No title needed

Posted on May 29, 2008 by grim

From the Economist:

Through the floor
America’s house prices are falling even faster than during the Great Depression

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69 Responses to No title needed

  1. njpatient says:
    May 29, 2008 at 5:53 pm

    Frist!

  2. chicagofinance says:
    May 29, 2008 at 5:57 pm

    Bill?

  3. jmacdaddio says:
    May 29, 2008 at 6:00 pm

    Figured I’d repost my comment from the last thread…

    My sis and bil are moving back to NJ from Cali. They placed craigslist ads offering their scooters for sale. My BIL had several replies from SUV owners looking to straight up trade their hulks for a used Piaggio. Total desperation out there … taking a loss of several thousand dollars on an SUV just to save a hundred or so per month at the pump makes no sense. Then again, if you’re as highly leveraged as the typical consumer, you need that extra breathing room even if it only lasts a few months.

  4. njpatient says:
    May 29, 2008 at 6:01 pm

    “Bill?”

    Indeed.

  5. gryffindor says:
    May 29, 2008 at 7:03 pm

    I just got home from a few days in the San Francisco area. I haven’t spent so much time in a car being driven around since, well, I can’t remember. I saw some of the “campuses” of the companies in Silicon Valley and couldn’t get over what a waste of real estate and resources they are. Let’s build 30 buildings 3 stories each far apart from each other and hire drivers to shuttle our employees around, instead of building 3 buildings 30 stories each with massive parking ramps to fit all your SUVs.

  6. Occasional lurker says:
    May 29, 2008 at 7:03 pm

    Those….housing terrorists! How dare they present the facts.

  7. kettle1 says:
    May 29, 2008 at 7:07 pm

    From the Dallas federal reserve

    Richard W. Fisher
    Storms on the Horizon

    http://www.dallasfed.org/news/speeches/fisher/2008/fs080528.cfm

    current unfunded US obligations are 99 Trillion!!!!! thats 6 times the national GDP

    from the speech

    I hope that gives you some idea of just how large the problem is. And just to drive an important point home, these spending cuts or tax increases would need to be made immediately and maintained in perpetuity to solve the entitlement deficit problem. Discretionary spending would have to be reduced by 97 percent not only for our generation, but for our children and their children and every generation of children to come. And similarly on the taxation side, income tax revenue would have to rise 68 percent and remain that high forever. Remember, though, I said tax revenue, not tax rates. Who knows how much individual and corporate tax rates would have to change to increase revenue by 68 percent?

  8. Rich In NNJ says:
    May 29, 2008 at 7:08 pm

    Hillsdale
    2434497 Sold
    ACT 12 HARRINGTON ST $629,000 12/4/2004
    ACT* 12 HARRINGTON ST $629,000 12/20/2004
    U/C 12 HARRINGTON ST $629,000 12/27/2004
    SLD 12 HARRINGTON ST $635,000 3/7/2005

    2723934 Withdrawn
    ACT 12 HARRINGTON ST $689,000 6/11/2007
    W-T 12 HARRINGTON ST $689,000 8/9/2007
    2742492 Expired
    ACT 12 HARRINGTON ST $659,000 10/19/2007
    PCH 12 HARRINGTON ST $639,000 1/4/2008
    EXT 12 HARRINGTON ST $639,000 4/18/2008
    EXP 12 HARRINGTON ST $639,000 4/29/2008
    2817462 Withdrawn
    ACT 12 HARRINGTON ST $638,500 4/29/2008
    W-T 12 HARRINGTON ST $638,500 5/22/2008
    2821719 Active
    ACT 12 HARRINGTON ST $599,000 5/29/2008

  9. bruiser says:
    May 29, 2008 at 7:09 pm

    I’d love used Piaggio (a three-wheeled variety, not a pink Vespia). Right now, the numbers don’t make sense, but as gas edges higher, the numbers start to come into line.

    Insurance costs kill the deal right now.

  10. grim says:
    May 29, 2008 at 7:11 pm

    Guess who?

