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I have a dumb question this AM. List price versus most recent tax assessment… What would be considered an acceptable ratio? Is there a ‘rule’?
Example: House for sale at $650K, 2007 tax assessment was $290K.
Tax assessment data was pulled from http://www.njactb.org
New Century (3rd largest subprime lender) delays.. From Reuters:
Sub-prime lender New Century to delay annual report
New Century Financial Corp. (NEW.N: Quote, Profile , Research), one of the largest U.S. subprime lenders, on Thursday said it is delaying the filing of its annual report with the U.S. Securities and Exchange Commission.
The Irvine, California-based company said it expects on Friday to file with the agency a formal notification of its inability to file.
On Feb. 7, New Century surprised investors by saying it expected to report a loss for the fourth quarter of 2006, and would restate earnings for the prior three quarters lower.
New Century and many other subprime lenders are struggling as delinquencies and defaults rise, and investors force the lenders to buy back loans that have soured. Subprime lenders make loans to people with poor credit histories.
Didn’t I see this movie?
Insider-Trading Ring Bust May Fuel Hedge-Fund Concern
The U.S. government’s accusations that Morgan Stanley, UBS AG and Bear Stearns Cos. employees were central figures in an insider-trading ring illustrate why regulators and lawmakers are suspicious of Wall Street’s relationship with hedge funds.
Prosecutors in New York and Washington yesterday laid criminal charges against 13 people, accusing an executive at UBS and a former compliance lawyer at Morgan Stanley of tipping off traders and brokers to new analyst ratings and secret takeover talks. Bear Stearns was home to at least four professionals who traded on information leaked from inside the two firms, according to a complaint filed by the Securities and Exchange Commission.
…
The government said yesterday that it broke one of the biggest insider-trading cases since the 1980s. According to the SEC, which brought a civil suit against 14 defendants, the scheme stretched over five years, included hundreds of tips and produced more than $15 million in illegal profits.
The arrests ended “one of the most pervasive Wall Street insider trading cases since the days of Ivan Boesky and Dennis Levine,” said Linda Thomsen, who heads the Securities and Exchange Commission’s enforcement division.
At a meeting at the Oyster Bar in New York’s Grand Central Station in 2001, Mitchel Guttenberg, an executive director in UBS’s equity-research department, and hedge-fund trader Erik Franklin hatched one of the schemes, the SEC claims.
Guttenberg, 41, offered to settle a $25,000 debt to Franklin, 39, by slipping him analyst ratings in advance, the agency said. To avoid getting caught, the men used disposable mobile phones to send each other coded messages, according to the SEC’s complaint.
My brother works at Morgan. Bonuses went out this year and from what I hear they are regularly depended on at year end. If this becomes a rout it could be abad christmas for the wall street crowd.
Hmm, Fremont delayed filing as well last night.
jb
could this lead to layoffs in financial sector?
I have a question for immigrants from India. Does National Fertilizers Ltd. have a mortgage subsidiary? I couldn’t find it on the financials. Miscellaneous loans for may $200m, I think.
Bucks Counties largest current foreclosure (2,000,000) is a palace owned by a former generics guy at a 2005 Chapter 11 in Cranford. National Fertilizers is on the hook for it.
Just curious.
curiousd: Tax assessment helps, but is not 100% reliable information. First, every town’s assessment varies significantly, i.e. some town assess to 100% of value some don’t. Also I see with in same town there is differences. Newer homes are assessed higher then older home.
But as long as you are taking one town, and assessing similar properties, tax assessment may help. But I don’t think there is generic percentage that can be applied.
BW Article
Why Subprime Lenders Are In Trouble
New analysis suggests that subprime lenders lowered their lending standards last year as they competed for business
by Peter Coy
http://www.businessweek.com/bwdaily/dnflash/content/mar2007/db20070302_477856.htm?chan=top+news_top+news+index_businessweek+exclusives
Pat,
Is information regarding National Fertilizer’s involvement publicly available?
#1
Tax assessments are a snapshot of home value at the time the reval took place. For instance, my town did a reval in 2004 and, right now, it could be a good indicator of where the asking prices are heading. Whether they are going back to 2005 or 2004 prices. Because each town will have done their reval at a different time, there will be a different multiplier in determining how close the assessed values are to present value.
Another thing to consider is that the reval companies make lots of mistakes when reassessing homes. My house for instance was listed as a two story colonial and it is actually a 1 1/2 story cape. The measurements were off for the house and for the property. Not everyone in town looked over their assesments that carefully so some mistakes were not addressed in an appeal.
The other thing they didn’t take into consideration is neighborhood. Almost my entire town was treated as one neighborhood even though there are definitly areas that sell for more and areas that sell for less.
I guess what I’m trying to say is that tax assessment may not be a good indicator of true market value of a home.
FYI, it might be a good idea to check the property record at the town hall when you buy a house to make sure that everything is correct. While I did appeal and got a reduction, it took well over a year to get them to fix the house measurements and I’m still trying to get the property measurements fixed but that’s more complicated because it is incorrect on the town map.
Regarding Fremont and NEW, Friday evening is the best time to file :)
SG, thanks. I thought that was the case. Very helpful.
thanks willow too…
SG 11, of course. All of Bucks County’s foreclosures must be public data.
These change daily or periodically. Top of page three today, third one down.
http://www.buckscounty.org/government/rowOfficers/Sheriff/SheriffSales/May022807.pdf
You can see the pic of the property on zillow.
Friday evening is the best time to file :)
I would assume this strategy might work if you are “flying under the radar”. But with all eyes on subprime, will it even matter?
jb
Pat,
Most of the countries in that part of the world have a “National Fertilizers”. I will have to check if this particular National Fertilizer is from India.
“Didn’t I see this movie?”
Everything that dies, someday comes back. That complacency word?? Bury it along with RE prices.
When looking at condos in the same development – how can one with a lower tax assesment value have higher actual taxes than one with a higher tax assesment value? Surely the formula for calculating taxes must be the same on each one, no?
>>If this becomes a rout it could be abad christmas for the wall street crowd.
wall street makes money no matter what. they’re intermediaries and ‘experts’ on where to invest. sure some sectors who rely on M&A deals and such will be hurt but overall the market makes money.
tax assessment value versus market value is a joke. the formulas to compete are worse than trying to price phone calls using FCC tariffs. if assessments even came near market value taxes would double to triple on most properties.
“they’re intermediaries and ‘experts’ on where to invest”
Richard,
Thanks for the comedy. This got a big laugh from some of those “experts”. By the way, I am no “expert”. However, I recently got my glasses adjusted.
Most of those market “experts” spend their time looking at charts and chatting up efficient market theory nonsense while raking in bonuses to get beaten as they get beaten by an index fund. A couple studies have shown that mutual fund /institutional managers based more then 500 miles from NYC or LA (Omaha anyone?) tend to beat NYC/LA managers fairly consistently.
I’ve read that at moneycentral.msn or money.cnn.
Fremont said it will disclose its reason for its late filing with the SEC by close of business today.
“When looking at condos in the same development – how can one with a lower tax assesment value have higher actual taxes than one with a higher tax assesment value? Surely the formula for calculating taxes must be the same on each one, no?”
As long as they are in the same town, the condo with the higher assessment should have higher taxes. Could it be a mistake in the listing? In GSMLS, they usually give the assessment and the rate – check if the rates are the same in the two condos.
with the ever expanding quick and easy access to information availability more people are on to the fact that the advice given by the ‘experts’ isn’t worth the price tag. we all have an idea of how many money managers beat the major indexes. you wouldn’t have a push for low/no load funds via etf’s and the like if these guys were worth their weight in salt.
BCB,
Talk to me about Dollar/Yen. Why are traders talking “end of the carry trade” all of the sudden? Looking at a 1y chart, we touched 115 last December, and even higher yet, 110 in May. Has there been some kind of technical breakdown? Other than setting lows this year, the current position doesn’t seem all that extraordinary.
jb
anyone else notice the new fad of ‘new price’ has come and gone rather quickly and we’re back to the old phrases of ‘reduced price’?
bairen,
You got that right. Just look at the overall performance of hedge funds, not the top ten. Yikes. However, they get away with fleecing their clients. Compare the fees of a hedge fund to Vanguard[not recommending Vanguard,only for fee comparison] Now ask yourself, what is the real value added to justify those outrageous fees??
A satirical look at tougher lending standards
The basis for the following discussion is a February 27th announcement by Freddie Mac but any number of such announcements from a variety of lenders would likely have served the purpose equally well.
Uncle Fred is pleased to announce that effective September 1, 2007 we will cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure. Our goal is not really to protect consumers from default, but rather our goal is self preservation. We want to protect ourselves against massive losses that other lenders are seeing.
Second, the company will limit the use of low-documentation underwriting for these types of mortgages to help ensure that future borrowers have the income necessary to afford their homes. Why we allowed such loans in the first place can be summed up in one word: greed.
To help lenders better serve borrowers with impaired credit, Uncle Fred is also developing fixed-rate and hybrid ARM products that will provide lenders with more choices to offer subprime borrowers. We are doing this to not as a favor to anyone but in desperate hope of keeping volumes going. Honestly, we don’t think this will work, but what else can we do?
Uncle Fred continues to play a leading lagging role in combating predatory lending and putting families into homes they can afford and keep. Proof is in the pudding. We let subprime abuse continue for years and did nothing about it. We took the loans knowing full well they were garbage. Simply put, we wanted our fair share of the graft. But in the wake of 27 subprime lenders blowing up, the market forced us to react. Better late than never we always say.
Uncle Fred’s new requirements cover what are commonly referred to as 2/28 and 3/27 hybrid ARMs, which currently comprise roughly three-quarters of the subprime market. Specifically, the company is requiring that borrowers applying for these products be underwritten at the fully- indexed and amortizing rate, as opposed to the initial “teaser” rate. Quite frankly we got tired of being a tease, not for moral reasons, but out of fear for our stock options.
http://globaleconomicanalysis.blogspot.com/2007/03/satirical-look-at-tougher-lending.html
Good morning,
Has anyone seen this site?
http://www.historicproperties.com/
Completely renovated victorians and colonials for 250K…..just not in NNJ of course. Fun to browse though.
-Beans
I’m waiting for the signs that say “Overpriced!”…
-R
jim, maybe people are starting to wake up to the fact that a 4.75% gap between yen and us dollar for example isn’t all the much when broken down weekly or monthly and a small move to narrow that range can hit pretty hard on hedge funds. i believe last i heard the carry trade was somewhere in the $1 trillion range. no small potatoes.
Timing is mostly everything with tax assessments. If you’ve been on this site for long you should know that assessments/revaluations in NJ take place once every 5 to 15 years or so and there’s a hugely political aspect to the timing.
Even when they are recent, they generally fail to capture the direction of the market, particularly at times of high volatility. If the assessment was 2003 or 04, the market had blown through the number before it became the basis for your taxes. If it was 2006, I’m guessing there is going to be a long line at the tax appeal window.
question for the board. anyone know of any furniture stores that sell period stuff in the NNJ area? looking for stuff for older homes like victorians, colonials, etc. thanks.
New, historic, or junk?
jb
We touched on this yesterday, but it seems to be making its way around the wires again..
Countrywide reports increase in late payments; WSJ
Countrywide Financial Corp. was the subject of a report in Friday’s Wall Street Journal that said the largest U.S. home mortgage lender saw a sharp increase in late payments in 2006. The WSJ said the company disclosed in a filing with the Securities and Exchange Commission that payments were at least 30 days late at the end of 2006 on 2.9% of prime home-equity loans Countrywide serviced, up from 1.6% a year earlier. In addition, payments were late on 19% of subprime mortgage loans at 2006’s finish for Countrywide, up from 15.2% at the end of 2005, the paper said. The stock closed Thursday at $37.44, down. 2.4%.
“Talk to me about Dollar/Yen”
JB,
The current position that the BOJ states? What about the amount off the books. OTC?? It’s mind boggling. I don’t have time to get into it in detail. I will answer later. By the way, everybody thinks China fell as a result of statements from their gov.. Hell, they have been warning about a stock bubble for the the past year. Why now?? Mark, 2/21/07 on your calendar, and read the statement from the BOJ. Forget about the .50 overnight call rate. Look at the bank loan rate. I posted it yesterday. This either presents a great buying opportunity or a historical turn.
In addition, payments were late on 19% of subprime mortgage loans at 2006’s finish for Countrywide
Unbelievable…
Mark, 2/21/07 on your calendar, and read the statement from the BOJ.
http://www.boj.or.jp/en/type/release/zuiji07/k070221.pdf
Washington Mutual does a lot of business in New Jersey. They released their 10-k today.
In NJ & NY, they hold $6,244 million in option ARMs. That’s enough to provide 100% financing option ARMs to about 14,000 median priced homes in the area. They also sold off a lot of these loans. This is just what they hold.
Another interesting tidbit of info is that they raise the cap on negative amortization. In previous years, an option arm could reach 110% of its original principal balance through negative amortization. In 2007, they are raising the cap to 15%.
It’s incredible. While housing market conditions continue to deteriorate, they keep taking on more risk.
BC (23)-
Our pal Reechard needs a primer in proprietary trading. I can hear the big yuks emanating from your corner of the world.
Renting (25)-
Will Fremont be disclosing that reason from a pay phone in Uzbekistan?
Another question: Why the pull back in Gold? I tend to look to equities, bonds and cash as investments and shy away from metals in general but isn’t inflation and the weak dollar still a factor?
The problem is that 110% neg-am cap is the equivalent of a margin call on those loans. Once that 110% limit is hit, the loan flips into fully amortizing mode, and the monthly payment skyrockets.
The homeowner has only three options at this point:
1) Refi and prepay the loan. (WaMu loses if they don’t refi with WaMu)
2) Sell and prepay the loan. (WaMu loses)
3) Default on the loan. (WaMu loses)
The fact that they are pushing the limit to 115% tells me that most homeowners using option arms are paying the neg-am minimum payments (not even the I/O payment).
jb
BC (30)-
You’ve gotta be rich, inbred and lazy (as in not having made that big pile of money by dint of your own hard work) to part with it so recklessly with the 2-and-20 crowd.
Nice blast at them by Buffett yesterday.
primer not needed clotpoll. i do plenty fine on my own.
jim, looking for either new, historic. thanks.
Richard Says:
question for the board. anyone know of any furniture stores that sell period stuff in the NNJ area? looking for stuff for older homes like victorians, colonials, etc. thanks.
You might want to follow the papers for estate sales in towns like Montclair, Glen Ridge, Westfield and so on. Any antique stores think everything they have should go on Antique Roadshow and be that $million piece in hiding. Also, Bucks county, PA has a lot of antique places. Be prepared to pay though. I was in Lambertville in some shops and nearly fainted at the money they wanted for smelly old junk.
JB,
The fact that they are pushing the limit to 115% tells me that most homeowners using option arms are paying the neg-am minimum payments (not even the I/O payment).
You hit the nail dead on with that statement. The vast majority of the borrowers who took out an POA loan are making the minimum payment which is less than the I/O payment. Although its a relatively small portion of loans out there…its scary nevertheless.
Richard #36,
kind of a wide field in NJ, but here goes:
for new reproduction pieces – NJ Design Exchange is in Water’s Edge
antiques – Just take Rt 202 South from Morristown to Bernardsville, and you’ll find something nice
http://www.salvageweb.com/articles/art22.asp
>>I was in Lambertville in some shops and nearly fainted at the money they wanted for smelly old junk.
i’ve been there a couple of times. the place has built a reputation as having quality antiques. there are a few noteworthy stores but overall i’m not impressed. there is one store where a guy makes reproductions of dutch colonial furniture. the quality is phenomenal and his prices are very attractive.
If you are looking new, there is a place on Rt. 46 West, a bit past Willowbrook in Fairfield called Town and Country Home. They carry some high-end (I’m talking quality-wise) lines, and have a good looking showroom. It’s worth a walk-thru at the least.
jb
(updated)
#30 BC Bob. The 2 and 20 crowd is really disgusting. 2 per cent of principal and 20% of profits. If a firm charged a maintenance fee of 50 basis points on principal and then 20% of any annual return above the yield on the ten year, at least a firm like that would be making money only if it put money in its clients pockets.
Buffet only got paid if his originnal investment partnership returned higher then 6%, Waltr Schloss only if his partnership had a positive return.
Hedge funds make money for their partners and employees, not their clients.
I’m planning to purchase a single family in South Brunswick Twp. Any good website I can use? also where can I find foreclosures?
Tx
>>NJ Design Exchange is in Water’s Edge
you mean NJ decorating exchange in river edge?
Any good website I can use?
This one.
jb
Our motto: we buy junk and sell antiques
>>Richard Says:
>>March 2nd, 2007 at 8:42 am
>>wall street makes money no matter what.
>>they’re intermediaries and ‘experts’ on
>>where to invest. sure some sectors who
>>rely on M&A deals and such will be hurt
>>but overall the market makes money.
umm…most of the big banks operate more like hedge funds than banks these days. They have a large amount of market risks on their prop books. Just ask anyone selling credit default swaps on the big banks ;)
Why the pull back in Gold?
Fears of a recession. Gold is an inflation hedge. Inflation risk typically subsides in a recession and deflation often becomes a bigger concern.
Goldseek is still bullish on gold. They believe that growing the money supply is the only way out of the housing bubble and the only way to rectify our massive trade imbalances. They also believe that subprime loans present systemic risk and that the Fed will provide massive liquidity to the banks to prevent a crisis.
When I was over at JPMC, there’d been continuing speculation that Dimon was just itching for a West coast acquistion; many including Wells didn’t want to play ball as Jamie’s rep as an axe-man/cost cutter didn’t go over too well… but many speculated JPMC was just biding their time until WaMu’s mortgage business really tanked, then would pick it up at a nice discount…
gary Says:
March 2nd, 2007 at 9:33 am
Another question: Why the pull back in Gold? I tend to look to equities, bonds and cash as investments and shy away from metals in general but isn’t inflation and the weak dollar still a factor?
gary: I posted this yesterday….
