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Given that consumer spending has been showing signs of weakness, perhaps it’s time to drag out the Christmas decorations. Last year, for the first time, I noticed Christmas decorations going up the day after Halloween. Why bother waiting, with spending on the decline, we’d better break them out now. With that, I’d like to kick of the Christmas 2007 season with a short video clip:
This post will remain at the top of the page during the weekend, any new posts will be displayed below.
Residential Construction Employment Conundrum Solved?
http://calculatedrisk.blogspot.com/2007/05/residential-construction-employment_17.html
This BED [revised] report [from wednesday]suggests that the revisions will be down this year, especially for – you guessed it – construction employment!
Unfortunately, we will not know the size of the revisions [for Q4 2006 & Q1 2007] until the advanced estimate is released in October.
BLS report was released yesterday and not wednesday.
The building slump that began in the late 80’s and continued through the early 90’s was particularly painful for New Jersey.
https://njrereport.com/images/constjobs.jpg
In a two year period, we lost more than 40,000 construction jobs statewide. It took 11 years for the state to regain those jobs.
jb
Moody’s Double Talk May Cost Taxpayers $3.6 Billion
http://www.bloomberg.com/apps/news?pid=20601087&sid=arEQD4YyUpkM&refer=home
When California sells taxable bonds to foreigners, Moody’s Investors Service says the state’s credit is Aaa, the highest possible. When the state sells tax-free debt to U.S. citizens, its creditworthiness is four levels lower.
China Raises Rates for a Second Time This Year to Cool Growth
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJm49M7_UjoM&refer=home
JB,
link doesn’t work :(
Fixed
JB [3],
Does that include commercial? There was a huge commercial bubble at that time.
Does that include commercial? There was a huge commercial bubble at that time.
Difficult to segregate the two, those numbers include:
Construction of Buildings
Residential Building Construction
Heavy and Civil Engineering
Specialty Trade Contractors (Largest subset)
Building Equipment Manufacturers
Unfortunately, the subset data is recent and doesn’t extend back to 1990.
jb
Anybody heard the story about China pumping $3B into Blackstone Group for a little US stock investment action? Is this a rumor? I can’t find any wire news on it.
If China’s joining the 2-and-20 set, we are definitely through the looking glass…
New Today! CNBC Permits Confusion
watch: http://www.paperdinero.com/BNN.aspx?id=188
CNBC struggles to make sense of a supposed anomaly between the permits and starts reported in the latest New Residential Construction Report. For better and more complete analysis read the following Starting to Apply Logic on the topic.
Originally aired on: 5/16/2007 on CNBC
Running Time: 2 minutes 20 seconds
Clot,
True. I believe, strictly overseas investing.
#10
foreign gov’ts routinely invest in PE
Clot,
Related story;
“Blackstone Group LP, the world’s largest buyout fund, in January tapped former Hong Kong Financial Secretary Antony Leung to run its business in China, Hong Kong and Taiwan. ”
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6Y5CcbF5Opw
skep (10)-
Yep, but most foreign govt’s don’t own majority stakes in 20 or more of their top publicly-traded companies. China looking to diversify out of their own market is a big story…especially coupled with their govt’s vocal concern with a stock market trading at a 60 multiple.
Speaking of China,
There seemed to be some last minute policy changes before the upcoming G-8 meeting. They altered their banding mechanism and raised rates by 27 basis points. Interesting to see how our markets react before the opening of their market on Monday.
good point, but $3B is not a particularly giant move for them. doesn’t necessarily mean that they are fleeing their own country
Are they telling Schumer to shut the F*ck up and worry about your own problems? Maybe directing flows back to the dollar. Give Ben a rising dollar/declining commodities before a cut?
“China’s government increased the amount its currency can appreciate, raised interest rates and curbed bank loans to tame a runaway economy and ease trade tensions with the U.S. and Europe.”
`Biggest Move’
“This is the single, biggest move yet on the part of the Chinese government to calm the stock market and address fundamental problems in its economy,” said Tomo Kinoshita, chief economist for Asia ex-Japan at Nomura International Hong Kong Ltd. “The signal is unmistakable: the government wants to stop the stock market exuberance and stem excess liquidity.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ45w6WAY2OY&refer=home
CAN YOU BELIEVE THE FEDS SPEND ALMOST A TRILLION A YEAR ON DISCRETIONARY ITEMS???
Congress Backs Partial Lapse of Tax Cuts
By MAYA JACKSON RANDALL
May 18, 2007; Page A2
WASHINGTON — Over White House objections, Congress approved a $2.9 trillion budget blueprint for the 2008 fiscal year that calls for big spending increases for education and health care and not renewing some of President Bush’s 2001 tax cuts.
The Senate passed the budget plan in a narrow 52-40 vote immediately after the House signed off on the measure, 214-209.
The nonbinding five-year budget plan sets the parameters for tax and spending legislation for the rest of the year, seeking to balance the budget by 2012. It provides $954 billion in discretionary spending in 2008
RE Agent referrals for Essex?
Few snipits on why lawmakers will have a problem forgoing foreclosures…..
Special-purpose entities may play role; “blowing ‘Q’ status”
American Banker Friday, May 18, 2007
As lawmakers and consumer advocates urge lenders to avoid foreclosures by modifying the terms of subprime mortgages, accounting rules have emerged as a complicating factor…Trade groups, accountants, lenders, and others say the rules are at best ambiguous about the preventive measures a servicer may take on a securitized loan….the problem goes well beyond getting investors to sign off; the off-balance-sheet treatment of the loans could also be at stake….”It’s a potentially huge issue,”….without further guidance from the FASB, lenders could lose their “Q status” and be forced to recognize “loans they really don’t own” on the balance sheet……..”No one has actually questioned whether servicers have the ability to renegotiate loans, but if a negative answer comes down from FASB, then renegotiating loans in a securitization would effectively unwind the accounting treatment. Unwinding those securitizations would not be pretty.”…If we don’t qualify as a Q, we don’t have investors.”
“Robin Camacho of Direct Access Lending said she can see that the median price isn’t accurately reflecting house values right now, but she can really only make an educated guess as to why.”
“‘Our research does show that the number of homes listed on the MLS for less than $270,000 has increased substantially in the past year,’ she said. ‘This indicates that prices are falling, though people are actually still paying the same but getting more for their money.’”
==============
No kidding a stacked ponzi scheme.
That closing I was talking about the other day,s till has nto happened, the 80% is sitting in a trust account, the sellers are p—-ed, and the buyers appera to haev disappeared; thye cannot get a hold of them.
I was reading the Bergen Reocrd yesterday,a nd looked int he publiuc notice section, whcih was filled with auction notices for 05/25 & 06/01 (the next 2 Friday’s). There were 4 pages of this, with more than 20 notices per page.
All in Bergen County, in the following towns. Hackensack, Teaneck, Little Ferry Ridgefield, Mahwah, Closter, Ridgewood, and Allendale.
Semmed alike an awful lot to me, these peopel loose these hosues, uncless they clean up their arrears in the next 2 weeks( doubtful).
The samllest amount owed that I saw was around 220K, the rest wer 300K and up, all the way to over 800k.
Mahwah, Closter, Ridgewood, and Allendale
BBB, [23]
You must have read wrong. That’s can’t be happening in these towns.
You should be more incensed about the non-discretionary items. That’s the catch-all for entitlements and the interest on all of our debt.
#24, That
#24 BC: And the nicer the towns, the bigger the mortgage amounts.
One good thing though, is that I am sure this is not happening in Westfield.
You must have read wrong. That can’t be happening in these towns.
Surely some sort of misunderstanding. How can they possibly be defaulting on a mortgage? Everyone knows that Upper Haughtyvillians buy houses outright with Wall Street bonus money.
jb
Sorry to disappoint, but Westfield has it’s fair share of problems..
City: Westfield Date Posted: 5/14/2007 Loan Date: 4-18-05
Zip Code: 07090-3533 Docket #: F-08541-07 Loan Amount: $550,000
City: Westfield Date Posted: 4/16/2007 Loan Date: 8-15-05
Zip Code: 07090-2306 Docket #: F-05925-07 Loan Amount: $700,000
City: Westfield Date Posted: 3/26/2007 Loan Date: 12-8-04
Zip Code: 07090-3701 Docket #: F-03524-07 Loan Amount: $1,365,000
Or this one, only took 9 months to hit preforeclosure. Given that a lender isn’t going to file a lis pendens before 30 days late, this one couldn’t make 9 mortgage payments before defaulting.
City: Westfield Date Posted: 4/9/2007 Loan Date: 7-6-06
Zip Code: 07090-3369 Docket #: F-04871-07 Loan Amount: $329,600
Yield on the 10 year at a 3 month high this morning..
jb
From the OC Register:
Irvine’s Option One cutting 600 jobs nationwide
Option One Mortgage Corp. of Irvine is laying off 20 percent of its staff, or 600 workers, including 133 in Orange County. It also is closing 12 loan processing offices nationwide, the company said Wednesday.
The job cuts, which run through Sept. 3, come as parent company H&R Block is selling the money-losing subprime unit to private investment fund Cerberus Capital Management L.P.
Christine Sullivan, a spokeswoman for the lender, said 20 percent of the cuts are in corporate functions, 66 percent are in loan production and 14 percent are in sales.
Grim–Are the Westfield foreclosures posted for auction? Where do i find the info?
#29 No actually as one acquaitenance told me a while back, I am trying to destroy the real esate market. What power!!
#30 JB Westfield? Are you sure, perhaps you mean Plainfield, yeah thats it Plainfield.
A great read over at Minyanville, especially given our discussion yesterday:
Priced For Picture Perfection
In 1987, a painting by Vincent Van Gogh was sold for $49 million dollars – a world record for a work of art at that time.
The painting, called Irises, depicts the garden of the mental asylum in France where Van Gogh was a patient. It was painted in 1889, a few months before Van Gogh committed suicide.
Not one of Van Gogh’s works sold during his lifetime, despite the fact that his brother was an art dealer. As Hemingway might have said – “Home is where the heart is, home is where the art is.”
There’s no accounting for popular perceptions. Value certainly lies in the eye of the beholder. The pupil of popular delusions lies in the madness of crowds. Value is a lady.
She is a fickle mistress.
1987 was an interesting year, besides a newfound appreciation for art; it was a year LBO’s were ablaze; every rumored takeover bolted. Insider scandals slithered off the charts. A new Fed chief was at the helm. It was a year that flipped its lid, blowing off to the upside before crashing to earth.
Twenty years later, some are asking, “Is it real, or Memorex?” The only difference is that Greenspan doesn’t have a beard, and yeah, the stock market hasn’t crashed.
I wonder if that $1.3m+ preforeclosure was an ARM reset (with or without teaser). Sure looks that way with an initial rate of 4.277%.
jb
That might have been, but this one certainly was. Talk about a half million dollar time bomb with a 1 year fuse:
City: Clifton
Date Posted: 5/7/2007
Loan Date: 4-25-06
Zip Code: 07013-3945
Docket #: F-08008-07
Loan Amount: $470,000
Interest Rate: 2.000
jb,
I loved the Visa video on the main page. Wickedly funny! It’d be even funnier if it wasn’t so dead on.
Payment on the mortgage only (no taxes or insurance) would have went from approximately $1,740 to just about $3,000.
Assuming $1k insurance and $7k taxes (just a rough approximation for Clifton) PITI would have moved from $2,400 to $3,600. Both cases assume a reset to 6.5%. A reset to 7% would have put the PITI at $3,800.
Trainwreck.
jb
All I know is that somewhere in Upper Vainglorious (it’s located between Mahwah and Wyckoff), people bought their houses for cash, foreign cars are allowed only (township ordinance) and the children are appallingly beautiful.
From MarketWatch:
U.S. May UMich consumer sentiment 88.7 vs 87.1 in April
Consumer sentiment improved unexpectedly in May, according to researchers at the University of Michigan on Friday. The consumer sentiment index rose to 88.7 in May from 87.1 in April. The increase was above the consensus forecast of Wall Street economists who had expected sentiment to slip to 86.0.
Yield on the 10 year at a 3 month high this morning..“‘Our research does show that the number of homes listed on the MLS for less than $270,000 has increased substantially in the past year,’ she said. ‘This indicates that prices are falling, though people are actually still paying the same but getting more for their money.’”
One could argue that the more ridiculous the prices in your market, the longer it will take to see declining median prices.
People in expensive markets are still shopping based on a price point, because most still have to settle for less than what they want/need. They just get a little more for their money versus last year.
If prices were to drop 10% in every market across the country today, and I were to buy in North Jersey today, I would likely spend was I was planning to spend and would just get more bang for my buck. I would still be settling.
On the other hand, if I moved to NC, I could buy my dream house for $300k. If it dropped 10% to $270, it would be my lucky day; I just saved $30k.
Assuming my behavior is normal, this would make NJ look like a stronger market on paper than NC when looking at median sales price. In reality, they both took the same hit.
Sign -o-the-times:
A house on my block (NE Bx) just re-listed with a new RE company.
It’s been sitting empty since Dec. 06, when the family moved to a ‘better’ house, and they were quick to trash the block to anyone that would listen to them. Since then, the deal with their buyer fell through, the listing with the RE from December has expired, and
a new RE shingle now is hanging outside their house. List price is now $35,000 below OLP, and $10,000 below their supposed ‘won’t sell below this price’. One problem is that this house needs a ton of work, but has been listed as ‘in good condition’, so it’s still overpriced compared to comps.
The weird thing is that you never see them around the house checking in on it, only lights in the middle of the night let you know that they’re still coming by.
Don’t wish anyone bad, but this must be a huge reality check for this family, especially when they had the arrogance, as I saw in their open house, to move out without even basically cleaning the house before they moved.
Regarding #26 and the Chinese financial system: Saw a story on the Japan news where a factory in China paid their workers in counterfeit money. A few workers noticed this after a while and demanded real money, which the factory refused. Workers went on strike and the factory assumed they quit. Once this issue was brought into the media spotlight the factory said they would negotiate with the workers about the counterfeit money.
This is just one story of many that give me little confidence in the Chinese financial system.
Conversation with other parent about summer camp options for 5 year olds.
McMansion Mother – complaining about $700 a week summer camp is so expensive that she can only afford 4 weeks and has to take time off work for rest of summer.
Me, cheapy mother – point out that town has (heavily subsidised, and yes, we pay for it with taxes anyway) summer camp for that age group which all the kids really enjoy and is super cheap – I’m sending my kids there. The saved money can go towards cool family trips and extra activities over the year.
McMansion Mother – “Oh well, my kids wouldn’t find that acceptable”.
Me – Choking.
I must be a bit old fashioned. Kids that age should learn to accept whatever their parents choose, not get to dictate how much the parents can go into debt in order to fund an “experience”. Plus, what happened to free play and the developmental advantages to children of unstructured time that stretches the imagination and allows creativity to flourish?
Think I’m getting a bit tired of this “if it doesn’t cost a fortune it has no value” attitude. The whole spend a fortune on tiny tots thing is just out of control. Funny thing is, the same womans eldest keeps begging me to take her hiking with my family as her parents never do anything so basic with her (it’s not fancy enough I guess).
#44 RentinginNJ Says:
‘People in expensive markets are still shopping based on a price point, because most still have to settle for less than what they want/need. They just get a little more for their money versus last year.’
It seems like you can get a lot more for your money in some areas already.
Originally,when we started looking back in Sept. 06, we were considering Putnam county, because we were hoping to negotiate for even a POS house at 350K. Seemed like the best option at the time, since Westchester and NYC seemed totally out of our price point. We got a lot of snide comments, and were blown off by several RE as well.
Fast forward to today, I see so many listings at that price point in Putnam, but not even considering it any more. Lots of areas in Westchester that have the good schools have dropped in price, as well as in NYC Queens/Bronx neighborhoods where we’re interested. Now it’s – where do we want to live? Not – where’s the only place we can afford to buy a home?
lisoosh,
How about all the birthday parties at these specialty places with themes, no less. We used to get one or two parties between the ages of 1 and 10 and you got a hotdog, a cupcake and a cup of soda. And, the party was in the basement!! LOL!
Yield on the 10 year at a 3 month high this morning
JB/Chi/Others,
The inverted yield curve in 2000 righted itself in early 2001 before we went into a recession later in 2001. Is it typical for the yield curve to right itself before a recession? If so, why does this happen? Or, does this essentially mean the inverted yield curve of ’06 was not forecasting recession?
Can anyone tell me the fate of 110 willow (way?) in bedminster?
Can anyone tell me the fate of 110 willow (way?) in bedminster?
MLS# 2112460
Listed: 09/29/05
OLP: 1390000
LP: 1390000
DOM: 242
Expired
MLS# 2304113
Relisted: 07/28/06
OLP: 1250000
LP: 1250000
DOM: 116
Expired
“lisoosh,
How about all the birthday parties at these specialty places with themes, no less. We used to get one or two parties between the ages of 1 and 10 and you got a hotdog, a cupcake and a cup of soda. And, the party was in the basement!! LOL!”
You have no idea – my daughter got invited to 25 of them last year. They cost the parents at least $400 and that is for a very standard 1.5 hours playtime, pizza and cake. The worst part is that when the parents spend a lot, there is competitive pressure on the guests to bring an “acceptable’ gift which gets more expensive every year (I try to collect a few in after-Christmas sales in preparation). This year I severely curtailed her participation to close friends as I am frankly sick of the expense and the time involved in dragging her all over the state to them.
The kids don’t even enjoy them that much, they just get disappointed if the goody bag isn’t big enough.
This year I am tying together both my kids parties – day in the park with barbeque and kiddy races and sports. $40 for a park permit, a few hot dogs and burgers and a cake. That’s it. I’m also considering telling people to keep gifts small and cheap, I don’t need tons of overpriced crap that the kids will be bored with in a day cluttering the house.
Kids b-day parties:
Would you believe that my daughter’s friends, who are all turning 13, are still having parties. When will it end? My daughter hasn’t had a party since 4th or 5th grade and my son’s party this summer (only the second one he’s ever had) will be a BBQ at the town pool. I will buy guest badges for anyone who doesn’t belong (only 1 or 2) and my husband will organize the games.
Wow! jb, that was lightning fast!!
We looked at it but thought the price was outrageous — I was clearing my desk and found the flyer for it – with the original 1.39 pricetag.
Thanks!
sl
bcbob…
“Does that include commercial? There was a huge commercial bubble at that time.”
Bob,
Down here in FL i took my brother/sister in law to the airport monday morning for a flight back to Ohio. I could not believe the amout of commercial buildings going up freakin everywhere. I came home and did a little looking and am utterly convinced commercial is gonna get pounded as bad or worse than SFR.
I’ll throw this out for everyone. One of my cousins was down last weekend also. He works for a major insurance carrier doing investments.
He told me that they really are not funding squat at this time. A few 5/10mil deals each month but not much else. The funny thing is they are sitting on 330m cash right now with access to almost 1.3b more in march of next year. He was pretty blunt that they are looking for bk companies to suck up for pennies on the buck. Like he told me “No rush”….
Chris
lisoosh and Willow,
Yes, it’s absurd. My wife tells me the same thing. Pretty soon, the b-day parties are gonna look like weddings!!
James,
Since you’re so quick on the handle today, can you tell me the fate of 6 Allen Road, North Caldwell? I believe the address is “6”… if not try “7” but I’m pretty sure it’s a “6”. Thanks.
CONFIDENCE IN CHINA????!!!? You all are going to make me fall off my chair. Their economy surely is bonkers, this is a country where they tried to counterfeit protein, yes PROTEIN. China is a disaster waiting to happen, a crazy market, with an insane corrupt government, a lack of modern laws and somehow all of the investment makes sense. I think we would be wiser to deal with the Latin Americans and Eastern Europeans because comparatively they look like well run countries. Not to mention the logistics of moving merchandise is much easier.
Still under contract, anticipated closing date is 06/30/2007.
jb
Thank You!!
My family loves to go out to the Garage sales. kids are too young to look down on old stuff, besides, mostly we just buy the disney movies which would cost much more even on ebay. Last year I bought an HP printer for 5$, which stopped working after a few days with paper getting stuck. Wife was after me to throw it away but I just kept hanging on to it for months. Finally bought new Ink Cartridges and it works fine now. Recently tried printing photos, and the results very good. A single photo print done at Shoprite = the cost of the printer..
Was looking at the graph of the 10 yr T and 3 month T Bill…the last time the “un-inversion” of the yield curve too place, it was 2001, and we know what happened after that.
Was wondering what your thoughts were on the yield curve being no longer inverted this time…. pump and dump time?
Thoughts anyone?
#54 Willow: A nice recession will clear that nonsense all up.
Personally, I believe the yield curve has lost some predictive power. As long as the long-end is getting snapped up by foreign buyers, the yield curve is going to remain flat or even inverted. Contributors to this phenomenon are trade imbalances, petro dollars, carry trades, etc. Also contributing to this are future rate expectations (this was typically the driver of the long end). The question there is whether these lower rate expectations are due to lower inflation expectations or recession expectations. However, I’m not going to go as far as saying “it’s different this time” or even both to use the words “new paradigm”.
jb
Willow –
That pool party sounds about right, fun and cost effective.
As kids age I was planning on just telling them to invite a couple of their best friends over for a sleepover or evening at the movies.
That way I can save for the whole Bar/Bat Mitzvah nonsense which is a whole other nightmare – they are definitely becoming like weddings and I hear the Sweet Sixteen circuit is the same thing. One friend spent $25,000 on a Sweet 16 party for his daughter because she “needed it” and her friends had them.
It’s no wonder that drugs and sex parties are so prevelant among young teens. They are all maxed out on “experiences” at an early age and have to get ever more extreme in order to feel any kind of thrill.
lisoosh,
In last weekend’s thread you mentioned a development in a “hot Middlesex town” where there were several 3-4 bedroom houses for sale and there had been recent price drops. Can you tell me the name of the town, and any listing numbers or addresses if you have them? I am curious, since we are looking in Middlesex County.
Thanks,
AK
#47: Count us in as cheapie parents as well. My kids have just as much fun taking the $55 music class at the YMCA as they would at Gymboree for $350. Another plus about the less expensive classes and camps is that you meet other more down-to-earth parents.
Has anyone noticed an increase in the number of agent-submitted For Sale listings on Zillow? A few months ago it seemed like only FSBOs.
#64
“#54 Willow: A nice recession will clear that nonsense all up.”
I don’t know. People in my town either have loads of money or they just spend on credit. I know families that really can’t afford to give their kids the things they ask for, yet they will. Another family makes a really good living yet spends every cent on their kids with next to nothing saved for retirement. It will be a huge comeuppance if a recession does hit.
The problem with living in an area where there is a lot of money is the resentment that I get from my 13 y.o. because we don’t give her everything she asks for. I refuse to have a spoiled child who gets everything she wants. We did finally go on a trip to Disney World but that’s it – once. We stayed at a value resort and took the train down ($440 round trip for all four of us). She does get an allowance ($5/week which is much lower than some of her friends) but it is tied to the state of her room.
To see kids get brand new BMWs for their 16th b-days (yes, before they even get their license) is going to be hard for my kids when they have to buy a used car themselves when they commute to college but it’s a lesson in life.
#66
lisoosh,
I have even been to relatives’ communion parties that were like weddings – in a hall, DJ, catered meal, etc. They were lots of fun for us but then you have to wonder how they will top that as the kids get older.
Our local Temple is under construction and a friend is so happy because she will be able to use the Temple for her son’s Bar Mitzvah rather than going to a catering hall. My daughter is going to a Bat Mitzvah at the Brownstone which is where a lot of people have their wedding receptions. I never went to one when I was a kid but I can’t imagine that they were this extravagent back when.
http://homefinance.nytimes.com/nyt/article/mortgage-column-by-bob-tedeschi/2007.05.11.13mort/?ref=realestate
Mortgages
Flexibility as a Marketing Tool
‘Late last month, for instance, Washington Mutual, one of the nation’s biggest banks, introduced a new mortgage that offers more flexibility than many other loans, analysts say.
The new offering, WaMu Mortgage Plus, combines a first mortgage and a home equity line of credit into a single loan, giving homeowners the ability to borrow against the equity in their houses without having to take out a home equity loan.
With a Mortgage Plus loan, borrowers can change from a variable to a fixed rate (or vice versa) as often as twice a year. They can change from a fixed to a variable rate at no cost. Those who change from a variable to a fixed rate can do so once at no charge; subsequent changes cost $250. There is no charge for taking equity out of the home.
The Mortgage Plus loan carries no closing costs, and the company said that borrowers may change their interest rate terms over the phone.
Rates for the fixed term are less than 0.5 percent more than those of WaMu’s conventional interest-only loan. Unlike other WaMu loans, the Mortgage Plus product carries no origination fees.
At minimum, only borrowers with prime credit scores (typically above 630) and those who can afford a down payment of at least 10 percent qualify for the loan. Customers who have loan payments automatically deducted from a WaMu deposit account receive initial interest rates 0.25 percentage points lower than those who do not bank with WaMu.’
Does anyone have any feedback about this? Would this be a good loan to consider?
#72 Great Loan…it’s these new products that allow for flexibility that has not allowed for the market to tank. Just enough demand for price stability and a long term flat RE prices. Basically a market with zero fluctuation over next decade.
That’s all folks.
http://www.app.com/apps/pbcs.dll/article?AID=/20070518/BUSINESS/705180430/1003
Ocean First sutting down Subprime unit
“Another family makes a really good living yet spends every cent on their kids with next to nothing saved for retirement. It will be a huge comeuppance if a recession does hit.”
Willow…
This also causes what i see in the friends my parents have. My parents estimate that LESS than 25% of their friends can retire at all. Most still work full time even though they are 60 plus years old. My dad semi retired 10 years ago/sorta retired for good in dec at 64. He handed me all the stuff for the rentals and said “Have fun!” The funny thing is even with good cash flow now the newest vehicle in the fleet is 7 years old…Yeah i am “Frugal”.
Chris
#73 make money
Not sure what you’re describing.
Are you saying that this kind of loan will keep prevent home prices from dropping? How that would be possible, when first time home buyers are still being left out of the market now? Wouldn’t there be the same affordability issues, even with this type of loan?
Please explain, thanks.
The loan is interesting, in fact, it’s the housing ATM perfected.
Allowing a refi within the confines of the existing loan is smart move from a WAMU standpoint. Why? Because they won’t have to worry about prepayment and the loan going to a competitor, they simply modify the terms of the existing. They’ve made it so easy to refi, those customers might never leave.
Second, kudos on building the HELOC right into the loan. I bet the borrower gets that HELOC checkbook right at closing. Those customers are going to be pretty tempted to write those checks, but I guess that is the point.
WAMU customers get a discount, so I’m sure most every borrower will move their accounts over to WAMU to qualify. Nice way to grow your deposits, not to mention increase fee revenues.
jb
jb,
Sounds like WaMu makes out. But for the buyer, how do you see it compared to the standard 30 yr fixed prime? What’s the catch?
The article talks about other banks following suit with similar mortgages, so it seems this will be a common option soon.
RentinginNJ Says:
May 18th, 2007 at 10:58 am
JB/Chi/Others,
The inverted yield curve in 2000 righted itself in early 2001 before we went into a recession later in 2001. Is it typical for the yield curve to right itself before a recession? If so, why does this happen? Or, does this essentially mean the inverted yield curve of ’06 was not forecasting recession?
Rent: The yield curve “righting” itself is generally procedurally caused by Fed easings which pull down the front end of the curve. The back end of the curve is the part that originally rallied, and caused the inversion in the first place. The Fed eases in reaction to economic weakness, in many instances this weakness could be the first stages of a recession.
In this particular phase [2006-2007] the Fed did not recognize a signal of economic weakness demanding it act by reducing the Fed Funds rate. As a result, even as long rates dropped, short[er] rates never corrected. The FF rate is 5.25% and it does not make economic sense for rates, 2 years and in, to be pushing too far away from that level.
If you view the yield curve as a continuum of current [spot] rates and future [forward] rates, the whole thing has to hang together as the market’s collective opinion of all rates, of all durations, at all points in time [no-arbitrage].
The market actors came to the collective opinion that the Fed wasn’t going to be easing rates down into the 4’s any time in the bulk of 2007, and there is at least some stronger possibility of further tightenings. The 2 was hit as a massive short was placed there.
One theory is that were already bottomed out and Bennie and the Feds pulled a super-soft landing out of the cards by not bring Fed Funds up to 6% [which is where I was barking they should be about a year ago]. I posited the “no-landing at all” outcome about 3 months ago, and we can guess that this result is possibly what has been achieved for now.
Personally, to Bost’s point, this China business is the wild-card. It gives new meaning to the China Syndrome in the reverse. When that nuclear chamber melts down, it is going to create a whole in the earth that will reach the United States. I don’t want to believe it is going to happen, but it will, just not very likely before the 2008 Olympics or more likely the 2010 Global Economic Summit.
From BusinessWire:
Fitch Ratings: Pressures Mount for U.S. RMBS Servicers
Continued increases in defaulted subprime loans remain the key driver behind many of the challenges that U.S. RMBS servicers face, according to participants who attended Fitch Ratings’ inaugural RMBS Servicing Workshop, which took place in New Orleans last month.
With higher defaults from the large volume of upcoming ARM resets likely, servicers are more hard-pressed to find and develop more proactive loss mitigation solutions. Making the task more difficult is the increased difficulty that servicers are having in contacting borrowers. Servicers expressed concerns that borrowers are becoming less cooperative and are going to foreclosure in increasingly higher numbers without speaking with the servicer. Ultimately, servicers agreed that developing overall proactive default strategies, contacting borrowers early and often, and in the case of imminent default, offering modifications that are in compliance with pooling and servicing agreements, were practical responses to increasing defaults.
From Reuters:
US home prices seen high, may prolong slump-survey
Potential buyers believe home prices are too high despite aggressive discounting and other incentives from sellers aimed at boosting sales and clearing inventories, according to a survey released on Friday.
In early May, more people surveyed described home prices as “too high” than anytime in the last six months, said Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers.
The negative consumer view on home prices could drag out the current U.S. housing slowdown, already exacerbated by the subprime mortgage crisis. But Curtin noted there were many people who found the discounted homes appealing, which could temper the market’s decline.
“This growing resistance to the current level of price discounts on homes will act to prolong but not deepen the slump in home sales,” he said in a statement.
Recent housing data suggest the housing weakness, which has been a major economic drag, could persist at least into midyear.
#81 JB “Could persist at least into the mid-year”.
So June 15th or so it should be all over right?
Loonie-30 year highs.
How about a Molson or a LaBlatt’s. Eh?
Can someone with MLs access give me info on 155 arrowgate in randolph
Thanks
#76 Lookinny: You are absolutely right.
The loan does nothing to address the issue of affordability. Saying prices will not come down because of this product is simply moronic.
Chiming in on the BDay parties,
My rule is 10 is the last big party, I have a family party for both and they can do something with a friend or 2 after 10. I have had parties at gyms, chuckie cheese, discovery zone, burger king,bowling none of these places were real expensive.However, my kids like the at home party best. We do a craft, play some games,such as air hockey tournaments, DDR contests, give out prizes and I don’t do goody bags, They each get a gift, picture frame, mug, crayons depending on age, possibly a board game, christamas ornament usally the items are personalized by me. Stress free fun for all.
KL
PS: My youngest is 10 this year.
#73 Make Money: yeah but they have to come up with the 10% first to qualify for theis product.
And how many 1st time home buyer hav 50K to put down on that POS colonial for 500K?
MLS# 2046425
Listed: 1/10/2005
OLP: 440,000
LP: 440,000
Sold: 2/25/005
SP: 440,000
DOM 11
MLS# 2389456
Listed: 3/26/2007
OLP: 469,000
LP: 469,000
Under Contract: 4/18/2007
Anticipated close is 5/24
Just an aside.. Two mortgages, first was an ARM for $352,000 and the second was a HELOC for $33,000.
#70 willow The recession is only a matter of time.
Thanks JB, went to their open house. The place was quite nice but didn’t bid on it b’coz didn’t like the kitchen. Few other houses in that complex are on the market for 450k or less.
Note that MLS and ask again in a week or two so that we can see what it sold for.
jb
re: WAMU loan
Asssuming one has 10% or more for DP,
why not take the new loan for the fixed rate now and adjust lower next year when the Fed starts to loosen?
As long as you avoid the HELOC option, you could play this loan to your advantage, especially with no closing costs. I have to say it looks attractive, especially to WAMU customers.
JB,
Can you give me the sale price on the following address. It is GSMLS (sorry, I don’t have the list number)
12 Biltmore
Green Brook
Thanks,
AK
The loan does nothing to address the issue of affordability. Saying prices will not come down because of this product is simply moronic.
Besides. Price is a function of “willing” and “able” to pay, not just able. Lets assume this magical loan really did solve the “able to pay” issue. Are people willing to pay today’s prices for a home?
Much of what drove the willingness to pay outrageous prices over the last few years was the fear of getting left behind and/or the prospect of big future appreciation.
Who cares if you spend $500k on a POS cap if next year it will be a $600k POS cape and you just made $100k for being such a savvy investor?
On the other hand, the idea of struggling to pay $184k in mortgage payments over the next 5 years so that you can build up $34k in equity on what is still a $500k POS cape in 5 years isn’t so appealing. This is assuming the buyer believes prices will remain flat.
New-to-NJ Says:
May 18th, 2007 at 12:42 pm
lisoosh,
In last weekend’s thread you mentioned a development in a “hot Middlesex town” where there were several 3-4 bedroom houses for sale and there had been recent price drops. Can you tell me the name of the town, and any listing numbers or addresses if you have them? I am curious, since we are looking in Middlesex County.
Thanks,
AK
it is NJ… It is prime… Every single place is Hot especially in Middlesex county!!!
In June august it will we a 100F easilly!!! -:)
Buy now or it will be too late!!!
Just like Bank of America’s recent “no closing cost” loans, it’s a way for BANKS to get/keep their PRIME customer’s in the hopes of having them open up other accounts or services with them. This is probably will be held in their portfolio, because I can’t imagine how you would model this loan in a securitization. You probably will not see this from any of the pure mortgage companies, they don’t have the balance sheet for it.
This wouldn’t be offered to subprime borrowers anytime soon, but just like the woes in the market now…..how do you save someone from themself?
————
Bottom line: A good loan if you’re good at handling credit. A bad one if you can’t resist the temptation to spend money.
http://www.businessweek.com/the_thread/hotproperty/archives/2007/04/wamus_new_loan.html
chicagofinance Says:
May 18th, 2007 at 1:33 pm
3 things from this post
#1 did that crap make any sense to you
#2 it is a “hole” in the Earth not a “whole”
#3 what is coming in 2010 is the World’s Fair/Expo to Shanghai
What a move on the 10 this afternoon.
jb
ChiFi / NJGal,
Do either of you take the PATH to and from work? When I came home yesterday, I was greeted by (what I imagine was) a husband and wife handing out FSBO fliers on their apartment.
Hopefully it will help sell their 1+ BR / 1 BA, 825 sqft apartment on 3rd & Washington…
… for $415k, $4,300 taxes and $175/mo maintainence.
JB, [98],
They’re attacking Gross.
Lincoln, I take the Path but not yesterday. I am not surprised – I see lots of ads down there, and the developments always have younger kids handing out fliers. It’s a little pathetic. I can’t believe the husband and wife did it. I would think that was desperation if I was interested.
JB,
Any chance you can post or email me information on MLS 2630371? This condo has been on the market for years under different MLS #’s and the sellers are the epitome of pompous greed. They bought for $440k and a year later tried to sell it for $660k, without doing a darn thing to the unit. The kicker was when my husband and I went to look at it a few years ago, the owners were so snotty and full of themselves, just obnoxious people, and they didn’t even bother to clean or tidy up the place, even though they had two days’ notice that we were coming!
So, I’m dying to know what they’re selling it for and how many mortgages they had to take out on it. Thanks much!
# 100, (Cont’d)
I stated earlier, a F*ck you Schumer, you got what you wanted.
Now, with their bands extended, their exports become that much more expensive. Therefore, a little less demand for our 10’s, less demand yields will rise. If they ever float, the 10 year will rise dramatically [yield]. Chuck, you are getting what you asked for, now live with higher rates.
in my neck of the woods (westfield), houses under contract appears to be picking up in the low to mid tier but there’s still a lot of inventory on the shelf, most of it uninspiring.
lisoosh #47, well said.
New-to-NJ:
I was talking about South Brunswick which isn’t convenient for Manhattan (although plenty of realtors will tell you it is) but is popular because it has a decent school district.
Prices are definitely dropping. If you are happy with ’80’s construction look in Woodland or Wetherhill developments. Woodland has smaller houses and lots, Wetherhill – just make sure to be away from the train line.
Willow –
I know what you mean about societal and peer pressure among the kids. As they get older it is tough. Mine are still little and relatively immune for now so I am trying to keep the brakes on and also cultivate a group of friends who are as thrifty as me.
I have found though that hand-me-downs from clothes horse friends are handy – my daughter has a nice little collection of Abercrombie, Gap and Saks, courtesy of people who buy their kids too much that nicely complements her regular Target and Old Navy stuff.
I just ask myself – what do kids really need? A $75 t-shirt or learning the concept of delayed gratification?
Chi,
#1 did that crap make any sense to you
Yes…Thanks for the explanation.
One question though, how much do inflation expectations play into the current yield curve picture? Versus November 2006 when the inversion was on the order of 50 bps, yields on the short end have fallen while yields on the long end have risen. Are market participants more concerned about inflation or recession?
#2 it is a “hole” in the Earth not a “whole”
I wish China would build nuclear power plants. They are building 1 coal plant per week over there. They are actually planning to shut down many of the plants when the Olympics come to town.
#3 what is coming in 2010 is the World’s Fair/Expo to Shanghai
Can China really hold things together until 2008 or 2010? Many of their stocks are seeing P/E ratios not seen since the dot.com days. 5 million new brokerage accounts were opened in China last month. Can China really engineer a controlled cooling of their economy?
Hi:
i saw on realtytrac.com that one of the house listed for sell is also in pre-forclosure. How do I find more information about the forclosure on-line? i.e. mortage amount, how long they have till the bank forcloses? This is in Westchester county. Also, what happends after pre-forclosure? the bank takes it over and sell it via different means?
Neat!
Endangered: Teardowns.
http://preservationnj.org/ten_most/ten_most_property_detail.asp?COUNTY=Statewide&PropID=141
while i hate boomer-shacks, in 40 years, they might even look cooler than the historic teardowns in the woods i used to explore as a kid.
Forget about a McMansion, condo or our favorite cape in NNJ. How about a container shack?
“Shipping containers find new life as homes
Inexpensive and abundant, they’re turning into affordable housing”
“With America exporting so little, shipping companies face the dilemma of what to do with these 32,000-pound containers. Increasingly too expensive to ship back overseas empty, these steel boxes — which can be as large as 20-by-48-feet — are stacked high, sitting in ports around the country. There are as many as 300,000 containers, by some estimates. And they’re cheap — ranging from $500 to $2,000 for an unused container.”
http://www.msnbc.msn.com/id/18475601/
BC,
Love it! That idea has crossed my mind every time I drove past Port Newark. Although every time I do, I can’t help of thinking about Gibson’s Neuromancer and the Sprawl. These were a set of paragraphs that described this massively overpopulated megapolis where the poorer folk lived in what seemed to me like.. well.. recycled cargo containers with just enough room for a bed and a computer terminal.
jb
And they’re cheap — ranging from $500 to $2,000 for an unused container.”
I wouldn’t pay that much! Overpriced POS Cape-tainers.
The Port Authority doesn’t know what to do with the containers. Newark is starting to complain about them stacking up. You would be doing them a favor to take them off their hands for free.
JB,
Amazing, we are flooded with containers. Too expensive to ship them back empty. If that does not may one wonder? Great for Fla, hurricane proof.
From Bloomberg:
New York Attorney General Cuomo Subpoenas Manhattan Appraiser
New York Attorney General Andrew Cuomo issued a subpoena to Manhattan real estate appraiser Mitchell, Maxwell & Jackson Inc. seeking information about the company’s dealings with mortgage lenders and brokers.
Cuomo spokesman Jeffrey Lerner said the subpoena is part of an ongoing investigation. He declined to comment further. In March, Cuomo said at a press conference that his office was investigating subprime lenders.
“It’s a rather large, broad, sweeping request for enormous amounts of information on everyone we work with,” Mitchell, Maxwell & Jackson co-founder Jeffrey Jackson said in an interview today. The appraiser, which evaluated about 20,000 properties last year in the New York region, said it received the subpoena “about 10 days ago.”
…
“The information that is being requested is whether or not pressure has been brought to bear on appraisers to change their appraisals,” said Y. David Scharf, an attorney at New York law firm Morrison Cohen LLP, who is representing Mitchell, Maxwell & Jackson. The firm is “continuing to gather information” in response to the subpoena, he said.
…
A borrower who gets a home loan based on an inflated appraisal and falls behind on payments would have difficulty selling or refinancing for enough to pay off the mortgage.
New York appraisers Miller Samuel Inc. and Vanderbilt Appraisal Co., competitors to Mitchell, Maxwell & Jackson, said they had not received subpoenas.
Appraisers frequently face pressure to revise their findings, said Jonathan Miller, president of Miller Samuel.
“I would seriously doubt that there is one appraiser in the United States that has not been on more than one occasion pressured to make a number,” Miller said.
Rent: Cape-tainers, too funny!! If you stack one on top of the other, can it be a Cont-lonial?
From Crains:
Spitzer forms task force on lending practices
New York state Gov. Eliot Spitzer on Friday announced an interagency task force aimed at combating predatory lending practices throughout the state.
The task force — Halt Abusive Lending Transactions — is designed to help the public handle questionable lending practices in the subprime market, and to make it easier for low-income families to buy new homes.
“Lending practices that prey upon the public cannot and will not be tolerated,” Mr. Spitzer said in a statement. “This task force will take a comprehensive look at the sub-prime lending industry, and recommend steps to protect borrowers, particularly minorities and the elderly.
“I wouldn’t pay that much! Overpriced POS Cape-tainers.”
Renting,
You owe me .75 for the snickers bar I just lost.
lol!
“You would be doing them a favor to take them off their hands for free.”
Renting,
There’s an idea. Knock down a McMansion and offer 100 condotainers. Throw up some s*it stucco and start a tainer blog. Just in time for the next dead cat bounce. It will be Tainer-Mania. Bidding wars for tainers. Hey, throw some up along the Gold Coast. Wall street $ will flow. We’ll go public and some pe firm will pay some ludicrous sum.
There are entire communities (online and offline) dedicated to shipping container architecture..
http://www.firmitas.org/
http://www.tempohousing.com/
Just a little inventory note.
Monmouth County public MLS’s have 8223 listings. Last Year, 7491.
JB, [119/120]
Very interesting. They can provide a waterproof basement. Won’t have to worry about a leaky roof either.
Granted, I’m not a big fan of poorly executed contemporary architecture, but there is something to be said of steel containers as a component of construction. There is no doubt that welded steel construction based on containers would be significantly stronger and long lasting than most of the poorly constructed stick framed structures we slap up today. Not to mention, significantly less expensive.
jb
“SHANGHAI: Grabbing a piece of the country’s bullish stock market has become something of a national passion, and the only people not excited about the situation are the many bosses out there struggling to keep their employees focused on their work rather than their portfolios.”
“And in some places of business, it is now considered poor form to disturb a staff member or government office worker during trading hours, newspapers have reported.”
http://www.chinadaily.com.cn/china/2007-04/30/content_863937.htm
Like JB says, we all may laugh at this, but how many people in New Orleans could have (or still could) used these things?
Yes, there are arguments that the people would end up staying in them causing a “container-ville”, but it has to be better than what’s down there right now…
jcer (59)-
The American investment powers that be have not blessed Latin America/Eastern Europe as “investable”. For a whole host of insane reasons, China HAS been so blessed. As Cramer has noted on several occasions, it makes no sense, but that’s the way it is, and one is well-advised not to buck the trends. Latin American stock panics come out of nowhere, and they can really mess up your day.
Do you have experience trading those markets? If not, be very, very careful. I play both S. America and the old Communist bloc (including Russia), and I don’t touch this stuff without insurance and/or trailing stops.
Clot,
China/Blackstone;
http://www.chinadaily.com.cn/china/2007-05/18/content_875929.htm
jcer (59)-
Frankly, why bother right now with S America/E Europe? Western Europe is on fire, and you get a nice currency boost on US mutinationals that do tons of biz there.
BC –
They do the container thing in London too.
#125:
The media would want you to believe otherwise, but there is an exceptional amount of rebuilding being done in New Orleans. Most neighborhoods not separated from the city core by a major waterway (e.g. MRGO) have experienced tremendous change in the past year. Homeowners taking hammer to nail themselves, neighborhoods forming community groups, etc. It’s much more lively down there than Anderson Cooper portrays.
I have a question regarding updates to my house. We have a room off our kitchen that was a porch – we put in heat, all new windows, insulation, drywall. One of the last things to do is to replace the carpeting that a former tenant installed. The rest of the house has pine floors (although downstairs, under carpeting, is that horrible clued on padding that looks like burlap stuck to the pine). I have looked at bamboo flooring because it’s a renewable resource. I have also looked at cork. If I install either of these, will they become dated and make it harder to sell the house? I am trying to make less of a footprint. Any advice would be appreciated!
Willow (70)-
Call me sick, but I funded a portfolio for my daughter when she turned 10 (my son turns 10 in Feb, and he’ll get one, too). The kids do their own research and make their own picks. I only wield veto power when their picks are companies that are so fundamentally bad (i.e., Gap three years ago), they cannot be owned by any sane person. Amazingly, though, what I’ve learned is that a well-informed child can construct a better stock selection than most investment professionals. I am not embarrassed to say that my daughter’s return in ’06 beat mine (with far less “churn”, too).
EVERYTHING my kids want that I deem “discretionary” has to either:
1. Be paid out-of-pocket by them; or,
2. Be paid for by funds from stock sales
At first, my daughter made a couple of quick stock sales to fund some purchases of dubious nature. However, she was subsequently faced with not enough in her portfolio to buy more AAPL when it began its meteoric rise. When faced with the consequence of her actions, her taste for the “consumer high” (surprise!) dissipated.
Now, she looks at every spending decision as a choice between a shiny new thing and an investment.
“I am not embarrassed to say that my daughter’s return in ‘06 beat mine (with far less “churn”, too).”
Clot,
She probably recognized the RE bubble before you and shorted the H-B’s.
BC (133)-
No short-selling. Yet.
Thanks for #127.
Clot, 132 –
Sounds like a pretty good strategy.
Jumping in to comment on the b-day parties, camps, etc.
My dd (age 8, only child) loves parties, but since the age of 2 has asked for donations in lieu of gifts. It’s not always easy-we have to talk about it-but she realizes how fortunate she is by giving to others. She actually has lemonade stands for charity! The interesting part is that so many parents seem so uncomfortable with the idea of donations in lieu of gifts. I realize that it takes away from the spirit of giving sort of, but whatever. My dd has SO MUCH.
Also, in defense of the theme, we LOVE the theme, for us it’s all about the theme. Unless the theme is “hired out” it is usually out of fun for the parent. This year for example (which will identify me to anyone I’ve directed to this site), my dd had a pottery painting party. One, she knows this is a huge part of her gift from us, but two, she asked for donations to an art in schools organization.
There are ways to “fit in” but teach what is right. It’s a balance.
130. The media would want you to believe otherwise, but there is an exceptional amount of rebuilding being done in New Orleans. Most neighborhoods not separated from the city core by a major waterway (e.g. MRGO) have experienced tremendous change in the past year.
Funny that this should come up today. Just talked to a good friend who moved to NO right before the storm. He and his SO (renters) moved just outside the city after the storm for safety’s sake. When I saw them last (March) they were talking about moving back into city center – trying to reinvest in the city. Coincidentally, she complained of having been sick off and on for three months.
Today, they called to say that they were moving back to NJ for the short-term. Crime is up in the neighborhood they wanted to move to, and Dr. indicates the environmental issues may be contributing to what has added up to her chronic illness (she’s 29).
So, it may be anecdotal, but… I figure if they’re moving back to the NJ, it must be pretty rough going down there.
They’re considering Asheville within a year. Seems like a good choice.
all (137)-
I hear the FEMA trailers have made everyone sick in NO. Any truth to that?
BBB, JB, 2008 buyer:
Thanks for the WaMu loan feedback. Not sure I’d ultimately want to go with it, but it’ll be interesting to watch what direction this trend will take.
#137 Allisononline: of course it is not the easiest place in which to live, but the crime increase is largely restricted to drug war-type events (not saying that is good, but in most neighborhoods it is not that different). I would imagine that people without a lot of emotional and personal investment would be quick to flee the city. Not that I blame them. Did they want to live in the Marigny? There was a high-profile murder there of a white woman. It scared a lot of people.
#138: I know a lot of people who jokingly complained of “Katrina cough” right after the storm but that was largely due to mold and dust from gutting homes. Almost everyone was gutting homes for almost a year. That activity is largely complete for homes that aren’t going to be torn down, save NO East and Lower 9th.
Interesting snippet over at CR from the OC Register:
Subprime delinquencies higher than reported
“Mr. Perry is correct that we have to differentiate by the type of servicer rather than the type of loan. This may not be a major issue because our latest subprime numbers are 14.4% delinquent by at least one payment, plus another 4.5% in foreclosure, for a total of 18.9% either delinquent or in foreclosure. For just subprime ARMs that number is 21.1%, so we agree with Mr. Perry’s estimates of the current state of the market.”
Possiblebuyer [140] –
To tell you the truth, I couldn’t tell you what exact neighborhood they wanted to move into. My fiance knows NO, but I have never been. In any event, they were really committed to the idea of sticking with the city as recently as March. She’s lived there her whole life, though he is from Budd Lake.
I think the health issues sealed the deal. It doesn’t really mean anything on a larger scale. Who knows what their other motivations are? Just interesting that it came up today…
maybe all the slowdowns will shake the losers out of the construction business…and all of the ‘busy’ contractors might start returning phone calls…..or not.
folk:
I’m looking homes in Clinton, Fleminton and Readington towns. Please comments about these towns in general…..Their school system, do they have main street? night life?..etc. most homes have septic and well…me being from the city, should I be concerned? I’m working in Morris county and wife in Newark. How is the traffic going east on I-78. Your feedback is much appreciated. Thanks.
poig (144)-
It sucks here. Metal detectors at the schools, crime in the streets, septic systems bubbling up thru the ground like on the Beverly Hillbillies. Traffic at a standstill. RE values dropping like a rock. Just last night, the police used one of those five-man truncheons to tear down the door of the crack house next to me.
One of the guys in the crack house got away, but my daughter beat him down with her lacrosse stick. And my son made him a cup of tea while he was sitting on the curb in plastic handcuffs.
clot:
hahaha…..I’m reading this blog for too long now to know what’s true…Seriously, how are the towns:)
anyone have an address for mls# 2401178 in good ole westfield?
tia
poigant Says:
May 18th, 2007 at 9:05 pm
folk:
I’m looking homes in Clinton, Fleminton and Readington towns. How is the traffic going east on I-78.
Poi-Boi: I know know what your tolerence is, but I can imagine a worse commute than need to use I-287 between NJTP & Exit 13 / also between Route 24 & I-80, and having to use I-78 East from Clinton to I-287 in the morning and reverse in the afternoon.
CANNOT!
I need to sober up – GO METS!
anyone know where to find rentals for warren, nj?
tia
afe,
1128 Grandview
poig (147)-
Just kidding. All three places you mention are very nice…all the bells & whistles. More specifically:
1. Clinton, Readington and Flemington have “Main Streets”. I’m partial to Clinton’s, but that’s because I live in Annandale, which is directly adjacent.
2. Schools in all three areas are top-notch. They differ in size. Hunterdon Central serves Flemington/Readington, and is a giant place that’s laid out like a college campus. They have a big-time sports program & every kind of extracurricular you can imagine. North Hunterdon is the HS for Clinton, and is smaller. Academics are super-good (IMO, better than the prep school I went to back in the Jurassic), there are tons of after-school activities and sports are good, but not overemphasized.
3. Biggest minus: Flemington= taxes. Readington= town leadership’s taste for expensive litigation. Clinton= political infighting.
4. I-78 during rush hours will be bad 1/3 of the time. It is rarely as bad as I-80, though. Tons of people here work in Morris Co and Newark. It is do-able commute, and I’ve seen much worse.
ChiFi (151)-
Yanks got schooled by a pitcher who was let go by the Pirates.
Doesn’t get any better than that! I have a good feeling two more a$$-whoopings are about to ensue.
GO METS!!!!
Just out of morbid curiosity, can someone tell me what’s happened to 44 South Street, Jersey City? I need to know what kind of idiot bought it.
131 Willow –
I really like bamboo flooring and it looks like wood which is pretty classic so I can’t see how it can really adversely effect house prices later down the line.
They do overprice it, bamboo is a very cheap resource and it has novelty pricing attached right now so shop around where possible.
Also, if you are into the green aspect of it you might want to look for low VOC (the glue holding it together emits less noxious fumes).
From a previous thread:
“Seneca Says:
May 17th, 2007 at 12:01 pm
Crack-Smoker-of-the-Day Award goes to:
http://tinyurl.com/2pcrwq
$649,000 for a 3BR, 2Bath “colonial” cape in Cranford on a colossal 0.17 acres of land.”
Saw this advertised in the paper today. Address is 100 Riverside Dr., the most flood-prone street in Cranford where 100s or residents were recently evacuated.
So no, I can’t support the price or explain it.
thanks jb. (Boy, you are up early this Sat morning!).
#157
lisoosh,
I have looked into the low VOC – I have multiple allergies/asthma so it’s very important to me. New carpet will send me over the edge. I once went into a cousins basement that had new carpet (not quality) installed the week before and, within hours, I was in a full blown attack.
I’m hoping that if we do install bamboo, it will not shout 2007 as harvest gold appliances shout 70s.
For NYC RE lovers…
http://www.therealdeal.net
Trade magazine
Excellent article here by Bill Fleckenstein
Ignoring the lessons of 1929
http://articles.moneycentral.msn.com//Investing/ContrarianChronicles/IgnoringTheLessonsOf1929.aspx
Away from the main topic.
I was watching all the 2008 presidential candidates debates on youtube and cannot help but wonder about the contrast in both parties candidates vision/philosophies.
1) Democrats (Clinton in particular) were debating what welfare programs to increase funding on and which taxes to increase. In fact in the 2nd republican debate held on 5/15 somebody quoted her that she said money needs to be taken from (supposedly) “wealthy” americans and used for ‘greater good’.
2) On the other side republican candidates were debating same things as we discuss on this forum. How to bring spending in control, and which taxes will they cut.
The contrast is pretty stark. Personally seems like Democrats are just gonna bring NJ gov. type drunken sailor’s fiscal discipline into the White house. Clinton just seems to be more bad news for ordinary tax paying citizen like me.
Is there anyone else who feels same way or thinks I might have mis-interpreted or misinformed?
Can I get a translation on the following description from a Realtor (TM)?
“This home exudes pride in ownership.”
I am watching the “Open House” show on CNN which is always good for a laugh and a recap of the news that James posted throughout the week on this blog. Brad Inman was just on advising buyers to be selective because there is a lot of inventory and more coming. Advised sellers to really work with whatever buyer you have who is making a legit offer because there may not be another one coming if you turn this one away.
twice,
Thanks for the info on the Cranford place. I guess the Realtor just wanted to get the listing? Never heard of these guys before http://marckelleyrealtors.com/ .
Clot (132).
Great idea for teaching the kids about making a choice b/w instant gratification or delayed gratification (hopefully via investment profits). This one is truly a gem.
http://www.nytimes.com/2007/05/19/us/19debt.html?th&emc=th
Couple Learn the High Price of Easy Credit
On a recent evening, Christine Moellering, 40, sorted through the plastic laundry basket where she keeps the family bills, statements and coupons.
“The Sears one is 32.24 percent,” Ms. Moellering said, reading a credit card statement with a balance of $5,955, including $155 in monthly finance charges. The high interest rate took her by surprise. “That’s nice,” she said sarcastically.
Ms. Moellering, and her husband, Mark, 39, earn average salaries for their age (together about $66,000 a year), live in an average-priced home and have an average cost of living. But like many other households these days, they have found that their day-to-day economic life has come to depend not just on how much they earn or spend, but also on how well they shuffle what they owe among a broad array of credit cards, home equity loans and other lines of credit.
. . .
When the couple met through Yahoo personal ads in 2003, they did not discuss debt. She wrote that she liked snow; he said he looked like Babe Ruth. She had about $6,000 in credit card debt at the time, mostly from paying for books and living expenses after a return to college. She used credit cards rather than applying for lower-interest student loans. “I never tried to get student loans,” Ms. Moellering said. “I was working full time and taking care of my sick mom and trying to go to school, so I never had time, so I just ad hoc’d.”
Their debt escalated when they decided to get married. They paid for rings, a reception, a honeymoon and a new bathroom — about $50,000 in a seven-month stretch.
Willow 160 –
Bamboo can be stained, and there are water based stains available – shouldn’t be too hard to update.
You can also get low VOC kitchen cabinets from bamboo or wheatboard, so there are lots of green choices out there.
From the above article;
“It doesn’t matter what you do, you always have that credit card debt.”
Asinine. Stop spending money on crap.
HOUSING COSTS: The median monthly housing costs for (specified) mortgaged owners was $1,723, (specified) nonmortgaged owners $656, and (specified) renters $856. Thirty-three percent of owners with mortgages, 24 percent of owners without mortgages, and 46 percent of renters in New Jersey spent 30 percent or more of household income on housing.
Source: american community survey, 2003
Any comments on this? Do you think that the % of renters who spend 30% or more on housing has decreased since 2003?
Re: afe’s post 168
I never got an answer to this: In the housing cost to income ratio, are housing costs just your mortgage or is it mortgage, insurance and taxes combined?
Right now by renting (I pay slightly more then half the rent) I pay roughly 8.25% of my gross monthly salary. And that includes my renters insurance.
lost,
I think whether the ratio includes all of the costs or not depends on which survey you are looking at. With this survey, since it mentions a “cost” associated with “no mortgage” I am guessing this “$656” figure includes monthly insurance & taxes. 8.25% is excellent. It kills me to think of spending much more than 15% on a mortgage (not including taxes, ins).
i mean including taxes, ins
There is a New Jersey architect, Adam Kalkin, that has a container house installation at a museum in Vermont.
http://www.shelburnemuseum.org/buildings_and_grounds/detail.php?id=5&flash=true
He has some other container houses on his website at
http://www.architectureandhygiene.com
RE: NY Times article in post #165
“It doesn’t matter what you do, you always have that credit card debt.”
As she stands in front of her new granite/marble bathroom:
http://graphics.nytimes.com/images/2007/05/18/us/19debt.large2.jpg
“Their credit card debt came to $22,228, including $380 in monthly finance charges. Interest varied from 12.1 percent to 32.24 percent. The Moellerings also have a mortgage of $93,000 and a home equity loan balance of $68,574, at 8 percent interest.”
Short of having a catastrophic illness, and needing money immediately, there’s no excuse to paying $400 a month in credit card interest. And to throw that $400 out the window, they have to earn $500, which after taxes is $400.
Drop your spending to zero, dummies, and pay off your credit cards, in full, over the next 6 months.
I wonder if the “urination style” tub spout was intentional. Sort of a reminder that they are getting pissed on by creditors?
Anyone else notice the towel sitting under the spout? I believe that thing is supposed to be installed with a drip tray when wall mounted. I hear it makes quite a mess when it “misses the bowl”.
jb
I wish my husband came with a drip tray.
Oh, my goodness, that didn’t sound so good, did it.
I mean, you know, when the game is good and he doesn’t want to miss a pitch, so he’s in a rush..
I think I’m making this worse.
How many people in the US even know what it’s like to live free…without debt?
Is it possible that they’ve never had the experience, therefore they don’t value it?
I just can’t imaging having debt anymore. That burden…that wet blanket on decision making.
Being debt free sure does feel great, but it doesn’t compare to the feeling you get when you’ve fully funded your “Go To Hell” fund.
jb
Pat,
You have’nt given me a good laugh like that in a long time.. many thanks.
KL
att [162],
“Clinton just seems to be more bad news for ordinary tax paying citizen like me.”
Just based on her spew;
1-Bad for taxes
2)Bad for the stock market- protectionism
3)Bad for the dollar
4)Great for welfare
5)Great for Gold
KL…timing is everything. I happened to be cleaning the toilets/bathrooms when I walked by and hit F5 and saw JB’s urinating faucet comment.
Willow 131
Re: Bamboo
just put a floating floor comprised of pre-finished, “engineered” bamboo from lumber liquidators on our kitchen floor.
It has a nice feel and it looks sharp, but it’s also very easy to scratch and dent.
The style factor is one to consider, but I guess it depends on how the rest of the room is finished. If you’re in an older house with darker wood trim, it may seem a bit out of place, in which case maybe oak or wide-board pine with a rich stain would be better.
As far as green goes, the greenest choice would be reclaimed lumber. You can find reclaimed wide board planking from lumber liquidators I think.
http://blogs.ocregister.com/mortgage/archives/2007/05/subprime_delinquencies_higher_1.html
more manipulation uncovered.
what a cesspool.
So much imagery in post #173.
:)
“The country is going through a Real estate Depression”
CEO Annaly Mtg.
hehehehehhehehe……
what u say ramen eating starving bunch?
Anyone think David Lereah, the past NAR chief economist will change his tune like greenspan once freed from the shackles of the NAR?
I feel the papapapaPANIC.
how ’bout you starving bunch?
Are the grubbers listening so u can make a commish and pay your past due bills?
Buyers should demand a written 500 word essay from a seller on why a buyer should buy their grubbing house.
I notice an attitude adjustment among a few realtors.
Lean times can do this.
Get the prices down you starving ramen eating bunch and just maybe u can make the next car payment.
hehehhehehehe
BOOOOOOOOOOOOOYAAAAAAAAAA
Bob
Clot,
Like I have staed they are green[no pun]with envy regarding Temasek.
More on China/Blackstone;
“While authorities have not yet revealed details about the new company’s size, economists say Beijing might allocate as much as US$200 billion (euro148.4 billion) to US$400 billion (euro296.8 billion) to the venture.”
http://www.chinadaily.com.cn/china/2007-05/19/content_876301.htm
Pricing in general in NNJ is 30% overpriced from peak 2005 prices.
That’s a starting point you ramen eating starving tour guides
BOOOOOOOOOOOOOOYAAAAAAAAA
Bob
Who buys a $2M+ house on a whim?
MLS 2247488 – Closed $2,275,000 in June 2006
Same property, listed less than a year later on May 15 at $2,399,000: MLS 2407812. Went into “Attorney Review” in 3 days.
Less closing costs and realtor fees, this seller is losing money.
BOOOOOOOOOOOOOOOYAAAAAAA,
Why the ramen reference?
Is it because of the high saturated fat content?
How many people in the US even know what it’s like to live free…without debt?
Is it possible that they’ve never had the experience, therefore they don’t value it?
It depends. I value being debt-free, since the little time I was, I felt like a slave. I worked my a$$ off in grad school so that I graduated debt free 4 years back. Both cars bought were paid off within 6 months. I use credit cards for everything, but pay off the balance in full and get cash back, which goes into a separate fund for fun money to spend on vacations.
When I buy a house, I will be a BIG debt.So I want that it will not throw our cash flow into disarray.
My only debts are my mortgage and my wife’s car payment (2.9% for 3 yrs, can’t beat that!)…
No credit card debt, student loans, medical loans, etc.. I hate owing people money.
stock market transaction volumes are exploding in China.
http://tinyurl.com/2d25mg
SAS
“Middle Eastern investors will buy anything as long as it is not American, while Asian investors are likely to be scared off by recent losses on mortgage holdings. Other countries such as oil-rich Venezuela and Russia explicitly use their reserves as diplomatic tools”
Re #110.
There’s a (prefab?) home in Ridgewood…on Linwood or E. Ridgewood..can’t remember for sure, that looks like a container…possibly made from similar (or same) material. So this may not be a far stretch!
Your only debt is to your parents for passing along their tainted DNA….but then you are aware how mixed a blessing that has been.
BC (187)-
It’s one thing for private citizens and institutions to chase higher yields. When it’s the gov’t of a superpower doing it- with one of the big reasons being they’ve seen their little neighbor (Singapore/Temasek) doing the same thing succesfully- it’s bone-chilling. Call me crazy, but I think this story is worth watching closely.
Talk about correlation…how do you avoid it if/when the Chinese get megayuan into the game?
Booyah (188)-
It’s people like me drilling the message into the show-and-tellers’ heads. And, trust me, I ain’t sucking down ramen.
So, some props please? I’m sure as hell not gonna see anything when you get one of your shiny little toys.
Though I’ll admit I’m as frustrated as you when I see bad agents take any listing at any insane price. That inventory just jams up the works and makes it harder to move the legit stuff.
Real Estate TV Alert
Tonight’s (Saturday) Selections:
9:00PM – “The Real Deal” on TLC
10:00PM – “My First Home” in TLC
10:30PM – “My First Home” in TLC
12:30AM – “Real Estate Confidential” on Fine Living channel
Sunday’s Selections:
9:30PM – “Real Estate Confidential” on Fine Living channel
10:00PM – “Bought & Sold” on HGTV
Read My Lips: 2008 Misery -Real Estate Depression 2008 Says:
May 19th, 2007 at 1:01 pm
That’s a starting point you ramen eating starving tour guides
BOOOOOOOOOOOOOOYAAAAAAAAA
Bob: please stop – you are killing me
Orion Says:
May 19th, 2007 at 1:29 pm
Why the ramen reference?
O: even cheaper than spaghetti
Sapporro Ichiban
James Bednar Says:
May 19th, 2007 at 12:08 pm
Being debt free sure does feel great, but it doesn’t compare to the feeling you get when you’ve fully funded your “Go To Hell” fund. jb
grim: I’ve got my fully funded “Reech – Go To Hell” fund. You have no idea :) :) :) :) :)
Bost / clot: is the Torre watch officially on? What happens to Clemens? I can’t even describe how great this is? How is April-Rod?
ChiFi (203)-
What caliber is it? Automatic or semi?
A small confession: I do buy ramen as snacks for the office. They’re great for a midafternoon case of the munchies, and at $2/case at the local ShopRite, you have to call ’em great value.
If I’m feeling really adventurous, I drop in some bean sprouts for a little healthy crunch. Beats stuffing your face full of chocolate and candy.
Clotpoll Says:
May 19th, 2007 at 8:43 pm
A small confession: I do buy ramen as snacks for the office.
clot: Are you publicly admitting to being a “…ramen eating starving tour guide…”?
ChiFi (204)-
I’ve been waiting years for this. 10 runs today, and another tomato can takes the hill tomorrow night…with a blown-out bullpen behind him.
I don’t think they can ditch Torre until after the Angels series, no matter how bad it gets. However, if der Fuhrer gets angry enough, we all know he can pull dumb moves with the best of ’em.
Who cares about Clemens? By the time he’s ready, they’ll be 12 games out of first place, and A-Clod will be on a 1-for-30 tear.
Me? I’m on the Rickey watch! Bring back Rickey!
ChiFi (207)-
I admit to being a ramen-eating, stone-cold, ghostface killa.
A small confession: I do buy ramen as snacks for the office.
If they had lower sodium they wouldn’t be bad at all. You could probably deice a driveway with a cup of ramen.
jb
grim (211)-
There’s so much MSG, you get a big-time head rush. That’s a plus in my book.
“Call me crazy, but I think this story is worth watching closely.”
Clot,
You may be a lunatic but you’re not crazy. By the way, they said Jesse Livermore was crazy. This is a story that requires our utmost attention.
“However, if der Fuhrer gets angry enough, we all know he can pull dumb moves with the best of ‘em.”
“I can’t even describe how great this is? How is April-Rod?”
Clot/Chi [205,209]
Clot,
Finally you can tout, even though we have not sat thru a GSP[GSP Boogie] summer traffic jam. Much better than discussing Carolina Blue vs the Hoyas. The Fuhrer doesn’t know how to get angry anymore. He’s shot. He did not know who Reggie was last OT’s game. I heard he thought he was still coaching college F-Ball in Ohio.
Chi,
Please, hold off that nirvana. Come Nov, describe how good it is when you are marching down Broadway, when the leaves are falling.I’ll buy you the best scotch on the land, if/when that happens.
That said, I do feel Move’s pain. He has to deal with the tumbling RE market, the Knicks, the Yankees and a wife that makes reservations 3 times a week.
Make,
I can’t imagine what you are dealing with. The Crankees have me upside down. I feel like a mortgage holder. Don’t let these Clot and Chi guys drag you down. There will be a Sunny Day for the Yanks. Speaking of;
Its rainin but there aint a cloud in the sky
Must of been a tear from your eye
Everythingll be okay
Funny, thought I felt a sweet summer breeze
Must of been you sighin so deep
Dont worry were gonna find a way
Im waitin, waitin on a sunny day
Gonna chase the clouds away
Waitin on a sunny day
Without you, Im workin with the rain fallin down
Im half a party in a one dog town
I need you to chase these blues away
Without you, Im a drummer girl that cant keep a beat
An ice cream truck on a deserted street
I hope that youre coming to stay
Im waitin, waitin on a sunny day
Gonna chase the clouds away
Waitin on a sunny day
Hard times, baby well they come to us all
Sure as the tickin of the clock on the wall
Sure as the turnin of the night into day
Your smile girl, brings the mornin light to my eyes
Lifts away the bleus when I rise
I hope that youre coming to stay
Im waitin, waitin on a sunny day
Gonna chase the clouds away
Waitin on a sunny day
Hello, is anybody alive out there? Remember, everything old becomes new again.
Number Player Retired
1 Billy Martin August 10, 1986
3 Babe Ruth June 13, 1948
4 Lou Gehrig July 4, 1939
5 Joe DiMaggio 1952
7 Mickey Mantle June 8, 1969
8 Bill Dickey 1972
8 Yogi Berra 1972
9 Roger Maris July 21, 1984
10 Phil Rizzuto August 4, 1985 *
15 Thurman Munson 1979
16 Whitey Ford 1974
23 Don Mattingly August 31, 1997 *
32 Elston Howard July 21, 1984
37 Casey Stengel 1970
42 Jackie Robinson April 15, 1997 #
44 Reggie Jackson August 14, 1993 *
49 Ron Guidry August 23, 2003
Yep. Alive, but exhausted.
Here’s one for all you sellers in preforeclosure.
http://www.youtube.com/watch?v=c6wTY37EvQI
About Ramen.. #211..
Forget sodium, it has MSG. How do you think all the instant stuff preserves its smell and ..ahem.. taste?!
Question for all – Has anyone heard of LoanSearch.com? They come up as the lowest cost loan provider on bankrate. But sounds a little fishy. Are they just a conduit to a loan shark?
I found a house I really like. There are a couple of negatives – really small bathrooms, inspite of a great yard it has a chain link fence (but the owner’s interior taste is much to my liking).
The roof may need replacement – it’s original 25+ yrs old.
btw, the house is fsbo. and owner has priced it high and if he doesn’t come down.. its just another house I liked
BC (213)-
Jesse Livermore WAS crazy. A one-man walking argument against modern portfolio theory. I read a lot of stuff about him years ago and got the feeling that guys like him are what make some people think stock-picking is just a sophisticated form of gambling.
Rent (210)-
Any company you find at Bankrate.com should be treated as suspect…simply because it’s there.
Remember, any lender not chartered in NJ is not required to disclose prepayment penalties on NJ loans. Any quote you find that seems unusually low at one of these “aggregator” sites should be regarded with a jaundiced eye. Most of the slop they throw out there is pure come-on.
Back to that Sunny Day;
The empty cargo containers will be filled with US exports, the deficit will be tamed, the dollar will be soaring, the unions will be dead in NJ, RE taxes will be declining, and the US will be a creditor, etc,etc…… And the Muts??
http://www.youtube.com/watch?v=xyscCIzK3zo&mode=related&search=
“Any company you find at Bankrate.com”
Clot [220],
SHORT.
clot(154)
Thanks a lot..appreciate your feedback. checked out 7 homes today in those areas. liked two of them, both in Clinton. one is older (1982) and other is newer (1992)with well and septic tank. How often you have to get the septic ( or well) cleaned. Seems like most homes in this area have septic and well and some even have Propane gas tanks.
Thanks again.
Thanks Clot.
So how exactly does someone find a good lender? (word of mouth?)
On a side note – I hate that that NJ grocery stores don’t sell liquor! Sat nite and i’m sober :(
ok, i should have said beer.. cheap beer
I ate so much Ramen in college I can never eat that stuff again. Just the mention of it making my stomach turn. Thanks guys. :)
Is anyone going to lookup 44 South St in JC for me? Please, pretty please?
By the way, they said Jesse Livermore was crazy. This is a story that requires our utmost attention.
“Reminiscences of a Stock Operator” can be found online at a number of sites:
http://www.mypivots.com/articles/booktext.aspx?bookname=Reminiscences%20of%20a%20Stock%20Operator
I admit, I did find it to be a very exciting story. However, I found myself questioning whether the story was really fact or fiction, it just seems *too* sensational.
Thanks for shedding light on ramen. I had thought it was a code word. Tried it only once, since the smell was putrid.
Realtors: Are any of you doing open houses today?
poig (223)-
Good for you. There are some decent deals to be had here now. Make sure your agent gives you the full story when it comes to days-on-market and re-listed homes here. There are a few homes that are probably looking at 300+ days, cumulatively speaking.
Septic systems- in good shape- only need to be cleaned out once every 2-3 years. There are anaerobic bacteria in them that break down waste, so you don’t want to kill them by exposing them to air all the time.
About the only thing you need to do with wells is a little kit test 1-2 times a year to make sure the pH is correct and to verify no coliform, nitrates or other bad stuff has seeped in.
It goes without saying: if you buy a home with well/septic, do NOT waive the inspections. If you have a good well, and a modern septic (PVC, not concrete laterals), you should be fine. It’s also nice not to get water/sewer bills!
Rent (224)-
Word of mouth is a good way to go. Once you get 2-3 recommendations, interview them. Ask them about what fees they do/don’t charge, how many different companies’ products they represent and whether they will immediately provide you a Good Faith Estimate on any quotes they make to you.
Right now, a good lender should be able to produce for you a “clean” (no fees, except for the commitment fee from the eventual lender) loan, and should also be willing to waive his application fee.
If you e-mail me thru Grim, I can provide a couple of names…
I’d like to post a real life example of what’s been going on with MEW.
I see a lot charts and graphs but real life examples really illustrate the problem.
I have two family members who shall remain nameless that have done
their share of MEW spending.
Family member #1
House purchased in 2001 in NJ 115,000.
Mortgage amount financed 80,000.
Current mortgage balance 2007 200,000.
Spent an extra 20,000 a year for the past 6 years.
Family member # 2
House purchased 2002 in NJ for 124,000.
Mortgage amount financed 121,000.
Current mortgage balance 2007 245,000.
Spent an extra 24,487 a year for the last 5 years.
Now that these families have pretty much maxed out their home ATM’s
there will be no more ridiculous spending. The other problem is
that now, they have to service this debt which means even less spending.
I can’t possibly know the only two families that have been living large
on MEW. I think the national figures for MEW are low. I believe we are
at a point in this country where consumer spending is just going to
fall off a cliff.
Another large jump in inventory this week to a record high of 95K, it will take 12 months to liquidate this glut of homes. We’re still at the top and at least 12 months away from the bottom. Is everyone trying to get out of NJ?
ChiFi,
Your favorite town of Hoboken is getting hit by a large jump in inventory. Did Wall St. dudes ran our of money to throw away on overpriced apartments? Or they realized that it’s cheaper to rent than own?
reading todays real estate , pricing still
looks high to me. inventory does not seem
to matter.
condo’s no problem, priced out of sight.
the tax problem seems to have gone away.
NJ the place to be. (which way is the welfare station?)
Speaking of falling off a cliff, check out how much MacMansions are selling for in JACKSON, NJ 08527. In 2005, they were selling for 700K+ now, all you can buy for 400K, and there’s hundreds of them for sale.
231 –
Kind of freaky being reminded that not so long ago it was possible to buy a house in Jersey for $115/$125k.
#236,
The way things are going, it will not be long before you see houses in NJ for less than 100K, the way of Michigan and Ohio.
This guy has it right! Check out the FOX
business outlook video at Yahoo finance.
http://finance.yahoo.com/
From MarketWatch:
Gloom settles over housing market
The spring housing market is turning out to be something of a dud, dashing hopes of a turnaround.
The spring season typically sets the tone for the last half of the year. This year, that tone is pretty gloomy.
“The housing market is struggling to get back on its feet,” according to Sal Guatieri, economist at BMO Nesbitt Burns Inc.
“The spring-selling season is coming well below expectations,” agreed Mario Ricchio, a housing analysts with Zacks.com.
At the beginning of the year, there was hope that housing had turned the corner. But these expectations seem to have faded away. “We were seeing signs of recovery last year, but a lot of that reflected warmer than usual weather,” Guatieri said.
Economists say housing is bumping down near the bottom. “We think the housing market will remain weak right through this year. It probably won’t be until early next year that we see a stabilization and some recovery,” he added.
Bottom calling has shifted from “next quarter” to “next year” :)
GJV #238
Jonas Ferris… I am in love.
Jonas is making money in SRS
http://finance.yahoo.com/q?s=srs
anyone check out the recent money magazine..a couple own 2 properties they wanted to flip in florida (can’t sell them tho’), their own home in fl and a vacation home in NC. Looks like the guy (60 something; who had retired) has to go back to work to make:
mortgage payments of 67k/yr
home assoc fees/ins 23k/year
prop taxes 22k/yr
pool/yard maintenace 3k/yr
utili 7k/yr
thats over 100k in housing costs! Yikes.
His net worth if he sold the properties inc his home’s value 1.6m
What is sadder, his daughter is a REA.
http://www.nytimes.com/2007/05/20/business/20tele.html?pagewanted=1&_r=1&hp
Tell your parents and grandparents to call their banks, insurance companies, etc. whenever they receive those privacy notices.
Too back we must make a positive election NOT to have our information transmitted and sold. Privacy law should make this a positive election to permit our names to be sold, with a cut of the profit returned to our accounts if we agree to the distribution and sale of our data.
Who owns our personal data anyway?
back=bad, even though I know everyone knows what I meant. ;)
GJV Says:
May 20th, 2007 at 8:47 am
good post.
=========
It’s a ticking time bomb for most of these show & tellers.
What u say starving bunch? No commish this month?
Go to work and push prices down 30%. Start talking some sense into these 2005 grubbers. Much lower prices will improve affordability and more sales.
BOOOOOOOOOOOOYAAAAAAAAAAAAA
Bob
http://tinyurl.com/3bzmgm
The Worst Investment Ever
“My fellow Fool John Rosevear considers a house to be the best investment ever. I disagree. A house is a place to live, not a road to riches.
Think about it for a minute. What characteristics do Fools look for in a great investment? Positive cash flow, low expense ratios, low transaction fees, and historically proven returns. Using these criteria, the average house falls well short of the all-time best.”
Clotpoll Says:
May 19th, 2007 at 5:42 pm
Booyah (188)-
It’s people like me drilling the message into the show-and-tellers’ heads. And, trust me, I ain’t sucking down ramen.
========================
If you are then my hats off to ya. The young buyers deserve the right to buy a house at a rational price not these outlandish entitlement prices.
Prices need to drop at least 25%-30 from peak 2005 house prices just to bring them to fair.
There are no bargains.
Bababababa
Subprime crisis brings more foreclosures, layoffs
By JERRY GLEESON
THE JOURNAL NEWS
(Original publication: May 19, 2007)
The subprime lending crisis continues to shake the Lower Hudson Valley, as lenders stepped up foreclosure actions in April and two more troubled mortgage companies in the area reported more than 300 job cuts.
Lenders started 181 foreclosure proceedings last month in Westchester County, up 50.8 percent from April 2006. Through May 15, the actions are up 38.6 percent from the comparable period a year earlier. Putnam County had 41 actions last month, up from 22 in April 2006. Year-to-date, those actions are up 66 percent from the comparable period a year earlier.
PASQUALE, DOUGLAS M.
What does this guy know?
SAS
jb, can you repost the case-shiller graph for me (I’m at work trying to show someone it but can’t find it…)
thanks, in advance.
sl
jb can you repost the shiller graph for me?
thanks in adv.
sl
(sorry for the repost)
sl
#251
http://www.paperdinero.com/CSI.aspx
#251
http://paper-money.blogspot.com/2007/03/charting-bubble-slight-return.html
SL,
http://infoproc.blogspot.com/2005/08/shiller-index.html
Apartment at Plaza goes for a big sum: $50M
Saturday, May 19th 2007, 4:00 AM
Some buyers just can’t wait.
Though the Plaza is still six months away from its grand reopening, an apartment in the fabled hotel has been reportedly sold for more than $50 million – the highest price ever for a pad in New York.
The New York Observer, quoting real estate sources, said the price easily tops hedge fund manager Daniel Loeb’s $45 million for a penthouse at 15 Central Park West.
A spokesman for Plaza developer El-Ad Properties said he “could neither confirm nor deny” the Observer report.
The Plaza, subject of a score of movies, not to mention the popular Eloise stories, has been a New York institution since 1907.
In August 2004, El-Ad properties, headed by Israeli-born developer Miki Naftali, bought the hotel for $675 million, closed it and announced it would spend another $400 million to refurnish it.
When it reopens in October, as a combined hotel, condominium and apartment complex, the new Plaza will have 182 private condos, 130 hotel rooms and 152 units that owners must live in three months out of the year if they want to rent them out.
As of 2004, the marketing plan called for condos to sell for up to $32.5 million. But prices have continued to skyrocket as New York’s real estate boom shows no signs of abating, despite a stagnating national housing picture, according to the Real Estate Board of New York.
Owen Moritz
Shiller chart
http://graphics.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
RE: $50M apartment in post #257
What a waste of money.
You can buy a few acres and a mansion for $5M on the North Shore of Long Island, or in NJ, leaving $45M to earn interest, which is $2.25M annually at an ultra-conservative 5%.
Jumping into the wayback machine again.
The kids party thing struck a real chord with me. I was never big on that stuff but my wife likes to make a big deal out of it. So we sort of compromise and try to make it at least interesting.
My daughter’s having one today with four friends. Archery at the Girl Scout camp and then rock (wall) climbing.
She’s 13 and the bat mitzvahs here defy description. I think the last one had to cost at least $50K. At Hollywood Country Club, Europe theme, Five course meal, 200+ guests, party favors included a pretty nice sweatshirt. It lasted about 4 or 5 hours. Insane.
My son got to take three buddies on a family snowboarding day trip.
We’re pretty much at the end of this stuff for both though. The parties with more than 5 kids stopped at age 6 or 7.
OK, what gives. I saw three real estate commercials on TV last night spewing their gospel, got another email this morning from a realtor asking if I’m still interested in buying and a phone call from another realtor today asking the same thing..
Was there a top secret realtor pep rally this week or something?
David Lereah: “It was a poor choice of title”
http://countrywide-foreclosures.blogspot.com/2007/05/david-lereah-it-boom-was-poor-choice-of.html
Lereah: Well, were in the middle of a real estate recession now, no doubt about it. The recession started 18 months ago, so this has been a regular recession for real estate. And the big news is this recession is going to be longer than we thought.
Lindsey,
It’s nuts, isn’t it? My wife and I had a conversation with the owner of a bike shop this afternoon who’s daughter is 16 and is attending the junior prom. He said some of the parents of his daughters friends are paying for the kids to go to a motel in Seaside Heights for 2 NIGHTS.
My jaw was on the ground. What is up with people anymore? Is the world going insane?
Kuwait abandons US dollar currency peg
http://news.yahoo.com/s/ft/20070520/bs_ft/fto052020071356196889
Kuwait on Sunday removed its currency peg to the US dollar, throwing plans for a Gulf currency union by 2010 into doubt and raising the prospect that other oil-producing states might abandon long-held dollar pegs.
bear [264],
Very alarming. Where would the 10 year be without petro-dollars?
Here’s some fun for a Sunday evening:
Check the # of FSBO listings on craigslist:
http://newjersey.craigslist.org/search/rfs?query=fsbo&minAsk=min&maxAsk=max
Total = 164.
Check the # of FSBO’s for Hoboken on craigslist:
Total = 56.
More than 1/3 of all FSBO’s listed are in Hoboken.
Now you could argue (probably with some merit) that the people who live in Hoboken are more likely to be familiar with and use Craigslist.
But my belief is that way too many people bought condos in Hoboken thinking they were making a “good investment”, and didn’t want to “throw money away on rent”. Now these people have to move, and find themselves underwater, since the 10-20% runup in prices has vanished.
Although I suppose some could argue that people in Hoboken are just more likely to think they can pull off a FSBO by themselves, but I’m not sure I buy that argument.
Forgot to include the FSBO & Hoboken link:
http://newjersey.craigslist.org/search/rfs?query=fsbo+hoboken&minAsk=min&maxAsk=max
Adam Kalkin’s Quik House
http://www.inhabitat.com/2006/06/30/prefab-friday-adam-kalkin/
QUIK BUILD LLC
Sales Office
59-65 Mine Brook Road, Bernardsville, NJ 07324
phone 908.696.1999 fax 908.696.199
Re Post 110:
I actually have a friend (my college roommate) using containers to expand his house in Alaska. He has a farm and he also basically buried one that he uses as a root cellar for his potatoes, beets, carrots, etc.
He’s not the kind of guy to be putting on airs if you know what I mean.
Gary #261
Actually, I DO think the Realtors had a pep talk this week! I was at the Lake Mohawk Country Club (Sparta) this week & at least three asked me if they were in the right room for the Weichert meeting! lol
adding to #270- they weren’t in the right room. Let’s just clear THAT up. They were also there quite a while b/c when I went by the LMCC about 8:30 they were just clearing out. Looked like a three + hour tour.
Neighbor had an open house today, only one person showed. Surprising, the weather was nice for most of the day.
jb
I think reality is about to sweep that second leg in the market our friend Jeffrey Otteau was talking about.
A while back I speculated that the fate of the market would be known at the end of the May.
My vantage point isn’t too great but I would swear I can see Booyaa Bob leading a fat lady onto the real estate market stage down there.
Lindsey,
I agree. There was a sighting. The fat lady was seen entering the bldg.
Grim (272)-
Too bad weather has no effect on affordability.
Can someone with MLS access confirm the original price for this home
MLS#: 2388460
I thought it was 394,900
but it now shows as List Price: $469,900.
Is it that some homes on the street have sold so the flipper can ask more?
thanks
I also have been contacted this past weekend by Realtors whose mailing lists I got on at open houses. Maybe there was some sort of rah-rah effort going on? Or maybe they just can’t find anyone willing to buy?
I plan to respond to all inquiries with “contact me again when prices become affordable”.
Parties and stuff:
What I see from giving your children too much stuff is they come to expect a unreasonable standard of living too early.
Some of you can blame MTV cribs or other media influences, but some of it also has to do with the fact that someone my age or younger can get credit easily, lease a car ( I remember the BMW ads on the radio for 325 a month for a 3 series on K-rock/FreeFM last fall ), or go and sign a note on a 14K motorcycle.
And then there is my sisters 25-30K wedding in two weeks but that is another story.
Or Mom and Dad buying Junior starter condos. When I had friends tell me repeatedly that they were buying a place and mom and dad were helocing the Down Payment/closing costs/co-signing the note.
I really feel that if you give the children too much stuff too easily you break their motivation to excel, and to appreciate what they do have.
I don’t have children but many of my friends do and it has been something I have pondered.
Orion #192, #228: I think it was the clip below that, at least in my mind, made the ramen to housing link. I first saw the link on this blog, and I nearly spewed.
http://www.youtube.com/watch?v=TxylHPnoloI
Kids birthday parties…. I had my soon to be 5 year old start saving for her birthday 4 months before the big day. We had home cooked meals every night (no take out, no going out, etc…), every time she wanted a little treat I reminded her we were saving for her birthday party, etc…Well, she got it. She was so happy we had saved up some money for her party, and her party was a big hit (nothing outrageous), that she now saves every penny she can find, lol. Very impressive and obviously a lesson well learned! She also knows we’re saving for college, and contributes a token amount every month.
I wish I was a fly on the wall for this one.
“Blackstone to Sell $3 Billion Stake to China’s Investment Unit”
http://tinyurl.com/2jklyt
SAS
Sassy #280,
Excellent!
Went to 4 OH today in Essex after 3:30pm. Prices ranging from 350k to 650k. All had about 5 or 6 names on the list.
Two were Weichert. All but one agent ( the one showing the house in the worst condition, not the cheaest) noted that owners are ‘flexible’. 650k house was bought in 2001 for 350k and in July 2005 for 650K.
To whomever asked about Open House:
I did an open house today, It went fairly well in comparison to the last couple I had w/1 or no attendees, We had five families/couples visit (4) not interested in that home, -over their price range- but all very interested in finding a home – very activly shopping. The 5th couple was’nt interested in the house at all, they came intent on helping a local cause. They bought raffle tickets for a new car. I hope they win.
Thank you, BC Bob, fellow blogger,& townie.
KL
Speaking of open houses.
On Saturday, a local RE office on Clifton Ave help an open house of their own. They had open house signs covered with numerous balloons, a hot dog cart and one of those big inflatable houses for the kids to jump around in.
When I drove by, I think there were probably 1 or 2 people there. What really struck me though was that this was a Saturday afternoon during the peak home buying season and the realtors® are all handing out hot dogs and sodas instead of moving homes.
Thanks Gary. When I was growing up my Dad would buy “one shoe” and we’d have to save money to buy the other shoe. So, if you wanted to wear timberlands or other expensive shoes you had to earn it. I babysat, grew vegetables, sold cookies, etc… Sure taught me a thing or two. Want my kid to have that same self-reliance.
Clotpoll Says:
May 19th, 2007 at 7:08 am
Yanks got schooled by a pitcher who was let go by the Pirates.
May 20, 2007
Mets got schooled by a minor league pitcher.
GO YANKS!
258– thank you !!!!
sl
why the major slowdown? Is austerity the new sterity?