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From BusinessWeek:
The Consumer Crunch
The long-awaited, long-feared consumer crunch may finally be here. That might not mean an economywide recession, but the pain for American households will be deep.
In recent years the U.S. mostly has seen narrowly focused downturns, where a few sectors are hit hard while the rest of the economy and financial markets remain relatively unscathed. In the dot-com bust of 2001, for example, tech companies and stocks took it on the chin, while consumer spending and borrowing sailed through without a pause. This time the positions will be reversed, as consumers tank while much of the corporate sector stays on track.
…
The subprime crisis, however, marks the beginning of the end for the long consumer borrow-and-buy boom. The financial sector, wrestling with hundreds of billions in losses, can no longer treat consumers as a safe bet. Already, standards for real estate lending have been raised, including those for jumbo mortgages for high-end houses. Credit cards are still widely available, but it may only be a matter of time before issuers get tougher.
What comes next could be scary—the largest pullback in consumer spending in decades, perhaps as much as $200 billion to $300 billion, or 2%-3% of personal income. Reduced access to credit will combine with falling real estate values to hit poor and rich alike. “We’re in uncharted territory,” says David Rosenberg, chief North American economist at Merrill Lynch (MER ), who’s forecasting a mild drop in consumer spending in the first half of 2008. “It’s pretty rare we go through such a pronounced tightening in credit standards.”
From the Economist:
America’s vulnerable economy
IN 1929, days after the stockmarket crash, the Harvard Economic Society reassured its subscribers: “A severe depression is outside the range of probability”. In a survey in March 2001, 95% of American economists said there would not be a recession, even though one had already started. Today, most economists do not forecast a recession in America, but the profession’s pitiful forecasting record offers little comfort. Our latest assessment (see article) suggests that the United States may well be heading for recession.
From the Economist:
Getting worried downtown
IN RECENT years, it has rarely paid to be pessimistic about America’s economy. Time and again, worried analysts (including The Economist) have given warning of trouble as debt-laden and spendthrift consumers are forced to rein in their spending.
So far, that trouble has been avoided. The housing market peaked early in 2006. Since then home-building has plunged, dragging overall growth down slightly. But the economy has remained far from recession. Consumers barely blinked: their spending has risen at an annual rate of 3% in real terms since the beginning of 2006, about the same pace as at the peak of the housing boom in 2004 and 2005.
…
But the good news may be about to come to an end. The housing downturn has entered a second, more dangerous, phase: one in which the construction rout deepens, price declines accelerate and the wealth effect of falling prices begins to change consumers’ behaviour. The pain will be intensified by a sharp credit crunch, the scale of which is only just becoming clear. And, in the short term, it will be exacerbated by a spike in oil prices—up by 25% since August—that is extreme, even by the standards of recent years. The result is likely to be America’s first consumer-led downturn in close to two decades.
From Bloomberg:
Losses May Wipe $2 Trillion of Lending, Goldman Says
Goldman Sachs Group Inc., the largest U.S. securities firm by market value, said losses from slumping credit markets may reduce lending by $2 trillion.
Losses related to record U.S. home foreclosures using a “back-of-the-envelope” calculation may be as high as $400 billion for financial companies, Jan Hatzius, chief economist at Goldman in New York, wrote in a report. The effects will be amplified as banks and hedge funds that borrowed to finance their investments scale back lending, according to the report.
“The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognized,” Hatzius wrote. “A $1 mortgage credit loss could result in a reduction in lending by significantly more than $10.”
…
Goldman’s Hatzius said his report is based on a “conservative estimate” of investors cutting lending by 10 times the loss to their capital. Investors realizing half of the potential losses, at $200 billion, would have to scale back lending by $2 trillion, he said.
…
“No serious analyst would argue that a 2.5 percent equity market decline will make an important difference to the economic outlook,” Hatzius wrote. “So what’s different about the mortgage credit losses? In a word, leverage.”
From Fortune via CNN/Money:
Fannie Mae’s fuzzy math
Investors might want to take a closer look at Fannie Mae’s latest earnings report. Lost in the unsurprising news of the mortgage lender’s heavy losses was a critical change in the way the company discloses its bad loans — a move that could mask that credit losses that are rising above levels that the company predicted just three months ago.
Without the change in disclosure, an important yardstick for credit losses that Fannie Mae (Charts) provides to investors would have looked much worse than it did in financials filed last week.
…
It all comes down to what’s known as the credit loss ratio — a measure that Fannie Mae has consistently provided to investors to help them assess the credit quality of its mortgages. The credit loss ratio expresses bad loan losses as a percentage of Fannie Mae’s loans.
In August, Fannie Mae predicted its credit loss ratio would be 0.04-0.06 of a percentage point for all of 2007. (Wall Street generally refers to percentages in basis points, which each equal one hundredth of a percentage point. In Fannie Mae’s terminology, then, its 2007 loss ratio estimate is four to six basis points.)
…
So what would have happened if the company had compared apples to apples — and stuck with the old method of calculating its loss ratio?
Under the previous method, Fannie Mae would have been well outside of its range. The company would have reported an annualized loss ratio of 7.5 basis points in the first nine months of this year.
…
Management acknowledges that credit losses are mounting. During an analyst call last week, Fannie Mae CEO Daniel Mudd warned that the company’s loss ratio could rise to eight to 10 basis points in 2008, due to a worsening housing market. It’s not clear whether that forecast is based on the old or new methodology.
The company may already be exceeding that 2008 guidance. Based on the old methodology for calculating the loss ratio for the third-quarter alone, the company’s annualized loss ratio is already at 14 basis points.
If so, Fannie Mae’s mounting losses are disturbing.
So what could a soaring loss ratio mean for Fannie Mae? Consider these numbers: At Sept. 30, Fannie Mae had exposure to $74 billion of loans with a FICO credit score below 620. Loans scored below 620 are generally classified as subprime. In addition, Fannie Mae has exposure to $196 billion of Alt-A mortgages, home loans for which the borrower doesn’t have to submit complete documentation for basic criteria like income.
At the same time, Fannie Mae has only $40 billion of capital.
From the APP:
Homeowner-builder confrontation put off
When Laurie and Richard Blake moved into their home at the Four Seasons of Mirage development seven years ago, they thought they had found the perfect place to retire.
The reality of being Mirage homeowners, they say, is much different. A chronic problem with water seepage in their basement has forced them into a perpetual battle with developer Menk Corp.
“It’s been a nightmare,” Laurie Blake said.
The couple, who moved to the 55-and-over community from Jersey City, blame what they say is faulty craftsmanship for a litany of problems ranging from crumbling concrete pilings to buckling kitchen tiles and a split in their bedroom wall.
Greenspan `Mess’ Risks U.S. Recession, Stiglitz Says
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYgKaN6mHrJk&refer=home
“I’m very pessimistic,” Stiglitz said in an interview in London today. “Alan Greenspan really made a mess of all this. He pushed out too much liquidity at the wrong time. He supported the tax cut in 2001, which is the beginning of these problems. He encouraged people to take out variable-rate mortgages.”
“The richest country in the world cannot live within its means,” Stiglitz said.
Clifton Comp Killers
92 George Russell
Purchased: 2/25/2005
Purchase Price: $430,099
Currently listed, MLS# 2459716
List Price: $419,000
137 Brittany
Purchased: 8/31/2005
Purchase Price: $575,120
Currently listed, MLS# 2425614
List Price: $569,900
1 Carrington
Purchased: 8/25/2006
Purchase Price: $425,000
Currently Listed, MLS# 2430456
List Price: $415,000
House passes homeowner protection bill
The proposed legislation aims to crack down on lax lending practices; faces uncertain future in the Senate.
http://money.cnn.com/2007/11/15/news/mortgage_bill.ap/index.htm?postversion=2007111522
Public School Funds Hit by SIV Debts Hidden in Investment Pools
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aYE0AghQ5IUA
>>
Too many examples to go over.
njrebear Says:
Public School Funds Hit by SIV Debts Hidden in Investment Pools
This is nothing but media hype bent on destroying the real estate industry. Like Bi said two days ago, the worst is behind us and there’s blue skies ahead.
njrebear Says:
Public School Funds Hit by SIV Debts Hidden in Investment Pools
This is nothing but media hype bent on destroying the real estate industry. Like Bi said two days ago, the worst is behind us and there’s blue skies ahead.
The focus until now has been on the Wall St. firms who hold debt. You haven’t really heard much about the poor suckers that have been buying this junk for years. The Citigroup and Merril writedowns we’ve been hearing about haven’t included the organizations that actually own most of this stuff.
….and you can add me to the unemployment list. any one who believes this mess is a media perpetuated phenomenon is totally misguided and half-witted.
story on CNN:
http://money.cnn.com/news/newsfeeds/articles/prnewswire/LATH21515112007-1.htm
So, has anyone out there actually “lowballed” successfully and got the house?
There are a few houses we like (NW Bergen) but they are definitely priced at post-peak listing prices. They need to come down at least 10-15% just to be ok to buy today (never mind what is going to happen in the future).
We have 20% down and a good income. Once our sell closes next week, we will have the cash in hand and will be going into a temp rental. So we will be quite free at that point.
Anyone successfully “lowballed”? I hate to call it lowballing, because it’s really not. Any tips?
Holy S*it, it’s only 8:18 AM and there is a week of news, here, already. It this continues, I may even turn bearish.
[4],
I’m confused, our brilliant market timer and pundit, from Westfield, touted the new era of eternal liquidity, easy access to credit and abundant leverage. We had entered a new era. I believe he spewed this as recently as 6-9 months ago.
Dickard, maybe Hatzius has it wrong. On the other hand, that sucking sound you hear is not water going down the drain.
“Any tips?”
Ann [14],
Hibernate for awhile.
Interesting -Homebuilder is saying -I am better off holding homes than selling – how is this for a money-making plan – they are hoping for spring bounce as well…..
If I’d have any of their stocks I would be pissed.
Home Builders Opt for Mothballing
http://online.wsj.com/article/SB119492391355890969.html?mod=yahoo_hs&ru=yahoo
“Lennar Corp., for one, has joined the ‘not to sell’ camp at its development in Orange County, Calif. The Miami company plans to finish building 259 homes, the first phase of a 1,100-unit development in Irvine, but it has decided not to sell any of them until the constrained mortgage market and swollen housing inventory improves.”
most important:
“‘We are better off holding off on sales at this asset and not discounting as steeply as the market is discounting right now,’ says Emile Haddad, Lennar’s chief investment officer, who oversees the company’s large West Coast projects.”
“Analysts expect more builders to mothball projects in the coming months, as they decide that the losses from selling homes at huge discounts are greater than the costs of carrying properties on their books.”
HUH????
Secondary,
Not sure I understand, were you at Franklin?
Anyone here into scripophily? I am thinking of starting a subprime collection of greatest hits!
Ann Says:
Anyone successfully “lowballed”? I hate to call it lowballing, because it’s really not. Any tips?
Why do the work if you can let someone else do it for you. If you can wait six months to a year, the recent comparable sales in an area won’t support these asking prices and sellers will eventually capitulate. IMO, you don’t want to be the one doing the fighting now. Let somebody else go through the aggrivation of haggling the prices down.
Al,
Lenar will be waiting for a long time..
—————————————-
Starting March, GSEs Tighten Up Loan Pricing
http://calculatedrisk.blogspot.com/2007/11/gses-tighten-up-loan-pricing.html
..they apply to any mortgage with an LTV greater than 70% and FICO less than 680. They range from 75 bps for loans in the 660-679 FICO bucket to 200 bps for loans with FICOs less than 620. These new fees are also cumulative, so they apply on top of the existing fees the GSEs charge for things like high-LTV cash-outs (50 bps for LTVs between 70% and 80% and 75 bps between 80% and 90%). So today, a borrower with a low-average FICO of 675 can get a cash-out up to 90% LTV with a 75 bps fee; that will turn into a 150 bps fee next March.
…
But it isonteresting that Lenar is doing the same as current buyers – Saying I will not give the house away!!!
I see a BK on the horizon for Lenar – but their CEO will collect his paycheck till the very end!!!
Secondary Market Says:
November 16th, 2007 at 8:00 am
….and you can add me to the unemployment list. any one who believes this mess is a media perpetuated phenomenon is totally misguided and half-witted.
SM: sorry to hear that….
#18 Grim:
Yes, I was on the Acquisitions Desk. Our entire department was laid off at 4pm yesterday (about 50 employees). I’m completely shell shocked right now but at no point did I feel my company or myself was impervious to what other companies were going through. However, the company was hanging it’s hat on a billion dollar infusion in 30 days; ironically the OCC took issue with our investor and shut it down. So here we are.
Secondary Market Says:
….and you can add me to the unemployment list.
Best of luck to you. Those of us who are still employed in this industry are all wondering if we’re going to be the turkeys next week.
If history is a guide, I bring up the great boom of 1988-1991 in Florida. Back then they were throwing up condos and retirement communities like they were gong out of style. Blue collar workers in NY and NJ nearing retirement ran down there and bought their paper lots of 120 to 160K and had dreams of selling their NY/NJ house in a year or two and retiring. Heck houses were going up each year in NY and NJ and they locked in their price down south and other than the 10% check given the builder they had no expenses with that to be house.
Well the lucky ones had the builder go under before they started their house and were out ten percent. The unluckier ones got he house 3/4 built and builder hit them up for another 10% and the worse ones moved in right before the crash and lived in a half empty community in a shoddy home with a “warranty” that was useless as the builder went under. Even better there was a good ten years till 2001 before the next boom started in Florida, sounds like a great retirement.
It is different this time!! My brothers father in law lost the ten percent on his 150K home paper lot florida home in 1991 and was mad as hell as that 15K that was big bucks in 1991. But guess what in 1993 he bought a slightly bigger already built home from the first stage of the same development for 135K so he acutally made out. Levit and all these builders are leaving half built crap all over and the bankruptcy judges are going to move inventory. The next 12-18 months are going to be a nasty bottom. At some point in that period there will be buying opportunities but I would rather be buying two years from now when the dust has settled then covering your eyes and jumping in blind today. Even builders like Pulte may not go bankrupt but as the dire straits said “you have to move those color tvs” and when they have a “sale of the century every few weeks” watch out. Remember they will be competing with foreclosures, short sales, bankrupt builder inventory and distress sales (divorce, death, job relocation) for buyers. The guy sitting on his house asking for 2005 prices won’t be their competition.
thanks x.
Franklin Credit Management Corporation – Franklin had a brand new foreclosure near my house last week, the place was priced very aggresive and relator told me Franklin wants is sold in seven days. She then told me Franklin had 7 foreclosures/REOS with her realtor and just last Saturday she told me that Franklin told her that all REOs need to be sold asap take any offer you can get. I was wondering why Franklin would be so desperate for cash, guess I know now. I am sorry about your job. But some of those ltvs on the houses she had listed were shocking. The house up the block was going for around 380K and Franklin had a 650K loan on it.
Second -I am sorry to here about your sad situation.
I will second the x-underwriter:
But I will say:
Best of luck to you. Those of us who are still employed are all wondering if we’re going to be the turkeys next week(year).
I think right now nobody, but top level management, or very stable goverment employee there, is safe.
Inflation and recession are very real.
Secondary Market:
Sorry, to hear about the layoff. It’s not only in the ‘street-related’ industries. I work for a financial printer and the person I shared my office with was let go about a month ago. She was an account executive for our brand management services vertical. Her main accounts were c21 and Avis. IMO, first it will be the street, then you’ll see it in the ancillaries. If this XMAS discretionary spending is a bust…full scale recession will hit. On Bloomberg this morning, a FED director (not sure which one) now posted the chances of a recession at 50/50, which really translates to more of a 75/25 split due to their optimism.
I received another interesting Don Harold email this morning. I’m not even sure why I get these, but they are interesting, although not as interesting as the picture of Don that comes in the email. He is shirtless, but wearing overalls in front of a wall of cash. Well here is the read:
Howdy,
QUESTION: What do Merrill Lynch, Lehman Brothers, E-Trade, Bear Stearns, GE, and GM have in common? (Answer below!)
Way back in April, as the Dow crossed 13,000, I told you to sell in to rallies. Clear out your Dow and Nasdaq stocks. Use the market nuttiness to take profits.
Oh, how silly I looked. I was called, “perma bear”, “negative”, “crazy”, and more.
Here we sit, though. At “Dow 13,100”. Seven months have gone by and the market is right back where it was when I said it was time to start selling into rallies.
To me, it’s all pretty funny. Funny, sad, and scary – all at the same time.
The funny part is when I watch all the shills on the boob-tube explain why the market is not up, the reasons bad economic data is no big deal, and why it was a super time to buy stocks at “Dow 14,000”. Oh, the hilarity of that last one!
The sad part is that I’m not sure y’all took any profits yet. See, last time I was all “bearish” back in 2000, I tried to get people out with my usual brand of “use your head, turn of CNBC, and trade logically, blah, blah, blah”. However, I got more “I wish I had listened to you” emails than, “Thanks for the great advice, you saved my ass” emails. I’m afraid that is where we are now.
The scary part is that this thing is not even close to where it’s gonna get.
But, in case you need a reason to believe, try these:
1) You’ve been lied to about inflation. Plain and simple, lied-to. There is no way that “core inflation” continues to be at a statistical standstill while the cost of every raw material is through the roof. The employment numbers (if you believe them) suggest that more people are working and getting paid more to do that work. Those costs would also be reflected in consumer prices. But, alas, you’ve been lied-to. The impact is that if inflation is higher than you’ve been told, that would indicate “the consumer” is spending more to get less. “The consumer” can’t keep that up for too long (regardless of how “resilient” and “strong” the mainstream media says “the consumer” is). A flaccid consumer will not bode well for this “all important” “holiday season”). And, a slow holiday season ain’t factored in to the market. Shoot, this market’s got “consumer” spending at double-digits. That’s not gonna happen. So, the “inflation story” you’ve been told is a lie, and the truth will be painful.
2) The “subprime” story is really a “debt is out of control” story. The answer to that question at the top is: They are all big-name, “top-notch”, super-fantastic companies who said there would be no problem with “subprime”, but now are laying people off, firing CEOS, and “writing down” billions in losses. Oh, and wait til the first bank goes under. That will be neat. It will be – as all of these other problems were – called a “surprise”. Well, let me be the first to spoil the surprise: More trouble lies ahead for the financial world due to the “subprime” or “credit crunch” issue.
