is talk of new paradigms and new realities.”
Completely agree. Considering i had just started working in 2000, I was downright frustrated when i lost 3K in the bubble … but that loss taught me this very valuable lesson.
>
I’m wondering when the reality bubble will pop?
If you need to buy then buy. If a home drops from 700K to 420K then why buy it at all? Are you really getting a bargain? It would be priced to sell at 420K but you will want it for 380K and then when prices start to rise you will be unwilling to pay more than 420K since you’ll be thinking you should get it for 420K. Of course someone else will come along and pay 450K and again you will miss your chance to own a home and continue renting.
for all y’all predicting 30-50% haircuts, the only viable measurement you can use is median price and inflation adjustment. no you can’t pick some dope who paid $700k and now a ‘similar’ house is $575k. you have to stay consistent. IMO we’re likely to see a median drop from the peak to trough of about 10-15% in nominal terms.
if thats the case – why am i looking at the same old stale houses that have been on the market for more than six months.
richatd: You most certainly can use the dope who paid 700K, and now the sam house is asking 575K. 575 is the new comp, all this chatter about 10 to 15% and nominal prices and all the rest, is just that chatter. The increases were shocking on the way up, and its shocking to some on the way down.
The prices are now dropping as fast as they went up, it makes perfect sense, perfect common sense.
Richard so the 700k home is now 630K? That is the market correction?
100K in rent? pleae get a hol of yourself. No where near that. But hey if you want to over pay by 100k, plus all the additional interest in that 100k, than by all means.
Its scary reading some peoples thoughts on this board. Sounds like rationalizing desperation to me.
didnt the inverse of this “no you can’t pick some dope who paid $700k and now a ’similar’ house is $575k” already happen on the way up?
There will be at leas% BUZZZZZ cut!
In my opinion, If sellers don’t appropriately cut prices by spring, we will have a recession. A recession will hurt everybody but it will be a nightmare for home owners with any kind of mortgage. I mean they are going to get crushed.
We need someone to convey this message to the sellers and i’m afraid ‘realtors’ are not going to take that responsibility .. oh well, nither sellers nor buyers trust them anyways.
I doubt if mainstream journalists will want to do it because they are happy covering what’s already happened. They also want to be ‘balanced’ so that they don’t hurt any section of their readers.
I don’t trust politicians because their only agenda is to screw the middle class so that the poor and rich can live comfortably.
This leaves sellers and buyers left to work it out amongst themselves while the rest watch the fun :(
that’s frightening.
“By the time the market hits the bottom, you’ll spend upwards of $100k in RENT in this area just waiting for the discount.”
A drop from $700k to $600k is just under 15%. New home prices have come down 9.7% nationally in the last 12 months. So a 15% drop might not take very long.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B8C7A541A%2D90CC%2D4F2C%2D89D0%2D19BEF9DE4822%7D&dateid=39016%2E4168211343%2D883649253&siteid=mktw
Lets say you put $50k down on the hypothetical $700k house. If your mortgage is $650k, your total payments over 30 years will be $742k in interest plus $650k in principal = $1.392M. If you wait for it to come down $100k, your interest payments will be $628k plus $550k in principal = $1.178M. Total savings are $214k over the 30 years. That number needs to be adjusted down to get present value (adjusting downward for inflation) and for any tax benefits to paying the extra interest. However, you’ll also be paying prop tax for an extra year, which would cancel some of that out. I don’t feel like pulling out my spreadsheet, so lets estimate the savings are a present value of $150k.
You could easily rent a current $700k house for $3k a month right now.
http://newjersey.craigslist.org/apa/224251243.html
http://newjersey.craigslist.org/apa/222327538.html
http://newjersey.craigslist.org/sub/222124879.html
$3k divided by $150k in savings = 50 months or 4 years and two months.
By these calculations, if you think the prices will drop 15% in less than 4 years, you’re better off renting (at least financially). Given that new home prices have already dropped almost 10% in 12 months, 15% over 50 months seems like a safe bet to me.
that was supposed to be a 30% buzz cut…. ehh gghemm.
“Average college cost breaks $30,000
Average for 4-year private school passes key mark; total costs for both public and private schools up well above inflation”
http://money.cnn.com/2006/10/24/pf/college/college_costs/index.htm
You know, NJ public schools are pretty damn close to the expsense of colleges. Is it not?
or am I just mininformed?
SAS
I mean…
am I misinformed?
SAS
SAS
i just took a look at the place at your previous link:
http://www.forsalebyowner.com/show-listing.php?currentlySearching=1&iListingID=20726447
Disgusting doesnt even describe it. @ 315 it leads you to believe that he will “take” a 300k offer. goodness what a roach house.
Cash is king. We may have a recession,however,
if you have CASH, you have an opportunity.
Most people do not understand finance.
“if you have CASH, you have an opportunity”
Bingo.
WHat good is a price reduction in house, car, or anything if you don’t have the CASH to buy it.
Moral of the story, raise cash, get out of debt, and clean house when the bubble pops and the recession hits.
Plan a budget, now.
SAS
http://www.mcmansion-movie.com
HAHAHAHAHA!!!
Anothwer nail in the coffin.
BOOOOOOOYAAAAAAAAAAA
Bob
“if you have CASH, you have an opportunity”
Bingo.
WHat good is a price reduction in house, car, or anything if you don’t have the CASH to buy it.
Moral of the story, raise cash, get out of debt, and clean house when the bubble pops and the recession hits.
Plan a budget, now.
SAS
A far cry from our “Show & Tell” Society
In my opinion, if a recession hits, prices will go down more than 30% and fearless leader Mr Liereah will go to jail.
Not sure if this has been posted before, some of these point are actually pretty good. I particluarly like #3,10,11, & 12. –SAS
25 rules to grow rich by:
1. For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.
2. It’s worth refinancing your mortgage when you can cut your interest rate by at least one point.
3. Spend no more than 21/2 times your income on a home. For a down payment, it’s best to come up with at least 20%.
4. Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.
5. Never hire a roofer, driveway paver or chimney sweep who is going door to door.
Invest
6. All else being equal, the best place to invest is a 401(k). Once you’ve earned the full company match, max out a Roth IRA. Still have money to invest? Put more in your 401(k) or a traditional IRA.
7. To figure out what percentage of your money should be in stocks, subtract your age from 120.
8. Invest no more than 10% of your portfolio in your company stock – or any single company’s stock, for that matter.
9. The most you should pay in annual fees for a mutual fund is 1% for a large-company stock fund, 1.3% for any other type of stock fund and 0.6% for a U.S. bond fund.
10. Aim to build a retirement nest egg that is 25 times the annual investment income you need. So if you want $40,000 a year to supplement Social Security and a pension, you must save $1 million.
11. If you don’t understand how an investment works, don’t buy it.
Plan
12. If you’re not saving 10% of your salary, you aren’t saving enough.
13. Keep three months’ worth of living expenses in a bank savings account or a money-market fund for emergencies. If you have kids or rely on one income, make it sixmonths’.
14. Aim to accumulate enough money to pay for a third of your kids’ college costs. You can borrow the rest or cover it from your income.
15. You need enough life insurance to replace at least five years of your salary – as much as 10 years if you have several young children or significant debts.
16. When you buy insurance, choose the highest deductible you can afford. It’s the easiest way to lower your premium.
17. The best credit card is a no-fee rewards card that you pay in full every month. But if you carry a balance, high interest rates will wipe out the benefits.
18. The bestway to improve your credit score is to pay bills on time and to borrow no more than 30% of your available credit.
19. Anyone who calls or e-mails you asking for your Social Security number or information about your bank or credit-card account is a scam artist.
Spend
20. The best way to save money on a car is to buy a late-model used car and drive it until it’s junk. A car loses 30% of its value in the first year.
21. Lease a new car or truck only if you plan to replace it within two or three years.
22. Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower.
23. Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11months in advance.
24. Don’t redeem frequent-flier miles unless you can get more than a dollar’s worth of air fare or other stuff for every 100 miles you spend.
25. When you shop for electronics, don’t pay for an extended warranty. One exception: It’s a laptop and the warranty is from the manufacturer.
“WORRY WORRY WORRY WORRY WORRY WORRY
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GRUBBERS!
start dropping youyr prices you greedy grubbing sellers.
You ain’t going to sell it at that bloated price. Also watch your paper wealth evaporate before your eyes as your bloated shack drops 30% in price.
hehehe
Kim pointed out this POS on another thread.
Can you believe the price?
http://www.realtor.com/FindHome/HomeListing.asp?frm=byxmls&xlid=1066757517&poe=realtor
SAS
Question on tax deductions. Any tax accountants out there? Property tax is tax deductible. I’ve also read somewhere once that a certain % of rent is tax deductible as well. Is this on a state or federal level or both.
someone posted earlier regarding rumors that the gdp will be revised to a lower number and wondering if it was true.
I think it might be. NPR and Bloomberg have a story on it. It will mostly be due to the automakers building cars on spec.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad2YPx3XGEW4&refer=home
http://www.realtor.com/FindHome/HomeListing.asp?frm=byxmls&xlid=1066757517&poe=realtor
is a good candidate for a minimum 30% haircut.
Any thoughts on Midland Park, Oakland, Waldwick, or Mahwah?
Love this 2 tone color house for this crazy price.
http://www.njrealestate.com/cf/details.cfm?mls_number=2635029&id=999999
unbelieveable.
SAS
Remember the range of decline last time – coops down 60% and more in some areas. The drop % will depend upon the type (SFH/Condo), location, condition of the property. Also the new costs associated with the ridiculous luxury condos with their high carrying costs (and eventual tax increases – if the have tax abatements – since people will be stuck their much longer) will push their prices down (it all balances as we all know)
For buyers, because of the large inventory, the best deals will be in the tough-to-sell properties. And the best options will be solid locations, unimproved homes (since the cost of renov will go down due to much less demand for renov in the downturn). Get a roof over your head for the lowest cost. A house is a house is a house – location cannot change!!!