    Purchased: 3/28/2005
    Purchase Price: $840,000

    MLS# 2633176
    Listed: 8/22/2006
    List Price: $998,000
    Reduced to: $975,000
    Reduced to: $939,000
    Reduced to: $919,000
    Withdrawn

    Relisted MLS# 2701367
    Listed: 1/10/2007
    List Price: $905,000
    Reduced to: $899,900
    Reduced to: $899,800
    Reduced to: $899,000
    Reduced to: $884,000
    Reduced to: $879,000
    Reduced to: $874,000
    Reduced to: $869,000
    Withdrawn

    Relisted MLS# 2719972
    Listed: 5/16/2007
    List Price: $869,000
    INCREASED TO: $899,000 (You show ’em!)
    Withdrawn

    Relisted MLS# 2817408
    Listed: 4/28/2008
    List Price: $869,000
    Reduced to: $799,000
    Active

  11. Arr Elle says:
    May 29, 2008 at 7:20 pm

    “America’s house prices are falling even faster than during the Great Depression”

    Wondering if Reinvestor read the above article

  12. Rich In NNJ says:
    May 29, 2008 at 7:27 pm

    (10)

    I KNOW, I KNOW!!!

    The guy who said he’d “NEVER TAKE A LOSS!”

  13. lostinny says:
    May 29, 2008 at 7:44 pm

    10 Grim
    Duckie?

  14. R Patrick says:
    May 29, 2008 at 7:45 pm

    The problem with bikes ( and I had a ninja 250 which got 70 MPG ) was snow = no riding. I did ride until December.

    So I had to have the car as well. My car though gets 40 MPG Highway, if I had by BIL’s V8 F250 the numbers may have worked more into keeping it even half the year.

    Bikes also need more frequent tire replacement, more maintenance, and of course all the gear. Port Authority changing the toll rules for bikes also sealed the deal.

  15. DINJ says:
    May 29, 2008 at 7:48 pm

    Interesting read….
    http://revnyou.com/

  16. Mikeinwaiting says:
    May 29, 2008 at 8:20 pm

    Just came from viewing an reo in my town. It was a sad experience. Kids stuff, pictures of son in peewee football, little girls room pink, grass a foot high, even left the 2 yr old suv in drive. It was sad to see by the grace of god not me. Who knows
    did someone lose a job or get sick. Maybe they just were stupid with their money. Place was real nice once, updated & all but now its a wreak. If it is around in 6-8 months I may try an offer after the bank is ready to give me a good deal.

  17. jmacdaddio says:
    May 29, 2008 at 8:40 pm

    A general question: who would you back in a steel cage PPV showdown – Keith from Housing Panic, or our very own ReInvestor101? Both seem to have their fair share of anger management issues.

    I’d shell our the $49.95 or whatever PPV events go for these days, fire up the grill, put some beer in the fridge, and root for ReInvestor.

  18. Orion says:
    May 29, 2008 at 9:14 pm

    #10

    Westfield Duckie for sure.

  20. Frank says:
    May 29, 2008 at 9:20 pm

    #10,
    $799K in CLIFFSIDE PARK, NJ? Is someone from another planet. Try $199K

  21. Mikeinwaiting says:
    May 29, 2008 at 9:21 pm

    Ket Should I fill up on home heating oil now or wait till summer?

  22. alia says:
    May 29, 2008 at 9:29 pm

    14- and, er, death. acquaintance died/had life support suspended two days ago. he turned into his driveway on his bike, buddy in car behind was following too close behind. was wearing a helmet, but it was knocked off in the collision. please, no dying, guys, i admire most of you too much.

  23. Mikeinwaiting says:
    May 29, 2008 at 9:33 pm

    Aah magical disappearing posts.

  24. x-underwriter says:
    May 29, 2008 at 9:34 pm

    grim Says:
    May 29th, 2008 at 7:11 pm
    Guess who?

    That freakin’ red leather couch is still there too!!!!

  25. sas says:
    May 29, 2008 at 10:04 pm

    Housing is still overvalued.
    It will fall further.

    and Citi will collapse. trust me ;)

    SAS

  26. sas says:
    May 29, 2008 at 10:11 pm

    I do think Lehman Brothers might just survive. but, they will have to drop some flies first.

    The first fly to drop should be that idiot Richard S. Fuld.

    Hey Fuld! Your a moron.

    SAS

  27. sas says:
    May 29, 2008 at 10:12 pm

    WASHINGTON MUTUAL… gone.

    SAS

  28. kettle1 says:
    May 29, 2008 at 10:12 pm

    mike,

    long story short, buy sooner rather then later.

  29. sas says:
    May 29, 2008 at 10:16 pm

    whatever happened to Booya Bob?