3) And, speaking of “credit crunch”… Remember how when “the fed” started to cut interest rates the market was just going to take off like a rocket? Yeah, that was a cool story. Funny thing, too, I hear EVERY DAY from wallstreet types how we need MORE RATE CUTS. Unreal. The truth is that the cuts done are bad enough to push the market DOWN, but the untold story is that “the fed” has “injected” another, oh, half-trillion or so of “liquidity” into the “system” (read: printed money they don’t own, loaned it to banks to be repaid with interest, and hammered the dollar into a freefall). But, here is where it gets interesting!
4) The same wallstreet liars who would have championed a “strong dollar” 5 years ago as proof of the wonderful US economy, are now saying that a weak dollar is good – even preferred to a strong dollar – because it will make the stuff we sell here real cheap. And, hey, that will bring foreign money pouring in to buy up all our neato cheap stuff. Problem is – and this is a problem – we don’t make anything the world really needs. Hey, if you disagree, please email me the list of exports we produce that can’t be made in China for 1/2 price. Right. But, that point aside, what’s gonna happen if the dollar gets stronger? Uh, oh. The folks who crow about the weak dollar now will have to explain why the “strong dollar” is better. I can’t wait for those tall-tales and flip-flops. Truth is that it does not really matter what the strength of our currency is with respect to exports because the world don’t need the stuff we make – we’ve become a “consumer” economy. 70% of our GDP is from “consumption”. A strong dollar just buys us more stuff to consume. There are less and less Americans left who remember the time when we were a 70% manufacturing economy and “made in America” meant something. When y’all are gone, all that will be left are debt-slaves living in houses they don’t own filled with plastic crap they could not afford but will pay for, for the rest of their lives.
Booyah!
Now, there are other stories we can talk about: the “$100 oil is good”, the “free trade (read: giving away more manufacturing jobs) is good”, or the “you want to buy stocks at all-time highs, you know, for the “long term” (read: Jim Cramer’s Rule #1) stories. But, I’ll save them for another day.
Don’t want to come across as too “bearish”.
17#, i think lennar made a smart move. a few years back when gold was st depressed price, some big mining companies held gold as reserve instead of pushing to market. finally they are paid off. i guess more builders will follow lennar espcially for over-built condos in miami, san diego. their stock prices are already depressed. it is good time for them to issue options – you don’t need back-dating again
SM,
Sorry to hear it…
John: At some point in that period there will be buying opportunities but I would rather be buying two years from now when the dust has settled then covering your eyes and jumping in blind today.
Good point. Today there are some good deals but the houses are crappy. The good houses come down only after a while.
Grim – posted very nice presentation yesterday from NAR (Ha Ha), that clearly shows the trend is down, no recovery in sight, inventory highes in last 10 years. No need to jump the gun.
SM,
Hope you find something soon.
Lenar wants to be “surprised”. “We didn’t expect it to get worse!”
14#, i would put a 10% lowball offer and try. sometimes it works. there is a recent sale in my neighborhood which ends up 6% from listing price. since the market is slow at the end of year, you may get a deal. good luck.
secondary [24],
I am really sorry to hear that.
#28 John,
We have/had 200-300% ltv’s in our portfolio. Just last week I was given a 21mm pool full of that crap to sell to private equity and our best bid was 57 cents on about 8mm of it. Although it was my job to buy this product, our business model was flawed in how aggressive we were pricing products that fell out of traditional secondary outlets.
as an employee i was not allowed to bid on REO properties we held but i suspect there are going to be great deals on the homes FCMC are selling.
I can certainly lead you to the right person if any of you would like to know the contact who handles REO for Franklin.
SM: What is your background.
I am in midst of starting a start up and definitely can use some bright minds. drop me a line if you wish.
skgala at gmail dot com.
Hey stuw6 – Great Post #30…
I have being tellis this all along:
Truth is that it does not really matter what the strength of our currency is with respect to exports because the world don’t need the stuff we make – we’ve become a “consumer” economy. 70% of our GDP is from “consumption”. A strong dollar just buys us more stuff to consume. There are less and less Americans left who remember the time when we were a 70% manufacturing economy and “made in America” meant something.
And: Hey, if you disagree, please email me the list of exports we produce that can’t be made in China for 1/2 price.
The above about summs it up:
I think right now China, India and rest of Asia are taking very close look at what does US actually giving them for their good they are selling us – we are not even giving them paper money (sorry cotton money) – we are giving them Virtual Money!!!! They will ask themselves – ok all this US debt is backed by excactly what???
What can they buy from us??? Food – yes US produces a lot but today dollar which they got from us 5 years ago is buying half of what it was buying before, and it is getting worse with food prices in a hurry.
So I believe what is happening right now is just the beginning and we are for a very harsh economy turmoil in the next 5-10 years.
Ohh yes, just wait for chineese good to start climing in prices (they are already doing so -go to a dollar store – there is nothing there for a dollar anymore) – what will goverment exclude from inflation next??? – everything?
SM,
I’d appreciate the REO contact info, jamesbednar at gmail dot com.
#39 SG:
i’m open to any possible ventures at this point, thank you.
here is the link to my linkedin website (its a professional network site) for a quick snap shot of my back ground.
http://www.linkedin.com/myprofile?trk=tab_pro
grim Says:
November 16th, 2007 at 7:22 am
From the APP:
The result of that was 24 notices of violation issued in September, claiming that those homes with leaking crawl spaces and basements were in violation of the state’s Uniform Construction Code. The violations were issued not to punish homeowners, said Township Administrator David Breeden, but to force Menk to comply with residents’ demands to fix the problems.
“What we’ve wanted since day one with all of this is for the houses to be fixed and the people to have an acceptable quality of life,” Breeden said.
And just HOW did these UCC violations pass inspection in the first place? Ant, then just how did they get C of Os?
And just HOW did these UCC violations pass inspection in the first place?
C’mon, this is Jersey. These kinds of problems are easily taken care of with an envelope…
#41 Grim:
i sent contact info to gmail.
My firend at UBS told me, that they have just let go 19 Public Finance bankers, and various support staff in their municipal bond department.
SM,
Thanks. I don’t think the linked-in link you posted is correct.
#17 Al: I bet come Spring time they will be unloading all of them.
13#, SM, sorry to hear this. a few years back the similar situation happened to me. but i also think positive from negative. acctually it openned up best opportunity in my career.
SM, I hope you find something quickly. And you’re so right about anybody who thinks this is just a “media-perpetuated” phenomenon:
________________________________________________
Ohio case might add to lender problems
Foreclosures blocked; ownership documents not produced in court
By Thomas J. Sheeran Associated Press
Published on Friday, Nov 16, 2007
CLEVELAND: A mortgage lender cannot proceed with plans to foreclose on 14 homes because it does not have proof that it owns the properties, a federal judge said in a ruling that could pose a new complication for the nation’s troubled mortgage industry.
http://www.ohio.com/news/top_stories/11421351.html
________________________________________________
So much for “mortgage-backed” securities . . .
grim Says:
November 16th, 2007 at 9:10 am
And just HOW did these UCC violations pass inspection in the first place?
C’mon, this is Jersey. These kinds of problems are easily taken care of with an envelope…
If I were the company, I would use the “approved inspections” as an affirmative defense, and move to shift liability onto the inspectors. “Hey, we got approvals at every step of the way, and we are shocked, SHOCKED, to find out they were not doing their jobe properly. In fact, we feel even more defrauded than the homeowners, and we are moving to sue the town for its shoddy inspection service because they have sullied out good name and reputation. (sniff, sob, breathy gasp for air, as the camera zooms in)”
Grim “C’mon, this is Jersey. These kinds of problems are easily taken care of with an envelope…”
If I were the company, I would use the “approved inspections” as an affirmative defense, and move to shift liability onto the inspectors. “Hey, we got approvals at every step of the way, and we are shocked, SHOCKED, to find out they were not doing their jobe properly. In fact, we feel even more defrauded than the homeowners, and we are moving to sue the town for its shoddy inspection service because they have sullied out good name and reputation. (sniff, sob, breathy gasp for air, as the camera zooms in)”
stu [30],
Who is the guy that wrote that? Does he have a website?
Oops, sorry about the double post.
43#, shore guy. i like your math on my hyperthetic case yesterday. but the real-life model is a slightly more complex. let’s say the probability for the case of negative 10% in 5 years is 30%, 0% return is 40% and 10% return is 30%, the equation could be different.
#47
http://www.linkedin.com/profile?viewProfile=&key=17067682&fromSearch=0&sik=1195189643637&split_page=1&rd=in&authToken=87C5mRg4ku6coh14gqweed8gR91hldvhkR1jAd4ck4NcQd4dQh4dP8UdzsSc3sN&authType=NAME_SEARCH&goback=%2Esrp_1_1195189643637_in
bi Says:
November 16th, 2007 at 9:28 am
43#, shore guy. i like your math on my hyperthetic case yesterday. but the real-life model is a slightly more complex. let’s say the probability for the case of negative 10% in 5 years is 30%, 0% return is 40% and 10% return is 30%, the equation could be different.
Agreed. THere are a number of factors that need to be taken into account. My ony point, in my back-of-the-envelope analysis, was to point out that the original poster’s comment that the loss of $50k was no big deal (because an eventual rise in prices after 5 years of decline would still make the house a good investment) ignored other factors. Any financial decision involving housing has any number of variables that require estimating, forecasting, and maybe guessing. My thesis, if you will, is that before making a decision to buy a given property under given circumstances one needs to do a thoughtful analysis. Even so, one can olny minimize risk, not eliminate it.
From MarketWatch:
Huntington Bancshares to see up to $300 mln Q4 charge
Huntington Bancshares to see charge from Franklin losses
Huntington Bancshares to see 81 cents per share Q4 charge
http://www.mlsli.com/ohDetails.CFM?MLNum=1942642&typeprop=1&start=1&rpp=20
Overpriced home of the week, 1.3 million beat to shit split level in Queens NY.
Secondary Market,
Just hang in there, everything will be fine. You’re already utilizing one valuable networking source here with this blog.
Was HBAN Franklins’ lead lender bank?
59 Magnificent Location On A Huge Lot Of 60X195. Great Opportunity To Built Your Own Mansion. Close To All. School District #26.
Hohn,
Didn’t you see the line at the bottom of the page: “Magnificent Location On A Huge Lot Of 60X195. Great Opportunity To Built Your Own Mansion. Close To All. School District #26.”
Just tear it down and build something decent on that HUGE lot, ROFL.
#61
Yes, previous to HBAN it was Sky Bank (recently taken over) and our 1bill was allegedly coming from Bank of Scotland.
#45 Secondary Market,
I’d also appreciate the contact information
Please sent to pnk211 at stern dot nyu dot edu
BC Bob:
donharrold.net
Disclaimer: I only read his occasional emails and have not subscribed to his pay service, although at the minimum, he is very entertaining.
accutally, dr. yun’s presentation was very good. here are some highlights:
“CA and FL still near U.S. Average even with increase” in foreclosure rate.
“All real estate is local”
some big cities such as Salt Lake City, Seattle and Raleigh are up about 10% in 2007
“REcovering Markets in the Northeast (first region to undergo a slump…”
top 3 foreign buyers are from mexico, u.k. and canada.
“worry spot – oil prices”
new home inventory starts to come down.
NAR is lobbying for higher GSE limis, lower jumbo spread.
finanlly, if you pay $10K for $200K home (possible?), your net worth will be 110K while it will be 23K for normal stock market (10% return.)
Great Job! Dr. Yun. thank you.
Bi,
What is your interest in the real estate industry? Are you a broker? Selling a house?
#45 SM
If you can also send that information to the address below, that would be great.
Thanks.
rachelchase@optonline.net
Retail must be REALLY hurting. I have never received so many “friends and family” coupons, etc. from many major stores. They are cutting prices big time to try to get people into the stores…
Bi,
Please read my friend re mothballing:
http://www.minyanville.com/articles/len-spf/index/a/14867
Stu,
Thanks.
Secondary Market,
Sorry to hear, good luck.
Imus [69],
Short the US consumer.
Disclaimer: Go heavy.
“Short the US consumer.”
Is there a new ETF for doing that?
What is the symbol? IOU?
#38
SM
If you can, Please send that information to the email address below.
Thanks.
peterd at atgmfg dot com
From MarketWatch:
Fed’s Kroszner content with current rate stance
Interest rates are low enough to get the economy through a coming “rough patch,” said Federal Reserve Governor Randall Kroszner on Friday.
…
His remarks are yet another message from the Fed to financial market participants that they should not to expect a slew of interest rate cuts in coming months.
Stu [74],
XLY.
Disclaimer: This is by no means a recommendation. You may be better off listening to bi.
I’m in the heart of several large financial firms and there is talk of needing to cut 14%-24% of salaries/workforce etc to get through the current and future losses.
Don’t think for a second that NY wont be effected they talk a lot on moving NY positions to TX, NC, KY, and oversees wherever possible in places where they cant foresee cutting workforce numbers.
The quality of service is not an issue as there is a large amount of data which proves moving positions to other areas that pay less provides similar performance.
I wouldnt be rushing out to buy that plasma TV but instead be putting that cash somewhere else for a while.
#69 The holiday season sales are expected to be an all time low. Call it subprime, forclosure, reduced pay scales, job instability, increased taxes, increased gas prices, etc.
If your buying yourself a gift it might be best to wait a while longer. The hurt put on retail this holiday season should cause prices to drop.
I think the recession has started even if no one is willing to admit it.
I should also point out that the increased gas prices have an effect of consumable items. Food Items, TP, Etc. People not normally strapped will have less cash to go around.
Don’t worry BC…I don’t take investment advice from anonymous message boards or blogs. If I’m gonna get hammered, I need to know the name of the person to sue ;)
i think this could be most effective. if you are interested obtaining REO info for Franklin, please email me at:
jamesgiglio at gmail dot com
i’ll do my best to respond as quickly as possible.
Re my post #14 lowball tips
Thanks everyone. I guess we will try to put in some bids (10-15% below LP) and see what happens. If not, then think about renting for a bit.
I’m getting the feeling that our realtor isn’t going to want to put in these offers. Do we dump her on the spot if we get that vibe? I’m thinking that the chance of a seller taking one of these offers is lower if the buyer agent doesn’t do a good job selling the offer.
THIS is the overpriced house of the week:
http://homes.realtor.com/search/listingdetail.aspx?zp=08827&nzp=07830%2c08801%2c08802%2c08803%2c08804%2c08808%2c08809%2c08822%2c08825%2c08826%2c08829%2c08833%2c08834%2c08848%2c08867%2c08868%2c08885%2c08886%2c08887%2c08889&ml=3&mnp=30&mxp=29&typ=31&pfbm=40&ofbm=20&sid=bdccf017e70c4cdbb933e1165fe93156&pg=3&lid=1084201355&lsn=25&srcnt=123#Detail
This is near me and I’m watching it….it was listed at 675,000.00 (?) originally. (OMG)
The description does NOTHING for the inside….I’ve been inside. The linoleum is soooo peeled up you have to lift your leg higher than your knee to step over the edges… the kitchen is a galley and the only place for a table is where the trap door to the basement is (!!!)
The house has NO HEAT on the second floor, although that’s where the one bathroom is located…hmmmm… very burrrryy baths…
The house was rented for about 40+ years. In the family since forever….they think this is a goldmine?
BTW-It’s in the highlands, in the spruce run watershed area, so there’s not much you can do with it :)
84#, this is land sale: 16 acres
Re Ann [83]
We VERY lowballed the listing I just posted and our realtor was happy to do it, plus chase them after it expired to see if she could deal direct… She put a few hours into the offer.
Forget any agent who has a bad ‘tude.
If it’s a big office, I’d go in on a weekend and ask if anyone else wants to make the offer…
bi [85]
Not it’s not. It’s not build-able. (Highlands)
The hay field is spent and about 1/4 of the property sits on a spring where it is is perpetually wet, plus a CAT1 stream at the prop edge. So you’ve got a 300′ buffer right there…
You’re not in the highlands, are you, Bi?…
“# 66 bi: Recovering Markets in the Northeast (first region to undergo a slump
Recovering?
Northeast first region to undergo a slump?
#14 Ann,
Here is my experiance with lowballing…
in the last 2 years I have put 4 lowball offers in on different homes. I also dont feel they were actual lowballs… all were about 5% off listing price. I have yet to be succesful.
I am still in the market and about to make an offer on another home at 10% off…my percentage went up becuase I am less confident in this market than in the past an I dont want to be left holding the bag. The price of the house is already $50,000 less than what the current owner paid 1.5 years ago. I doubt that my offer will be accepted (or entertained) but eventually I will catch something on my hook.
Bi, I might add it was worth something BEFORE the highlands act came along.
They missed the window of opportunity to sell at top dollar by about 5-6 years.
The cost to re-start the fields is enormous as they let it be farmed by a cheap home builder for mulch hay (garbage used by homebuilders to lay in new lawns) and to get it back to higher quality animal feed hay would require an enormous outlay of cash plus a year of hard work and no return.
And sadly, that’s ALL you can do with this land. Nothing more.
“Northeast first region to undergo a slump?”
I saw that too. I have given up. SRS continues to perform nicely though ;)
and in case you weren’t watching. Oil seems to be crashing upward today ;)
90#, some groups are lobbying to repeal hignlands act. that property definitely worths more if they are successful
Thanks spam and Luke.
Luke, interesting that your lowballs (hardly) were all rejected.
I guess in the end the sellers have to come to the realization THEMSELVES that they need to lower the price if they want to sell, essentially “lowballing” themselves, rather than accepting this truth from an outside buyer. Which could takes years if they are not in a big rush and are getting bad advice from their realtors.
Sigh.
“You’re not in the highlands, are you, Bi?…”
Did you mean to say high altitude?
The only time lowballing works is when you are in gay bar on senior citzens day.
Jay Z is a true capitalist. I love this guy.
US Dollars are worthless now. You need Euro’s if you wanna show of and “flauce”.lol
http://charlotte.bizjournals.com/charlotte/stories/2007/11/19/story8.html
BI Half a million on bet lobbying groups will repeal it.You would have to be crazy.Bad investment.Oil at 95.
Ann wait them out time on your side,rent till they are giving them away.My target is 20% off 2005 for my area ,then chip down alittle more.
Ann,
Presentation is everything, your agent should present your offer as if it were filet mignon on mikasa china. A steak served on a garbage can lid…… well would you eat it? Also make sure he/she is presenting it in full contract form, not verbal or a small offer to purchase, it does not convey confidence in the offer if you or she are’nt willing to put it in contract form, which involves quite a few pages and many signatures.
KL
“U.S. industrial output down 0.5% in October
Biggest drop since January, weakness across the board”
http://www.marketwatch.com/News/Story/october-industrial-output-takes-biggest/story.aspx?guid=%7B2F724C3A%2DC503%2D4FF1%2D8E4F%2D1B0F6433700E%7D
rhymingrealtor,
Besides full contract form, what else can be done to make the offer look like “filet mignon on mikasa china”? Thanks.