“Latonya Barbery, a medical assistant in Old Bridge, N.J., said she has looked for a home for the past 18 months but found them still too expensive. ‘They’re asking too much for these little shacks,’ she said in an interview with The Associated Press.”
SAS
569k reduced reduce from what?? – this is a home that is generic split that will be a dog to sell for the next 6 years
The masses know about the bubble Grubbers!
Better wakeup your equity is going POOOOOOOOOOFFFFFFF!
BOOOOOOOOYAAAAAAA
Bob
Spelunker ,
http://www.bloomberg.com/apps/news?pid=20601087&sid=ad2YPx3XGEW4&refer=home
“I think it might be. NPR and Bloomberg have a story on it. It will mostly be due to the automakers building cars on spec.
”
Thanks, that was me.
from the link –
Last quarter’s annualized 26 percent increase in auto production shocked Joe Carson, now director of economic research at AllianceBernstein LP in New York. Without the gain, the economy would have grown at an annual rate of 0.9 percent, not the 1.6 percent the Commerce Department reported today.
So GDP is now pegged at 0.9%!!!! That’s scary. Steeper decline than what was reported.
Makes you wonder if this was a honest mistake.
569k reduced reduce from what?? – this is a home that is generic split that will be a dog to sell for the next 6 years
It’s not going to sell at that Dreamed up price.
Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut, called the numbers “the most unbelievable detail” in the GDP report.
Experts are still debating what the slowdown will mean for the overall economy. New Jersey’s unemployment rate was at 5.2 percent in September, up from 4.4 percent during the same period last year, according to Bureau of Labor Department figures released last week. The Bureau considered that increase to be significant.
Wow we are starting to see housing effect, wait till unempleyment will reach 10% – after that rents will suffer- first on the lower and apartment, after that on higher ends/condos /than homes… Snowball effect
everyone from the bottom to the top of the food chain know real estate is tanking.
Game match OVER!
Bring it on….2007 Spring housing MASSACRE!
Yeah!
Boooooooooooyaaaaaa
Bob
Give me a C
Give me a R
Give me an A
Give me a S
Give me a H
What’s that spell?
C-R-A-S-H
bad news Grubbers.
BooYa Bob,
Are you a realtor trying to use reverse-psychology on us ?
it will be fun watching the Grubbers slug it out with their neighbor lowering the prices on their bloated overpriced shacks….
babababa
WORRY Grubbers….Prices are tanking…Does anyone want your shack? Plenty to choose from….
SOS….Help the ship is sinking .
abbababa
Give me a C
Give me a R
Give me an A
Give me a S
Give me a H
What’s that spell?
C-R-A-S-H
**Too funny.
no yes no…
I think BooYa Bob is a spy working for the NAR
the kid in me says yes, very funny.
:)
SAS
the scarey part is to imagine what booya bob in a cheerleader outfit might look like. I thoroughly enjoy his spirit though.
I know your reading this Grubbers….Better worry…It’s not 2003-2005…It’s TANK TIME!
Like Tanking down…can you say 30%?40%?
Worry Worry……..What if prices really tank 50% like they did for condos in early 1990’s?
Can you take it?
rational well financed buyers can….
hehhehehe
I know your reading this Grubbers….Better worry…It’s not 2003-2005…It’s TANK TIME!
Like Tanking down…can you say 30%?40%?
Worry Worry……..What if prices really tank 50% like they did for condos in early 1990’s?
Can you take it?
rational well financed buyers can….
hehhehehe
Don’t forget.
Clocks go back an hour to return to standard time
SAS
Booya Bob,
Will you be a buyers agent for me?
v,
It seems that when you search housing in google news now, you get an heck of a lot more hits than you did even a week ago. usually it would return some stuff about the US but mostly how housing was still booming in the UK (they are headed for their own fantastic bubble). The GDP drop seems to have opened a lot more eyes on the housing issue. Mostly every article blames housing for the GDP slump.
Sometimes it takes a blowout to recognize that your tires were running bald.
Question-
With falling prices when do you think credit will start drying up?
Zac,
i’ve often thought of putting in my lowball offer in throuhg Bob myself! The delivery would be fantastic.
Spelunker,
good point.
As i said earlier, main stream news media is content on reporting after the fact :(
“By the time the market hits the bottom, you’ll spend upwards of $100k in RENT in this area just waiting for the discount.”
Two points:
1) Not trying to find “the bottom,” but it’s brain-dead not to avoid the top.
2) By not buying an over-priced house, rent is offset by interest income (for many to $0 or even a monthly net profit). Free housing is nice.
Zac Says:
October 28th, 2006 at 12:04 pm
Booya Bob,
Will you be a buyers agent for me?
I’ll give you a pat on the back and a big boooooyaaaaaaaa if you pound a grubber into submission and buy a house for 30%+ off of 2005 peak prices.
“Latonya Barbery, a medical assistant in Old Bridge, N.J., said she has looked for a home for the past 18 months but found them still too expensive. ‘They’re asking too much for these little shacks,’ she said” Latonya is one smart girl. You gett’em girl. 50% on condos!
So get to work abusing grubbers and realtors.
“Kim pointed out this POS on another thread. Can you believe the price? “
That’s certainly an overpriced POS, but can you believe the price of this one:
http://www.realtor.com/Prop/1063372053
Or this one:
http://www.realtor.com/Prop/1067048618
Or even this one, which looks like a bedroom with a roof:
http://www.realtor.com/Prop/1069625017
pretty good link housing vs GDP
http://www.housingbubblebust.com/Fed/GDPvsHSG.html
SAS
“Booya Bob, Will you be a buyers agent for me?”
Now that would be worth the money. Just to see the look on the Greedy Grubber faces.
UnRealtor Says:
October 28th, 2006 at 12:15 pm
Or this one:
http://www.realtor.com/Prop/1067048618
what!
hahahaha
kEEP US POSTED ON THE OUTCOME OF THIS THING…
Pretty good read
http://patrick.net/housing/crash.html
good quote
“The real issue isn’t whether you will be stuck being a renter all your life, she says. Its whether you’ll get so scared about being shut out that you’ll buy at the market’s peak and be stuck in a property you can’t afford or sell.”
That about sums up the past 5 years and the next 5 years for alot of people.
SAS
“And now’s the time to buy for the long-term. ‘Many potential home buyers who have been taking a wait-and-see attitude or taking their time and being methodical in the search process are being enticed by lower home prices,’ said the NAR’s David Lereah.
How does this guy look at himself in the mirror?
The internet ia a great equalizer to expose such behavior.
Bob, I’d also like to get you as my buyer’s agent.
But only if you look like this, and take your cat, too (pic 2)
Happy Halloween.
http://www.castleofevil.com/
Click on meet Bob. How about that, sellers?
Take that, you greedy grubbers:
http://www.mycathatesyou.com/cats/2003/06/90
Here we go – Someone finally waking up!
http://biz.yahoo.com/ap/061028/america_the_bankrupt.html?.v=1
GAO (Government Accountability Office ) Chief Warns Economic Disaster Looms.
…
he just wants to make it politically palatable. He has committed to touring the nation through the 2008 elections, talking to anybody who will listen about the fiscal black hole Washington has dug itself, the “demographic tsunami” that will come when the baby boom generation begins retiring and the recklessness of borrowing money from foreign lenders to pay for the operation of the U.S. government.
…
A modest rise in interest rates wouldn’t necessarily be a bad thing, Rogers said. America’s consumers have as much of a borrowing problem as their government does, so higher rates could moderate overconsumption and encourage consumer saving. But a big jump in interest rates could cause economic catastrophe. Some economists even predict the government would resort to printing money to pay off its debt, a risky strategy that could lead to runaway inflation.
Has anyone seen GDC’s full page ad in the NYT RE section (Sunday’s edition). GDC’s President giving advice on how this is a great time to buy their homes.
I am retyping into this blog (apologies for typing errors) I can have a blast commenting on alomost every word in this letter. But I leave the fun to you. Go at it!!
GDC’s President giving advice on how this is a great time to buy their homes.
“A letter from Martin Ginsburg FOunder and President of GDC Homes:
I have been in the home building business industry for more than 40 years. I have seen the highs and I have seen the lows. The funny thing is that when prices are going up, people gleefully chase them up, all the while think they are being priced out, but when things slow down, all of a sudden everyone is scared, even though that is the best time to buy!
Something exciting is happening now that I have not seen in all my years in this business. At the same time that prices have been tamed, interest rates have dropped again. This is unheard of. Usually when rates go lowwer, prices go up, and vice-versa.
I am absolutely convinced that anyone buying now will realize they got the deal of a lifetime. Locking in a low price and a low interest rate at the same time is simply an unbeatable opportunity.
The people who act now will be the envy of everyone else in the future. Their friends will think that they a re real estate geniuses. Most importantly, those are the people who will be enjoying life and a great new lifestyle right now. Waiting isn’t going to do it – if you wait, you will see prices go up and possibly interest rates go up also. You may very well kick yourself for missing this opportunity. If you have a house to sell, price it right, get a great pricea nd a great rate on your new home, and enjoy your new life.”
” I have not seen in all my years in this business…This is unheard of. Usually when rates go lowwer, prices go up, and vice-versa.
”
He doesn’t know what the he** is happening …
“I am absolutely convinced that anyone buying now will realize they got the deal of a lifetime”
yet he is bullish…. hmmm
what is GDC anyways?
GDC is a developer of SFH and condo communities.
http://www.gdc-homes.com
So they obviously have a motive to sell…
They actually have a good reputation. I think the fact that they are reputable, even further shows the despiration when they have to state the facts and skew it to push sales.
# v Says:
October 28th, 2006 at 12:05 pm
Question-
With falling prices when do you think credit will start drying up?
there are two options – credit will dry up and interest rates will satty level or second:
credit will saty loose but interest rate will have to go wayyy up – like in early 80th when they were in 17% APR.. So one of my older friends told ne few month ago – when I bough a house in 1981 interest rates were at 15-17% so you should buy a house at any price right now….
Interesting thought – if interest rates will raise to let’s say 10% – what will happen to home prices next????