    “greedy grubbin”

    ;)
    SAS

  30. victorian says:
    May 29, 2008 at 10:22 pm

    ket – you need to change your URL from “blogstop” to “blogspot” – typo :)

  31. kettle1 says:
    May 29, 2008 at 10:22 pm

    while there may be short lived drops in the price of oil. it will continue to go up for the next year barring unexpected ‘exceptional” events. Recently oil has been showing exponential growth in price and total production has been dropping. while i am not suggesting a long term trend under these conditions i would be surprised at a significant change from the current conditions within the next 12 months.

  33. victorian says:
    May 29, 2008 at 10:26 pm

    ket – had a question to ask you if you dont mind..

    I know that coal is definitely not the answer to our problems considering the environmental impact and the fact the most energy dense coal has already been used.
    But wont the fact that it is the most abundant source of energy available in the US make it the most politically viable solution?

  34. kettle1 says:
    May 29, 2008 at 10:27 pm

    i am half tempted to go ahead and call $250 – -300 oil by August 09. but want to wait and see how a few factors shake out first.

    realize that while the government may step in and take some sort of action if oil continues at in the current trends, that it will not be a good thing. Once the government interferes with oil prices or supply in any overt fashion we are likely to see the return of 70’s style gas lines and beyond.

    dont get me wrong, i am not sitting in a corner waiting for the world to end, but like a patient with a gangrenous wound, we are going to suffer significant pain before we are healthy again. at the current rate we ( the patient) are simply refusing to acknowledge that the limb has to go and getting sicker for it.

  35. sas says:
    May 29, 2008 at 10:28 pm

    victorian,

    FDG on the NYSE

    baby its been a fun ride!

    SAS

  36. kettle1 says:
    May 29, 2008 at 10:29 pm

    Vic,

    yes!

    and that would not be the worst thing in the world if we would use it to transition to non-fossil fuels. but that will not happen as any such transition requires substantial changes in our current society , which would be political suicide.

  37. kettle1 says:
    May 29, 2008 at 10:33 pm

    Vic,

    there could be an interesting twist to the coal story however….

    As the american financial empire crumbles and china et al come calling for their money back, one of the few things of value that we have and they want is potentially coal. In that sense we many need, due to financial insecurity to export a significant amount of coal to maintain basic debt servicing

  38. sas says:
    May 29, 2008 at 10:34 pm

    kettle1,

    I think we may have talked about this before, but there will be a point when price of solar will equal that of oil.

    Then, perhaps we will turn into a solar economy and can create massive jobs with the changing infrastructure.

    well, thats what I hope & wish will happen.

    Lets keep out fingers crossed.
    SAS

  39. victorian says:
    May 29, 2008 at 10:38 pm

    Ket,

    But if the american empire collapses, so do 300 million consumers. Whom does China sell its stuff to?

    On another note, there was an interesting chart on the BigPicture blog about projected water supplies in the future. Looks like we might are getting boxed in from all sides – water, food and energy.. Interesting Times!

  40. Hard Place says:
    May 29, 2008 at 10:40 pm

    SAS,

    Even if Citi disposed of assets as they implied, you still think they are going down? What in particular leads you to believe so?

  41. kettle1 says:
    May 29, 2008 at 10:42 pm

    incase anyone was feeling too cheerful today…

    current US debt: 9.3 trillion

    unfunded Social Security: 13.6 trillion

    unfunded medicare liability: 85.6 trillion

    average consumer Credit Card debt: $8,000

    amount per man/woman child to cover current unfunded liability: $356,000

    or an avergae of 1 million per family

  42. kettle1 says:
    May 29, 2008 at 10:44 pm

    Vic,

    I am working on a post, the jist of it is water, food, energy are all intimately linked and what happens to one happens to the others on a large scale

  43. kettle1 says:
    May 29, 2008 at 10:45 pm

    regarding #40,

    current US GDP???? 13 trillion

  44. victorian says:
    May 29, 2008 at 10:49 pm

    nice!! Looking forward to reading it.

  45. victorian says:
    May 29, 2008 at 10:50 pm

    so, it is bye-bye SS and Medicare. All that money from my paycheck going to waste.

  46. sas says:
    May 29, 2008 at 10:58 pm

    “Even if Citi disposed of assets as they implied, you still think they are going down? What in particular leads you to believe so?”

    I have connections all over the place.

    Lets put it this way, Citi doesn’t know how far they will fall and the only way out would be to pull illegal schnanagins.

    but hey.. I’m just some guy on the NJRE blog.

    :)
    SAS

  47. njpatient says:
    May 29, 2008 at 10:58 pm

    10 grim

    It walks like one and quacks like one!

