Preliminary August sales and inventory data for Northern New Jersey is in. Please note that this data is subject to revision.
The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 1000, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.
(click to enlarge)
The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.
(click to enlarge)
The third graph displays only August sales, 2000 to 2007 YOY.
(click to enlarge)
The fourth graph displays an overlay of Sales and Inventory from 2003 to 2007.
(click to enlarge)
The last graph, new this month, displays the year over year change in inventory on a monthly basis.
(click to enlarge)
Contract-sales data can be found in spreadsheet form here: contracts.xls
Sales and inventory data can be found in spreadsheet form here: salesinvoverlay.xls (large file)
Something is different, but anything different is not always good.
august looks weaker than the overall pattern. i’d expect september to look stronger to even out the overall trend we’re seeing this year compared to others.
Reech (2)-
Why? What if the donwtrend is simply gaining momentum?
i’d expect september to look stronger to even out the overall trend we’re seeing this year compared to others.
As we all know, Bush is fixing all the Foreclosure and ARM problems
Richard,
Have you looked at August contracts?
jb
Of course, the trend looks like it’s going to even out.
JB,
Any news on NJ August pending sales number?
Thanks.
Reech may not be wrong if closings meant for mid/late August bleed into this month. I said the same earlier today. I think it’s possible, not that it WILL happen.
grim: you received the updated info on the ID?
For my edification: Does the CONTRACTS.XLS file as compiled by JB document the number of sales contracts reported upon signing, or out of attorney review, or….???
Thanks in advance.
dukeb,
The CONTRACTS.XLS file shows signed contracts sales that are out of attorney review and are now pending sales.
If a unit is out of attorney review it either is active again (agreement canceled by either seller or buyer) or under contract (signed).
Rich
Thanks for the clarification, Rich
rich,
any word on 240 paramus? still UC?
sl
Let me make this clearer:
The CONTRACTS.XLS file shows only signed contracts that are out of attorney review and are now pending sales.
If a unit is out of attorney review it either is active again (agreement canceled by either seller or buyer) or under contract (signed).
Rich
Sobering images.
This market won’t be in it’s true death throes until sellers stop talking about “giving their house away” and start talking about “being grateful to find a buyer”.
We are in the anger phase, big time.
Still Looking,
Yup, still under contract as of 6/15. The estimated closing date was 7/10.
Might be the “wet lands” that are holding it up?
Rich
Fire damages Springfield luxury condo project
Fire heavily damaged a condominium complex under construction in Springfield and intended to offer a view of the Manhattan skyline, authorities said tonight.
The three-alarm blaze on Wilson Road began at 6:30 p.m. and was under control an hour later, police Sgt. John Cook said. No one was injured, he said, but the cause of the fire remained under investigation.
Construction of the project, called Skyline Ridge, began about a year ago, former Mayor Clara Harelik said. The complex was slated to have four towers and about 90 units.
Original plans called for the price of the condominiums to start at $750,000, Harelik said.
Listened to some talk republican radio in the car tonight on the way to the grocery store (rarity – the wife listens).
EVEN THEY are angry about Bush’s bailout plan. Are we even sure this will pass through COngress?
Remember … write your local representative, and try to be heard!
From the WSJ:
Why Libor Defies Gravity
Divergence of a Key Global Rate Points to Strain
By IAN MCDONALD and ALISTAIR MACDONALD
September 5, 2007; Page C1
The Federal Reserve could cut short-term interest rates in the weeks ahead, but right now one key rate is going in exactly the opposite direction, something that could have a big impact on markets and the economy.
That rate is the London interbank offered rate, or Libor. It is an important benchmark for everything from adjustable-rate mortgages in the U.S. to giant floating-rate bank loans taken out by global corporations.
Credit-market turmoil has pushed the Libor higher, even as other short-term interest rates, such as the interest rate on Treasury bills, are falling.
“Higher Libor rates affect the whole economy by tightening the budgets of borrowers large and small,” says Lou Crandall, chief economist with Wrightson ICAP in New York. ” It hurts corporate profits and tightens household budgets, too.”
The disjointed movement in Libor and other short-term interest rates underscores the turmoil that persists in money markets more than two weeks after central banks in the U.S., Europe and Asia sought to settle short-term lending by injecting massive amounts of cash into the global financial system.
…
According to HSH Associates, a New Jersey mortgage-information company, the interest rate on a three-year adjustable-rate mortgage taken out in 2004 and tied to the Libor could be more than a half-percentage point higher than a similar mortgage tied to U.S. Treasurys, whose yields have been falling. On a $200,000 mortgage, that is a difference of about $1,000 a year in interest payments, though many adjustable-rate mortgages include caps that limit how much interest payments can go up in any single year, softening the pain.
Posted on the main page, but will repost here for discussion.
From the Record:
Yearning for good old days of 2005
If there’s one thing that home sellers hate to hear, it’s: “Your house is worth less than you think.”
But that’s exactly the message that real estate agents in North Jersey (and nationwide) must deliver in a market where prices have declined from their peaks of 2005.
“We have homeowners who bought two years ago; they’re going to have to sell for less than what they paid,” said Randy Douglass of ERA Douglass Realtors in Montvale. “They get very upset and disappointed. It’s hard to swallow.”
The problem is that many sellers stubbornly cling to the price their neighbors got two years ago.
“Sellers are still stuck in the old days, and they’re not going down [with their asking prices],” said Ivana Crecco of Camelot Realty in Hackensack.
Many, she said, tell her they need to get the higher price because they have to pay off credit card debt. She has to break the bad news that buyers just don’t care about their credit card problems.
“When it sits on the market [at the higher price], they start to blame the real estate agent,” Crecco said.
So how can real estate agents get sellers to accept reality?
“Often we have to show them what the other homeowners are doing,” Douglass said. If the asking price has just been cut on a similar house nearby, some sellers will agree to lower their prices. Douglass also shows the actual selling prices of comparable houses — another reality check for sellers.
Tim King of King Real Estate Agency in Bergenfield said he often reminds sellers that the house they’re buying has probably come down in price, too.
“It’s all relative,” he said. “Even though you’re getting less for this house, you’re paying less for the next house.”
King said he will sometimes spend two hours with clients, showing them all the comparable houses on the market in their town. “It takes a lot of educa-tion,” he said. “You can’t ask $400,000 for a Cape Cod in Bergenfield if the same house next door is on the market for $358,000.”
