From the Wall Street Journal:
Steep Home-Price Drop Stirs Fears
Market May Get Worse Still As Effect of Stricter Lending Has Yet to Show Up in Data
By KELLY EVANS
August 29, 2007; Page A3
The decline in U.S. home prices accelerated in the second quarter as a glut of unsold homes and tighter lending standards continued to weigh on the market.
Home prices nationwide tumbled an average 3.2% from a year earlier, according to an index compiled by Standard & Poor’s Corp. The decline was sharper than the year-to-year decline in the first quarter, when the S&P/Case-Shiller national home-price index dropped 1.6%.
Lehman Brothers Holdings Inc. economist Michelle Meyer attributed falling home prices to a “huge imbalance” in the housing market: “There’s a high presence of risky [mortgage] loans and a massive overhang of homes for sale,” she said.
Home prices have been falling for more than a year and economists had widely expected the S&P/Case-Shiller index to reflect that trend. But the size of the latest decline was worrisome in part because it was larger than that of competing home-price indexes. A separate report released Monday by the National Association of Realtors found that the median sales price of existing homes slipped to $228,900 in July, down just 0.6% from a year earlier.
Moreover, the latest S&P/Case-Shiller survey covers the April through June period, prior to the sharp deterioration in the health of the nation’s mortgage lenders that came to light this month. That trend, which has been unfolding for months, picked up pace in August as Wall Street cut off funding to mortgage lenders and mortgage companies sharply curtailed their lending to consumers, squeezing a number of buyers out of the market. That could lead to further deterioration in home prices in the future.
“These pricing pressures have not been seen in post-World War II history,” said economist Brian Bethune at Global Insight. “It’s very difficult for the markets to be able to deal with that kind of stress.”
Mr. Bethune noted that today’s price declines are worse than those during the housing bust of 1990-91 that preceded a national recession. “The housing market is definitely a leading indicator of a potentially more serious downward moment in the economy,” he said.
BY METRO AREA
The S&P/Case-Shiller Home Price Index includes data on major metropolitan areas. January 2000=100.
| Metro area | June 2007 level | % change from year earlier |
| Atlanta | 136.12 | 1.6% |
| Boston | 171.30 | -3.7% |
| Charlotte | 135.05 | 6.8% |
| Chicago | 165.96 | -0.7% |
| Cleveland | 118.54 | -3.6% |
| Dallas | 126.53 | 1.6% |
| Denver | 138.09 | -1% |
| Detroit | 109.57 | -11% |
| Las Vegas | 221.86 | -5.1% |
| Los Angeles | 262.12 | -4.1% |
| Miami | 264.89 | -4.8% |
| Minneapolis | 164.35 | -3.8% |
| New York | 208.52 | -3.4% |
| Phoenix | 212.52 | -6.6% |
| Portland | 185.76 | 4.5% |
| San Diego | 231.37 | -7.3% |
| San Francisco | 209.48 | -4% |
| Seattle | 191.92 | 7.9% |
| Tampa | 219.37 | -7.7% |
| Washington | 233.52 | -7% |
S&P Case Shiller Home Price Index dataset can be found here:
https://njrereport.com/files/SPCSI_graph_data.xls
Keep in mind that the New York metro area contains the following New Jersey counties:
Bergen, Essex, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren
jb
Interesting quote from Hughes.
CIT Group abandons the lending ship
The housing slowdown probably started in the fall of 2005, and “we certainly have not reached the bottom yet,” Hughes said. In New Jersey home prices rose 130 percent from 1998 to 2006, and during this housing boom, “there were people in the housing market who shouldn’t have been there, and mortgages were given out at very low rates.” Price peaked in 2006 and may decline into 2009, Hughes said. “Prices may not decline a lot, but it could be 2016 before prices return to the 2006 level.”
From Inman:
NAHB: Flashback to the 1990s recession
It’s beginning to look a lot like the early 1990s for the housing market, officials for the National Association of Home Builders trade group said during a “Credit Crunch” presentation Tuesday.
“The housing market is down, it’s hurting, and it doesn’t look like it’s going to bounce back as quickly as we’d hoped,” said Jerry Howard, CEO for the builders’ group. The focus of the presentation was on problems in the mortgage market and the impacts on the overall real estate market and economy.
While the economy is not in a recession this time around — at least not yet — the risks of recession are increasing, said David Seiders, chief economist for the home builders’ group. Seiders also said he believes the economy can withstand the drag of the housing market, though that will become progressively difficult if the housing market remains in the doldrums.
“The contraction we have under our belts to this point, in percentage terms, certainly rivals the 1990-91 contraction when we did have an economic recession,” he said.
Home prices will continue to drop, he said. “I don’t expect to be seeing systematic price appreciation resurfacing until 2009.” The price drops could be deeper than during the early 1990s, he said, adding that home prices tend to be “sticky” on the down side — they typically don’t drop as much during a down market as they increase during the boom phase of a real estate cycle.
“If you look at the mountain of price appreciation that we had in those earlier (boom) years, the declines have been pretty modest to this point … they probably won’t go all that far beyond what happened in the early 1990s.”
He also said that “affordability measures are still not very good,” and price drops may help to restore some balance with housing affordability.
Seiders expects the annual rate of new-home sales to bottom out at 800,000 in the fourth-quarter. For the full year in 2007, he expects 843,000 new-home sales, and he said he expects that number to rise to 869,000 in 2008.
The rapid run-up in housing prices, sales and production in 2003-05 was clearly unsustainable, Seiders said, and the mortgage-market troubles have blasted a deeper crater for the slumping market.
A rising percentage of builders have reported a “substantial impact” on new-home sales from tighter mortgage lending standards in monthly surveys, Howard said, and most builders now report “some impact” or “substantial impact” from the tightening.
The problems in the subprime market have spilled into other segments of the mortgage market, Seiders said, which has created a bit of panic among investors in the mortgage-backed securities market.
“We knew subprime was contracting and pretty much going into nonfunctioning mode,” he said, though the “newfound problems” include trouble with still-risky but lesser-risk mortgage products such as jumbo loans and Alt-A loans.
From MarketWatch:
Week-to-week mortgage applications off 4.0%
The number of mortgage applications filed last week slipped 4.0% from the previous week, while the average interest rate on one-year adjustable-rate mortgages shot up, the Mortgage Bankers Association said Wednesday.
Also on a seasonally adjusted basis, applications for mortgages to purchase homes were down 4.0% on a week-to-week basis, according to the group’s latest survey. And applications for loans to refinance existing mortgages were down 4.2% in the week ended Aug. 24.
From Bloomberg:
`Subprime Chuck’ Schumer Plays Fool in Crisis: Jonathan Weil
It’s bad enough when a company’s outside auditor is a pushover for management. Equally galling would be for the auditor to try telling management how to run the company. Yet that’s what U.S. Senator Charles Schumer has asked the Big Four accounting firms to do at the subprime lenders they audit, pronto.
“One of the most promising solutions to the anticipated foreclosure crisis is the voluntary modification by lenders of existing unsustainable subprime loans,” Schumer, a New York Democrat, said in an Aug. 23 letter to the firms’ top executives.
The chairman of Congress’s Joint Economic Committee then called on the firms to “assist this country’s mortgage crisis” and “urge your clients to do their part to keep our housing markets afloat, by modifying subprime loans that are at risk of default.”
In so doing, Subprime Chuck made a blithering fool of himself, though he probably doesn’t realize why. So far, none of the four firms — PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young, and KPMG — has responded publicly to his plea for lobbying help.
From the Courier Post Online:
Real estate auctions draw bargain hunters
About 60 people huddle on the front lawn of the white bungalow with green shutters in Ocean Township. Parents with children in tow meander on the porch, while others weave in and out of the freshly painted rooms, inspecting appliances and the wood floor planks.
Many of them clutch bright yellow paper signs showing a bidder number. They hope to walk away with a house, winning a good deal at an auction while sidestepping the typical six-month house hunt with a real estate agent.
As the housing market slows and foreclosures spike, people who have to sell quickly or lenders that need to unload properties they took back at sheriff’s auctions are turning to the fast-talking spectacle for quick sales. Even some homebuilders and condo developers are using auctions to reduce excess inventory.
These auctions differ from sheriff’s sales, trustee’s sales or courthouse sales, which conclude the foreclosure process and are conducted by the county. Often, the lender wins the property at these sales and then tries to resell it by auction.
…
Lingering on the sidewalk, Tim Lane is curious to see what his old house will go for. He sold the house two-and-a-half years ago for $255,000 to the investor who lost it in foreclosure.
“The guy tried to flip it for $379,000 a month later. Obviously, it didn’t work out,” the 39-year-old electrician says with a chuckle.
…
The condo is first and, just like in the movies, Green rattles off the bids without a breath. The offers start to stall on the condo after its opening bid of $25,000, so Green tries to entice the crowd.
“The last listing prices for this condo was $160,000,” he says.
Hands shoot up and Tony Nardini, a 50-year-old mortgage broker, finally wins the condo for $75,000.
The Trenton house is next. After opening the bidding at $10,000, Green quickly drops it to $9,000, then $8,000. No takers. Finally, at $7,000, Davis raises her hand and the crowd applauds.
“Now, here’s the one you have all come for,” Green says, pointing to the quiet bungalow.
Opening at $50,000, the bidding surges above $200,000. Kelly shakes her head as the price soars beyond her budget.
Finally, Antonio Pragosa’s offer of $283,000 ends the battle for the bungalow, and the West Long Branch resident slips away shortly after signing the auction papers.
Nardini, who grabbed the condo for his parents, says: “That guy paid way too much. He let emotion take over as opposed to reality. At $200,000, it would have made sense.”
Diversity.
# Richie Says:
August 29th, 2007 at 8:25 am
Diversity.
didnt we have this argument yesterday???
I always love to see the reactions the day after!
WSJ
Thwock, Gulp,
Kaching! Beer Pong
Inspires Inventors
College Drinking Game
Spurs Cottage Industry;
Mr. Best’s Backup Career
By SHELLY BANJO
August 29, 2007; Page A1
CHICAGO — Sick of cleaning sticky floors after bouts of beer pong, a popular campus drinking game, recent Northwestern University graduates Andy Wright and Mike Johnson put their engineering degrees to use. They devised a triangular rubber mat that helps keep plastic cups of beer from toppling over.
Then they started marketing the mats through their online company, Bottle Cap Technologies, for $9.99. They say they have sold more than 100 since April and are negotiating to sell 1,000 in one swoop to an online store called drinkingstuff.com. “Now, you don’t have to clean up the mess and you don’t waste beer,” says Mr. Johnson.
A growing number of young entrepreneurs and beer-pong enthusiasts are attempting to cash in on the traditional college-drinking game. WSJ’s Shelly Banjo reports. (Aug. 29)
These guys aren’t exactly Steve Jobs and Bill Gates. But Messrs. Wright and Johnson, both 22 years old, are part of a new wave of young people trying to make money tapping into their peers’ devotion to beer pong, a cross between ping-pong and beer chugging. As beer-pong season hits a peak with the start of the school year, these beer-pong entrepreneurs are running tournaments and peddling customized beer-pong tables, balls and apparel.
[edit]
My criticism about those who opine for diversity is not that they are looking for cultural diversity, but that they are looking for a special case of cultural diversity, one devoid of the lower-end of the economic diversity spectrum.
A neighborhood that is culturally diverse, but middle class or poor, is generally referred to as a “ghetto” or “slum”. But point to one that it upper middle class or wealthy, and it’s a gem.
jb
11-
Its always been interesting to me that the more money a person of color makes, the less it matters that they’re a person of color to those who would judge them in the first place.
Nice to see the word recession come into play. People on this blog have been talking about it since the middle of 2006 (if memory serves).