My opinion (far from expert) is that with the current economy, a raise in interest to that level will not occur. It would destroy the economy. But what other effects?
Anyone can chime in about how 1980 fundamentals were different from now?
Al, (warning – my knowledge of bonds is almost zilch. Please correct me if i’m wrong)
Yesterday’s GDP numbers should have changed most economics view of a ‘soft landing’.
Wouldn’t this cause bond buyers to demand extra interest for taking on a riskier bet? After reading yesterday’s GDP number, someone currently holding sub prime bonds will be sweating in thier pants.
They can either cut thier loses and run or start pumping more money hoping that more credit will lead to improvement housing market.
” 1980 fundamentals were different from now?”
Back then there were more manufactoring jobs across the country and credit was not replaceing a decent middle class income.
Today, toxic mortgages, and credit cards have replaced middle class incomes.
Sooner or later someone has to pay the pipper.
In this case, the pipper is China.
SAS
Bonds are considered safest inestmentd after CD’s and Treasury notes… Yeld on bonds is fixed, if company foes bankrupt Bonds are cashed in before everything else, so they are pretty safe… Thats why yesterday everything but price of bonds went down…. Bonds went up:
Bonds rose Friday, with the yield on the benchmark 10-year Treasury note falling to 4.68 percent from 4.72 percent late Thursday. (notice: bonds went up even though the yield went down!!!!)
But as mentioned iin this article all major indexes went up week to week, with DJIA up almost 0.7% – huge gain in one week. So I think next week more bad news. I agree that I do not see interest rates rasing – that will in turn cause drying up money supply as foreighn investors wll not want to rist their money with too low yeild.
But market have proven itself very illogical and based on emotions – US viewed as very strong and safe market – so investments might comtinue…
# SAS Says:
October 28th, 2006 at 1:28 pm
” 1980 fundamentals were different from now?”
Back then there were more manufactoring jobs across the country and credit was not replaceing a decent middle class income.
Today, toxic mortgages, and credit cards have replaced middle class incomes.
Sooner or later someone has to pay the pipper.
In this case, the pipper is China.
SAS
Great point SAS,
In 1980 – China was closed country and no credit came from there, India was still a big village with 1 billion people in it – no money came from there, US was still having positive trade balance!!!!!!!
In large it was due to WWII Marshall’s plan.
http://en.wikipedia.org/wiki/Marshall_Plan
US did help Europe but it was not for free.. They were repaying their debt untill almost the end of 80th…
Now – well you all can see record budget deficite every year, huge negative trade imbalane and so on….
Was in Irak costing 24M/day…
Al or others,
Does fed rates have to go up for mortgage rates to go up? Are the two rates tightly coupled?
its not a one to one relation ship between the two but mortgage rates to follow shortly after the fed rate.
“ts not a one to one relation ship between the two but mortgage rates to follow shortly after the fed rate”
accepted.
SAS
I found the answer –
http://starbulletin.com/2004/07/01/business/story1.html
Mortgage rates are not tied to Fed rate.
Which makes be believe that a realization of a ‘hard landing’ in the housing market can cause mortgage rates to go up.
oops …
Fed fund rate in late 2002 was 1% and mortgage rate was 5%. Fed fund rate is now 5.25% but the mortgage rate is 6.5%.
That apparent contradiction stems from that fact that mortgage rates are not tied to the Fed rate, but to the yield on the 10-year Treasury bond, generally running about 1 to 1.5 percentage points higher than the yield on that security. So how is it not tied up to fed’s rate – it is tied up to 10yeaarss treasury bons which runs at 1 to 1.5% higher than fed’s rate – in my world it is still tied up to feds rate!!
just one more banker to take his 1% profit instead of diret distribution…
General comment: believe it or not I was born long before internett existed, back than there was a big problem in geting the information….
Right now it’s even biggger problem processing all the information you get :)
To illustrate I googled it:
Results 1 – 10 of about 3,340,000 for “relationships between 10 years bonds yield and federal reserve rate”. (0.32 seconds)
thats 3.3 millions!!!!
“Some economists were unfazed by the softening numbers.”
“My feeling is this is the worst of it,” said Peter Morici, a professor at the University of Maryland School of Business. “It’s a reflection of the new economy. We don’t have recessions anymore. We just have growth slowdowns.”
New economy, like in the late 90’s?
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/10/28/BUGC5M1GIK1.DTL
“Something exciting is happening now that I have not seen in all my years in this business. At the same time that prices have been tamed, interest rates have dropped again. This is unheard of. Usually when rates go lowwer, prices go up, and vice-versa.”
This is BS. Why fella in early 1990’s rates wen from 9% to 6% and condos crashed and houses tanked in price. hhhmmm.
THIS IS NOT THE TIME TO BUY…WHEN PRICES REALLY DROP AND AFFORDABILITY COMES BACK THEN BUY…THIS IS NOT THE TIME TO BUY.
I don’t care how many year you been in the housing market. The rest of public builders ceo’s have many years of experience and look how badly they were fooled by this…but makes you think why were thye dumping stock so aggressively near the highs but talking it up until the bitter end.
Also INtereesting – right now trade deficit skyroketed and home prices are crazy… In 1980’s bubble there was:
Beginning in the early 1980s, annual U.S. trade deficits reached unprecedented levels. After decades of postwar surpluses, the U.S. trade deficit topped $100 billion in 1984 and peaked at a record $153 billion in fiscal year 1987. The trade deficit shrank to a low of $31 billion in 1991, but it has grown again to more than $100 billion a year since 1994, (5) reaching $113.7 billion in 1997
http://starbulletin.com/2004/07/01/business/story1.html
negative trade deficit = bubble in something, consuming more that producing???
# Jay Says:
October 28th, 2006 at 2:10 pm
“Some economists were unfazed by the softening numbers.”
“My feeling is this is the worst of it,” said Peter Morici, a professor at the University of Maryland School of Business. “It’s a reflection of the new economy. We don’t have recessions anymore. We just have growth slowdowns.”
New economy, like in the late 90’s?
Lol what a bull#$%^. I think we do need to cut funding to colleges – just for bull like that…
“..Locking in a low price and a low interest rate at the same time is simply an unbeatable opportunity.”
What low price???
prices are at least 25-30% overpriced for houses and condos who knows how low.
More BS from a person tied to real estate. It’s the same rap fro them all.
Spring 2007 housing Massacre. Take that!
“My feeling is this is the worst of it,” said Peter Morici, a professor at the University of Maryland School of Business. “It’s a reflection of the new economy. We don’t have recessions anymore. We just have growth slowdowns.”
This guy is the poster child for Fools.
Yo Pete this statement is going to haunt you for many years to come.
BOOOOOOOOYAAAAAAAA
Bob
Some mortgage rates are tied to the LIBOR.
-Sapiens
“It’s a reflection of the new economy. We don’t have recessions anymore. We just have growth slowdowns.”
What? Wakeup? Hello?
new economy – just print paper and print mortgage loans and credit card loans. Transfer money back and forth. Strong economy…
Righto!
Who can guarantee that you will stay in the same place for 10 years..
Who is so confident – anyone here. I am guaranteed by my company for 2-5 years, after that they said -it is all depending on economy and company performance. So if you have a chance you’d have to move soon – you loose huge if home priced drop.
Once again look at your job and ask yourself – are you 100% confident you are going to be here in 10 years??
I bet you people at GM pick-up tracks factory in Linden were confident 5 years ago – they are safe – company is huge what can happen???
SPRING 2007 HOUSING MASSACRE…
LET THE PANIC BEGIN…
Bob,
There isn’t one bit of truthful info in the GDC statement – I knew you’d have fun it.
The market drives long term rates. The Fed can do little about it. The fact that long term rates are close to or even less than short term rates right now *might* mean that the market expects bad returns from short term debt, stocks, etc. in the near future (i.e. recession).
OR, it might just mean that the Japanese are fine with the low yield on US bonds because they still yield a lot more than their own bonds, and the Chinese are OK with the low yield on US bonds because it’s helping to keep their currency where they want it to be against the dollar.
It will be interesting to see what happens when the market, the Japanese, or the Chinese change their minds.
It seems unlikely to me that US interest rates will remain significantly below today’s 10 or 20 year avarages forever.
UnRealtor – another daydreaming seller.
http://new.gsmls.com/public/detailLst.do?mlsNum=2319298
It’s a 3BR Cape Cod for 825k in Chatham
it ammazes me that homeowners are asking 2-3 times assessed value for their homes. This seems outrageous.
well will just wait and watch them sit yntil they wakeup to reality.
price of lumber is at or near lows.
How is steel moving these days?
SAS
lone wolf,
Assessed rates are meaningless. The assessments are rarely up to date and towns do revals at different times. Unless you have the county assessment ratio table assessed values will tell yoiu very little.
Here’s one in Millburn. We can call this ‘Oops I didn’t mean to buy this property.’ Seller bought it in 4/06 for 500k.
http://new.gsmls.com/public/detailLst.do?mlsNum=2331528
It’s called a 3BR bungalow for 529k. Not very charming at all.
David,
“It will be interesting to see what happens when the market, the Japanese, or the Chinese change their minds.
”
another reason could be potential defaults by 5 million+ ARMers.
When I click on the link, I am heep getting this message”
Sorry. Your user session has expired.
I can’t see your links.
?
SAS
I was looking to buy a house in middlesex county for around 400k. But after reading this blog I’m having second thoughts. Ran the numbers and this is what they look:
400k loan means 2400$ per month of mortgage of which about 2k would be interest. Beyond that add 600$ property tax, 500$ for insurance, increased utilities and repairs etc. Total comes to 3500$ per month out of which 3000$ is interest or other irrecoverable expense. So 36K will be lost in first year for no apparent benefit.
Now add to it that this 400K house might decrease by 10% in one year to 360K. So effectively if I buy now I would lose this 40K + 36K = 76K.
Alternatively we can just rent for 1 year(I dont have kids yet) for about 15K per annum. So net loss by buying a home is 60K, not counting the interest I could have earned on this or closing costs of the house.