Buyers are out there, agents agree — but they’re looking for bargains. Homeowners must understand that as the inventory of houses has risen, there’s a lot more competition for buyers’ attention, Douglass said.
“If you have 10 houses in Upper Saddle River that you’re competing with, you have to be the No. 1 or 2 house in your price range,” Douglass said.
Douglass said the sellers in the most pain are those who bought in 2005. They may have to take a loss of as much as 10 percent, he estimated.
From MarketWatch:
Mortgage applications up 1.3% last week: MBA
The number of mortgage applications filed last week ticked up a seasonally adjusted 1.3% while mortgage interest rates barely moved, the Mortgage Bankers Association said Wednesday.
The volume of applications for all loans in the week ended Aug. 31 was up 10% on an unadjusted basis compared with the same week in 2006, the MBA’s latest survey showed. The survey encompasses about half of all U.S. retail residential mortgage originations.
Applications filed to refinance existing mortgages rose a seasonally adjusted 2.3% on a week-to-week basis, while applications for loans to buy homes were up 0.4%.
The four-week moving average for all loans was down a seasonally adjusted 1.3%.
Hat tip to CR, some interesting news from National Mortgage News:
Countrywide May Trim Up To 10,000 Workers
Countrywide Financial Corp., is contemplating slashing its work force by 7,000 to 10,000 workers, according to industry officials close to the situation.
Lay-offs surge 85 percent in Aug vs July: survey
http://biz.yahoo.com/rb/070905/usa_economy_jobs_challenger.html?.v=1
Did anybody else catch Kass on Fast Money last night? He was great, pointed out the LIBOR problem, which can’t be fixed by the Fed, and said Countrywide will be lucky not to go bankrupt.
Are there any stats out there on how many ARMs are based on the LIBOR versus other indices?
RentinginNJ Says:
September 4th, 2007 at 11:30 pm
Fire damages Springfield luxury condo project
rent: let’s make a pool on the different accelerants…..everyone pull a piece of paper out of a hat for $10
RentinginNJ Says:
September 5th, 2007 at 8:44 am
Are there any stats out there on how many ARMs are based on the LIBOR versus other indices?
LIBOR….you would have to have a 1M or 3M resetting I would think….someone must have been seriously in whack-job mode to take on this one
#3 Clot Because, simple as that. All negative news can be explaiend away.
Acceptance of it would mean acceptance that there was a bubble,that has now popped,with of course a drop in prices.
A real estate bull especially one who purchased so recently can never accept that.
And anyhow what would you know, your only in the real estate market everyday.
#7 chgo: And of course we have to consider that some of those closings could be pushed out even further than Sept, as the purchasers try to obtain financing, assuming of course that the seller iis willing to wait.
And some may not close at all, and come back on the market.
Acceptance of it would mean acceptance that there was a bubble,that has now popped,with of course a drop in prices.
A real estate bull especially one who purchased so recently can never accept that.
Very true. Many sellers rationalize their problems selling by blaming buyers:
“Sure, there might be a bubble somewhere, but not in ________. It’s different here. After all, we are close to ________ and have great _________.
While there are a lot of homes for sale in my neighborhood, my house is much nicer than those other dumps. The _________ was just updated in 198_. And, my house isn’t even the most expensive. I’m asking $___ hundred dollars less than the house down the street!
Buyer’s are getting too greedy. I have a highly desirable home in a highly desirable neighborhood. I’m not just going to give it away!”
http://www.msnbc.msn.com/id/20546324/site/newsweek/
BOYAAAAAAAAAAAAAHAHAHAHHAHAHAHA
Bob
Hello!
Anyone listening?
Comps are collapsing.
hehehehhehe
lisoosh Says:
September 4th, 2007 at 11:16 pm
Sobering images.
This market won’t be in it’s true death throes until sellers stop talking about “giving their house away” and start talking about “being grateful to find a buyer”.
We are in the anger phase, big time.
===================================
Great observation.
Recently, spoke with an angry johnny come lately. But ya know what they said.
“I AIN;T GOING TO GIVE IT AWAY”
HAHAHAHAHAHAHAHA!
Around the holidays grateful for any bid by a qualified buyer will emerge.
Does anyone know the definition of “no reasonable offer refused”?
What’s reasonable mean?
hehehehhehehehe
BOOOOOOOOOYAAAAAAAAHAHAHAHHAHAHHA
Bob
A little update on the vulturing toy front.
Oh man, do i have a sucker uh I mean show & teller uh I mean pigeon going to buy high priced toy from at .60 on the dollar. it’s nearly brand new.
BOOOOOOOOOOOYAAAAAAAAAAHAHAHAHHAHA
Bob
These Jobs losses are coming at the very bad time. In spring it would have been OK not in Aug. Labor day is gone and a recession is coming.
http://www.marketwatch.com/news/story/wall-street-drops-start-after/story.aspx?guid=%7BB0D2126D%2D2BA8%2D492E%2DA31C%2D25B555E74CD9%7D&dist=hplatest
By the way, my wife has sold my “haunted house” I actually made two dollars. A chinese restaurant owner bought it.
I’m sure he won’t have any trouble renting it to the asians. Market niche I guess.
RIP…sort of
http://www.nydailynews.com/entertainment/tv/2007/09/05/2007-09-05_cnbc_commentator_seth_tobias_found_dead_.html
OT: But what a difference between the 2 states.
http://www.bondbuyer.com/article.html?id=20070904SQ5IHVCT&from=home
pending homes………ouch
From Bloomberg:
Pending Sales of Existing U.S. Homes Decreased 12% in July
The drop in the number of Americans signing contracts to buy previously owned homes in July dropped by the most since records began in 2001, extending a U.S. housing slump that is weighing on credit markets and the economy.
The index of signed purchase agreements, or pending home resales, fell 12.2 percent to 89.9, the lowest since September 2001, after increasing 5 percent in June, the National Association of Realtors said today in Washington. The median estimate of economists polled by Bloomberg News projected a 2.2 percent drop.
More restrictions on obtaining loans and higher short-term mortgage rates may be extending the housing slump, now in its second year. The lingering weakness in residential construction is threatening to slow consumer spending by driving down property values, increasing the risk the economy will stumble.
“The housing market is weakening,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. “There’s been a definite sort of shift in terms of the tightening of credit standards, which we believe is affecting the demand for homes and the demand for mortgages.”
The median forecast was based on a survey of 26 economists. Estimates ranged from a drop of 4 percent to an increase of 1.5 percent.
The National Association of Realtors began reporting pending home resales in March 2005 and has supplied historical data back to February 2001. The gauge is considered a leading indicator because it tracks contract signings. The group’s existing-homes sales report tracks closings, which typically occur a month or two later.
…
“Our members are telling us some sales contracts aren’t closing because mortgage commitments have been falling through at the last moment,” said Lawrence Yun, a senior economist with the Realtors’ group. “There are continuing issues for subprime borrowers, but there are no serious problems for the majority of buyers who qualify for conventional financing.”
From MarketWatch:
PENDING U.S. HOME SALES SEE STEEPEST MONTHLY DECLINE SINCE 2001
Contract signings on existing homes fell by 12.2% in July — the largest drop since the pending homes sales index started in 2001, the National Association of Realtors reported Wednesday. The index hit its lowest level since September 2001. The index had gained 5% in June. Pending sales are 16.1% below July 2006. A decrease in pending home sales was seen in all four major regions of the United States, the group said. In July, pending sales fell 13.1% in the Midwest and 6.6% in the South. Pending sales fell 20.8% in the West and 12.2% in the Northeast.
Holy S**T Batman…The market was expecting a 3% drop….
The Pending Home Sales Index*, based on contracts signed in July, fell 12.2 percent to a reading of 89.9 in July from the June index of 102.4, and was 16.1 percent lower than July 2006 when it stood at 107.1
Given the NAR contracts data for July, and the GSMLS/NJMLS contracts data for August, it looks like sales may be poised for another leg down.
jb
the mortgage market wasn’t even that bad in July. August numbers are going to be a real sh*tshow
#38 “but there are no serious problems for the majority of buyers who qualify for conventional financing.”
Yeah, no serious problems, excpet the problem of qualifying in the first place. He did say conventional financing, did he not?
pending home sales did “even out the overall trend” LOL.
#44 God you are so neagtive!!
just to provide some anecdotal counterpoint: a buddy of mine is scheduled to close on a place in Boston later this month and he just told me that the closing is going ahead as planned. He putting down 10% and getting a fixed rate jumbo for the rest.
#39
no surprise there, and august will be worse, september will drop even farther. preparing for the october armaggedon, as we enter reset city.
Hurricane Chip hit early…….
daniel Says:
September 5th, 2007 at 10:23 am
#39
That’s some restaurant you have, although I don’t really appreciate French….the food is too rich and so are the tabs…
45]
Is there any reason to be postive? Unless you are in the reach camp where sum of monthly home sales in a down year is always constant.
We gonna have bad sales data for the rest of the year. That’s yesterday’s news. Toll, Mozillo, everyone said this.
Today’s problems are really the loss of jobs and lack of creating new jobs.
It’s spilling over and heading to a recession near you. Consumer is holding up fairly well and Christmas season will be a major test. The problem seems to be with the business as they are slowing spending and investing. If this trend continues then we are in for a major recession. Bye bye US dollar.
I’m in a process of buying some Francs and putting some bubble dollars in a Swiss CD.
my two cents.
http://finance.yahoo.com/loans/article/103446/drive-your-car-to-death-save-31,000
Drive Your Car to Death, Save $31,000
By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000, according to Consumer Reports magazine.
Consumer Reports’ “Good bets” for making 200,000 miles: Honda Civic, Honda CR-V, Honda Element, Lexus ES, Lexus LS, Toyota 4Runner, Toyota Highlander, Toyota Land Cruiser, Toyota Prius, Toyota RAV4
Consumer Reports’ “Bad bets” for making 200,000 miles: BMW 7-series, Infiniti QX56, Jaguar X-type, V8-powered Mercedes-Benz M-class, Mercedes-Benz SL, Nissan Armada, Nissan Titan, Volkswagen Touareg, V6-powered Volvo XC90.
It is obvious that the negative media campaign against real estate has finally had an effect on buyer psychology. Expect all the inventory to dry up when the media moves on to something else.
just kidding…
Both my cars have manual transmission so they will easily go 200,000+ miles.
From MarketWatch:
More credit-market turmoil to come, regulators say
U.S. financial regulators said Wednesday that the turmoil buffeting the credit and mortgage markets will take time to settle down but that major U.S. banks and the overall economy are both in good shape.
Treasury Undersecretary Robert Steel, Comptroller of the Currency John Dugan and FDIC Chairman Sheila Bair made their comments in remarks prepared for delivery before the House Financial Services Committee.
“This process is far from over,” said Steel. “It will take more time to play out and certain segments of the capital markets are stressed.”
Steel said an interagency group of officials will study the role of securitization and ratings agencies in the recent market downturns.
“However,” he added, “the economy was in strong condition going into the recent period of volatility, and while certain sectors like housing are undergoing a transition, overall economic fundamentals remain solid.”
Dugan sought to reassure lawmakers, meanwhile, that big U.S. banks are weathering the storm caused by the implosion in subprime lending.
“The national banking system remains safe and sound,” he said.
“The worst problems we have seen in the markets … have occurred outside the commercial banking sector,” said Dugan.
#51
why do you think the consumer is still in good shape? consumers do not appear to be buying big ticket items such as cars and appliances
Mike Larson over at Interest Rate Roundup has got a Bloomberg screen cap. of the pending home sales data.
Worth a peek:
http://interestrateroundup.blogspot.com/2007/09/gigantic-plunge-in-pending-home-sales.html
James Bednar Says:
September 5th, 2007 at 10:04 am
From MarketWatch:
PENDING U.S. HOME SALES SEE STEEPEST MONTHLY DECLINE SINCE 2001
Contract signings on existing homes fell by 12.2% in July — the largest drop since the pending homes sales index started in 2001, the National Association of Realtors reported Wednesday. The index hit its lowest level since September 2001. The index had gained 5% in June. Pending sales are 16.1% below July 2006. A decrease in pending home sales was seen in all four major regions of the United States, the group said. In July, pending sales fell 13.1% in the Midwest and 6.6% in the South. Pending sales fell 20.8% in the West and 12.2% in the Northeast.
==================
YIIIIIIIIIIIKES!
BOYAAAAAAAAAAAAHAHAHHAHAHAHAHA
Bob
Good morning dried friskie eating bunch.
When you treat 1st timers and buyers like dirt you gotta pay now.
The few qualifed buyers with an “attitude” raise your hand. YOU ARE A HIGHLY VALUED COMMODITY NOW.
BOOOOOYAAAAAAAAAAHAHAHAHHAHAHAHAHAHAHA
Bob
It’s great to be heavy with cash while the rats are jumping ship.
hehehehehhehehehehe
#50 njbear: I was kidding.
#51
why do you think the consumer is still in good shape? consumers do not appear to be buying big ticket items such as cars and appliances
Look at all the retailers. cars ans truck? look at GM.
Jobs jobs jobs…that’s the key.
ChiFi (35)-
Who’s short QSGI? Nice little payday yesterday!
Just saying…
“Numbers like this should put to rest the belief that we’ve reached the bottom” in the housing market, said Joel Naroff, chief economist for Commerce Bancorp Inc. “There’s still a lot of pain that’s ahead of us.”
from:
http://biz.yahoo.com/ap/070905/pending_home_sales.html?.v=11
#38 lol
“The housing market is weakening,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, said before the report. “And Michael Jordan wasn’t a bad ballplayer.”
It’s funny how a Weichart Realtor tried to get me to buy a home over my limit using the 40yr mortgage product when things was good in the hood. (smile) My reply was yeah right so in due time I would end up with an upside down mortgage??!!!!. Whew thank goodness for common sense (patting myself on the back) Of course he denied that the market was going to go down. Hmm maybe I should call him just to see how he is doing. (smirk on my face)
Kass was claiming last night that the death of the consumer is going to start showing up this quarter. Who knows? I think the majority of people in this country will spend until they can’t get any more access to credit.
Arr Elle,
That’s nothing. How about a realtor telling you to take out a 2nd mortgage on your home to use as a down payment on another home. And, don’t tell the bank the real reason for the loan and make sure you take out the loan at least 48 hours before you list your current home. That was a Weichert realtor.
#49 chi
“That’s some restaurant you have, although I don’t really appreciate French…the food is too rich and so are the tabs…”
But the atmosphere is pretty decent.
HEHEHE
“I think the majority of people in this country will spend until they can’t get any more access to credit.”
…and is that time now? Magic 8-Ball says “all signs point to ‘Yes’.”
Hey Booyaaaah – why is it that I can’t get Jimmy Cliff’s “The Harder They Come” out of my head?
Hmmmm?
HE HE
The consumer was alive and well and buying very expensive back to school Items at the garden state plaza just the other day. Can some one tell me why I would pay 75.00 for a pair of “destroyed” jeans?? I mean I am a little crazy yes.. last year I bought a 35.00 santa suit for my 9 year old and took it in the yard and “destroyed” it my self, (he was bad santa)
but at least I had some fun!
Oh and I have been waiting for a commitment since 8/16 from countrywide whats up with that.
KL
Keep in mind comments cannot show true states of mind.
“I think the majority of people in this country will spend until they can’t get any more access to credit.”
I think they will in fact slow and then stop “spending” any remaining credit if the macro outlook does not improve. What they will do instead is begin to “draw down” any remaining credit in order to service their current credit obligations. This would be akin to the Hail Mary play in sports. They’ll do it in the hope that things will improve before they are maxed out and life will take them to an even greater high. On the flip side; bankruptsy. (And they’ll just shrug their shoulders about that as being fate.)
#68 Gary:
Wow, again thank goodness for common sense!!! Gary you should call that realtor to see how they are doing (smile) Yeah I know you can care less.
“Consumer Reports’ “Bad bets” for making 200,000 miles: BMW 7-series, Infiniti QX56, Jaguar X-type, V8-powered Mercedes-Benz M-class, Mercedes-Benz SL, Nissan Armada, Nissan Titan, Volkswagen Touareg, V6-powered Volvo XC90.”
So I guess that 1984 7 series Beemer with 350k on the clock sitting in my driveway is a figment of my imagination.
Cars last when you take care of them.
Glen Rock
SLD AMHERST CT $680,000 8/2/2005
ACT AMHERST CT $669,000 2/13/2007
PCH AMHERST CT $659,000 3/14/2007
PCH AMHERST CT $639,500 5/4/2007
W-U AMHERST CT $639,500 6/4/2007
ACT AMHERST CT $609,000 6/4/2007
PCH AMHERST CT $599,000 8/9/2007
ACT AMHERST CT $579,000 9/5/2007
#76 Rich: that is ugly, down 100K,and it has not even sold yet
re: Wall St jobs
just read on the WSJ “Deal Journal” that only 3 M&A deals over $1b were announced in August. This compares to 26 in May.
#75
lishoosh,
One problem I had with that article was that no model years were mentioned.
I think those older 7-series were light-years more reliable than the more recent models. The 90’s onward era 7’s were plagued with electrical gremlins.
But I do agree with you that with enough maintenance (and repair $$) cars do last.
“was just updated in 198_. ”
Renting: I just laughed tea out my nose.
Chi (#35)
Tobias? This guy?
Let’s try that again:
Tobias? This guy? http://www-dot-bluthfamily.com/characters/tobias-funke/
http://seekingalpha.com/article/46295-merrill-cuts-estimates-on-banks-says-60-chance-of-recession
Merrill Lynch analysts : 60-65% chance of a recession.
Don’t forget to write your Senator’s and Congressmen to say NO to a bailout! Links and writing suggestions (don’t just copy and paste, try to use some original writing) can be found at the below link:
http://patrick.net/housing/contrib/nobailout.html
i rec’d a listing from my realtor for a house in millburn (walnut ave) for 795,000. it says it was totally renovated by the builder in 04-05. according to zillow, it was sold in 12/04 for 751,500.
i can’t imagine that that house will for 795,000 now -but even if it does, with all the costs involved with the renovation, closing costs, realtors fees, and the cost to own this house for 3 years, the seller is really at a loss. i imagine that i will soon see it for rent at some absurd price.
From MarketWatch:
Sen. Dodd bill would reform mortgage practices
Senate Banking Committee Chairman Christopher Dodd, D-Conn., said Wednesday he will introduce a bill aimed at protecting homeowners, particularly in the hard-hit subprime mortgage market. The bill would ban prepayment penalties, prohibit “steering” of custommers to higher-priced loans and take other steps. “My bill will help keep Americans in their homes while also helping to restore public confidence in our mortgage and capital markets,” said Dodd, who is running for president. Dodd’s announcement follows regulators’ guidance to banks on Tuesday to help borrowers avoid foreclosure, and steps unveiled last week by President Bush to allow some refinancings.
From Forbes:
FDIC anticipating 1.5 mln borrowers unable to make mortgage payments after reset
The Federal Deposit Insurance Corporation is anticipating that 1.5 mln borrowers will be unable to make their mortgage payments after interest rates on their loans reset in the coming months, according to FDIC Chairwoman Sheila Bair.
‘We will have a lot of resets,’ Bair told the House Financial Services Committee today.
Bair testified with other banking regulators today who said they have seen many questionable lending practices disappear in light of subprime borrowers’ increasing inability to repay loans.
Beige Book
http://www.federalreserve.gov/fomc/beigebook/2007/20070905/default.htm
I have been reading this blog since my wife and I moved here about a year ago. I have found the information to be outstanding.
As much as we would like to buy, it would make no sense at all to do so. It would easily cost us 60% more than what we pay for rent, even before factoring in repair reserves.
We live in a circa 1987 townhouse in Madison. We are not in a big complex, but big enough that a few of the units have changed hands since we’ve been living here. A couple of months ago I saw two units in the MLS. One was a 2BR 2.5BA with significant recent upgrades (granite, SS, new baths, etc) listed for $479K. There was a 3BR 2.5BA with original fittings listed for $499K. Since there are no ‘For Sale’ signs on the units I’m not sure of the specific addresses.
The 3BR is still in MLS. The 2BR has disappeared. This week I saw that there was a $399K real estate transfer in my complex. I suspect that this was the unit listed at $479K. If so, this definitely qualifies as a low-ball since the sale price is 17% below the asking.
Well its about time homeowners and others se a REAL PICTURE.
Home prices’s have to come down 30-50% or no SALE!!!
Fire sales have already started in OCEAN and Essex county.But insurance companies KNOW Better!!!
kl (72)-
“Oh and I have been waiting for a commitment since 8/16 from countrywide whats up with that.”
That Countrywide office is probably having a coin drop on the street in front of their building to raise the funds for that loan.
I think next year this time will be when the real bargains hit. If you can wait than wait until 2009. Prices sticky on the upside and downside. Funny I know someone who bought a house in Millburn for $640k on January 05. The house next door only slightly bigger sold for about 700k earlier this year. That person who bought for 700k will regret not doing their homework. My friend told the seller I was interested in a house. When I found out what they would ask w/ a broker, I said I’m sorry, but you’re outside my price. I would not have paid $500k for the house, but that’s me. That’s why I’m still renting and living in a 2BR w/ my wife and 2yr old kid. We’ve got a new one coming at the end of the year, but we’ll sleep on a pull out couch or w/ the 2 year old kid if we have too until the market turns. The “Titanic” is turning my friends, unfortunately it may sink first.
I was getting my haircut last week in Brigadoon when I noticed several flunkies outside the Countrywide office a few doors down. They were hard at work loading file boxes from inside the office into a waiting van.
Many boxes.
Don’t know whether they’re still open for business. Next time I’m over that way I’ll check. I’m not jumping to any conclusions, maybe they were just cleaning up the records for the end of the month.
Another commentary on the proposed bush bailout
IWhy Bush’s Mortgage Bailout Plan Is a Bad Idea
#89 There is a town house development in my area 20 years old all the same, 2bed/2 bath. At the peak in 2005, they were closing at 500k.
Asking prices are now down to 420K, and sitting, one just dropped to 400k, that was forclosed, now owned by the bank.
I do not understand why the owners did no tye and sell, becasue according to the Sheriif Dept info, back in May/June the outstanding mtg balance was only around 210K.
Anyhow if you bought one of those in 05, you are down at least 80 to 100k, and the units sitting have not even sold yet, so could be down a lot more.
I think the consumer will continue to spend as long as the credit card offers come in the mail, who cars if the interest rate is 24%, the minimum payment is only 49.99 a month !!
We really need a recession to remind people that the economy cycles through boom and busts. With better risk management and better (read loose) monetary policy, we have taken the edge of the recent recessions, but they do happen.
“So I guess that 1984 7 series Beemer with 350k on the clock sitting in my driveway is a figment of my imagination.
Cars last when you take care of them.”
Hey, you’ll win once in a while sticking on 16 against the dealer’s 10 in blackjack too ;)
Only half kidding that you’re just lucky – I have a ’99 528i bought with 50k miles for 1/3 of it’s new price, and plan on driving it until the wheels fall off. Fairly regular oil changes, cooling system checks, and a sympathetic driving style will indeed help ensure a well designed car lasts a loooooooong time.
Kurt
COuntrywide is down to $18 a share today. At $17 and lower it turns that BoA deal into an usecured loan with a high yield.
In other words, don’t wait on line when I claim Chapter 11.
Mozillo is a pimp. Applaud the guy.
Mozillo is my hero. True capitalist to the core.
In one townhouse complex I know, the prices were in 380K range in 2005, today the asking price is 320K. The prices down 60K or 20%.
i sure hope that those waiting on the sidelines have the patience to hold off until the prices match back up with income levels…the banks and brokers need to be regulated somehow to assure the 20% down with the certain income to housing ratio that need to be met…may Bush can work on that instead of this bailout i keep hearing about (by the way, that all talk, it will never pass through congress!)
Did anyone catch Cramer last night on Mad Money? He predicted the financial have bottomed. He says buy, buy, buy.
How many of you believe that?
What’s wrong with the guy? Does he even care if his viewers make/lose money. CNBC should oust both him and Larry Cudlow. I’m tired of watching them beg for a rate cut. Enough already.
So I guess that 1984 7 series Beemer with 350k on the clock sitting in my driveway is a figment of my imagination
No. Beamers just ain’t what they used to be.
No. Beamers just ain’t what they used to be.
I beg to differ my M6 is phenomenal. If you go for a ride then you’ll change your mind.
I guarantee it.
Clotpoll Says:
September 5th, 2007 at 2:10 pm
kl (72)- “Oh and I have been waiting for a commitment since 8/16 from countrywide whats up with that.”That Countrywide office is probably having a coin drop on the street in front of their building to raise the funds for that loan.
clot: who needs a coinbox when you have this………
https://bank.countrywide.com/scontent.aspx?cmtag=Content-cds
A story to confirm what is going on in Bergen County- The Disconnect Between Sellers and The Market.
Just cancelled a contract on a home in Midland Park. The Seller failed to disclose that her furnace never worked on the basement level, nor did she disclose that there was a fire (I found out via family friends who live in the neighborhood) Also found Mold upon inspection.
She ‘sold’ the house for 600k in April, never made it to inspection as the buyers could not get financing.
We offered $573, ready to roll, pre-approved, quick close etc. She balked that she was ‘giving the house away’ But accepted. After inspection we asked for credit on the above issues. What does she offer? $500. We killed the deal. Not even a discussion.
This woman had been in the home for 30+ years, and still believes that the home is work what it was in 2005. Very sad.
Another house in Wyckoff, the Realtor tells us that the owner is a stubborn old man. He will not go below 590. Do these folks watch the news?
We will only look at homes that are estates or where we know the sellers HAVE to sell. Why waste time with folks that are clueless?
No. Beamers just ain’t what they used to be.
You might be right, this one is built like a tank, I was putting 25k a year on it a while ago. That is why I hesitate to get rid of it now, it makes a superb back up, and we have a whole cars worth of spare parts just in case.
mm: having an M6 in the US is like bringing a bazooka to a squirel hunt.
The car was made to cruise all day at 150mph on the autobahn, and/or to be one of the world’s more expensive d!ck extensions.
PS: last week I rode in an M3 CSL on the Nuerburgring. Very nice car, but again useless in the US totally pointless unless you have access to a road racing course.
Kurt
MM (103):
The difference between porcupines and BMWs? A porcupine has its pricks on the outside.
nj buyer…the word is getting out but really slowly….it takes time for people’s mind to change especially those that have owned an asset like that for 30 years! hard to part with without getting the top dollar they think they can get! remember a lot of these folks think that they can retire on what they sell the house for! another fallacy that was created during the recent boom!
you also have to remember that the 573K you were about to pay may only be 500K next year this time! if you dont HAVE to buy right now – dont…
i firmly believe that the prices will drop 10 – 20% before it ‘stabilizes’ but then there still will be good deals to be had since the prices are not going to shoot up like they did these past years!
PATIENCE….
#105 573K in Midland Park!
You would have way over paid. If you want to buy up in that area, concentrate on Wyckoff, Allendale, or Oakland.
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oakland? isnt that way up there? for 573K you should be able to get something really nice in oakland (remember i am talking real prices not todays overhyped prices)…my opinion wyckoff, allendale are in a much higher league than oakland…after the prices have adjusted, you should be able to pick up something nice in wyckoff, allendale for 573K but then again, those areas could be one of the few where prices down really come down???
There are over 100 hosues for sale In Wyckoff right now. I would suspect there will be even more next Spring.
And prices will come down there too, alot(IMHO).
“Jamey Says:
September 5th, 2007 at 3:31 pm
MM (103):
The difference between porcupines and BMWs? A porcupine has its pricks on the outside.”
Clever. And original.
“Kurt Says:
September 5th, 2007 at 3:28 pm
mm: having an M6 in the US is like bringing a bazooka to a squirel hunt.
The car was made to cruise all day at 150mph on the autobahn, and/or to be one of the world’s more expensive d!ck extensions.
PS: last week I rode in an M3 CSL on the Nuerburgring. Very nice car, but again useless in the US totally pointless unless you have access to a road racing course.
Kurt”
Perhaps; but there are amateur autocrossing and track events available to enthusiasts for which these cars are perfect. One could make the same argument for Vipers, Corvettes, etc…
In my opinion, it’s not about the ultimate top speed or triple-digit cruising capabilities, but more for the road “feel” and handling characteristics. That engineering can be experienced on a daily basis, given the right off-ramp and traffic volume.
That being said, I think an M6 is a boat.
#109 CAIBC, we could be patient but have been living with my folks and 2 year old son since last Sept.
We have been concentrating on Allendale, HHK, and Wyckoff. In the $550-600 price range there is junk.
Our Realtor told us when we killed the deal
“At your price range, you are going to have to make some concessions” Needless to say, we found a new Realtor.
#116 Clueless Realtor
Hard Place (91)-
So why are you so itchy to buy a rapidly-depreciating asset?
Unless, of course, you have some sort of psychic insight into when the bottom will form. You seem to be intimating that in your post.
NJ notbuyer (116)-
Your words:
“In the $550-600 price range there is junk.
Our Realtor told us when we killed the deal
“At your price range, you are going to have to make some concessions” Needless to say, we found a new Realtor.”
Given your statement above, what did your agent tell you that was not true or consistent with what you’ve already observed?
If you are looking to buy a house at next year’s prices, why are you looking today?
In a few more months, the nutjobs and ’05 wishers will be wiped out. Why not just go out then and buy?
That being said, I think an M6 is a boat.
LOL, It’s more like a super speed boat.
Vipers, and Corvettes and all American Cars for that matter cannot compete with German Engineering especially the Ultimate Driving machine.
M6 hugs the road. It sticks to the asphalt at 120mph.
10K-15K of Political Contributions to the correct parties with networking and you’re pretty much out of any Ticket. You already know this.
BTW I took the Governor off. Soo you know what that means.
Not to mention the 20yr old blondes it attracts. Ask my wife!!!!
Was this posted yet?
From the WSJ:
Lenders Urged to Help Avoid Foreclosures
By GREG IP
September 5, 2007; Page A2
WASHINGTON — Federal and state banking regulators urged lenders and investors to restructure the loans of millions of borrowers at risk of losing their homes as their adjustable-rate mortgages reset to a higher rate.
Lenders should “review to determine the full extent of their authority to identify borrowers at risk of default” and find a way to keep the borrower in a home, the regulatory bodies said in a joint statement.
http://online.wsj.com/article/SB118895083007417527.html?mod=hps_us_whats_news
“Not to mention the 20yr old blondes it attracts. Ask my wife!!!!”
Your wife has a thing for 20 year old blonds? Now we know why you have the M6.
Lisoosh,
Your wife has a thing for 20 year old blonds? Now we know why you have the M6.
I wish.
She chases them away like the little chicken that they are.
BMWs are no longer the ultimate driving machines, they’re the ultimate marketing machines. They even admitted that the new M3 was designed first and foremost as a counter punch to the better looking and more powerful AMG Mercedes.
It was interesting that the hard core ‘Ringers at the Nordschliefe last week (very talented and not poor Norwegians, Swedes and Germans I was hanging out with, I am poor in comparison) all spoke very highly of the Z06 ‘vette, and it’s widely known that the Viper is great fun on the track, though the interior is sh!t and if you flip it you die.
That beind said, they all hammered around in GT2/GT3 Porches or track prepped M3 BMWs. The 2 Z06s there were crawling around the track by middle aged dudes with young trophy wives.
I was driving a rental BMW 320 diesel wagon and having a ball :)
make (123)-
The only place you’re hooking up with a 20 y/o blonde is on 10th Avenue.
And, if I were you, I’d “check under the hood” first…if you know what I mean.
#120
Not a fan of the M6, I have to be honest. I like more nimble cars. Performance-wise, the newest Corvette z06 will embarass an M6, by the way.
Clot,
Why the personal attack? I never said that I was hooking up with them. All I said was that it still attracts the oppsite sex. That’s all. My wife and I, get into little fights all the time.
It’s funny that I don’t see JB erasing post #125 on the basis of it being an unprovoked personal attack.
#126, New Investor
I never said I had the best car in the world. I don’t comment of no one’s car here on the board or compare it to others.
I just said that BMW is still one of the best cars to drive. That’s all.
#124
I unfortunately have to concur with Kurt. BMW (BMWUSA, in particular) has perfected the practice of marketing. The company used to be catered to enthusiastics, but it’s moving further and further away from those roots with every generation of models.
More weight, bigger size, standard run flats, lack of LSD’s except on M models; these all detract from the ultimate drive that BMW sports sedans used to embody.
I think it’s solely a matter of time before the Japanese rivals offer superior performance, for lower cost, and wayyyy more reliability.
At least the older models are still plentiful and can be picked up cheaply these days.
#128
No offense intended. I drive an M3, by the way, not a Corvette. I just was contesting your assertion in a previous post that
“Vipers, and Corvettes and all American Cars for that matter cannot compete with German Engineering especially the Ultimate Driving machine.”
I’ll cease the automotive discussion now, for this is a RE blog.
I want a TVR Griffith or Chimera. TVR is supposed to be coming to the US. Amazing cars.
“I’ll cease the automotive discussion now, for this is a RE blog.”
True, but at least there are similarities.
The biggest one being that both cars and RE are depreciating assests ;)
#85 (tcm)
“i can’t imagine that that house will for 795,000 now -but even if it does, with all the costs involved with the renovation, closing costs, realtors fees, and the cost to own this house for 3 years, the seller is really at a loss.”
For this walnut ave house, I hear that the renovations were done prior to the current owner purchasing for 751k. I think they are justing trying to unload to break-even after the realtor fees.
Speaking about realtor fees, etc., does anybody think that sellers looking to unload below their purchase costs will meaningfully increase traffic to discounters such as Foxtons (as they look for every way possible to save money)? Or is the thinking that a rare but excellent realtor is needed now more than ever?
make (127)-
“It’s funny that I don’t see JB erasing post #125 on the basis of it being an unprovoked personal attack.”
In my book, yammering about a Bimmer is a direct provocation.
duke (134)-
Think sharp buyers looking for a steal don’t know how Foxtons- and others of their ilk- operate?
Foxtons is the first place today’s vultures look for fresh meat. The current market conditions have just about wiped them out.
Clotpoll Says:
September 5th, 2007 at 4:39 pm
make (123)-The only place you’re hooking up with a 20 y/o blonde is on 10th Avenue.
And, if I were you, I’d “check under the hood” first…if you know what I mean.
clot: traffic lights are optional when approached by “CWD” as they say on the old channel J
ChiFi (137)-
Where are Robin Byrd and Al Goldstein when I need them?
“CWD”…hardy-har!
I’ve been tracking inventory for about 2 years now in the 350-550K price range for selected towns. The Sept ’07 numbers are only slightly higher than those for Sept ’06, which were about 30-40% higher than those in Sept ’05.
Given that the market has deteriorated since Sept 2006, I’m guessing people are finally dropping prices in order to move this inventory, unless it is all moving below 350K.
So, if Sept 2007 sales numbers turn out better than August, we should look at the price statistics.
There’s a show on HGTV called Small Space Big Style and up next is how someone has designed a cargo container.
When I cruise at 80 mph in my POS car, no M6 can beat me. The only thing he will beat me is to a traffic ticket by a donut-chompin cop.
Just caught a clip of Delaware PBS news – their median salary dropped $1,800 last year.
Where is BC Bob?
oh my lord, check out this crap….
http://www.linkedin.com/profile?viewRecs=&key=2300687&authToken=fATp&authType=name
Foreclosure filings jumped by 30% last month from the prior month across the entire country, and doubled in most troubled states like CA, FL and AZ. Taking about blood bath on the horizon.
“I was getting my haircut last week in Brigadoon when I noticed several flunkies outside the Countrywide office a few doors down. They were hard at work loading file boxes from inside the office into a waiting van.
Many boxes. ”
Brigadoon and Camelot in the same thread.
I couldn’t even read the rest of the thread. Help.
From Barron’s … I don’t have a subscription to get the full article
FREE PREVIEW
Fannie and Freddie Revival
Word Count: 604 | Companies Featured in This Article: Fannie Mae, Freddie Mac
Friedman Billings Ramsey
THINGS HAVE CHANGED VERY QUICKLY in the mortgage-banking world as the secondary market for non-agency loans has basically dried up.
Because of the dislocation in the non-agency market, we believe the run-rate for total originations has declined from $3 trillion in the first half of 2007 to $2 trillion in the second half, a 33% decline that has taken place in less than 30 days.
More importantly, the more profitable non-agency originations have grinded to a halt in the last 30 days and will probably decline by 50% from the first half to the second half and …
#143,
Huh?
To quote Scooby-Doo: “ruh-roh!”
WSJ
MOOD SWING
Deals Boom Fizzles As Cheap Credit Fades Wall Street Mulls End Of Golden M&A Era;
Opening for Foreigners
By DENNIS K. BERMAN
September 6, 2007
The global mergers-and-acquisition boom that began in 2003, the greatest deal frenzy in history, is winding down.
This summer’s crisis of confidence has choked off the easy credit that fueled buyouts for years, abruptly altering the psychology of the deal market. Through June, M&A activity, as measured by total transaction values, had been running at its highest annual rate ever and was on pace to generate the deepest pool of investment-banking fees.
But within weeks, the market began to run out of steam. In August, there were about $222 billion worth of deals around the globe, according to market research firm Dealogic, the lowest monthly total since July 2005, and a far cry from the $695 billion figure struck in April and the $579 billion in July.
“The M&A business has always been cyclical, and a downturn is inevitable,” says Robert Kindler, vice chairman of Morgan Stanley. While M&A isn’t going away, he says, “I would not be surprised if deal volume is down 20% to 30% next year.”
[edit]
As one banker put it, the market has gone “dead, dead, dead.”
Mergers and acquisitions, of course, are not about to cease altogether. What bankers expect is a shift to more traditional stock-swap mergers between companies that see compelling reasons for joining forces.
Still, the last couple of weeks have chipped away at the confidence of a market accustomed to believing that just about any deal was in the realm of the possible. Wall Street deal makers now say the pace, size and audacity of deals struck over the past three years is unlikely to return for months — maybe not for years. That’s likely to hit Wall Streeters where it hurts most. Annual bonuses are expected to shrink this year, and layoffs are not out of the question.
[edit]
The last deals boom, which ended in 2001, was propelled by a rising stock market, especially in the technology sector. That enabled companies to use their inflated stock as currency to make bold bids for corporate icons. The pinnacle of that boom was America Online’s acquisition of Time Warner.
The latest boom, which stretched from the end of 2003 to the middle of this summer, is looking to Wall Streeters like the richest era since the rise of the modern deal-making industry in the 1980s. From 2004 to date, about $13.32 trillion worth of deals were struck, according Dealogic. That exceeds the total during the technology boom years of 1998 to 2001, when, adjusted for inflation, $13.21 trillion of deals were struck. Inflation-adjusted totals for the 1980s deals boom were far lower. In the most recent cycle, cash rather than stock played a bigger part in the average deal.
What fueled it was cheaply priced credit — bank loans and high-yield bonds were readily available. The biggest beneficiaries were private-equity funds, which took advantage of low interest rates and lax terms from lenders to make acquisitions more cheaply and with lower risks than corporations could.
[edit]
“I would call it a very unusual confluence of cheap debt, huge pools of money to invest, and asset prices that became unattractive to most companies,” says Marc Granetz, co-head of investment banking for Credit Suisse in New York. The credit-market trouble “means we aren’t likely to see large or very levered private-equity deals for some time.”
[edit]
Until the credit squeeze eases, it will be difficult to fund new leveraged buyouts. And even when credit markets recover, private-equity firms may have less flexibility and leverage over the banks that lavished financing on them during the past two years.
[edit]
For companies already under private-equity control, which tend to carry lots of debt, higher interest rates and tighter credit could make it harder to turn a profit, which could lead to layoffs and cost-cutting.
Few on Wall Street expect a quick rebound in the credit markets. But deals aren’t likely to dry up altogether. Bankers says three factors could sustain deal flow: new, nontraditional M&A players; so-called strategic deals between companies swapping stock; and the overall health of the economy, which is critical to deal making. Nevertheless, deal volumes are unlikely to return to their mid-2007 levels, the bankers say.
The slowdown may open a window of opportunity for new buyers in distant markets that are emerging as M&A powerhouses. As Western companies get cheaper, buyers from oil-rich Arab nations, China and India may see it as a good time to spend existing cash reserves.
The government investment arms in Kuwait, Saudi Arabia, Dubai, Abu Dhabi and Qatar combined hold an estimated $1.5 trillion. These entities aren’t as dependent on debt financing as are private-equity firms and corporate buyers.
Over the past few weeks, these buyers have shown their strength. Dubai-based concerns are pursuing the leading Swedish stock exchange and have agreed to purchase New York department store Barneys, nearly 10% of the MGM casino empire, and a $2 billion U.S. aviation-services company.
Russian natural-resource firms, Indian technology companies and Latin American conglomerates, flush with cash, have also emerged as bidders for U.S. companies.
But there are limits to what this pool of capital can buy in the U.S. — limitations that are largely political. Congress interceded, for example, when a Dubai-based company moved to take operational control of U.S. ports back in 2006, ultimately scuttling the proposed deal.
With private-equity firms on the sidelines, the coast will be clear for U.S. corporations to pursue stock-swap deals that have strategic merit. That’s particularly true in industries that haven’t experienced a big wave of buyouts, such as technology and health care.
I think Camelot might be more appropriate than Brigadoon for Westfield? What do you guys think? Richard?
http://www.youtube.com/watch?v=YCtselIX4yg
The M3 is one of the best car on the planet.
Corvettes are junk.
http://www.bmwusa.com/vehicles/futurevehicles/newm3
I’ve told Make Money before he should have picked up the M3 instead of the 6 and pocked the change. :)
People who drive a BMW “because it’s a BMW” are imbeciles. People who love driving, love BMWs.
“I think Camelot might be more appropriate than Brigadoon for Westfield?”
Well, there are quite a few anglophiles here, plus a smattering of authentic English families. Then again, we have a healthy amount of Irish, not to mention Italian-Americans, Asians, and the rest. King Arthur probably owns a castle here and the elementary schools have reported “leprechaun mischief” on St. Patrick’s day.
Right now Brigadoon is the accepted convention on the blog; not sure who coined it.
#151 twice: I will take the bow, I coined Brigadoon.
re: my post #139 from yesterday, I double checked my numbers when I got home and would like to correct some numbers:
from 9/2005 to 9/2006, inventory doubled
from 9/2006 to 9/2007, inventory increased 7.5%
re: my post #139 from yesterday, I double checked my numbers when I got home and would like to correct some numbers for what it’s worth:
from 9/2005 to 9/2006, inventory doubled
from 9/2006 to 9/2007, inventory increased 7.5%
Jim, please delete post 153 (and this one)
151 twice shy:
Ok, maybe we can use Camelot for Chatam/Short Hills/Milburn/Summit. Ridgewood could be Shangri-La and Oradell could be Glocca Morra.
JM