20% off 2005 is already here! You better buy now. Fortune says 15% off 2007 prices in NJ in five years and 25% off 2007 prices in LI in five years. I see open houses that are “attractively priced’ versus spring 2007 (100K less) and no one shows up at open house. 2005 prices won’t be back until 2015. Buy a million dollar home in NJ today and in five years it will be worth $850, buy a million dollar NJ tax free bond and in five year you have almost 200K in tax free interest. Smells like you are really out 350K. Buy a home cause you want a home, if you think it is an investment that is not the case.
102: But, but, but REinvestor said that, as Americans, we have the right to a home that only appreciates in value!!
You are clearly a terrorist for suggesting otherwise
ALL: Just spoke with REO Manager @ Franklin, states that she lists REO’s with local Realtors and she could not provide me with a list of any sort.
Secondary Market: Thanks anyway, appreciate your quick response. Good luck!
afternoon, fellas!
How’s the commodities bubble bursting party going? Is oil at $40 yet?
Re lowballing tips:
Serve it up like a filet mignon on a nice piece of china. Good tip. Also good tip on writing it up as a full offer. I received one of those lame one-sheet “intent to make an offer” forms and it was worth nothing to me.
We just sold and we got 5% over 2004 peak price, or 7% below 2005 peak. I don’t think 20% off of 2005 peak is here quite yet. Problem is sellers are pricing ABOVE the 2005 peak.
Ann (14)-
Speaking as an agent, the only deals I’ve done since August on behalf of my buyers have been of the lowball variety. Believe me, they are do-able. The biggest part of the deal is, you have to be able to separate the smart sellers from the dopes (no easy task). If you don’t have a willing seller, no amount of pressure will work.
Beyond that, be ready to leave your offer on the table and walk away. Also, don’t think that you can “educate” your seller with comps, stats, etc. Many a buyer and agent who feels compelled to point out to a seller what a POS his house is finds himself dispatched forthwith…sadly, sometimes in a situation in which the deal could’ve been done if less were said.
al (17)-
Looks like a great signal to get short LEN.
What a bunch of f-ing morons.
#106 I agree a lot of the prices look like 1-2% over 2005 pricing.
Still a lot of loans to reset soon at higher rates. Early spring 2008 will be a mess.
108#, clot. i guess the life in hunterdon county is too boring and you want to take a broken roller coaster in jackson
“Ann Says:
November 16th, 2007 at 8:08 am
So, has anyone out there actually “lowballed” successfully and got the house”
Others here have heard this story, but yes, I did in March, the sellers told me to take a hike, and by the time they came to their senses two weeks later, I had come to mine.
Century 21 handles a lot of Franklin homes, but it is farmed out to the individual offices.
bi (31)-
“…it is good time for them to issue options – you don’t need back-dating again…”
Yep, that’s the ticket. Let a bunch of cash-starved HBs- who all have affiliated lending operations- start cranking out derivatives.
Dude, you must be from Jupiter…or Kpax…or somewhere not of this planet.
bear (25)-
Surprised, as in a skillet across the head from behind?
Nearly one in three buyers between June 2006 and June 2007 had no skin in their deals, according to new research that represents further evidence of the poor quality of loans that helped fuel the rising tide of delinquencies and foreclosures. Though the study of nearly 10,000 transactions by the National Association of Realtors did not note whether the loans were prime or subprime, it found that 29% of all buyers — and 45% of all first-timers — financed the entire purchase price. Somewhat surprisingly, considering that they usually have money from the sale of their previous residence to put into the transaction, 18% of repeat buyers also put up none of their own money.
al (40)-
“…think right now China, India and rest of Asia are taking very close look at what does US actually giving them for their good they are selling us…”
At least we know what the hell we’re getting from China: poison toys, poison food and a bunch of crap that doesn’t work.
24 Secondary
I’m really sorry – sincere condolences and good wishes for the next phase.
http://www.premierereo.com/reo/consumerSvlt/propertySearch/nav/ConsumerNavL1.jsp/requestPage/consumer/PropertySearchResults.jsp?alwaysUseCache=true&searchState=NJ&searchZip=all&searchCity=all&searchDwelling=all&searchSqft=all&searchAuction=all&minPrice=none&maxPrice=none&listSize=20&searchLastModified=null&referenceProperty=0250749124B&pageAction=previous&firstProp=0250749124B&lastProp=1256006728A
20% off of 2005 isn’t here yet in my neck of woods & I mean woods.Comp buster posted by Grim last night Vernon NJ was about on the mark for 2005 price for this type of house here.They paid much too much in 04.That being the reduced price of 26900.You will be able to pick one up at 200k by sept- oct 08.
bi (55)-
“hyperthetic”
Is that:
1. A self-description, combining the words “hyper” and “pathetic”? If so, you should submit it to the OED…with a photo of yourself attached.
2. Your spelling of the word “hypothetical”? If so, you should fashion yourself a conical hat of construction paper, put it on and face the closest corner.
bi (55)-
Of course, you’d need to remove your tinfoil hat first…
#94 ann
Which could takes years if they are not in a big rush and are getting bad advice from their realtors.
If sellers are willing to wait year, than IMHO, they are not sellers.
my prediction is 10 year treasury will go under 4% by year end. jumbo spread will under 50 basis points.
“x-underwriter Says:
November 16th, 2007 at 9:59 am
Bi,
What is your interest in the real estate industry? Are you a broker? Selling a house?”
You won’t get an answer to this question – I’ve been trying forever. bi has let it slip on a few occasions that falling prices are killing him, though.
Folks, we’ve only seen a correction back to 2005 prices. That’s basically a blow-off top confirmed. Now the next leg down starts where weak holders will be weeded out; we’re nowhere close to capitulation land. This rolling stone will gather more loss as time goes on….
“I’m getting the feeling that our realtor isn’t going to want to put in these offers. Do we dump her on the spot if we get that vibe? I’m thinking that the chance of a seller taking one of these offers is lower if the buyer agent doesn’t do a good job selling the offer.”
I’d say yes, and for exactly the reason you give.
Gary,
Besides full contract form…
Loan pre-approval and a deposit
“my prediction is 10 year treasury will go under 4% by year end.”
Severe recession, market upheaval or both?
#84 pigmeat
That was a VERY long url.
Here’s a Thanksgiving present to you from all of us:
http://tinyurl.com/
#128 Bob
Severe recession, market upheaval or both?
Both!
“BC Bob Says:
November 16th, 2007 at 11:58 am
“You’re not in the highlands, are you, Bi?…”
Did you mean to say high altitude”
lack of oxygen?
“my prediction is 10 year treasury will go under 4% by year end.”
Severe recession, market upheaval or both?
I think this was one of Bi’s “goldilocks” predictions.
10 yr. under 4%
Oil under $40/bbl
Houses in certain desirable areas of central NJ doubling in price as gas becomes cheap and plentiful again
I predict Bi will go 0 for 3.
108 clot
damn straight
Jeebus.
#94 Ann
We have been looking for over a year, been in contract on 4 homes, all fell out over inspection issues. Also, we have gone through 4 Realtors.
Currently entering into a contract on a home in NW Bergen. We offered 20% below OLP. They came down in increments over the last few weeks, finally accepting our offer yesterday.
What worked well in this situation was the following.
1. Listing agent was no dumb cookie. She knows that we have a solid offer and they don’t come around much these days. (More than 20% down, Highly Reputable Bank Loan, no contingencies, flexible closing date)
2. The owners are there 30+ years and have clearly made a profit on the home. They can afford to sell at a lower more realistic price. AND they have already bought somewhere else.
Prior to writing an offer on this home, we had our Realtor do the leg work on the homes we were considering. If the Seller did not have to move, we did not bother seeing the house. Look for homes that have been occupied more than 25+ years, or ones that are empty. We wasted a lot of time looking at homes that folks did not HAVE to sell.
Good luck. They are out there if you have the patience
What is the Highland Act, that restricts development?
as far as presenting a lowball as a nice cut on a nice plate, I rather suspected a former agent of mine presented lowballs by saying something like: “I’m sure this is really just an opening bid and I understand if you don’t want to entertain it, but…” because that was the equivalent reaction she gave me when I told her what I would be bidding. I think simply having an agent who will take your lowball offer in (fully papered as others have discussed) and SELL it, will certainly be better than having an agent who won’t. And I’ve come to the conclusion that this is a common problem and folks like Clot and KL and Rich are a bit hard to come by.
Rich In NNJ,
Thank you!
“Fed Pumps Over $47 Billion Into Financial System”
http://www.cnbc.com/id/21821095
135#, wiki for highland act
http://en.wikipedia.org/wiki/Highlands_Water_Protection_and_Planning_Act
The way the fed keeps printing greenbacks, it might make sense to look into an investment in green ink manufacturers.
“Dwindling mortgage options leaves Bay Area home sales mired in misery”
“Of particular concern in the high-priced Bay Area housing market is that the number of jumbo loans, or those over $417,000, has slowed to a trickle. This summer, after higher defaults in the subprime sector – where mortgages were given to people with iffy credit – investors stopped buying jumbo mortgages, leading buyers to walk away from deals or avoid the market altogether.”
“Larry St. John, owner of an insurance brokerage, bought a home for more than $900,000 early this year in a new development on the city’s northwest side. This weekend, St. John said the builder – DeNova Homes – is planning an auction of more than a dozen similar homes, with starting bids about $300,000 less than what recent buyers paid.”
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/11/16/BUH8TCG24.DTL&type=business
Explain what is going on here:
We bid $495k on a house asking $549k. They countered with $537k and we said $505k. The said no. Ten days later we decided the house was worth more to us and bid $520. They said $530k. We said no. They then reduced the list to $534.5k. Our offer is 97+% of their new list. How could they not take that in this market at this time of year? Who would build that little flexibility into their asking price?
So will we get another Friday 2pm sell off?
What does bi think?
(initiate black box startup sequence, in 5, 4, 3…)
“Who would build that little flexibility into their asking price?”
Someone who has a realtor that still thinks a lower asking price will generate a bidding war. That’s who.
#142 Anotherone.
Sit tight, once they reduce the price on the MLS they may or may not get another offer but it will be lower than yours. Hold your ground at $520.
stuw6,
But the house had been at the market at $549k for over a month and a half. How is a $15k drop going to cause a bidding war?
remind me again why a buyer’s agent is recommended?
>>Presentation is everything
waste of time. sellers care about one thing. price. everything else is a distant second.
“But the house had been at the market at $549k for over a month and a half. How is a $15k drop going to cause a bidding war?”
Does the selling agent have the initials B.I.?
Seriously though, just wait them out.
In all sale negotiations, it is never prudent to let the seller know you really want their product. If your price was fair, they will eventually come to their senses. If they don’t, then you just avoided overspending.
“waste of time. sellers care about one thing. price. everything else is a distant second.”
Richard,
Sorry, the worm had turned. #1, is now a qualified buyer.
reech (148)-
So, if I make an offer on your castle, can I ask you for a 3-4 point seller concession?
has turned.
146
I don’t think stu thought that it would. He was suggesting that the agent thought it would (I assume stu thinks the opposite but I’ll let him speak for himself).
JPMorgan CEO Dimon Recruits on Enemy Turf
By Tim McLaughlin
NEW YORK, Nov. 13 (Reuters) – Jamie Dimon, chief executive of JPMorgan Chase & Co, showed his famous brash side as he gave a recruiting pitch on the turf of a rival firm on Tuesday.
Taking questions at Merrill Lynch’s banking and financial services conference, from an audience including executives and analysts from rivals, he made the pitch — a sign of confidence in his company as the fallout of huge Wall Street losses is expected to cause a talent exodus at the most troubled firms.
“If any of you think you’re good and you’re looking for a job or something like that, feel free to give me a call,” Dimon said. “Because we will be hiring.”
His pitch might have a broad appeal at Merrill Lynch & Co. The company does not have a CEO after the ouster of Stan O’Neal, blamed for the biggest quarterly loss in company history.
Dimon was in an irreverent mood. He began his presentation mocking the bronchitis of Morgan Stanley co-President Zoe Cruz, who attended the event but could not make her presentation because of a case of bronchitis.
“Can everyone hear me?” Dimon said as he started. Then in a croaky whisper, he joked, “I have a bad throat.”
Dimon also twitted other companies, saying that as they scramble to shore up failed risk management or find their next CEO, he’s willing to make decisions now that don’t necessarily have an immediate payoff.
He said it’s OK if the earnings pop from JPMorgan’s strategic moves don’t start paying off until 2009 and beyond.
Dimon’s shoot-from-the-hip style makes him a standout on Wall Street, where many executives stick to a script to convey a carefully worded corporate message.
Once a top protege of former Citigroup Chairman Sandy Weill, Dimon fell out of favor and was ousted. Years later, Weill told television interviewer Charlie Rose that Dimon had been a little “obstreperous.”
“SIVs don’t have a business purpose,” Dimon said. “They will go the way of the dinosaur.”
In contrast, JPMorgan does not have SIV exposure and its write-downs on other risky assets have been much smaller than those of Citigroup and Merrill Lynch. JPMorgan shares are down 7 percent this year.
When discussing JPMorgan’s exposure to subprime mortgage-related assets, Dimon said, “We think we’re fine.”
But he also cautioned that the bank’s positions contain risk.
Dimon said subprime lending won’t go away, because it is a good business.
“It was something good that went way to excess,” he said. “But remember subprime is minority groups, younger folks, immigrants, people who had problems earlier in their life. There’s nothing wrong with it. It’s a good thing.”
He later said, “It is not a big deal for the U.S. economy and certainly a much smaller deal for the world economy.”
149#, if i do this, i will ask buyer, seller, buyer’s agent and seller’s agent to split $10K gap, that is, $2500 each.
I just don’t understand how a seller or broker would think a 15k haircut could induce a bidding war. On the other hand, we saw a house last weekend in South Orange that was having a two-day “20% off” sale, reducing the asking price from 850 to 680. The house was in contract in February, I am told, for 950. They had multiple offers.
FYI: I am not a realtor or agent or what have you.
I agree with you NJPatient, your agent should just submit your offer without making extraneous comments explaining the bid or talking about it being a starting point. If they feel a need to talk anything up it should be how qualified and serious you are as a buyer.
That being said and getting back to Gary’s question about presenting a low ball (or any) bid, I think you should provide or do the following which I’ve gleaned from this site (today alone: KL, NJ Buyer) and personal experience.
Offer in writing via contract form
Minimum 20% down (more of course will make you stronger, not needing a Jumbo loan as well)
Pre-approval on mortgage (I agree w/NJBuyer, the rep of the bank helps Ex. Coldwell gives those with great credit VIP status on approval letters)
Deposit check
Don’t provide analysis (charts, spreadsheets, etc) in an attempt to show the seller what their home is worth and in the process explaining your bid.
Also extremely helpful:
No contingencies (mortgage; sale of YOUR house, etc.)
Flexible closing date
Any other additions or thoughts?
>>Sorry, the worm had turned. #1, is now a qualified buyer.
not in my neighborhood. remember i live on fantasy island.
A buyer needs to take emotion out of the value equation. Value the home at what you feel it is worth and don’t go up from there. If you feel your offer is fair (and not an intended low ball) then don’t change it. If you low balled and knew it, then come up a bit. You will feel much more satisfied knowing you purchased a home at a fair price, then feeling you overpaid for it. Especially once you move in and discover what the inspector failed to. ;)
clot you couldn’t play in my neck of the woods. would be fun watching you get bounced around though.
Actually, I have to agree with Richard. I’ve asked many realtors in the last few years if I had any kind of advantage since I’m a prime buyer, with assets and at least 20% DP. All of them, some more subtle than others, stated that the buyer doesn’t care who’s buying and how as long as they get their price. Some of the realtors said that they could care less who buys, how sweet your sob story is, etc. as long as the deal gets closed.
>>Overpriced home of the week, 1.3 million beat to shit split level in Queens NY.
john your ignorance is quite apparent. do you know anything about the area? didn’t think so. it’s little neck and that’s a huge lot for that area. it will sell for over a million at least.
Richard / Gary,
…sellers care about one thing. price.
Until they’ve had to deal with a few unqualified “buyers”. Then they’ll realize that those that can close set the price.
RE: stuw6 Says:
November 16th, 2007 at 2:03 pm
A buyer needs to take emotion out of the value equation. Value the home at what you feel it is worth and don’t go up from there. If you feel your offer is fair (and not an intended low ball) then don’t change it. If you low balled and knew it, then come up a bit. You will feel much more satisfied knowing you purchased a home at a fair price, then feeling you overpaid for it. Especially once you move in and discover what the inspector failed to. ;)
What we started doing when looking at houses is to look at the property in two pieces. The house and the land. We figure out the market value of the lot and then look at what it would cost to build the house. We will not pay more than the combined cost of these. Of course, the newer home would, in many cases, have better insulation, windows, etc, and is being built with today’s labor cost, so the price of the existing house has to be less than the land plus new construction to get us to bite.
#157
is there sufficient competition for houses at this point that you would not want to have a financing contingency?
I just personally would not want to hang myself out there as bound to close regardless of whether the mortgage comes through, esp given the current state of the mortgage industry
Rich in NNJ [163],
One would think that is the case. So maybe I do have an advantage.
Richard
As ignorant as john may be, Little Neck aint worth 1.3+ (unless its Edgardo Alfonzo’s house, with the batting cage in the basement, which has been on the market forever for roughly 6 Mil i think, which I think is this house’s next door neighbor based on one of the pictures). Why pay 1.3 for Little Neck, big lot or not, when you can get a good house in Great Neck for 1 million or less…
161 Gary, You said realtors told you that over the last few years. How about the last few months? It didn’t matter a few years ago because your ability to pay back your loan (being prime) didn’t matter, and anyone could get money.
Richard [158]
What good is a buyer, if they are not qualified, or they have contingencies [need to sell first]? Lending standards have changed dramatically. I don’t care if you live on Fantasy Island or 3 Mile Island, 2004-early 2007 is history. RE-ROIDS is kaput.
why you guys always think you are the only qualified buyers over there? tons of people keep looking since 2002.
Can someone help me find the great commodity crash in OIL that bi was referring to yesterday?
http://futures.tradingcharts.com/intraday/CL_/C7
oddly, the most popular search on AOL today is “Brigadoon”
WTF?
stu [171],
Let’s not get on bi. I used him/her as my indicator. Bi, thanks for that trade.