If I think about it, it would take me 2 – 2.5 years to accumulate 60K. Why should I throw it away just to own a house!!!
Fellow readers, what do you think about the above analysis? Am I thinking correctly or I’m all wrong? Is there any other aspect of home buying right now that I’m missing?
All comments/suggestions are greatly appreciated.
v,
“another reason could be potential defaults by 5 million+ ARMers.”
I would see that as a symptom of higher rates more than a driver of them.
“When I click on the link, I am heep getting this message”
Sorry. Your user session has expired.”
yes, gsmls creates a “session” whenever you do a property search and times-out after 20 or 30 minutes. You need to do a new search to access the links to the listings, and that search has to return the listing you are trying to access.
So basically links to individual listings on gsmls are useless.
On the other hand, gsmls is so much better than njmls which gives you virtually no useful listing info. It’s intended to force you to contact a realtor for even the most basic info like lot size and property taxes. NJMLS’ listings are basically teasers. Personally, I totally resent this. It’s such a time waster when I could be narrowing down properties quickly.
Jim, let’s get going on the open mls.
Assessed rates are meaningless. The assessments are rarely up to date and towns do revals at different times. Unless you have the county assessment ratio table assessed values will tell yoiu very little.
Right to the point – recent years corrupted everything which was related with the lending/assesment – if appraisal would not give desired price lender/realtor/seller/buyer would just find another appraiser…
Here they are at realtor.com:
$825K Chatham cape:
http://www.realtor.com/Prop/1068012763
$530K Millburn crapbox:
http://www.realtor.com/Prop/1069944437
Talking about NJMLS, here is a copy of a letter I sent about a month ago to NJMLS:
Tina Griffin, MLS Executive Director
New Jersey Multiple Listing Service, Inc.
P.O. Box U
Haworth, NJ 07641
Ref: NJMLS.COM
Dear Ms. Griffin,
I am writing to express my total dissatisfaction with your njmls.com public website. The listing information you present is incomplete and of little value, and the low resolution images are virtually worthless. Your withholding of basic information that would allow buyers to intelligently narrow-down properties of interest is wrong-headed, and will eventually backfire as user resentment grows and alternative listing services emerge. With so many houses on the market these days, you create a huge inconvenience for buyers trying to wade through all the listings by forcing them to contact an agent for a simple and basic information like taxes and lot size. You are doing business like it was 1968 and there were no computers or internet.
Are you so paranoid about your members lack of value to the public that you must inconvenience buyers by reducing the information in your public listings to a teaser? Why should I have to waste my time and an agent’s time to find something as basic as lot size when you can just simply list this most basic information?
When compared to your Garden State MLS competitor and other state MLS websites, the deficiencies in your listing data and photo quality become painfully obvious (see attached).
Even when requesting a “full listing” from one of your members agents, other important data such as Days On the Market continues to be withheld. GSMLS does not withhold DOM, LD or any other information that is important to buyers in their agent supplied full listings.
You are doing your agent members and the public a disservice.
thanks David.
“I would see that as a symptom of higher rates more than a driver of them. ”
Rates have increased since 2003-2005 ARMers financed. When these ARMers try to refinance they will have to pay a higher monthly payment because
1] current interest rates are higher or negative amortarization or both.
2] comps are less than loan amount.
This could cause some of the ARMers to default payment. Defaulted payment could inturn cause credit to shrink (fear of capitulation) and cause borrowing rates to go up because bond investors may have to balance risk. Higher borrowing rates can cause more ARMers to default payment. I’m thinking of this as a cyclic effect triggered by exisitng higher ARM rates.
Assessed values aren’t meaningless. Just know what year the town was assesed.
If houses in a town are generally selling for 15% above assessed value, and some Greedy Grubber is asking for 150% above assessed value, you can laugh in their face.
Or you can laugh at the Greater Fool bagholder who bites on the absurd ask price.
Here’s a prime Greater Fool example — paid $845K in March (over 100% above assessed value) on a street filled with identical houses worth about $600K at the time:
169 Myrtle Ave
Millburn, NJ 07041
http://www.zillow.com/search/Search.htm?addrstrthood=169+Myrtle+Avenue&citystatezip=07041&mode=search
It’s a Cape Cod with a 20×20 back “yard.” I don’t know where the realtors found this fool, but the house was bought a few days after hitting the market. A flipper bought it for about $500K 6 months prior, threw in some “granite and stainless steel” and made over $300K profit in 6 months.
There’s an ever worse Greater Fool example I’ve seen recently, but no time to post now.
This guy must be up all night.
Here’s the $825K Chatham cape:
http://www.realtor.com/Prop/1068012763
Here’s the $530K Millburn crapbox:
http://www.realtor.com/Prop/1069944437
Jay, check out how MLS systems are run in other parts of the country. They still relist and mask DOM and price drops, but they at least provide the address:
http://search.har.com/engine/indexdetail.cfm?mlnum=6039391&class=1&leadid=6&sTYPE=0&backButton=Y
It seems the mls systems need to withhold info to help keep their increasing irrelevant realtor members employed.
I meant to say “increasingly irrelevant”
That’s some house linked to above, it was just a randomly selected listing:
* Curved oak staircase
* 5,265 square feet
* Cul-De-Sac
* Brick construction with arched windows and a turret
* Foyer bigger than most living rooms
* Great yard
* Top schools in the state
* 3 car garage
* Tremendous rooms, and rooms we don’t even have in NJ.
‘Normal’ rooms:
Living: 17X15
Den: 20X18
Dining: 14X15
Kitchen: 18X18
1st Bed: 22X20
2nd Bed: 15X14
3rd Bed: 14X14
4th Bed: 15X14
5th Bed: 14X14
‘Extra’ rooms:
Game Room: 22X18
Breakfast: 12X11
Study/Library: 14X13
Foyer: 15X22
http://search.har.com/engine/indexdetail.cfm?mlnum=6039391&class=1&leadid=6&sTYPE=0&backButton=Y
“Jay, check out how MLS systems are run in other parts of the country. They still relist and mask DOM and price drops, but they at least provide the address”
I don’t expect any of the public mls systems to offer DOM, but when you request the “full listing” from a NJMLS realtor member, it is still withheld, unlike GSMLS. Not sure about other states “full” listings…
i’ll say it again. 10-15% median at the bottom before a flattening to slight upward trend with inflation. we shall see now won’t we.
“This guy must be up all night”
wow, I can’t believe that one. That poor sap.
I sometimes wonder… is someone that stupid or were they EXTREMELY mislead and misinformed?
whew baby…
unbelievable.
SAS
Richard,
I remember few months back you were of the opinion that RE always goes up. As of today you are saying it’s going down 10-15%. I will wait for your Oct 2007 prediction.
Since we are always speculating, you should peruse this article…….
http://nymag.com/realestate/vu/2006/23166/index.html
What New Jersey really needs is an Open MLS system… Maybe something like:
New Jersey Open MLS (http://njomls.com)
(coming soon)
jb
how soon? :)
I have a question for you all.
If you had to sell and had to take a loss, how much of a loss were you willing to take before walking away?
You know, like all or nothing. Some seller in this market may want to sell, but are finding themselves underwater already.
-Sapiens
Sapiens,
fear or greed will dictate the selling price.
SAS at #142…
That house is also for rent for $1850, along with being up for sale. The MLS listing says that “price is as is due to moisture in the basement.” As if it’s priced correctly???
Yes V,
Yet, if you can’t make the payments (Option ARM) and are underwater to the bank for whatever amount you don’t have on hand, what is your option other than default, -bankruptcy.
Like it or not, none of this bodes well for all of us as a society.
Cheers, enjoy the collapse as it will be felt in our own flesh and blood with painful suffering.
May God helps up, if there is a God, if not, let us hope we can find the wisdom to find the right way out of this mess.
-Sapiens
v,
I understand about ARM resetting but again, it’s rising rates that drive this problem, not the other way around.
It’s inflation risk, not default risk, that drives long term rates.
“we can find the wisdom to find the right way out of this mess”
There is a way out, its called war.
Go back and review your history books.
Wars are not started by someone throwing rocks, wars are started by someone saying….”hey, wait a minute, you owe me some money”
SAS
Sapiens, your post #242
If my thinking is right the “mind of an flipper” is currently looking for an exit strategy. Depending on the fear factor, this mind can reach a limit where it will take any exit strategy thrown at it. I’m guessing these will be the first set of “comp killers”, the once that break the 20% barrier. Once we break the 20% barrier all hell will break loose. ARMers/momentum might kill the next 10%.
I feel flippers will the first to take the loss and quit. I would wait for the ARMers to show up.
“That house is also for rent for $1850, along with being up for sale”
wow!
SAS
I bumped this from comment #95. Can anyone comment?
Any homeowners living along the Main/Bergen line — I’m wondering about quality of life in homes near the rail. If you live near the tracks, or near a grade crossing, please let us know if it’s something you cope with or if it’s a non-issue.
I read there were a lot of complaints about train whistles in the Glen Rock/Ridgewood area in 1999-2001. Did that problem get resolved or did you just learn to live with it?
“It’s inflation risk, not default risk, that drives long term rates. ”
Thanks David.
Also, if I may add to my post #248
Even review your bible (no, this is not a religious debate neither), Jesus was not crucified for his preeching….
He was crucified for kicking out all the crooked bankers and tax collectors out of the temple.
He preeched for years, people thought he was just some nut case, but as soon as he challenged the monetary system (with violance I might add), boom…..he was crucified the next day.
Think about that one over dinner.
SAS
SAS,
Interesting point :)
I am posting a comment in weekend discussion that pertains to the post about the couple in the star ledger today. They have purchased their dream home in Glen ridge b4 selling their home in Bloomfield, and are paying 2 mortgages , stressing out , selling stocks, etc. My thinking is what is wrong with the home they have? It look’s like a beautiful home. It seems to have plenty of space for their family. Why does everyone seem to want more? How many of our parents bought one home and stayed in it, till it was paid off. Remember mortgage burning parties? My parents had 3 kids in a small 2.5 bedroom colonial my brothers bedroom fit a twin bed( after my father cut a little into the wall) a small dresser and he even had a tv! Does anyone think this need for excess has gotten way out of hand? Is it too much HGTV?