WSJ
AHEAD OF THE TAPE
By JUSTIN LAHART
Bets for Safety Only Left Many At Greater Risk
March 1, 2007; Page C1
[edit]
Correlation is a dirty word among professional money managers. The more their investments move in lock step, the higher the risk that one bad day could put them out of business. So, with the flood of cash into financial markets in recent years making it harder to generate returns, the search for uncorrelated assets has become particularly keen.
But by deliberately investing in assets that have shown little correlation in the past, investors may be making those assets more correlated, says Craig Asche, executive director of the Chartered Alternative Investment Analyst Association. If investors find that, say, Pet Rock and corn-dog prices tend to be uncorrelated and decide to invest in both as a result, they will end up driving prices for the rocks and dogs up together.
What is more, because a diversified portfolio is believed to be inherently less risky, investors have felt emboldened to explore riskier assets in their effort to generate returns. One consequence of that dynamic is that the riskiest financial assets are now showing the highest degree of correlations to one another, Mr. Richards says.
Also driving financial market correlation, says Massachusetts Institute of Technology finance professor Andrew Lo, is that fund managers are, by and large, using similar approaches to investing, and they are applying them across a swath of assets. “You have investors who are now invested in all these different instruments and they all seem to think alike,” he says.
[edit]
The more investors who share an opinion, the more dangerous it is when that opinion gets proved wrong. In this case, the opinion was that a diversified portfolio even of risky assets wasn’t all that risky. On Tuesday, that opinion was left in tatters, and fund managers marched together to cut their exposure to those assets across the board.
#36 Richard,
Red Bank has an antique center. one of the buildings has over 100 dealers mostly selling antique furniture. Further south there’s a smaller antique center in Point Pleasant and even further south there are a few stores in Smithville.
Lamberville and New Hope are very expensive.
If you want to go even further away try the Pennsylvania dutch area. Haven’t been out there for 4 or so years, but they have weekend markets that dealers sell at.
Jerseyguy (56)-
If you have to ask where the foreclosures are, you’re not ready to swim in that pool. Beware!
bairen Says:
March 2nd, 2007 at 10:02 am
#36 Richard,
Red Bank has an antique center.
bairen/index: you are sending Reechard to Red Bank?!?! Make sure he takes his meds first :(
JB,
When you can, check your email for stats.
Rich
From MarketWatch:
UMich Feb. sentiment revised down to 91.3 vs 93.3
Consumer sentiment weakened in late February to its lowest level since September, according to research from the University of Michigan. The UMich consumer sentiment index fell to 91.3 in late February from 93.3 earlier in the month, according to Reuters, which has an arrangement to publish the index. The decline was unexpected. Economists were expecting the index to remain steady at 93.3. Sentiment hit a two-year high of 96.9 in January. The current conditions index slipped to 106.7 in late February from 108.3 earlier in the month. This is down from 111.3 in January. The expectations index fell to 81.5 in late February from 83.7 previously. The index is down from 87.6 in January.
thanks for the tips on furniture places. i’ve been the to the red bank place. nice stuff but a bit far for me. i can’t be away from my oxygen tank that long ;)
What’s wrong with the red bank antique center? I’m suggesting he look at furniture there, I’m not recommending buying a house and sending his kids to school there.
the timing of this credit meltdown is really amazing.
it’s almost as if you can see the spring selling market swirling down the tube
and yet, the vast majority of sellers persist with their absurd prices.
The old, tall building at the Red bank center smells a bit musty though.
Richard #57
I’m fogged, you’re right. They have great catalogs.
“The old, tall building at the Red bank center smells a bit musty though”
…………However, you can then walk to another musty place, The Dublin House Pub, on Monmouth St..
Thanks all for the Gold info, I’ve been swamped at work because of end of month stuff and haven’t been able to read much.
Bairen, the spring is a good time to drive over to Renningers off the PA turnpike exit for Adamstown (the one after Morgantown.)
http://www.antiquescapital.com/cgi-bin/members.cgi?Category=Antiques
As you drive into a Adamstown there’s also an outside market down the road a mile and then a left called Shady Grove. I got an un-refinished washstand for 60 bucks. Seller wanted 70, but I thought he would’ve felt ripped off if I just paid the 70 without bargaining.
Right by Renningers is a great old little diner with pretty good sandwiches of scrapple slabs.
skep-tic Says:
March 2nd, 2007 at 10:13 am
the timing of this credit meltdown is really amazing.
it’s almost as if you can see the spring selling market swirling down the tube
and yet, the vast majority of sellers persist with their absurd prices.
Credit meltdown has not really started yet…. wait till September… Still there are plenty of lenders outthere, who offer no-doc, 100% LTV loans with no money down.
Just got one phone call yesterday:
Great rate, fixed neg arm??? – did not even know such thing as fixed negative arm existed, no doc up to 500K just based on my credit score.
Higher if my wife have a good score…
1% for the first year…. I did not listen much longer – asked him what is rate are capped at long-term – 17%….. and teher is pre-pauyment penalty…. But hey great rate furst year, and I can get into that house with no money down. tehy will even be willing to work with me on getting closing costs tucked into the loan…
# 62 Steve Says:
‘When I was over at JPMC’
When were you here? I’m currently at 194 Wood Avenue South
A Bloomberg report said that prices for credit-default swaps linked to the banks’ bonds this week traded at levels that equate to debt ratings of Baa2, just about junk status.
http://www.marketwatch.com/news/story/fresh-subprime-worries-spell-pressure/story.aspx?guid=%7BCB32F8EF%2DB962%2D4545%2D8EB5%2D2C1BE6EB6BF7%7D&siteid=yhoo&dist=yhoo
BC Bob Says:
March 2nd, 2007 at 10:18 am
“The old, tall building at the Red bank center smells a bit musty though”
…………However, you can then walk to another musty place, The Dublin House Pub, on Monmouth St..
……….oh yeah..then wings at the Globe
Quick question: Lately I’ve noticed a trend where listings drop off Realtor.com or GSMLS, yet FOR SALE signs remain posted on the lawns for weeks, even months, with no Under Contract or Pending status indicated.
Does Realtor.com and the MLS charge to post listings? If so, could this be an indication realtors are trying to lower marketing costs while keeping listings active (but just not posted online)?
thanks
#81 Twice Shy
they’re scared of online. educated consumers with tools are scary.
IMHO….When a large (Top 20) lender goes down and is not bailed out by a Wall Street, Private Equity, merger, by someone, that’s when I would be worried. It will be unfortunate for the workers, but there is too much excess capacity in the market now. The ripples (now) will become waves (3 to 5 mts) and I hope it doesn’t turn into a tsunami.
“As long as they are in the same town, the condo with the higher assessment should have higher taxes. Could it be a mistake in the listing? In GSMLS, they usually give the assessment and the rate – check if the rates are the same in the two condos.”
They should be but they aren’t – they are all over the place. Condos with a $610k assessment have higher taxes than condos with a $650k assessment. I got my numbers from NJ Tax Records Search. I guess a call to the town asssessor is in order. Thanks.
“condos with a $650k assesment”
That says it all
This is a test
It’s quiet… too quiet.
http://www.youtube.com/watch?v=NRxrCBvt7TM
#81, been wondering the same thing recently. looked up a town on gsmls that i’ve been following (came back wiht about 60 total props) and then happened to do same lookup on a brokers site and it came back with about 76 propos for the same town. anyone have thoughts on whether inventory nos being understated on gsmls?
i also noticed on some properties i’ve recently checked out at open houses, the relisting move is happening quicker than ever. saw MLS#: 2379165 in january open house and it was at 569, after two weeks of open houses (and i can imagine no offers as its no great shakes and especially not at that price) they drop it at end of month and relist first day of feb. at 548. don’t think that move is goign to fool anyone tho as its still way overpriced.
re:gold
Gary,
Just my opinion. Short term overbought condition, margin calls, yen and spill over [see Chi’s WSJ article]
That’s a start. Again, just my opinion. Goldman Goldman ,Goldman. Who do you think will be buying at some predetermined price level??
JB,
I had a long post regarding the yen. Unfortunately, I received the dreaded error message. I should have known to copy before I hit submit. I will post again, later today or tonight.
The fact that anyone would even consider paying over 200k for a condo astonishes me.
house > townhouse > studio apartment > studio condo > Over $200,000 condo
#91 Espcially a codo that’s over 20 yrs old. i thought condos/townhouses built in the 80’s and earlier were predicted to only have lives of 30 to 40 yrs. Who would pay 300k+ for a 20+ yr old condo that only has 10 or so years before serious structure repairs will be required?
Here we go!
From MarketWatch:
Regulators propose tougher subprime lending rules
Federal bank regulators demanded tougher standards for subprime adjustable rate mortgages on Friday. The regulators’ guidance targets loans including subprime ARMs that have low initial payments and loans that have high or no limits on how much payments or interest rates may increase. The Federal Reserve and other agencies said lenders should inform consumers of potential payment increases and prepayment penalties associated with such loans. Regulators will take comments on the proposals. A copy of the guidance was obtained by MarketWatch.
Proposed guidance can be found here:
http://www.fdic.gov/news/news/press/2007/pr07018a.html
From the Fed:
Agencies Seek Comment on Subprime Mortgage Lending Statement
Pat Says:
March 2nd, 2007 at 6:49 am
I have a question for immigrants from India. Does National Fertilizers Ltd. have a mortgage subsidiary? I couldn’t find it on the financials. Miscellaneous loans for may $200m, I think.
Bucks Counties largest current foreclosure (2,000,000) is a palace owned by a former generics guy at a 2005 Chapter 11 in Cranford. National Fertilizers is on the hook for it.
Just curious.
Pat, NFCL is quite a big company in south India. Check for Nagarjuna Finance Ltd…that may be the subsidiary of NFCL you’re looking for the information.
Fed regulators are a bit late for demanding better standards for subprime arms. About 5 years late.
talking about high rents:
http://www.msnbc.msn.com/id/17419944/
With about 6,000 apartments, Starrett City has about half as many as Stuyvesant Town and Peter Cooper Village. The Brooklyn complex has its own shopping center, schools, churches, synagogues, power plant and armed security force. Some tenants pay as little as $200 a month in rent.
Find me a room in NJ which you can rent for 200$
jb, others –
This site has become very slow to respond and giving lot of 500 errors lately.
Is it just me or anyone else experiencing this?
Today’s especially bad.
jb – I hope you are raising hell with yahoo if you have others complaining as well.
Pat: I was thinking more this…….
http://www.youtube.com/watch?v=g8Z1MpcyqQU
bairen Says:
Fed regulators are a bit late for demanding better standards for subprime arms. About 5 years late.
The Government didn’t do anything about Al Qaeda until 9/11. Why is everyone asking why they haven’t done anything on lending?
Expect a Wall St. 9/11 before anything with real teeth. How about outlawing all the reduced doc products?
This site has become very slow to respond and giving lot of 500 errors lately.
It’s been horrible, I’m in the process of moving the site to DreamHost from Yahoo, but I’m running into problems. My databases are too large to move using the tools provided by Yahoo, so I’m trying to find a workaround.
Yahoo has been completely useless, quite possibly the worst technical support I’ve ever received. I don’t even bother trying to call or email anymore.
jb
JB…you might not be giving them the right login/password info:
http://www.youtube.com/watch?v=J3D1L513YkY
..and never pay full price.
http://www.youtube.com/watch?v=J3D1L513YkY
#42 # RentinginNJ Says:
Hopefully by the time the negam hits 115% the current executives would have time to cash in on their options and leave some one else to clean up the mess. This is the kind of things a good analyst should pick up on, but as we know they just keep looking at the earnings.
does anyone know about Sea Girt, NJ? I was looking to buy and wanted to know how prices are in the town.
“Yahoo has been completely useless, quite possibly the worst technical support I’ve ever received. I don’t even bother trying to call or email anymore.”
I have had the same experience with Yahoo. Totally incompetent and not just in the support area. Don’t even get me started on how terribly organized their pay per click program is.
Subprime lending standards:
Typical action by fed. Shut the barn door after the horse has already bolted.
About bailing out failed banks, it makes no sense to me as this lowers risk premiums in the market. I strongly believe that LTCM should have folded on their wrong bets, but the top dogs on wall street had too much money invested in LTCM to let that happen. I don’t think anyone in wall-street cares if some of these aggressive sub-prime lenders fold.
I think I know the problem..
Pat is eating away all your bandwidth.. and trying to bring down youtube as well… along with chifi. ;-)
jb, if you have telnet access perhaps you can split, copy, merge onto dreamhost.
As far as I can tell, Yahoo Small Business doesn’t offer/allow shell access. I’d love to be proved wrong on this, as it would be an easy solution to my problem (just run the mysql commands via terminal).
jb
Did anybody use Cyberhomes.com to check the price estimates of the homes? Seems these guys are fast in adjusting the estimates based on the recent comps. See the estimates of below listings in bridgewater.
12 Ten Broek ct — List price — 694,900
Cyberhomes estimate — 620,334
9 Noble ct — List price — 724,600
Cyberhomes estimate — 648,218
Seems these guys are more realistic than zillow.
Can anybody check for the other towns and see how realiable the estimates are ?
advice me
weeks ago i liked a 2bdr town home and i bit for 320k against the asking price of 369k. They countered my offer for 357k. Then i raised my bit to 325k they did not respond. today they reduced the house by 10k to 359k. what sould i do ?
From MarketWatch:
Bond default protection shoots up for banks
The cost of insurance against a default by top investment banks Goldman Sachs Group Inc., Merrill Lynch & Co Inc, Lehman Brothers Holdings Inc and Morgan Stanley ballooned this week, amid increased nervousness about their exposure to the shaky subprime lending market.
The trend toward more expensive credit-default swap protection for these four banks began last week and accelerated this week, said Michael Fuhrman, an institutional equities salesman for GFI, an inter-dealer broker for credit derivatives.
“This is a trend across the market,” Fuhrman said. “Instruments of broker-dealers and institutions closest to originators of mortgages and those that securitize them have moved the most.”
During the housing boom, these firms made large sums of money securitizing mortgages, but new signs of trouble in the sub-prime market have shifted the focus from profits to the credit risk and lower revenue. Sub-prime mortgages, taken out by homebuyers with below average credit ratings, generally charge rates at least two or three percentage points above prime loans.
sam, did you have an expiration on your offers?
You should give them a new offer of 315k which expires in 2 days. If they don’t respond favorably, just move on!
yeah it is going to expire by monday. i get the point. thank you
Grim (110)-
Call Chloe at CTU. She can help you.
She’s also the prez of the Regina Spektor fan club.
Beans #32, great website!
Here’s a nice Greek Revival on 21 acres in NY for $250K:
http://www.historicproperties.com/detail.asp?detail_key=Nebat005
A real stunner in Rhode Island @ $500K:
http://www.historicproperties.com/detail.asp?detail_key=Nelin002
RL (114)-
That’s an excellent way to fail. No matter how dense the seller is, it’s hard to put a positive spin on taking money off the table. Doing this is really an attempt to intimidate…and even sellers who could otherwise actually BE intimidated get PO’d and write off prospects who do this. I’ve seen it a million times.
IMO, it’s also bad-faith negotiating. It’s the equivalent of a seller countering you at a price higher than his original asking.
Clotpoll Says:
March 2nd, 2007 at 1:35 pm
Grim (110)-
Call Chloe at CTU. She can help you.
Priceless…
Check out Zillow, they now have lot lines drawn on their Florida maps:
http://www.zillow.com/search/Search.htm?addrstrthood=221%20lakeland%20dr&citystatezip=33405
Then i raised my bit to 325k they did not respond. today they reduced the house by 10k to 359k. what sould i do ?
Sounds like you made an impression on the seller.
Did you already fall in love with the property?
jb
JB,
Got your email and I sent the February data.
I guess I was thinking March when I sent the info this morning.
Rich
If you’re thinking of Red Bank at all you should know that the Dublin House is under heavy reconstruction at the moment.
I think the kitchen is still shut down, but they’re doing a very nice job rebuilding the place and the bar is indeed open.
If you’re down there during working hours during the week, stop in and see Gary next door to the Dublin House at that Hot Dog Place. Great soup and a great guy, even though he’s a Yankees’ fan.
yes we like the perperty.
BTW, Chifi,
Don’t make me break out the Bjork, I’ve got more than you can imagine.
FYI, the owner’s of the Dub asure me they will be ready for St. Patrick’s Day.
Rich,
Got it, thanks.
The declines in median and average prices were surprising (although I realize those numbers are volatile).
jb
Clot,
What do you think about waiting a few weeks, perhaps up to a month, and re-presenting the same offer?
jb
sam Says:
March 2nd, 2007 at 1:24 pm
advice me
weeks ago i liked a 2bdr town home and i bit for 320k against the asking price of 369k. They countered my offer for 357k. Then i raised my bit to 325k they did not respond. today they reduced the house by 10k to 359k. what sould i do ?
Withdraw your offer [formally].
An observation:
It seems to me that some towns are holding up in this deflating bubble. Cedar Grove (borders Upper Montclair and Verona) has very low inventory (only 13 houses listed under $600,000, and very few at all higher prices) – much lower inventory than last year. And houses are actually selling at insanely high prices (some neighborhoods/streets way higher than last year), esp. in desirable neighborhoods.
I personally cannot believe it. Perhaps it’s because that compared to other towns, esp Montclair, the taxes are low. Beats me…
Are others seeing this in some towns????
When do you think wil market go up again ??
Who’s got my crystall ball?
njrerisk: cyberhomes.com
I looked up one address on the site. The estimate was $580K, but it was recently sold for $505K. I would take that much ratio down.
RE: 102
James check out http://modwest.com/webhosting/
i use them and they have served me well.
No magic tool is going to give you the “right price” to pay.
jb
RE: does anyone know about Sea Girt, NJ? I was looking to buy and wanted to know how prices are in the town.
My Aunt Uncle and cousins live there. The police chief’s patrol car is a lexus. $$$ town
Grim (129)-
That’s a much better play. No foul in waiting a seller out.
MS (# 131) –
Exactly!! I’ve been screaming this from the roof tops since the so-called peak and phantom decline. That’s my point, there is no decline!! I don’t care what data says what, the desirable areas have become “necessary”. The moronic, idiot bumpkins have ingurgitated the putridity that has been jammed down their banty little throats. You’re absolutely right, if you want to live in town “A”, there’s plenty of homes to low ball. If you want to live in town “B”, you….. are….. going….. to….. pay.
Those towns that have always been desirable are now I-need-to-buy-here-or-I’ll-die towns. They f***cked it up for all of us. What, I’m going to sell my house just to move into the same house for $300,000 more in Upper Vainglorious??
No magic tool is going to give you the “right price” to pay.
I agree. I wanted to type, use them as estimate or general gauge.
Sea Girt/Spring Lake??
The Irish Riviera??
Wicked,
Do you know anybody is selling tickets for next Fri’s Big East??
gary (138)-
Get my e-mail from Grim, and I will send along an absolutely filthy joke about this phenomenon.
It involves Mouton-Rothschild, property lines and nether regions of the female @natomy…so there’s no way I can clean it up for public consumption.
Clotpoll,
lol.. Sure thing. It really frustrates the h*ll out of me, this stuff. I’m in work and have no access to outside email, I’ll do it this evening.
Gary,
Beverly Hills has TWO zip codes. Only ONE of them is 90210.
BC (140)-
Are those sunburned Irishmen on the beach…or parboiled lobsters?
Lee Harvey:
All filthy jokes must include me on the dist list.
http://ir.impaccompanies.com/phoenix.zhtml?c=119470&p=irol-sec
impac mortgage delays reporting
ChiFi (145)-
Send your e-mail thru Grim.
I have a strategy in place to deal with stubborn sellers who are lowering their price by 5 K at the time:
We have a submitted offer which was 20% off seller’s asking price. They told us that they were ready to drop 10% and not a cent more.
After that I have submitted and offer at 25% off and I put it in offer that this offer is valid untill May 15th Unless: I bought a house or house conditions significantly deteriorated since the time of my offer. ( technically, this offer does not bind me in any way since I am free to buy any house i want, as long as I buy it before they have accepted my offer – so it is really a competition between sellers, on who will accept my offer first. )
Basically seller told us “no way”, but they will keep our offer in mind.
I think that if they do not sell it before May 15th, they will contact us – they have already moved out of their house, and house have been on the market for 85 days. Last 2 month it has been sitting empty – they do heat it and pay electricity and I assume pay taxes…. Water service is temporary suspended.
3 reductions in price by 5K each, last one – a day after our first offer.
Now I have couple more houses I am going to put a similar offer on.
The hardest part was to convince my agent to go with this plan…. – I told to her: there is no extra work compared to submitting just one offer – you have aready shown me all houses, by wrighting up one offer we have completed all paperwork, all we need to do to submit next offer is put new address and new price.
YOu should see realtor’s face!!! and I just do nto understand why did it meet such a resistance??
May be because it puts no pressure on me??
Clot – any comments – why do you think this approach is not used more often????
WickedQuiver Says:
March 2nd, 2007 at 2:37 pm
RE: does anyone know about Sea Girt, NJ? I was looking to buy and wanted to know how prices are in the town. My Aunt Uncle and cousins live there. The police chief’s patrol car is a lexus. $$$ town
http://www.flickr.com/photos/18175464@N00/233150291/
More motivational photos from Hoboken 411
http://www.flickr.com/photos/18175464@N00/217192390/
“After that I have submitted and offer at 25% off and I put it in offer that this offer is valid untill May 15th Unless:”
Al,
By giving a 90 day notice you are allowing sellers to shop around. They are probably going around telling everyone that they already have an offer.
Sea Girt, Spring Lake, Brielle… all beautiful towns, BTW. We had our Wedding Reception at Doolans. Two Italians having their reception in Doolans. LOL!! What can I say, the food has always been fabulous!
Al (148)-
Because it won’t work.
#112 sam Says:
“Then i raised my bit to 325k they did not respond. today they reduced the house by 10k to 359k. what sould i do ?”
————————————-
I’d give them 310k which resets in 24 hrs to 300k.
Greedy grubber wants to dig his heels a lil’ deeper?
No problem, another 24 hrs. go by, it’s gonna be 290K, bagholder!
Ok, who’s in on this restoration with me…
http://www.historicproperties.com/detail.asp?detail_key=Necar001
JM
No offense intended, but it’s common sense.
Put yourself on the side of the Seller for a minute- if I were them in the situation above, and I’d ultimately decided to sell for a significantly lower price, I’d proceed to sell at that lower price to *someone else* just on principle.
No one wants to feel like they’re getting scr—d over.
“Are those sunburned Irishmen on the beach…or parboiled lobsters?”
Clot,
Very surprised at you. What true Irishmen is on the beach?? You must be talking about that neon burn?? By the way, St Paddy’s is on a Sat this year. Try to get into Kelly’s, Neptune after 7:00 AM. Better cahnce of BC winning the national championship.
Over the run of the up-market (’96-’05), every once in a while I’d encounter a seller who really wanted to rub buyers’ noses in it. On more than one occasion, I saw a seller having more invested in getting to feel like Donald Trump than in making the best possible deal for his home.
Now, it appears the shoe is on the other foot. Is the purpose being discussed here buying a home, or beating up a seller?
Piggish behavior generally implodes on itself. Even if the seller’s only option is deciding he’d rather burn his house down than sell it to someone trying to intimidate him…at the end of the day, the buyer who tries this tactic hasn’t gotten any closer to owning a home.
Bear Bryant used to have a piece of advice for his receivers & running backs who were expected to score a lot each season:
“Act like you’ve been there before.”
It’s far more unnerving to a seller to have a strong buyer submit an offer, kill date it, then shut up. The more you talk, the more you undermine your position. Strength needs no qualification.
If the kill date passes, just keep waiting & watching. When you think the time’s right again, submit another offer. Do it the same way. You’ll eventually prevail.
Saw this in CBS MarketWatch today….
WASHINGTON (MarketWatch) — Question: My question is very similar to “Is something fishy with developer’s deep discounts?” I just found out the builder in my community sold over 11 units this past weekend at a discounted rate of $199,000. I bought over a year ago at $275,000. Do I have any legal rights against this builder or is it just my bad luck?
That’s a 27% haircut in a little over 12 months.
#159
Clot,
Can’t the seller still come back to an offer that has expired and ask the buyer to resubmit their offer.
njrebear Says:
March 2nd, 2007 at 3:16 pm
“After that I have submitted and offer at 25% off and I put it in offer that this offer is valid untill May 15th Unless:”
Al,
By giving a 90 day notice you are allowing sellers to shop around. They are probably going around telling everyone that they already have an offer.
Please do not tell mr that sellers are not shopping around:
Example:
two houses I looked at – both of them went though attorney review already, closing date is in 30 days for one house and 60 day’s for another. They are still showing both houses, and ready to accept higher offer.
I do think that price I have put in is fair, and if they ever list at this price their house will sell….
In general – the more I learn about residential real estate transactions (e.g home selling and buying), the more it STINKS!!!
I am starting to think that the only way to buy a house is at FK auction. Or may be Bank owned REO property – at least you are not dealing with owner – once people get attached to their house, it is worth it’s weight in gold to them.
“When you think the time’s right again, submit another offer. Do it the same way. You’ll eventually prevail.”
Clot,
I agree.
Though recently we actually outbid another couple and were stronger buyers the seller went with the other couple. I don’t think it had anything to do with our original lowball bid back in July (the seller is “odd” to put it nicely).
Rich
SG #133,
I have been an unsuccessful lowballer for the past six months. When I submit my offers, I want to refer some third party data points to the seller that their home is not as worth as they think. Surprisingly, i saw some of the houses I am tracking are estimated by cyberhomes, 10% below the list price which I can refer to the seller. Ofcourse, my offers are below these estimates, based on recent sales.
Alcatel-Lucent’s suit against Microsoft tossed
Judge dismisses patent claims that software-maker infringed on technology that converts speech into text.
Clotpoll Says:
March 2nd, 2007 at 3:35 pm
Bear Bryant used to have a piece of advice for his receivers & running backs who were expected to score a lot each season:
“Act like you’ve been there before.”
Paul LoDuca said something similar to ARod last year…..7/2/2006 That’s because the Yankees threw an 8-spot on Mets starter Alay Soler, highlighted by Rodriguez’s grand slam. As the ball sailed into the right-field bleachers, Rodriguez flipped his bat and looked into the Yankees’ dugout, a scene reminiscent of his walk-off homer against the Braves on Wednesday.
Mets catcher Paul Lo Duca was not pleased with Rodriguez’s actions, and he let A-Rod know about it after he crossed the plate. Jason Giambi interfered and also had some words with Lo Duca.
“It upset me a little bit that he threw his bat; I want to protect my pitcher, and I didn’t like the way he showed him up,” Lo Duca said. “You want to stare at it, that’s fine; but don’t toss your bat and stare at your dugout like that. Act like you’ve hit one before. It’s over with and that’s that.”
Neither Rodriguez nor Giambi would comment on the confrontation, but Torre said he saw both sides of the issue.
“I can understand where Lo Duca was coming from, but knowing and living with the situation we’ve been living with, I don’t think Alex was trying to show anybody up,” Torre said, referring to the criticism A-Rod has taken from the fans. “It was basically, ‘Here, I hit a big home run,’ and he was looking to us like, ‘I helped you guys.’ I don’t think the intent was to call attention to himself.”
Al,
I was saying that sellers will be shopping around telling prospective buyers that they already have an offer. This will force an average bag holder to make a higher counter offer.
Willow (161)-
Sure.
Risky (165)-
I was about to throw out a post to discuss the only thing worse than trying to “muscle” a seller:
Submitting comps with your low offer.
Thanks for saving me the words.
Question to the realtors on board. When I go for the open houses, can I ask the listing agent for the justification of the list price. How do they take it? I am fed up with their on the fly list prices.
Risky (171)-
I’m going to guess that you don’t negotiate for a living.
Why bother?
jb
Risky (171)-
Actually, it’s perfectly OK to ask agents how they arrived at a price. They should be informed enough to share comps and area history with you.
Sorry to crack on you; you just gave me a couple of BP fastballs.
172# Clotpoll
Do you mean, I can expect the same anwer from listing agent.
They should be informed enough to share comps and area history with you.
Truth being, the owners brother sold a similar place for $450,000 last summer, so they decided to list at $475,000. When the listing broker attempted to negotiate with them to list at $450,000, the owner simply said “go to hell”. The agent didn’t want to lose the listing, so they took it at $475.
What comps?
:)
174#
My best guess is, the listing agent says “If you are working with a realtor, he/she will do it for you”. But I want to hear the justification from the listing agent and see their sorry
face(?) for coming up with the bloated price. Anyway, I’ll give a try next time.
njrerisk – it’s the ‘entitlement’ spirit that prevails among sellers and most realtors.
The following questions to them cause rapid b0wel movements:
1) Original purchase price of the buyer?
2) How much do you (seller/agent) gain to make in this transaction?
3) Why do you think your POS is worth so much?
I can go on…
Risky (172)-
No. What I’m getting at is that it’s better to kill with kindness.
If you- without emotion- ask a listing agent to discuss comps and area history with you, you’ll probably get some good info.
If you ask the same questions- with even a slightly adversarial tone- you will get a grill full o’snapback.
You are getting egged on here with advice from people who are thinking with their adrenal gland and not their brains.
http://biz.yahoo.com/ap/070302/fremont_creditwatch.html?.v=1
S&P Puts Fremont on Credit Watch
S&P Says Fremont’s Credit Downgrade Possible Due to Delayed Filing of 4Q and 2006 Financials
To follow up on (179), I consider myself a fairly laid-back, low-key guy. Not too much really gets me going (at least as far as work goes; now, the Heels…well, that’s life-and-death).
Every few months, I inevitably get a random call from a buyer, a call that takes the form of a “who do you think you are/seller think he is/nobody would pay that” variety.
I just hang up.
…the owner simply said “go to hell”. The agent didn’t want to lose the listing
I’m hearing more stories about agents telling sellers to “go to hell” when they refuse to list at a reasonable price. They don’t want to waste their time, effort & money listing a place that won’t sell.
Or, in the more diplomatic alternative, an agent will agree to “try it your way” (i.e. overpriced) for a set time and the seller agrees upfront to lower the price if it doesn’t generate interest at that price after a few weeks.
Are these scenarios common? Or, do agents basically just do what ever a stubborn seller wants?
Sellers seem dug in, determined to get their price or within 5%. I don’t think the market is bad enough in desirable towns for them to capitulate unless they’re really strapped. A lowball will only work in the absence of other offers or interested buyers. Sellers will always hold out. They’ll re-list, change agents, paint the interior, let the listing expire and bring it back to life like Re-Animator. Nice new ad copy and away we go.
Moral of this story, no one wants to walk away from 10, 20 or 50k if they think they can get more. If we were in their shoes, we wouldn’t either. Few of us wants to overpay and no one wants to sell at a price that we think represents value, so the standoff continues, ad nauseum.
Sorry for the typos in #182. I need one of those pints right about now.
Anybody knows about Harding TWP? The tax are very low there. What about the school?
Subprime Exposure Could Cost GM
The world’s largest auto maker disclosed Thursday that it will need more time to file its 2006 annual report with the SEC….Many analysts say GMAC’s home-lending unit, Residential Capital LLC, known as ResCap, is heavily involved in the subprime mortgage business…estimated that loan-loss provisions and writedowns of mortgage securities at ResCap could cost GM $900 million to $950 million in cash charges in the first half of this year.
http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20070301-001118-1608
#186
Look at the NJ Monthly magazine list of top 75 schools in NJ (it came out last fall) for school evaluation. It actually has the ranking for all the schools in NJ on its web-site.
Schools in the top 75 always do better with real estate values holding up (another reason Cedar Grove real estate seems to not be deflating).
#184 (Twice Shy):
I am seeing a perfect example of that in one of the towns we are interested in. A house we like but is VERY overpriced has been on the market for approx. 9 months without any nibbles. We went to an open house about 5 weeks ago and the Agent told us to “expect a very significant price decrease soon.” Well, that was 5 weeks ago and the price is the same. Our agent asked the LA what happened to the price decrease (we made it very clear we wouldn’t even take the listing seriously without a substantial decrease) and the LA told her that the sellers decided they would rather negotiate than lower the price. Apparently there are other parties “interested but waiting for a price decrease” as well. (The house is obviously overpriced – even to someone with no knowledge of the area). The sellers are waiting for this mystical buyer who will ride in on a white horse and pay asking price. Funny, esp because the house has been vacant for months too.
Renting (183)-
The good agents will always walk on a POS selling proposition. They’re hard workers, not miracle workers.
However…many “commission advance” companies are now advancing vs UNSOLD listings (yowww…this is one step above borrowing from CashCall or “Vinnie Kneecaps”).
Will be interesting to see how that plays out in a few months!
http://marinrealestatebubble.blogspot.com/
A RE bubble blogger discontinuing blog after death threat.
BC Bob Says:
March 2nd, 2007 at 5:06 pm
Bost: I am going to look for anecdotal evidence around Hoboken and NYC of the “unwind”.
I wish we had good wings in Hoboken……
http://www.flickr.com/photos/18175464@N00/217192346/in/photostream/
http://www.flickr.com/photos/18175464@N00/233150273/
http://www.flickr.com/photos/18175464@N00/233156400/in/photostream/
Fremont to exit subprime!!!!
http://www.sec.gov/Archives/edgar/data/38984/000003898407000003/form12b25.txt
In light of the current operating environment for subprime mortgage lenders and recent legislative and regulatory events, Fremont Investment & Loan, the Company’s wholly owned industrial bank subsidiary (“FIL”), intends to exit its subprime residential real estate lending business.
>>
Source and more at CR
Does refinancing in mid 2005 into an option ARM and puting the excess equity ($130,000) into a universal life policy so it grows tax free and you can withdraw it tax free make any sense? I’m more concerned with the refinancing into the ARM than the insurance part. Thanks for any advice.
Another one for FDIC!!!
Fremont’s Subprime Platform Collapses; FDIC Steps In
http://www.housingwire.com/2007/03/02/fremont-collapses-will-exit-subprime-lending/
Two for FDIC in a day??
http://users1.wsj.com/lmda/do/checkLogin?mg=wsj-users1&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB117286729439625151.html
New Century Financial Corp., one of the nation’s largest subprime lenders, announced that it has been informed of a federal criminal inquiry into its accounting and trading in its securities. New Century also said that a failure to obtain waivers from lenders could prompt its auditors to warn of “substantial doubt” over its ability to remain in business.
http://www.onlinebankingreport.com/resources/100.html
Fremont is 78th largest bank in US. $9.3 bln in deposits.
>>
source CR
jayb (197)-
Worry about the insurance part. Is your universal life policy also variable? If it is variable, do you have to prove your health is not deteriorating every time you wish to change the savings/insurance balance? Why not just invest it in a traditional return-producing vehicle? IMO, life insurance should only be used as a protection for loved ones against the contingency of your untimely demise. The investment/savings features of life insurance are famously overstated by insurance companies and their salespeople.
Term life insurance is the “purest” (and least expensive) form of life insurance, because there are no cash or investment features to be funded and maintained. Needless to say, these products also represent the lowest margins for companies and their salespeople.
I am not an insurance professional and all disclaimers apply. However, I believe life insurance (other than term) to be the closest thing to legalized, government-sanctioned theft ever devised.
So…..
What about China’s Olympic frenzy???
anyone….
SAS
MLS #2707545 –> On the market for months? No problem, just re-list it again, and again, and again, and again. Brilliant. And to top it off, the price is the same.
I wonder when this flipper is going to blow a gasket.
This should have the likes of Sarbanes & Oxley running over each other to regulate lending & RE.
jayb [197],
Please. Stop!! If you were across the desk from me I’d grab you by the neck. You are bending down and kissing your *ss goodbye. Please, please, I’m begging you to not do this. If it was me,I’d rather jump from Eli Manning’s apt.. The only problem, I’d probably miss the ground.
Clot is 100% on the money. I’m not an insurance man, but guess what?? Your life ins.person is no
investment wiz. Treat the two separate. Buy a term life policy and place your other $ elsewhere.
Some points/questions
1) Take those assumed calculations and throw it in the Hudson. Tell the agent you want a sample of real policy to read the actuals. Tell them to get a policy from a current client and show you. Just watch their reaction.
2) Universal Life is extremely front loaded, the agent may get a huge part of your initial payment in the form of commission.
3) How much of your premium is paying for mortality versus your “investment”??
4) The fees, the fees??? Look at all the fees, mortality charge, service charge, management charges. There are more fees in there than bottoms in real estate.
5) The ins agent shows you assumptions, what is the guarantee??
5)As you may be aware/or not, I’m pretty bearish real estate. That being said, I would rather buy a house this weekend than buy this rip off/crap.
I can’t beg enough, don’t do it. It’s a financial disaster. No disclaimers required here. If you like, I’d be happy to sit down with you and rip apart an actual universal life policy. It’s all in black and white. The problem is nobody reads it.
Please, I don’t want to buy a house this weekend, don’t do it. I’ll debate any insurance agent until I’m blue in the face.
All I can guarantee, I will save you a ton. You’ll owe me a drink at the next meeting of the NJ Vulture Fund.
This thread on Fremont (5th largest subprime lender) is a must-read:
http://calculatedrisk.blogspot.com/2007/03/fremont-files-notification-of-late.html
Jay – 179. Like the others have said please please stay away from universal life. Read this site:
http://ul.blows.2y.net/
It will explain in no uncertain terms why you should stay away from such a rip off.
Oh and by-the-way, I am speaking as someone who once walked away from 14k in paid premiums because it was cheaper for us to burn that money than to continue to pay into the policy. Yikes.
My goodness. BC Bob calm down…you don’t have to buy a house. Thank you to those that replied. My aunt actually did what I wrote, and I’m in the process of fixing this mess. This all thanks to her “CFP” advisor. She refinanced into an option ARM and is paying $20,000 a year into that insurance. I just wanted to see if there was something I was missing that some more experienced or educated people on this blog knew about.
What the hell is a CFP’s Code of Ethics and all that lovely stuff good for?
jayb (208)
The only credential worth squat is the “CE”:
Caveat Emptor.
From Bloomberg:
New Century Faces U.S. Probe; Fremont Quits Subprime
New Century Financial Corp. disclosed a criminal probe and regulators told Fremont General Corp. to halt improper subprime loans, piling new scrutiny on two home lenders who’ve already lost about half their value this year.
Investigators are focused on New Century’s accounting and trading in its securities, the Irvine, California-based company said in a filing with the U.S. Securities and Exchange Commission today. Fremont said a regulatory order will require it to stop giving mortgages to people who can’t repay, and it plans to get out of the subprime home-loan business.
“It just shows there was a lack of principles and standards,” said David Hendler, an analyst at CreditSights Inc. in New York. “There was no real major guardian of conservative standards anymore, and that’s a danger to the safety of the market.”
A surge in defaults on mortgages to the least-creditworthy borrowers has forced more than 20 lenders to close or seek buyers since the start of 2006. Earlier today, the Federal Reserve told banks to scrutinize their underwriting standards on subprime mortgages and make lending terms easier to understand.
BC (205)-
If you hopped out of Eli’s window & missed the ground, Shockey would catch you, spike you, preen & showboat, then get a 15-yd unsportsmanlike call.
I am a financial planner and registered investment advisor representative. There is a place for whole life insurance and annuity product. However, it only makes sense in instances where you have exhausted all other avenues, or are intersted in an immediate lifetime income stream. If you are considering an insurance product that is anything other than term insurance, you are most likely making a sub-optimal and surely an expensive decision.
To give you a frame of reference, a commission on selling an insurnce product is usually in the area of 65-80% of the first year premium. In other instances there can be payments of 4-9% of the face amount of the policy. So on a $130,000 investment whole life policy, a broker could pocket for his “office” in the neighborhood of $10,000. You figure out why an insurance company would pay a salesman so much money.
I really didn’t expect all of this to play out so quickly..
New Century says it faces criminal probe
New Century Financial Corp. said late Friday that it’s facing a federal criminal probe and will likely breach a major lending covenant with its financial backers, bringing into question the survival of the second-largest U.S. subprime-mortgage lender.
“What about China’s Olympic frenzy???”
SAS,
Hopefully it won’t be akin to having Lazarus light the torch.
A couple of obversations;
1)Out of the heat, into the fire??
2)Is it me, or is anybody else wondering about what they are wondering about??
2) Should chap Green spend more time in his favorite London pub??
Englishman???
“HSBC Holdings Plc, founded in Hong Kong and promoted in ads as “the world’s local bank,” had an edge when lending went global. Now, after a costly adventure in the U.S., the 142-year-old bank is scrambling to reclaim Asia.”
“Green, a Church of England lay minister in his spare time, has fired top American managers, tightened loan requirements and embarked on a new growth strategy: retake emerging markets. When Green presents 2006 earnings on March 5, analysts and investors want proof he has scrapped predecessor John Bond’s U.S. strategy and moved the world’s third-largest bank back to its roots.”
“HSBC should be allocating resources more aggressively to emerging markets, where the company made its name,” said Sandy Chen, an analyst at Panmure Gordon & Co., who has a “hold” rating on the stock. “The returns on invested capital are far greater in those markets.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a8I4ADKF0Z88&refer=home
SAS,
It really WILL be a frenzy, if China can’t keep improving infrastructure and services in rural areas.
The rural peasantry in China all want to move into the cities. However, rural-to-urban migration is largely prohibited. One way the gov’t there suppresses the urge to move is through upgrading the quality of life in outlying areas. Much of China’s economic growth is fueled by giant rural infrastructure projects designed to keep the peasantry “down on the farm”.
Squatter camps in Beijing with millions of displaced people wouldn’t look good on NBC.
Coincidentally, China has apparently helped avert the disaster it feared the most: the complete political/social meltdown of North Korea. They were huge in helping broker their recent agreement to abandon nukes. The Chinese govt’s most-conservative projection of societal breakdown in PDRK had tens of millions of starving people crossing the border into a part of China that in no way could handle even a fraction of that displacement.
BC (215)-
HSBC just learned that the American deadbeat is akin to a pit bull with a gut full of Tabasco sauce and gunpowder.
And equally vicious, to boot.
I heard that Christopher Christie has subpoenaed 7 of our representatives regarding the “Christmas Items” snuck in last years budget. The increase in the sales tax, that they tell you is a penny, [actually close to a 17% hike] raised a little more than $1 billion. These thieves snuck over $340 million of spending hikes into this budget. Imagine that?? By snapping their fingers they s*cked up over 1/3 of the sales tax hike, in one damn fell swoop. This does not include other spending increases.
I believe this story is on nj12news.com. They want me to pay or dish out my cable id # to get the story.
“Federal prosecutors have subpoenaed budget documents from Gov. Jon S. Corzine’s office in their investigation of the state’s spending plan.”
“State Republican Chairman Tom Wilson said Christie’s investigation “now touches the very pinnacle of the Democratic Party in New Jersey, Gov. Jon Corzine.”
“Wilson noted Republicans urged Corzine last year to veto the grants added to the budget by lawmakers, but alleged he instead “joined the back room cabal and signed the budget.”
http://www.chron.com/disp/story.mpl/ap/nation/4591838.html
power to the people
jayb Says:
March 2nd, 2007 at 9:26 pm
What the hell is a CFP’s Code of Ethics and all that lovely stuff good for?
jayb: It means a hell of a lot to me. I busted my a– to gain my credentials.
Please report this person if you believe your relative was treated inappropriately….
http://www.cfp.net/learn/complaint.asp
“My goodness. BC Bob calm down”
jayb,
You’re right. Sorry for being so damn emphatic. As you can tell, I thought this would be a huge mistake on your/your aunt’s part. I did get a little emotional. I saw some good friends/family get ripped off with this crap. It struck a nerve. I’m sure you can understand. I just did not want to see anybody else get snuckered.
In conjunction with this, yesterday was the Ides of March. It gets serious this month, time to stop playing games.
Clot,
Regarding that Shock guy, two questions.
1)With or without his helmet??
2)With or without Tara Reid on his arm, for lack of a better word??
Michelle Says:
March 2nd, 2007 at 9:11 pm
Oh and by-the-way, I am speaking as someone who once walked away from 14k in paid premiums because it was cheaper for us to burn that money than to continue to pay into the policy. Yikes.
M: you could have used some of that money to buy this………
http://thecomplete.depechemode.com/
I thought the Ides was the 15th.
BC (220)-
I’m surprised “Tara Reid” didn’t get you thrown into moderation.
oh no. doh!
“New Century said it is seeking waivers of financing arrangements that require it to report at least $1 of net income for any two consecutive quarters. New Century said there is no assurance it can get the waivers from all lenders but is in talks with the lenders and “has made progress.””
A realtor who constantly posts spam on CraigsList:
“I can’t believe I’m thinking of moving to New Jersey!!!”
http://newjersey.craigslist.org/rfs/287500321.html
What a tool.
Please click this link if you hate realtor spam, so CraigsList deletes this junk:
http://flag.craigslist.org/?flagCode=15&postingID=287500321
And another one:
“Are you ready for Short Hills?”
http://flag.craigslist.org/?flagCode=15&postingID=286080084
Are you ready to post some listings instead of spam?
This Chatham listing is ripe for a lowball:
MLS 2365317
http://www.realtor.com/Prop/1074827852
Been on the market almost a year, and I believe was priced at $750K.
Now listed at $674,999.
Nice section of town, with much more expensive homes all around.
ChiFi (224)-
Speaking of “doh”…New Century has just released a CAT scan of its CEO’s head. Obviously, this poor man’s illness explains the erratic recent decision-making of this venerable financial institution:
http://www.english-zone.com/funny-pix/homer.html
Fremont General Corp down 18% in after hours trading
Hi everybody. I was browsing GSMLS.COM and found listing #2338524. There is a note on that page saying “Sale is subject to bank approval for a short sale”.
What does that mean?
BC BOB 205
I think Jay 197 is going to go for that whole life insurance policy, so if you don’t mind can you buy the house I’ll be at on sunday.
Thanks much
KL
231
http://homebuying.about.com/od/4closureshortsales/a/shortsalebasics.htm
Hi everybody. I was browsing GSMLS.COM and found listing #2338524. There is a note on that page saying “Sale is subject to bank approval for a short sale”.
What does that mean??
A short sale occurs when the seller sells the home for less than the amount they owe on their mortgage. Rather than go through foreclosure, the bank will accept less than what the original owner actually owes. The bank benefits by not having to deal with a foreclosure. The owner benefits by not having a foreclosure on their credit report.
For example, you buy a home for $500k in 2005 with an I/O loan. You are behind on the payments, but can only sell it for $450k due to a deteriorating housing market. The bank accepts $450k as payment in full so that they don’t have to deal with a foreclosure.
This one might be ripe for a lowball:
http://www.realtor.com/FindHome/HomeListing.asp?frm=byxmls&xlid=1069729469&lnksrc=00045&poe=realtor
Re looking in Sea Girt (way back at 106)
You better love the Shore and have plenty of money because almost all SfH listings are over $1M.
I’m pretty sure they aren’t selling though, so consider making an offer.
What is a short sale?
To me, it’s proof that prices are falling.
The owner of that property paid $339,000 on 9/12/2005. It’s listed for $329,000 and has been on the market for 117 days (which means it’s still overpriced).
jb
This picture shows percentage of home loans that used Subprime by state. NJ is listed as 5% to 10% loans.
http://photos1.blogger.com/x/blogger/6511/1295/1600/518101/BW_map_of_misery.jpg
The only area in Red – California. I don’t know how they will deal with this mess.
Chicago 222
Wasn’t that the DM download that had all the glitches?
SG,
The title of that image doesn’t jive with “subprime percentage”.
Sure that isn’t just “pay option” loans as a percentage of outstanding mortgages?
jb
What are the odds the New Century will file for BK this month?? I say 90%. What are the odds that Merill, Goldman, Bear and UBS will endup with massive losses due to this bankruptcy?? I say 80%. What are the odds that mortgage traders at the big banks will have the summer at the beach?? I say 70%.
What do you say??
Hilariously recount of New Century’s conference call.
http://forum.themarkettraders.com/read-m/71/3023
How much do you think the Dow will be down on Monday?? I am an optimist, I say down 500 at the open.
An article for people like me who didn’t knew what the heck was “Carry Trade”.
http://www.businessweek.com/globalbiz/content/mar2007/gb20070302_745284.htm?chan=top+news_top+news+index_global+business
FYI: My friends sold there house in wharton, last year it would of easily sold for 300,000. They listed it 2 months ago at 290,000 , lots of activity but no offers, someone than offered 260,000. They declined, but after another month they lowered it to 269k and finally got an offer of 261k. And they say there is no bubble..Right
“This Chatham listing is ripe for a lowball:
MLS 2365317
http://www.realtor.com/Prop/1074827852”
Not a bad little house, I would bet the property tazes would be a killer in that town?
I don’t know much about Chatman?
SAS
chicagofinance Says:
March 2nd, 2007 at 10:20 pm
jayb Says:
March 2nd, 2007 at 9:26 pm
What the hell is a CFP’s Code of Ethics and all that lovely stuff good for?
jayb: It means a hell of a lot to me. I busted my a– to gain my credentials.
I’m sure it does Chicago. I guess I got a little emotional too. I know some people that have advisors doing the right thing for them. Didn’t mean to broadly apply any disdain for the general CFP community. Thank you for the link. I believe my aunt will want to report this guy.
And BC Bob, you don’t ever have to apoligize to me for any emotional outbursts. Although you are the only person I know that loves using question marks :/ And when is the next get together????
ha ha…
I don’t feel sorry for this person at all.
“Borrower pays for years, but her debt just keeps growing”
http://tinyurl.com/2hqwrw
SAS
SAS (248)-
With you. This is the garbage that passes for journalism now.
A homeowner who also has two rental properties…who doesn’t know what neg am, I/O ARMs are?
The investment properties are probably meth labs.
JPMorgan Chase & Co., Bank of New York Co. and State Street Bank & Trust Co. gained higher credit ratings from Moody’s Investors Service Inc., which said the U.S. government would back the banks if they faced default
http://www.bloomberg.com/apps/ne…2fIw&refer=home
>>
So the other banks have to swim for themselves?
http://www.bloomberg.com/apps/news?pid=20601087&sid=abohn9cD2fIw&refer=home
What is a short sale?
To me, it’s proof that prices are falling.
The owner of that property paid $339,000 on 9/12/2005. It’s listed for $329,000 and has been on the market for 117 days (which means it’s still overpriced).
I have a feeling there’s something wrong with that property. A similar property sold recently in the same development for 357k.
Does “sale is subject to bank approval for a short sale” mean anything to the potential buyer other than closing uncertainty? Is there a financial risk involved?
Clotpoll Says:
March 2nd, 2007 at 10:51 pm
ChiFi (224)-Speaking of “doh”…New Century has just released a CAT scan of its CEO’s head
Lee Harvey: mmmmmm doughnut
#248 SAS:
Crazy woman. What else can I say?
“Last year, she paid about $33,000 in interest on her properties, just about equal to her gross income.”
She has a gross income of $33000 a year and 2 investment properties on neg-am mortgage. Chifi, you should use her as a model when giving financial advice.
Real estate listings to be put on Google, Trulia
From Bloomberg News
March 3, 2007
Realogy Corp., owner of the Century 21, Coldwell Banker and ERA real estate brokers, agreed to place more than 500,000 listings on Google.com and Trulia.com.
The move will broaden the exposure of listings from Realogy companies because more than 58% of all Internet searches for “real estate” are conducted on Google and its partner sites, Parsippany, N.J.-based Realogy said.
Google Inc. operates the most-used Internet search engine, and Trulia enables the public to find properties online.
http://www.latimes.com/business/la-fi-briefs3.6mar03,1,1905097.story?coll=la-mininav-business
I wish they put NJ listings. At present we don’t see the address of listing on MLS. I am wondering with this would one see the location.
KL [232],
Oops. Can we consider it similar to a dept store sale? When they run out of the sale items, you get a rain check.
Clot,
Only on my calendar does the Ides of March begin on the 1st. I moved this up years ago to coincide with first “official” spring training games and of couse March madness.
jayb,
Yes you are correct about the question marks. The way I see it there are a ton of storm clouds colliding with cross currents. There are multiple potential outcomes. These raise many questions. If everybody would take the time to think, they may be able to avoid certain train wrecks. The main reason, many people don’t have a prayer arriving at a particular calculating answer because they have no clue what the question is. Just my experience, the question is more important than the answer. The answer is finite, the question is infinite.
Sellers: You are not alone.
Even stars have trouble selling homes
Ben Casselman
Wall Street Journal
From Miami to San Francisco, the real-estate market is glutted with the splashy homes of professional athletes. Experts say there are simply more of them out there than there were a decade ago, as salaries and signing bonuses have soared and even some first-year players are living large in gigantic, decked-out homes. At the same time, trades and free-agency deals have continued apace, meaning more properties are being put up for sale every year. And the offers aren’t rolling in.
http://www.azcentral.com/business/articles/0302wsj-homefront02-ON.html
I had appointments to see 4 houses this weekend 2 in Westfield and 1 in Fanwood, and 1 in Scotch Plains. All 4 houses were on the market less than 2 weeks and all 3 went UC before I could even see them today. Is Union county experiencing significant demand and houses are just flying off the shelves or was it because these houses were priced 425-525 that they sold so quickly, or is the market moving into frenzy again? I’m assuming because these homes were priced so well that they went. My realtor said that his office broke a sales record this February. What kind of buyers market is this. Could it also have anything to do with mortgage interest rates dropping these last two weeks?
Frank Says:
March 3rd, 2007 at 7:18 am
How much do you think the Dow will be down on Monday?? I am an optimist, I say down 500 at the open.
Mr. Furter: I’m guessing a lot of guys didn’t want to carry positions across the weekend. If Asia/Europe doesn’t have something overly dramatic, or there isn’t an “event”, I would guess that there would be a gap up. If you look at most of the indeces, I would think that roughly 12-2PM on Friday [even to slightly down] is where the Monday morning “true” position would be.
The value of the previous opinion is the equivalent of the results on the human digestive of the addition of prune juice and brownies made from Ex-Lax.
From Today’s NY Times:
Keeping Borrowers Afloat
http://tinyurl.com/2svxdu
_____________________________________
AS foreclosure rates rise, lenders are redoubling their efforts to keep borrowers afloat. Mortgage executives say that because foreclosures hurt them, too, they are trying to help curb the trend.
Ms. Beckles said that Freddie Mac, which currently finances about 10 million mortgages, has in the past paid banks and other mortgage servicers $200 per case when they were able to work out repayment plans with borrowers who were 90 days late on their mortgages. Now, she said, Freddie Mac has increased the payment to $250 and shortened the late period to one month.
According to the Federal Reserve Board, homeowners are falling behind on their mortgages at a faster clip than a year ago. The Fed said last week that 2.11 percent of all residential loans were delinquent in the fourth quarter of 2006, meaning that the borrowers had missed at least one payment. That compares 1.78 percent in the fourth quarter of 2005.
The Fed did not break out regional statistics, but companies that track foreclosures like ForeclosureS.com, based in Fair Oaks, Calif., said that troubles have been most numerous in the Northeast, Midwest and Southeast. In the Northeast, for example, foreclosures in the counties it tracks jumped 65 percent. In New York they rose by 24.5 percent, and in New Jersey, they more than doubled.
Alexis McGee, the president of ForeclosureS.com, said that borrowers in New York, New Jersey and Connecticut have an advantage over people in other states, in that foreclosures are executed in the courts. “That can take 12 to 18 months,” she said, “compared to states like Texas and Georgia, where the house goes to auction in 30 days.”
Please let it be frenzy. I’d like to unload LOL.
We are just prolonging the inevitable. I don’t see home prices or incomes rising enough for some of these option armers to keep their homes. Lenders will try to keep moving the pain to another day, but it WILL COME !
This is part of the reason I think the correction in housing will be a multi year process. Banks freely handed out loans to everyone regardless of their ability to pay and now that many of these borrowers are falling behind, banks are trying to prop them up hoping that either their incomes will increase or house prices will recover next year for these people to sell and get out.
I don’t see either of these happening to some of these people who are drowning in debt and stupid to boot.
Bear in mind – no recession…..things are not that bad. Don’t get into a frenzy.
THAT SAID……we are 50/50 for a recession by the 4Q07. I’ll be betting for BOOOYA’s Spring 2008 housing massacre. We are still OK, but you can certainly turn up the volume for the potential ugly factor for 2008.
#258 ck986:
Based on my research, I think the union county towns with a good commute to the city will be last to correct. In my opinion the first places that see price declines will the brunswicks, oldbridge, monroe, manalapan, etc. These towns have seen tremendous building activity in the last couple of years and the supply of homes on the market is is much much higher than last year.
The thing you should note is the i-bankers. They received their bonuses in cash for 2006. Even if it turns out that most of the last 12 months has been a wholesale sack of manipulated capital markets stunts, no one is going to return the money.
Welcome to Wall Street.
Those Union County towns will do even better once the Raritan Valley line starts running all the way to NY Penn.
Village-like feeling suggested for Bridgewater’s Finderne section
The township hired Kitchen & Associates — a Collingswood-based architectural firm — to study the township’s Finderne section. The working-class community housed many employees of nearby factories such as American Cyanamid, Johns-Manville and Mack Trucks.
Since many of the industrial hubs have closed, the neighborhood was left with a mish-mash of industrial sites nestled next to homes and stores.
Douglas Cohen, a Kitchen & Associates principal, presented his firm’s findings at Thursday’s Township Council meeting.
[…]
Cohen said many small changes — such as giving Finderne a village-like feeling — could be enough to make people take notice of the neighborhood.
He said the area should be marked with a large, landscaped sign letting visitors know they have arrived in Finderne. The sign would be a landmark, lending a sense of pride and identity to the neighborhood, he said.
He outlined some architectural nudges — including wrap-around porches, roof changes and six coordinated paint color schemes (such as Amish green, Andover cream, and a brick-like hue called terra wood) to give buildings a richer texture. Cohen stressed the suggestions are just guidelines, not mandates.
[…]
The Township Council wanted the Planning Board to review Kitchen & Associates’ findings before giving its blessing to the study, said Council member Allen Kurdyla.
[…]
An 200-unit age-restricted development is proposed in place of an existing warehouse and Weyerhaeuser construction supply center, a few blocks south of East Main Street.
The Wyeth property — next to Commerce Bank Ballpark — was home to one of New Jersey’s earliest chemical facilities when Calco Chemical Co. opened in 1915.
[…]
Wyeth … would like to build a golf course there.
Fremont, New Century dead!
Next turkey to roast?
WaMu!
“No ma’as” white horsed, ARMed to the eyeballs FB’s to the rescue, bagholders!
#260 (NYT article)
as lenders are keeping people afloat they,ll be returning to lending standards or tightening credit. This seems to be a contradiction.
make it hard for new and easy for the stupid.?
It’s the Northern NJ herd factor. It was a great place to live when the only thing you heard about NJ was the toxic dump jokes. Gotta have it, gotta live here and the rules don’t apply like the rest of the nation. If you want an expanded split or CHC in a desirable town, you’ll have to come to the table with at least $150,000 in cash to join the extortion. If this makes you queasy, move to Fort Wayne, Indiana.
“So, tell us Herb, what has our contestant won!!” (Insert game show assistants voice here) “Well Bob, once the 150K is squandered, our contestant will be left with a $600,000 mortgage, $14,000 in taxes, plus insurance for a grand total of $5000 per month in payments!!” (Crowd oohs and ahhs with applause.) “That’s not all, Bob, our contestant will also be left with a 25 year old furnace, a 15 year old water heater, a super drafty front window and a spongy wall behind the ‘master’ bath shower!! (more applause.) And that’s not all Bob, wait until that first big rain comes and… THE BASEMENT GETS FLOODED!! (Big crowd applause here) All told Bob, this package is worth $6,647.51 per month in house expenses alone!! (crowd clapping)”
So, let’s add in the car payment and insurance, food, gas and electric, credit cards, cable, phones and misc. and we’re up to a total of $8,500 to $9,000 per month. Now, based on lending practices (BWAHHAAA!), if you take just the mortgage, which is roughly $3,700 per month, this should account for 28% of your gross monthly income.
That means your gross income should be about $13,000… per… month… to afford that “trophy” split you’ve dreamed about your whole life.
Welcome to New Jersey and please buckle up.
gary: saturday morning blues !!! huh !!!
Market has unforseen ways of correcting. The main thing in RE is unemployment. Wait till employers realize its easy to relocate to south and save big. Bad stock market will fasten that move.
Deep in Debt, Deeper in Denial
“Maxed Out,” a documentary that opens nationwide next week, examines the dark side of America’s love affair with debt.
By turns humorous and heartbreaking, “Maxed Out” exposes the targeting techniques of credit card companies (the most profitable customers are broke); the gold rush mentality in the business of debt collection; an influential credit scoring industry riddled with errors; and the power of the credit card lobby at the highest levels of government. (MBNA, the biggest campaign contributor to President Bush, was behind the restrictive bankruptcy legislation of 2005.)
http://finance.yahoo.com/expert/article/moneyhappy/25516
SG,
You rock!! When’s the next get together, I need another of those $8.50 a pop Grey Goose exgtravaganzas!
Wait till employers realize its easy to relocate to south …
From what I’m seeing, they already have. Most of the people I have worked with on various projects in the last few years have been out of office buildings in Dallas, Atlanta and Raleigh.
Gary 270 –
“So, let’s add in the car payment and insurance, food, gas and electric, credit cards, cable, phones and misc. and we’re up to a total of $8,500 to $9,000 per month.”
Suggesting that “top town” wannabes are morons.
Better to live in a less snobby neighbourhood and send the kids to private school.
RE: Obsessive lowballing.
I’m not sure what the point is in throwing around lowballs and hoping one sticks right now, and actually think it is a bad idea for two reasons:
1. There is just not enough blood in the water yet.
2. It encourages sellers to hold in there by letting them know that there are buyers out there somewhere. A few months of complete silence are a lot more scary than multiple lowballs.
#270 Gary
“So, tell us Herb, what has our contestant won!!” etc.
———
Gary,
LMAO!!!
(scared family & neighbours with my insane laughter)
Quite a few non-top towns have decent to good schools.
But they are far away. I believe the term in style these days is exurbs.
The OFHEO HPI press release from a few days ago has some good data on exurbs.
http://www.ofheo.gov/media/pdf/4q06hpi.pdf
Consumer debt caused by irresponsible consumption is one of my favorite topics.
http://finance.yahoo.com/expert/article/moneyhappy/25516
“Maxed Out,” a documentary that opens nationwide next week, examines the dark side of America’s love affair with debt.
“A lot of people we talked to said, ‘Gee looking back at the level of debt, there should be a Mercedes or a Ferrari in my driveway, but I have nothing to show for it,'” Scurlock says. “Most Americans are very optimistic. They think things will always get better from here, they’ll make more money, they won’t have any emergencies. Credit has become so ingrained in the culture that so many people can’t imagine living without it. Once you decide you’re never going to be out of debt, you can afford anything.”
lisoosh,
“A few months of complete silence are a lot more scary than multiple lowballs.”
Try to convince 99.9% of the sheep of this concept.
——————————
lowball,
Insane actions call for insane laughter. And that’s exactly what the herd has become: insane.
Rachel,
Amen.
looks like there will be fewer imbeciles trolling thru houses now
S&P cuts New Century deeper into junk on mortgages
Reuters – March 02, 2007 5:11 PM ET
NEW YORK, March 2 (Reuters) – Standard & Poor’s on Friday cut its ratings on New Century Financial Corp. (NEW) into junk territory, and said it may cut them again, citing concerns about financial stress facing the mortgage lender.
New Century, one of the largest U.S. providers of home loans to less credit-worthy borrowers, said on Friday it has laid off 300 workers to cut costs, citing a “turbulent environment.” For details, see [ID:nN02312769].
The news follows its statement late on Thursday that it was delaying the filing of its annual report with the U.S. Securities and Exchange Commission.
“In a residential mortgage market where investors and other participants are rapidly losing confidence, it may be a challenge for the company to work through current credit trends,” S&P said in a statement.
“New Century specializes in high-risk subprime lending,” S&P said. “The company’s core subprime loans have experienced significant credit deterioration during the past few quarters and we expect these negative credit trends to continue into 2007.”
S&P cut New Century’s counterparty credit rating by two notches to “B,” five levels below investment grade, from “BB-minus,” and cut its senior unsecured debt by two notches to “B-minus,” six levels below investment grade, from “B-plus.”
DA DA DA another bites the dust!
BOOOOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
Now serious buyers who value their hard earned savings will not have to bid against some loser toxic loan addict. good luck.
HOUSING MASSACRE SPRING 2007-2008!!!!!!!!!!
BLEED”EM DRY!
BOOOOOOOOOOYAAAAAAAAAAA
Bob
“THAT SAID……we are 50/50 for a recession by the 4Q07”
Chi, [any others]
Aside from this weeks market gyrations, is it possible we are in the beginning of a recession at this point in time? If not, maybe spring training. Note: I am not suggesting that we are, just probing.
We just had the biggest downward revision in GPD since the early 90’s. The revision was down approx 40%. In addition to this, the durable goods # in Jan was putrid and we all know what the housing #’s indicate. Granted we need to monitor additional reports going forward, these recent #’s do not present sufficient supporting data.
However,it does seem like we are curently in a housing/auto related recession. Does the economy continue to chug along on exports[falling dollar] and govt/service related jobs? Usually, you don’t know when a recession starts or when the recession cycle ends until 9 months-year later,lag effect. Poor George Sr., he lost the 1992 election as the result of the recession. Looking back, we actually realize we were out of the recession for the previous year before that election.
lisoosh Says:
March 3rd, 2007 at 11:40 am
RE: Obsessive lowballing.
I’m not sure what the point is in throwing around lowballs and hoping one sticks right now, and actually think it is a bad idea for two reasons:
1. There is just not enough blood in the water yet.
2. It encourages sellers to hold in there by letting them know that there are buyers out there somewhere. A few months of complete silence are a lot more scary than multiple lowballs.
========================
very good advice.
BLEED”EM DRY!
If they want their price tell’em to get a second job.
hehehehehehehe
BOOOOOYAAAAAA,
Love the new sign in name. It seems like you have more sign in names than flippers have houses/condos.
A s-t panic this week was good, but probably need a few more scares. those smart @$# young mba’ers hedgees are really $H!!! their pants lately.
man am i really going to make a killing off of these chumps.
BOOOOOOOOOOOOOYAAAAAAAA
Bob
This is going to be fun and rewarding. Hang in there the best of times for people with a strong balance sheet. Keep your lips zipped and contain the excitement cuz fun times are approaching. Gonna pick a few bones clean when this all ends.
New Century Faces U.S. Probe; Fremont Quits Subprime (Update3)
By Bradley Keoun and Christine Harper
March 2 (Bloomberg) — New Century Financial Corp. said it’s the subject of a criminal probe and Fremont General Corp. agreed to a cease-and-desist order with bank regulators in the biggest regulatory actions to emerge from the subprime mortgage meltdown.
The investigation is focusing on New Century’s accounting and trading in its securities, the Irvine, California-based company said in a filing with the U.S. Securities and Exchange Commission today. Fremont said a regulatory order will require it to stop giving mortgages to people who can’t repay, and it plans to exit the subprime home-loan business.
“It just shows there was a lack of principles and standards,” said David Hendler, an analyst at CreditSights Inc. in New York. “There was no real major guardian of conservative standards anymore, and that’s a danger to the safety of the market.”
A surge in defaults on mortgages to the least-creditworthy borrowers has forced more than 20 lenders to close or seek buyers since the start of 2006. Earlier today, the Federal Reserve told banks to scrutinize their underwriting standards on subprime mortgages and make lending terms easier to understand.
New Century, whose shares have lost half their value this year, said in its filing that the U.S. attorney for the Central District of California is running a criminal inquiry “in connection with trading in the company’s securities, as well as accounting errors regarding the company’s allowance for repurchase losses.”
SEC Seeks Meeting
SEC staff also told New Century it wants a meeting to discuss events that preceded the company’s Feb. 7 disclosure of a pending restatement to earnings, according to the filing. NYSE Regulation Inc. is reviewing trades that took place before Feb. 7 and has requested information, the company said.
New Century, the second-biggest subprime lender, said it will cooperate with the three inquiries. Laura Oberhelman, a spokeswoman for New Century, declined to comment on the filing. Earlier today, the company cut 300 jobs, or about 4 percent of its workforce, she said.
The company’s lenders include units of Goldman Sachs Group Inc., which extended a loan agreement last month that was due to expire on Feb. 15 to May 14. The filing said the company’s auditor, KPMG LLP, will include a statement questioning New Century’s ability to stay in business if the company can’t get lenders to ease terms or find new financing.
Fremont plans to report a net loss from continuing operations in the fourth quarter after setting aside more money to buy back loans that defaulted, the Santa Monica, California- based company said in a regulatory filing.
Cease and Desist
Fremont General Credit, a unit of Fremont, is submitting to a cease-and-desist order by the Federal Deposit Insurance Corp. halting 14 violations that include “unsatisfactory lending practices” and “operating with a large volume of poor quality loans.”
The proposed order was received Feb. 27, Fremont said in a statement. Shares of Fremont plunged 24 percent on Feb. 28 after the company postponed the release of its fourth-quarter results.
The lender said it hired Credit Suisse Group to help sell the subprime residential business, and talks have started with “various parties.”
Two other California lenders, Impac Mortgage Holdings Inc. and Accredited Home Lenders Holding Co., said today they won’t be able to file their financial reports on time. Shares of both tumbled.
Material Weakness
Impac found a “material weakness” in its cash-flow reporting, the Irvine, California-based company said today in documents filed with the SEC. Accredited Home, based in San Diego, delayed its report until March 16 because of “sizable demands upon the company’s management and staff,” including a recent merger that may cause a writedown.
Shares of New Century fell $1.20 today, or 7.6 percent, to $14.65, before the announcement in New York Stock Exchange composite trading. They dropped as low as $10.60 in after-hours trading. Fremont, which fell 4.3 percent to $8.71, has lost 46 percent this year.
Impac shares fell 10 percent to $5.96. The stock has declined 32 percent this year. Accredited Home’s stock fell 3.7 percent to $21.70 in Nasdaq Stock Market trading. Shares in the company have fallen 21 percent in 2007.
— With reporting by Justin Baer and Jody Shenn in New York. Editor: RBGreen (ehs/rik)
“Goldman, Merrill Almost `Junk,’ Their Own Traders Say (Update1)
By Shannon D. Harrington
March 2 (Bloomberg) — Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds.”
Welcome to the roaring 2000’s.
http://www.marketwatch.com/news/story/bernanke-shrugs-off-globalization-fed/story.aspx?guid=%7BC3538401%2DC7D4%2D4CE5%2DB7EC%2D386DB5A013CB%7D
Bernanke –
Globalization has not materially affected the ability of the Federal Reserve to influence financial conditions in the United States nor has it led to significant changes in the process which determines the U.S. inflation rate
But this [globalization of manufaturing] effect may be offset by the prices of energy and other commodities because of strong growth in emerging-market economies.
But globalization has made it more difficult to assess domestic economic conditions
ck986 #258,
I’ve checked Westfield and Summit occasionally and strange enough prices haven’t moved down much there. 3 BR cape asking prices are ridiculous. I am seeing some drops in Chatham, Short Hills, Madison and Mendham. These towns are just as nice if not nicer than Westfield & Summit.
lowball Says:
March 3rd, 2007 at 1:00 pm
March 2 (Bloomberg) — Goldman Sachs Group Inc., Merrill Lynch & Co. and Morgan Stanley, which earned a record $24.5 billion in 2006, suddenly have become so speculative that their own traders are valuing the three biggest securities firms as barely more creditworthy than junk bonds.”
hanging low: This is news, but don’t read into it too much. It’s just a thinly traded derivative market, which is prone to volatility. You could argue that it is an arb opportunity in tandem with the debt securities, but I’m not familiar enough with the dynamics to provide informed commentary. If the DEBT of the company started being quoted on a price basis (junk) instead of a yield basis (investment-grade) THAT would be news. More likely it is a bunch of “big swinging” realizing that they can attribute more to Viagr- that verility.
Any insight as to when the Raritan Valley train line will go through to NY Penn? We’re looking in Westfield but changing trains is a bummer
The Office of Federal Housing Enterprise Oversight says that house prices rose 1.1% in the fourth quarter of 2006 from the third-quarter level. That put them 5.9% higher than they were in the fourth quarter of 2005.
http://www.ofheo.gov/media/pdf/4q06hpi.pdf
Keystone,
Not until The Tunnel is done.
According to the state of NJ, The Tunnel will be ready no later than 2016.
Hey, what do you expect? It’s close to New York City and they’re not making anymore land you know.
http://www.realtor.com/FindHome/HomeListing.asp?frm=byxmls&xlid=1075805040&lnksrc=00045&poe=realtor
gary,
that is too funny.
And just think, all you need is $165,980 minus the closing costs to avoid the PMI.
Here, finally! A beautiful starter at a rock bottom price!! If you never have kids, the extra bedroom can be turned into an office. Notice the gorgeous lawn!! Fabulous!
http://www.realtor.com/FindHome/HomeListing.asp?frm=byxmls&xlid=1069261101&lnksrc=00045&poe=realtor
#258 I would not worry, I think it is some pre-Spring buying by some clueless people. I thibk the Spring market activity is earlier this year, and as we get into March through June, activity will be light, but inventory high.
7 new listings in my desireable, award winning close to NYC prestigiious BC town, in the just the last 3 days. Adding to the already bloated sitting inventory.
One final thing those houses you were scheduled to look at, just becaue they went under contract, does not mean they sold. They are never sold until the actual transfer of money and title happens ont he day of closing, which is anywhere from 45 to 90 days, and sometimes longer.
Lots of deals falling through and the hosues come back on the market, watch and see if that happens on the ones you were glojng to look at.
#300 Gary 629k for a 2 bed room cape in Clifton? what can you say, obviously the sellers are on crack.
I would not get upset, really, just laugh, it really is hysterical.
Here is a perfect example of a would be buyer being insulted by the asking price. Insulting, but nevertheless hysterical
bergenbubbleburst,
Yes, hysterical. I don’t know who’s worse anymore, the buyers or the sellers. Just $125,800 gets you this lovely (cough!) home without the PMI! Gosh (sniff, sniff), I’d be the envy of all my fiends and family!
ck (258)-
There’s been a sustained burst of activity since 1/1/07. With the bond rally this past week, mortgage rates have repriced at very attractive levels. That may fuel a few more weeks of healthy sales.
That said, it’s gonna take a lot more than one- or even two- consective quarters of strong sales to say the overriding trend has been reversed.
What you’re also seeing is proof that all RE is local; if sellers in the area you want to be in are getting their prices lined up with the market’s expectations, guess what? The market is hot. So what if one town over, things are in utter collapse? That’s not where you want to be.
Sync (267)-
Finderne? Yeech.
My proposal? An “Andover Cream” neutron bomb.
http://www.nytimes.com/2007/03/03/business/03charts.html?_r=1&oref=slogin
2006 – Citites all over showing drop in prices!!!
Welcome to the Bushisto-fascist Amerika y’all:
“JPMorgan Chase & Co., Bank of New York Co. and State Street Bank & Trust Co. gained higher credit ratings from Moody’s Investors Service Inc., which said the U.S. government would back the banks if they faced default.”
Rrrap-rrrap-rrrap-rrrap-rrrap…
“The problem for lenders, however, is now so out of control that they must begin to choke off credit to the growing segment of “Alt-A” borrowers with better, though not pristine, credit.”
“A borrower a month ago who could have qualified for a $450,000 interest-only loan for the home’s full value without proving his income would today be limited to a $300,000 loan for 70 percent of the property value, Low said, citing a conversation with a nationwide lender”
“The now “localized” credit crunch may reduce U.S. gross domestic product growth by some 0.2 to 0.3 percentage point, FTN’s Low said. That figure would climb if mortgage tightening begins to spread to the rest of the economy, he said.”
http://www.reuters.com/article/reutersEdge/idUSN0222181120070302?pageNumber=1
Have been watching Bergen County NJMLS listings for past two years — noticed a possible new scam — has the real estate industry began to withhold publicly accessible listings in order to mask the number of new listings — in other words, do they have two different listing databases, one for the industry that lists everything and the other for the public in which many listings are deliberately omitted ??
Fremont email
>>
—–Original Message—–
From: (PRESIDENT)
Sent: Fri 3/2/2007 4:45 PM
To: **All Employees
Subject: Message from (PRESIDENT)
Dear Colleagues:
I have some difficult news to share with you today. You are all aware of the challenging conditions in the sub-prime market, and you know that we have been taking steps to adjust our business to the new market realities. We have tried our hardest to stay the course in sub-prime, but due to recent legislative and regulatory events and the challenging sub-prime market, today we announced plans to exit our sub-prime business. We will continue to service our sub-prime portfolio and remain in the commercial real estate lending and retail deposit businesses. We decided to make this move now in response to new guidelines issued today by federal regulators and requests by our regulator, the FDIC, for a variety of changes to our sub-prime lending business.
…..
Sincerely & God Bless,
************
President & Chief Executive Officer
>>
http://www.brokeruniverse.com/grapevine/thread/?thread=369658
njrebear Says:
March 3rd, 2007 at 6:12 pm
http://www.nytimes.com/2007/03/03/business/03charts.html?_r=1&oref=slogin
Bear: I guess the NYT Business section reports one thing and the Real Estate another. The equivalent of talking out of two sides of your mouth. I’m telling you, pitch that rag in the garbage.
““The now “localized” credit crunch may reduce U.S. gross domestic product growth by some 0.2 to 0.3 percentage point, FTN’s Low said. ”
Wait a min. Isn’t housing just 6% of total GDP????
Clot #181-
Sometimes I’ll be standing in my sister’s store when someone comes in and looks at a price. For some reason they feel the need to announce out loud that they would never pay that much for a hand blown vase or brass fixture. After all, Wal Mart sells vases for a nickel.
Why not just walk out without embarrassing yourself? No class.
cf,
I know but it’s emotionally not easy to look the other way :)
As some of you may know, today was the Hoboken St. Patrick’s Day Parade….an annual friggin’ mess.
They have a website where people are monitoring the police scanners…..they have this tidbit…
date/time: 3/3 6:45 pm
location: 1st/Bloomfield
Nature of incident: port o’ potty knocked over by drunks with friend still in it.
d2b (313)-
What’s that old saying?
“…knows the price of everything and the value of nothing…”
ChiFi (315)-
At least gunplay wasn’t involved.
Didja ever see the episode of “Jack@ss” where they put Johnny Knoxville in a “loaded” portapotty & had a hydraulic lift turn it upside-down?
A classic.
Now, THAT’S entertainment!
CF #292
“More likely it is a bunch of “big swinging” realizing that they can attribute more to Viagr- that virility”
reminds me of this russian joke:
an american guy and a russian guy are standing on a bridge overlooking a river in the middle of winter, and they both take a leak. The american looks at the Russian and says, it’s cold down there, and the russian says…yeah, it’s deep too.
“Welcome to the Bushisto-fascist Amerika y’all”
I’m trying to understand a context where this absurd statement makes sense, with no luck.
The FDIC was created in the 1930s, over a decade before Bush was born.
While still priced far into the stratosphere, it’s interesting to see a $600,000 price drop on a house listed only two months:
MLS 2359477
Jan 5, 2007 – $6,595,000
Mar 3, 2007 – $5,995,000
http://www.realtor.com/Prop/1073984300
A truly breathtaking house.
Look at this folks.
http://lvarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Lehigh&PRGNAME=MLSPictureDescriptions&ARGUMENTS=-N165598658,-N266243,-APB,-N0,-ARR
We’re out of our minds. Why in the world would anyone want to sell their soul just to buy somebody elses mold infested, over-priced, p*ss-smelling piece of sh*t house when you and your family could enjoy a beautiful home like this? Public utilities and $4400 a year in taxes with a view and an immense yard. What a goddam shame how we’re getting fleeced here.
New Jersey: highest car insurance in the world.
New Jersey: highest property taxes in the world.
New Jersey: highest cost of living in the world.
New Jersey: most corrupt state in the world.
Anywhere else in the U.S., you can live your life, have a nice home, pay your bills, save some money and actually sleep at night. Not here, kids.
I did a search on realtor.com earlier for homes under $450,000 in Bergen County’s most sought after towns. I came up with 15 houses. Yes, 15 dumps that look like sh*t either in a flood zone or on a main road built when Washington’s posse was on the march. Compare that to this beautiful home in the link just over the border in PA.
How the frig does a guy driving a truck 70 hours a week put his family in a nice house when these greedy pig sellers and the leechs looking to share the action are DEMANDING 10 times the median salary.
You guys and gals with young families should be revolting. It’s pathetic and the housing situation here is just one of many symptoms.
BTW, that house is listed for 349K and can probably be had for 310K or so.
Gary (321)-
It’s not going to change much. Are you going to move now?
I’m watching prices drop everyday
No, I’m going to start a revolution. :)
No need Gary, the thing is imploding on it’s own.
Does anyone have an idea what is the likely motivation behind a seller putting a house up for sale AND for rent? I can’t tell if the seller isn’t all that motivated to sell or not.
Zac (324)-
Yes, prices are dropping every day. However, newer 4BR Colonials in BC probably aren’t going down to 310K. And if they do, nobody with 310K to spend on housing will buy it…because a lot of other, terrible stuff will be going on.
I hope I’ve established enough cred here for regulars to know I’m not just a shill for prices going higher ad infinitum, but there’s a point at which even the most earnest populist rants come across as nothing more than whining.
If Lower Macungie Twp, PA seems like American Nirvana to you, move there. You can probably buy a house from someone there who sees his 310K Colonial selling for 180K in Pittsburgh…and takes that as his cue to head West.
Relax Clot, this is a blog, not a courtroom.
JKL (327)-
That’s a really motivated seller. He’s in a world of s@#$ and just needs to make the monthly payments go away…by any means necessary.
That’s also a great situation in which to propose a lease/purchase agreement with some very favorable terms to the renter/buyer.
Hey guys. What are your thoughts on Hillsborough? Looks like some decent homes pop up there for under $400k (comparatively speaking).
Zac (329)-
I was relaxed…until the whining started.
#330 Clotpoll:
Thanks. Do you have any suggestions as to how a l/p agreement would be made favorable to the buyer? I have always been wary of “rent-to-own” type setups, but what you say sounds very interesting.
if you’re not part of the solution –
you’re part of the problem.
Hillsborough is nice although access to Route 287 from there is painful during rush hour. Schools are good, but Montgomery is better.
JKL (333)-
There are ways to structure all aspects of the agreement to the tenant/buyer’s advantage. Crediting rent payments toward the purchase price, having the seller take back a second mortgage (at below-market rates) and renting with an option to purchase are just the tip of the iceberg.
It’s been a long day, I’ve had a couple of drinks, and I’m feeling lazy. If I wasn’t, I could go on for a while. However, I’d suggest Googling the name Robert Bruss. He is a syndicated RE columnist (Gannett) and author of several books that- among a variety of topics- touch upon creative lease-to-own arrangements. His techniques are legal, ethical, workable…and don’t fall into the province of the late-night infomercial guys. Invest in any of his books, and you will get a world a great- and practical- ideas.
I’ve been remiss in not mentioning Mr. Bruss sooner. He is an excellent writer and an honest man in a sea of swindlers.
Clotpoll (336): Thanks for the info. Much appreciated.
I went and saw some homes today with my realtor in Union county and was talking about the homes that were UC. Well he said that a lot of realtors in the area do not update the listings so a lot of the listings on the GSMLS may be under contract but the listing still says active. So other than the realtor saying that he had a strong February I have no other evidence that sales are picking up. If the realtors are not updating hte listings then I am looking at stale listings that may or may not have sold.
I noticed there are also a lot of flipper specials in Fanwood/Scotch Plains,Clark in the 500-600 range. These peaked my interest as there are none in this range in Bergen they go for 600-700+ there.
Regarding someones post earlier, the bonuses were good this year, I am in IBanking, I dont make 300+ a year but I make a good living. I am not running to throw it into some black hole though or finance someones retirement. I value housing, but not as much as some do in NJ. I am likely moving to NJ or looking to move there from Manhattan because my wife is from there and she wants to be near her parents. I also want a place to call my own, but we are extending our lease this week so I guess we will be looking to buy again next year.
The notable homes that I saw today were, 1 in fanwood and 1 in Scotch plains. The one in SP was built in 1895 and was very nice, the owner bought it for 365 in 05 and dumped money into it and well, is trying to unload it for 525. I dont really know what I would offer as I am just learning about the area.
The other house a flippers special in Fanwood selling for $479 1/4acre, was bought 6 months ago for 275. This house was updated meticulouslyand was fairly large (4br). I really liked the house just not the location. There were power lines in sight from the backyard. Should this cost 479 I dont know, but I dont think so. There was a puddle of water in the basement, a pipe was leaking may have burst as there was no heat in the house. There was a home across the street 1/3 acre, a builders special selling for 900. 10 homes down the block there is a 2 bedroom dollhouse selling for 399. Its a very interesting area regarding real estate dynamics to say the least.
I ended up looking in Union after combing through all of Bergen, then Chatham and MAdison in Morris, so now I am in Union. I am looking for mid to low taxes (5-7) and a 400-500 price tag conveniently located close to town and a train or bus. This is our first house. I havent foudn it yet.
#338,
Union, Essex and Morris Co are just way to overpriced, over taxed and overcrowded. If you want real values look in Monmouth Co.
#338,
Check this listing:
http://www.realtor.com/Prop/1072399828
It’s 10 minute walk to train station, bus right in front of your house, it has been on the market for few months, you can get it for under $400K. It’s 50 minutes to Midtown on train or bus.
#340
Did I read that right, only 1 full bath???
How much would it cost to put another one in?
5 grand, and it will raise your taxes
By how much you think?
not sure, have to check with the town’s tax office
Sync, you read that wrong.
The house has one full and one half bath.
That still sucks. Most 3 bedrooms have 2.5.
Im a physician having an opportunity to buy a property that is “Professional Residential”, ie the garage has been converted into a practice office. This enables the practice to pay rent to the property owner. The house is an old 1905 Victorian, but it has been renovated 3 yrs ago. The sq footage of the house is about 4500, and the practice is about 1200. I would really appreciate if anyone can advise me on how I can value such a property as compared to neighbouring comps which are purely residential. The owner is pricing it at 750k, neighbouring houses with similar stats on Zillow are listed at 500k!
Any thoughts are welcome.
Thanks..
SUBPRIME LENDERS STOCK CHARTS COMPARED !!!
http://finance.yahoo.com/q/bc?s=FMT&t=6m&l=on&z=m&q=l&c=nfi,new
Maybe a silly question, but 750k for the whole thing or just the garage???
Hard to say without more info. May be a good idea to invest in your own appraisal. For tax reasons, wouldn’t it be better for your legal entity to own? You must be at AMT level.
300, Gary
http://www.realtor.com/FindHome/HomeListing.asp?frm=byxmls&xlid=1069261101&lnksrc=00045&poe=realtor
let us all call the realtor requesting to see the house. The realtor will get fed up receiving 100 calls
Home buying: Buy now? Or wait for prices to drop?
Wednesday February 21, 11:11 am ET
By Asa Fitch, Money Magazine staff reporter
Question: My wife and I want to buy. Should we wait to see if prices fall, or take advantage of today’s low mortgage rates? – Heath Hewett, Columbia, S.C.
Answer: If you’re asking whether a significant price drop would lower your monthly payments more than a big increase in mortgage rates would raise them, it’s easy: You should probably root for the price decline.
For example, the monthly payment on a $300,000, 30-year fixed-rate mortgage at today’s rates is $1,847. Rates would have to rise to 8.1 percent – nearly two full percentage points – before a $250,000 loan would cost that much.
But it sounds as if you’re really asking whether prices in your area are likely to decline enough to justify holding off on a purchase. When it comes to that, frankly, your guess is as good as ours.
While there’s no lack of experts making predictions about where home prices are headed in the next year, no one knows for sure.
So instead, focus on what we do know: Over the long haul, home prices in the U.S. have appreciated at about 6 percent a year, and even in the most volatile markets, one-year declines of more than 10 percent are very rare.
And if you wait to buy, you’ll still need to pay rent in the meantime, so holding off would have a cost too. Meanwhile, a buyer’s market gives you leverage to get the most concessions you can from the seller, says Barry Miller, a buyer’s agent based in Denver.
If prices are stagnating or dropping in your area, you can offer about 10 percent below the asking price to start off the bidding, says Miller, and ask the seller to pay for closing costs, which can run to 2 percent or 3 percent of the value of the mortgage.
Or see if you can get a new roof, wiring or better appliances thrown in ( just don’t get greedy: Your seller might walk away if you demand a Jacuzzi to boot).
Bottom line: If you can afford to make the purchase now and you’re planning to be in the house for at least five years, “I wouldn’t be worried about buying a house today,” says Reston, Va. financial planner Patricia Houlihan.
Of course, in any market, it pays not to get in over your head. If you would have to get a short-term adjustable-rate mortgage in order to afford a home, you could run into trouble if interest rates are higher when your mortgage adjusts.
And if you think you’ll want to sell within a few years, you could end up with a loss (after paying broker’s fees) if home prices in Columbia stagnate or increase just 2 percent a year during that time.
can anyone tell me the fate of 57 (?) laomatong way in bedminster?? It is off gsmls.
Thanks in advance,
sl
can anyone tell me the fate of 57 (?) laomatong way in bedminster?? It is off gsmls.
Thanks in advance,
sl
From the Star Ledger:
Trump drops plans of burial on his links
Donald Trump has withdrawn plans to build a family mausoleum at his golf course in Bedminster Township, abruptly ending a flurry of excitement over the real estate mogul’s intention to spend eternity in the bucolic hills of Somerset County.
“It’s just not a priority at this time,” Trump said in a phone interview yesterday. “It’s hopefully something I won’t be needing for many years.”
still,
Was it #3 Laomatong? That is the most recent. If not, #3 has a most interesting history.
Purchased on 7/2002 for $1,225,000.
Listed for sale on 7/2004 for $1,495,000, reduced to $1,425,000, and finally expired.
Listed for sale on 5/2006 for $1,395,000, then reduced to $1,325,000, and finally withdrawn.
Listed for sale on 11/2006 for $1,295,000, went under contract on 1/18/2007.
Surprising that the latest asking price on this property was basically at 2002 pricing, give or take a few dollars. Given a 5% commission, if it sells at asking, the seller will only manage to make out by a few dollars (nominally). Adjust for inflation, and this is a loss over 5 years of ownership.
jb
From the Washington Post:
Mortgage buyer Freddie Mac to apply stricter lending rules
Freddie Mac, one of the biggest investors in U.S. mortgages, plans to toughen its standards and stop buying certain types of risky loans that have been linked to a high number of delinquencies and defaults.
The decision, announced Tuesday, is the latest sign of the deep problems roiling the subprime mortgage market, which caters to borrowers who could not qualify to buy a house with a conventional loan, including people with blemished credit records.
…
”This is one of the biggest voices in the mortgage market saying in a very public way that the mortgage and housing markets are very troubled,” said Mark Zandi, chief economist at Moody’s Economy.com.
Uh oh, nothing like a fancy graphic to panic investors..
http://www.nypost.com/seven/03042007/photos/biz029.jpg
Doc (347)-
You have a situation in which “comps” to neighboring homes isn’t applicable. There’s an income-producing (and a convenience) element.
Unless you know how to take your anticipated “rent” payments and apply the local cap rate to determine the value of the 1200 sf of professional space, I’d suggest hiring an appraiser, giving him an idea of what your practice would pay in rent, and let the appraiser come up with a number.
I believe this “story” is just crossing the wires, and damn is it hot.
HSBC reportedly to write off $11 billion on U.S. mortgages
HSBC Holdings will take a charge of $11 billion to cover the bad debts seen by its acquired Household division in the U.S., according to reports from the Sunday Times and Sunday Telegraph newspapers. HSBC reports its annual results on Monday. The bank recently issued its first profit warning over mounting bad debts in the U.S.
That $11b figure has been floated around before. I’ve seen it referred to the value of HSBCs second lien portfolio, as well as referring to their US loan-loss provisions
Here is the piece from the Times:
US triggers $11bn HSBC fall-out
jb
Grim (360)-
I think the head of HSBC’s mortgage division has his resume posted at Monster.com.
EUROPE’s biggest bank, HSBC, is to write off $11 billion to cover mounting losses in its troubled American offshoot, HSBC Finance Corporation.
Stephen Green and Mike Geoghegan, the bank’s chairman and chief executive, are making the huge provisions — which will be announced alongside tomorrow’s full-year results — in an attempt to draw a line under the bank’s miserable experience since buying the business, then known as Household, for $14 billion (£7.2 billion) four years ago. The duo are under unprecedented pressure from shareholders over ballooning bad debts at its US mortgage business.
…
The provision is equivalent to a third of last year’s operating profits of $30 billion and half its pretax profits, expected to be just north of $22 billion. This will be the highest-ever profit made by a British-based bank. To put it in context, the write-off is equivalent to the overall profits of £5.7 billion announced by HBOS, Britain’s fourth-largest bank, last week.
…
The warning came after the bank discovered that rising problems in the US mortgage business meant that the group’s bad-debt provisions had surged by $1.75 billion — 20% higher than analysts and investors had been forecasting. The bank is understood to have lent about $11 billion in so-called second-lien mortgages — a form of high-risk loan where a bank only has a second claim if a borrower defaults.
…
In a move that shocked the City, HSBC admitted it had seriously underestimated the number of people in America who were defaulting on second home loans in portfolios bought by the bank. What was even more shocking was that many of the loans had been taken out just six months earlier.
Let this be a lesson to all New Centuries, Fremonts, Merills, Goldmans and UBSs, when dealing with an addict (US homeowner) not only the user gets burned but also the drug dealer.
Email from Countrywide to Loan Sellers
http://blownmortgage.typepad.com/blownmortgage_blog/2007/03/email_from_coun.html
“I just received an email from Countrywide which I can’t republish in its entirety here, but the jist of it is:
Defaults associated with the subprime market are spreading upward in to Alt-A
Because of the incresed default risk the value of these mortgage backed securities on wall street is near zero (and in some cases unsellable)
Wall Street investors of these securities are refusing to buy them if they contain 100% financed loans and loans with credit scores under 660
Countrywide is going to change its guidelines and is increasing pricing to mitigate loss risks
There you have it. 100% financing causing trouble to even people with good credit.
Full disclosure: My company sells loans to Countrywide. “
Alt-A might very well be the real ticking time bomb here. This market respresents prime or near-prime borrowers using risky mortgages to stretch “affordability”. Personally, I’m more concerned about the prime and near-prime Alt-A buyers using options/io/neg-am products than I am with a subprime borrower in a fixed-rate, amortizing product. Why? Risk models. Subprime has always had a significant amount of risk/loss involved, just part of the game. But Prime/Alt-A? Are we sure they’ve got those modelled right?
jb
With the tightening of standards, lenders are redefining qualifications for a prime borrower. It will be interesting to see what happens when an Alt-A borrower is reclassified as subprime on an ARM reset.
http://www.brokeruniverse.com/grapevine/thread/?thread=369637
Don’t even think of signing any RE sales contracts until fall.
There is NO WAY RE prices will hold at these levels after the sub-prime collapse we are watching.
DISCLAIMER: The above is not MHO, but FACT!
Johnny B (from the TARA get-together)
why would anyone buy period? you have to put %60-%70 down to buy a house and have the same monthly payment vs. renting
it doesnt make sense which is why we are all here.
but does anyone see median house price and median income a historical ratio?
but does anyone see median house price and median income a historical ratio?
i meant returning to a historical ratio which i think was around 3-1
Stocks: Expect more anxiety
Investors crawl back to work Monday after toughing out the worst week on Wall Street since 2003. And the choppiness may continue.
http://money.cnn.com/2007/03/02/markets/sunday_lookahead/index.htm?postversion=2007030408
Our feeling is that this will be a fairly short, somewhat volatile, violent correction that that will last a few weeks or a month,” he said. “But is it the start of a bear market? No.”
HSBC reportedly to write off $11 billion on U.S. mortgages
allow me: doh!
Frank Says:
March 4th, 2007 at 8:00 am
Let this be a lesson to all New Centuries, Fremonts, Merills, Goldmans and UBSs, when dealing with an addict (US homeowner) not only the user gets burned but also the drug dealer.
Furter: leave out the i-banks….bankers get paid in cash…they are already off the the hook…..next!
#373,
I hope you’re right, but I know that a lot of I-banks are holding subprime mortgages, residuals on their deals, huge warehouse lines and recently bought originators. Especially the newcomers to the game, Merill, UBS and Barclays. There’s going to be a blood bath when this unravels. I am saving my money and planning for a long summer off at the pool.
Numbers Drop for the Married With Children
Institution Becoming The Choice of the Educated, Affluent
By Blaine Harden
Washington Post Staff Writer
Sunday, March 4, 2007; Page A03
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/03/AR2007030300841.html?sub=new
Punctuating a fundamental change in American family life, married couples with children now occupy fewer than one in every four households — a share that has been slashed in half since 1960 and is the lowest ever recorded by the census.
As marriage with children becomes an exception rather than the norm, social scientists say it is also becoming the self-selected province of the college-educated and the affluent. The working class and the poor, meanwhile, increasingly steer away from marriage, while living together and bearing children out of wedlock.
The marital unions of high earners are a significant factor in the growth of income inequality since the 1970s, according to Gary Burtless, an economist at Brookings. His research attributes 13 percent of the increase in the nation’s income inequality to such couples.
Developer in Newton sees future in the past
600-unit plan gives nod to town history
Sunday, March 04, 2007
BY JIM LOCKWOOD
Star-Ledger Staff
It could be the biggest thing to come to Newton since the railroad.
K. Hovnanian Homes, the seventh-largest home-building firm in the nation, has submitted to the town a preliminary “redevelopment” concept for more than 600 housing units to be built in six different areas of town.
http://www.nj.com/news/ledger/sussex/index.ssf?/base/news-1/1172987722127910.xml&coll=1
Now in Morristown, a wait for the hum
Assorted delays leave construction projects quiet
Sunday, March 04, 2007
BY MAURA McDERMOTT
Star-Ledger Staff
The clamor of construction was supposed to have started by now at sites across Morristown.
But five long-anticipated building projects — adding some 600 homes as well as new businesses — have run into obstacles ranging from the real estate downturn and a developer’s bankruptcy to litigation and a dispute over union labor, according to local officials.
http://www.nj.com/news/ledger/morris/index.ssf?/base/news-2/1172986870127910.xml&coll=1
Trump withdraws plans for mausoleum
“It’s just not a priority at this time,” Trump said in a phone interview. “It’s hopefully something I won’t be needing for many years.”
http://blog.nj.com/ledgerupdates/2007/03/trump_withdraws_plans_for_maus.html
Is county government necessary?
Sunday, March 04, 2007
BY BRAD PARKS
What happened Tuesday night at the Cranford Township Commit tee meeting hardly had the appear ance of a revolution: By a 3-2 mar gin, the committee voted to study the benefits Cranford taxpayers receive from Union County.
“Our director of finance tells us we give Union County $13.5 million in taxes and are receiving $1.5 million in services in return,” Cranford Councilman Bob Puhak said. “We have a responsibility to advocate for our taxpayers.”
Up until this point, the only municipalities griping about supporting county government had been wealthier ones, the Millburns, Summits and Montclairs of suburbia.
But Cranford? Cranford is solid, middle-class New Jersey, exit 137 off the Garden State Parkway. If the Cranfords of the state start asking hard questions about what county government is doing for them, that could be the start of something revolutionary.
http://www.nj.com/starledger/stories/index.ssf?/base/news-0/1172986548127910.xml&coll=1
Frank (374)-
And other I-banks are waiting in the weeds, ready to pounce (e.g.- Goldman) on all sorts of opportunities that are shaping up: gold at a better price, some discounted Chinese stocks, etc. Goldman also has very little subprime exposure.
I think Bear and Lehman are in for some pain, because mortgages- including subprime- represent big biz for them (for Bear, about 1 bil/year).
#380,
I hope you’re right because I don’t see how I am going to be employed pass March. If you see a guy in a suit collecting money outside the Path station to pay my mortgage that will be me.
#381 – Frank, I’m sorry to hear that. I’m sure you will land on your feet should that happen.
Clotpoll Says:
March 4th, 2007 at 11:28 am
I think Bear and Lehman are in for some pain, because mortgages- including subprime- represent big biz for them (for Bear, about 1 bil/year).
Clot: as you know, the banks don’t pay people to sit on the beach —– do you remember I was yammering [do I do anything else?] about a “swath” of the banks getting whacked out…….let’s be on the watch for it
jb,
I found the address: #12.
most recent listing (before vanishing) was part of the prop (5 ac for 799,K) or whole prop (15 ac at 1.099K)
the house was nearly falling down on itself – only value was the land, really.
We looked at it maybe 9 mos ago? I figured it expired or was withdrawn. But who knows…..
sl
Am I the only one who has serious doubts that RE prices won’t fall too much in the shore towns? I have been waiting to buy, only to be priced out of the market for the past 2 years, and prices are still way over the top. Does anyone think this area will correct too – or is it just “differnt here”?
The Monmouth Riviera ?
“I think Bear and Lehman are in for some pain, because mortgages- including subprime- represent big biz for them (for Bear, about 1 bil/year).”
Clot,
I agree. The contagion will be lost jobs in mbs trading, operations, risk management and earnings going forward. It seems like Lehman and Bear have the largest exposure. I talked to a friend[headhunter], he said he never has seen the amount of resumes come in the door in one day like it did on Friday. Just a gut feel, 2006 bonus $ may remain in liquid, high quality vehicles for a period of time.
As most people who are looking to buy or are involved in real-estate know, there is a fairly large number of buyers out there. These buyers have different price points they will enter the market. My price point for example is about a 6% to 8% compounded appreciation from 2000 price levels in that town. The premium I pay will depend on how much I like the house. At the same time there are buyers who are oblivious to the correction that is happening now and is buying up some really bad properties.
What I don’t get is the mind set of sellers whose home remains on the market for over 6 months.
I would guess they are really stupid and are waiting for someone even more stupid than them to eventually buy the property or they don’t really want to sell but just list and see if they can find a sucker to bite.
Does anyone here have the scoop on the Washington school in West Caldwell? The mls captions and realtors tout it as a very desirable school district but the recent report card scores seem relatively low to me, certainly lower than other elementary schools in Caldwell/WC. Am I missing something?
Situs…are you new ?
Realtors are salesmen, not editors.
They do not check facts or confirm sources.
Not new. I know that realtors can outright lie and, at best, leave out part of the story. Maybe it was a good school at one time and ran into recent problems. I honestly don’t know what the story is. That’s what I’m trying to find out.
JB [366],
It’s certainly unchartered waters. Risk management parameters will be totally rewritten.
IMO, it’s the difference between rapidly/slowly advancing terminal cancer. The end result is the same. The msm seems to be anchored with the subprime. This crisis is spread through-out each sector. Nobody would reasonably conclude that an individual making 300-400k, and still employed, can actually be on the path to foreclosure. Big mistake, this lunacy does not discrimate.
Also, regarding the carry trade:
Like I said this can be an entirely different blog site.
Whatever the # is, lets use $1 trillion for argument’s sake. This only respresnts one side of the trade. This is levered out into many different asset classes/sectors/currencies. I can’t even begin to guess what this levered # is.
I would imagine central banks are ready to intervene [selling yen] if necessary. The problem here is twofold.
1)Currency intervention is only a short term band aid. It only works [long term] if the fundamentals and techicals of the trade are cooperating. Both are not at this time.
2)A bigger problem, at least to me, is the other side of the trade. I always felt/still do that the B side of the spread is where the main dilemma is hibernating. If you are financing a levered losing position, in conjunction with a rising yen, you have sirens going off on both side of the floor. Currency intervention will not solve this problem. Many times when one side of the trade is losing, traders will leg out of the spread. It’s not a good idea lifting one leg when you are still exposed.
Paulson Says Foreign Treasuries Holdings Not Threat
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEeEOjOBI8Ns&refer=home
Treasury Secretary Henry Paulson said foreign holdings of U.S. government debt pose no threat to the economy, countering comments made by leading Democrats including Senator Hillary Clinton.
bear,
What the hell does he know, he’s only GS. What is important is both Hillary and Charles Rangel disagree. Yikes.
More on carry;
The most watched item this week may be the announcement/statement from the Bank of New Zealand. Go figure.
Last weeks adjustment, kiwi/yen almost wiped out the entire gain in the spread for 2006.
If there is an unexpected cut or a friendly statement, I would imagine you should fasten your seat belts.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNVE5a_xdkd8
Frank [381],
I did not see this post earlier. If I had I would not have mentioned my friend, [headhunter]. Sorry.
#381 situs:
You can see NJASK Test scores and other school information in http://www.greatschools.net. I think this is a good indicator of elementary school performance.
ChiFi (383)-
I think Bear & Lehman will feel big pain but survive this.
My call is that a major bank- WaMu, to be precise- bites the dust.
#396,
BC Bob, don’t feel bad for me, I made my money while it lasted, now it’s time to move on. Maybe I’ll start a foreclosure company.
Frank (399)-
Why don’t you get long the yen and hard commodities? Just do the opposite of what’s taking down some of these outfits.
Hope you’re not let go…but if you are, wouldn’t it be nice to be making $$ on the other side of their trade?
BC (394)-
Hillary scares the bejesus out of me. Did these foreign governments buy our Treasuries at gunpoint?
Imagine if she really were prez and made statements like she did last week.
Frank,
I just got back in from playing BB. I couldn’t have hit the ocean, if I was 20 feet away. Now you know how Clot feels watching his Tar Heels.
Is this imminent or just a possibility? If imminent, I would be happy to assist, make some calls on your behalf. You can get my email address from Grim.
Clot [401],
Very,very scary.
It would have been an all out crash rather than a fender bender if she was Pres.. However, in that capacity I don’t think, [again I don’t think], she would have pitched such a misguided statement. I must have it all wrong. I thought we were the debtor.
#323 Clot: Not sure what you are saying?
I seem to remember you saying at one point, that would be no real Spring market this year, and that prices are and would to drop, watch out for the inventory tsunami in the next 6 weeks.
Did I miss something?
to anyone with access to GSMLS:
I was considering a house in 2005 at 142 Park Ave in West Caldwell but decided not to make an offer. It subsequently sold for $499K. But there is no record of it in Domania. Is it possible that the deal was never completed?
Same question for 109 Parkview Drive in Bloomfield – it supposedly sold for $492K in 2005 but there is no record of it in Domania.
The weird thing is I believe there were records for both of these houses in Domania at the times of their sales.
Any help on this would be appreciated.
I know it’s nuts, but we found a house we’d like to make an offer on. Anyone have advice for how long to make the offer valid until it “expires?” A week? 48 hours? Also, we planned on countering only once, to our max, and then bowing out if they refuse. How long should that counter be valid? Our agent really doesn’t play hardball so he’s not much help.
#405
Check propertyshark.com. I found the sales records of both the homes along with current and previous owner names. I think simple registration is required.
Possiblebuyer:
What are you going to do if the offer expires?
Wait a month, then put in another offer?
BC Bob,
This weekend –
Bernanke says don’t fear inflation.
Paulson says don’t fear foreign debt.
Moodys says don’t fear GS, JPM, et al.
So i guess we have nothing to fear except fear itself.
#408 Pat:
Yes, probably. Unless we see something else we like better in the meantime.
Clotpoll Says:
March 4th, 2007 at 3:34 pm
ChiFi (383)-
I think Bear & Lehman will feel big pain but survive this.
My call is that a major bank- WaMu, to be precise- bites the dust.
Clot: I don’t think you appreciate the magnitude of what you are saying. I would say that a realistic worst case with WaMu is that the stock gets whacked back to the 20th Century and some heads roll. Beyond that, the only other catastrophe might be that Reechard forgets his meds again.
Compare that to this beautiful home in the link just over the border in PA.
Unfortunately, PA is changing and its future is likely to resemble NJ. It was a red-state but people from NJ have been moving there for years and they brought their voting habits with them. Simply put, it means higher taxes for PA. Too bad the people who escaped NJ’s high taxes are stupid enough to vote the same corrupt, tax raising politicians in PA.
“Bernanke says don’t fear inflation.”
bear,
I agree. Hey, we were able to cool off the printing press while the yen carry burdened the load. Not to worry, let GS hammer the market,prick the carry trade bubble, just slightly, let the air out, force the world to rush into the 10 year. Now Ben has it right where he wants it, justification to get the choppers going. A much welcome relief for those stressed to the max. Goldilocks reigns.
Burst (404)-
I’m fairly sure I said that before the bond rally. Anyway, I still stand by it. Maybe we get a prolonged run of sales (into April?), but a few weeks of good sales is not a trend reversal. And there are no other catalysts in place to keep things humming. Low rates will only do so much now.
bubbleburst: if Wall Street goes into the sh!tter, you can kiss everything around here goodbye. You will hear that “giant sucking sound”.
ChiFi (411)-
I do appreciate the magnitude of what I’m predicting. If all the bluster here is worth the bandwidth, it’s gotta end in something bloody and unexpected. Several here have predicted this will eclipse the S & L crisis in ’89, and frankly, the players at jeopardy this time around aren’t a bunch of mom-and-pop thrifts.
My call on WaMu is based on their festering swamp of subprime, Long Beach Mtg. Long Beach is no stranger to trouble, and Long Beach’s original “brain trust” left there several years ago to found…you guessed it…ResMae, one of the first subprime implosion casualties. Let’s just say that if Long Beach stayed their former masters’ course, they should be in a purty tight pickle right about now.
I also think that Jamie Dimon would love to swoop in and pick WaMu’s bones clean…once the stock price has cratered its way to China. D’ya think JPM might be a little short these guys right now?
AntiTrump – I checked that site out and it didn’t have any parent comments about the school or anything that would explain why the school is being touted as a good school when the report card and test scores are low compared to the rest of the district.
http://finance.yahoo.com/intlindices?e=asia
Nikkei opens beloe 17K. Down 2+%
“Low rates will only do so much now.”
Clot [414]
Yes…..and to boot, probably not much.
When the fundamentals change and if it results in an increase/glut of inventory, the market becomes insensitive to interest rates.
Congrats for sweeping the Dookies.
still,
#12 Laomatong expired.
jb
bubble disciple,
142 Park
Sold on 8/2005 – $499,000
109 Parkview Drive
Sold on 1/2007 – $490,000
jb
Sold = Closed
Possiblebuyer, make your counter and then say that’s it. We’re in the process of doing the same thing – we made an offer almost 10% off of asking (clost to 100K below the original ask) and we’re just not willing to up our bid my more than 15-20K. I wouldn’t call it “bowing out” exactly, but if they won’t accept my final, oh well. There are other houses out there, and I will be happy to bid on those if they don’t like my offer.
We have a friend who lowballed and was told to p-ss off. 3 mos. later they called and accepted. So you just never know. Stay calm and stay in the driver’s seat, and you’ll be fine.
PS – what does “clost” mean? Sorry I meant “close” – hey, forgive me, 2 glasses of wine into my Sunday!
“Nikkei opens below 17K. Down 2+%”
bear,
The nikkei gaps down and the yen gaps higher.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aglTcM9Tk0GA&refer=home
This really sucks, I am going to Japan next week. I should have locked my sushi prices with a forward contract.
Bob,
You have the right answer for every situation :)
“PS – what does “clost” mean?”
NJGal,
Some subliminal Clot sell/sold theory??
By the way Clot,
It will be a hell of a March Madness.
“China says military spending to grow nearly 18 percent in 2007”
http://www.iht.com/articles/ap/2007/03/05/asia/AS-POL-China-Politics.php
SAS
“You have the right answer for every situation ”
bear [427],
I wish I did. I’m trying to get a handle on the questions. Nikkei down almost 400 points.
BC (419)-
Dook su@ks. That win made my day. Check that…it made my week.
So, I’m walking out of my gym this afternoon, and there’s a car that’s exactly identical to mine parked next to me. I inadvertently remote-unlocked my door but walked to the driver-side door of the other car.
Just then, I hear this whiny, nasal, wussy-boy voice yell “hey, that’s my car!” in a voice that was this pantload’s idea of intimidating (like a 47 yr-old white guy in Dockers is doing daylight car crasts in Hunterdon Co…).
I look up, apologize, make a joke about our cars being identical and start walking around to my driver-side door. This guy- who is about 5’5″, has a worn-out Brillo on his head and his face furrowed into about 1,000 wrinkles of ill intent- keeps striding at me like he wants to throw down or something.
Just then, I see a “Dook” sticker on his bumper. Of course, I cannot resist the temptation to begin softly singing the Carolina fight song.
He stares straight down at the ground, gets into his car and peels out of the lot.
Best of all…I get to come home and use this priceless encounter as another valuable “teaching moment” in raising my children to despise anything associated with Dook.
I hope we get ’em again next week in the tourney. We’ll put 100 on ’em.
Any ideas for an ACC tourney hooky party? Prof…BC?
WSJ
Out of Stocks, and Into …?
Where the Money Travels Depends on Rival Views Of What Drop Means
By E.S. BROWNING
March 5, 2007
All dressed up with no place to go.
That’s the problem confronting the investment dollar in the wake of last week’s stock slide.
As billions of dollars came out of the world’s stock markets last week, the money didn’t just evaporate. It is trying to decide where to alight.
The economy continues to grow, generating profits. Market interest rates remain low — in fact they have been falling again — making it cheap to borrow money. So there is no shortage of cash.
The question is where, once the dust settles a bit, the cash will go. Some lately has been heading for safety, to such things as Treasury bonds. In the longer run it is likely to go elsewhere as well, and where you think it will go depends a lot on what you think just happened to the financial markets.
Analysts see at least three ways to view last week’s trouble, which resulted in a 4.2% drop in the Dow Jones Industrial Average. Goldman Sachs economists Ed McKelvey and Andrew Tilton outlined three competing views in a report last week.
1. A much-overdue short-term pullback. The Dow Jones industrials hadn’t fallen as much as 2% from a high in more than seven months, and hadn’t fallen 10% in almost four years. That is an exceptionally long time without a serious hiccup.
If last week’s trouble was just a hiccup, then stocks should rebound in the next few weeks, and the trick is to pick out the stocks likely to rebound the most.
[edit]
2. A flight from risky investments. If that is what is going on, then the market shift is more serious.
At least for now, this appears to be happening. Investors suddenly have pulled back from a raft of risky securities, from developing-country stocks and bonds to junk bonds and small stocks in the U.S.
“I would caution people not to say that this is over,” says Marc Stern, chief investment officer at Bessemer Investment Management in New York. His view is that investors had become blasé about risky securities, paid too much for them, and now are seeing the prices of those assets fall back to a more normal level. “One should naturally expect heightened volatility to persist. A healthy correction in this time period wouldn’t surprise us,” he says — meaning he thinks risky investments could fall further.
Mr. Stern, in other words, won’t be following Mr. Leuthold into China anytime soon. He won’t be buying developing-country bonds until their prices have fallen to a level he considers more realistic. Earlier this year, Mr. Stern had built up his cash hoard and has pulled back from risky securities. Once the storm seems to be passing, he says, he likely will buy larger, blue-chip stocks that can withstand the possibility of more stormy weather as the year progresses.
“Some of the easy money that went elsewhere may be coming back to the U.S.,” says Richard Sichel, chief investment officer at Philadelphia Trust, who also thinks the stocks of big U.S. multinational companies could come back into favor. Big-stock bulls have been predicting such a shift for more than a year, and big stocks generally have lagged behind other investments, but the bulls think they will come into their own now.
[edit]
3. A sign of a weaker economy to come. This could be the most troubling prognosis. Some investors took former U.S. Federal Reserve Chairman Alan Greenspan at his word last week when he said a recession later this year couldn’t be ruled out. These investors see the flight to bonds as another sign conservative investors are hunkering down for a period of economic trouble.
Until last week, investors who had bet on a softening economy hadn’t done very well. Consumer spending and corporate profits repeatedly have come in stronger than most pundits expected. Reports of the consumer’s demise have been exaggerated.
Despite this, the Goldman economists say in their report that they think economic growth, the housing market and consumer spending all may be softer this year than more bullish analysts are forecasting. They also don’t rule out the possibility that default problems in the lower end of the mortgage market could bleed into other lending markets.
The Goldman economists see a silver lining: They expect the Fed to step in by June and begin cutting its target interest rates.
Early this year, before the U.S. government slashed its once-strong estimate of fourth-quarter economic growth, many investors thought the robust economy would prevent the Fed from cutting interest rates until year’s end, if then. Today, with the economy appearing to be growing more like 2% than 3% annually, bond yields and interest-rate futures suggest many investors think the Fed will cut rates by summer to give the economy a boost.
Lower interest rates support stronger economic growth. They also support home sales because they make it cheaper to invest in land and to take out a mortgage.
And cheap money makes it easier for people to borrow money and invest in financial markets. A big source of support for the stock market over the past four years, and for a wide variety of riskier investments, has been the huge amount of cash sloshing around, looking for a place to go. The availability of cheap money has made investors a lot more comfortable about taking risk.
As long as the Fed is expected to cut rates — rather than raise them, as it was doing in 2000, when the last bear market began — the cheap money can continue supporting stocks. Cheap money would help offset some of the worries these days about slowing economic growth, a credit crunch, a weak housing market and investor exposure to risky assets.
corzine corruption
Corzine:
“If you were — I’m hypothesizing; I’m not stating anything — if you were going to pay a tuition bill or something over a period of time … you pre-funded it,” Corzine said. “I could have done that.”
Asked if he paid for Katz’s children to attend the private school where they are enrolled, Corzine demurred. “I’m not saying that at all,” he said. “I’m saying you could have.” The school in Pennsylvania lists its day-student tuition at $22,000 a year.
At least this time the recipient of the governor favours is a woman (Katz, “president of CWA Local 1034”). How long does it take to get the first indictments against Corzine? Feds have several investigations on-going. Anyway, NJ truly deserves this corrupt tax raising scumbag.
I can tell you where my money is, it’s at Citi esavings account earning 5% guaranteed until this mess clears up.
Tomorrow NYT
http://www.nytimes.com/2007/03/05/business/05lender.html
This reminds me of 2000 when the dot com bust.
I knew it was coming but I did not think it will take that long. Then I did not think it will all collapse in 2 weeks.
If you are looking to incinerate massive sums of wealth…use these….
http://www.proshares.com/funds?products=&fundType=MarketCap
repeat after me……every bankruptcy is sacred, every bankruptcy is good……if I use these investments, I should be used as a crash-test-dummy on the Pulaski Skyway.
#385–re: prices at the shore.
I live at the shore, southernish end of Monmouth County. People seem stubbornly firm, imho. Examples: one house on my block (a real POS 2-family) went on market last June for $529,000, still hasn’t sold, and owner hasn’t lowered the price a nickel. Another house (very tiny cottage) entered market two Januarys ago at $399,000; price is now $369,000, which is still too high. Time to buy at the shore’s gonna be–at the earliest–after Labor Day.
“Just then, I see a “Dook” sticker on his bumper”
Clot,
Could that be point guard from JC with that great Irish name??
frank,
2 weeks back citi cut their savings rate. The 5% pop ups have disappeared.
Frank [434],
Yeah, the tribe was conditioned was to buy each and every 10% pullback. It works until it doesn’t.
cf,
is there a mortgage lender (alt a + subprime) index we can short?
RE post 429:
SAS,
You do realize that China could raise military spending (credit for not using the euphemistic “defense,” that’s just crap) by 18% every year for 15 years and they still would be nowhere near us, right?
cf,
never mind … i don’t want to violate grim’s guidelines of not discussing securities.
bear,
Would you rather short the relief rally??
It’s funny, the silence has been deafening regarding the rally in the HB’s & XHB. By the way, these have demonstrated classic, textbook, market action with the failed/failing retracement.
bear [442],
Is that official or arbitrary??
Clot, (post #395)
Hillary may or may not understand global finance, but “she scares the bejesus out of me?”
Umm, how do you get out from under your bed with the current cast of morons? Exactly what path do you think she might take that that would make a bigger mess of things?
I have no idea what Clinton said, the context it may have been said in or if she’s truly a blithering idiot, but there are certainly reasons to believe that massive foreign holdings of debt denominated in our currency could be problematic for us (Right now I’m pretty sure it’s a serious problem for them).
While the seller of that debt runs the very great likelihood (which I believe they understand and so are probably extremely unwilling to try)of going over the cliff with us if they try to throw us over, that doesn’t mean it can’t happen.
I’m not trying to defend Clinton, she is very low on my list of presidential choices, but worrying about what foreigners might do with all that debt of ours is hardly beyond the pale.
Excuse me, Clot’s post was 401.
“You do realize that China could raise military spending (credit for not using the euphemistic “defense,” that’s just crap) by 18% every year for 15 years and they still would be nowhere near us, right?”
Yes. I am aware… but tell that to Japan.
and if they listein, the next steak dinner is on me.
Keep your eyes on Taiwan.
SAS
This is probably a repeat, but anybody have insights/advice/warnings about Oradell and/or River Edge (which apparently share a school district)-schools, taxes, safety, value, other attributes/problems? Previously, we had been looking in Bergen County at Ridgewood, Glen Rock, and Fair Lawn, and at Chatham, Madison, Short Hills in Essex/Morris, and are these towns comparable? (I work in NYC and need a town with a train to commute).
Thanks,
Eagle
I think it is arbitrary as of yet. However, discussing short positions could change his mind.
RE post #385
Am I the only one who has serious doubts that RE prices won’t fall too much in the shore towns?
I don’t know if you’re the only one, but you should be. If anything, the shore has been more outrageous than the state as a whole over the last two years, so it is as much primed for a fall as anyplace.
The fall may not come in the next 3 months or even 6 months, but it is coming.
Right now in Monmouth County inventories are about 20% over where they were at the start of March in 06, and listings are starting to pick up. If the March jump this year is proportional to what we had last year, we will have 7,800 to 8,000 listings at the end of this month. Last year that number was about 6,500 and it peaked (in September) at 8,500.
All that inventory may not force a “correction” by the end of the summer, but a “correction” is coming.
It isn’t different anywhere.
It saddens me to say it, but I think Taiwan’s absorption by the China is going to happen, but I don’t think it’s necessarily going to occur at the end of a gun. I’m guessing it’s at least 25 years off though.
The problem is that so many on the island view China as their nation, something that would not be the case if it wasn’t used as the refuge in 1949.
Adding to post #450:
As homes come onto the MLS over the next month or two, I really don’t expect the median asking prices to drop, and they actually might rise, in one category in particular.
What I’m thinking of specifically is asking prices for condo/townhouses on the Eastern Monmouth MLS. Right now median ask is about $349K (up 9K in the last week).
There could be a lot of “high end” units hitting the listings very soon because of redevelopment in Long Branch and I just don’t think the people looking to sell are ready for how bad this market is.
An interesting anecdote.
If you go to Centex’s website right now and go to the “Chapel Hill” townhouse development you will see they list asking prices “from $464,500 to $534K.”
Three weeks ago when they unveiled the models the Asbury Park Press ran a story/advertisement saying the starting price for the lowest model was $389K.
I’m guessing someone decided that since they weren’t going to sell any units they may as well not sell them for $464K rather than $389K.
Nikkei down 484 – going to be interesting day tomorrow…
jb,
thanks! (I am not surprised given its history.)
sl
#433 Frank Says:
I am with Frank on this one. Keeping my money in 5% Savings until the dust clears.
>Lindsey Says:
>March 4th, 2007 at 11:04 pm
>It saddens me to say it, but I think >Taiwan’s absorption by the China is going >to happen, but I don’t think it’s >necessarily going to occur at the end of a >gun. I’m guessing it’s at least 25 years >off though.
Not going to happen…the voters in southern Taiwan would never let that happen. They would rather be a part of Japan than be a part of China.
>The problem is that so many on the island >view China as their nation, something that >would not be the case if it wasn’t used as >the refuge in 1949.
That’s only if you read the biased “mainstream” pro-unification press. Fortunately, they’ve largely been discredited in Taiwan and have been losing influence to blogs and underground radio stations.
JY,
I hope you’re right.
#460 JY: Are not the people in Taiwna Chinese?
Who knows, after the next Chinese revolution (you know, when Americans can no longer buy their exports or China decides they don’t want any more US debt, and employment crashes, leading to millions of unemployed and disaffected urban slaves teaming up with rural revolters) perhaps Taiwan may wish to return to a newly-democratic mainland?
And yeah, the Japanese could have cutting edge atom bombs in what, 30 days, if China got frisky?
#462
The Taiwanese are indeed Chinese by heritage, but was a part of Japan from 1895 to 1945. The Taiwanese were Japanese citizens and even served in the Japanese Imperial Army. The ex-president’s brother is enshrined in the Yasukuni shrine (the shrine that irks China every time a Japanese PM visits it).
At the grassroots level Taiwan has a deep mistrust of foreign powers (including the KMT), a legacy of the 228 incident which left 30,000 Taiwanese dead and the martial law rule that followed. It wasn’t until the aforementioned ex-president liberalized Taiwan that you have the thriving democracy today.