Nearly one in three buyers between June 2006 and June 2007 had no skin in their deals, according to new research. The study of nearly 10,000 transactions by the National Association of Realtors found that 29% of all buyers — and 45% of all first-timers — financed the entire purchase price.
How would a 0 down buyer who “bought” within the past 2-3 years feel if someone told them they were losing $2K a month just in depreciation on a POS entry-level shack in NJ?
There is no difference between renting from a landlord (like renters do) and renting from bank (buyers doing an IO loan, or their house depreciating as much as their principal being paid back monthly). It’s going to take a fair amount of crawling out of a hole for buyers with no skin in the game to build up any equity in the near term.
RayC,
Maybe the realtors have changed their tune? I haven’t been to an open house in months nor have I asked in months. You’re probably right.
skep-tic #165,
I agree, which is why I listed it as “Also extremely helpful”.
In order to do this you need to be a TRULY qualified buyer, have more than 20% down and the bank you use needs to be highly reputable.
Rich
#14 Ann,
I’ve made multiple lowballs and have not made a purchase, but most of the houses eventually sold around my offer, some below, some above. You won’t know until you make the offer. I also beleive that selelrs need to receive low offers in order for them to realize they’re overpriced. Until then, they’re just in price purgatory with no offers.
For what it is worth:
Chinese lunchtime television on Friday gave ordinary people a basic tip on how to play the currency markets: sell the dollar!
http://www.cnbc.com/id/21829883
No way – Under a million I can get a bigger lot. When I lived in Douglaston we shared the church with Little Neck. Other than Dunkin Donuts and a few stores on Northern blvd and the train it has nothing going for it. Bayside’s nightlife is like Vegas next to Little Neck.
Little neck is a mystery to me I would much rather live in Douglaston or Great Neck and in both towns you can look at 1.4 million dollar homes and get them for 1.3 million and not have to build a house from scratch. Little Neck has not been a hot spot since 100 years ago when they closed the clamming, don’t know why they still call them little neck clams since little neck is closed for clamming. here is a better deal for a tear down.
http://www.mlsli.com/uniDetails.CFM?MLNum=1985691&typeprop=1&start=21&rpp=20
Richard Says:
November 16th, 2007 at 2:06 pm
>>Overpriced home of the week, 1.3 million beat to shit split level in Queens NY.
john your ignorance is quite apparent. do you know anything about the area? didn’t think so. it’s little neck and that’s a huge lot for that area. it will sell for over a million at least.
reech (158)-
“…i live on fantasy island.”
Are you Mr. Roark, or the midget?
http://www.mlsli.com/uniDetails.CFM?MLNum=2003994&typeprop=1&start=41&rpp=20
Here is a 90% built little neck mcmansion being sold as is.
3b,
From Reuters:
UBS cuts 30 people in the muni securities group
reech (160)-
“…clot you couldn’t play in my neck of the woods. would be fun watching you get bounced around though.”
My team plays in your neck of the woods 2x a year (on the polyturf field next to the train tracks).
It is, invariably, a “W” I can pencil in before the season even starts. Your travel teams’ players are soft and lack competitive fire.
“Richard Says:
November 16th, 2007 at 2:06 pm
>>Overpriced home of the week, 1.3 million beat to shit split level in Queens NY.
john your ignorance is quite apparent. do you know anything about the area? didn’t think so. it’s little neck and that’s a huge lot for that area. it will sell for over a million at least.”
Richard, you ignorant slut. My mother grew up a few blocks East of that house. That place is hideous, and although that lot is larger than some, the frontage is not large enough to subdivide (yeah – death in the family following which we sold a comp with a Little Neck address and Great Neck School access (and just so you know, Little Neck school system is Queens County and sucks, and Great Neck school’s terrific).
If that place gets $1M I’ll eat my hat. Feel free to watch it for me.
BTW, when was the last time you drove down Northern Boulevard through Little Neck??
“Are you Mr. Roark, or the midget?”
Clot – depends whether you mean physically, intellectually or emotionally…
gary (161)-
That may have been the case in the good old days, but no longer.
What seller wants to take an offer from a barely-qualified buyer, only to find later in the deal that the buyer- for whatever reason- can’t move forward? Believe me, it happens regularly now. And it really sucks for the seller if he’s moved on or made a purchase of his next home in the interim. All these unexpected fall-throughs are part of the 2.1 million vacant homes for sale in the US.
“It’s all cash at the closing…who cares?” is not a phrase I expect to hear again for a very long time.
“bi Says:
November 16th, 2007 at 2:31 pm
why you guys always think you are the only qualified buyers over there? tons of people keep looking since 2002.”
I would like to answer this question…as soon as I can figure out what it means…
http://www.mlsli.com/uniDetails.CFM?MLNum=1969770&typeprop=1&start=41&rpp=20
six million dollar batting cage house in little neck.
Clotpoll [185],
We’ll see if that’s the case when I decide to start hitting a few of these open houses again.
BC (173)-
Like a parakeet in a coal mine.
bergenbuyer Says:
November 16th, 2007 at 2:47 pm
#14 Ann,
I’ve made multiple lowballs and have not made a purchase, but most of the houses eventually sold around my offer, some below, some above. You won’t know until you make the offer. I also beleive that selelrs need to receive low offers in order for them to realize they’re overpriced. Until then, they’re just in price purgatory with no offers.
________________________________________________
That’s the bottom line–it’ll take time for people to accept that the offers aren’t going to get any better if they really want to sell. In the meantime, a buyer just has to be patient and remain emotionally detached, and be willing to walk away as often as necessary until the right deal comes along. Just as you can’t afford to fall in love with a car, you can’t afford to fall in love with a house. Figure out what you want and need, make sensible offers, wait until someone smart enough bites, and accept that most won’t. It’s frustrating, but I think it’s the only sensible play now.
Anyone any experience or thoughts on
http://www.buysiderealty.com/index.asp
Will sites like these be the Foxtons of the buyside, driving the buyside commission down to 1%
181#, john, how long is the commute from little neck to grand central/penn station? door to door. thanks
“as soon as I can figure out what it means…”
Translation:
If you are one of the thousands* of people out there looking for a house, and have been looking since 2002, it means you are a qualified buyer.
*Note: Tons has been tranlated into thousands, based on approximate weight. Some settlement of contents may have occurred.
gary (188)-
Don’t talk to any agent at an open house. Smart agents (like KL) are sitting them in order to meet buyers. If they have any sense, they’ll be happy to meet you and will agree with anything you say (that’s what I do when I sit my 1-2 open houses every year). Any other agents sitting them are desperate, clueless…or both.
“six million dollar batting cage house in little neck.”
Can we send A-Rod there, for the month of October?
OT,
Anybody know a Senior Web Designer seeking employment in North Jersey??
PGC,
That model isn’t allowed in NJ, only a licensed agent can be paid a commission on the sale. Giving a commission “rebate” to the buyer is the equivalent of being paid commission.
You always have the option of asking your agent to cut his/her commission as part of an offer. If all an agent is doing is submitting an offer (not playing weekend babysitter), why should they take a full cut?
Future mortgage resets could fuel continued drop in home prices – S&P
Laurie Goodman, managing director and global co-head of fixed-income research at UBS AG, said the glut of adjustable-rate mortgages (ARM) is sparking a cycle that will likely drive US home prices duwn farther in 2008.
Goodman, who was speaking at Standard & Poor Ratings Services’ 2007 Bank Conference, described a cycle in which expected home price deterioration in the next quarter will result in more ARM defaults and losses, leading to further tightening of lending standards. Goodman added, ‘…as we move forward, the ratio of weaker borrowers to stronger borrowers is increasing.’
S&P chief economist David Wyss said, ‘Real estate prices were elevated at that time (late 2005, 2006), and thus first and second-quarter 2008, when these mortgages reset to a higher interest rate, could see more damage to consumer buying power.’
Goodman said there isn’t one solution to fix the reset mess and the best choice for individual borrowers is to refinance their ARM mortgage into an ‘agency’ loan, which is sponsored by the government-sponsored enterprises Fannie Mae and Freddie Mac or to the Government National Mortgage Association.
Nice rip into Chameleon Yun in Seeking Alpha:
Home Prices will be flat next year, as will home sales – whew! Thank god, I was worried after a 7 year bubble it might take more than 9 months to wash out all the ills… but according to the always accurate Lawrence Yun of the National Association of Realtors – nothing to fear people.
Now Mr Yun is of course unbiased and one of my favorites, since he has been calling for a bottom and quick recovery for about as long as Mr Hovnanian. I see either the NAR has no such thing as performance reviews and/or prefers incorrect information as long as its bullish. I really start to wonder if our major industries, much like the government, overlook bad information as long as its information they want to hear. I mean it works for the government – and “yes men” are famous for trailing along with their favorite CEOs…. truly his track record is sad.
I always love how the media trot out his ‘updated’ predictions every 4-6 weeks and cheer. Never pointing to his previous track record (abysmal). Plus really this is probably the most biased economist in the entire country you could ask about housing, no?
I spoke about Mr Yun’s track record in early October [Realtors Group Lowers Forecast But Lawrence Yun Still on Kool Aid] I will save you the time from clicking on the link – here is his history regarding 2007 sales as of early October. In reverse chronological order.
October prediction) Yun now calls for home sales to be down 10.8% from last year.
September prediction) 30 days ago, Yun thought it was (drumroll) going to be 8.6%, so he is only off by a factor of 25.6% in 30 days.
Here is the kicker… he thought back in February the year over year drop off would be only (drumroll) 0.6%! Don’t even make me try to calculate by what magnitude that ‘economic forecast’ was off by.
What did Yun think about 2008 – 6 weeks ago?
You guessed it
Sales will increase (he now says flat?) and a few months before that he was calling for an even larger increase!
October prediction)
Yun now predicts 6.12 million in sales, UP from the 5.78 milion predicted for 2007 (which goes down monthly) – thats a 5.9% increase! woo hoo!
September prediction) Now the kicker of all kickers is that 6.12 million in sales is down 2.4% from his forecast last month, so this is his conservative number. He was even more bullish last month – what were we looking for last month? 8% increase in home sales for 08??
So lets review, completely wrong on 2007 and in the span of under 3 months he has taken down 2008 from a 8% increase (September) to 5.9% increase (October) to flat (November)
Mr Yun, this Buds for You….
BC BOB, I am a programmer work for an ecommerce dept, PHP,MYSQL,FLASH,FLEX,Content Management,SEO, marketing,etc. Would be interested in consulting on the side. Very Low Fees
If interested jeb00@optonline.net
Little Neck is 33 minutes to Penn, when I lived in Douglaston I was walking distance to the train and it was 30 minutes to Penn. Bayside has coops right by the train and is 29 minutes.
My place in Douglaston on top of being by the Lirr even had the NYC bus stop out front and I could wait in lobby and there was an express buss to the city and by car was one minute from LIE, GCP and Cross Island and 15 minutes to midtown tunnel and Throgs Neck Bridge. That is why prices are high plus some houses have 2k in re taxes.
Great Neck has one stop service to city, 30 minutes and has beautiful waterfront mansions and some of the best parks and schools in the nations. Plus low RE taxes.
Worse part about Little Neck is that it has become another Flushing, all the bars and resturants shut. Patricks Pub in Little Neck was where Broadway Joe and the 1969 Mets and Jets went after every game. When the owner closed down he said it was hard to stay in business as “the new folks in the neighborhood ain’t exactly buying pints of Guiness and Shepards Pie” I guess that said it all.
money-wise, is medical doctor still a good profession?
CNN Money: Young doctors in debt
Chris and Meg Reis are on their way to long medical careers. Now it’s time to deal with $500,000 in student loans.
http://money.cnn.com/2007/11/16/pf/young_doctors.moneymag/index.htm?postversion=2007111611
I’ll do it “Grim Style”:
Ridgewood
495 Alpine Terrace
Purchased: 7/27/2005
Purchase Price: $750,000
Currently listed, MLS# 2743981
List Price: $749,000
Tim [200],
I sent you an email.
Thanks.
bi (202)-
“…money-wise, is medical doctor still a good profession?”
I think whoever becomes your therapist can plan on a long, lucrative career.
Not to mention the kickbacks that person could earn by overmedicating you…
201#. john, thanks. good info.
There is no difference between renting from a landlord (like renters do) and renting from bank (buyers doing an IO loan, or their house depreciating as much as their principal being paid back monthly).
The difference is that I can walk away from my rental with 1 months notice for just the cost of mailing a certified letter.
Clot [205],
Why do I picture the video/song, She Blinded me with Science.
Being a doctor is a waiting game. Very hard to get through and the payoffs do not hit until your late 30’s or 40’s but when they do watch out. My buddy is a new cardiologist in Pittsburgh. Had to deal with school/residency/fellowship until he was about 30-31. Then he gets a job at Pittsburgh heart practice for $300K to start. It will only go up from there the longer he stays with the practice. Yes he has $200K in school debt but he will pay that off quickly with his income in Pittsburgh. It takes 10 years from start to finish to really see any payoff but when you do, watch out!
Clifton Comp Killer
87 Whiteweld Terrace
Purchased: 3/24/2004
Purchase Price: $404,000
Sold: 11/16/2007
Sale Price: $375,000
Post Commission: $357,000
Estimated Loss: 12%
Think that is bad? Someone bought the unit next door for $457k in 2005.
BC (208)-
bi is blinded by margin calls.
grim (211)-
I think I feel worse for that guy next door.
How are people defining lowball now? Is it the same now as it was during the peak (2005)?
If Bonds got 10 years in a federal pen, would anyone care?
My brother is a physician. He’s hitting his 40s and has it good with his private practice. But with the reward comes the risk; the big bucks flow but the risks of a malpractice lawsuit are omnipresent.
Bi, try running your portfolio for a client with the thought that he could sue you any time coz you screwed up unintentionally. It’ll change your thinking considerably even though you make the big bucks. You might perhaps have a 1% retainer fee line item at the end of his brokerage statement stating ‘adjustment for catharsis’.
For me personally, I feel 10% off is a real lowball, 5% still up there. The way my realtor talks so far, she thinks 3% off would be getting the house for a steal.
Thanks for all the tips today everyone. Things I hadn’t thought of and lots of things I was thinking the opposite on (like justifying an offer with data and analysis).
I jotted them down to keep in mind when we finally do start making some offers.
dream (216)-
Catharsis isn’t the same as diarrhea.
#210 Mike,
I agree, med school/residency/fellowship is tough but once you’re done you’re set. My sister (32) is an opthamologist. Her first job 9-5 started her off at 350K and she’s got no loans bc of Dad.
found an open house down behind the Esso Club tomorrow,
http://www.thetigernet.com/blogs/plyler/?entry=20071116
BC – what’s your prediction for the game?
T- 26:45
Ann,
I hope one of the tips was find a new agent.
Rich
#218 Clotpoll
The term catharsis has been used for centuries as a medical term meaning a “purging.” Most commonly in a medical context, it euphemistically refers to a purging of the bowels. A drug, herb, or other agent administered as a strong laxative is termed a cathartic.
Bi,
Listen to Matthew Simmons and learn about oil:
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vB27_iYgpufM.asf
“If Bonds got 10 years in a federal pen, would anyone care?”
Clot,
Could we put away the dollar with those Bonds?
ignorant slut? lol. you just made my day. i owned a few properties in great neck, little neck and saddle rock i know the area well. the location is key on that little neck property it’ll still sell for over a million though how much is anyone’s guess.
Pro,
Sad to say, BC gets their a** kicked. I’m hoping I’m wrong. If I was an impartial fan, lay the points.
>>Worse part about Little Neck is that it has become another Flushing,
yeah ok. i smell racism.
dream (222)-
Catharsis seems like such a precise, clinical word; it implies that there’s a plan, followed by an action. There’s also the theatrical use of “catharsis”, which I always kinda liked.
Then, there’s the crude, random nature of the word “diarrhea”. Fits our pal bi to a T.
#104 (Mikeinwaiting)..if you have the address of some properties for sale in your area that your are interested in (or suspect they bankowned), try realtyshark.com. (although some of the data is not up to date) I have found some addresses that list a recent sale of $100 with a company name or bank listed. Also, I may be wrong, but ask the realtor showing/listing the house point blank-I believe they have to disclose if it is bank owned or not. For one in my area I knew was going to foreclosure, I went to the county clerk office and got the mortgage info, then called the bank. There are resources and ways to find out.
bc 224
Oh ye of little faith. You’ve had our number for two years now, both in OT.
Same deal this year, and Tiger fans will complain about how we “should” have…
“For the first time in at least a decade, the world’s biggest financial institutions are paying more to borrow in the corporate bond market than industrial companies.”
“These things are going to have us on pins and needles, particularly since the housing market doesn’t seem to be stabilizing just yet,” said Kevin Murphy, head of investment- grade corporate bonds at Boston-based Putnam Investments, which manages $65 billion in fixed-income assets.
http://www.bloomberg.com/apps/news?pid=20601109&sid=amZ7QD1CKCvw&refer=home
“Oh ye of little faith.”
pro [228],
I’ve been conditioned. You get hit on the head repeatedly, eventually you begin to realize that you have a headache.
Ann,
I know you are planning to purchase the house to live in and not solely as an investment, but if there is one key to successful investing, it is patience.
It took me a while to learn this, but it pays off in droves. Whether it be stocks, or homes you are purchasing, or consumer products. It’s much easier to buy at the right time than it is to sell. Look at those original Iphone purchasers for example.
208 RentinginNJ
Just this morning I had the plumber in to switch over to heat, the agencies maintenance man fixing the garbage disposal and fireplace, and had the widow man over to fix two broken windows; it didn’t cost me a dime. My rent is about 60% of what a mortgage in my area would cost. I get a 30$ credit on the water bill to make sure that the grass stays watered.
Renting is nowhere near the same as owning a house!
Gary,
Further to my post 99, I agree with clot regarding statistics & comps. Ann I believe has mentioned she has a least 20% down, I would place emphasis on that, and while I would want to present it as their best offer, I would suggest to Ann that it not be. Everyone likes to feel there is give and take, however sometimes this will only serve to make it easier for the second buyer….
KL
John Says:
November 16th, 2007 at 3:47 pm
Worse part about Little Neck is that it has become another Flushing, all the bars and resturants shut.
Prostitute Patron: I grew up in Flushing and you have now self-proclaimed yourself the patron saint of a%%holes. Most of my friends from the old neighborhood are smarter and more successful than you…and their parents basically forfeited their careers so my friends had that chance. You xenophobic prick.
A good chunk of my mother’s side of the family lives in Great Neck….that is nowhere you want to be now. Basically it is the bizarre land of retirees with live-in children well into their 20’s & 30’s. It is JAP/IAP central, along with my cousins…..my second cousins are all hopeless basket cases with accents.
