Blame it on the boomers?

From the Courier Post Online:

Baby boomers behind second-home sales surge

Try this stat on for size: almost 40 percent of the homes sold in 2005 were second homes, eclipsing first-time homebuyers.

That was one of the more startling figures recited by Tony Macaluso at Wednesday’s Triple Play Convention seminar on baby boomers and the second-home market. The annual meeting brings together real estate professionals from New Jersey, Pennsylvania and New York.

Despite a rise in interest rates in the last few years and a relative slowdown in the market, New Jerseyans will continue to step up and buy second homes. New Jersey ranks in the top 10 states where vacation home buyers live. Pennsylvania and New York also land in the top 10.

Still, the real estate market isn’t booming as much as it was a year or two ago.

Because the purchase of a vacation home — even one expected to be a permanent residence come retirement — is discretionary, buyers kick the tires a little longer before making a decision. Buyers are more deliberate, more concerned with what they get for the money, what the house sold for before. Two years to decide is not uncommon, said Julie Staradumsky of the Vanguard Property Group in Egg Harbor Township.

“It’s a changing market. The market is coming down to where it should be,” she said.

Boomers also look for amenities their parents never dreamed of: recreational activities like a gym; high-speed computer access; hot tubs; even an entertainment center.

Buyers come from Greater Philadelphia, South Jersey, North Jersey and New York.

“They may come down for a few weeks a year, rent it out the rest of the time, maybe have a winter rental,” said Staradumsky, who grew up in Bellmawr.

New homes in Brigantine range from $300,000 to $5 million, said Donna Diana, also of Prudential Fox & Roach. In South Jersey, the median sale price between third-quarter 2006 and third-quarter 2005 has risen in Camden, Burlington and Gloucester counties. But the price fell by more than 8 percent in Cape May County, the largest decline in the state, according to the New Jersey Association of Realtors. However, the number of homes sold during that time has declined in every part of South Jersey, with the largest fall-off in Cape May County.

Still, developers are betting that a new condo in the Diamond Beach section of Lower Township will find buyers. The former Grand Hotel fell to the wrecking ball this year, and in its place will rise a luxury condo with 125 units, either for owners to use or to rent out for a week or longer. With prices beginning at $650,000, each unit offers a view of the pristine beach, said Howard Watson, a sales rep for the condo.

The company has sold 22 condos already for an average price of $1.1 million.

“In Stone Harbor it would be $3 million for the same unit,” Watson said. “Most of the owners fall within a three-hour drive.”

This entry was posted in Housing Bubble, New Jersey Real Estate. Bookmark the permalink.

173 Responses to Blame it on the boomers?

  1. James Bednar says:

    BOE holds at 5%. From Marketwatch:

    Bank of England holds interest rate at five-year high

    The Bank of England on Thursday left its key interest rate unchanged after two increases in the last four months have taken the cost of borrowing to a five-year high.

    The bank held its rate at 5% — in line with market expectations — giving it time to consider further inflation data before deciding its next move in early 2007.

    Two of the nine members of the rate-setting Monetary Policy Committee opposed the decision to raise interest rates in November, so few expected a further hike this month.

  2. James Bednar says:

    SoCalMtgGuy has a piece up on the OwnIt Mortgage failure:

    http://housingbubblecasualty.com/?p=50

    jb

  3. James Bednar says:

    The European Central Bank (ECB) raises rates 25bps to 3.50%. From MarketWatch:

    European Central Bank lifts key rate a quarter point

    The European Central Bank on Thursday made its sixth interest-rate hike in a year, lifting its base rate by a quarter point as the European economy continues to accelerate.
    The bank’s concerned there’s too much money around for companies and consumers to spend.
    The ECB, in a well-choreographed move, lifted its key interest rate to 3.5% from 3.25%.
    The central bankers in Frankfurt, who unlike their Federal Reserve counterparts are keen watchers of money supply, are acting as the money supply is rising at an 8.5% rate.
    The ECB, which sets rates for countries that use the euro as their currency, favors growth closer to 4.5%. With money supply on the rise, the ECB is acting even as annualized inflation at 1.8% is below its target of near 2%.
    The central bank has room to act due to the strong European growth.

    ECB President Jean-Claude Trichet hasn’t shown much concern with the euro’s appreciation — so far at least. The head of the Dutch central bank, Nout Wellink, also hasn’t been too concerned.

    Reports have suggested that the ECB would get uncomfortable if the euro would reach the $1.40 level against the U.S. dollar. Thursday morning, the euro was trading at $1.3289.

  4. James Bednar says:

    From the Star Ledger:

    Allstate: No new N.J. home coverage

    Citing concerns about having to make huge payouts if a hurricane slammed into New Jersey, Allstate Insurance Co. will stop selling new homeowner policies in the state beginning Feb. 5, company and state officials confirmed yesterday.

    Allstate collects about 10 percent of New Jersey’s home insurance premiums, second only to State Farm. It insures about 230,000 homeowners.

    Company spokesman Sheila Breeding said that despite its freeze on new business, Allstate will not drop homeowners who already have policies with the company.

    “At this time, Allstate is not withdrawing from the market and will continue to renew its existing property insurance customers,” she said. “Allstate’s 230,000 customers are absolutely not affected by this announcement.”

    Allstate will not accept any new business for insurance policies on homes, condominiums and mobile homes. The company also will not issue new policies that it specifically designs for landlords, and will not renew policies for about 300 commercial customers, mostly in coastal counties, Breeding said.

    Breeding said there is real potential for catastrophic damage in a small state like New Jersey, which has with a large coastline.

    “There is much information that we’ve entered a decade-long period of increased tropical storms,” she said.

    “Allstate’s change in policy is an omen. It’s the first sign that homeowners insurance companies are getting uneasy about their catastrophic risks in New Jersey,” he said. Saying weather experts predict a major hurricane could make landfall in New Jersey during the current decade, Panter said Newark would be under water even if a weak hurricane hit Asbury Park.

  5. AntiTrump says:

    Skeptic:
    I was just catching up on the last weekends open discussion as I was visiting family in the south over the weekend and nerver got to catch up on the posts.

    I agree with you that you could potentially find some value in this market if you looked hard enough. I am seeing some asking prices closer to my negotiating range than I saw last year. If I was ready to buy, I would atleast starting talking to some of these sellers now.

    But I am convinced that it is going to get worse and I can get a better deal for the same money next year, so I prefer to hold, but others could have a different opinion and that’s okay.

  6. James Bednar says:

    If housing is really returning to normal, that means that appreciation rates are returning to normal as well. Normal being only slightly faster than inflationary growth.

    If this is the case, waiting still makes sense for me. Why? I’m a prolific saver. Saving doesn’t hurt me all that much. Keeping the belt tight and socking away cash isn’t such a bad way to live, if you ask me. I can grow my savings at a faster than inflationary rate as well, so no worries there.

    The reason everyone got so caught up in the “don’t be left behind” frenzy was because housing was appreciating faster than someone could save. It was almost impossible to save for a downpayment. If you didn’t jump right now, it didn’t matter how much money you could save, or how high of a return you could get, at the end of the day, you were in worse shape for waiting. Certainly one of the many hallmarks of a bubble.

    “Normal Markets” are “Slowly appreciating markets”. So if all that we’re seeing is a return to a normal market, why the rush to buy?

    jb

  7. BC Bob says:

    “almost 40 percent of the homes sold in 2005 were second homes, eclipsing first-time homebuyers.”

    ….and there was no speculative fever at play???

  8. twice shy says:

    I have a question for any realtors or RE investors on the blog. What are the pros/cons of a buyer conducting a home inspection before making an offer? In a slow market this seems extra protection for the buyer (and seller too), particularly for an older property w/ suspected deferred maintenance. Is this done at all these days?

  9. youallwanthouses says:

    Twice Shy:

    Interesting point. I guess in a slow market, you don’t have to worry much about competing buyers, thus not really wasting money on home inspector fees.

  10. James Bednar says:

    Home inspection contingencies are commonly part of an offer. Thus if the inspector does find serious issues, you do have the ability to renegotiate or walk away.