We all need to be reminded every once in a while that happiness is not having what you want it is simply wanting what you have.
KL
UnRealtor Says:
October 28th, 2006 at 4:20 pm
Here’s the $825K Chatham cape:
http://www.realtor.com/Prop/1068012763
This one maybe the most outrageous of all.
What a laugh.
General Question:
What is so attractive about aquiring forecloser properties, especially if you are now signing over the ridiculous default amount of a bloated price house some moron paid in 2003? (for example)
There might not be a war this time but the Chinese are setting up a poision pill scenario. If the US brings them down, the US goes down with them.
I can imagine the Chinese asking for a substatial technology transfer to write off the loans.
SAS,
Thanks, unfortunately I am well aware… Just can’t believe I get to witness it in the front row. This is a ticket to a show I didn’t want to attend.
And you are correct about Jesus.
-Sapiens
Yes, KL, I was thinking that same thing about the couple in NJ.com today. They just had to move from Red Bank to Pt Plsnt. Dream home.
Dreams.
“Dream homes bring on nightmares when buyers’ first house doesn’t sell”
Sapiens: “If you had to sell and had to take a loss, how much of a loss were you willing to take before walking away?”
Me, nothing. Too much past experience with having nothing, and too much sweat to get where I am. I am perfectly satisfied not having benefitted from the run up in home prices.
Others I know have made the decision on the loss level at various tension points. A good college friend, after a messy divorce, lost a lot, and walked away. Still ruminating over it.
Another is still seeing the losses build in her condo development, after buying at peak. This person will not be too devastated if she has to move & sell; it would be disappointing after saving for five years for the downpayment. But she won’t sell simply to cut the loss. She’d have to move home with her elderly parents, and incur the moving expense.
I have not spoken to anyone who bought 2004-2005 who has had to sell simply to cut losses.
My husband’s co-worker had a reset coming, looked for a higher paying job, found one, and will just pay the higher amount.
So far, regular folk seem to be managing, but they are stressing about this, for sure.
2006-10-28 13:25:25
“mountain of unsold completed homes”
Inventories
“mountain of unsold completed homes”
Inventories of completed new homes is actually skyrocketing not falling (see Chart 2 on Page 3):
http://www.billcara.com/ML%20Oct%2026%202006%20D%20Word.pdf
Thanks Pat,
Come next year they will be happy to keep their exisitng jobs. Cuts are usually last in first out. The last person to enter the door will be the first to go out.
it’s crashing,
That Merill Lynch report says what exactly what we discussed on thursday :)
“Desperate times require desperate measures and median new
home prices were cut 9.3% on the month and are now down 9.7% year-on-year –
the steepest deflation since December 1970 (when, if memory serves us
correctly, we were in recession).”
So while Alan Greenspan may well have been
prescient that housing has bottomed, perhaps he was referring to the “price-tobook”
for the homebuilding stocks.
And if we are right that
residential construction spending in 2007 moves back to 2003 levels, it is difficult
to believe that employment in this sector, which has leveled off, but not yet
contracted, will stay at current levels. The implications could be worth as much as
500,000 lost payroll jobs in the coming year
But today’s report, while being billed as good news in some circles because of the
inventory draw, smacks of something else. It’s called desperation.
Now this may come as a surprise to some, but the inventory drawdown was
actually less impressive than meets the eye. When we get the sales data, what
we receive are (i) units not started; (ii) units under construction; and (iii) units
completed. While the sales of completed units rose 12% y/y in September, the
unsold inventory here actually rose 4% month-over-month and is up a record 47%
year-on-year.
http://www.billcara.com/ML%20Oct%2026%202006%20D%20Word.pdf
Pat, and that is exactly it. As long as the economy grows you can eek out a living. Yet if there is a major contraction, it topples down like a house of cards.
-Sapiens
this report is worth posting again.
I think Al brought it to the table?
http://www.policy.rutgers.edu/news/reports/RRR/RRR_July_2006.pdf
SAS
there are also some other reports worth looking into at the same place:
http://www.policy.rutgers.edu/news/reports.html
Enjoy you taxes at work!! you paid for this to be dome, migh as well use it.
” you paid for this to be dome, migh as well use it”
Much rather have taxes goto a study like this than tax money to the home boys on welfare sucking the tit of the govt and do nothing….generation after generation….after generation…
oh yeah, and the welfare mothers too, cut them off as well.
SAS
Lol i Always though that welfare was the worst which can be done – it encourages people to do nothing espetially in current form. My wifes relatives are on welsfare, they are young couple, have a year old baby – recently they tried to get a job in the safeway or as reshelvers – floor cleaner – yea they felt badly about being on welfare…
Guess what – their pay check is about the same as welfare – good right??
But tehy lost all Food Stamps and in addition to that lost subsidized housing and they need a babysitter. So by getting a job they actually pu themselves at a lot worth position than when they were on welfare – guess what – they are right back on it… it is hard to see young people have no hope…
Sounds like minimum wage should be raised because the cost of housing is so expensive
“it is hard to see young people have no hope”
yup, welfare pays better than those type of jobs you mention, that is why we have the south of the border people coming up. There either illegal or non-citizens, so they can’t collect the dol. You wanna solve immigration problem, get rid of welfare.
And the middle class pays for it all.
If you are poor the govt will take care of you and if your rich…hey….your rich….
The middle class gets squeezed till ya can’t squeeze no more.
Thank god I had a strong back in my youth.
SAS
They are living in a small town in Wisconsin, but even than – it’s just when you get paid 5.50/hour and all those lowest jobs in the stores – they are part time, so you get like 15hours/week – it is a bit better in NJ i think – at least I do not see people living on minimum wage – thats why we have so many illegal aliens – americans just won’t do the job and will not rent a house with 20 roommates to make the ends meet
by the way, when you rent an apartment there is a liimit in your lease on how many people can live in your apartment. what about – I bought a house and moved 30 people into it – can county/municipality tell me no – even if they are all my relatives ?? And what if I decide to have 20 kids??
“And what if I decide to have 20 kids”
that’s not even funny!
is 10 funny?
check this out:
Here’s a chart from a bloomberg terminal screen scrap showing the US median new home price for the past five years. NHSLAVSL = new home median home price index
http://photos1.blogger.com/blogger/6089/1833/1600/sg589667.gif
TIMBER!
OK Al. twenty is funny, scarey but funny.
Well I know it is funny, but it is also customary for many immigrant families to live with their parentss and those families get pretty big – 8-10 people easilly…
Foreclosure alert:
79 Westminster Dr
parsippany,NJ 07054
Bought at 2004 for 450K.
Default Value $450K
I guess 0 down party is great until reality kicks in
Foreclosure alert:
279 Reynolds Ave
Parsippany, NJ 07054
Market value:
$454,833
Default value:
$898,875
the guy must regret to have treated that proerty as ATM machine….
Good question brought up at the housingpanic.blogspot.com/
When will Time magazine do a housing crash cover story?
SAS
Let the flipper lose their pants and realtors lose their skirts…..
It is always fun to watch realtors talk. I am wondering they don’t get bored by those lying nonsense? They should know nobody believes in what they said.
> (notice: bonds went up even though the yield
> went down!!!!)
Bond prices always move in the opposite direction to yields.
Mike R,
Is it because the value at maturity is always going to be constant?
Al (274)
Yes, it’s legal to have 10 or 20 kids, and extended family. You’d be surprised how many people these days actually think it’s illegal to have ten kids, simply because some people have never seen a family that large.
I was one of ten. [No, you guys, no welfare, ever, just hard-working father & mother who liked kids and each other].
The support system is incredible. But even back in the 60’s & 70’s when larger families were more common, we experienced “profiling” and discrimination from neighbors, teachers and others. They naturally assumed we were on food stamps, thought we were slow, or even thought we were dirty.
The next time you see a house with a bunch of kids running around and grandma sweeping, maybe don’t assume they’re in there counting food stamps, illegal, or mental. Maybe they’re in there sitting around the kitchen table playing pinocle, learning calculus from the family math wiz, or all the things people can do in a big group.
hey, I never assumed families with a lot of kids are poor or mental. If we all were good atholis we would still have lot’s of kids…
I was just wondering exatly as you said – how do the neighbours react to someone in their neighbourhood having 5-6 kids – obviously your RE taxes are not covering 9K/kid school costs – just wondering beause in japan for a while you did not get any tax breaks if you had more that 1 kid and even got penalized for the third, but I guess they are overpopulated.
And one of the ways to afford overpriced real estate is to move together with you realtives…
thats why I asked.
MY mom’s family had 7 kids, my farther – 6 kids, but it was in 50th. the largets family out of my dad’s/mom’s sisters/brothers have 3 kids, so size clearly changed.
al,
China not japan
I don’t trust politicians because their only agenda is to screw the middle class so that the poor and rich can live comfortably.
V, the poor don’t live comfortably; that’s why they’re called poor.
Dude,
i meant to say the politicians want to be comfy with the poor and rich.
Actually In china it was illegal to have more that one kid – you’d go to prison, you kid would be taken away from you, but In Japan It was forced via taxation……
Al, on the school taxes issue, you’re right, the taxes my Dad paid didn’t pay for our education. Back then, it probably cost 200 hundred bucks a year per kid to educate us. Never thought about that being the cause of any resentment. Maybe it was. Others with fewer children resented that???
But those ten children, what an investment in return, if you look at the jobs they have now, versus the minimal societal investment until 18. Almost all went to college. Many post grad.
I wouldn’t mind a family paying zip in taxes, if I knew their children were going to contribute for 50 or more years later.
But in our society, we don’t invest in our children. We really just use them as a means to budget deferral of deficits, so nobody wants to pay to educate other’s kids.
I never remembered anybody saying anything on how much $$$/per child it cost till last few years.
I always kind of thought about it as fixed cost – you must have one math teacher, and he can teach 1 kid or 80 kids – depends on the district.