“Sign Of Times: NJ School Cameras Fed Live To Cops”
http://www.roomrate.com/seattle/attractions/SpaceNeedle.asp
SAS
oppps…
that was the link for my planning my trip..
here is the correct one
http://wcbstv.com/technology/surveillance.demarest.cameras.2.565939.html
“Clotpoll Says:
November 16th, 2007 at 4:45 pm
If Bonds got 10 years in a federal pen, would anyone care?”
His girlfriend. The one in the pen, I mean. The one on the outside wouldn’t care.
BC
looks like it might be a good matchup, but whatever happens, hope to wish you luck on Sunday with that headache…
“Bi, try running your portfolio for a client with the thought that he could sue you any time coz you screwed up unintentionally.”
Unintentionally – hell, just imagine what would happen if you lost your client $50K and then told him it was no big deal.
217 Ann
5% off definitely does not count as a lowball for an initial offer.
“Richard Says:
November 16th, 2007 at 5:09 pm
>>Worse part about Little Neck is that it has become another Flushing,
yeah ok. i smell racism.”
…said the man who lives in a town with 3 non-white people in it, each of whom gets pulled over by the cops in town at least three times a day.
It is the case that Northern Boulevard through Little Neck is now predominantly Korean and Vietnamese (and I’m talking like 85% Korean and Vietnamese). I love the food, the crime is fairly low, the people are very nice, but culturally I don’t particularly fit in there like I did in the ’80s.
Thanks rhymingrealtor. :)
“A good chunk of my mother’s side of the family lives in Great Neck….that is nowhere you want to be now. Basically it is the bizarre land of retirees with live-in children well into their 20’s & 30’s. It is JAP/IAP central, along with my cousins…..my second cousins are all hopeless basket cases with accents.”
Holy smokes – I think we may be related, chi….
Ann Says:
November 16th, 2007 at 4:50 pm
For me personally, I feel 10% off is a real lowball, 5% still up there. The way my realtor talks so far, she thinks 3% off would be getting the house for a steal.
3% off?
lol! typical realtwhore..
House Hunter 227 Thanks for info.
Noone can afford the asking prices. The step up buyer is dead. No more monopoly money to sell a smaller house at a high price to put down on a step up house at higher price.
The ponzi Chain has been broken.
Sitting on the fence waiting for my pigeon to flinch. And I am starting to see more by the month.
I don’t know that the term lowball has much relevance these days. I’m of the opinion that asking prices in this market mean nearly nothing.
I’ve been looking at houses for the last year or so and most of the ones I’ve seen I wouldn’t even take for 20% off ask. When I’m ready to start making offers sometime next year, I’m going to offer what I think a house is worth. If that’s 25% or 30% off ask, that’s what it is.
The seller will either accept my offer or they won’t. It’s not like there’s going to be a shortage of housing inventory any time soon.
SAS Surveillance cameras in schools.Big brother is watching.Your freedom gets taken away alittle bit at a time in the name of safty or common good.With freedom comes risk you can’t have it boyh ways.
Off soap box.
Heard an economic analysis by Robert Kuttner today that echoed many of the posts here, re: Fed. rate cuts, using homes as ATMs, dropping dollar value…. And, yes, it’s from WNYC, a public radio station.
http://www.wnyc.org/shows/lopate/episodes/2007/11/16
Chuchundra I have some #’s in my head off of certain timeline,but bottom line you are right.I will offer what I want to pay,if they say no go on to another.Regardless of asking.I’m sure with the info gained here I’ll know when to make my move.
So, Clot. What would be a ball park number on a cash discount right now versus last year?
Pat (252)-
I don’t think I can correlate it to a dollar amount; however, I’ve found that a 20% dp- plus a willingness to walk away- leads nervous sellers to eventually take some damn low offers.
Sorry I’m being so vague on $ and %…I look at every home’s value vs. comp, vs. trend and vs. asking as a fresh case every time.
I’ll leave the data crunching to grim and Shiller. They are far better at it than I…and they’re the ones who’ll be looking at it hard thru the rear-view mirror.
Citibank limits Daily transfers to $2K, down from $10K for “security reasons.” Bank run protection?
“The daily limit for Standard transfers is up to $100,000 of incoming and $2,000 of outgoing transfers each Business Day.”
Citibank user agreement: http://tinyurl.com/2reuoo
“Sorry I’m being so vague”
Clot,
You sound like Mark McGuire before the Senate. Jose Canseco, the only one telling the truth? If I can borrow from 50.5, Bullspit.
http://www.youtube.com/watch?v=942HcHKbOno
Kettle [254],
Strictly to protect the depositor.
BC Bob,
wre they having security issues with people removing 10K at a time? I am serious, i am not a banker
Ann … just an opinion … wait it out if you can. I said earlier this year that the owners asking 600k in 2006 will be selling for 400k when all is said and done.
Stand by it. The key is patience. Don’t know your situation so can’t speak to it. We don’t love to rent, but we are. 3/4 of our wedding presents are at her mom’s place. Our 20% is tucked away neatly, collecting decent interest.
ethanol – wrong concept. even bill gates got fooled.
http://finance.yahoo.com/charts#chart3:symbol=peix;range=2y;charttype=candlestick;crosshair=on;logscale=on;source=undefined
Bi
I dont necessarily disagree with you, but the question remains, what comes after oil? The current use trends are unsustainable. Maybe the answer is nukes/wind.solar/geothermal/a mixture of all, but the fact remains that the status quo can not be maintained (oil as primary energy source).
not to get to far afield here, but BI, here is part of the problem
Chart ( energy research Vs iraq war spending)
http://tinyurl.com/2n5ram
not to get to far afield here, but BI, here is part of the problem
Chart ( energy research Vs iraq war spending)
http://tinyurl.com/2n5ram
Does that graph include private/corporate R&D or is it just government spending?
bath (258)-
Give it up. You can’t talk the market down to 0. Not everyone needs to- or is willing to- live in discomfort to save a couple of bucks. This lady is no dope, and she’s going to get a good deal.
bi (259)-
Agreed, but for every PEIX, there’s a MON, POT or TNH that blows it out by just promulgating the seed corn or fertilizing it.
Now, every John Q with a couple of acres in Iowa has it under ultra-intensive bean or grain plantation. And, with the massive pandering of the current election cycle acting as a tailwind, expect the acreage and yields in ’08 to be monster (of course, a hyper-weak dollar doesn’t hurt the export markets, either).
All disclaimers.
262
What’s your point? You think private/corporate R&D on alternative energy is in the same ballpark?
Not even playing the same sport.
Clot / Pat,
…plus a willingness to walk away- leads nervous sellers to eventually take some damn low offers.
I concur. It’s so true, come Monday morning the phone starts ringing.
—-
And winning best non sequitur of the day, ethanol – wrong concept. even bill gates got fooled.
How old is Reggie Theus? Looks 38.
The motor fuel of the future is going to be some sort of biodiesel. It will be refined either from a genetically-modified, super-producing, oil-bearing crop or algae.
Sugar-based ethanol isn’t bad, but the supply is limited. Corn-based ethanol is nothing more than back-door subsidies for agribusiness.
Was walking thru a couple of Vegas casinos earlier today. Stumbled into the NAR convention at the Venetian.
What a ridiculous conference. Tons of $ spent on frivolous stuff. James Taylor did a show and Bill Cosby was there.
I noticed that a daily convention newspaper was being published, so I picked up a copy. Went to a Mexican restaurant, where a ordered a tequila or 3 and began to read that paper.
Mostly the paper was ads. I remember one for shortsalecorp.com. But funniest thing was the front page article about the new NAR president. The guy’s name is Dick Gaylord.
269
Lol
Thanks for the report, pre
(Upon a time, I knew a guy named Dick Semen)
Here is a different slant on oil,we the US have the largest oil deposites in the world.More than Saudies off gulf coast.It is now not acceptable to drill there,more off Fla.sam deal.When everyone runs out it will still be there.Then it will be ok to drill our oil, no choice.Last one with oil wins.It could happen.
From the Daily Record:
Small businesses see profits slide, costs rise
How’s business?
Not great.
In response to an informal survey of a dozen small-business owners in Morris County, many said business is lagging.
They attributed that to a sluggish economy and higher prices for everything from energy to comic books to cream cheese to plastic.
Some said Internet commerce is hurting their business, but others said they depend on it to get through slow patches.
Those factors, coupled with a perception that consumers are spending less as gas prices hover near $3 a gallon, leave business owners feeling a pinch.
From the WSJ:
Bond Funds Are Victims of Timing
Thinking Worst Was Over,
Top Performers Now Lag Behind
By TOM LAURICELLA
November 17, 2007
After successfully dodging the bond-market storm earlier this year, several big mutual funds thought the worst was over. It was a bad call, and now they’re feeling the pain.
The result: Some funds with great long-term track records — including funds from Capital Research & Management’s American Funds, and Legg Mason Inc.’s Western Asset Management group — have taken significant hits in just the past month or so. Some that have long been top performers are now posting below-average returns and lagging behind the broad bond market by anywhere from one to nearly five percentage points, a huge gap for bond funds.
Some of these funds used a “bull-market strategy” of buying on a dip, says Jeffrey Gundlach, manager of one bond fund that has largely avoided the recent damage. That strategy “doesn’t work in a bear market,” he says.
“Clotpoll Says:
November 16th, 2007 at 10:42 pm
bi (259)-
Agreed, but for every PEIX, there’s a MON, POT or TNH that blows it out by just promulgating the seed corn or fertilizing it.
Now, every John Q with a couple of acres in Iowa has it under ultra-intensive bean or grain plantation. And, with the massive pandering of the current election cycle acting as a tailwind, expect the acreage and yields in ‘08 to be monster (of course, a hyper-weak dollar doesn’t hurt the export markets, either).
All disclaimers.”
Btw u know that all chemical fertilizers come from one thing: O-I-L.
HE (276)-
I thought fertilizer production was more natural gas-intensive.
Tribeca Lending, a subsidiary of Franklin Credit, seems to have imploded as well..
From Lender Implode:
Tribeca Lending Corp. (Wholesale) – Wholesale
Clot,
U r got my facts mixed up, natural gas = fertilizer, oil = pesticides; in either event it’s why they say the whole ethanol thing is too energy intensive, you use too much natural gas/oil based inputs that you don’t save anything on the ethanol.
250 “I’ve been looking at houses for the last year or so and most of the ones I’ve seen I wouldn’t even take for 20% off ask. When I’m ready to start making offers sometime next year, I’m going to offer what I think a house is worth. If that’s 25% or 30% off ask, that’s what it is. ”
See my post number 164, regarding pricing. This is much the the same approach we are taking. The land is worth so much, and the house is worth so much. If the asking price exceeds the two combined, it is not worth it — regardless of owners’ beliefs of current value. I do not give a tinker’s damn for whether an offer hurts anyone’s feelings or if it is rejected.
There is something to be said for not having to mess with building, just as there is with being able to control the quality of the raw materials and construction practices. So, we are considering those two countervailing issues a wash.
I was recently looking at a lake property, decent home but nothing fancy, decent shape but not pristine. It was a nice place and the owner wants $995k. We priced out lots (all larger, and just as nice a view, etc.) and they were in the $200k range. So, for a 1500 sq. ft. home (about 12 years old, and just a few away from when things start to go), assuming a final sale price of $900k, and deducting a more-than generous value for the land ($200k) the seller was looking for $466/sq. ft, for the HOUSE ALONE.
The current situation reminds me of some of the spoild brats we have all known or seen, who go around acting badly UNTIL people stop putting up with the misbehavior and cal them to account. Only if sellers see that the only offers are far below the asking price will they begin to get the message. Silence, is seen as affirmation. “The price was fine but it was too far to work for them, or they were looking for a different color bathroom, etc.” Self delusion will remain unless and until the buyers make offers they suspect will be rejected.
“N.J.’s debt burden tops $38B”
Lets raise taxes, tolls and fees, what are we waiting for? Don’t forget the gasoline tax, I sick of paying less than $3 for a gallon. It should be more like $5. Let’s get it done this year. Keep people out of NJ!!
“N.J.’s debt burden tops $38B”
Lets raise taxes, tolls and fees, what are we waiting for? Don’t forget the gasoline tax, I am sick of paying less than $3 for a gallon. It should be more like $5. Let’s get it done this year. Keep people out of NJ!!
#278 Grim
you are correct. they shut down our Marlton, Bridgewater and NY office. they have been consolidating for a couple of months now moving all of Tribeca to Franklin’s headquarters in Jersey City (where i was). oddly we just secured additional floor space at 101 hudson and even met with architects to revamp our space.
this hit was completely unexpected and devastating, obviously.
just last week i priced and was awarded a 77mm pool of loans that would have made a phenomenal x-mass for me. now, my x-mass will be spent standing in line for some fine gubmint cheese. hey, you gotta laugh right?!
Shore guy What # do you use for price per sq.?
Shore Guy: With your method of determining a fair price, you’re never going to buy anything. I’m just sayin’, but I think buying a house could be looked at like many other retail transactions, and retailers exoect to make a 1/3 profit on everything they sell. You’re trying to buy wholesale, imho.
shoreguys got his formula and isn’t afraid to walk away….key in any transaction…he’ll find something eventually….any buyer will in this market…there will be a lot available.
#283,
“Secondary Market”,
You mean at this point in the market you did not anticipate that your job will gone any day now?
Regarding today’s comp killers;
Top towns immune? My a**. This train wreck is picking up steam. Pay down debt and save. You will need to have your guns loaded. You won’t believe the bargains that are coming your way. Note, I’m talking off 2005 highs. I don’t consider 30-40% off 2005 a bargain, more like realistic pricing, a start. If you feel you are lowballing at 5-10% off 2005, do yourself a favor. Lie down and take a few Tylenol’s. Then start growling and hibernate for the winter.
Complacency
Concern
Fear
Panic
Fear will start to creep in once the 2008 spring season proves to be another bust. How many days for the Super Bowl??
njpatient Says:
November 17th, 2007 at 12:29 am
269 Lol Thanks for the report, pre
(Upon a time, I knew a guy named Dick Semen)
patient: my cousin’s husband has a patient named “Dick Aiken”…..my brother-in-law’s aunt is “Sandy Dick”.
BC My view also, no spring sales then the big turn.I’m playing with idea of one more spring bust (09) then make my move.No hurry real sweet deal renting almost makes it stupid to buy.
“As news circulated about Barclays Bank’s write downs and executive shake-ups, market sources were saying that the bank would also cease trading MBS paper. Barclays is not the only bank to decide to pull back from MBS trading, say sources, who added that Washington Mutual might also pulled the plug on such trading, as it comes under the heat of a fraud probe”
http://www.securitization.net/article.asp?id=1&aid=7728
The above will result in 500+ jobs lost.
Does anyone has more info?
“N.J.’s debt burden tops $38B”
This proves once again that Liberalism is a mental Disorder.
PeaceNow Says:
November 17th, 2007 at 9:52 am
Shore Guy: With your method of determining a fair price, you’re never going to buy anything. I’m just sayin’, but I think buying a house could be looked at like many other retail transactions, and retailers exoect to make a 1/3 profit on everything they sell. You’re trying to buy wholesale, imho.
I do not NEED to buy anything and I am not willing to spend $1.05 to get something that I can purchase for $1, nor will I flinch from Spending $2 for something (whether a car, house, cufflinks, etc.) that is a fair price for the goods.
The bottom line is that in the euphoria of ever-rising prices people forgot that there has to be an underlying value to what they are selling. In RE everyone says it is location, location, location; the location is the LOT. The structure may or may not be a substantial component of the total price, but that depends on so many factors, e.g., square feet, quality of raw materials, workmanship, age, maintenannce, etc. For me, and I am not suggesting it is the only way, it makes no sense to ignore the value of the land itself and then to consider whether the rest of what is being sold makes sense. Think of it this way, if one purchases a home for $900k and the cost of the land is, at current market conditions, 300k. If the place burns to the ground tomorrow, you cannot get more than replacement cost for the structure. If it is a 700 sq. ft. 2 BR 1 Ba cottage with wall to wall over unfinished floors, there is only so much the house is worth.
The key thing, from where I sit, anyway, is that there is no PERFECT house. It is not unlike spouses, we may all love our wives/husbands totally and without reservation. That said, if we had never met them or they died, we would all likely find someone else we would be perfectly happy with.
The minuter you are not fully willing to walk away from any negotiation, you are lost. You need not be a SOB during the process, but dispassion is your friend, well, that and 20% down and financing in hand.
Greg It would seem that conservatism has the same disorder.Bush just found his veto pen about 3 months ago(it is a special pen only with this pen in hand could he remember what his party stands for).Who do we vote for now.
Maybe the guy that looks & sounds crazy is the sane one. Ron Paul anyone?
Clot – Not trying to talk the market down to anything. Just trying to avoid buying a house, watching it lose value as the neighbors cash out for lower than what i just bought, and being pissed about it.
I realize you can’t time the market, but i sure can try my best. No question that reading this board helps. We have decided not to buy in the first half of 2008. And we certainly won’t be buying in NJ (likely in PA).
Bbath, we are going to give it a shot this winter and see what happens. We will rent if it comes to down to it though. Heck, you can rent some of the same exact houses that are for sale for rents much less than owning.
#280 I agree that silence is taken as an affirmation. It’s not their pricing, it’s that there are just no buyers right now. Or it’s the upcoming holiday season, it’s the football games, it’s the weather. Never their prices.
Lots of open houses going on this weekend where we are looking. One more open house on top of the ten they have already had. Their time would be better spent spending their Sundays taking down all of that hideous wallpaper that they slapped up in the 80s.
Grump, grump, we’re taking the weekend off.
Shore Guy,
I cant predict the future but I would have to agree with you. I have more than my 20% and will be agressive the same way. My neighbor had his house listed for 749k , one year later its been reduced to 599k, its been over a year and still not sold. He bought in 2000 for 300k. Be honest his house is priced lower than most, however its not selling. Why, because at the most is worth 400k. “Shore Guy for President”
#287 Frank.
I never for a second thought FCMC was impervious to what the rest of the market was going through. Management and share holders were extremely optimistic that our position with our joint ventures were secure. We had 2 billion lined up with AIG and Bank of Scotland. But the dagger to the heart was the OCC regulating (rightfully) Hundtington’s holdings. They did not like our business model and performance of the portfolio; despite our 17 year relationship.
BLoodbath Prices should stay flat after bottom.