    I’m not sure there is any benefit to doing it prior to making an offer. However, there is serious detriment associated with waiving the inspection contingency when you make an offer.

    jb

  11. FirstTime BuyerNotBuying says:

    Why tippy tow around an obvious right of a buyer(sucker) YOU can inspect as much as you want before or after an offer!

    What are you afraid of? Offending the seller?
    It is just the most significant purchase in ones life.

  12. Willow says:

    “I have a question for any realtors or RE investors on the blog. What are the pros/cons of a buyer conducting a home inspection before making an offer? In a slow market this seems extra protection for the buyer (and seller too), particularly for an older property w/ suspected deferred maintenance. Is this done at all these days?”

    I think the risk would be that you would have wasted money on the inspection if your offer is not accepted. Why not wait until your offer is accepted and then get the inspection done. If there are many problems with the house, and the owners will not fix them or cut the price so you can, you can get out of the contract.

    We had a contract on a small bungalow for $140,000 back in late 1995. After the inspection, we found out that there were many problems such as a boiler that needed replacing, a water heater that was leaking gas and a live infestation of termites. It was amazing that the listing realtor wouldn’t admit there was a problem even with the termites flying around him in the basement and the tubes visible in the crawl space under one of the bedrooms. Anyway, we got a contractor to give us an estimate of what all the repairs would cost and submitted it with a revised offer of $128,000. This was rejected so we moved on. The house then sat empty for another 6 months (it was an estate sale) and was finally sold for $128,000.

  13. curiousd says:

    grim, great articles/info this morning.

    Concerning the Euro: They are trying to stamp out inflation (having not lowered them like USA) but are scared of an inflating currency. That’s a problem. There’s only a few global/liquid currencies out there… and if you are ‘antiDollar’ you MUST be ‘proEuro’. So, IF the $ continues its decline and IF the Euro keeps rates high and IF Europe doesnt go into a recession and chugs along at 2%… US interest rates (fed rates)are in for some ugly, ugly times (and I’m assuming the YEN stays stable)… Benny can pick stagflation (higher rates) or inflation (lower rates).

    Ack.

  14. profuscious says:

    great article. My neighbor across the street bought their house as a second home. They recently retired to a place down the shore but wanted to have a place close to family.

    There’s also a plan to build 264 condos here, some of which will be marketed to retirees.

    http://tinyurl.com/y2yvba

  15. Richard says:

    for all you renters, make sure when you’re doing rent versus buy analysis that for buying you not only consider mortgage and property tax deductions but also the equity built depending on type of loan you’d take out. a $400k loan @6% will start building equity at around $400 monthly. i used a 5 year average of interest paid to calculate. for renting make sure you take out taxes on the interest you make on your savings. IMO this is a crock and should be tax free but the whole scheme is geared towards incentivizing homeownership to lock you into the cycle.

  16. Homer Simpsom says:

    I am lost, who the hell are these people who want to vacation in NJ?? This is NJ not the Bahama’s. I mean maybe my judgement on vacation is clouded by the fact that I live in NJ as see no point in vacationing here. But to me taking a vacation in NJ is like taking a vacation in Utah. And with property taxes being so high even if you have the money to spend that just seems pretty lame to spend all the money on a vacation home. But I guess People are entitled to be Jidiots

  17. pesche22 says:

    nj is one of the leaders in over 55 housing.

    Retire to NJ , I guess that a theme we have to
    pay attention to.

    Drive our highways and see the construction.

    after all its saves the taxpayers money
    on school budgets.

  18. Rich In NNJ says:

    “nj is one of the leaders in over 55 housing”

    All the speculation of NJ retirees moving to FL or the Carolinas was wrong. Family and friends are still very important to many and they want to remain close, so I don’t think anyone is moving to NJ to retire. It’s the one’s already here filling these places.
    Hence the baby-boomer dual ownership.

    Rich

  19. AntiTrump says:

    Richard:
    $400k loan @6% will start building equity at “around $400 monthly”

    Could you explain?

    For a 400K loan @6% your monthly intest cost is 400000*(6/100)/12 = $2000.

    Where is the 400 equity coming from? Home price gains?

  20. Pat says:

    “..for renting make sure you take out taxes on the interest you make on your savings”

    This savings, as it is in lieu of a long-term purchase (30-yr), could be thought of as retirement savings, and therefore IRA/401(k) tax deferred. Why would you include a negative on rental choice for taxes not due for 30yrs?

  21. commanderbobnj says:

    Re:
    twice shy #9 about bringing along a home inspector when looking at houses to buy:

    I would think that it’s a good idea.—BUT, You would have to find someone who wouldn’t charge alot ($100-$150)and limit the inspections to only a few homes to maybe an hour each.

    The problem here is getting the real estate agent and homeowner to go along with it. The agent doesn’t like any negative things ‘pointed-out'(especially when he or she is ‘harping’ on the positives) and the homeowner (If they suspect the “friend” that you brought-along is an inspector) would in my opinion be somewhat ‘cold’ to a “stranger” moving ‘stuff’ and peeking into crawlspaces and attics. Besides,there are no contracts signed at this stage-of-the-game.

  22. lisoosh says:

    “AntiTrump Says:
    December 7th, 2006 at 9:44 am
    Richard:
    $400k loan @6% will start building equity at “around $400 monthly”

    Could you explain?”

    I second the question. How can you factor in equity growth if you don’t know where house prices are going?
    There is a bit of an obsession with equity as if it is real money, you can’t realize it until you sell a property so why bother even focussing on it, especially short term.

  23. lisoosh says:

    Bosses in rush to sell their shares

    By Tom Stevenson
    Last Updated: 2:49am GMT 07/12/2006

    Company directors on both sides of the Atlantic are cashing in their shareholdings in the biggest flight for safety since before the 1987 stock market crash. The value of boardroom sales in November outpaced purchases in both the US and Britain by a factor of more than 60 to one.

    The dash for cash suggests that the investor confidence that has driven stock markets to multi-year highs is not shared by company executives facing profit slowdowns after four years of strong economic growth….

    That dramatic ratio of share sales to purchases was matched almost exactly in the US, where the directors of S&P500 constituent companies disposed of shares to a value of $8.4bn (£4.26bn) while they bought just $133m worth of their own company stock, a ratio of 63 to one. According to Bloomberg, which analysed the US data provided by Washington Service, an information group, the balance of sellers to buyers was the highest since at least January 1987.

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/12/07/cnshares07.xml

  24. FirstTimeBuyer says:

    Homer, Utah is a lovely vacation spot if you’re an outdoorsperson, and NJ has some nice shoreline. Good for surfing. Close to home.

  25. 2008 Buyer says:

    I’m with you on this one BC Bob

    “almost 40 percent of the homes sold in 2005 were second homes, eclipsing first-time homebuyers.”

    If I wanted to tell a little lie as opposed to a big one when applying for a loan I would say its my “2nd home” to get a slightly better rate as opposed to I’m buying for “investor” purposes.

    Personally I wouldn’t want to retire to NJ Shore either. Why buy a 2nd home that’s almost as expensive as your primary home when you can more to Florida, Arizona, or Utah for half the cost and I’ll bet definitely lower property taxes. Call me crazy but that’s me.

  26. Rich In NNJ says:

    “AntiTrump Says:
    December 7th, 2006 at 9:44 am
    Richard:
    $400k loan @6% will start building equity at “around $400 monthly”

    Could you explain?”

    I second the question. How can you factor in equity growth if you don’t know where house prices are going?

    I beleive Richard is talking about the principal payment on the loan as it becomes equity.

    Rich

  27. skep-tic says:

    AntiTrump, BC Bob, Grim,

    I’m with you on the view that this housing market has declined remarkably without a real catalyst this year.

    I also tend to believe (maybe I’m alone here) that the market is much worse than the official numbers suggest, due to serous lag and manipulation.

    With this in mind, I’m saying that a big chunk of the 04/05 speculative activity has already gotten wiped out. Perhaps an even bigger chunk is to come, but at the very least it seems to me that the correction is well under way.