But right now with teachers unions and regulations there is fixed # of teachers/student. So I can see it might be an issue.
I am sorry but again I blame housing for this: I think people care too much about what their house costs and a big part of it a school districts – GOOD schools – good for house values…….. Especially it goes to absurd in NJ – before I moved eher al of my future colleagues during interviews told me how good the schools in NJ are.
I wish schools would be untied from housing values, because right now it is helping to slowly split people in “have” and “have not’s” = and removes chance for poor peole to get good education.
I see slow splitting into feudalizm again- Rich class, MD’s Class, Scientists Class, lawyers claass and blue color Class or people with very few changing.
And no race/income inequality law’s are broken – just economic factors……..
Thats would be the worst consequence of the real estate boom.
“the poor don’t live comfortably; that’s why they’re called poor”
Trust me, there is no such thing as poor in this country. ok, some might not have what others may have, but you are by no means poor. You want poor, goto Calcutta, Rio, Mexico City or other countries. Thats poor. Why are they poor? cause man…they have no opportunities, they have nothing, not even a pot to piss in.
Walk through the so called “poor” sections of Harlem, alot of ipods, gold chains, and $200 sneakers, and FUBU clothing on kids. Guess they ain’t so poor afterall.
Actually, in this country the poor live very well. They don’t have to work and get a pay check every month. Shit, wish that would happen to me. Maybe I am the poor one, because I am the one who has labored. You tell those guys to work…they will tell you to fu*k off.
Your right, we shouldn’t assume a large family is a lazy welfare bum. But if you play the odds, the odds are that…they are bums.
THe parents anyway. Its those kids I feel bad for because they will just repeat the cycle.
I see this shit everyday. I live near the Fredrick Douglas houses. No, I am not poor nor do I live in a bad area, its just that the whole area has changed for the better, and the so called “poor” well, they didn’t change, because they didn’t want to get up in the morning and goto work, alot easier to collect the dol.
In any case, time for my nightly ritual: warm milk & cognac.
Cheerio.
SAS
Yes, these days, school quality matters immensely, for more than housing reasons.
I went to the “bad” school in town. Teachers slept through many of the classes, or read, while we slept. But 25 years ago, you could still make it. Still survive the day without a knife attack. Still get into a good college, if you worked hard, despite the school.
Now, minimal chance.
There is a way to fix this, but it will be a tough sell in NJ. It will take years, and the unions have to go. Until then, the disparity will continue to grow, as you said, based on economic factors.
The poorest people i have seen in my life (no I haven’t been to Africa) – Indian reservation in NM.
But hey the Tribe’s chieftan lived well – house in Calif, house in Nevada, and smallest home of all – on the reservation territory in NM….
v (#285),
Probably easiest with an example (sorry for the following oversimplification):
$100 face fixed rate bond paying 5% annually = $5 interest per year.
If you pay $100 for that bond, you get 5% yield on the price you paid (ie, $5 on $100).
If you pay $200 for that bond, you get 2.5% yield (ie, $5 on $200)
If you pay $50 for that bond, you get 10% yield (ie, $5 on $50).
These changes occur to reflect the current interest rate environment vs the bond’s coupon. In other words, if you can get 10% on a bond, all other things being equal, why would you pay the same price for a bond that only pays 5%, and vice-versa, why would someone sell you a 10% bond for the same price as a 5% bond?
On bonds with adjustable rate coupons, depending on the features, pricing will not necessarily move inversely to yield.
As you get closer to maturity, the less that changes in the interest rate will affect pricing (ie, if you know that the bond is going to pay off tomorrow, even with a terrible yield, you’re not going to give much of a discount on it… of course with 30 years to look forward to, you’d be more open to negotiation).
“Indian reservation in NM”
excellent point Al. If there is one race in this country that is actually poor and whom are REALLY discriminated against is the native Americans. Yes, I have been to those NM reservations, but that ain’t as bad Pine Ridge, South Dakota. You go there, you might as well me in a third world country. Then again…they too get a nice check from the govt too, and unfortunatly, it goes to booze, if not booze, they drink Lysol straight. No shit, its the truth, I have seen them do it. Because they can’t buy booze with the actual stamps, so they buy the Lysol. Alot of corruption with the govt money out there. Its a shame, a crying shame.
btw- the eldery and the native americans are the ones whom are really discriminated against, everyone else….your just a slingen cain.
SAS
v,
“Is it because the value at maturity is always going to be constant?”
That’s half the story. Let’s say you own a bond with 5 years to maturity and a 5% coupon. If interest rates rise, and a newly issued 5 year bond yields 6%, then the price of your bond will decrease so that if you sold it, the buyer would get a 6% yield. Thus, yields increase as bond prices decrease. The longer the time to maturity, the more sensitive the price is to interest rate changes.
Hope this helps.
“v Says:
In my opinion, If sellers don’t appropriately cut prices by spring, we will have a recession. A recession will hurt everybody but it will be a nightmare for home owners with any kind of mortgage. I mean they are going to get crushed.”
Not true, if you were smart and bought within your means you’ll still be fine. Our 30 fixed mortgage is only 2x our annual income and our monthly housing expense(P+I+taxes) is less than 20% of our monthly income.
Yes if I lose my job I’ll get crushed, but in that case I’d be getting crushed even if I didnt have a mortgage.
David & Politely,
Thanks you for the tip. Now i have an opportunity to play financial expert with spouse :)
ADA,
A renter losing a job will be hurt but i believe a home owner with mortgage will be crushed. The renter will be able to easily move in with someone or move to a cheaper place while the home owner will also have to deal with foreclosure which can be a major psyhcological factor. There is also the “wait and hope” phase a home owner will most probably experience. This phase can quickly eat into savings. I mean you are not going to put your house on market the day you lose your job.
I think we’ve broken a record with the number of comments on this post. Perhaps we’ll hit 400 by the end of the day.
jb
Interesting, what we are now witnessing some people were talking about in 2004.
http://www.abovetopsecret.com/forum/thread44866/pg2
-Sapiens
v Says:
The renter will be able to easily move in with someone or move to a cheaper place while the home owner will also have to deal with foreclosure which can be a major psyhcological factor.
I am not trying to take away from the homeowner being crushed or hype up a who will suffer worse debate. However, one thing that hasn’t been touched on much is this: If homeowners cannot sell their homes and instead rent them out, or even rent out an apartment in their homes, renters will be paying that homeowner’s mortgage that was ridiculous in the first place. And if the homeowner is making the rent high enough to cover taxes where is the deal on renting? This is what scares me about renting. There is no guarantee that rent will stay the same either. Private residences do not fall under rent control. I don’t even know if there is rent control/stabilization in Jersey. So moving somewhere cheaper isn’t necessarily an option. Because if I could afford to pay the rent that I see a lot of people asking, I’d have a mortgage, or I’d go live in Manhattan. :)
Lost in NY,
My scenario assumes a recession.
“And if the homeowner is making the rent high enough to cover taxes where is the deal on renting? This is what scares me about renting.”
The rent like home prices can go up only until what the renter can pay. I believe rent saturation will happen faster than home prices because it will require ALL middle/low income families renters to actually pay cash at the endo of each month in order to rent. Again during a recession there may not be enough cash to go around for most to have good paying jobs so that they can pay off home owners mortgage + insurance + PI. Since this involves poor people, politicians will come to the rescue :)
“There is no guarantee that rent will stay the same either. Private residences do not fall under rent control. I don’t even know if there is rent control/stabilization in Jersey.”
There is rent control in NJ. I live in one where the rent is controlled :) In the area i live, rent/own option put out by sellers, include new (2003-2005) condos/townhouses that are very close to rent controlled apartment rates. They cannot make them any higher because the apartment rates will bring them down. They also have some older ouses for rent that are cheaper than apartment. But old houses are a hazzle for renters.
Lost in NY,
I had typed in a big reply but the post didn’t stick :( Anyways, there are three points i wanted to make. Please note my scenario assumes recession.
1] Like home prices rents can go up only to the point where renters can pay. Unlike home prices where a few duds paid a whole lot more, ALL renters have to pay high rents. This will crush poor people and politicians like poor people :) Therefore i believe rent hike saturation will happen sooner than house price saturation.
2] I live in a town [ NJ ] where the apartments are rent controlled.
3] During a recession there will be less credit floating around, less high paying jobs for the renter to pay home owner’s mortgage + insureance + PI.
Lost in NY, (my third attempt to post)
I had typed in a big reply but the post didn’t stick :( Anyways, there are three points i wanted to make. Please note my scenario assumes recession.
1] Like home prices rents can go up only to the point where renters can pay. Unlike home prices where a few duds paid a whole lot more, ALL renters have to pay high rents. This will crush poor people and politicians like poor people :) Therefore i believe rent hike saturation will happen sooner than house price saturation.
2] I live in a town [ NJ ] where the apartments are rent controlled.
3] During a recession there will be less credit floating around, less high paying jobs for the renter to pay home owner’s mortgage + insureance + PI.
V,
I understand your point but I think you have to assess the risk of a job loss vs the obsence rents in this area. (And no, I’m not going to move away from here.) Prior to owning I paid 3500 monthly in rent in nyc. My current housing payment is 4000. If I lost my job, and have to sell prematurely, I may well have to eat a loss.
But I have to balance this potential worst case scenario against the savings I will get from not paying 42,000 a year to a landlord who keeps raising my rent.
>>Richard,
I remember few months back you were of the opinion that RE always goes up.
v, you’re either a liar or have me confused with someone else.
V,
I see all of your posts. :) And I really didn’t know private residences could be under rent control. That’s great! But I think as a renter, the safest person I could rent from is someone who bought their home years ago and isn’t planning on selling anytime soon. At least, I hope that’s a safe bet.
Lost In NY,
” private residences could be under rent control”
I don’t know if the private houses that are around my block fall under rent control. What i’m saying is that the rent controlled apartments are bringing down the rents of private homes. :)
i dunno sapiens. it reads as if the author of that page was on a bit of “soft metals” himself.
test
im going in for a lowball on this one today. Flipper picked this one up a bit over a year ago for 700K. Selling it today for 855K.
http://www.realtor.com/Prop/1065463046
Man, this country advances more and more.