If you are not in hurry wait it out & look for signs of upturn then buy.You might pay a hair more but will not lose any value.Remember the resets start up big time in 2010 after drop off in 09.We will see,its a very tough call.
Nobody wants to buy a house , including myself and find out in 2009 that it is 150k less than what you purchased it for. So thats why 20% off is a good starting point.
One more thought, we are seeing a lot of houses that are owned b families trying to buy up.
They list their current house high, and then are probably calculating on that sale that they can afford some super big house, that they will of course, lowball, because they are such wheeler-dealers.
Nothing makes me run from a house faster than some couple in their forties with two school-age kids who bought in the late nineties and aren’t getting divorced.
296 Ann Says:
November 17th, 2007 at 10:47 am
#280 I agree that silence is taken as an affirmation. It’s not their pricing, it’s that there are just no buyers right now. Or it’s the upcoming holiday season, it’s the football games, it’s the weather. Never their prices.
Ann,
It reminds me years ago when young women “let down easy” some guys I knew. “Oh, how nice, I’d love to but we are ….. tht day.” It was only once women started getting more blunt, “Hey use more deoderant,” etc. that they started to get the meassage.
Heck, I suspect that nearly any decent husband is only a decent husband because he got (whether he wanted to or not) an earful about a load of different topics from a slew of former girlfriends. It was from those earlier prods, and comments, that we, as men, got our acts together enough to be decent spouses. Not all of us, no doubt, just darn-well any guy I know, lol. Anyway, whether we wanted the comments or not, hearing the messages and adjusting ourselves to be more appealing to the buyers (or in this example, potential mates) made us more attractive in the dating marketplace.
Right now, sellers need some tough love. Not nastiness, just icewater in the veins negotiations. Nothing personal, its only business.
One more thought, we are seeing a lot of houses that are owned b families trying to buy up.
They list their current house high, and then are probably calculating on that sale that they can afford some super big house, that they will of course, lowball, because they are such wheeler-dealers.
Nothing makes me run from a house faster than some couple in their forties with two school-age kids who bought in the late nineties and aren’t getting divorced.
Talk about a grim view!
Unfortunately, it all makes sense.
http://www.rgemonitor.com/blog/roubini
Question for the realtors;
Friend has just put townhouse on market (unexpectedly large addition to family forcing move).
I THINK they priced high (but are willing to lower and aren’t unrealistic about the market) but have question about realtor performance.
After 2 weeks on market, the house has absolutely NO internet presence whatsever, Realtor has bare bones info with no pictures, realtor has no website. House is based in Middlesex so the MLS there is closed.
Realtor is focused on open houses, had one last week and tried to push one Thanksgiving weekend which my friend refused (quite rightly I thought) thinking it was a waste of time.
Is it me, or is this realtor a time waster trying to put in a “show” of marketing on the cheap all the while using my friends house to troll for buyers for herself?
CAPE TOWN (Reuters) – U.S. Treasury Secretary Henry Paulson said on Friday Washington was following a strong dollar policy and indicated he expected it to rebound, emphasizing the U.S. economy’s long-term strength should help the currency.
http://tinyurl.com/34oq2u
Really?????
Lisoosh,
I’m not a realtor, but I think you nailed it on the head.
A friend bought a house in 2001 for $145,000.
After improvements, all in is $245,000.
Three months ago, puts it on the market for $639,000. Five people have looked since. Even the realtor’s open house was a bust, 3 realtors showed up. Fast forward….
Reduced to $579,000, reduced to $549,000.
Friend says, “I’m not going to give it away!”
I cringe at the statement.
When we look to buy, i will do my best to try and find out what the owner paid. And I won’t be paying for a house if the owner has clocked 10-15% gains each year.
And the reasoning is because housing does not rise at those levels. Anyone who does is likely buying a wildly overvalued house.
#305 Lissosh,
I’m not a realtor, but it looks to me that the listing agent is not utilizing the max tools available. In this market, you need visuals, glossy flyers, MLS, and definitely internet exposure. I read somewhere that 60% of buyers start looking on the internet.
My 6c (inflation adjusted).
Orion Friend wants to double his money & then some in 6 years.Greed will backfire on him.With that kind of margin he should price under market and take the money run,as it will only get worse.Can’t help some people.Heard same quote from friend by me tried to talk some sense,no dice.Well I tried.
#298,
Management and shareholders have an obligation to lie, you need to be smart enough to know more than them because you’re running the business. In this market anyone working in the mortgage business can expect to be laid-off any day now, including myself.
#311 mikeinwaiting-
I totally agree and yet, it’s difficult to reason with the “my house is worth it” sentimental gobblygook.
Any good reason why I keep hearing military jets flying over my house (Brunswick area)? We are in Newarks flightpath and they don’t generally carry out excercises over here.
Ann, my parents are in the same situation as you. There was no talk of a bubble when they sold in NJ in 1996, and then they sold in Buffalo in 2006, a city that never had a bubble. They returned to NJ to find real estate gone mad.
With the kids gone, they are 2 financially secure adults in an apartment in Union County for the past year, but my mom is itching for a home. I am disgusted by the places and prices my dad shows me when I visit. They lowballed some placed in Union/Somerset counties over the summer and it is mid-November and the houses are still sitting there.
I read this board with interest because I will hopefully be a first time homeowner in NJ sometime after 2009 and to help my parents in their search. Thanks everyone to all the good info on here!
Shore guy Silence might work more REOs every day.This will force prices down as banks sell cheap to raise cash in tight credit sit.Also the winterizing,lawn,vandalism,taxes.We will just have to wait it out.
Orion#304 Grim indeed.”bad news on the doorstep
I couldn’t talk one more step”,just keep singing
seems to fit.
We’ve been in the “flipping” (god I hate that term) business for almost 20 years in Northern NJ and have seen the markets rise and fall. A well presented and well priced home will always sell if you know how to place it in the market. People will always want a piece of the American Dream, so while it may take longer to sell than before, and you may get less, you can still move property in any market. We have ALWAYS low balled in every market condition. In better markets the deals are far and fewer between but they exist. In a declining market they are more plentiful. 50% on asking is NOTHING to be embarrased about. If you don’t have to move, someone will eventually accept, or offer you a counter that works. Don’t be embarrassed and find a Realtor that will work with you-they do exist. Our key has always been all cash with a 10 day close, but its still doable with terms.
We’ve been vouyers on this board for a long time. Thanks to all for the insight and entertainment!
lisoosh,
We just sold a townhouse for about 5% over 2004 prices in under three weeks. We came on the market last in our price range in our town, and we are going to be off first.
Here’s how I think we did it. We first priced sort of high. After ten days of no showings and against our realtor’s advice, we priced under our competition by about a few percent for a nicer home overall.
Our house is move-in condition. Townhouse buyers really want move-in condition. Make sure their paint is fresh, and flooring is fresh too (throw in some new Home Depot rug if they have to). Do all the easy staging stuff (fresh towels, take down all personal items, clean, clean, clean). Freshen up the outside if possible, including the landscaping. Rent a storage unit if you have to and throw all of your junk in there so your closets look normal. I know with kids myself, it is very easy to look to cluttered.
After the price drop, we had fifteen showings that week and three good offers out of an open house. I believe the price was the driver, along with offering townhouse buyers what they want, total move-in condition, easy living.
Our realtor had a really nice featured tour also and nice handouts available. Nothing too over the top, but nicely done.
Good luck to your friend, it can be done! I think you are right. They need a nice internet presence (which their realtor needs to do) and they they need a shiny, move-in townhouse if they haven’t already, priced below the competion.
“Any good reason why I keep hearing military jets flying over my house (Brunswick area)?”
lissosh,
Hopefully they are planning a blitzkrieg, to wipe out Trenton, not the town, the state govt.
GRYF – Just a thought …
Have you considered possibly buying a house … with your parents? One where they would have their own living quarters/wing (their own kitchen, family room, bathroom, bedroom, etc).
Depending on your relationship with them … and how cool they are with the idea of giving you space and them being independent … this would allow three things:
1) You’d be able to combine forces with them to buy a much larger house
2) MASSIVE tax break in PA compared to NJ.
3) Your family wouldn’t have to worry about giving all their savings to medicare when that time approaches.
I’m sure many will mock this as a radical and crazy idea, and surely it is not for everyone.
I should have added this idea is much more likely to stick in PA, but not really in NJ.
Bloodbath The idea of generational living in same home is done in europe.Prices are so high in Italy that mortgages are passed down with the house.I guess you could say they’re renting,but nobody can make you leave your home.
It’s looked down upon in US.Posts by afew last night show this.We all need are own home,even thou many can’t aford one.Look at what it has created.
Further more I think it is great keeping together.This way someone would be home with kids while mom& dad work.If you use extra savings 1 parent could stay home to take care of older gen. when the time comes.Wouldn’t this be novel & nice.Families providing mutual support in finance as well as care for old age & chid care.Boy what blue collar loser concept.
My A** it is.This would be a good thing for our country.
I am a current condo renter and today I received a pamplet in my door saying, “I can help you. According to public records your home is currently in foreclosure…” I am highly doubtful of this statement since I saw phamplets in a large number of other doors around the complex.
I am a current condo renter and today I received a pamphlet in my door saying, “I can help you. According to public records your home is currently in foreclosure…”
I am highly doubtful of this statement since I saw pamphlets in a large number of other doors around the complex. Do you guys think that these people where just trolling for distressed properties? Is there anyway for me to check on the status of my landlords mortgage to see if it really is in the process of pre-foreclosure?
Thanks.
Does it still have demand for McMansions in central jersey?
http://www.dunhamsfarm.com/index.htm
293# shore, how to determine land value? for the towns which did ressessment recently, you could use that as reference. but for most towns in nj, what you found in tax record is the value evaluated 20 years ago.
“Does it still have demand for McMansions in central jersey?”
Only if it was knocked down and turned back into a farm.
#325,
yep goto realtytrac.com or the public record website.
Bloodbath, I am not opposed to that idea, but currently it just doesn’t work for our family. My parents are looking forward to a small house. I plan to get married in the next few years and my guy would refuse to move in with his wife’s family until maybe kids come kicking around, haha. Of course, he also thinks paying 1 million for a crappy Manhattan apartment is totally normal, so reality hasn’t hit him yet.
All this house talk has me looking forward to going to NJ next weekend and resume house hunting with my dad.
lurking I also worry about this from time to time.As I rent a house the owner could just walk away & I’m out.I would also like to check it out.Maybe some one knows a way?
Now there is one compeling reason to own, even if it cost more.
Thanks Frank
shore (280)-
Why are you using a method of valuation that would be rejected by an appraiser or a lender?
What you’re doing is essentially utilizing the replacement approach to valuation. This approach is only valid for historic, special-use or other one of a kind properties (such as churches or libraries).
You’re coming up with some interesting stuff, though I don’t really see where it’s going to take you. At some point, when prices get low enough, all your research could get wiped out by another buyer(s) who’s simply willing to pay more.
mike (290)-
I’ll be the first to make an end of year prediction: the Spring ’08 bust will be so bad, there won’t be another one in ’09. By then (to paraphrase Toll), we’ll be staggering along the bottom.
Peace (285)-
Shore falls into the 60% here whom I believe will never buy. I meet 4-5 people every year who’ve decided they have discovered the new way to value, negotiate and purchase RE. To be fair, Shore’s got a more interesting approach than most, but in the end, it will yield the same fruitless result.
It’s like being the only one who understands Mandarin in a giant room full of English-speakers.
Ann (296)-
The right price and promotion will bring a buyer…in the middle of a blizzard on Jan. 3.
The scores of houses out there that aren’t selling are in that position for the same reason so many I-banks have CDOs marked to blackbox. The minute some seller- or group of sellers- decides to meet the actual market of buyers, it’s box cars…and lookout below.
255, thanks, Clot.
Tim, do you know any us site with fee-based e-mail service out based on social security death files/obits/weddings?
Ann (301)-
As an agent, I run from them, too. Stupid sheeple who think they can get an ’05 price for their POS, then turn around and undress the seller on their trade-up.
Those are also- inevitably- the people who end up blaming the agent when the whole plan comes unraveled.
And, in a way, it IS the agent’s fault…for choosing to work with morons.
Clot334 I would tend to agree.Also if dems get in they will tax or print to save another round of REO’s 2010-12.As we know resets go back up again almost to 08 levels.Either party IMHO will have to bail out by then,it will be that bad.But as pricing should remain stagnant for long time, no hurry.
lisoosh (305)-
You are absolutely right.
Orion (310)-
It’s more like 80%!
the problem with Little Neck is not the people who grew up there it is the people who live there now in million dollar homes with clothes lines on the front lawn
Lisoosh (314)-
It is the endtimes.
Why do lurkers sometimes raise their hands to comment about the entertainment around here?
Are there really people out there laughing at the posters?
On the right of the Home Page
A button you’ll see.
Press it and treat Grim
to a lil cup o’ tea.
Keystone (318)-
Hats off to you! There’s always a way to make a good deal: up, down or sideways market. That’s what’s so great about this game.
Or maybe there is a hurry,my wife.Hates to rent
nesting instinct have to own to keep kids safe & stable.Can’t win that fight!
FDIC gearing up:
https://jobs1.quickhire.com/scripts/fdic.exe/runuserinfo?Haveusedbefore=5
Ann (319)-
Wanna be a Realtor? I could use about five more agents like you.
mike (323)-
“Families providing mutual support in finance as well as care for old age & chid care.Boy what blue collar loser concept.
My A** it is.This would be a good thing for our country.”
This may not be optional pretty soon.
lurky (325)-
Go to your county clerk and see if a lis pendens has been filed.
Office of Thrift Supervision gearing up:
http://www.fbo.gov/EPSData/TREAS/Synopses/1767/OTSDC20050001A-Phase4/TE-
US population can’t keep going into debt to live.Less toys (for adults)& everything kids
want is bought has to stop.Some might call this a lower standard of living, but I don’t.Most wil
eat well & be warm in winter go to work & school.What we do have will mean something,all is taken for granted.Whoever wrote story about 2 islands,could not be more on the mark.
Corrected URL for the OTS:
http://www.fbo.gov/spg/TREAS/OTS/PASDC/OTSDC20050001A-Phase4/listing.html
Jill347 That read like a book.They’re getting ready for the storm.
“Clotpoll Says:
November 17th, 2007 at 4:34 pm
lisoosh (305)-
You are absolutely right.”
Thanks for the reply. I had a little 10% hope that there was something I was missing. Friend has what in a good market would have been considered a desireable model in a popular development and I think her realtor assumes it will sell itself.
Now I get the nasty job of trying to get her to shake up her realtors @ss before she screws it up and flounders in the spring.
“China warns of weak int’l demand as global economy slows”
http://www.chinadaily.com.cn/bizchina/2007-11/17/content_6261480.htm
Ann –
Thanks.
Luckily the landscaping is top notch.
Unfortunately, she has 3 kids, about to be 4 and they are a little “ahem” destructive.
Luckily most of the home is in neutrals, the furniture is new/classical and good and the bathrooms updated and pleasant.
The big negative would be the carpet, which is a little the worse for wear, HD rugs is a great idea, I will suggest it to her to brighten it up and give the floor a fresher look.
Sheriff Auctions
How are the prices of homes AT Sheriff aucitons?
Anyone has experoence in this or bought something at a good price?
Shore Guy, re: 293. You do realize, don’t you, that in most of your post you kind of make my point: that buying a house is a lot like buying a sweater. If you don’t like what it costs, you go somewhere else, or you buy a different (cheaper) sweater, or you decide you don’t need a new sweater at all. But what you don’t do is stand in the store and calculate how much the yarn cost, the wages paid to the person running the knitting machine or how much rent the store pays for the shelf space the sweater takes up.
I appreciate that you want value for your money, and that’s what you should get. However, your example “if one purchases a home for $900k and the cost of the land is, at current market conditions, 300k. If the place burns to the ground tomorrow, you cannot get more than replacement cost for the structure. If it is a 700 sq. ft. 2 BR 1 Ba cottage with wall to wall over unfinished floors, there is only so much the house is worth,” doesn’t exist in the real world. All it indicates is that someone wildly overpaid (or had visions of tearing the place down before it burned).
And Clotpoll, 335: Thanks, but I’m more optimistic than you. I’m guessin’ 60% will buy, only to bitch and moan about it later.
Just for info:
South Brunswick, North Brunswick, Franklin – that whole Exit 9 area, sensibly priced houses are at 2004 levels and dropping fast. It is AMAZING what is starting to come up in searches.
Gary’s Holiday Tale:
Scrooge and Marley’s Foreclosure Services, I believe.
(cheerfully)
Have I the pleasure of addressing Mr
Scrooge, or Mr Marley?
SCROOGE
(melodramatically)
Mr Marley has been dead these seven years.
He died seven years ago, this very night while pad-locking a McMansion while a drunken FB shot him.
The two gentlemen exchange glances while Scrooge grins malevolently at them.
The first gentleman hands his credentials to Scrooge.
1ST GENTLEMAN
(to Scrooge)
We have no doubt his liberality is well
represented by his surviving partner.
At the ominous word “liberality”, Scrooge frowns, shakes his head, and hands
the credentials back. The 2nd Gentleman takes pen in hand.
2ND GENTLEMAN
At this festive season of the year, Mr
Scrooge, it is more than usually desirable
that we should make some slight provision
for the destitute sellers and realtors, who suffer greatly
at the present time. Many thousands are in
want of common necessities; hundreds of
thousands are in want of common comforts,
sir.
SCROOGE
Are there no bankruptcy lawyers?
The gentleman lays down his pen.
2ND GENTLEMAN
Plenty of legal representation.
SCROOGE
And government assistance agencies? Are they still
in operation?
1ST GENTLEMAN
They are. Still. I wish I could say they
were not.
SCROOGE
Beautician and Bartending schools are in full
vigour, then?
1ST GENTLEMAN
Both very busy, sir.
SCROOGE
Oh! I was afraid, from what you said at
first, that something had occurred to
stop them in their useful course. I’m
very glad to hear it.
1ST GENTLEMAN
Under the impression that they scarcely
furnish cheer of mind or body to
the multitude, a few of us are attempting to
raise a fund to buy the duped homeowners and misunderstood realtors
some meat and
drink, and means of warmth. What shall I
put you down for?
SCROOGE
Nothing!
1ST GENTLEMAN
You wish to be anonymous?
SCROOGE
I wish to be left alone. Since you ask me
what I wish, gentlemen, that is my answer.
I don’t make merry myself during this holiday and
I can’t afford to make the drunken sellers and their foolish realtors merry.
I help to support the establishments I have
mentioned: they cost enough: and those who
are badly off must go there.