    I understand that RE generally moves slowly, but given the relative speed of the descent in the past year, and given that it has occured without any real trigger, I wonder whether the market can continue to decline so quickly year upon year.

    For this to occur, it seems to me that now there must be some trigger to intensify the decline. Either that or the momentum from what has already been happening to speculators is enough to hit the larger bulk of homeowners.

    I know that speculators were a huge group during the past few years, but as a percentage of homeowners overall, they remain a small minority. It is difficult for me to imagine that the momentum from the former group could cause a panic in longer term homeowners. So far, it hasn’t.

    I’d like to add that this big guess I’m putting forward still could amount to a big correction for housing in real terms. If we’ve already lost 10% and simply stay flat for another few years, we’ll be down 20% when it’s all over. If we lose another 5-10% next year just from momentum, this will have been a very bad housing recession in an otherwise strong economy.

    I still think that wait and see is the best strategy for 2007. I’m just saying that it is possible that we are in the worst period right now.

  28. twice shy says:

    thanks to all who replied to my question about home inspections. this remains a great place to share ideas.

    as to retirement, I’m an active bodyboarder (former surfer) and go out from Spring Lake to Sandy Hook year round. Jersey’s got surf! Plus beach/parking fees in season. I’d love to retire to the shore but the cost is prohibitive. Right now I’m considering Delaware.

  29. AntiTrump says:

    #27 Rich In NNJ Says:

    Just start putting the 400K in an online savings account giving 5% rather than buy a home with a mortgage for 400K to build up equity of 400K a month. What about the costs of maintenance, repairs, capital loss??

  30. v says:

    Update on jobless claims from claculated risk –

    Weekly claims are very noisy, so most analysts follow the 4-week moving average of weekly claims. The 4-week moving average has been moving up and is now at 328,750.

  31. UnRealtor says:

    Just received an e-mail from one of those “top producer/million dollar club” type realtors.

    The e-mail states: “What you’ve heard in the media is true, the housing market is heating up again! Now is a great time to buy or sell!” Disgraceful.

    In the e-mail it also included closings for November. And it omitted the homes which closed for significantly less than asking! Disgraceful.

    Behold the “realtor code of ethics” in action.

    Another top producer sent an e-mail, citing the Otteau Report that “the market is improving,” but at least included all November closings, including the ones significantly below asking price.

  32. RentinginNJ says:

    I would say its my “2nd home” to get a slightly better rate as opposed to I’m buying for “investor” purposes.

    I don’t buy this second home thing either. I think its primary purpose is as an investment that can be enjoyed as a vacation home (secondary purpose) for a few years before its off loaded to rake in the profits to supplement retirment income.

  33. FirstTimeBuyer says:

    Is it me or are comps useless? Just because a similar house sold for X a few months back doesn’t mean it will sell for that now.

  34. The Kid says:

    To build on that point,

    Aren’t tools that show comps, part of the problem with chaning the mind set of sellers? Sellers see what sold a few months ago and want part of that action.

    The Kid

  35. Richard says:

    >>For a 400K loan @6% your monthly intest cost is 400000*(6/100)/12 = $2000. Where is the 400 equity coming from? Home price gains?

    use an amortization calculator (provided one below) and plug in the numbers. you pay about $5k in principal off the first year and that of course grows as time goes forward. with any fixed loan the longer time goes on the more principal you pay off. so if you sold the house for exactly the same price you paid for it a year from now (let’s ignore the commissions for this example), you get $400k and you owe the bank $395k. if you were renting you don’t have that $5k hence why i use this to compare rent versus buy. this is all of course predicated on what a house price would be in the future. i assume no appreciation in my calcuations.

    http://calculators.interest.com/content/calculators/monthly-payment.asp

  36. Richard says:

    >>This savings, as it is in lieu of a long-term purchase (30-yr), could be thought of as retirement savings, and therefore IRA/401(k) tax deferred. Why would you include a negative on rental choice for taxes not due for 30yrs?

    i wasn’t assuming savings was tax deferred. i’m talking about savings that in the bank potentially waiting to be a down payment on a house. that money is taxable income at the federal and state level. if you made $10k and you’re in a 28% federal bracket you really only made $7200.

  37. 2008 Buyer says:

    Unfortunately comps and other housing price comparison tools out there lagging. They are somewhat useful in an appreciating market because it provides a minimum benchmark for where prices should be. I know….benchmark for where other inflated prices were. However in a depreciating and correcting market where we are now they are useless.

    The best method would be to use a combination of looking at listings ( original price to sells price, days on mkt, etc) and perhaps a comp of at the most 2 months ago would probably be the best measure. And as others on the board like to say…take an additional 25% off…lol

  38. skep-tic says:

    transaction volume is so low in the areas that I watch that it is hard to treat recent sales as anything other than noise– uninformed buyers, unique properties, individual distress situations, etc.

    official price measures are holding up only because there are virtually zero transactions.

  39. BC Bob says:

    pesche,

    Did you step up and get run over???

  40. Seneca says:

    I was waiting for someone to mention the builder stocks today…

    at midday
    XHB down 1.9%
    TOL down 3.2%
    DHI down 1.5%
    CTX down 1.5%

    …oh Ivy Zellman, what havoc you have wrought!

  41. The Kid says:

    NEW YORK (CNNMoney.com) — Mortgage rates fell for the sixth week in a row, to nearly the lowest level of the year, as a slowing housing market helped keep rates down, a survey said Thursday.

    The 30-year fixed mortgage rate fell to 6.11 percent in the week ended Dec. 7 from 6.14 percent in the prior week, according to Freddie Mac’s (Charts) Primary Mortgage Market Survey.

    It was the lowest the 30-year has been since the week of Jan. 19, when it averaged 6.10 percent. A year ago, the 30-year averaged 6.32 percent.

    The 15-year fixed-rate mortgage averaged 5.84 percent, down from 5.87 percent last week. A year ago, it averaged 5.87 percent. This is the lowest the 15-year FRM has been since the week ending Feb. 9, when it averaged 5.83 percent

    Rates for five-year adjustable-rate mortgages (ARMs) came in at 5.92 percent this week, down from 5.95 percent last week. A year ago, the five-year ARM averaged 5.78 percent. It was the lowest since February, when it averaged 5.89 percent.

    One-year ARMs averaged 5.43 percent, down from 5.46 percent last week. A year ago, the one-year ARM averaged 5.16 percent. This is the lowest it has been since March, when it averaged 5.41 percent

    “Continued signs of slowing in the housing market and weakness in the manufacturing sector helped keep mortgage rates down this week,” said Frank Nothaft, Freddie Mac vice president and chief economist.

    “Looking forward in the housing market, we think that housing is about 2/3 of the way through the correction, and should stabilize by mid-year 2007,” Nothaft said.

    What are peoples thoughts? The Kid is taking notes.

  42. Rich In NNJ says:

    #27 Rich In NNJ Says:

    Just start putting the 400K in an online savings account giving 5% rather than buy a home with a mortgage for 400K to build up equity of 400K a month. What about the costs of maintenance, repairs, capital loss??

    AntiTrump,

    Re-read #27 again. I was taking a guess (correctly I might add) to answer your question (#20) as to what Richard meant in #16. I never made any statements about Rent vs Own.

    But in any case, what do you mean here?
    …build up equity of 400K a month.

    Reading IS fundamental, Rich

  43. scribe says:

    Question: What’s considered the start of the spring selling season?

    March, April … ?

  44. BC Bob says:

    Seneca,

    Don’t usually like to mention day to day #’s. In the big pic, it’s just noise. However, was just concerned when there was no pesche sighting.

  45. Rich In NNJ says:

    Richard,

    Most Rent vs Own calculators I’ve seen factor in the build up of equity from principal payments already.

    Rich

  46. Pat says:

    Ok., Richard, look at it this way. The opportunity cost of using that downpayment on the home must then be considered, if you are also debiting the renter for tax consequences of after-tax savings. [see Anti’s post #30]

    What is the opportunity cost (lost benefit) if you purchase a home versus invest it?

    I was trying to get you off the hook on opportunity cost of tying up a downpayment, by getting you to remove the taxable interest debit on the other side against renting.