Only a matter of time before they take your job.
China launches high-power communications, broadcast satelli
http://news.xinhuanet.com/english/2006-10/29/content_5261682.htm
SAS
Richard,
The site doesn’t have a search utility that i could use. So i had to manually dig up your posts for October :(. I wish we had a search utility that searched the archieves.
I see you that you have changed from the 5-7% range to what is now 10-15% range in a week?
Richard Says:
October 20th, 2006 at 8:48 pm
Allow me to inject a dose of reality into this herd mentality. In the decent towns in NNJ, prices right now seem to be anywhere between 5-10% less than the peaks set between mid 2005 to mid 2006 and many of them appear to be attracting interest at this level. maybe there are a few more suckers, but if you look in the top and second tier towns this is the case. a few examples. home in westfield listed at $629,900 in mar rejected an offer for $620k, rode the price down now under contract at $590k. another listed at $629k in feb, even high for this market, wrote the market down to $585k now under contract. house in summit listed at $635k in mar. a bit ambitious even for the bubble market, several price drops settled at $590k.
my point is there are still some buyers out there ready to buy on a 5-7% reduction from comps as recently as 4 months ago and who could blame them? sure the market could fall further but if you could predict the future you wouldn’t be on this blog.
R is not an issue – the issue is that the rents are likned to salaries and not to FUTURE appreciation patterns.
If a person thinks the rental price is too high one would move to cheaper/smaller apartment that bringing a price of heaper ones up but at the same time forcing more expensive ones to go down… Should I remind you that it is better to have a home rented at 1500$/month for 24 month to the same tenant that to havee it rented for 3000$ for 12 out 24 month… Because otherwise you are paying utilities and heaating bills for extra year…. I addition there are costs for home-owner realted with the changing tenants as well – starting with cleaning carpet (if you previuos tenant lived in a place for more that a year you can not charge him for carpet cleaning… Most people do not know about that though) ending with the time/effort to find new tenant and run all credit checkss and that evicting him two month laterfor not paying any rent/trashing you home…… Thats why in my previouse place when I rented half of a duplex duplex owner nevr raised rents once you moved in.
Sapiens, I didn’t try your terms, but that is a bizarre read.
Thank heavens that some Anonymous writer broke the rules and wrote about the covenant. At least now, they will be cast to the depths from whence they came and remain there until the
end time of infinity itself.
Spelunker,
I agree, but he is right on…!
-Sapiens
Pat,
I am glad too! LOL..!
-Sapiens
But V,
I didnt see anywhere in Richard’s post where he claims RE always goes up.
That was your original point, which you failed to back up with your search. He may have slightly changed his forecast for how much RE will fall but you were just plain wrong.
v Says:
October 29th, 2006 at 8:33 am
Richard,
The site doesn’t have a search utility that i could use. So i had to manually dig up your posts for October :(. I wish we had a search utility that searched the archieves.
I see you that you have changed from the 5-7% range to what is now 10-15% range in a week?
“I think we’ve broken a record with the number of comments on this post.”
I think a number of comments on this post sound like a broken record.
:p Rich
Spelunker,
What are you going to offer with your lowball?
Pat:
Hunter Charles chicagofinance arrived on 10/24
“GAO chief warns economic disaster looms”
http://seattlepi.nwsource.com/national/1155AP_America_the_Bankrupt.html
ADA,
It would be more apparant if you read what i said more carefully.
That was few months back … i would have to manually look through archives to find the post. This was somewhere during May-Aug where we were lectured on the virtues of owning a house.
That could very well have been a different Richard but i doubt it.
“may have slightly changed his forecast for how much RE will fall but you were just plain wrong.
”
A ‘slight’ change in prediction that changed by 100% in a week??? hmmm
Well that’s why i said i will wait for his Oct 2007 prediction.
About a month old, but a pretty good read.
“US housing bubble: Economy in denial”
http://www.atimes.com/atimes/Global_Economy/HI27Dj02.html
SAS
man, this guy is a moron.
“10 errors that made flipping a flop for one”
http://www.coloradoan.com/apps/pbcs.dll/article?AID=/20061029/BUSINESS/610290309
SAS
Anyone want a good laugh…I mean a REALLY good laugh..
“NAR code of ethics”
http://www.realtor.org/realtororg.nsf/files/R_COE-Pledge-of-Performance.pdf/$FILE/R_COE-Pledge-of-Performance.pdf
ha ha….haha….ha ha…..oh man!!….ha ha….ha…. this is funny shit.
;)
SAS
Well, finally found something useful about the coming crash:
http://www.markswatson.com/Depression1.html
-Sapiens
“NAR code of ethics”
http://www.realtor.org/realtororg.nsf/files/R_COE-Pledge-of-Performance.pdf/$FILE/R_COE-Pledge-of-Performance.pdf
I’ll GIVE IT HAAHHAAHAHAHAHHAHAHA
LOTS OF HOLES PUNCHED THRU THAT CODE.
who the hell enforces it?
Realtors credibility?
ZILCH!
The Spring 2007 Housing Slaughter coming to a neighborhood near you.
BOOOOOOOOOOYAAAAAAAAAA
Bob
Sapiens Says:
October 29th, 2006 at 9:38 am
Well, finally found something useful about the coming crash:
http://www.markswatson.com/Depression1.html
If you read this report – thats a sure way to be depressed… Unfortunatelly all he is saying is true…
ADA,
I will offer 450K
Bob / SAS,
Continued good reading.
Don’t forget to watch HGTV’s Flip that House to learn to be as successful as the guy in the “10 errors” website.
Bob – Spring 2007 – how low will it go….
Sellers will forget how much they are losing and need to eat – then we’ll see the real drop.
From the Record in New Jersey. “It’s a lesson home sellers are learning all over North Jersey. The fizz has gone out of the real estate market, both nationally and in North Jersey.”
“For sellers, all this adds up to one question: How to sell in a buyers’ market? The first answer is probably the most painful: Price it realistically. Just because your neighbor got $600,000 a year ago doesn’t mean you’re going to get $650,000 — or even $600,000.”
“‘A lot of sellers haven’t accepted reality,’ said (agent) Nick Tselepis in Clifton.”
“Nilsa and Edwin Santiago have heard the message, and cut the asking price on their three-bedroom home in the Lakeview section of Paterson. They first listed it in January at $359,900; now it’s listed for $329,900.”
“Although the Santiagos got offers for the house last winter, the best one was for $306,000, well below what they were willing to accept. ‘I guess people don’t want to buy houses now,’ said Nilsa Santiago. She speculated that would-be buyers are scared off by high prices and the fear that house values will continue to fall.”
OK just because I can’t help myself:
http://newjersey.craigslist.org/rfs/226574850.html
Originally listed at 385K in either June or August. I can’t remember. Every upgrade they did was done poorly with the possible exception of the kitchen. In essence, everything has to be redone cosmetically, and I can only imagine what the cost would be if there are structural problems.
I’ve been trying to find a link to the piece in this mornings Record. If anyone has it, please post it up.
jb
Is rahway any good? I asked because of the previously article about rahway being redone
Its a close commute to the state lock up.
http://www.cityofrahway.com/redevelopment_agency_update_2005.htm
More info… wonder how long it will take to implement
jb were you looking for the article “u.s. faces financial disaster”?
No, it was a piece on RE. I found it shortly after I asked. The piece is posted below this one.
jb
that should be bae not bea…
“the poor don’t live comfortably; that’s why they’re called poor.”
During the Cold War the Soviets filmed the American “poor” and showed it to the Soviet people, in an effort to say “See, America is filled with poor people.”
The Soviet people looked at the film, and marveled that American “poor” people had television sets and cars.
Plan backfired.
People who remain poor for a long time have no one to blame but themselves. There are Fedederal loans for college, which will get you out of being “poor.” But if there’s no desire to work hard, and get through college, well, then you’re on your own, forced to watch “MTV Cribs” and resent the world for not handing you a free $300K Bentley.
that is one of the most arrogant things a person could say
RE: Rahway
“Its a close commute to the state lock up.”
LOL!
For a good laugh, here is a really funny and clever version of Don Henley’s “Boys of Summer” (posted in comments on the HousingBubbleBlog).
———————————–
No buyers on the road
No buyers on the beach
I feel it in the air
The price is out of reach
Open house,
Empty streets
The Realtor sits alone
I’m drivin’ by your house
Though I’m sure – no one’s home
But I can see you-
Your sale signs shinin’ in the sun
You got your hair combed back and your
Sign spinners on, baby
And I can tell you my need for you will not be strong –
after the prices of summer have gone
I never will forget those heights
I wonder if it was a dream
Remember how the price was crazy?
Remember how it made me scream?
Now you don’t understand whats happened
To your sales,
But babe, I’m gonna get you back
I’ll be watchin’ as the market fails…
I can see you-
Your sale signs shinin’ in the sun
I see you talkin’ real slow and you’re smilin at everyone
I can tell you my need for you will not be strong
After the prices of summer have gone
Out on the road today I saw a Realtor sittin’ on a stucco shack
A little voice inside my head said,
“Dont look back. you should never look back.”
You thought you knew what homes cost,
What did you know?
Those days are gone forever
You should just let them go but-
I can see you-
Your sale signs shinin in the sun
You got that price pulled down and
that push-up bra on baby
And I can tell you my need for you’s completely gone
Now that the prices of summer have gone
I can see you-
Your crab grass dying in the sun
You got that hair slicked back and
That smarmy smile on, baby
I can tell you my need for you’s completely gone
Now that the prices of summer have gone
Not sure if your comment was directed at me Zac, but I had nothing handed to me, and started at zero. Had to work hard, for years, to get where I am today. No sympathy, at all, for those unwilling work hard to get ahead.
“Poor” can be a relative term.
“People who remain poor for a long time have no one to blame but themselves. There are Fedederal loans for college, which will get you out of being “poor.” But if there’s no desire to work hard, and get through college, well, then you’re on your own, forced to watch “MTV Cribs” and resent the world for not handing you a free $300K Bentley”
Amen to that….
Hard to get ahead in life if you sleep till noon everday.
SAS
“get through college”
actually, you don’t need college to be successful.
You just need to realize life is not always a party, and your drink of choice should not always be tanqueray and tonic.
Ever goto these “hoods”? Everyday is a god damn party.
SAS
I’ve been thinking of buying a house in edison or iselin in middlesex county. Does anyone has any recommendation on which one is better than other and why.
The only thing that seems to different in them is that iselin has about 8-10 mins less commute to NYC as well as may have about 1-3k less in property taxes. But at the same time houses in iselin tend to be older than in edison.
Any opinions?
Here is a piece of crap from Weichert –
Are we in a buyer’s market?
Separator
Are we in a buyer’s market? It isn’t a simple question, because it requires us to assess supply and demand. Recently, demand for homes was generally high and it caused prices to rise. That made for a seller’s market. You may have read that demand is decreasing now, so more homes are on the market and prices are dropping, creating a buyer’s market. That’s probably true nationally, but we believe that locally it’s more accurate to say that supply and demand are leveling off. We call this a normalized market and, at Weichert, we believe it’s an excellent time to buy. That’s because you have the advantage of prices stabilizing at the same time that mortgage rates are still near historic lows.
Look at it this way: If you’re planning to sell your home and move up, and your home’s value hasn’t risen in the past 6 months or so, it’s likely that the home prices you’ll be looking at have also stabilized. And that means your dollars are likely to go further now.
Go to Weichert.com for a list of frequently asked questions for buyers and sellers.
Weichert should spend all their time convincing grugging sellers that their stratosperic house prices are not going to sell their overpriced shack.
Aj,
In my opinion, North Edison is a pretty nice area, but way too overpriced. South Edison (area near plainfield ave) is horrible. Can’t believe a differnece a few miles make to a town. North Edison is expensive, 2-3 bed townhouses in high 300’s, low 400s. Taxes are ok. Iselin is ok town also, but old properties and not so great school district.
-SB
SB, I’m not sure who is better at distorting the truth, the Realtors or politicians. ‘Tis the season for lies…
Thanks SB for your advice. Can you please elaborate what do you mean by area new plainfield ave being horrible?
Also we do not have kids currently. So quality of schools does not matter that much to me for next 8-10 years.
It seems that 3-4 bed in norht edison starts from 450k, in iselin and south edison it starts from 400k. Is anyone keeping a track of how much prices has fallen in iselin, north/south edison??
Interesting … New Yorker is even getting into the fun.
SAFE AS HOUSES?
http://www.newyorker.com/talk/content/articles/061030ta_talk_surowiecki
From post 344: “Although the Santiagos got offers for the house last winter, the best one was for $306,000, well below what they were willing to accept. ‘I guess people don’t want to buy houses now,’ said Nilsa Santiago. She speculated that would-be buyers are scared off by high prices and the fear that house values will continue to fall.”
Ho is it don’t want to buy?? she did get an offer. I’d say she did not wanted to sell, she just wanted to get rich quick.
“The idea that housing prices have nowhere to go but up is, in other words, a statistical illusion”
That was a great quote from that article.
http://www.newyorker.com/talk/content/articles/061030ta_talk_surowiecki
SAS
http://news.bbc.co.uk/2/hi/africa/6096420.stm
Nigerian sultan among crash dead
The plane reportedly burst into flames just after take-off
Crash aftermath
The spiritual leader of Nigeria’s Muslims was among those killed after a plane carrying about 100 people crashed near the capital, Abuja, officials say
—
Any chance of oil prices going up?
CF- congratulations to Mom and Dad. I hope you’re are all home now, safe and healthy, and busy figuring everything out.
The latest series of builder and RE agent ad’s explaining why it is the “right” time to buy (or admitting it in their own twisted way), is a clear sign of the coming next phase of price reductions. Here we go….
this is a surprize… some of those NJ jobs are going to Mass.
http://www.boston.com/news/local/massachusetts/articles/2006/10/28/mass_economy_grows_34_twice_us_rate/
SAS
Any chance of oil prices going up?
Oil prices will begin to rise on November 8.
“If the National Association of Realtors chief economist David Lereah had covered the arrival of the Hindenburg in New Jersey in 1937 it too may have been described as a ‘soft landing.”
chicago, congratulations dude. hope you and misses are getting some sleep.
Jay
This covenant must NEVER, EVER be known to exist. It must NEVER, EVER
be written or spoken of for if it is, the consciousness it will spawn
will release the fury of the PRIME CREATOR upon us and we shall be
cast to the depths from whence we came and remain there until the
end time of infinity itself.
Author: Unknown
Sounds awfully Weichert to me.
Grim,
Just checked my email today. Got your message.
Smart move. But I think you should also consider the long run. Long tun = 5 years+
SAS
More lease options popping up on the NJ Apartment MLS: http://www.GardenStateApartments.com …
And the days on market for many properties in Essex & Husdson counties are climbing over the 100 day mark… what a good time to wait to buy!
>>I see you that you have changed from the 5-7% range to what is now 10-15% range in a week?
um, v i’m talking about 2 different things. first post is about those that are buying on 5-7% dips and the second post my prediction for how low median housing prices will go nominally. you’re typing too many messages and getting all confused!
i’ll stick to my story for now. small price adjustments are bringing buyers out in the better towns in good sections. now that could change come spring. i’m well versed in the subject and believe we’re way more likely to go down to flat than up. question is how much and how long.
almost at 400 grim. ya got 2 more hours baby!
Asian Stocks Drop as U.S. Economy Slows; Canon, Samsung Decline
“A slump in the U.S. housing market, the biggest cause of the slowdown in the country’s economy, will lead to decreased consumer spending in the U.S. next year,”
Japan’s Nikkei 225 Stock Average lost 1.4 percent to 16,443.42. Markets fell around the region, except in New Zealand, the Philippines, Indonesia and Australia.
“Many tech companies around the world were underperforming already, so this could make things worse for a while.”
“Investor confidence in stocks is fragile and the worse- than-expected U.S. report isn’t helping,”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE62klWxWLzQ&refer=home
A US downturn will drag the entire world down.
ADA, that’s a great quote!
“If the National Association of Realtors chief economist David Lereah had covered the arrival of the Hindenburg in New Jersey in 1937 it too may have been described as a ‘soft landing.’ “
aj
I’m from Iselin, and have family in the area.
Property taxes are definitely better in Iselin because it’s part of Woodbridge Township, which is huge – 10 towns and lots of commercial/industrial interests that lower taxes for homeowners.
There’s been so much new construction in North Edison there’s talk that they might have to build more schools so taxes might go up some more over there.
Fast commute to Metropark – trains are frequent, including lots of express trains. But you need to pay for parking and the access road can be congested at rush hour.
China Sets New High for Yuan Vs. Dollar
The official opening exchange rate for the Chinese yuan was set at a record high against the U.S. dollar on Monday and a top official pledged more progress on loosening currency controls.
http://biz.yahoo.com/ap/061029/china_currency.html?.v=6
This could be a double edged sword.
I want to know what these people are smoking…
http://www.realtor.com/FindHome/HomeListing.asp?snum=1&frm=bymlsid&pgnum=1&mls=xmls&js=off&fid=so&vtsort=&ss_aywr=&locallnk=&poe=realtor&ct=&st=&zp=&primaryZp=&nearbyZp=&mnprice=0&mxprice=99999999&mnbed=0&mnbath=0&typ=1&typ=2&typ=4&mnsqft=0&exft=0&exft=0&exft=0&exft=0&lid=2298487&sid=077F5E6E9DFDC&snumxlid=1064342300&lnksrc=00002
$749k for a 3BR/2ba in Mendham. Approx. 2000 sq.ft.
They are more than 250k overpriced.
These guys are sharing the same pipe…
http://www.realtor.com/FindHome/HomeListing.asp?snum=2&frm=bymlsid&pgnum=1&mls=xmls&js=off&fid=so&vtsort=&ss_aywr=&locallnk=&poe=realtor&ct=&st=&zp=&primaryZp=&nearbyZp=&mnprice=0&mxprice=99999999&mnbed=0&mnbath=0&typ=1&typ=2&typ=4&mnsqft=0&exft=0&exft=0&exft=0&exft=0&lid=2292025+&sid=077F5FBE5CB3C&snumxlid=1063173146&lnksrc=00002
$799k for a 4BR/2ba Cape Cod in Mendham. You do get 2.2 acres but there is a much larger house w/ 10 acres selling for the same price.
Survey: Rising Rates Worry Homeowners
1]about one in seven respondents had an adjustable-rate mortgage.
2] 80% of homeowners with adjustable-rate mortgages are “concerned” about rising interest rates.
3]10% homeowners expect their properties to appreciate a lot. 53% a little. 24% see flat.
4] Younger homeowners see thier house as a good “investment”.
5]72% that the equity in their home was their most important investment
6]Margin of error 3%.
http://biz.yahoo.com/ap/061030/homeowner_survey.html?.v=2
Depression,
here we come!
V,
re: dbl. edge… would you elaborate, please? Thx.
“Essex and Morris counties both have good schools, and yes, Essex has high taxes (though not just because Newark is there). There are pluses and minuses to both. I can’t speak to Montville’s surrounding areas, but if you’re going to look in Livingson, you can also look in similar areas — Short Hills, Summit, Chatam, Florham Park, and the western half of West Orange.”
I wouldn’t include West Orange if you have children who will be going to the schools. I know many people who live in West Orange and either send their children to parochial and private schools or home school. The other towns have good school systems.
In Montville, you can get more land with your house and their school system is tops. A friend who considered buying in Montville did not because she was used to living in a town and she would have to drive everywhere she went. If being more out of the way is what you want then Montville is a good choice. If you want a town, I would go for Chatham, Madison, etc. Caldwell and Verona have town centers but their taxes are high and lots are small.
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