1ST GENTLEMAN
Many can’t go there; and many would rather
die.
SCROOGE
If they would rather die, they had better
do it, and decrease the price of their POS dumps as well.
Besides — excuse me — I don’t know that.
1ST GENTLEMAN
But you might know it.
SCROOGE
It’s not my business. It’s enough for a
man to understand his own business, and not
to interfere with the sellers and realtors greedy intentions. Mine
occupies me constantly. Good afternoon,
gentlemen!
http://www.littleneck.net/westmoreland/
dobut the new neighbors follow the covents in place in little neck
sizzler – chinese buffet
bar corner of northern and nassau – chinese vegatable store
german delli corner of glennwood and norhern – asian deli
italian bakery – chinese restaurant
over by marathon cool pool hall and bar out of business
italial shoe repair – dont know asian symbols
auto part store corner of glenn wood and norther = asian store dont know – sign in mandarian
patricks pub gone
lots of local merchants gone, new residents go to flushing for plumbing painting shopping clothes etc and all local business went under.
the few who are left can even go to most of the stores as no one speaks english.
I don’t think it is racist if one group moves in and drives every business under. I would hate it no matter what the ethnic background.
I like a mixed neighborhood and old time neighborhood but Little neck changed from 1998 to 2002 which is overnight. The old timers became isloted in their own neighbor hood and all the covents that make the neighbor hood nice was broke.
Scobee diner is all that is left!!!
348 Clotpoll: Thanks for the compliment, but I couldn’t deal with the people!
357 lisoosh
Wow, 3 to be 4 kids and trying to sell. I did it with two and thought it was going to kill me. Definitely some new rug. And no more toys kids! One basket each!
My brother works for the biggest insulation company in NJ. The Company just announced 5 weeks before Christmas that there Will be no Christmas bonus’s this year. I wonder how many other Companies are announcing
the same thing. No wonder the retailers
are tanking. Not a good time to be employed
in the construction industry.
Grim,
Could you please give me address/price history/dom on:
GSMLS Number: 2417676
Thx in advance.
-AT
I am here in the San Jose area visiting family. They have a beautiful ranch house in the hills. I have always been a colonial guy, but this is my first experience staying in a ranch style house. Got to say that having everything on one level does have it’s benefits. Granted, most ranches are ugly but if I can find a good one, I will consider it.
AT,
459 Mountain
MLS# 2336985
OLP: $729,000
LP: $679,000
DOM: 180
Expired
Relisted # 2417676
OLP: $649,000
LP: $599,900
DOM: 154
It was also listed for rent earlier in the year at $3k. Listing was withdrawn after 144 days.
Mediterranean ranches can be lovely with the tile floors, high ceilings thing. I have a thing for courtyards – Californian friends always had homes with these lovely little walled off areas between the house and garage. A quiet outside space with grape vines, perfect for morning coffee.
Wouldn’t be so comfortable without the climate though.
361 Gary
That was pretty funny. But you need to take a break. Why don’t you turn on TNT and watch Titanic? Like BC said, at least they had a band.
lostinny,
lol! I saw “Titanic” at least 20 times. I’m watching “Little People” on TLC.
lostinny,
lol! I saw “Titanic” at least 20 times. I’m watching “Little People” on TLC.
One thing I like about ranch-style homes is the driveway and garage do not dominate the front yard.
For 30 years, US homebuilders seem to have decided that the places for the cars are the most important architectural elements.
Look at this home design from a subdivision mentioned in an earlier post.
http://www.dunhamsfarm.com/elevations-layouts/hampton-elite-elevation.htm
But I agree with lisoosh that the ranch design is a better match for the California climates.
#323 mike: Europe has always has inter-generational living, high prices or not.
You would think he would be insulated from not getting a bonus.
GJV1 Says:
November 17th, 2007 at 7:24 pm
My brother works for the biggest insulation company in NJ. The Company just announced 5 weeks before Christmas that there Will be no Christmas bonus’s this year.
Grim/Clot, could you tell me if 2460213 is pending contract or under contract? Thanks.
#360 lishoosh,
Thanks for the heads up! What sites can I snoop around to look up the inventory around this area?
And yeah, what was up with the jets overhead this morning? The last time I heard a lot of buzz overhead was a helicopter looking around for an escaped fugitive at night around a year back.
360#, as far as i know, south brunswick and east brunswick holds better than franklin or north brunswick. interestingly, people prefer newer development in these areas. the listing price does not change that much from 2005 level for the developments such as countrywood, beakman manner and deans pond. maybe you can negotiate a few percents but not that much. i mentioned one extreme case in this blog: friend of mine sold his home in countrywood (east brunswick) in 1 day for 5K over listing price. it was in august.
dunhams’ farm i posted earlier is a brand new development which has east brunswick address but belongs to south brunswick school system. it is priced starting 950K base. do you think they are nut in this market if there is no demand?
Disclaimer: i have no relationship with dunham development. the link is purely for information exchange.
Renters are not immune from the housing bubble.
http://www.nytimes.com/2007/11/18/us/18renters.html?_r=1&hp&oref=login
3723, Pret, i think this design is purely for efficiency: you save steps to your front door after parking your car. since my garage is at side. most time i use side door.
“What it all comes down to is that Joe Six-Pack has been taking equity out of his house and supporting the U.S. economy,” said Simon Ballard, global credit strategist at ABN Amro Asset Management in London. “Now house prices are correcting, the bubble is deflating. You’re going to see the engine of global growth significantly weaker.”
This is not what realtors were telling me. In July, one told me that this sub-prime “stuff” is contained. Last year, another one told me that the housing bubble talk is a bunch of bullsh*t. You mean… they lied to me?
“I now see the risk of a severe and worsening liquidity and credit crunch leading to a generalized meltdown of the financial system of a severity and magnitude like we have never observed before.”
-Nouriel Roubini (11/17/07)
Ann (363)-
“Thanks for the compliment, but I couldn’t deal with the people!”
Ann, I can teach you how to be a sociopath. It is a learnable skill, you know. Once you don’t care about people, your problem ceases to exist. :)
mo (375)-
Stuck with an Apple computer for the weekend & can’t access GSMLS. Maybe late Sunday PM, I can take a look. Sorry…
287 Frank
You do realize that was a d+ck thing to say?
Frank read that in real time 287 today.Reasoning may be sound,but you shouldn’t have gone there.Figured let the man speak for himself, but really was taken back.Go easy, that was beyond the pale.
“do you think they are nut in this market if there is no demand?”
bi [378],
Probably should be under the supervision of Nurse Rached.
http://www.jokesunlimited.com/picture.php?jokeid=1036
Mojo,
As far as I can tell it isn’t in Attorney Review or Under Contract.
It has been relisted however, it was previously listed as MLS# 2404826. Original list price was $2.25 reduced to $1.99. DOM was 183 on that listing. It was relisted about 10 days ago for the same $1.99 price. Just an FYI, it was purchased in 2002 for $1.72.
6 Beaver Creek, same builder, similar style is UC as a corp relo. Was purchased in 2003 for $1.84 and was currently listed at $1.89 (down from $2.3).
Little Ferry Comp Killer
Purchased: 7/21/2004
Purchase Price: $315,000
Currently active, listed as:
MLS# 2744285 – Washington Ave
OLP: $299,000
List Price: $280,000
DOM: 17
Active
Waldwick Comp Killer
Purchased: 12/22/2005
Purchase Price: $575,000
Currently active, listed as:
MLS# 2746123 – Donald Place
List Price: $519,900 (Relisted, reduced from $599,000)
DOM: 186 Total
I read on Trulia web site that Asbury Park has 46 month’s worth of condo inventory. I don’t know how they came up with this number but can this possibly be true??!
Orion Must be the new math, sounds alittle fishy to me NAR in reverse.
Affordability will still remain the main criteria for determining house prices. Once the creative financing issues are settled, we will be back to average house prices determined by average income available to buy available house.
#385,
Truth hurts, but the sooner you realize it, the better.
#385,
I am in the same boat as he is, out of work any day, so I have no problem stating the obvious.
Frank, go back and scan from comment #1 up and you will understand what njpatient means in #385.
In the first story of the print version Barron’s this week, there is a scary article on the future of our financial system.
There was one statistic that did not seem right. Their analysts estimated that 45% of all sales in the 4th quarter of 2008 will be foreclosures. Since foreclosure sell at prices at 25-30% below fairmarket value, this will bring many homes closer to the realm of affordability.
Could this foreclosure percentage (45%) be accurate?
Are there many contracts expiring? or people buying homes in droves?
The inventory took a dive this week.
Frank – There are few qualified buyers. Even less when you count the jumbo factor. So what’s the point of keeping your house on the market?
Don’t look at inventory, man. Go out, drive around, tell me what you see.
It is the Middle of November GSMLS is at 35,236 , I dont see this as a DIVE. Your going to see over 40k in April 08
Is anyone able to get #’s of gsmls from prior years this would be interesting to track month to month.
“or people buying homes in droves?”
Frank [398],
Sarcasm, right?
“Housing starts in the U.S. fell to a 14-year low in October, signaling the real-estate slump will continue to weigh on growth, economists said before a report this week.”
“Sales are dropping and inventories are growing as the collapse in subprime lending and the prospect of further declines in property values scare away buyers. Tumbling residential construction will weaken the economy into 2008.”
“The housing recession looks far from over,” said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York. “Builders continue to cut construction aggressively.”
“Toll Brothers Inc., the largest U.S. luxury homebuilder, said Nov. 8 that fourth-quarter revenue fell 36 percent and the rate at which contracts were canceled rose to the highest ever.”
“We do think that this is worse than it was in ’88 through ’90,” Chairman Robert Toll said on a conference call. “We can’t predict how long this down-period will last.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=acK.D3z5K7rA&refer=home
Mike,
I have an inventory graph, I am on my way out the door (open house)I will see what I can post later.
KL
BC
I answered your email late last night
KL
Inventory is last years news, now it’s month’s supply. Inventory vs. Sales
Example from Otteau around September:
“From a supply perspective, the Unsold Inventory of homes for sale in New Jersey has been virtually unchanged for 5 months now. Given however that the pace of home sales is declining, this inventory now represents a 13 month supply on the market up from 7 months in March and 10 months in August. It is therefore clear that the bottom to the current housing slump is nowhere near.”
Frank,
Inventory always declines this time of year. People will pull the homes off the market during the holidays and some will re-list while others will wait for Spring.
Bergen County: First of the Month
Month 2004 2005 2006 2007
Jan 3,027 3,069 4,296 4,827
Feb 3,117 3,109 4,734 5,142
Mar 3,206 3,235 4,945 5,231
Apr 3,342 3,288 5,330 5,526
May 3,546 3,567 5,809 5,972
Jun 3,932 3,913 6,350 6,248
Jul 4,109 4,049 6,562 6,260
Aug 4,130 4,220 6,668 6,243
Sep 4,067 4,289 6,518 6,067
Oct 4,142 4,612 6,458 6,164
Nov 4,009 4,898 6,242 5,979
Dec 3,655 4,879 5,622
#399, #402,
I see a lot of people buying homes these days, it takes longer than the 1 week that it took in 2005 but all the homes around me sold, after some price cuts of course. While there are a lot of homes on the market but around me things are moving fairly smoothly if you think about it.
Grim,
Please delete the section above that I pasted from Otteau’s site. I just saw scrolled to the bottom of the page at their web site.
Market Trends
Thanks, Rich
Frank,
Where are you?
Since September, sales in Bergen County are the lowest they’ve been in the past 13 years.
Bergen Sales – Sep
1995 721
1996 705
1997 841
1998 886
1999 842
2000 803
2001 732
2002 828
2003 1039
2004 952
2005 946
2006 679
2007 581
Bergen Sales – Oct
1995 720
1996 792
1997 826
1998 845
1999 799
2000 785
2001 897
2002 793
2003 976
2004 887
2005 830
2006 725
2007 565
402#, bob, for the towns i tracked, it went down week by week. you and grim will argue it is purely seasonal. but if my memory is still working, it is less than 06, which is less than 05 for this time of the year. in 05, inventory spiked up after katrina but did not come down that much at the year end. 06 is a litle better. amazingly, sub-prime drama did not drive up inventory that much.
#409,
Hazlet, Monmouth County, NJ
Frank,
As long as the red line stays above the x-axis, year-over-year inventory is increasing.
https://njrereport.com/images/oct07_invpace.gif
The pace of inventory growth has indeed slowed dramatically, however. I wouldn’t be surprised to see yoy inventory begin to slowly decline either. However, I would be careful interpreting a decline in inventory for a strengthening market. For that we would need to understand the reason behind the inventory decline. If that decline is due to increased sales (at a YOY level), I might agree that the change in inventory as bullish. However, if the drop in inventory is due to expirations and withdrawls, to me that points to strong levels of shadow inventory that will likely reappear.
“While there are a lot of homes on the market but around me things are moving fairly smoothly if you think about it.”
Frank [407],
Actually, if you do really think about it, a bust is evolving right before your eyes. That said, there is one given; everyone’s own town, section of town, even right down to their specific street, is/and will always be immune to any decline.
The pace of sales? Just take a moment and look at the data. It’s akin to comparing the road runner, beep-beep, to a snail. However, I do realize that it’s all relative. If you think about it, a snail does actually move fairly smoothly also.
#413,
Snail will move steady for years to come as opposed to a road runner that can trip and fall at anytime.
Frank [414],
You are 100% right. Actually, we have witnessed this. The road runner has crashed. Excellent example.
bi Says:
November 17th, 2007 at 2:05 pm
293# shore, how to determine land value? for the towns which did ressessment recently, you could use that as reference. but for most towns in nj, what you found in tax record is the value evaluated 20 years ago.
I agree that the approach takes work, and is inexact in towns where no vacent land has recently sold. Nevertheless, it helps one focus on the essential fact that much of what is being offered at current prices offers little value for the dollar.
Clotpoll Says:
November 17th, 2007 at 4:20 pm
Peace (285)-
Shore falls into the 60% here whom I believe will never buy.
As for your assessment, bi, you ae incorrect. We own multiple properties, for our own use and enjoyment and will buy yet another if and when we see some reasonable link between the value of the property (which takes into account lifestyle, return on investment vs. altrenative uses of the money (in essence opportunity cost of owning the property) and other factors). For many, RE has become an emotional issue. To us, it is just another business deal that needs to be looked at with the benefit of serious analysis.
PeaceNow Says:
November 17th, 2007 at 6:43 pm
Shore Guy, re: 293. You do realize, don’t you, that in most of your post you kind of make my point: that buying a house is a lot like buying a sweater. If you don’t like what it costs, you go somewhere else, or you buy a different (cheaper) sweater, or you decide you don’t need a new sweater at all.
I agree with you. My only point was to illustrate a method I use for helping me seperate the emotion from the economics. Before our last purchase, we saw some nice properties, which were just overpriced. We walked away from them and they eventually sold to people who, as current trends now show, just plain overpaid.
Whether they did so based on the prospects of ever-increasing values, or because they were focused on the monthly cost, or some other reason, I don’t know. What I do know is that at $80k, any Kia is overpriced; at the same price, a Rolls Royce may or may not be overpriced, depending on condition, etc.
What I observed down the SHore is that a lot of people saw “Kias” and got worked up int a frenzy thinking that if they did not outbid some other buyer they would be locked out of the market FOREVER. So they over paid. The pitch that land would run out drove the bubble in Florida decades ago; last I saw, there has still been development going on there.
I disagree with your statement that:”I appreciate that you want value for your money, and that’s what you should get. However, your example “if one purchases a home for $900k and the cost of the land is, at current market conditions, 300k. If the place burns to the ground tomorrow, you cannot get more than replacement cost for the structure. If it is a 700 sq. ft. 2 BR 1 Ba cottage with wall to wall over unfinished floors, there is only so much the house is worth,” doesn’t exist in the real world. All it indicates is that someone wildly overpaid (or had visions of tearing the place down before it burned).”
There are numerous properties that I have seen over the past 5 years that had no rational connection between the value of the structure and the price of it. Some of these were in Spring Lake, others in Sea Bright, others elsewhere. I suspect such properties can be found in nearly any NJ town.
417#, shore minor correction. 60% number not-buying is from my pal clot. my assessment is 90% buying.
re 419, No offense intended.
418#, shore, when people look for primary residency or vacation homes, there is always emotional factor, which is different from investment property. for investment property, what you only care is return. for primary residency, you have many not-quantifiable factors. I had very strict requirements for schools, towns, locations and even internal of the houses so i was quite flexiable on prices as long as it was not hugely overpaid.
Thought this one was interesting..
As Owners Feel Mortgage Pain, So Do Renters
In the foreclosure crisis of 2007, thousands of American families are losing their homes without ever missing a payment. They are renters in houses whose owners default on their mortgages — a large but little noticed class of casualties.
Some live in big apartments, others in houses owned by small investors who got in over their heads.
There are no exact figures for how many renters have been evicted because of foreclosures, but a survey taken this year by the Mortgage Bankers Association found that one in eight foreclosures was non-owner-occupied. This figure probably underestimates the problem, according to the association, because buildings receive tax benefits if they are registered as owner-occupied. More than one million properties are expected to enter foreclosure this year.
Many renters say they never even knew their buildings were heading for foreclosure.
“This is an explosion,” said Judith Liben, a lawyer at the Massachusetts Law Reform Institute. “This isn’t business as usual. These are investors that overleveraged themselves, and the renters are collateral damage in the mortgage crisis.”
Bi – do you mind if i ask why your typing and grammar are so poor? Not meant as an attack, just curious.
Jersey shore marketing, need I say more?
http://newjersey.craigslist.org/rfs/482614284.html
Another interesting property up on Craigslist..
http://newjersey.craigslist.org/rfs/482535140.html
Purchased for $305k during the last bubble. Current asking is $465k. Works out to roughly 2.5% appreciation per year over ~17 years of ownership.
If we adjust for inflation (using the CPI), $305k in 1990 dollars is equivalent to $487k in 2007 dollars.
In real terms, this house is selling at a loss, after 17 years of ownership.
They would have broke even if they had sold a year earlier.
Grim, thanks for the info. I’ll probably wait until 6 Beaver Creek closes and I know the sale price to make a move on 29. Prices seem to be hovering at 2003 levels (non inflation adjusted) in this neighborhood, which seems remarkable to me.
#423…another i.e. browser user….switch to firefox…they have spell check.
Mike,
I have a simple spreadsheet on gsmls inventory starting may 06, The following figures are averages. At the end of each month I average it and put in another cell, this is the shortest way to give it to you. Please keep in mind this is based soley on the number you see when you go to the opening page. James has a more detailed list broken down by SFH.