    It’s all a big balance sheet. Debits and Credits. If you add a negative on one side of the equation, there is a corresponding entry on the other.

  47. twice shy says:

    re: home builders stocks as proxy for your local RE market.

    sorry, very little connection. the homebuilders have been cut in half over the past year and now represent a long-term value play for value investors. historic low P/E ratios and possibility of earnings recovery maybe next year.

    our local RE markets will not be driven by the action of the XHB etc. IMO. the builder stocks may represent a good entry point (and they do look like they’ve bottomed) for anyone seeking diversification into this “space” for the long-term.

    Asking prices of houses today have not been cut in half. The market is slow, but has not crashed, and sellers have yet to throw in the towel (capitulation). We’ll know the bottom when we see all the major newsweeklies with scary covers showing houses and homeowners underwater and drowning (or variations thereof).

    disclaimer: the above is for infotainment purposes only.

  48. BC Bob says:

    “re: home builders stocks as proxy for your local RE market.”

    Twice,

    Exactly right, at this time ZERO correlation. The HB’s are concentrating on puking out land options, the homeowner is wondering what to do when their mortgage adjusts.

  49. Seneca says:

    BC Bob, twice shy, et. al. – I am in no way suggesting looking at daily value changes in homebuilder stocks or looking at homebuilder stocks in general is a meaningful way of predicting the future of the real estate market. I was only following up on the back and forth from yesterday. I have some stocks in my portfolio that I have owned for decades.

    Now, its time to go to Home Depot and buy some holiday ornaments on sale because they are no longer able to sell those bargain basement kitchen cabinets to flippers.

  50. AntiTrump says:

    #42 Seneca Says:
    “I was waiting for someone to mention the builder stocks today…”

    Sorry peche22’s computer only tracks market upticks. When there is a downtick his screen isn’t updated. That’s why he is only able to inform us of moves up in the XHB. Bear with him please..

  51. AntiTrump says:

    #43 The Kid Says:

    Like most busts, we will know the bottom only six months or more after it has come and gone. But I do belevie that you will start to see pockets of value in late 2007/2008 especially from sellers who have heard the spring song 2 years in a row. Many will give up their plans to move the 5000 sq ft new construction and continue to live in their 700K cape.

    Those that have to sell well either find a buyer or return the home to the bank minus the refund.

  52. Richard says:

    pat, i understand credits and debits. i was pointing out a couple of things people don’t tend to do when comparing rent versus buy. unless you leave money in the bank you’re at risk of it losing value. with real estate it’s more pronounced because you’re typically leveraging 4-5x the investment (20% = 4x).

    in investment terms if you sell property at a profit after a certain time you don’t pay capital gains tax. if you invest in the market and make a profit you do pay capital gains. that’s a huge difference. the downsides to real estate is you can’t diversify, you’re leveraged far higher than the original investment and the cost of the transaction is 5%. still the game is stacked to favor buying over renting over the long haul.

  53. AntiTrump says:

    #44 Rich:

    I meant $400 a month not 400K. I understood what you said. I was just countering rich’s view that there are other ways to save $400 a month for the next two years rather than buyer an overpriced house to build *negative* equity. Wasn’t suggestion it to be your opinion.

  54. BC Bob says:

    Seneca,

    I know where you’re coming from. My post was not referring to you. My post was to the individual that said tol was up 20% yesterday!!

    Anti,
    You may be right. His trade alerts/bells only go off on the upside.

  55. pesche22 says:

    steal balls adds to positions in here
    rebalanceing today

    don’t forget you can go short as well.

    but then again, most do not know how to short

    don’t forget gold

  56. AntiTrump says:

    “with real estate it’s more pronounced because you’re typically leveraging 4-5x the investment (20% = 4x).”

    Rich, this leverage works against you in a declining market.

  57. pesche22 says:

    now lets see, ummm tol up 50% from bottom
    last july, but then most were all
    gloom and doom,,,

    philly housing index 28% to the upside since
    over the summer.

    but wait theirs more.

  58. RentinginNJ says:

    Question: What’s considered the start of the spring selling season?

    The week after Superbowl Sunday is often considered the start, but it’s highly dependent on the weather in the early weeks.

  59. BC Bob says:

    “but then again, most do not know how to short”

    HAH,HAH!!!!

    At least he’s alive. First of all, you should refer to a price of a stock in relation to its high, Tol off approx 45% from high. Movements from lows are called retracements
    until the trend changes. 45% off the high does not in any manner change the trend.

    Please stop making comments about gold, you are making me nervous!!

  60. Rich In NNJ says:

    AntiTrump,

    Thanks for clarifying.

    “…countering rich’s view…”
    “Rich, this leverage…”

    I think you’ll get a response if you use his name, Richard.

    I think Pesche22 is just pulling everyone’s leg. You know, breaking shoes, busting balls, etc.
    I could be wrong…

    Rich

  61. pesche22 says:

    well we sure have floks here who have all
    the answers, just ask the question.

    must be renters, with no money

    and watch the subprime lenders as well

  62. FirstTimeBuyer says:

    For a laugh…

    http://newyork.craigslist.org/jsy/rfs/245359727.html
    $699k for a split level. This is exactly like the house I grew up in, but uglier. It’s about 1600 sq ft. with a one car garage. This is what’s wrong with real estate!

  63. BC Bob says:

    Rich NNJ,

    You’re right about pesche 22, he likes to bust b*lls. If he put his *ss on the line he would be run over like the I/O’s/flippers.

  64. Seneca says:

    Rich,

    I agree on pesche, either a ballbuster or an automated bot posting drivel.

    Or maybe its grim trying to encourage heated debate on the site?

    nah, its a bot.

  65. The Kid says:

    What is I/O’s/flippers?

    The Kid is just trying to get a handle on the “slang”.

  66. FirstTimeBuyer says:

    Here’s another:
    http://newjersey.craigslist.org/rfs/245082195.html
    $1.9 for a bigger, ugly split level with baseboards and a two-car garage. And it’s been reduced!

  67. scribe says:

    Renting,

    Thank you.

    Kid,

    I/O = interest only

    I/O/flippers – people who buy with interest-only mortgages in the expectation they’ll be able to flip before the interest-only phase ends

  68. make money says:

    I’m a sooo called flipper, or grubber….

    In a past 5 years I cashed out of over 10 million from the bubble…I still own numerous properties all sitting on 30 yr fixed mortgages with 20% down….my cash flow is positive(rents-mortgage, taxes…maintance..etc)…

    I have 2 properties that I’d like to sell…after listing them several times..I can’t get any reasonable offers…

    The market is slow….This is well documented everyone agrees….

    however…What makes you renters think that I will lower my the price on the house when I can continue to take you money from rents…and continue my positive cash flow month in and month out….

    Do you really think that us real estate flippers are STUPID…

    How do you think we made our millions? by following the crowd?

    25%off…is funny but not smart…he’s saying that I’m starving…While yes my profits are down I only flipped 2 houses in calendar year of 2006…and I profited $135,000…which is peanuts comared to what I was caking in the prvious years….

    How many of you broke renters made $135,000 when business is BAD…lol

    One factor that no-one metions is Immigration…
    When immigrants moved to US in the past decades they got low paying jobs and it took them 10-15 yrs to buy their first home. Now they’re coming in masses and they’re all educated and making a killing right away…and even if they don’t have an education they’re working in construction for they’re making more money than their educated counterparts. Furthermore, the waiter that you are tipping 20% now is buying the house that you’re waiting for the price to go down. 10 yrs ago we tipped 10%…that means waiters income has more than doubled interest free…

    These are the people that don’t know about bubbles and down trends they know that they have extra cash everymonth and want to and can afford to buy a HOME.

    So to you renters…or so called smart people…
    as long as you keep paying my rent why would I lower my asking price…ad if you can’t save enough money for a downpayment…I’m sure a cab criving Arab or an Albanian waiter can.

    Just wait unrtil your lanlord is an Indian doctor.