  48. njpatient says:
    May 29, 2008 at 10:59 pm

    Behold the duck
    It doesn’t cluck
    A cluck it lacks
    It quacks

    – Ogden Nash

  49. grim says:
    May 29, 2008 at 11:00 pm

    Sure is a nice night out there, so nice you almost want to turn off your router or cable modem for a few seconds.

    I understand that this is a requirement for Hudson County residents.

  50. kettle1 says:
    May 29, 2008 at 11:00 pm

    vic,

    all that money from your paycheck is paying for the current people on SS and medicare. is that a waste? yes and no in my opinion

  51. sas says:
    May 29, 2008 at 11:04 pm

    “connections”

    I didn’t sweep the rug out from under South Koreans w/out a little help.

    Some know what I’m talking about…

    SAS

  52. njpatient says:
    May 29, 2008 at 11:12 pm

    SAS

    I trust you.

    And me.

  53. njpatient says:
    May 29, 2008 at 11:16 pm

    37 sas

    You and me both.

  54. Essex says:
    May 29, 2008 at 11:17 pm

    9. I have my m/c endorsement and love to ride…a scooter? Probably not enough power for my taste….and large carcass.

  55. jmacdaddio says:
    May 29, 2008 at 11:19 pm

    sas 37 –

    Oil is basically solar energy in liquid form. We’re using solar energy captured hundreds of millions of years ago by plants, which were consumed by dinosaurs, which were eaten by other dinosaurs, which died and decomposed in such a way that their organic matter was liquified and trapped in rock. Or something like that. Solar powered cars have a long, long, long way to go before evolving into anything remotely practical.

    45 – Will Citibank be around to open Citi Field next Opening Day? Or will it be Abu Dhabi Sovereign Wealth Fund Field by then?

  56. Hard Place says:
    May 29, 2008 at 11:21 pm

    SAS –

    I’m just some guy on an RE blog as well. My connections told me the JPM/BSC marriage was a shotgun wedding…

  57. njpatient says:
    May 29, 2008 at 11:24 pm

    “Solar powered cars have a long, long, long way to go before evolving into anything remotely practical”

    Solar homes, on the other hand – no problem.

  58. njpatient says:
    May 29, 2008 at 11:25 pm

    hard
    Nice weather we’re having.

  59. TJ says:
    May 29, 2008 at 11:35 pm

    x-underwriter Says:
    May 29th, 2008 at 9:34 pm
    grim Says:
    May 29th, 2008 at 7:11 pm
    Guess who?

    That freakin’ red leather couch is still there too!!!!

    Hah. And I even remember the horrible plastic picnic table style table clothe.

  60. Hard Place says:
    May 29, 2008 at 11:35 pm

    Can’t complain at all about the weather.

    This is now the NJ Weather Report.

  61. kettle1 says:
    May 29, 2008 at 11:38 pm

    Jmac SAS

    solar works with our current tech, just not our current society and infrastucture….. will our, or any other society voluntarily rebuild/retool their infrastructure without being forced to?

    consider the coming energyr/food crisis an opportunity for human kind to take the next step and learn to think/plan more then 5 years ahead and understand exponential growth. until we learn to plan decades ahead we will continue to repeat bacterial type growth-collapse cycles

  62. kettle1 says:
    May 29, 2008 at 11:42 pm

    Nj patient…

    imagine if any significant portion of the US decided to go to solar homes (pretend there are no sunlight/orientation issues). We simply do not have the resources to do it in time frames less then 20 – 30 years.

    i really do not want to be the spoil sport here, but we need to realize that we are too late for the easy solutions. any of the easy solutions like shifting people to solar homes would takes decades and would need the US to be financially healthy and NOT in an energy crunch.

  63. jmacdaddio says:
    May 30, 2008 at 12:21 am

    Kettle 60 – Solar could work as long as all of us voluntarily accepted a much less energy-intensive existence, which will never happen.

    The US public, at least the enlightened part that wants to do something about energy, climate change, etc. has been duped into thinking that there is a green alternative for every aspect of modern life. You know, organic burgers instead of fast food, corn ethanol instead of gasoline, carbon offsets for the trip to Barbados. It’s a classic case of wanting to have your cake and eat it too. We want the freedom of the open road without the carbon guilt, so we’ll believe anyone who’ll tell us we can have it. The long term solution is rearranging our geography so that we’re no longer an auto-dependent society, which is politically disastrous for whoever steps forward.

  64. njpatient says:
    May 30, 2008 at 1:32 am

    Ket
    “We simply do not have the resources to do it in time frames less then 20 – 30 years”

    Agree
    But that’s how I see it playing out: a painful, drawn out transition that doesn’t even begin until 5-10 years from now, and involves all sorts of patchwork use of coal, gas, rationing of oil resources, ramping up of wind and nuclear, etc.

    It’s going to be ugly, and it’s going to stay ugly for some significant period.

  65. Mikeinwaiting says:
    May 30, 2008 at 5:02 am

    kettle 27 I agree, just wanted an op from are resident oil guy. Thanks.

  66. Sam says:
    May 30, 2008 at 9:03 am

    All the folks who wish to get a scooter or a motorcycle to offset the spike in gas prices….few words of advice: You better buy good life insurance because you will probably get run over by an SUV driver.

    I rode motorcycles for fifteen years and one thing is certain…riding is suited for pleasure in America; not for necessity (unless you live in one of those touristy towns).

  67. jcer says:
    May 30, 2008 at 11:42 am

    Jmac, I disagree with the thought that auto-dependency must die in the US for Americans to have sustainable energy use. If you were to look at the NY metro area you would see that the suburban model works relatively well, and would work much better if the mass transit infrastructure were better. Note that most suburbanites in NNJ never drive more than 10 miles to reach necessities, most often drive 2-3 miles, oil use for daily driving is not that high if, and it is a big if you don’t drive to work. Cars can be generally environmentally friendly and aren’t contributing as much to greenhouse gases as everyone thinks they are. There is an underground coal fire in china contributing more to c02 emissions than all of the autos in the US. What we need to push for is more fuel efficient vehicles, some hybrids get 50 mpg, some diesels get 50 mpg, a diesel hybrid could do even better, hell a jaguar xj8 gets 30mpg because of a 7 speed transmission and its incredible light weight. If we could get fuel economy on average to 35mpg which is double what it is now, we could cut consumption in half. Carbon credits are a good idea, it is the only way to reasonably encourage people to counteract carbon dioxide emissions.

    FYI corn ethanol is a horrible idea, look a Brazil and how well their sugar cane ethanol program has worked. We should be using sugar based alcohols as they are more energy efficient to produce.

    Americans can modify their lifestyle sightly to be closer to Europeans and greatly impact our carbon footprint. A more modern mass transit system would help tremendously as the only distance driving I do is to the Jersey shore, if it were served by effective mass transit I would probably opt to take it. When it is not the summer I put on average 600 miles per month, which amounts to 32 gallons of fuel per month. Total per year of 600 gallons. I am slightly more mindful of my energy use than the typical NJ citizen, but compared to the rest of the us we consume less energy in NJ, unfortunately it is still coal powered.

    There is still a lot of low hanging fruit in the US. Sustainable community models, better insulated housing, more efficient heating and cooling, low energy appliances, low energy lighting, low energy tv’s, etc. Americans could easily lower their energy usage by 20% without negatively affecting their quality of life. Additionally if people were willing to pay for more friendly electricity, and fuels we would do better. I for one think the gov needs to invest in nonfood-agrifuels, ie. biobutanol, biodiesel from algae. The time is now, the solution is here we can cut our footprint by 50% by spending 20-30% more money when building a home, the same is true for autos, then you use more sustainable fuels, and modify your usage patterns and easily we can decrease energy usage by 70% per capita without drastically changing our lifestyle. So I think this “the world is ending, the sky is falling attitude” is wrong, the message should be we are in trouble and any little thing that helps a little be it driving less, carpooling, eating less meat should be encouraged as part of the solution.

  68. GetAClueNJ says:
    May 30, 2008 at 5:22 pm

    #25 SAS

    Citi did a conference call the other day titled, “Why banks aren’t lending, and why you haven’y noticed yet?” The numbers were pretty bleak; dare I say abysmal, and this was coming from Citi themselves. They are in deep doo. I can send you the presentation if you like.

  69. grain o salt says:
    May 31, 2008 at 8:42 am

    Nice headlines make the best lies.

    Notice that the comparable run-up from 64 to the 80’s was puntuated by several drops. Then notice that run-up from 92 to ’06 was not punctuated at all, and grew steeper as it went.

    That’s because they were giving $1/2 million to the nation’s deadbeats. And because they were deadbeats, they couldn’t/wouldn’t/never were gonna pay the money back. So yeah, deadbeats ruled the last four years, and will rule in the next four. Eventually we will decide not to give stuff to deadbeats. But probably not until our elected deadbeats try to give them some more.

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