Further proof that this is a seriously informative blog.
I still recall telling relatives last x-mas that we could be in serious trouble, and the market was drying up, and everyone saying, ‘no, it’s all good, you’re so negative, blah, blah.’
Hold onto your jobs! Cash is king! And if you can resist for a few more months, obviously dont buy.
#12
Want to see it in action? Just look at our own affordable housing policies.
jb
Socio economics is the new “race”….in fact you can see this play out with a class system based not on ‘color’ but on earnings.
Do you mean caste?
jb
16
It does almost seem like a caste system. But, and call it me being naive or hopelessly optomistic, one can “move up”. Can’t he/she?
it seems like Fitch woke up this morning. I guess it’s better late than never.
http://www.forbes.com/markets/feeds/afx/2007/08/29/afx4063329.html
“China sold 600 billion yuan ($79 billion) of bonds, the most ever, to fund a company that will help invest the world’s biggest foreign-exchange reserves.”
“The nation is setting up a $200 billion investment company to seek higher returns on its $1.33 trillion of currency reserves, after cutting U.S. Treasury holdings in the second quarter.”
“The company will have to make a higher return than that on the reserves managed by the central bank,” said Sun Mingchun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. “To achieve this goal, it may have to diversify its investments into higher-yielding assets such as pension funds.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6zPJF.siDeE&refer=home
I’d argue that NJ affordable housing policies, which allow upper-class towns to push off their obligations to lower-class towns, is essentially a legalized way of enforcing social stratification.
jb
Cash is king!
Not with the inflationary pressures coming to us. keep your money in foreign currency denominated asstes, preferably Euro.
Hey MM
What do you think about “The Pointe” in St. George? Just wanted to get an opinion from someone who invests in SI.
Thanks for the Fitch link.
Contraction in housing market to be worse than expected in rest of 2007 – Fitch
Fitch Ratings said the contraction in the US housing market is likely to be more severe than anticipated during the rest of 2007, mainly due to tighter mortgage standards and disrupted mortgage markets.
The rating agency added it sees 2008 to be another challenging year for the housing sector, as it expects operational and financial pressures not only to persist but to intensify for public homebuilders.
Fitch said it is lowering its ratings on most of the public homebuilders and has put a negative rating outlook on most of the homebuilders.
It considers excess inventory as the most challenging issue for housing, both new and existing.
Fitch assumes that year-over-year declines in starts, new home sales and existing home sales will be more pronounced during the last five months of the year.
#14 JB:Not to belabor this whole diversity thing again, but it is getting kind of old.
I mean to diverse people worry aboput diversity, and by that I simply mean non-white, as it always appears that white is not diverse, yet i grew up in a NYC city white neighborhood, with people whose ancestors were mainly from 2 different parts of Europe, and culturally it was diverse.
We had some things in common, yet many other practices and rituals, outlooks were different.
At the end of the day we were just kids, just Americans.
Is it only white people who value diversity, and at the end of the day does it really matter, are we not all supposed to be American.
I live in a diverse town, and the reality is there is not a lot of mixing between the 2 groups, its just the way it is.
Should we worry about diversity, or should it just be as long as you work hard,follow the rules you are welcome, no matter who you are.
I come from an immigrant background, I am diverse (cultural practice, rituals certian outlook) yet I am not ramming it down other peoples throats. I am tired of this arguement. Instead of forcing it, can we not just let it happen on its own.
Does the rest of the world beat themselves up over this diversity arguement/challenge. We are all Americans in the end, that is all that should matter.
About diversity and Socioeconomics..
My wife is Psychologist who works with/studies family interactions and socioeconomics. From the work of hers that i have seen, is appears that socioeconomic can generally be a better/ more accurate characteristic to look at when discussing groups. People of a similar socioeconomic group often have more similarities even amongst different races then people of the same race in different socioeconomic groups. Part of this seems to come from personal values. People with similar values and goals tend to end up in similar places i life
On another note i think that the current crap of diversity being a buzzword and the fad of the day is crap. It has been shown numerous times and around the world that peole will often self segregate. This is not an inheriently bad thing when it is not enforced or encouraged by the state. By activly promoting/pushing people to mix within groups that they would not normally do so only increases tension and other issues. I pointed out a study yesterday by harvard that shows that diversity has definite negative effects on a community. Dont misinterpret what i have said, i do not support segregation or racism, however i dont generally care for the level of social engineering that takes place in the USA such as affirmative action.
—steps off of soap box
“Harvard political scientist Robert Putnam — famous for “Bowling Alone,” his 2000 book on declining civic engagement — has found that the greater the diversity in a community, the fewer people vote and the less they volunteer, the less they give to charity and work on community projects. In the most diverse communities, neighbors trust one another about half as much as they do in the most homogenous settings. The study, the largest ever on civic engagement in America, found that virtually all measures of civic health are lower in more diverse settings.”
The study did show that diversity tends to increase creativity, so there are up sides….
News article about the study
http://www.boston.com/news/globe/ideas/articles/2007/08/04/the_downside_of_diversity/?page=1
Study can be found in the following for those who have access
Scandinavian Political Studies
Volume 30 Issue 2 Page 137-174, June 2007
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9477.2007.00176.x?prevSearch=authorsfield%3A%28putnam%29
due to the very localized aspects of real estate even to sections within a town figured i’d quote this example. i know the agent that had this listing last year (MLS #2424833) and said it could’ve been had at the time for no lower than $593k. the highest offer was for $585k so they rented it out. back on the market and just under contract after 2 price reductions (615k->608k->598.8k). more than likely this house sold for the same price they wanted last year so no change from a year ago. note the house next door sold for $600k and it’s almost exactly the same with the exception of a bigger family room. overall i’d say in this neighborhood prices for houses at this price level and location are flat to down a couple of % from last year.
#20
and so it’s always been. it’s a sucker bet making the discussion about race or any other PC term du jour. it’s always been about money, and it will always be about money. making it about race is just the easy way to divert your attention away from the man behind the curtain.
This is a serious question; why must we have affordable housing laws?
I am not trying to be naive, but would it not be more effective from an economics point of view to allow the “market” to solve the issue? Also what is the issue? I ask because i do not know. Would people really have no place to live if there were no affordable income housing laws.
Can anyone explain what’s up with all this volatility. Dow up 100 right out of the gate. No real news. Marketwatch citing bargain hunters as the reason. That’s a bunch of BS if you ask me. Anyone?
How about an increase in the savings rate, productivity growth, increases in output, less consumption, decrease in our money supply, descrease in our current account deficit and asset appreciation as the result of real increases in incomes. How’s that for diversity?
#22
way to overpriced and a few blocks from the slums of SI. Stay away!!!!
Re: Subprime & Recession
Good read with graphs:
http://www.investorsinsight.com/forecasts.aspx
# Comrade 3b Says:
I agree with your outlook. the current diversity hype is the modern social engineering experiment and in my opinion is that the general philosophy is that by mixing everyone together you will help bring some of the lower class/socioeconomic groups up to a higher level. unfortunately it doesn’t work like that, but looks good on paper and political coampaigns
Richard,
Here is the prior MLS listing, you didn’t include it in your post:
MLS# 2272227 – 822 Harding
List Date: 04/27/06
List Price: $659,000
Reduced to: $600,000
DOM: 67
Withdrawn
jb
Most people are not feeling an ‘obligation’ to anyone but their own families. And do not want affordable housing anywhere nearby. In fact if you look at towns with large affordable housing sections, you might also see things like crime and loitering….not citing facts, here, just thoughts.
#24 Comrade 3b
When people say diversity it is almost always a person who wants others to think they “too cool for the room”. I’ve lived in over 10 states (mostly the SE and NE) and two different countries over a 25 year period. I’ve also lived in both Northern and now Southern NJ and this is a typical NJ attitude. For some reason, people aren’t diverse unless they are a different color.
Taken from another blog, but funny
Real Estate This Year!
August 25th, 2007 by MG
Got this in my email box this morning and couldn’t help but giggle. I’ve written about depreciation in the housing market, job layoffs, people being stuck in houses they can’t afford, facing foreclosure, but at the end of the day…
Things could be worse!
If you had purchased $1000 of Nortel stock one year ago, it would now be worth $49.
With Enron, you would have had $16.50 left of the original $1000.
With WorldCom, you would have had less than $5.00 left.
If you had purchased $1000 of Delta Air Lines stock you would have $49.00 left.
But, if you had purchased $1,000 worth of beer one year ago, drank all the beer, then turned in the cans for the aluminum recycling REFUND, you would have had $214.
Based on the above, the best current investment advice is to drink heavily and recycle.
It’s called the 401-Keg Plan.
Has this been posted yet?
Countrywide lifts on talk that Warren Buffett will pounce
By David Litterick, in New York
Last Updated: 12:11am BST 22/08/2007
(edited, old – jb)
Ok, enough diversity talk for today.. Can we please table the discussion for another day?
jb
#38 James Bednar
Sorry, I’ll table the discussion for today.
#39 agreed.
39
Fine by me. Let’s talk about the get together.
so since we expect this subprime shock to last about a year or so, are we also expecting the market to be this violatile for the next year? it has to stabilize pretty soon right?
just wondering…
CAIBC
I had two requests: hotel bar and gold coast.
jb
#43 Too early to call that IMHO, it depends aht else coems to ligh over the next weeks and months.
the Case/Schiller numbers are interesting, but what’s more interesting is that these declines are far from market clearing. Inventory continues to build.
How about a bar/grill?
gold coast please for us NYC dwellers looking to move to NJ…
JM
Do we have to call it the Gold Coast? I mean is it still glittering?
How about the Mile Square in Hoboken?
http://www.reuters.com/article/domesticNews/idUSN2735472220070829?&src=082907_0935_DOUBLEFEATURE_on_the_sidelines
Housing crisis keeps buyers on sidelines
Wed Aug 29, 2007 3:09AM EDT
By Nichola Groom
LOS ANGELES (Reuters) – For some prospective home buyers in Southern California, the effect of the U.S. mortgage crisis has been to keep them on the sidelines of the home market, wary of stepping in for fear prices will fall further.
Sheila Hill, 35, is no closer to making a down payment on a house than she was a year ago, when she began shopping in the San Diego area, even though prices on some of the single-family homes she has seen have fallen $200,000.
“It’s kind of an awkward time right now to be a buyer,” Hill, director of a human resources organization, said in an interview. “I have the credit, but with the market slipping down so much it’s hard to know when to jump in.”
Last month Southern California recorded its weakest July home sales since 1995 because potential buyers were holding out for lower prices, according to real estate research firm DataQuick Information Systems.
A total of 17,867 new and resale homes were sold in Southern California in July, down 27.4 percent from the same period in the previous year, DataQuick said.
“They are terrified to purchase a home and have it decline in value,” said Steve Johnson, director of the Southern California region for market research firm Metrostudy. “We haven’t seen this kind of buyer apathy in regards to committing to real estate in 15 years.”
Ed Smith, vice president of government affairs for the California Association of Mortgage Brokers, blamed “media hype” for the worries over declining property values. “It’s not fueled by empirical data,” he said.
To a certain extent, that is true. The median price paid for a Southern California home was $505,000 in July, the same as a record high posted earlier this year. However, that data is skewed by the fact that most home sales are occurring in the high-end markets as a spate of foreclosures and the collapse of the subprime mortgage market has damaged the lower end.
Brokers and other industry veterans are telling prospective buyers with good credit who can afford homes in good neighborhoods that buying a home in the current market is still likely to be a good long-term investment.
“I’ve been saying to people, if you can afford to buy in a decent neighborhood right now with a decent (mortgage) product, you should do that,” said Lori Gay, chief executive of Los Angeles Neighborhood Housing Service, a nonprofit affordable housing lender and developer. “Hoping that there might be a phenomenal deal a year from now in that nice neighborhood might not be the way to play it.”
And, if they wait too long, getting a mortgage with low interest rates may get tougher. Already, interest rates on jumbo loans — those of more than $417,000 — are on the rise. Because of high property prices in California, most buyers need jumbo loans.
Still, prospective buyers like Hill and Chanette Duplessis, a 53-year-old publicist in the entertainment industry, would rather sit on the sidelines for now.
“I’m a little hesitant to jump right in immediately, because I think that prices are still going to go down,” said Duplessis, who has been paying $2,600 a month in rent since she sold her last home in the city of Inglewood near Los Angeles a year and a half ago.
“I’m not at this point too anxious,” she said. “You know why rich people are rich? Because they shop around.”
© Reuters 2006. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
Can any of the finance guru’s here comment on this? what is the significance? It looks like someone with a HUGE amount of money is betting on the EU and US markets taking a serious hit in the next couple of weeks? is this correct or am i missing something?
16 Aug 2007
Carry trade unwinds as yen hits one-year high
An anonymous investor has placed a bet on an index of Europe’s top 50 stocks falling by a third by the end of September, as world equity markets plunged for a third day and volatility hit a three-year high.
In the last 2 weeks there have been 2 huge money plays betting on the downfall of the markets
1. 16 Aug. Mystery investor has bought put option contracts on the DJ Eurostoxx 50 index that will result in a profit if it plunges to 2,800 or below by the end of September. Based on the 2,800 strike price, the position covers a notional €6.9bn. The investor has bought a total of 245,000 put options on the index. The September put option with a 2,800 strike was the most popular DJ Eurostoxx 50 contract yesterday, according to data from Bloomberg.
http://www.smartmoney.com/news/on/index.cfm?story=ON-20070816-000531-0927
2.There are 65,000 contracts @ $750.00 for the SPX 700 calls for open interest. That controls 6.5 million shares at $750 = $4.5 Billion. Not a single trade. But quite a bit of $$ on a contract that is 700 points away from current value. he entity or individual offering these sales can only make money if the market drops 30%-50% within the next four weeks. If the market does not drop, the entity or individual involved stands to lose over $1 billion just for engaging in these contracts!
http://finance.yahoo.com/q/op?s=SPY&m=2007-09
I dont know how reliable this source is, but yahoo backs it up
http://www.tickerforum.org/cgi-ticker/akcs-www?post=4669&page=1
So how exactly did hoboken get the name Gold Coast, the first time i heard that description was on this board?
Was bestowed upon it during the 1980’s real estate bubble.
From the New York Times:
Jersey’s ‘Gold Coast’ Losing Its Glitter
By THOMAS J. LUECK
Published: March 24, 1991
THE New Jersey shore of the Hudson River, which emerged in the mid-80’s as a powerful new magnet for high-rise office development, is struggling with high vacancy rates, canceled projects and nagging doubts about the capacity of its roads, parking and public transportation.
No area better symbolized the 80’s real estate boom in the New York region. An 18-mile corridor of gritty piers, derelict warehouses and abandoned railroad yards, the New Jersey riverfront became a patchwork of huge development sites.
It also became the focus of a feisty battle for New York City tenants and the centerpiece of an urban renaissance so sweeping that some began calling the area the “Gold Coast” of New Jersey.
For now, the renaissance has slowed. With 15 million square feet of space — more than half of it built in the last five years — developers on the New Jersey shore are beset by the highest vacancy rates in the New York area.
“When the Manhattan market became soft, it really hurt the New Jersey waterfront,” said Peter Eppie, managing director of Edward S. Gordon Company of New Jersey, a commercial brokerage, based in Jersey City. In an analysis this month, it found office vacancies in New Jersey’s Hudson River cities running at more than 30 percent, nearly double those in Manhattan.
“Can anyone explain what’s up with all this volatility. Dow up 100 right out of the gate. No real news. Marketwatch citing bargain hunters as the reason. That’s a bunch of BS if you ask me. Anyone?”
End of another bit of carry trade unwinding
Subprime Mortgage Crisis Spreading to High-End Housing Market
http://biz.yahoo.com/ap/070829/expensive_homes.html?.v=2
Reechard, Westfield will never go down in value. Even if it does, your block will never decline in value.
There are so many EMPTY houses for sale out there. How can any bulls be optimistic?
#53: Can anyone explain what’s up with all this volatility. Dow up 100 right out of the gate. No real news. Marketwatch citing bargain hunters as the reason. That’s a bunch of BS if you ask me. Anyone?”
Some of it is bargain hunting I’m sure. More likely, yesterday’s drop might have been a little bit overdone. You can’t really judge the market day to day or even week to week. You’ll get shook out if you do. At a minimum, you must look at month to month trends and year over year trends. Your investing window should be no less than 7 years, let alone 7 minutes. I am shorting RE, because its going to come down eventually. Maybe not tomorrow, or next week, or next month, or next year. But over the next seven years, I am pretty confident that I will sell my position with a reasonable gain which is a hedge against my long-term positions in case of a recession. At the worst, if the economy takes off, I stand to lose some potential gains.
There are so many EMPTY houses for sale out there. How can any bulls be optimistic
Not in Westfield.
#56 Stu: “I am shorting RE, because its going to come down eventually. Maybe not tomorrow, or next week, or next month, or next year.”
Real estate is coming down now, and will continue to come down, next year as well.
#57 Make Money: Over 200 huundred available for sale now, don’t know how many may be empty, but plenty of inventory for everybody!!
JB [60]: Housing-related stocks aren’t necessarily a proxy for the existing housing market.
True. SRS, my ETF of choice for shorting RE, is made up of the holdings companies in the IYR ETF following sub-sectors: real estate holding and development and real estate investment trusts. There are no homebuilders. There is a nice balance of residential and commercial REITs and some mortgage companies.
“Fitch Ratings said the contraction in the US housing market is likely to be more severe than anticipated during the rest of 2007”
Than anticipated by whom?
debt does not equal wealth (from the Housing Bubble Blog)….
The St Petersburg Times reports from Florida. “Liz Seither deftly juggles the two phones that never stop ringing in her kitchen. The Clearwater Realtor’s eyes are puffy below unkempt flaming orange hair. Seither invested in expensive Clearwater waterfront property at the peak of the recent boom. Lenders are after her for millions of dollars in debts.”
“After juggling 15 calls from debtors, creditors and clients, Seither lays the phones aside and delivers a pep talk to herself. ‘I’m not a real estate bum,’ the president of Executive Preferred Properties announces. ‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
Stu,
I deleted my comment, I’ve been trying to stay away from investment-related discussion and I crossed over my own line.
jb
“On another note i think that the current crap of diversity being a buzzword and the fad of the day is crap. It has been shown numerous times and around the world that peole will often self segregate. This is not an inheriently bad thing when it is not enforced or encouraged by the state. By activly promoting/pushing people to mix within groups that they would not normally do so only increases tension and other issues. I pointed out a study yesterday by harvard that shows that diversity has definite negative effects on a community. Dont misinterpret what i have said, i do not support segregation or racism, however i dont generally care for the level of social engineering that takes place in the USA such as affirmative action.”
Kettle (#25) – I agree. “Diversity” has been jammed down our throats at so many levels you’d think there’d be just volumes of proof supporting its virtues. To my surprise, when I searched for this proof I came up rather empty, and here we have a piece actually proposing that diveristy may in fact be a negative factor. Perhaps going forward we should make policy choices based on science rather than the political flavor of the moment, especially as it applies to some of our most important issues such as education and employment.
“After juggling 15 calls from debtors, creditors and clients, Seither lays the phones aside and delivers a pep talk to herself. ‘I’m not a real estate bum,’ the president of Executive Preferred Properties announces. ‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
If only she had the Glengarry leads.
jb
Off topic, but interesting. My brother brought this to my attention.
From Knowledge ‘at’ Wharton (registration required, but free):
‘Quality Fade’: China’s Great Business Challenge
Chong Says:
August 29th, 2007 at 11:12 am
“Perhaps going forward we should make policy choices based on science”
And what do you expect science to say? That the Chongs are racially superior to the Wangs and therefore have the right of way?
“Chong Says:
August 29th, 2007 at 11:12 am
…Perhaps going forward we should make policy choices based on science rather than the political flavor of the moment…”
HA! Good luck with that one.
#66
May be time for a remake of that movie. Might be interesting to see it with a more female dominated cast
I’m not sure about all Chongs, but Tommy Chong certainly deserves the right of way.
jb
May be time for a remake of that movie. Might be interesting to see it with a more female dominated cast
Barbara Corcoran as Ricky Roma, for sure.
jb
Looks like it’s gonna be a while before oil hits $40.
Also curious about the stock market being up … heck, apple is up $5, but that may be because rumors have surfaced that on Sept 5, apple will show what the new ipods will look like.
Just a rumor for now … but the stock is up $5 early.
Hope some of you got in on apple when it dipped to 120 a week ago …
From the AP:
Helmsley’s Dog Gets $12 Million in Will
Leona Helmsley’s dog will continue to live an opulent life, and then be buried alongside her in a mausoleum. But two of Helmsley’s grandchildren got nothing from the late luxury hotelier and real estate billionaire’s estate.
Helmsley left her beloved white Maltese, named Trouble, a $12 million trust fund, according to her will, which was made public Tuesday in surrogate court.
That business with Helmsley’s estate was hilarious. Twisting the knife even after death.
http://mikeelliottsblog.wordpress.com
HC: In my experience Chong is not a Chinese surname, but a Korean first name.
James Bednar Says:
August 29th, 2007 at 11:22 am
Off topic, but interesting. My brother brought this to my attention. From Knowledge ‘at’ Wharton (registration required, but free):
grim: by definition – all such material is of a lesser grade
UPDATE 1-Bank earnings more threatened now than 1998-S&P
Wed Aug 29, 2007 10:41AM EDT
http://www.reuters.com/article/marketsNews/idUKN2933783920070829?rpc=44
“After juggling 15 calls from debtors, creditors and clients, Seither lays the phones aside and delivers a pep talk to herself. ‘I’m not a real estate bum,’ the president of Executive Preferred Properties announces. ‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
The clock has struck midnight for those who thought real estate was their ticket to unending riches. The coach has turned back into a pumpkin and the white horses have turned back into mice. The diamonds, Rolexes and Hummers will turn back into cheap costume jewelry, Swatches and Honda Civics. It’s time for this “classy realtor” to go back to being Cinderella again; working at the local Family Dollar for little pay and fending off creditors.
From the WSJ:
Basis Capital Fund Files
For Bankruptcy Protection
By PATRICK FITZGERALD
August 29, 2007 11:16 a.m.
Australian hedge fund manager Basis Capital Wednesday sought U.S. bankruptcy protection for its Yield Alpha Fund (Master) after it suffered big losses due to the fallout from the U.S. subprime mortgage crisis.
The Cayman Islands-based fund sought Chapter 15 bankruptcy protection in U.S. Bankruptcy Court in Manhattan. The Chapter 15 filing was made by the Cayman Islands-based liquidators of the fund.
Shareholders of the Yield Alpha master fund Tuesday placed the fund in liquidation in the Cayman Islands and it is being wound up.
The liquidators are seeking a temporary restraining order to block creditors from trying to seize the remaining assets — consisting largely of securities instruments backed, in part, by subprime home loans.
“Just a rumor for now … but the stock is up $5 early.
Hope some of you got in on apple when it dipped to 120 a week ago …”
Dude: nobody cares, can we stop getting a daily update on everyone’s stock picks? We all know you’re very, very smart.
Congrats on your purchase.
#63 Skeptic –
‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
You made my day.
On the class issue- here in the States you have nothing to complain about, try growing up in the UK – now THERES a class system!
#81
agreed
“Can anyone explain what’s up with all this volatility. Dow up 100 right out of the gate. No real news. Marketwatch citing bargain hunters as the reason. That’s a bunch of BS if you ask me. Anyone?”
Dollar is down another 1/2 percent, so the DOW is really down for the day.
#63 Skeptic –
‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
I’ve been chuckling nonstop over this one.
#63 Skeptic –
‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’”
Straight out of American Beauty.
“I will sell this house today!”
“And what do you expect science to say? That the Chongs are racially superior to the Wangs and therefore have the right of way?”
No, thats political rhetoric too, just on the opposite end.
BC (19)-
China’s version of doubling down?
comrade 3b #60-
Did a quick check, houses over $1MM, SFH in Westfield. Empty = no visible signs of furniture.
Empty = 16 (2 were not completed construction)about 23%.
Also interesting, 31 were architectural renderings, not pictures. Must be a number of developers with land sitting on there hands.
BTW, couldn’t make a call on houses with only the front facade pictured. So, results could be higher.
JM
comrade 3b #60-
Did a quick check on realtor.com (I know not that accurate), houses over $1MM, SFH in Westfield = 70. Empty = no visible signs of furniture.
Empty = 16 (2 were not completed construction)about 23%.
Also interesting, 31 were architectural renderings, not pictures. Must be a number of developers with land on there hands.
BTW, couldn’t make a call on houses with only the front facade pictured. So, results could be higher.
JM
JB-sorry about the double post, could you delete 89.
JM
#90#90 Bklyn Hwk not surprised, no area is immune. That is the point that Bulls fail to understand, no area is immune. Even Brigadoon (Westfield)
from craigslist:
It’s pretty unusual to see anything under $300,000 in Colonia:
$264999 Must sell due to loan rate change
Bought the house 3 yrs ago on a 3 yr ARM loan. My rate will change soon, so I must sell ASAP. For this reason, the house is well under priced.
http://cnj.craigslist.org/rfs/408704423.html
This one has been floating through the “central Jersey” section for a while. I’m pretty sure the price has been reduced, but the old photos showed the rooms furnished. The new photos show empty rooms.
$305000 *** CHARMING CAPE – MINUTES TO BEACH – Mortgage Rate Buy Down!!! ***
http://cnj.craigslist.org/rfs/408665727.html
JB, #93 is stuck in moderation.
#82 lisooh: I noticed too that it is still there after my last trip 2 years ago, although I thought it appeared to be declining.
Hey whats with all the St George flags I saw flying around, and people telling me they prefer to be called English, not British, that seems to be a change.
“China’s version of doubling down?”
Clot,
More like playing with Chuck Schumer. OK, we’ll be more flexible with our bands. However? Chuck, be careful what you wish for.
#87 Chong,
I doubt you will see policy decision being made based on science as the standard practice anytime in the near future. Most people who are not in the math /science/engineering field want a simple yes/no answer to an issue and most of the time science based analysis will only yield a “most likely”. This is to unpopular politically and does not give people that warm fuzzy feeling that “yes this is the 1 and only answer” gives the masses..
S&P Says Rout May Hurt Wall Street More Than in 1998
http://www.bloomberg.com/apps/news?pid=20601087&sid=aD2T8JdjWCbQ&refer=home
“This is more severe than in 1998,” when investment- banking and trading revenue fell 31 percent in the second half following Russia’s debt default, S&P analyst Nick Hill said in the statement.
Before fed emergency meeting a few days ago, media portrayed Ben Bernanke an academia who is touching his beard, wandering and wondering if the target inflation rate should be set to 2.7182818% or 3.1415926%. They forget this chairman is from a working class town called Dillon in SC and a Great Depression scholar. He knows what walk-out means than anybody here on this board. When touching his long and neat beard, he certainly thinks of those bag holders who hold their bags tight and cut their grasses more often than he cuts his beard.
On Friedman’s 90th birthday, Nov. 8, 2002, Ben Bernanke said: “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”
(http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/default.htm)
Are you sure? Ben
#63 Skep-tic,
The complete article for ‘I wear diamonds, Rolexes and necklaces. I’m a classy Realtor.’
is great. You can view it at:
http://www.sptimes.com/2007/08/26/Business/Down__but_not_out___I.shtml
#81: You said what we were all thinking. Thanks!
>>Here is the prior MLS listing, you didn’t include it in your post:
yes there were a couple of houses like this one who listed in the stratosphere and didn’t even get glances hence the drastic lowering of prices. i believe there were two or three that sold near asking. the true definition of a greater fool.
Oh man:
“She rented her private residence to a guy who fell $15,000 behind in rent. The guy arranged to pay Seither. But when she arrived he had vamoosed with her high-end washer, dryer and refrigerator.”
Thanks, Rachel.
Priceless!
“The plan seemed so simple. Buy a condo for $500,000 in Mandalay. Hold it a couple years. Flip it for big money. Invest the proceeds in another million-dollar condo. Flip. Profit. Repeat.
A lot of people had the same idea. Of the 153 units at Mandalay fewer than 50 are owner-occupied. “The lights are off at night,” Marottoli says.”
>>Reechard, Westfield will never go down in value. Even if it does, your block will never decline in value.
no one said it won’t decline but i believe it will weather the storm far better due to it’s desirable traits. sheesh a guy down the block just recently overpaid for a $1 million dollar house and (i believe $1.04) and is having it renovated and moving in in 3 months. doesn’t hurt the neighborhood that’s for sure.
“Seither’s agency is a shell of its former self. The 10 agents she once employed are mostly gone. She survives by managing rentals, 150 properties at last count. Rentals: It’s a growth market.”
Sshhhhhhhhhh….. don’t tell pretorius…
another article about govt bailout:
http://tinyurl.com/yrvg3w
went through Brigadoon the other day and saw an uncompleted new construction right in the middle of a nice north side nabe and it was clear that no work has been done on the place since I passed by 3 months ago. Not so good for the neighborhood.
The more time goes by, the more I’m convinced that the only way to get wealthy for me and most of us is to work our boring regular jobs and live like monks. The high-class realtor struggling to pay for her Rolex and other bling cracks me up. So many “successful” people are broke, even during the good times. The realtor’s situation would not shock Millionaire Next Door readers in the least.
Good piece here on how similar the current situation is to 1998, when the Fed helped with a bailout … the talk isn’t positive for baholders
http://www.newyorker.com/talk/financial/2007/08/27/070827ta_talk_surowiecki
The fall in housing prices, the drying up of new construction, and the sharp rise in foreclosures in many areas are having a serious impact on employment and economic growth. But these are not problems that the Fed’s action will solve. Cutting the discount rate is not going to help subprime borrowers get new loans, nor will it get the housing market moving again. What it will do is reassure investors and save some money managers from well-deserved oblivion.
Also, I really, really hope that guy from The Street is incorrect.
It’s incredibly irresponsible for that kind of bailout. Just goes to show that ‘doing things the right way’ is never the answer … cut corners and hope somebody throws you a life preserver
bleeping annoying to even read it …
>>Did a quick check, houses over $1MM, SFH in Westfield. Empty = no visible signs of furniture.
if there’s a glut of inventory anywhere it’s in the new construction. most of these are spread out but i know of 2 cookie cutter developments. i noticed many of these houses are priced way too high for the market. heck they were priced high even for the peak market. couple of builders aren’t going to make much money in the end.
Ah, The Millionaire Next Door…the guy in the cheap suit who eats simple foods, drive a Ford and hates to buy stuff (I jest!!!)
The Clearwater story is a little bit of Schadenfreude.
>>went through Brigadoon the other day and saw an uncompleted new construction right in the middle of a nice north side nabe and it was clear that no work has been done on the place since I passed by 3 months ago. Not so good for the neighborhood.
wow 1 out of 12k stock. the neighborhood is going to hell. no area is immune to this slowdown my point is some will weather it far better than others.
http://biz.yahoo.com/ap/070829/expensive_homes.html?.v=2
So called “rich” folks (indentured slaves) are not immune.
BAAAAAAWAHAHAHAHAHAHAHA
To ReadMyLips….”rich” folks don’t need to cut anything….it’s the poor schlubs who are getting hammered here. Buy a clue.
#115 Richard: “no area is immune to this slowdown my point is some will weather it far better than others.”
Thats all we ever wanted to hear you say. You are just about there with us, except for you characterization as it being merely a slow down.
Its far more than a slow down, more like a melt down, or will be soon be one.
Tell that to the so called hotshot Show & tellers getting bounced on on some of those $1.5 mil+ homes.
##117 Essex: lots of people though they were rich. A big part of the problem. Now they realize they are in fact not rich, and that makes the problem worse.
Essex Says:
August 29th, 2007 at 2:17 pm
sound sore today?
Undergoing a lifestyle change?
Commish dry up?
No builder jobs?
No more wires to run?
No more lies working to suck in 1st timers?
Struggling juggling show & tellers cutting own grass now?
Granite & marble sales “dry up”?
No more fool wantabe home buyers?
It’s payback time baby.
BOOOOOOOOOOOOOYAAAAAAAAAAA
Bob
3B i rarely read anything you write. please don’t denigrate others by using you and we interchangeably.
Know of one house that under contract for high $3 millions but can’t close cuz the buyer can’t sell his show & tell mcmansion.
hehehehehehehe
Even the so called “rich” rely on this ponzi scheme….
babababababa
looks like booyah bonehead is back with nothing substantive to add to the discussion but his clownish outbursts. i think people tolerate you because you’re looked at more as an amusement.
Well rich or not, most people go through a variety of economic realities in their lifetime, if they are lucky enough to live that long. The smart one’s figure out ways to handle it….
CUT YOUR PRICES GREEDY GRUBBING ENTITLEMENT BUNCH OR YOU AIN’T GOING TO SELL OR BREAKEVEN FOR 10 YEARS.
10 YEARS! OR ABOUT 13% OF YOUR LIFETIME. IS IT WORTH IT TO RIDE IT DOWN JUST TO BREAKEVEN IN 10 YEARS CUZ YOU WANT WHAT YOU ‘THINK’ YOU ARE ENTITLED?
GOOD LUCK.
#113 Richard
“if there’s a glut of inventory anywhere it’s in the new construction. most of these are spread out but i know of 2 cookie cutter developments. ”
Speaking of which, there’s that old-folks home complex (or whatever it is) on 28 coming into Westfield that seems to be looking for renters now. Do you know if that was the plan, or were they unable to sell the units?
Richard Says:
August 29th, 2007 at 2:27 pm
looks like booyah bonehead is back with nothing substantive to add to the discussion but his clownish outbursts. i think people tolerate you because you’re looked at more as an amusement.”
I laugh at you and the other people unwilling to admit reality cuz it may impact your lifestyle. It’s called a show & tell society.
#125 Essex: we appear to be lacking enough “smart ones.”
Could not agree with #124 Richard more. Booyah’s posts are nothing but an annoyance that I scroll through while trying to get to something interesting.
His computer screen is probably covered in the spittle from his sound effects.
#128 We love BOOOYAH! Sure he is entertaining, but mroe importantly he is right.
After several years of non-sense from show & tellers, it will be fun to buy some toys at clearance prices (already picked up one wish toy). It is nice to be well financed in troubled distressful times.
bababababa
People read Booyah’s posts?
I am a huge fan of Booyah. Often, i laugh out loud at his posts.
Naturally, he is right on point.
Greed has really screwed up the housing industry. Nobody wants to cut prices because their neighbors got big bucks in 2005 … well you should have accepted those lowballs in 2006!
Now, you’re holding the bag.
CUT YOUR PRICES GREEDY GRUBBING ENTITLEMENT BUNCH OR YOU AIN’T GOING TO SELL OR BREAKEVEN FOR 10 YEARS.
Ok we will
10 YEARS! OR ABOUT 13% OF YOUR LIFETIME. IS IT WORTH IT TO RIDE IT DOWN JUST TO BREAKEVEN IN 10 YEARS CUZ YOU WANT WHAT YOU ‘THINK’ YOU ARE ENTITLED?
no. you’re right. we didn’t think of that.
GOOD LUCK.
thanks, anything else?
my realtor just emailed me telling me NOW is the best time to buy! she also told me that over the summer was the best time to buy, last spring was the best time to buy, the winter before was………..is this desperation or what! i just wish one seller would lower their price and get this ball rolling already! the faster we get the buyers motivated again, the faster the RE market will start to go back up again! oh and we also need the fancy financing otherwise there will be no buyers left for all this inventory!
#122 Little sensitive there are you not Richard?
You see the diference, is I read what you post, and there are even times I agree with you. And I acknowledge when I do,in the spirit of give and take; its called maturity.
But the fact remains, you were a Bear who became an uber Bull A9after you purchased), who c claimed for months that prices would not decline in Westfield, who is now grudgingly admitting that no area is immune, including Westfield.
You see Richard the difference between you and I is I actually lived through a real estate bust, many of the same arguements today, about why prices won;t fall, or why they won’t fall in a certain are many of the same from the last bust,with the occassional , ” well maybe they did, but this time is different.
The problem I have always had with that arguement, is that nobody has ever offered a coherent arguement, as to why it is different.
At the end of the day, after all the facts, stats, graphs, experts, talking heads, buzz word, and all the rest, it all coeme down to a simple matter of common sense.
Whether you admit it or not you have chanegd your tune yet again, which of course is your right.
But in the spirit of pettiness, I too will now refrain from reading any of your posts, so there now we are even.
This rich vs poor appearance is deceptive at best:
You see a stranger driving by in a new BMW and thing he/she must be rich to afford that car. But he/she can just about afford the lease payment and lives pay check to paycheck.
You see a stranger driving by in an 86 Camry. The car was paid off 17 years ago and the driver has banked the $200/month not used for car payments, which is now now $100K.
Who is actually the rich guy? And yeah, the guy with the $100K can now most probably send his kid to college, who will graduate debt-free.
#138 Stop talkinbg about me.
I love Booyah’s posts.
It’s a welcome refresher during the course of the day.
It’s all the posts about people’s idiotic stock picks and political opinions that I skip over.
“my realtor just emailed me telling me NOW is the best time to buy! she also told me that over the summer was the best time to buy, last spring was the best time to buy, the winter before was………”
This is why I keep files of every email I ever receive. When some fool sends me an email like that, I reply with copies of all of the previous ones.
The market is clearly in a downturn. NOW the question is when to buy? When to sell the 4 shares of Apple and buy that really super townhouse in Parsippany? That is the question…
3b lol
What kind of beemer? ;)
Booyaaah Bob has been a regular poster for just about 2 years now.
jb
#145
I know JB, I just didn’t realize everyone read his posts. They usually come in succession and I just breeze through to the next post. I don’t enjoy them, and I am not a real estate bull.
Maybe that’s just me… oh well.
grim,
And Booyah has been talking about being a “vulture” buyer/investor for a while, too.
He has an agenda, and it’s not exactly mysterious.
I think pricing got out of hand, but I wouldn’t wish “misery” on anyone, either, with the exception of the “get-rich-quick” flippers.
Oh please…I drive an 05 Bimmer not leased– thank you– I bought it certified with a grand total of 7k miles….it is loaded. I let someone else pay the depreciation on it….it is a great car….and no, I don’t pine for a Camry.
Actually, the sap driving the camry saved $48,000, not quote 100k (20 years x 2400 a year).
Still, yes, that is the wise move. No question. The key is finding a good mechanic and upkeep. I draw the line at the AC. I absoltely will not drive a car that doesn’t have AC.
What I find hilarious is the people who are salivating — to buy — be it a home or a car — from someone else at a bargain price — when they are actually too lazy to do the legwork themself. Bargains are all around even in the best of times…It takes a good hunter to find them and a good closer to buy them.
#149 Blood, that $200 a month saved compounds too….. do the math at 9-10% ROI.
#148 Essex, I wasn’t referring to you in my example…just generalizing that we shouldn’t judge someone on appearances. Since you do have a BMW, let us know how the maintenance goes a few years down the road….
Reech (124)-
Booyah’s more skilled at being amusing than you are at being annoying.
#147
“He has an agenda, and it’s not exactly mysterious.”
So?
Is your point that Booyah is up front about his agenda? And that’s …. bad?
#150 Essex
“What I find hilarious is the people who are salivating — to buy — be it a home or a car — from someone else at a bargain price —too lazy to do the legwork themself. Bargains are all around even in the best of times…It takes a good hunter to find them and a good closer to buy them.”
You think you can find as good a bargain now as you could after the market as a whole drops 15%?
Maybe I’m having trouble understanding your point as written, but if that’s your point, it’s tantamount to saying that the state of a particular market (be it for homes, cars or any other thing) is irrelevant for purposes of determining the best price a buyer can get.
And that is patently absurd.
Essex Says:
August 29th, 2007 at 3:16 pm
Oh please…I drive an 05 Bimmer not leased– thank you– I bought it certified with a grand total of 7k miles….it is loaded. I let someone else pay the depreciation on it….it is a great car….and no, I don’t pine for a Camry.
BMW = The Ultimate Drive Expense
WTTW: Know a good mechanic that works on German cars and doesn’t work in a delaership.
From the WSJ:
http://blogs.wsj.com/economics/2007/08/29/text-of-bernankes-letter-to-schumer/
Text of Bernanke’s Letter to Schumer
The following is the text of a letter sent by Federal Reserve Chaiman Ben Bernanke to Sen. Charles Schumer.
The Honorable Charles E. Schumer
United States Senate
Washington, D.C. 20510
Dear Senator:
Thank you for your recent letters of August 8 and 22, in which you express concern about the potential effects of volatility in financial markets and the tightening of credit conditions on homebuyers, consumers, and the economy as a whole.
I want to assure you that the Federal Reserve, in cooperation with other federal agencies, is closely monitoring developments in financial markets. As you recognized, the Federal Reserve has also taken steps to increase liquidity in the markets. In particular, our changes to our discount window program are designed to assure depositories of the availability of a backstop source of liquidity so that concerns about funding do not constrain them from extending credit and making markets. Also, the Federal Open Market Committee has stated that it is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.
I share your concern about the potential impact of scheduled payment resets on homeowners with variable-rate subprime mortgages. Over the next several years, many such homeowners will face significantly higher monthly payments and, consequently, an increased risk of losing their homes to forced sale or foreclosure. The federal banking regulators have encouraged banks and thrifts to work actively with troubled borrowers to modify loans or to refinance as needed to avoid default or foreclosure and have jointly issued guidances to address underwriting and disclosure practices related to subprime mortgage lending.
The twelve Federal Reserve Banks around the country are working closely with community and industry groups dedicated to reducing the risks of foreclosure and financial distress among homebuyers. The Board is also engaged in these issues; for example, Governor Randall Kroszner serves as the Federal Reserve’s representative on the board of directors of NeighborWorks America, which has a program to encourage borrowers facing mortgage payment difficulties to seek help by making early contact with their lenders, servicers, or trusted counselors. And as I noted in my testimony in July, in order to strengthen consumer protections, the Federal Reserve Board is currently undertaking a comprehensive review of the rules regarding loans subject to the Home Owner Equity Protection Act as well as some rules pertaining to mortgage-related disclosures under the Truth in Lending Act.
It might be worth considering at this juncture whether the private and public sectors, separately or in collaboration, could help the situation by developing a broader range of mortgage products which are appropriate for low-and moderate-income borrowers, including those seeking to refinance. Such products could be designed to avoid or mitigate the risk of payment shock and to be more transparent with respect to their terms. They might also contain features to improve affordability, such as variable maturities or shared-appreciation provisions for example. One public agency with considerable experience in providing home financing for low-and moderate-income borrowers is the Federal Housing Administration (FHA). The Congress might wish to consider FHA reforms that allow the agency more flexibility to design new products and to collaborate with the private sector in facilitating the refinancing of creditworthy subprime borrowers facing large resets.
As you note, the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac are currently assisting in subprime refinancings. However, the GSEs’ charters limit their ability to take on higher-risk mortgages and their programs are relevant only to a relatively small share of subprime borrowers. The GSEs should be encouraged to provide products for subprime borrowers to the extent permitted by their charters. The current caps on GSE portfolios–which were imposed for safety and soundness reasons-need not be lifted to allow them to accommodate new borrowers. Currently, the GSE portfolios include substantial holdings of GSE-guaranteed mortgage products, which are easily placed in the private secondary market even under current conditions. Thus, the GSEs could readily sell these securities to make space for new mortgages if they wished to do so. Policymakers may also want to encourage the GSEs to increase their mortgage securitization efforts, which are not constrained by their portfolio caps.
We will continue to keep the Congress informed of developments in the subprime markets and in the credit markets more generally. As you know, Federal Reserve governors and staff have made numerous appearances before the Congress and in other forums on subprime-related issues. Board staff members have continued to brief members of Congressional staffs on these matters. Board staff members are also assisting the Government Accountability Office in the report that they are preparing that will provide a comprehensive review of developments in the subprime mortgage market.
Again, thank you for your interest and please be assured that we are following these issues closely.
Sincerely,
Ben S. Bernanke
Booya does lighted up this forum. Adds humor value.
njpatient, #153
My point:
He’s constantly SHOUTING IN ALL CAPS lines like:
CUT YOUR GRUBBING HOUSE PRICES FAST
… so he can buy at vulture prices.
He’s said – many, many times – that he already owns the house he lives in.
But he doesn’t want *you* to buy a house, or go to open houses – even if you find a great deal on a house you love – because he wants to force the market down as far as possible.
*He’s* the “greedy grubby” who wants to profit from other people’s “misery.” Buy at a deep discount – and flip at a profit.
From the seller side, being attacked by overly aggressive would-be flippers – that’s one of the things that makes for serious resistance to cutting prices.
I can’t say I have read everyone of Booya’s posts in the last two years. I have gotten some laughs out of them. But, from time to time, when he doesn’t attack the sellers on the board with his machine gun key board, he has some pretty insightful stuff to say.
My mental picture of Booya is either a guy in a really impressive corner office who secretly jumps on here for a release or trying to short the RE market(ie Whole Foods CEO) or he’s a guy in his parent’s basement with a Commodore 64 linked in thru a 56k modem with one bare bulb casting some light over head.
Booya, could you tell us a little more about yourself?
JM
Scribe, do you seriously think Booya’s singlehanded ‘huff and puff and blow the house down’ will drive the market down? Take him with a pinch of salt….
Having said that, if you read between the lines, there are some gems in his quotes.
every now and then a parent brings a kid to an adults only gathering. eventually the adults get used to the kid running and screaming all over the place. the kid’s funny and amusing to some and annoying to others.
how you would react to the kid in that situation is probably how you feel about booyah bob.
I never read booyah’s posts.
Booyah sounds as much as a troll as bi or duck. But I don’t hear the regulars complaining. I guess he is tolerated cos he shares the same view.
By the way, people should realize that this can pretty much put all arguments of diversity to bed.
as far as the adults are concerned…there’s always a babbling idiot.
Bernanke’s letter was leaked on purpose to set the stage for talk of some type of bailout for borrowers. I’ll bet his working class roots are telling him to do everything he can to push for an intelligent and limited bailout, but that will likely be impossible to pull off. Still, I think he’ll resist cutring rates until serious disaster looms because he doesn’t want to pull a Greenspan-II and knows that it will mostly help Wall Street at this point.
“He’s constantly SHOUTING IN ALL CAPS lines like”
Yes, I know what he does. I’ve been reading his posts for awhile (and he’s been here a lot longer than I have).
“But he doesn’t want *you* to buy a house”
Fine with me. I actually find it refreshing, after several years of having every fool that can breathe repeat ad nauseum their idiotic “BUY NOW” platitudes, like “it’s always better to buy than rent” or “home values NEVER fall” or “now is the BEST time to buy” (oh, wait, they’re still telling me that last one).
People who read these comment threads would do far better to take Booyah’s advice than Richard’s.
Comrade 3b Says:
“Hey whats with all the St George flags I saw flying around, and people telling me they prefer to be called English, not British, that seems to be a change.”
No idea, grew up in Scotland, and we are definitely Scottish, not British. Maybe the English just caught nationalism off of all the Celts. I alternate between a St. Andrews flag and the Lion Rampant on my house.
bi?
where you are? i wanted to know your response to jb’s post #156? i think this confirms your point that fed’s main job is to protect american people’s property. right?
you are a awesome.
and bi the way, I wish this board had two Booyah’s and no bi. I’d make that trade in a heartbeat.
I like Booyah, its nice to see him back.
And when he does slip some nugget of insight in there it is far more cogent than anything written by bi, or duck or a few others.
#160 Dream
agree completely.
dreamtheaterr Says:
August 29th, 2007 at 4:05 pm
Having said that, if you read between the lines, there are some gems in his quotes.
yan: agreed…absolute Beavis & Butthead – if you take it at face value, you miss most of the insight
2005 Subprime Lending by NJ Cities:
http://www.nj.com/news/bythenumbers/
1) Go to Home Sales
2) Go to Subprime Lending
Clickable map shows % of subprime loans
Too bad they don’t have one for Alt-A
Uh oh. Via Orion’s link, I see that sale prices in Westfield are dropping.
Home Sales
Sales in Your Town
http://www.nj.com/news/bythenumbers/
biluva Says:
August 29th, 2007 at 4:14 pm
While I have no issue with your orientation, the fact that you make a public statement of it with your moniker, I find, to be a bit forward…..
#155….Misconception re: expense and Bimmers
Everything…and I mean everything is free — they just put new brakes and rotors on–my cost…NOTHING.
Now, I am sure that out of warrantee work is $$$$ — but as of now that is not a problem
how long is the warranty? How much did the warranty cost?
A bailout of homeowners may be too sweet a proposition for politicians to resist. Whoever pushes it through gets all of the credit in the short run and will likely be out of office by the time any long term negative effect materializes (e.g., moral hazard).
Take a look at the governor of FL move on insurance as an example. Instead of letting the market work, he is in effect forcing all of the people who live inland to subsidize the people who choose live on the coast. The underlying problem (people who can’t really afford it living in hurricane prone areas) remains uncorrected. But in the short run, he looks like a hero because people can buy cheap insurance
Same thing will happen with a housing bailout
#166 I was at the Hunter Mountain Celtic festival a couple of weeks back; great as always.
Oh Flower of Scotland when will we see….
Good luck to you!!
“Same thing will happen with a housing bailout”
Frankly, I don’t think the federal government has the money.
#154–absurd? No, my point that if you are a good hunter and understand the scene–be it a market — or a seller — you can work the system in any market. Sure, I am not selling today….nor buying for that matter — but the fact that saavy buyers can find deals even in the most competitive bloated markets. I did.
#177 And how many bail outs will they need. If a homeowner gets bailed out lets say, and a year later finds themselves in trouble again, do they get bailed out again?
I do not see it happening on any large scale.
It will totally (IMHO), destory/distort the market, and any kind of real pricing risk etc.
#161 biluva: NO, its how we react to you
ouch! is hurts!
People who read these comment threads would do far better to take Booyah’s advice than Richard’s.
QFT
#180 Essex
Ah – I see. You think you can find as good a bargain in today’s housing market as you would be able to find in a market with median prices 20% lower?
median is just an average…..good property still command top dollar…..
“median is just an average”
can’t type…..laughing….
#186 “good property still command top dollar…..”
Perhaps for now, but then………there is so much good property out there now, but then………. its still sitting there.
patient….are you patient because you are a buyer waiting? If so, once the fed eases…or the NY TIMES delares the crisis over….or some other occurance that sends people into a buying frenzy, the bidding wars will resume and the truly nice homes will be sold at better prices….I’m not talking about mCmAnsions here….or “pos capes” — or places where grandma moved out after 40 years of neglect….
“good property still command top dollar…”
I thought your point was you found a bargain. Did you find a bargain, or did you pay top dollar?
also, see here, and don’t say I don’t look out for you: http://realestate.about.com/od/mo/g/defmedian.htm
I agree that a bailout will totally distort the market, but there are many politicians who don’t care. talk of a bailout is already pretty strong and we are not even in a recession yet. If there is a nasty recession next year in the middle of a presidential election, don’t be surprised if funding a bailout becomes a major campaign platform.
As for not being able to afford it, since when has this stopped the federal gov’t?
Plainsboro and West Windsor show 22 and 29% drop in Median sale price..these towns are known for their good schools..
ah, and you have your coming out party as a housing bull, Essex.
You just bought, as you tell us, and either got a bargain or paid top dollar, and are now a bit panicked you’ll have to sell your Beemer when your ARM re-sets.
No wonder you don’t like Booyah Bob.
*Sales for 2007 are through 2/6/2007, are based on preliminary reports, and the median price might not be comparable to previous years.
Bernanke says lets get some creative mortgages to help the distressed borrowers. This is funny to me.
http://www.marketwatch.com/news/story/new-mortgage-products-could-help/story.aspx?guid=%7B69E9EB78%2DD404%2D4305%2D82E2%2D7892DB5EA2B8%7D
OK, median…middle…is that your point? Because if it is, I’m not like…totally…impressed or anything….Whoa
Uh, for the record…I bought in 02…charmed the seller….we simply hit it off…she was the original owner…I have a fixed rate….good for that time and better than today….my bimmer…(god bless her) is safe for now….booyah is not my problem.
#191 How do you do it though. And I am serious, I just can not see logistically how they can do it.
Yes, I am bullish on housing….I believe that it is a shakeout now….that things are tough based on banks/mortgage brokers and this is adversely affecting the market. I am ‘entertained’ by the board and it’s various naysayers and doomsday theorists….these same people probably have 6 months worth of canned goods in their basements
Essex (189) “once the fed eases…or the NY TIMES delares the crisis over…or some other occurance”
1) IF the Fed cuts the FFR, that will cause inflation, which will cause the loan originators to raise their rates, which will cause housing prices to fall. Although the stock market may benefit some, as may the portfolios of PE companies, this won’t help a bit with the massive overhang of available housing stock or the mass quantities of upcoming ARM resets.
2) The New York Times controls the housing market? My G*D man, why won’t they DO something!?!
3) “or some other occurance” – you’re really grasping at straws, aren’t you?
patient….are you patient because you are a buyer waiting? If so, once the fed eases…or the NY TIMES delares the crisis over….or some other occurance that sends people into a buying frenzy, the bidding wars will resume and the truly nice homes will be sold at better prices….
This didn’t happen during the 90s, after the 80s bubble collapsed.
jb
Despite rates falling as well… And the NYT “declaring”.
jb
Watch patient….watch ‘pent up demand’ and so forth and for those who are timing the market looking for a bottom….that science is inexact….good luck. The Bottom Will Not Be Televised…LOL
After the fed cuts the FFR, foreign investors will punish the dollar by dumping treasuries, which will push bond yields up.
There’s no free lunch.
#189 Essex; Seriously bidding wars and the Fed cuts and evrybody comes out of the wood work, many are going to have to come up with the down payment first, will they not? ANd of course have to qulaify with tighter lending standards across the baord will they not?
This belief that the Fed cuts and all will be well is naieve at best.
They may cut,and it will be like the last down turn, interest rates dropped along with houisng prices, it then became a good time to buy if you could.
I try to give you the benefir of the doubt, as attempting to be balanced, but you come across as a real estate bull kind of in disguise.
Essex (180): “saavy buyers can find deals even in the most competitive bloated markets. I did.”
Essex (197): “Uh, for the record…I bought in 02…charmed the seller…”
Can you reconcile these two seemingly contradictory statements? Or are you saying that 2002 was the peak of the market…
The federal government won’t be able to pull off a bailout no matter how sweet it sounds. It’s too big a group and they won’t be able to agree on who deserves it. The Fed will realize that the best it can do is get the mortgage credit markets going again – to take that leg out of the perfect RE storm – and they’ll start lending on crappy CDOs to do it. They’ll effectively eat some of the subprime hit to bail out America (and the stupid bastards holding that crappy paper).
I’m not saying the fed cut will be the only factor….or that people without money will be buyers. I am saying that I believe in housing. Simple. I was a buyer in 02 and would be a buyer today. If I had more money…I would have bought more…etc. What is the first thing people do when they have a windfall??? House and Car. Priorities.
P.S. I am not a fan of bidding wars…..and we have had inflation….and wage deflation.
#203 Essex
You appear to have missed the discussions of the previous several days in which the “pent up demand” myth was severely punctured. Just read back a bit. There is none.
Furthermore, no one expects to time the bottom. But I, for one, think it’s idiotic to buy at or near the top. We’re about to plunge.
“I am saying that I believe in housing. Simple.”
That is simple. On that point we agree.
Here is the NYT bottom declaration, printed in 1991.
Bottom of the Housing Slump Is Seen in the New York Area
By THOMAS J. LUECK
Published: March 1, 1991
The New York area’s housing slump may have finally hit bottom, or come close to it.
The drop in mortgage rates did little to reignite to boom:
Home Buyers Holding Off Despite Low Interest Rates
By THOMAS J. LUECK
Published: October 27, 1991
DESPITE a steep decline in interest rates that has brought fixed 30-year mortgage loans to below 9 percent for the first time since 1977, home buyers are holding back across most of the nation in what experts say are stubborn fears that job cuts and other recessionary pressures will persist.
…
Home resales, which rose in March, April and May in what analysts described as a burst of optimistic buying after the Persian Gulf war, have fallen each month since then. The decline, amounting to a 10 percent reduction in monthly sales from June to August, the most recent month for which data are available, came while mortgage interest rates were falling a steep 0.4 of a percentage point.
02 was pretty aggressive and has been for a while….I see 05 as the peak….but maybe you disagree. You never answered my question btw…are you ‘patient’ because you are waiting for a bus…or to buy a home? Just curious. Not a broker.
#207 vers
agree that’s the best they can do. And if they have any ‘nads, they won’t do even that.
Of course, the NYT “declaration” did little to stem to drop in prices, which were still falling:
Have Suburban Prices Hit the Bottom?
By NICK RAVO
Published: February 28, 1993
THE market for one-family homes in the suburban New York metropolitan region, much of which has been in decline for the last five years, appears to have bottomed out in most areas, and, in some places, such as Northern New Jersey, a modest recovery seems to be under way.
One reason that I am here is to learn…granted. But sentiment has a lot to do with markets…mine is positive and I have seen only positives in my ‘patch’…
“You never answered my question btw…are you ‘patient’ because you are waiting for a bus…or to buy a home? Just curious.”
Why do you care so much?
jb…awesome history…cannot believe you had that so handy.
“One reason that I am here is to learn…granted. But sentiment has a lot to do with markets…mine is positive and I have seen only positives in my ‘patch’…”
A herd follower, then.
Heck, four years after the initial “declaration”, there was still little confidence in the market:
New York Housing: Sellers Finally Sell
By NICK RAVO
Published: February 26, 1995
OWNERS of residential real estate in New York City, particularly those with co-ops, may look back on 1994 as the year when it once again became possible to sell their homes — even studios and one-bedroom apartments. It still wasn’t easy, and the big profits of the 1980’s remained only a memory, but the increased demand and stable prices were a substantial improvement over the early 1990’s, when market activity slowed drastically and prices fell.
I really don’t but you seem passionate about your stance and usually that indicates an agenda.
I don’t think the housing recession has even started in the NY metro area, way to much funny money floating around. Wait for the NY Christmas layoffs this year.
Historically these events work on a 7 year cycle. Why will this one be so short?
njpatient seems to like to catagorize. Good luck with that.
jb…awesome history…cannot believe you had that so handy.
Take the time to read the full piece, I’m sure you’ll find it very interesting.
https://njrereport.com/80sbubble.htm
156#,
i am not suprised to see ben’s letter. see my post 100# earlier today:
>When touching his long and neat beard, he certainly thinks of those bag holders who hold their bags tight and cut their grasses more often than he cuts his beard.
“I really don’t but you seem passionate about your stance and usually that indicates an agenda.”
Yes – of course I have an agenda. I am sitting on a pile of growing cash, and when prices fall through the floor I will sail in and buy. You have an agenda too. You own, and want prices to continue to rise. Unless I’m wrong, and you don’t want prices to rise despite owning. I don’t begrudge you your position; I’d want prices to rise too, if I’d purchased recently.
Now, you can answer my question at #206.
“njpatient seems to like to catagorize. Good luck with that.”
If the shoe fits…
I thought I did….anyway…I love the fact that jb runs this board….frankly that is all I have to say.
From today’s “Hotsheet”:
Demarest
SLD 51 NORTHWOOD AVE $1,599,000 9/30/2005
ACT 51 NORTHWOOD AVE $1,799,000 4/27/2007
PCH 51 NORTHWOOD AVE $1,749,000 6/3/2007
PCH 51 NORTHWOOD AVE $1,599,000 6/14/2007
ACT* 51 NORTHWOOD AVE $1,599,000 7/18/2007
U/C 51 NORTHWOOD AVE $1,599,000 8/3/2007
SLD 51 NORTHWOOD AVE $1,570,000 8/28/2007
Ridgewood
ACT 616 MORNINGSIDE RD $729,900 3/9/2007
PCH 616 MORNINGSIDE RD $699,900 4/11/2007
PCH 616 MORNINGSIDE RD $665,000 4/28/2007
PCH 616 MORNINGSIDE RD $625,000 5/30/2007
EXT 616 MORNINGSIDE RD $625,000 6/8/2007
PCH 616 MORNINGSIDE RD $565,000 6/18/2007
ACT* 616 MORNINGSIDE RD $565,000 6/28/2007
U/C 616 MORNINGSIDE RD $565,000 7/12/2007
SLD 616 MORNINGSIDE RD $560,000 8/29/2007
Tenafly
SLD 63 DAY AVE $490,000 5/25/2005
ACT 63 DAY AVE $629,000 3/1/2007
PCH 63 DAY AVE $594,900 4/30/2007
PCH 63 DAY AVE $549,900 5/17/2007
W-C 63 DAY AVE $549,900 5/22/2007
ACT 63 DAY AVE $549,900 5/22/2007
PCH 63 DAY AVE $549,900 5/23/2007
ACT* 63 DAY AVE $549,900 6/1/2007
U/C 63 DAY AVE $549,900 6/8/2007
SLD 63 DAY AVE $508,000 8/28/2007
192#,
source? i live nearby but not in either of these two towns. i did not see this happened so far this year.
>Plainsboro and West Windsor show 22 and 29% drop in Median sale price..these towns are known for their good schools..
(1) Essex (180): “saavy buyers can find deals even in the most competitive bloated markets. I did.”
(2) Essex (197): “Uh, for the record…I bought in 02…charmed the seller…”
(3) Essex (212): “I see 05 as the peak”
If (2) and (3) are true, then (1) cannot be true.
Rich,
You must be making those up, surely nobody who owned a “million dollar Bergen County” home would ever sell at a loss.
jb
#229
here’s your source
http://www.nj.com/news/bythenumbers/
#228 Rich
Like renting, with risk!
(can’t remember who I stole that from, but too funny not to repeat).
Geezus patient….why the heck not??? Look, I saw a bunch of properties….liked some, hated most. Saw the one I have now, the seller and I hit it off…She was 93 years-old and was sick of people coming through her house criticizing it and so forth…I made a comment that was simple and positive. We sat down and chatted a while…she called my realtor…told him she wanted me in the house….actually reduced the price by $10k and refused to accept any bids…..we took a coventional mortgage and moved in a month later….she was an awesome gal….you on the other hand I am not so sure about.
When touching his long and neat beard, he certainly thinks of those bag holders who hold their bags tight and cut their grasses more often than he cuts his beard.
What?
Can you break down the meaning of that for me Shakespeare?
232#, you are right. your patience finally paid off. give them a lowball with this table.
Year Sales Median. Price (000s)
2000: 499 $272 Change
2001: 400 $320 17.6%
2002: 462 $355 11.0%
2003: 462 $389 9.7%
2004: 566 $430 10.3%
2005: 493 $502 16.9%
2006: 415 $545 8.6%
*2007: 19 $385 -29.4%
Rich, my guess is the guys in their cubicles are all frustrated playrights?
make that playwright….for my little buddy with the calculator
They could do a bailout in a lot of diff’t ways. One way might be to order the GSEs to offer low fixed rate loans to homeowners who demonstrate need
Essex,
You purchased in 2002, did you not?
jb
I wonder where all the yelling and screaming in Congress was when the same deadbeats were getting evicted from the apartments they were renting before the bubble. Gimmee a break Schumer.
yes jb 02….
The last I checked there was no constitutional right to a good credit score in this country.
Essex Says:
August 29th, 2007 at 5:01 pm
Yes, I am bullish on housing….I believe that it is a shakeout now….that things are tough based on banks/mortgage brokers and this is adversely affecting the market. I am ‘entertained’ by the board and it’s various naysayers and doomsday theorists….these same people probably have 6 months worth of canned goods in their basements
Essex: I think you are a little ignorant of the group here. Further, you may also be arbitrarty in your views of the overall market that exists currently.
I would say that you attitude here borders on hubris, and you have merely cast aside a great deal of fact-based opinions because it does not agree with your entering thesis.
Real estate is very complex, and to say “I’m bullish….” is counterproductive to most of the discussion here. I would say the bulk of us are bullish on housing, just maybe not on August 29, 2007. Why do you think we are here?
Essex Says:
August 29th, 2007 at 5:31 pm
Saw the one I have now, the seller and I hit it off…She was 93 years-old and was sick of people coming through her house criticizing it and so forth…I made a comment that was simple and positive. We sat down and chatted a while…she called my realtor…told him she wanted me in the house….actually reduced the price by $10k and refused to accept any bids…..we took a coventional mortgage and moved in a month later….she was an awesome gal….
Essex: so basically you found someone in 2002 who followed Booyaa’s instructions from 2005-2007…..and yet you chastise Booyaa for requesting the same level of accomodation you received?
Chastise? Hahahaa — hey it’s 5:30 isn’t to logoff from the work-day and head home boys??? LOL
In Niagara Falls,
The guys are luvie dolls.
pesche would say it to be mean,
But I’m thinkin’ some Canadian gene.
No tourists, terrific!
Exchange rate, horrific.
It was a great week to come here,
I miss the blog and the beer.
you guys keep buying, mercedes and BMWs the only real estate market coming back is Germany. Acording to the Papal driving rules it is a sin to own a BMW and unpatriotic to boot.
I got lucky I bought my SL pre Papal driving rules so I am sin free!!!!
I guess it is the white rich version of diversity, German in the driveway, Italian on the feet, Swiss on the wrist, and a Mexican mowing the lawn.
Booyah provides diversity, humor and, if you read between the lines, insight.
This one’s for you Booyah:
http://granitegrok.com/pix/angry_wet_cat.jpg
BTW, lotsa folks from Montreal here.
And North Jersey. Lotsa people from North Jersey. Not much of anything else outside of international. I’ve been listening.
North Jersey still has $$$ to spend.
Nobody from PA. Nobody from DE.
$h#ts rolling uphill.
John #248
And, if you’re very, very lucky, a Greek in the kitchen.
#234 Essex
The point, which you missed, is that you claimed to have found a bargain at the height of the market. Then you said you bought in 2002. Then you said 2005 was the height of the market.
In short – you did not find a great bargain at the height of the market. That was the point at issue.
“she was an awesome gal….you on the other hand I am not so sure about.”
No. I’m not a dying old woman to be taken advantage of.
#237; #246 Essex
If that’s your take on the folks who post in this comment section, then you certainly lack perception.
Uh….yeah patient you are right…you win. You are the ‘smarter girl’ on the forum….keep waiting sweetie.
P.S. that ‘is’ my take. If you work — and you seem to — yet spend all day here arguing with me….(I am not at work btw)…then you are truly wasting time….and annoying me….
P.S.S…you should, if you’ll take my advice…save that pile of cash you are accumulating — because once your websurfing/time wasting ways become apparent, your pink slip will prolly follow. LMFAO
Interesting bit from CR:
http://calculatedrisk.blogspot.com/2007/08/goldman-sachs-on-housing.html
In a research note today (no public link), GS forecast house prices to decline 7% in 2007, and another 7% in 2008 (based on the Case-Shiller index). They believe the OFHEO index will show smaller price declines.
Essex, you seem upset. Cool down.
njpatient,
After reading your posts today, I finally understand ur handle. you handle bulls**t really well. You took *him/her* all the way from yeah I got a deal to I don’t even know when the peak happened.
Maybe you could try being a little less tolerant!! LOL
afe
some pump and dumps on the homebuilders today?
any think agree? or disagree?
SAS
I like Booya.
He introduced me to “greedy grubbing”
SAS
Yeah jb Goldman is amazing with their research…..(anyone remember the internet bubble) they were right on with their predictions there………….
Thanks, afe. I’m just a patient kinda guy.
#186 and # 187
Median a more detailed explanation courtesy of Wikipedia
Median
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This article is about the statistical concept. For other uses, see Median (disambiguation).
In probability theory and statistics, a median is a type of average that is described as the number dividing the higher half of a sample, a population, or a probability distribution, from the lower half. The median of a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one. If there is an even number of observations, the median is not unique, so one often takes the mean of the two middle values.
At most half the population have values less than the median and at most half have values greater than the median. If both groups contain less than half the population, then some of the population is exactly equal to the median.
Popular explanation
The big difference between the median and mean is illustrated in a simple example.
Suppose 19 paupers and 1 billionaire are in a room. Everyone removes all money from their pockets and puts it on a table. Each pauper puts £5 on the table; the billionaire puts £1 billion (i.e.£109) there. The total is then £1,000,000,095. If that money is divided equally among the 20 people, each gets £50,000,004.75. That amount is the mean amount of money that the 20 people brought into the room. But the median amount is £5, since one may divide the group into two groups of 10 people each, and say that everyone in the first group brought in no more than £5, and each person in the second group brought in no less than £5. In a sense, the median is the amount that the typical person brought in. By contrast, the mean is not at all typical, since nobody in the room brought in an amount approximating £50,000,004.75.
Two of Boooya’s terms have made it to my vocabulary:
* “greedy grubbers”
* “Friskees eaters”
Sprinkle those into everyday conversation (where appropriate) and you’re guaranteed to raise a chuckle.
My friends at D&T told me they signed off on SOX and first quarters numbers at AHM right before they went bankrupt and got a lot of heat and are on the hot seat. The other people, Thromberg, Countrywide etc. our going to have their portfolio looked at very strictly from the external auditors as they are most likely impaired and the phrase “on-going” concern may pop up. If it is a mortgage broker or REIT (even worse, remember they pay our all profits so how the heck do you reserve for a rainly day), and you are buying for a juicy dividend, hold out until after third quarter numbers are signed off on and the 302 certifications are done. The Melt down happened July 19 when Bear got caught with their pants down. That means this whole fiasco is in the third quarter, those second quarter numbers in mortgageland were pretty lame so imagine what they are like now.
Thanks, afe. I’m just a patient kinda guy.
——————————————-
I actually thought maybe you were in a state hospital, thanks for the clarification.
LMFAO…….In probability theory and statistics, a median is a TYPE OF AVERAGE that is described as the number dividing the higher half of a sample, a population, or a probability distribution, from the lower half.
http://cagle.msnbc.com/news/HousingMarket07/main.asp
great housing bubble cartoons
Essex,
“In probability theory and statistics, a median is a TYPE OF AVERAGE that is described as the number dividing the higher half of a sample, a population, or a probability distribution, from the lower half”
you are missing the point. If i sell 10 homes for the following prices
$1
$1
$1
$1
$1
$1
$1
$1
$1
$10
then the mean (called the average in common none technical conversation) = $1.9
The median = $1
Now multiply the numbers in this example by 100,000. The difference between 100,000 and 190,000 is a very big deal when dealing with real estate.
The ultimate point here is that while mean median and mode are all types of statistical averages, they can provide you with very different outcomes in analyzing your data. You need to be very clear about which one you are using. consider the following statement
*Sales for 2007 are through 2/6/2007, are based on preliminary reports, and the median price might not be comparable to previous years.
notice the report specifically states that they used the MEDIAN. if you try to compare this data to a mean, then you will think you are seeing trend that do not really exist due to the fact that you numerical comparison was invalid.
This is not an attach and will stop feeding any trolls that may be floating are. The more you know….
http://www.nytimes.com/2007/08/29/business/worldbusiness/29regulate.html?ref=business
THE NEW YORK TIMES / August 29, 2007
Calls Grow for Foreigners to Have a Say on U.S. Market Rules
By HEATHER TIMMONS and KATRIN BENNHOLD
“America depends on the rest of the world to finance its debt,” Mr. Peter Bofinger, a member of the German government’s economics advisory board and a professor at the University of Würzburg, said. … “If our institutions stopped buying their financial products, it would hurt.” “We need an international approach, and the United States needs to be part of it,” said Bofinger, … President Nicolas Sarkozy of France, who has vowed to “moralize financial capitalism,” has asked his finance minister, Christine Lagarde, to prepare a proposal for stricter disclosure rules on market participants before an October meeting of finance ministers from the Group of 7. On Monday, in a foreign policy speech, Mr. Sarkozy called again for stronger global regulations to avoid financial crises. … “Greater cooperation on the international stage between regulators is undoubtedly one of the things we need to see more of.” … In the United States, much of the focus is on rating agencies, which are paid by banks for rating products, and which sometimes attached investment-grade ratings to securities that turned out to be not up to that standard. … “There is the need to challenge the sovereignty of national regulators,” he said. “Why should the rules of lending in the U.S. be left to U.S. regulators when the consequences go everywhere?”
gotcha….never cared much for math myself…but you know….like they say “figures lie and liars figure”
#266 john
That sounds about right. I’m no SOX fan, but a little fear of criminal penalties sure does seem to get folks to put a touch more work into the financials, doesn’t it?
“never cared much for math myself”
Come 2009, you just might have to. That’s when RE prices becomes fun again, and you also need to pay to replace your brake pads and rotors.
#274 2009? Nah, I think they will be pretty fun in the begining of 2008. They are heading that way now in fact.
Perhaps, but I think she’s covered far beyond that — when did the market peak? When did it bottom? Did you buy the most house you could afford? Did you get a deal? Who knows. Fact is you gotta jump in sometime and simply say WTF……life is funny like that.
Australian Basis Capital Hedge Fund files for BK:
http://www.reuters.com/article/businessNews/idUSWEN072020070829?feedType=RSS&feedName=businessNews&sp=true
Ironic how the rich are being battered by poor people’s defaults.
Rich in NNJ # 228
That l isting in Ridgewood at 616 Morningside is the perfect example of why it is complete irrelevant of the what the initial listing price compared to the sold price is and how it shows nothing of the status of the market. I was in that house twice. It was as close to a teardown as you can get, had a driveway it shared w/ 2 other houses, had mold problems, etc. Just b/c they were asking an insane amount and got a realistic one, doesn’t show anything about the market at all.
Essex,
You really should relax. You bought in 2002, you don’t have anything to worry about, yet. At least not as much as those who bought in 2005, 2006, early 2007.
You probably would be in better shape if you took an intro stat/math class but hey, life is funny that way. Lots of people bought homes thinking they would make lots of $$ without even learning math.
afe
i hear ya afe…….
“If so, once the fed eases…or the NY TIMES delares the crisis over….or some other occurance that sends people into a buying frenzy”
Buying frenzy? You have to be kidding. We have just gone experienced the biggest bubble in RE history. It doesn’t matter what the fed does [there are other asset classes you want to own if this occurs], nor what the NY Times says. This is one hell of a mess and it is in it’s infancy stage. Buying frenzy?
Every markets needs sponsorship to advance, this market needs a tsunami of sponsorship. Investors, all over the world, have fueled this insanity. Presently, as the market still searches for bodies the conduit for the sponsorship has vanished. Yes, you will still find financing if you are a prime buyer, with a good dp. However, this group was not responsible for the final blast off of this market. Hard to believe but now you need a job, proof of income and bank statements to get a loan.
This unwinding will take years. There is too much crap to clear out in a short period of time. How can the smoke clear, the fire is still spreading. I don’t understand why everybody is fixated on the fed easing. How the hell did we get into the mess. Cure the hangover with an open bar?
“Two of Boooya’s terms have made it to my vocabulary:”
* “greedy grubbers”
* “Friskees eaters”
blb,
One of his best, played to the music of the B-52’s, condoshack. I have not heard that one recently.
Did you ever come back to this blog, see 200+ new messages since you last read, and said, f&^# it, I’m just scrolling to the bottom?
Or is it just me?
Good to hear from you BC. Been a shortage of sanity today.
BCBob, what stupefies me is the the cheerleaders are already trying to look ahead and say RE prices might recover in 2009 (2008 has been pretty much written off) and 2010. But who the ‘ef’ knows the magnitude of the decline in between?
A 5% increase in 2009 after a 10% decline in 2008, or a 10% increase in 2009 after a 15% decline in 2008? Either way, this sh1t is going to stink and sink many folks. This didn’t happen overnight and won’t rectify itself overnight either.
Booyaa has a lot of classics… how about ‘read my lips you schmuck’?
#264, 268
I have learned much on this site and thought it was time to give back a little.
An issue with Wikipedia is that it is not always correct regarding technical definitions and varies in its accuracy on a daily basis.
A median is not a type of average. It should be referred to as a ‘measure of central tendency’. Measures of central tendency also include several computations of means or averages (weighted, geometric, etc.) and modes.
There are a couple of academic web sites that give a good, basic review if you do a search on measures of central tendency, but the examples above are spot-on.
-L
It’ll be interesting to watch it unfold….I still say the whole thing is overblown, but I am not an expert.
“”Or is it just me””
No, its not
Lizard 288,
you are correct, however outside of a statistics discussion (the applied math not football) and even in elementary and high school math classes, mode, median and mean are all described as types of averages. While someone who is technically proficient in more advanced fields of math make then finer distinction that you pointed out, the overall significance of this point is irrelevant to the majority of people ( excluding engineering finance, research .etc)
note: the wiki page for median actually differentiates between the “common description” and the more technically accurate descriptions
The wikipedia page actually has pretty good info
wiki on average
http://en.wikipedia.org/wiki/Average
wiki on median
http://en.wikipedia.org/wiki/Median
Lizard 288,
you are correct, however outside of a statistics discussion (the applied math not football) and even in elementary and high school math classes, mode, median and mean are all described as types of averages. While someone who is technically proficient in more advanced fields of math make then finer distinction that you pointed out, the overall significance of this point is irrelevant to the majority of people ( excluding engineering finance, research .etc)
note: the wiki page for median actually differentiates between the “common description” and the more technically accurate descriptions
The wikipedia page actually has pretty good info
Lizard,
Most math books of highschool and elementary school kids (family friends/nieces nephews) actually define mode median mean as three types of averages. However the lack of quality and accurate knowledge in schools is a discussion for another board :) good point you made though
Kettle1,
Point taken.
For me, Wikipedia is often a good place to start for many subjects, but I try to check other sources.
I found the example you gave to be a good one, particularly because it shows that medians are resistant to the influence of outliers (the 10)that will skew means.
Cheers!
Lizard,
you certainly seem to know your math, why not correct wikipedia and throw them a bone? just a friendly thought not meant to be patronizing. Gnight all
Lizard i agree wikipedia is one of the best places to start researching info i am not generally familiar with and then following it to more authoratative sources once i have a better grasp of the basic concepts
Largest Gathering of Default Servicers in the History of Residential Mortgages Takes Center Stage September 9-12 in Dallas, Texas
DS News Hosts First-Ever Town Hall Meeting to Debunk Public Misconception
Lenders and Servicers Are Looking to Foreclose on Homeowners
DALLAS, Aug. 29 /PRNewswire/ — With foreclosures increasing nationwide
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Freddie Mac Deputy Chief Economist Amy Crews Cutts will discuss the
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New to this year’s conference is DS News Town Hall sessions designed to
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“This year’s conference addresses efficiencies and best practices
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Andi Zimmerman, associate publisher of DS News, says they are excited
about offering attendees several new events, such as our Town Hall series.
“In fact, many attendees have already expressed huge interest in our DS
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picture of the industry,” added Zimmerman.
The highly anticipated Town Hall will be held on September 10, 2007
from 4:00pm-6:00pm in the Wedgwood Room of the Hilton Anatole. There will
be a press conference immediately following the event. DS News Goes on
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Also new to this year’s conference is the Lender/Servicer Open House, a
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gain tips on securing their business. The Five Star Institute will also
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six certification courses.
Bringing today’s economic and housing market trends to center stage,
the 2007 Five Star Conference promises to attract professionals from all
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more information on the Five Star and a complete schedule, please visit
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About DS News — http://www.dsnews.com
Uniquely focused on the rich landscape of default servicing, DS News
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“common description”
Probably more useful for conversing with someone who “never much cared for math”
Go to it.
Wow.
You certainly know how to make a convincing argument. I had the misimpression that the RE market was in free fall, but given your cogent, logic-based and fact-laden arguments over the course of today, I am forced to re-visit that conclusion.
what bubble #279,
Just b/c they were asking an insane amount and got a realistic one, doesn’t show anything about the market at all.
I believe it does.
Was a time when they could get that insane price. Then a time where they could get above a “realistic” price. Next may come a time when they get below a “realistic” price.
Richie,
Did you ever come back to this blog, see 200+ new messages since you last read, and said, f&^# it, I’m just scrolling to the bottom?
Or is it just me?
All the time.
Except when I see one of your posts of course.
They’re rare, pithy and worth the pause.
Rich
“you guys keep buying, mercedes and BMWs the only real estate market coming back is Germany.”
Yeah, but we pay CASH for USED… And German cars tend to last forever if well cared for. My diesel Benz is 400k mi and about 20 years old, try comparing it to any Caddy or Town Car of equal vintage and size…
“Nobody from PA. Nobody from DE.”
We’re quietly chuckling at the folks still stuck in hightaxland ;)
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