  69. skep-tic says:

    watch this CT realtor’s pitch to buyers and be prepared to vomit:

    http://www.ruthmanre.com/

  70. Pat says:

    …eeeeewe, sticky.

    I picture some young, engaged 21-year old naive person (male or female) watching that, smiling and sighing as he/she flips through Bride magazine.

    You have Over-the-Rainbow in the background, etc.

    So is this one butt-kissing strong potential buying groups, or still trying to sell the American Dream (maybe with a twist)?

  71. make money says:

    my comment is awaiting moderation….what does that mean???

    The reality is too harsh for you renters?

  72. Pat says:

    JB- can you post a moderation explanation at top of page or below the [Submit comment] button so people stop getting offended when they put in too many links or some word from American Pie?

  73. Seneca says:

    ruthmanre.com – now THAT is comedy. They don’t discount their services, just give the buyer half their commission? huh?

    I wonder if Israel Kamakawiwo`ole estate knows they ripped off his rendition of “Somewhere Over the Rainbow”. Something tells me they aren’t paying royalties.

  74. pesche22 says:

    hey, bc go get your shoe shine kit.

  75. make money says:

    I’m a sooo called flipper, or grubber….

    In a past 5 years I cashed out of over 10 million from the bubble…I still own numerous properties all sitting on 30 yr. fixed mortgages with 20% down…my cash flow is positive(rents-mortgage,taxes…maintance..etc)…

    I have 2 properties that I’d like to sell…after listing them several times..I can’t get any reasonable offers…

    The market is slow….This is well documented everyone agrees….

    however…What makes you renters think that I will lower my the price on the house when I can continue to take your money from rents…and continue my positive cash flow month in and month out….

    Do you really think that us real estate flippers are STUPID…

  76. skep-tic says:

    Calculated Risk has a great chart up showing homeowners’ equity is at an all time low. decline in equity is a generational trend that has been going since the early 80s. Incidentally, early 80s also marked the emergence of the credit card. consumers treat homes just as they treat their entire balance sheet: every asset is a vehicle for leverage. credit has been expanding steadily and consumers have been piling on debt for over 20 yrs. in other words, it seems unreasonable to argue that we will return to old standards of leverage vis a vis housing

  77. v says:

    pesche22,
    just let bob know when you need the shoe shine kit.

  78. make money says:

    One factor that noone metions is Immigration…

    When immigrants moved to US in the past decades they got low paying jobs and it took them 10-15 years to buy their first home. Now they’re coming in masses and they’re all educated and making a killing right away and even if they don’t have an education they’re working in construction for they’re making more money than their educated counterparts. Furthermore, the waiter that you are tipping 20% now is buying the house that you’re waiting for the price to go down. 10 yrs ago we tipped 10%…that means waiters income has more than doubled tax free…

    These are the people that don’t know about bubbles and down trends they know that they have extra cash everymonth and want to and can afford to buy a HOME.

    So to you renters or so called smart people,
    as long as you keep paying my rent why would I lower my asking price? and if you can’t save enough money for a downpayment then I’m sure a cab criving Arab or an Albanian waiter can.

    Just wait until your lanlord is an Indian doctor

  79. Rich In NNJ says:

    This ought to be good…

  80. Hehehe says:

    Make money,

    Thanks for the concise and fact filled analysis. I especially liked the part about tipping. That was really helpful. I feel as if you put me in my place. I may go and get a job as a waiter so that I can really clean up.

    Hehehe

  81. Rich In NNJ says:

    I will comment on one thing. I never tipped as low as 10%. I tip 15% – 25% depending on the establishment and service.

    I’m sure others will show “Make Money” the NJ immigration stats.

    Rich

  82. make money says:

    or maybe the polish contractor that charges 6-8 thousand to redo a bathroom and does it in 2 days.

    I sold a 10 family building in Brooklyn to some Chinese guy who has been in the county for 3 years…

    When I asked him “how did he save $300,000 in 3 years”…he said “You ever hear about Chinese food”

  83. Pat says:

    I really think this one is J.B. Too good.

  84. Hehehe says:

    You sound sooo legit.

  85. FirstTimeBuyer says:

    So the point of this thesis is that immigrants are smart enough to “make a killing” when they get here and buy houses, but not smart enough to follow economic news.

    And how are we paying his rent?

  86. FirstTimeBuyer says:

    Ooh he’s racist *and* a realtor. Nice!

  87. make money says:

    FirstTimeBuyer,

    I’m a real estate investor.

  88. Seneca says:

    I came across this while looking for historical median multiples in the US. Some interesting stuff from the Demographia International Housing Affordability Survey, see pdf pages 13 and 14 for some US stats.

    http://www.demographia.com/dhi-ix2005q3.pdf

    Is it just me or does anyone else have family that thinks they are just “cheap” for not buying in today’s market?

  89. FirstTimeBuyer says:

    make money- sorry, racist and a real estate investor.

  90. make money says:

    First time homebuyer says,

    And how are we paying his rent?

    I got news for you. The rent that you pay every month to your landlord. Us Landlords refer to that money as MY rent money”I get over 75K everymonth”

    So when we see you on the first we ask you “Do you have my rent money”

    lol

  91. FirstTimeBuyer says:

    Actually, no. Our family and friends live in South Jersey, Eastern PA, and Upstate NY. They think we’re being screwed with high prices and taxes even though they aren’t much better off. They’re mostly shocked by how much property is selling for now.

  92. FirstTimeBuyer says:

    Make money-
    We don’t pay your rent though. Your unfortunate renters do. And that doesn’t really have anything to do with lowering prices of SFH that aren’t selling.

  93. BC Bob says:

    Is the keg running dry??? Sorry, no link.

    WASHINGTON (MarketWatch) – Outstanding consumer credit fell by $1.2 billion or an annual rate of 0.6% in October, the biggest decline in 14 years, the Federal Reserve reported Thursday. Consumer credit in September was revised to show a $4 billion gain, or 2%, revised from the earlier $1.2 billion decline, or 0.6% annual. It’s the biggest decline in credit in percentage terms and in absolute terms since 1992. In October, revolving credit, such as credit cards, rose $2.9 billion, or 4.1%. That’s down from 4.9% in September. Nonrevolving credit, such as auto loans, fell by $4.2 billion, or 3.3% annual. That’s the biggest decline since 1993. Economists were looking for outstanding credit to grow by $4 billion in November.

  94. make money says:

    everyone please,

    Instead of having all these ideas of how and why real estate will go down, why don’t you start a blog on how to make money?

    I’ll tell you why cause you have no idea.

    Spend the next couple of days trying to figure out how to make 10 thousand a month(after all taxes) cause that’s how much you need nowdays to live a decent life.

  95. Nice to see so many fuming underwater homedebtor trolls about to blow a gasket:
    ‘The reality is too harsh for you renters?’
    Huhh?
    Me renter, you homedebtor, capishi?
    Is (homedebtor waged) class warfare coming to a location near you?
    Don’t forget:
    ‘GREED IS GOOOOOD!, GRUBBERS’ (and keep riding the market down, you GreenScam worshippers)

  96. pesche22 says:

    now your thinking , this is what i have been
    saying . lets make some money

    down goes fraizer today xhb ,, a little
    profit taking.

    but,

  97. make money says:

    I guess I’m a bad person cause I cashed out around 10 million since 1998.

    I’m a bad person cause I listed a property with an asking price that even I thought was 2 high and then watched people go into bidding wars for it.

  98. Clotpoll says:

    Hey Skep-tic (from #70):

    Just barfed in my mouth from that video. This is the kind of stuff that makes people hate us. Also a POS as an effective marketing tool…no real appeal or call to action, coupled with the come-on of a discount (while claiming that the company doesn’t discount!).

    I cannot fathom this appealing to anyone not completely sedated with Haldol or Thorazine.

  99. make money says:

    you know why people hate real estate agents and investors?

    While everyone was sitting around watching and talking about real estate we we making tons of money.

  100. BuyNextYear says:

    “Spend the next couple of days trying to figure out how to make 10 thousand a month(after all taxes) cause that’s how much you need nowdays to live a decent life. ”

    What??? You need 10G a month to live a decent life? Sounds like someone who has lived a spoiled life!

  101. dreamtheaterr says:

    makemoney, how about some ‘tips’ on how to make money? Save us poor renters from anguish and give us hope……

    btw, Indian doctors are brilliant but useless landlords.

  102. Pat says:

    You know, make money, you have some typing idiosyncrasies that make you very, very familiar.

    Let me see.

    Who else types polish with a lower case “p”? Got me one time on that one before, you stinker.

  103. Richard says:

    >>it seems unreasonable to argue that we will return to old standards of leverage vis a vis housing

    this is something i’ve tried to get across a couple of times. i thought car leasing was a fad until it wasn’t. we’re talking about homes here folks. a place to live and raise your family. this is one of the most important and sacrosanct things in a person’s life and it shouldn’t surprise anyone what people are willing to do to get it. the only thing that will significantly affect this market is some exogenous factor (e.g. war, plague) or a shutting off of the credit spigot. i just don’t see either happening in any significance anytime soon hence a slow crawl.

  104. Spelunker says:

    “I guess I’m a bad person cause I cashed out around 10 million since 1998.

    I’m a bad person cause I listed a property with an asking price that even I thought was 2 high and then watched people go into bidding wars for it.”

    No, you’re a GREAT person and we should all aspire to being just like you.

  105. Spelunker says:

    Hey Richard what plagues occurred during previous 2 housing busts?

  106. FirstTimeBuyer says:

    Notice how that make money dude never denied that he was a racist.

    I don’t hate real estate agents or investors. I don’t hate people who have more money than I do. I hate people spend their whole lives screwing the little guy while they accumulate more wealth they can can spend. It consumes their personality and leaves them with little to talk about other than how they screwed the other guy. So good for you and your $10 million.

    I also hate trolls.

  107. Spelunker says:

    Did you know?

    “Starting today, Zillow Inc. joins a growing list of websites that allows homeowners and real estate agents to post virtual “For Sale” signs for free.”

    http://www.latimes.com/business/la-fi-zillow7dec07,0,411614.story?coll=la-home-headlines

    sorry if this was posted earlier.

  108. bergenbubbleburst says:

    People can do whatever they want to do to get a house,and of course we all know that so many have. The question is, now that they have it, will they be able to keep it And for many I believe the answer will be no.

    Do not forgt so many bought not becasue of “chestnuts roasting on an open fire”, and all that warm and fuzzy stuff;they bought because they believed it to be a get rich scheme. Many put no money down, and when things get rough (as tjhey already are) they will walk away, no skin in the game so most will not care.

  109. make money says:

    Spelunker,

    Thanks. Instead of hating all people like myself, you should use us as an inspiration.

    In 1998 I graduated from NYU with a Finance Degree, I owed around $100K in loans. I got my first job at PriceWaterhouse and was making 58K at 22. My Dad (an immigrant) gave me his life savings to pay off my college loans. Instead I put the money in a downpayment on a commercial building on Madison avenue.

    In six months I was able to get some high paying tennants and sold the building to tennant next door after profiting $455,000.

    After I walked home from the closing I told my Dad what I did, and then I told him that I quit my job and decided to become a real estate investor.

    and the rest my poor renters is history…

  110. Pat says:

    Cool story.

    So why are you here, my son?

  111. Spelunker says:

    make money

    Like i said you’re a GREAT person and we should all aspire to being just like you. That’s a great story.

  112. HEHEHE says:

    Make money = fantasy land

  113. Pat says:

    I said, “Why are here, my son?”…

    O.K., say three Hail Mary’s and two Our Father’s and go beg your father’s forgiveness for screwing his trust.

  114. BC Bob says:

    “Spend the next couple of days trying to figure out how to make 10 thousand a month(after all taxes)”

    Hey *sshole,

    Do you propose that many of us take a pay cut???

  115. profuscious says:

    A wise man named Dick West once said to me, “Twice blessed is he who drinketh from another man’s wine, for he shall have his own on the second day”

  116. AntiTrump says:

    #70 skep-tic Says: http://www.ruthmanre.com/

    Oh Man ! That was really touching. I have to go out there an buy a house now !

    A house by the river where there is always a rainbow in my backyard and cute dog called Fido.

    Life is good.

  117. AntiTrump says:

    #78 make money Says:

    The immgrant story again. Will you ever get tired of this?

    Why did the housing inventory increase by over 50 to 100 percent in the last couple of months. Did the immigrants take a break from buying 500K capes??

  118. Pat says:

    prof, I believe the actual quote is, “Thrice blessed is he who has a wife who stops at Joe Canal’s discount liquor for the big box of Merlot on the way home from work, for he shall drink his wine today, tomorrow, and the next day, without getting up from his recliner.”

  119. BC Bob says:

    “When the only purchasing opportunity the crash-and-burn crowd sees comes on the heels of a full-out RE collapse, be very sure that there are many more out there beginning to see opportunity now.”

    Clot,

    That’s expected, you will get bounces all along the way. Does it mean that those buyers are buying real value at this time??? I knew a lot of traders that though enron was a buy at $17, not comparing the two just talking psychology.

    I think that it is much deeper than media soundbites when the Toll’s & D.R. Horton reports 35-40% cancellation rates. Who requires a news flash from a bobblehead to come to the conclusion that that this industry is severely fractured??

  120. AntiTrump says:

    #78 make money Says:

    It’s funny when you don’t have facts and try the emotional angle. Guess it works sometimes. Hopefully the readers on this site have gotten the facts before your “Immigrants will eat your lunch if you don’t go out and buy a house now story”

  121. skep-tic says:

    BC Bob,

    that note on credit contraction is interesting stuff. if it continues, this could be what takes housing into the next stage of decline. all of these forms of credit are tied together. a lot of people pay for their basic needs with credit cards. can’t get to work without a big car loan. can’t keep the house without a refi. take away any one and a lot of these people will be sunk

  122. Eisbär says:

    Make Money sounds like a bad parody of that “Rich Dad, Poor Dad” dude. To quote one of my Jay-Z songs, he’s just an “imaginary playa.”

  123. James Bednar says:

    Re: #70

    The use of the Israel Kamakawiwo’ole song was a nice touch in the video. Tugs the ol’ heartstrings in just the right (read: manipulative) way.

    jb

  124. AntiTrump says:

    Immigrant Facts:
    http://tinyurl.com/ycobhn

    Concentration in Six States:

    In 2000, over two-thirds of the nation’s total foreign-born population lived in six “Major destinations” states:
    California (28%)
    New York (12%)
    Texas (9%)
    Florida(9%)
    New Jersey (5%)
    Illinois(5%)

    ________________________________________

    http://tinyurl.com/yn5zgp

    “Although the largest immigrant populations are still concentrated in a relatively small number of states, immigration growth rates are highest in “non-traditional” destinations in the South and Midwest. For instance, the number of immigrants in South Carolina grew by 47.8 percent in just the 2000-2005 period. In Georgia (which has the ninth largest immigrant population in the United States), the foreign-born population increased by almost 39 percent in five years. ”

    _____________________________________

    Can you please stop trying to convince people to buy homes from the immigration story !!

    Yes, immigration growth is a part of home ownership growth, but that doesn’t justify the 100% run up in home prices in the last 5 years !!

    However, the overall share of the immigrant population living in these six states declined significantly from 75% in 1990 to 68% in 2000.

  125. BC Bob says:

    Clot,

    One other thing, nobody suggested that business just stops, drys up completely. New buyers think they are getting a deal with the incentives, their choice. However, it seems like you step on one (one closing) and 8-10(new listings) appear, like cockroaches, especially this spring when the withdrawals/expired come back into play.

  126. Clotpoll says:

    Make Money just sounds like an investor to me. As this blog grows, you’ve got to expect to hear the voice of guys who have made- and continue to make- good money in the RE investment game. Longtime players are well-buffered against even the most catastrophic downturn and shouldn’t even be a target of the doomsday crowd here…they’re bulletproof, at least in my book. You don’t see them upside down with I/O’s and negative equity.

    On the other hand, Robert Kiyosaki is a phony and a huckster, whose empty, circuitous-logic platitudes are those of the multi-level marketing crowd. The entire “Rich Dad, Poor Dad” is a fiction, having been exposed (along with the other massive discrepancies in Kiyosaki’s CV) by John T. Reed, at his excellent website:

    http://www.johntreed.com

  127. chicagofinance says:

    oops

    RBC Capital Cuts 41 Jobs in U.S. Fixed-Income Sales (Update1)

    By Elizabeth Stanton

    Dec. 7 (Bloomberg) — RBC Capital Markets, the investment- banking arm of Canada’s biggest lender, eliminated 41 bond sales jobs this week from offices in seven U.S. cities as part of a plan to add specialization in the U.S. fixed income business.

    The people let go in New York, Chicago, New Jersey, Florida, Tennessee and Oregon were part of the firm’s so-called middle market group that sells to institutional customers, spokesman Kevin Foster said today. Most had worked for Dain Rauscher, a Minneapolis-based brokerage Royal Bank of Canada acquired in 2001, he said.

    RBC is “in no way reducing its commitment to the U.S. or the middle-market business,” Foster said. “The goal is to align our operations in the U.S. the way we have them set up in other regions.”

  128. AntiTrump says:

    #129 Clot Says:

    “Make Money just sounds like an investor to me”

    I think if he was a smart investor he wouldn’t care if prices went down as it will give him more opportunity to load up on stuff on the cheap and get a better return on investment on his investment. He is not an investor, he is a flipper who makes money by finding someone to pay more than what he paid regardless of the intrinsic values of the property (i.e. ponzi investor). Unfortunately for the likes of him, the market is turning against them, and they will keep blowing the trumpet to get attention in their last ditch efforts to get more buyers into the market.

    Seriously, if he bought and rented as he claims, lower and not higher prices work better for as he gets a better return on his investment.

    He gets over *75K* a month, but he prefers to spend more time on blogs trying to prop up the property market. Did you guys know that peche22 is actually Donald Trump?

  129. lowball says:

    makemoney why are you biting your nails in anger?

    Relax, this comes straight from NAR’s horses mouth:
    “The only real bust underway is in sales volume, not prices or property values”.

    See?
    Your 10 mil. Monopoly $ are safe now.
    Prices will only go up, and up!
    Them stupid renters!

  130. d2b says:

    I have two friends that are just like make money. They have made way too much money flipping property over the last four years. While I’m jealous, I am also happy that they had the balls to do it.

    There is nothing wrong with being in the game. In reality, all asset bubbles are a ponzi scheme.

    Make money may not need to sell. But plenty of others will. People will get burned on the way down. That never changes. This crash in the market is part of the cycle.

  131. chicagofinance says:

    skep-tic Says:
    December 7th, 2006 at 2:50 pm
    watch this CT realtor’s pitch to buyers and be prepared to vomit:
    http://www.ruthmanre.com/

    skep: It is having the same effect on me as scallions at Taco Bell.

  132. chicagofinance says:

    make money: that violation of your father’s trust is almost unforgivable – you are giving us prima facie evidence that you are not anyone we would either want to know or emulate.

    Further – I am partly Albanian and have immigrant relatives living in the USA. I say categorically that you are a jackass, troll, or whatever suits you. By the way, why don’t you study finance at a real school.

    chicago

  133. HeHeHe says:

    skep-tic Says:
    December 7th, 2006 at 2:50 pm
    watch this CT realtor’s pitch to buyers and be prepared to vomit:
    http://www.ruthmanre.com/

    “We care about the well being of human kind”

    Unbelievable.

  134. Spelunker says:

    i thought taps would have been a more appropriate sound track.

  135. James Bednar says:

    This one question is really nagging me.

    Why would a successful investor, especially one who has “cashed out over 10 million”, waste his/her time bragging about it on an website?

    jb

  136. chicagofinance says:

    James Bednar Says:
    December 7th, 2006 at 7:15 pm
    This one question is really nagging me.
    Why would a successful investor, especially one who has “cashed out over 10 million”, waste his/her time bragging about it on an website?
    jb

    Ate Taco Bell last week and is stuck at home recovering. Try to take their mind off of the consequences.

  137. BuyNextYear says:

    “After I walked home from the closing I told my Dad what I did, and then I told him that I quit my job and decided to become a real estate investor.”

    Why do I get the feeling that you couldn’t hack it in the big accounting firm? One building and you need to quit?

  138. HeHeHe says:

    Maybe he too cares about the well being of human kind?

  139. Spelunker says:

    HeHe

    You know there is one thread with an entire two pages worth of blog space about you on kannekt. Folks there are wondering where you went. Apparently you had some admirers too!

    Dont think you’ve seen it since being cast out.

  140. chicagofinance says:

    My wife is director of employment for a large financial services firm, and claiming $58K as a starting salary for some chump change 22 year old in 1998 causes one’s nose to get longer [in the folklore] – as they say….

  141. Spelunker says:

    Just out of college, no experience, yep, 58K to start.

  142. Orion says:

    I believe he/she really meant $158.

  143. Pat says:

    Yep, CF, if she told you that, she would be

    CORRECT.

  144. Orion says:

    Or maybe $58.00

  145. v says:

    #98 pesche

    “down goes fraizer today xhb ,, a little
    profit taking. ”

    I thought profit taking occurs on an upgrade. Guess with your new ‘crap game’ profit taking happens on a downgrade.

  146. v says:

    Dec 08
    08:30 Nonfarm Payrolls
    08:30 Unemployment Rate
    08:30 Hourly Earnings
    08:30 Average Workweek
    10:00 Mich Sentiment-Prel

  147. v says:

    from calculated risk.
    http://photos1.blogger.com/x/blogger/2825/754/1600/42960/mortgageEquityQ32006.jpg

    The Fed reported today that houseowner equity, as a percent of market value, fell to a record low 53.6%, compared to 54.0% in Q2, and 54.6% one year ago.

    Homeowners borrowed almost the entire amount that their homes increased in value in Q3. Homeowner equity market value increased $194.5 Billion in Q3, to $20.48 trillion. Meanwhile homeowners mortgage debt increased $180 Billion. So homeowners borrowed 92% of the increase in market value.

    This may sound like a high percentage of equity, but according to Robert Broeksmit, Chairman of the Residential Board of Governors, Mortgage Bankers Association (from the Senate hearing on Wednesday):
    “More than a third of homeowners, approximately 34 percent, own their homes free and clear.”
    So many of the remaining homeowners have a very low percentage of equity. Note: Typically free and clear homes are older and have a lower market value than newer homes – so you can’t just subtract 34% from 53.6% to find the percent equity of homeowners with mortgages. But this probably indicates that more and more homeowners have maxed out their “home ATM”.

    If house prices stabilize or fall over the next few years, the percentage equity will drop sharply (see 1990). This will make it more difficult for homeowners to extract equity from their homes.

  148. HeHeHe says:

    Spelunker,

    Yes I saw that today from work. Good to see there’s some fellow housing bears on that website. Of course the moderator and his RE cronies would claim all the postings are from the same person.

  149. chicagofinance says:

    Well Citadel pulled it off – at junk spreads mind you….

    http://www.bloomberg.com/apps/news?pid=20601009&sid=aPOT8XkaunMg&refer=bond

  150. still_looking says:

    ….money maker must be that australian accented guy on the radio who talks about buying his first piece of real estate “at 17 without a dime in my pocket” You too can get rich quick!!

    I’ll believe it when he posts his 2005 tax return to verify.

  151. still_looking says:

    ….money maker must be that australian accented guy on the radio who talks about buying his first piece of real estate “at 17 without a dime in my pocket” You too can get rich quick!!

    I’ll believe it when he posts his 2005 tax return to verify.

  152. Seneca says:

    Hey chicago – easy there with the digs at NYU. The MBA program is well-regarded and the Finance program ranks in the Top 10 in just about every publication that ranks these sort of things.

    I think Make Money is referring to the School of Continuing Education class he took on Flipping Real Estate. Based on his spelling and grammar, he never would have been accepted into any NYU program.

  153. SAS says:

    Make money,

    Too shay my friend…. too shay.

    I too cashed out and made alot of jack during this bubble. But I admit, I got out of the market because I forsee a sinking ship.

    These immigrants you speak of is a farse, and we know it. If anything, they drive prices down, because its the wrong type of immigrant. (not my opinion, its the markets opinion).

    I caution you on being so cavalier as a landlord. This rental market is about to become diluted.

    SAS

  154. Homer Simpson says:

    everyone please,

    Instead of having all these ideas of how and why real estate will go down, why don’t you start a blog on how to make money?

    Sorry getting in late to the blog tonight.
    You mean some get rich quick scheme?
    How much of that 75k is profit? I bet you a decent amounmt is not profit.
    Being a real estate investor doesnt take much skill, just money to start investing.
    Even a monkey with a few hundred thousand dollars could do it. Why not actually do something that takes skills or is riskey. Anyone with money can go buy 20 properties and rent them out for x amount of dollars.
    If you buy 20 places at 400k and charge 2500/month for rent it will take around 14 years to start making a profit So yes thats 50,000.00/month and maybe a buyer can buy the properties out flat, but any way you look at it you still got make up the 8 mill you invested in those 20 places.

    You asked Do you really think that us real estate flippers are STUPID. Yes I think you all are a bunch of whiney little Bi****s
    And I hope you lose all your money and end up in the poor house. The problem with investors is they think they are invinceable and say why should I lower my prices I am greedy. Well what happens when you cant rent any of your places or sell them becuase no one wants to bail you out of bad investments? CRASH AND BURN and I will be laughing when I see you eating your welfare cookies PUNK

    ———————————————
    ANd to respond to this post:

    Did you guys know that peche22 is actually Donald Trump?

    I dont think Trump knows how to work a computer, plus Trump is as usefull as toliet paper, he’s only good to wipe your…well use the imagination and fill in the rest.

  155. SAS says:

    Make money,

    btw-

    if you really wanted to make money, you wouldn’t be a RE landlord.

    What you have in your pocket, may be dimes and nickels to others.

    So, let us not boast for people whom boast don’t dine at our table.

    SAS

    SAS

  156. v says:

    Another one from Calculated Risk –

    Credit Suisse on Homebuilders
    In a research note titled: “Not So Fast”, Credit Suisse’ Zelman, et al, offered their top ten reason to downgrade the homebuilding sector. Here are a few reasons:
    • Impairments are being ignored: The market is assuming that book, as reported, is worth what the builders paid for it. Combining prices that have retreated to at least 2004 levels with still falling absorptions would suggest a recurrence of large impairments witnessed during prior cycles. Including our estimate for impairments, we believe the stocks are trading at 10.6x normalized earnings, or a 30% premium to the historical trading level.

    • Record new inventory could get worse: According to our channel checks, despite the soft markets, the pipeline for new communities remains full with an 11% median increase in community count expected for next year. In fact, 63% of respondents expect to increase the number of open projects. We are dubious that the increased supply won’t heighten the need for incentives and aggressive pricing in the spring.

    • Credit quality and affordability: The exotic mortgage wave of 2004-2006 is starting to unravel with ARMs resetting, delinquencies rising, spreads widening in the CDO market and foreclosures skyrocketing. At the minimum, these dynamics put further pressure on supply, and more severely could tighten mortgage liquidity for the consumer .

    Existing inventory could run up again in spring: With both real homeowners and forced investor sellers looking to the new year to test the market, we expect the pressure from resales to resurface in the first quarter.

    • The economy: With real estate accounting for almost 30% of employment growth from 2002-2005, we believe housing and the economy can not be viewed in isolation. While we are not economists, we admit that we are concerned that the leverage of the economy to housing is greater than it has been in the past.
    Some of the other reasons were technical or based on valuations.

  157. New In Town says:

    As a boomer myself, I think there is a little mentioned effect on housing not that far over the horizon. Many of the members of my cohort seem to be planning to downsize in the near future. Lots of preferring renting and condos, having ‘done’ the house thing.

  158. pesche22 says:

    aholes sit up late worrying about
    blogs,

    europe is open

    and V dont forget you can always go short

  159. pesche22 says:

    V where are you , asian closed down
    if you hurry perhaps you can short the naz

  160. Al says:

    If house prices stabilize or fall over the next few years, the percentage equity will drop sharply (see 1990). This will make it more difficult for homeowners to extract equity from their homes

    Believe it or not but the percentage of equity is at it’s historic Lows – it has never been so low. NEVER!!!

    And that is after the run up of the lst 5 years so you would assume that people benefited fro it.
    Here is the post:

    https://njrereport.com/index.php/2006/11/16/refinancing-the-american-dream/

  161. Al says:

    Between 1973 and 2004, homeowner’s equity actually fell—from 68.3 percent to 55 percent. In other words, Americans own less of their homes today than they did in the 1970s and early 1980s.

  162. James Bednar says:

    You must have missed the memo that Orwell sent out. The thing you speak of is no longer referred to as debt, but wealth.

    jb

  163. make money says:

    Seneca,

    I have a bachelors from Stern business school. When people are not buying houses then they must be renting.lol.

    As far as 75K per month I get from rents today, 22K is profit.

    I haven’t had a real job since 1999. I don’t know what quality time with my kid is cause I’m home enjoying her all the time.

  164. AntiTrump says:

    #148 V:

    Do not question peche22’s intelligence. He has made load of money buying high and selling low.

  165. make money says:

    All you educated professionals who have real important jobs and don’t have time for anything
    because your career takes all your time, how much do you make 90K-115K?

    And you feel good about yourselves right?

    How much is that a month after taxes, transportation cost, clothing etc?

    6k-7K a month if that.

    Ask yourselves this how would you feel if you set yourselves up with proper investments and now you make 3 times that much and you don’t have to go to work or do anything.

    Who the stupid one now?

  166. James Bednar says:

    make money,

    Can you explain why your traffic is coming in from an NYIT (New York Institute of Techology) domain and you initially registered with an NYIT.edu email address?

    jb

  167. make money says:

    Homer Simpson,

    I’m not talking about get rich schemes. I’m talking about making money.

    You see me and my friends we sit on a table and we discuss ideas on how to make money while all you bears talk about us entreprenuers as if we are stupid and you want us to fail.

    I’ll give you an example.

    My brother in law is a architech major at NYIT. During his summer break he sells bottles of water of a cooler in Times Square. He sells between 1,000 and 1,200 botlles a day.

    Thats almost a thousand a day profit not taxable income. He’s lazy so he only does it twice a week.

    Work 2 days and make 2K. not bad ha?

    That’s what I mean about making money.

  168. make money says:

    Sure,

    I’m taking some classes at NYIT..

    Why are you asking JB.

  169. Pat says:

    JB..remember last summer, there was a nice discussion about Queens and how there’s a “lot of polish …” Chicago got it…I didn’t.

    Interesting, when you run a Website, and you keep IP address, date, idiom and a few other fields in Access, with a quick reporting front end, the connects you see. It’s like having a response profile. Makes for really scary Big Brother customer service. Like being offered some books and CD’s you might like when you return to a Website. Would be an ideal little tool on a future real estate site. User wouldn’t even have to complete fields or drop downs. Eliminates the entire intimidating spreadsheet type look. Nice, Huh?

    Hi, Mr. Bednar:
    Here’s a list of homes you might like to check out. And here are your mortgage options today, Mr. Bednar. If these selections don’t meet your needs, just click here.

  170. Seneca says:

    make money’s architech (sic) brother-in-law sells half a pallet of bottled water in the middle of Times Square two days a week during the summer. The profit is all non-taxable which can only mean he is a non-licensed street vendor.

    make money, your brother-in-law the ‘architech’ would be shut down in an instant by the police that patrol each corner of that area with cops walking the beat and enough surveillance cameras to keep Bosch Security in business for years. Never mind that the licensed competing street vendors who work that area would beat him to a bloody pulp for infringing on their business without the proper permits.

    PUT THE CRACKPIPE DOWN or at least put some effort into your fairytales.

Comments are closed.