5/2006 27909
6/2006 28471
8/2006 31892
9/2006 32601
10/2006 32749
11/2006 32088
12/2006 30040
1/2007 28877
2/2007 28925
3/2007 30737
4/2007 32861
5/2007 33493
6/2007 35196
7/2007 35311
8/2007 35537
9/2007 35944
10/2007 36005
KL
[424],
Second blonde from the left; Is she a former linebacker for the Gints?
#424,
Can I get a BJ if I buy?
“dreamtheaterr Says:
November 17th, 2007 at 9:58 pm
#360 lishoosh,
Thanks for the heads up! What sites can I snoop around to look up the inventory around this area?
And yeah, what was up with the jets overhead this morning? The last time I heard a lot of buzz overhead was a helicopter looking around for an escaped fugitive at night around a year back.”
Just looking at Realtor, I am coming up with house prices I haven’t seen in years. Houses which had asked $400+ back down to low $300’s and even $299. Imagine – houses in the $200’s (and dropping).
The helicopter – yeah, I remember. They were chasing kids from some party that got out of hand where the cop who arrived said he heard gunfire. Was never proven though.
Bi – Most of my friends live in South Brunswick.
Every one told me that their homes would never again decrease in value.
Boy, have they been surprised.
South Brunswick is a wannabe town, and prices are falling right now. Plenty of houses sitting on the market there for well over 6 months too.
Rhyming 428 Thank you.Its what I wanted.
BC 429 Sure thats a girl?
Frank 430 My wife said same thing,great sense of humor.
Shore (417)-
I still think the basis for your research is faulty…and bizarre.
BC-
Nice win last night. Any visiting team that wins in Death Valley has onions, fer sure.
Mike [433],
LOL. I should have asked if she/he/it was a former linebacker?
Clot [435],
Didn’t think it was possibe, after a rag-tag, Terrapin team wiped us up.
Oh boy..
From the AP:
OPEC interested in non-dollar currency
Iranian President Mahmoud Ahmadinejad said Sunday that OPEC’s members have expressed interest in converting their cash reserves into a currency other than the depreciating U.S. dollar, which he called a “worthless piece of paper.”
His comments at the end of a rare summit of OPEC heads of state exposed fissures within the 12-member cartel — especially after U.S. ally Saudi Arabia was reluctant to mention concerns about the falling dollar in the summit’s final declaration.
The hardline Iranian leader’s comments also highlighted the growing challenge that Saudi Arabia, the world’s largest oil producer, faces from Iran and its ally Venezuela within the Organization of Petroleum Exporting Countries.
“They get our oil and give us a worthless piece of paper,” Ahmadinejad told reporters after the close of the summit in the Saudi capital of Riyadh. He blamed U.S. President George W. Bush’s policies for the decline of the dollar and its negative effect on other countries.
“All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency,” Ahmadinejad said. “Some said producing countries should designate a single hard currency aside from the U.S. dollar … to form the basis of our oil trade.”
#437…..that’s it….time to take him out.
>>When we look to buy, i will do my best to try and find out what the owner paid. And I won’t be paying for a house if the owner has clocked 10-15% gains each year.
what an ignorant idiotic statement.
It’s now a ‘buyers’ market as long as that buyer doesn’t actually…..A. Fall in love with a place…..B. can get financing…..C. Isn’t completely focused on taking advantage of a desperate seller…..OK, C is optional.
one of my tenant’s lease is up. heating oil is up substantially so i’m jacking their rent up 10% so my net profit never dips. i’m happy there are plenty of people out there like those on this blog who believe renting is better than owning i need you guys to keep making me more wealthy.
#438/437, it’s official I voted twice for the worst President in US History.
#437,
I hate to agree with a terrorist but I am close to asking my boss to pay me in Euros.
Richard,
Better jack it up 15% to cover the upcoming property tax hikes.
“i’m happy there are plenty of people out there like those on this blog who believe renting is better than owning i need you guys to keep making me more wealthy.”
Richard [441],
In addition to this, I am truly thankful that the herd, including those that capitulated in late 2006, payed irrational, absurd prices to rent mortgage $ as compared to renting a place to live.
reech (441)-
What makes you think you can make a rent hike stick in this environment? There’s probably a bunch of places that can’t/won’t sell- nicer and bigger than yours- offered for rent at a much lower price right now.
If you think I’m just giving you the treatment, just look at owners’ equivalent rent in the CPI. It’s dropping like a rock. In fact, it’s such a grossly-overweighted part of the CPI, it’s almost singlehandedly keeping that number down.
Don’t be surprised if your tenant packs and goes when you deliver the happy news. I would.
Dude
heating oil is up substantially so i’m jacking their rent up 10% so my net profit never dips
You use heating oil???
clot: you got that right
reech: Westfield….do you pay the finder’s fee as the owner, or does the renter? Because if you have to forfeit a month or possibly more because you feel like being a juvenile a%%hole…good for you….otherwise, quit trolling us and shut up….
Bob,
In addition to this, I am truly thankful that the herd, including those that capitulated in late 2006, payed irrational, absurd prices to rent mortgage $ as compared to renting a place to live.
I think the person you adressed did just that. LOL.
also…I have a good relationship with my landlord. However, if things get much worse around here, I am going to entertain the idea of requesting a rent reduction….especially once we move off the contract and start going month to month….it’s a buyer’s market for renters you know…..
here we go………perfect gift for us shrewd wheeler-dealers…….
http://www.territoryahead.com/jump.jsp?itemID=1295&itemType=PRODUCT&RS=1&keyword=pig
WSJ
Hedge Funds Are Shaking Off Summer Jitters Investors Plow More Into the Largest Firms As Many Best Market
By GREGORY ZUCKERMAN
November 19, 2007
During the summer, hedge funds were back on their heels. Some big names closed down, others were startled by sudden losses and some investors questioned whether juicy opportunities were a thing of the past.
Now, with notable exceptions, hedge funds are storming back — and pulling in more money than ever from investors.
Leading in market performance are old-school stock pickers, some of whom anticipated the subprime-mortgage mess and have won bets they made against financial companies and lower-rated slices of debt. Unsettled markets also have helped hedge funds. That is because many of them buy certain shares while wagering against others. Some hedgies also are scoring from big moves in oil, gold, currencies and emerging markets.
“Everyone got nervous over the summer, but now the good managers are taking advantage of the market’s volatility,” says John Rigas, who runs Sciens Capital Management, a firm that invests in hedge funds and is up sharply lately.
For the year, inflows have reached record levels. The growth is giving hedge funds more clout to put pressure on companies around the globe and influence trading in various markets.
Through the end of the third quarter, hedge funds have seen $164 billion in new asset flows this year, already a record for a full year, according to Hedge Fund Research Inc., based in Chicago. The previous record year was 2006, with $126 billion in new asset flows. As much as $45 billion was invested in hedge funds in the third quarter, when markets were the most turbulent Some 71% of that went to big hedge-fund firms — those managing more than $5 billion each.
As investors plow more money into the largest hedge funds, the influx is raising questions about how long these funds can best the market. More money under management sometimes makes it harder to generate standout returns.
At the same time, the hedge-fund business is going through a shakeout. New and smaller hedge funds are finding it harder to attract money. In the first half of this year, there were 600 funds started globally, the slowest pace since 2003, according to HFR. And certain trends appear to be stalling out, such as the climb in oil and the tumble in the dollar, making November more challenging.
[edit]
“HE (276)-
I thought fertilizer production was more natural gas-intensive.”
Clot – you should know by now that bullsh+t is produced almost entirely by use of hot air….
cf,
I think this one is fitting..
Large Bronze Bull and Bear Fighting Sculpture Statue
Richard Says:
November 18th, 2007 at 6:49 pm
one of my tenant’s lease is up. heating oil is up substantially so i’m jacking their rent up 10% so my net profit never dips. i’m happy there are plenty of people out there like those on this blog who believe renting is better than owning i need you guys to keep making me more wealthy.
You sound a little worried. You should be…the spring is gojng to be the nail in the coffin for house prices. This fence sitting jack will finally come down to play.
#441 to keep making me more wealthy.
He laughs and signs and talks about it, that’s because he does without it.
Chifi Have seen rent decreases on houses in my area.Many can’t sell and are looking for anyone to help with carry costs of empty homes.I myself was able to negotiate with my present rental off asking rent for a great deal.Played my old landlord off new, got decrease from both,then took best deal.You are in the drivers seat go for it.
When I closed Sept. 06 only 1, 3-4 br home in my area.Now you can find one easy.
Sh%& thats negociate #457
Had 2 fam. rental house for 14 yrs.Increase rent lose tenant takes 2 mon. to rerent I lose
$.Sometimes rents have to be raised but if you are a pig you get burnt.Sold 05 thank goodness.
richard –
when i moved to nj last year, i had a hard time finding a decent rental. now, i look at rental listings every once in a while, and there reallly is much more to choose from. some cheaper, and some, only slightly more money (but i could probably negotiate), but, more than i have now. I also notice that it takes a long time for a rental to get rented. i’m sort of tempted to move now, but i’m a little lazy about packing up – but if my landlord raised the rent 10%, i’d have no trouble finding another place i’d be happy with, and i’m sure the place i’m in would be empty for quite a while.
Chifi Have seen rent decreases on houses in my area.Many can’t sell and are looking for anyone to help with carry costs of empty homes.
Mike,
Good point. Census Bureau data shows that vacancies for owner-occupied housing are at an all time high in the Northeast. Rental vacancies are near historic highs.
In my area, I’m seeing many homes for sale that are vacant. Some of these sellers will chose to rent out these places while they “wait for the market to turn around”.
There is an oversupply of housing and this doesn’t bode well for sellers or landlords.
Man oh man…..you let that landlord have it….one reason I did not care for renting was dooshes like that….YECH.
I rented from some real characters, some great some not so great…but I am at a point in my life where i really value privacy. One great thing amongst the multitude of un-great things about homeownership.
Here is my story.
I have been lurking here a long time (8 months or so). Before that I was lurking on the Housing Bubble Blog for about two years.
We lived in CA Bay Area from 2004-2006. The entire time, and before we moved there, I was calling how “creative” mortgages would backfire, that a trickle of homeowners would be force to sell for a lower price when their interest rate reset, which would put more pressure on the other’s with rate resets, which would make the home builders slash effective prices, which would put more pressure, etc. etc. Basically I called it like it happened, I think.
We looked for houses in Monmouth and Middlesex counties back in April/May this year. Sellers were ridiculous. We made reasonable offers (under ask by 3-5%) and had nothing but trouble from them. Some of them remained on the market until just last month, dropping in price the entire time. We had a new home builder (Ciaglia) tell our agent that we didn’t meet their qualifications to talk to them. Financing for us was not a problem, but apparently they chose to be jerks. All of their houses that we considered are still on the market. Hilarious.
I was convinced that we’d wait to buy until Spring 08. But a funny thing happened along the way: I got tired of carrying two sleeping toddlers and a newborn out of the car and up an elevator and down a huge hallway to our apartment.
So we looked at homes again in August just for fun. We saw several overpriced crapshacks between $575 and $675 in Monmouth county. We then saw a home under construction for $600 that was bigger than the others, had a nicer layout, more land, and a good location (end of a culdesac).
I wanted to make an offer for a few reasons:
1) It was priced below the crapshacks
2) It was nicer than the crapshacks
3) I wanted new construction and I figured builders would stop building very soon
4) I figured the mortgage market was about to implode and I wanted to make sure we could still get a jumbo
5) They had just dropped the price 3%
I also carefully weighed the fact (rather, my conviction) that prices will go down another 5-10% by the end of 2008 or 2009 (not sure when it will be). In the end I figured: I don’t care. This from a guy who called the over priced market for years and told everyone else not to buy.
The reality of it is that, for a guy in my situation (never owned) now was just the time that we had to buy, for our own sanity (hauling kids gets tiring). I figure we’re making out pretty well considering that prices have not appreciated in two years to begin with so the market has already partially corrected.
The way I look at it is that if no disaster strikes (e.g. divorce, death, etc.) then we’ll be fine. But that’s pretty much the case if we’d stayed in an apartment too. If someone dies or we get divorced then the least of my worries are how much equity I have in my house.
I’ve pretty much been too embarrassed to post that I am buying in this market. But I figure it might be interesting to some.
Oh, we signed back in September and should close in December. The builder was still working on it as of Friday, so I’m not worried yet :)
BH
#437 –
Part of a pi$$ing match designed to get support on the Arab “street”. The two countries hate each other and are vieing (sp?) for supremacy.
BH – Congrats on the house. Hope it is all you wanted it to be.
Question though – why rent an apartment in a high rise? Plenty of single family rentals out there at great prices.
And why carry the kids? They didn’t let you use a stroller in the building?
Just curious; sounds like you made yourselves more uncomfortable than was necessary.
#466
lisoosh – I’ve never rented from private landlords. I rented once, back in college, from a smaller complex and found it to be a nightmare. I’ve only looked at a few single family rentals before. Let’s just say we have pretty exacting standards and the places I’ve seen are either dumps or priced much higher (e.g. double) the price of apartment building rents. It is probably also something about me in that I’ve never been interested in dealing with renting a single family from an average joe. I like my landlords to be large faceless corporations that follow the rules to a t because they are more afraid of being sued than anything else. It has worked out well for me, never had any trouble.
Oh, they let us use a stroller: but the kids don’t :) Once their head hits the stroller they wake up for another 3 hours. Gotta carry them to keep them asleep. Other times we have groceries to take upstairs plus sleeping kids so we use the stroller for other things. The point is that the logistics of getting into the apartment suck.
BH
Well, I’m glad that you moved away from the dark side, came to your senses and bought a house for your family. You won’t regret it. They’re not making anymore real estate and your children deserve to grow up in a house and play in a backyard. I congratulate you!
Fortunately, you posted this late in the day, so you probably be spared from the brunt of the venom that would be spewed your way from some of the housing militants here. Don’t worry about them. Most of them are deadenders who would never buy a house under any circumstances.
“The reality of it is that, for a guy in my situation (never owned) now was just the time that we had to buy, for our own sanity (hauling kids gets tiring). I figure we’re making out pretty well considering that prices have not appreciated in two years to begin with so the market has already partially corrected.
The way I look at it is that if no disaster strikes (e.g. divorce, death, etc.) then we’ll be fine. But that’s pretty much the case if we’d stayed in an apartment too. If someone dies or we get divorced then the least of my worries are how much equity I have in my house.
I’ve pretty much been too embarrassed to post that I am buying in this market. But I figure it might be interesting to some.
Oh, we signed back in September and should close in December. The builder was still working on it as of Friday, so I’m not worried yet :)”
“394. Frank Says: November 18th, 2007 at 10:16 am
#385,Truth hurts, but the sooner you realize it, the better.”
Explain to me how it was helpful that you crapped on a guy who just lost his job?
396
Thanks, bi
Grim 425,
There are 2 reason why that townhouse doesn’t sell.
First, the prices of suburban townhomes are more volatile than nearby detached homes. In bad markets, townhome prices plunge.
Second, nobody wants a home with a garage as the defining architectural element. That thing looks like a pig with that snout nose facade.
ChiFi (452)-
.vix is our friend. After Turkey Day, nobody but the H@rdc0re will be in the game.
” 414. Frank Says: November 18th, 2007 at 1:28 pm
#413,Snail will move steady for years to come as opposed to a road runner that can trip and fall at anytime.”
Now that’s some pithy godd+mn analysis. Bravo.
…(If you think about it)….
425
Grim
Now THAT is interesting.
buying (464)-
You made a good buy (and made a decent deal) for all the right reasons. No need to defend. A juicy, new end-of-CDS for under 600K is my idea of a place you can enjoy for 5+ years. It’ll weather this whole market cycle well. Even extreme and limited markets offer opportunity for certain players. You be a playa.
BTW…I think the proper term is “stack-a-shack”, not “crapshack”.
25.25 (468)-
You’re amazing.
Even when you’re right (which isn’t often), you’re wrong.
And, for all the wrong reasons.
If I ever came to hate RE, it would be because of people like you.
yay or nay? rates start going up as prime arms implode to keep inflation in check?
475 . *nodding*
patient (469)-
That’s the humor of the guy who knows he’s next at the gallows.
This sh#t’s gonna hit a lot of people on the wrong side of the prop. Nasty times ‘a coming.
think (478)-
Nay. All rates going down, because we’re entering the mother of all recessions.
Pats ain’t gonna lose. All the way out.
Damn.
#464
what do you do?! 2 toddlers & an infant affording $600k?
Married, no kids & $350k makes my head spin (no clunker lemon) in this market: south of Rt.24, north of Rt. 22, east of 206.
“Don’t be surprised if your tenant packs and goes when you deliver the happy news. I would.”
Clot – oddly, just gave a tenant in Brigadoon this advice yesterday – he’s in process of calling landlord’s bluff.
#481. Don’t tell me that, I just locked. btw, thought of using you but sorta’ UC now although doubt any concessions will be met… rather 51% hoping the sellers don’t pony up as we hate where we rent.
BuyingH –
I hear ya on the private landlords. I rent a townhouse from a corporation, but those are rarer. Like you, I prefer dealing with a corp where it is all business and relatively efficient, rather than deal with an emotional landlord who takes a week to fix something. Rent increased controlled too so no pressure financially.
My oldest was a bear about sleeping and waking so I can fully sympathize there too.
#486, Lishoosh I couldn’t agree you with more. Our apt complex is very well-run, corporate-owned and we’re in a rent increase controlled kinda thingy. 1% increase last year…
think (485)-
Thanks for the thought, but that’s OK. I don’t write offers or represent posters here, out of respect for Grim. Don’t wanna use this site to troll for customers; it’s not fair.
464 BH
Why would you be embarassed to buy in this market? You shouldn’t be anymore embarassed than the people who bought at the runup or the peak.
We are going to attempt to buy this winter sometime. We will rent if we don’t find anything that we like at a price we can stomach, but we are going to give buying a real shot. I would prefer not to rent either because it just adds one more move and if I never have to move again, that would be a great thing, especially with kids and pets.
The truth is everyone can make predictions about low the market is eventually going to hit, but they are just that, predictions. To us, the most important thing is that we find something in a town that we love that we are planning on staying in forever.
Congrats on your buy, it sounds like a lovely home!
Clotpoll Says:
November 18th, 2007 at 5:22 pm
Shore (417)-
I still think the basis for your research is faulty…and bizarre.
To each their own. I trust that you have an approach that works for you; this works for us (and has worked well).
I’d prefer reading in my native language, because my knowledge of your languange is no so well. But it was interesting! Look for some my links: