It seems I’ve struck a chord with Mr. Warren Boroson..
It’s important to defend against liars
The 11th Commandment, so far as I am concerned, is: Thou shalt not suffer thyself to be Swift Boated.
If you permit yourself to be lied about without vigorously defending yourself, you are encouraging the perpetrator to lie about other innocent people, too.
…
Example: Someone named Grim has a blog that focuses on the supposed alleged bubble in New Jersey real estate, and he regularly lies about me. He has accused me of urging people to buy houses while I quietly unloaded my own.
It was a lie that I have in recent years urged people to buy houses.
In my column, where I can express my opinions, I have suggested that sellers sell and suggested that buyers not buy unless they are prepared to live in their new house for many years.
In news or feature stories, in which I may not express my opinion, I have quoted people worried about New Jersey residential real estate, such as A. Gary Shilling, as well as people who are not worried.
So, I defended myself against Grim’s accusation that I sold my house while urging others to buy.
Apparently he was startled. He referred to my vehemence and to my “insults.” (I had called him a liar and a creep.)
He quickly erased my comments, though. I guess he doesn’t think it’s insulting to accuse a journalist of double-dealing.
Warren says that I deleted his comments, which is absolutely untrue, they can be found here:
http://nnjbubble.blogspot.com/2006/01/warren-boroson-profile-of-real-estate.html
Anonymous said…
From Warren Boroson
I sold my house because I didn’t need 4 bedrooms, and I think older people like me should live in an apartment, for safety. I STILL OWN ANOTHER HOUSE. Since selling that house, it has appreciated $100,000.I have repeatedly written about selling my house. Ain’t no secret. In Kiplinger’s, in my own column.I have conveyed various people’s views in my column — the view that house prices are poised to plummet, the view that house prices will level off. My own view, which I have written about many times, is: Sell sooner rather than later.By the way, if I’m a shill for the industry, how come I wrote a book called, How to Sell Your House Yourself?You guys are a bunch of ignorant creeps. And terrible writers! But you are hilarious. And I love the publiciity!
and here is another one:
Anonymous said…
LIAR, LIAR!
from Warren Boroson
By the way, GRIM says that I have urged people to buy houses now — while selling one of my houses. That is a lie. I have told everyone what Jim Hughes of Rutgers has said: If you buy now, be prepared to hold on for 10 years.What a creepy guy this GRIM is!
As far as I can tell, these are the only two replies that Mr. Warren Boroson posted on this blog, to which I replied:
Nice to meet you Warren. We were wondering when you would stop by.
grim
You can read the rest yourselves. I don’t mind being called names, god knows I have enough emails calling me names. What I don’t like is that he said I deleted his comments. Absolutely untrue. I have only ever deleted 2 comments from this blog (spam aside, of course). One was due to the use of profanity, and the other was the posting of private information.
Mr. Boroson should have done some more research before stating that I deleted his messages. I did not. He was obviously mistaken, likely due to the fact that there have been a number of “Warren-Watch” threads posted on this blog. Everyone here knows this is an open forum. Anyone can post anything they’d like without fear of it being deleted or having their view oppressed.
Mr. Boroson, I expect an apology in print.
Caveat Emptor!
Grim
Here is a compendium of the Warren Boroson series:
Boroson on Morris County
http://nnjbubble.blogspot.com/2006/04/boroson-on-morris-county.html
Nothing But The Truth..
http://nnjbubble.blogspot.com/2006/03/nothing-but-truth.html
Warren Watch – Home prices set to fall
http://nnjbubble.blogspot.com/2006/02/warren-watch-home-prices-set-to-fall.html
Warren Boroson – Profile Of A Real Estate Cheerleader (Continued)
http://nnjbubble.blogspot.com/2006/01/warren-boroson-profile-of-real-estate.html
To Warren Boroson and Dominick Prevete
http://nnjbubble.blogspot.com/2006/01/warren-boroson-profile-of-real-estate.html
Bubble-backer changes tune..
http://nnjbubble.blogspot.com/2005/10/bubble-backer-changes-tune.html
Excellent Grim!
Nothing clears away spin like the truth.
Sincerly, One Creepy Guy
Keep up the good work.
The media is biased one way or another. You post facts that no media outlet does.
Thanks for saving me. I nearly put myself into a F borrower situation by over paying for a house using a stupid loan. I would be a debt slave or bankrupt. I am forever grateful!!!
“The 11th Commandment, so far as I am concerned, is: Thou shalt not suffer thyself to be Swift Boated.”
He doesn’t make a strong start, with the “Swift Boated” comment as that involved the word of 100 decorated veterans, who were all in agreement.
So right off the bat, this reveals much about Boroson.
Thou protest too much Boroson!
Posted this in the another thread, I’ll just post it here as well.
My identity is no secret, it has never been.
My name has been published many times, in just about every North Jersey paper, either through quotes or through stories about the blog.
Heck, I’ve even mentioned my own name in a number of press releases.
The bulk of North Jersey real estate journalists know who I am, and have my contact information on file. I speak to a number of them regularly. I was interviewed by a journalist from an NJ magazine this past Friday. She received my contact info from one of the above mentioned journalists.
And it’s not just my name, my photograph was also published a few months back.
So while I prefer to use “Grim” on the blog, my identity is no secret.
Sincerely,
James Bednar
Thanks Grim! -interesting I’m getting a ‘server too busy’ comment on some of your story links — do you have text excerpts.
You should forward your post and this thread to poynter.org and cjr.org. Your interaction here is an outstanding exibit how columnists can get de-pantsed by bloggers when they don’t practice what they preach (also an indication of how journalists are paying very careful attention to bloggers these days — something that, like truth-telling about the bubble, was almost nonexistent in years past.)
Boroson is a spiteful, odd, little man…
http://tinyurl.com/rw58q
“Alleged Bubble”
You gave yourself away.
The 11th Commandment?
Boroson, where do you get off considering yourself God?
…
That article really shows this guy’s true colors, and they aren’t pretty. I am more disgusted and apalled by him than ever, and I’m going to write to the Daily Record to inform them that I will not subscribe to anything that publishes this fool’s biased, slanderous faux-journalism.
Boroson, not everyone on this blog agrees with Grim, but at least there is debate with civility. Your article was more childish than some of the worst posts ever seen here – and you presumably have an editor that let that slide by. Amazing and pathetic.
I sem to remember a Warren article where he recommended buying about 2 years ago. Is there a place to find his old articles?
I find his swift boat and working past retirement comments to be in very poor taste. They aren’t clever or controversial. More like the pompous comments you would expect to hear from a tenured professor who has only earned money from grants and acadmeia.
But I live in a high-rise apartment with 24-hour doormen and a pool, and I own a weekend home in the Catskills.
I eat out maybe eight times a week, and I have even started a club, the Wine Lovers, which meets once a month at an exquisite French restaurant to savor expensive wines.
I regularly attend concerts in Newark, Englewood and New York City. Last year, I vacationed in Africa, and this year, I would like to visit Spain. In short, I am living pretty high on the hog.
Agreed. I don’t see too many journalists brag about what they have in their stories. Most of them remain modest.
Warren, some of you’re comments have as much taste as a bottle of Boone’s. Perhaps you should should one at your next wine club meeting.
Can everyone here please email the editors of the Record. Please, I’m asking you to take only one minute to email the following individuals. I’d like to be given the opportunity to defend myself, in print.
Walt Lafferty – Publisher
wlaffert@gannett.com
Dennis Lyons – Executive Editor
dlyons1@gannett.com
Jack Bowie – Managing Editor
jbowie@gannett.com
and of course
Warren Boroson
wboroson@gannett.com
http://www.dailyrecord.com/customerservice/forms/letters.htm
Link to submit a Letter to the Editor at the Daily Record for your convenience….
BTW, I know it may seem weird that I’m all defensive being that I’m a recent home buyer, but it just gets my goat that this guy wants to silence an opposing viewpoint just because it doesn’t agree with his own.
Oops that link didn’t fit…here’s the short version:
http://tinyurl.com/hckf2
or add ters.htm to the one above.
Double oops – sorry Grim, you beat me to it by 2 mins and I didn’t notice!
(feel free to delete these last 3 posts)
Grim,
Done. I subitted online.
Dear Editor,
The recent article by Warren Boroson concerning a blogger in Northern New Jersey has several misstatements and needs to be rectified. First of all he states that the blogger is anonymous which is patently untrue. His name is on the main page of the blog, James Bednar. Secondly, Boroson accuses Mr. Bednar of deleting his comments. It is also not true to my knowledge. If something is deleted it still remains as a “deleted by administrator” placemark.
I myself frequent the blog daily because it provides a counterpoint to most of the real estate news you find out there which up until recently has only been positively spun. If you don’t decide to print my letter then please allow Mr. Bednar to clear up the misinformation that has been printed in Mr. Boroson’s column.
Thank you,
Please take the time to email.
I really want to be given the opportunity to defend myself in print.
Grim & All,
Sent following email to all the addresses mentioned earlier.
Good work. Keep it up.
=======
Dear Editor,
I read about recent difference of opinion from NNJ blogsite. I would like to vouch for Grim, and say he has been very honest on his blogsite and keeps his opinion very impartial. He has always laid out truthful information on his blogsite.
http://nnjbubble.blogspot.com/
In that respect, I would recommend, it would be great service if your News organization can represent the plight of many young families in NJ that can not buy a decent house due to ridiculas prices that sellers are asking.
In my personal opinion, there has been very lack of reporting of Housing shortage situation in the state. I would appreciate if Media can help in projecting the issues faced by most of us who frequently visit Grim’s blog site and vent our frustrations.
Shailesh Gala.
In short, I am living pretty high on the hog.
Gawd, how tacky.
Grim,
Ironically, his comments actually bring a lot more publicity and attention to this blog! Now that he will be required to write a retraction, even more free advertising!
Would love to see a recent poll concerning the nations distrust of journalists. His article would serve as a prime example of setting forth as truth baseless lies. Shameful!
I will also write on your behalf.
Thanks everyone..
In the process of writing a rebuttal..
grim
Mr. Boroson:
I hope you’re reading this blog and see this posting. Please don’t believe that every poster here is against you. Unlike your articles, the people who frequent this blog prefer not to have a balance of opinions. They simply want an amen corner with no diversity of opinion.
I happened upon this blog after the author visited another website and provided a link to this blog. I was shocked by what I saw over here. I indicated that I had a different view and was met with all sorts of name calling and cute little comments. I’ve never responded in kind even as some here have openly called for boycotts of open houses or other actions to make the market collapse quickly.
I have maintained that calling for things of this nature is anti-american. I’ve been laughed at and have had to read parodies of our national anthem.
To be fair, I must add that Grim, unlike some others here, has not attacked me. However, you should defend yourself vigorously.
reinvestor101 wrote:
“I indicated that I had a different view and was met with all sorts of name calling and cute little comments. I’ve never responded in kind”
That’s a laugh! You’ve called most people here “commies” and “working for the terrorists” on many occasions.
You’re not only a few cards short of a full deck, but dishonest as well.
reinvestor101 continues:
“I have maintained that calling for things of this nature is anti-american. I’ve been laughed at and have had to read parodies of our national anthem.”
The horror! Welcome to America, land of the free, home of the brave, and the First Amendment.
REINVESTOR101 said…
Sir:
Please spare us the sanctimonious martyr routine.
You are welcomed to post here, and I for one, want to hear your opinions.
Don’t hold grim responsible for all the content of external parties.
grim i heard back from lafferty. he said they give anyone a chance to retort, so write up your stuff and send it in. it should get published.
The new migration data released today show people are booking out of the Garden State.
RELEASED: 12:01 A.M. EDT, THURSDAY, APRIL 20, 2006
Domestic Net Migration in the United States: 2000 to 2004 — This report describes recent patterns of population redistribution within the country. Analysis focuses on net migration for different geographic areas, including regions, divisions, states, metropolitan and micropolitan statistical areas and counties. The report focuses on the post-Census 2000 period but also includes data from 1990 to 1999. Internet address: http://www.census.gov/prod/2006pubs/p25-1135.pdf
I read this blog because it contains the truth backed up by hard facts. These facts allow me to come to my own conclusion. Articles by Warren Boroson are more for entertainment than for making any kind of informed dicision.
These types of newspapers tell you what they want to tell you, not what is really going on. A lot of people are going to be ruined thanks to biased writers like Warren Boroson.
I’ll be writing to all the editors.
Awesome blog Grim. Thanks for the facts.
Reinvestor101 must have a vested interest in the real estate market either directly or indirectly that is why his posts have always been pro real estate.
He doesn’t care about anyone but himself. He doens’t care if you buy a house for twice what it is worth and then go bankrupt a few years later. He only cares about his own self interest not you and not the truth.
Lets see people leaving the state of New jersey, An out of control State budget, Higher property taxes, Health insurance out of control,Median Incomes Flat for 5 years, housing insultingly priced
Yeah i know thye ain’t making anymore land.
Japan housing prices dropped 60% peak to trough. They ain;t making land there either. 75% drop in Hong kong.
But Housing never goes down in NNJ according to the vested interest types. NOT!
If you buy a house at these prices expect to be underwater for about a decade and at some point be down more than 25%. Okay you don’t have to sell, but their are no guarantewes in life that you may not have to sell so be careful paying insulting prices.
Warren Boreusomemore
Reinvestor101,
All most of us ask of you is that you back up your assertions with data and hard facts. If I am wrong about the existence of a speculative RE bubble in Northern NJ, then convince me why; show me your data. I enjoy spirited debate with anyone who can present an intelligent and coherent counter argument on the issue. However, when you base your comments solely on emotion or accusations of “conspiring with the terrorists”, it really doesn’t add all that much value to our discussion.
Actually, Reinvestor101, I would be very interested in hearing about your position to get a better idea of where you are coming from. How many properties do you own? When did you buy? What kind of mortgages did you use? Are you trying to sell?
this reinvestor: guys a moron.
cant possibly be well read on
the state of the industry.
another one in a dream world. its called denial.
Grim,
Would this consitute lible?
Hi all,
I just logged on from my hotel in Germany (on Holiday with family).
I’m sorry to hear you have to deal with this nonsense Grim, I will certainly write to every editor on
your behalf
I just noticed a major price reduction in Allendale and Ridgewood which knocked my socks off:
Ridgewood
ML#: 2605088
Addr: 317 DOWNS ST
Original List was $649 and current price is $598. Not sure of DOM but it has been almost 2 months.
Allendale
ML#: 2541034
Addr: 41 WOODLAND AVE
Original list was at least $599 and last LP: $509,900. Has been on the market since at least February
newspapers are pretty scared of sites like this. Grim provides real facts, not anecdotes, and actually breaks news stories far more often than newspapers. nobody pays him a salary. he doesn’t need to rent an office. he doesn’t need to pay for paper and supplies. over the coming decade, I wouldn’t be surprised to see hundreds of sh*tty local newspapers fold, while sites like this one flourish.
… and he is not beholden to advertisers, which for a local paper means local real estate agencies.
I meant libel.
Chatham inventory going through the roof — properties sitting 90+ days.
Chatham, 07928
DATE / TOTAL / UNDER 750K
3-Mar-06 / 85 / 15
8-Mar-06 / 87 / 17
14-Mar-06 / 93 / 20
30-Mar-06 / 104 / 28
6-Apr-06 / 111 / 28
20-Apr-06 / 122 / 35
Here is the letter i just sent to the 3 editors and I copied Boroson (i included references to some comments made on the board to illustrate my point, hope you don#t mind)
Dear Mr. Lafferty, Mr. Lyons and Mr. Bowie:
It is unfortunate that Mr. Boroson has defended himself so pathetically and that his defense is clearly a lie upon itself.
James Bednar, who facilitates the North New Jersey Real Estate Bubble Blog, is not a liar, does not remain anonymous and is doing readers a great service by presenting us with the true facts, not anecdotes, unlike the real estate industry and the mainstream media. He, and the community of bloggers on this blog, urges us all to think before we act, to not go out on a limb with an I/O loan or 100% financing for more house we can afford, just to keep up with the Jones’. Nobody pays him a salary, he is not reaping monetary rewards for the service he is providing to our society.
And he is certainly not beholden to advertisers, which for a local paper means local real estate agencies. Therefore, he can research and present the truth without the repurcussions any newspaper might face.
I urge you to please allow Mr. Bednar the opportunity he deserves to defend himself in print.
CNN:
Housing prices put Americans on the move
Residents are leaving high-priced markets in the Northeast and West Coast for more affordable places in the Sun Belt.
Long link:
http://money.cnn.com/2006/04/19/real_estate/net_migration_tilts_south/
Short link:
http://tinyurl.com/fyy7a
reposting from the monster 125+ post thread below
*****************
I appreciate the bulls’ presence here (esp skeptic’s), but I suggest that if you guys think current house prices are only a problem for those who are “priced out,” you haven’t thought about it hard enough.
first of all, the entire real estate market depends on entry level buyers. if the entry level becomes unaffordable, then almost nobody can sell their homes because people won’t be able to trade up.
but maybe you say that you don’t care because you’re not interested in selling anyway.
well, high housing costs still hurt you.
for one, your property taxes go way up.
two, maybe the “great schools” in your town start to suffer because teachers can’t afford to live anywhere near you. paramedics are priced out too, so it might cause those ambulances you need to get to you a little slower.
three, all of the mom and pop stores in your town start to go out of business because they can’t afford the rent. it’s ok since you can still get everything you need at the big box store down the road, but a lot of the charm of your town is lost.
four, you start to notice that it’s getting harder to find a decent plumber, electrician, mechanic, etc, anywhere near you. come to think of it, all of the “regular” jobs seem to be filled by illegal aliens. well that’s because all of the young people who don’t work on Wall St. have concluded that they can’t afford to live here and have moved away.
five, since real estate is now so valuable, there are endless contractors looking to tear down all of the normal homes in your neighborhood to build McMansions. those young people who are fortunate enough to be able to afford to live in your million dollar neighborhood want a house that looks like it cost a million dollars, not a normal sized cape. so all of a sudden your town starts to become overrun with 4000 sq ft monstrosities sitting on 0.1 acre lots. Again, much of the “charm” of your area starts to evaporate.
I could go on and on, but you get the point. Universally high real estate prices hurt everyone, not just those who are priced out.
I would be interested to hear RE bulls’ perspectives on these issues as well.
Another comment about Boroson…
He said himself in his own article “In my column, where I can express my opinions…”
Why is he not on the Op-Ed page? It’s so irresponsible for the paper to publish his “opinions” as news.
bwhahahahaha – hello folks, I’m the anon who penned the parody last night that offended the reinvestor101 troll. Can’t stop laughing –if one is going to be a flag waver, one should know the words of our own national anthem.
What I parodied “My Country Tis of Thee”(and thanks bobby for the props).
Would suggest you disingage from his posts, unless he produces proof of citizenship.
Sorry supposed to say “what I parodied was” my country tis of thee- laughing too hard to type
This is hysterical, well worth the 2-minute read:
http://waiterrant.net/?p=129
First off, let me say that this post is one of the few offered here with debatable material. My response here will also address RENTINGINNNJ who, while expressing disagreement with me, has been reasonably cordial. Skep-tic in bold below and my response follows
first of all, the entire real estate market depends on entry level buyers. if the entry level becomes unaffordable, then almost nobody can sell their homes because people won’t be able to trade up.
The entry level is higher now mainly because of the out migration of New Yorkers into NNJ. There will be plenty of entry point buyers, it’s just that their ecomomic status will be much different that the traditional entry point buyer.
for one, your property taxes go way up.
Property taxes are up because of tax and spend liberals being elected. Also, some areas need to be consolidated to save costs and taxes.
two, maybe the “great schools” in your town start to suffer because teachers can’t afford to live anywhere near you. paramedics are priced out too, so it might cause those ambulances you need to get to you a little slower.
The problem is that these people are going to make more in NJ than they will in other places. Have you seen the benefit packages that these teachers get? It’s pretty damn rich. They’re not going anywhere. If they can’t afford it, they’ll just commute from furher away.
three, all of the mom and pop stores in your town start to go out of business because they can’t afford the rent. it’s ok since you can still get everything you need at the big box store down the road, but a lot of the charm of your town is lost.
Mom and Pop will do better with the improved demographics of their customers. Why do you think Fresh Fields and all these guys like to locate in places like Millburn? That’s where the dollars are. Mom and Pop would be a fool to move away from a bag of gold. The same thing applies to the plumbers, electricians and etc. They’ll make more money not less money. Again, this is premised on the fact that of outmigration from NY and relatively high incomes these people bring.
five, since real estate is now so valuable, there are endless contractors looking to tear down all of the normal homes in your neighborhood to build McMansions. those young people who are fortunate enough to be able to afford to live in your million dollar neighborhood want a house that looks like it cost a million dollars
There’s nothing wrong with this and charm is not lost. This is call progress–something this country has been built on.
I would be interested to hear RE bulls’ perspectives on these issues as well.
Thanks for giving me an opportunity to respond to something other than a unpatriotic diatribe cheering for the downfall of real estate markets.
“There’s nothing wrong with [knocking down beautiful older homes] and charm is not lost. This is call progress–something this country has been built on.”
So would you knock down the Lincoln Memorial and replace it with a ‘modern’ building with vinyl siding?
Don’t want to stop “progress”…
“unpatriotic diatribe cheering for the downfall of real estate markets”
What kind of patriot celebrates that a great many low, middle, and high income families can’t afford to buy a house in NJ?
And what kind of patriot mistakes My Country Tis of Thee for the National Anthem?
reasoned debate is good. I think we can all agree on that.
responding to your points in kind:
“The entry level is higher now mainly because of the out migration of New Yorkers into NNJ. There will be plenty of entry point buyers, it’s just that their ecomomic status will be much different that the traditional entry point buyer.”
correct me if I’m wrong, but outmigrants from NYC have always been a large part of the suburban market. It’s the young couple who has a kid and realizes the implications of raising him/her in the City.
I don’t see how this phenomenon justifies the very high entry level market right now. If anything, fewer young couples are moving out of the City to raise families than did in the past given that NYC is so much safer now than it used to be.
Also, even though people who work in NYC are relatively high income, incomes (even in NYC) haven’t kept pace with house prices.
Let me give you a concrete example. Entry level salaries at the top law firms in NYC were recently raised from $125,000 to $145,000. That’s a 16% raise in one year– pretty decent, right?
well, this is the first time these salaries have gone up since 2000, so in fact the raise only amounts to 2.6% per year over that 6 year period– barely keeping up with inflation.
Keep in mind also that these are very coveted jobs that are only available to people coming out of top law schools. Your average entry level lawyer in NYC isn’t even making 6 figures to start.
The same holds true across a wide variety of professions. The last year or two have been really good money-wise, but this is coming after several years of crappy bonuses, layoffs, and salary freezes.
So while people coming from NYC may pump up the suburbs a little, I don’t see how they’re single-handedly causing 100% appreciation over the past 5 yrs. I also don’t see a radically different demographic of entry level buyers coming along to prop up these very high entry level prices.
“The problem is that these people are going to make more in NJ than they will in other places. Have you seen the benefit packages that these teachers get? It’s pretty damn rich. They’re not going anywhere. If they can’t afford it, they’ll just commute from furher away.”
They already make more than in other states – this is nothing different. They still do, and STILL can’t afford to be around. How long a commute would you like if you were in this position? People will stand an hour but after that, they’re looking elsewhere, where even if the salaries are low, the housing is low as well, and in their price range.
“The entry level is higher now mainly because of the out migration of New Yorkers into NNJ. There will be plenty of entry point buyers, it’s just that their ecomomic status will be much different that the traditional entry point buyer.”
Not for that long. There are only so many NY’ers willing to live in NJ, and those that will will only leave in towns close to NY. Any of their numbers will be balanced out by the giant out-migration of boomers and those who can’t afford to live here.
Also, I suppose I qualify as one of those potential buyers from NY with a higher economic status in your book. The reason I’m not looking to buy in NJ now (although I did at one point) is because without fail, the taxes here are worse than anywhere else in the tri-state area (except some towns in Westchester), and I would only look in a midtown-direct town. Those towns are already overcrowded, overpriced and starting to lack charm to me.
Nothing has changed in the last 5 years:
* NY City has not moved
* No new NJ Transit lines built in North Jersey
* Salaries relatively unchanged
* School systems unchanged
* Commute times unchanged
* NY City job market unchanged (probably a bit worse with all the “outsourcing” of top jobs to India)
* Rents relatively unchanged.
The only thing that has changed, is the price of buying a house — up 100%.
Buy into this speculative real estate bubble at your financial peril.
“Let me give you a concrete example. Entry level salaries at the top law firms in NYC were recently raised from $125,000 to $145,000. That’s a 16% raise in one year– pretty decent, right?
well, this is the first time these salaries have gone up since 2000, so in fact the raise only amounts to 2.6% per year over that 6 year period– barely keeping up with inflation.”
As a lawyer, I can attest that this is true. So very very true. What you left out is that those 145K salaries also include a DROP in the bonus, as law firms decided that they should not operate like investment firms – law firms were very heavy on the bonuses these past few years. Therefore, there’s not actually much of a salary increase at all – it kind of just evens out. Add law school debt onto that, and you’re looking at spending no more than 650K (did the math) on a house if you want to be able to sleep at night.
Lawyers make up a large chunk of the “well-to-do” workforce in the NYC area, more so than bankers – and when lawyers making good money think housing is overpriced, there’s a problem.
Nothing has changed in the last 5 years:
* No new NJ Transit lines built in North Jersey
Thats not actually correct. The Seacaucus transfer station was finished, and the Hudson BErgen light rail was started.
I just want to thank everyone for their support, but more importantly, for creating this community.
This site is much more than just what I post on the main page. It’s the community in here, in the comments, that really makes the site tick.
I appreciate everyones contributions and comments. Yes, even yours REInvestor101.
This isn’t some fascist community where we silence disenting opinion. Everyone is entitled.
I have provided my rebuttal to the appropriate parties at the Daily Record.
Caveat Emptor!
Grim
From Skep-tic:
Let me give you a concrete example. Entry level salaries at the top law firms in NYC were recently raised from $125,000 to $145,000. That’s a 16% raise in one year– pretty decent, right?
well, this is the first time these salaries have gone up since 2000, so in fact the raise only amounts to 2.6% per year over that 6 year period– barely keeping up with inflation
Real median household income nationwide over the last decade has grown less than 10% as I recollect, so the growth in the income highly paid attorneys is not unlike the experience of most of America. Of course, the picture is much different at the upper income levels and the reason the picture is much different is attributable to the movement of the economy to a more investment based scenario. I’ll admit that investors rather than wage earners have been the real winners over the past few decades.
Notwithstanding the tepid increases in real income, the economy has not stopped. Those earning wages have been accomodated with financing mechanisms that allow them to buy. Also, they do have the option to commute if they can’t afford certain areas. I believe that the demographics of NNJ have changed to the extent that the area is effectively a borough of New York City. That has driven up prices and will continue to support prices in the foreseeable future. Many of those complaining here are indirectly complaining about the demograhics. (And there are others who are spitefully wishing for a collapse). It ain’t gonna happen.
I appreciate everyones contributions and comments. Yes, even yours REInvestor101.
This isn’t some fascist community where we silence disenting opinion. Everyone is entitled.
I appreciate these comments Grim. I know I’m the person that some people love to hate here, but I intend express my opinion.
“Thats not actually correct. The Seacaucus transfer station was finished, and the Hudson BErgen light rail was started.”
Fair enough, but did the Secaucus Junction actually reduced commute times? Wasn’t that just a pork project? Regardless, I don’t think you could say a new train station in Secaucus caused houses in Summit, for example, to double in value.
The Light Rail benefits a few towns (Hoboken and Jersey City), but has minimal net effect for NNJ overall. (Also, there was a PATH train before, which still runs.)
“I believe that the demographics of NNJ have changed to the extent that the area is effectively a borough of New York City. That has driven up prices and will continue to support prices in the foreseeable future.”
I’ll admit that I didn’t grow up in the area, so I don’t have a great handle on how it used to be, but my impression is that NNJ, LI, Westchester, and southern CT have been basically boroughs of NYC for at least 50 yrs.
If the changing demographics you reference have more to do with a greater stratification of wealth, then I sort of understand where you’re coming from. Compensation at the very top is indeed rising rapidly, while most people’s wages are stagnant.
However, the CEOs, managing directors and partners in law firms are not looking to buy your average single family home in the suburbs.
I think you hit the nail on the head when you mentioned easy credit. This is the only thing that has allowed entry level buyers to get into this market recently given their stagnant wages. So it should follow that as interest rates go up and exotic loans get harder to come by, house prices will have to fall to remain affordable.
Those earning wages have been accomodated with financing mechanisms that allow them to buy.
Those mechanisms only work as long as the market goes up 10% or so. Once it stops doing so, the whole process unravels.
Historically, periods of loose credit and a lack of attention to risk have led to crashes.
“I believe that the demographics of NNJ have changed to the extent that the area is effectively a borough of New York City. That has driven up prices and will continue to support prices in the foreseeable future. Many of those complaining here are indirectly complaining about the demograhics. (And there are others who are spitefully wishing for a collapse).”
I disagree that it will hold up and I’m not complaining about either the demographics or wishing for a collapse. I just think your arguments are very typical “it’s different here because…” which are just pointless, as everyone thinks their area is different. NNJ is no different now than it was 5 years ago, save for housing prices. There are simply no new fundamentals that support the increases.
And Grim, it’s going well, keep it up.
This paper outlines one of the main issues in NJ.
http://www.rpa.org/pdf/propertytax101705.pdf
As cities, towns and villages seek to maximize revenue and reduce costs, they try to attract development that promises short term revenue and lower costs, and shun development that will impose new costs. This has led to overzoning for commercial development, such as malls and office parks, and underzoning for housing. In particular, municipalities often limit zoning for all but age-restricted housing in order to avoid the costs of educating school-age children. Also, when new development is allowed, it is often in dwindling agricultural and greenfield areas that are less costly to developers and least disruptive to existing residents.
The issue in last 2 decade has been that while Jobs have increased in NJ & NY, not much new housing has been built in that proportion. There are 2 main reasons,
1. Local government not wanting more houses with Kids as that increases Education costs.
2. Local residents not wanting that because of increased Taxes & Traffic.
The only way this can change is if State government shows leadership. But in reality, young guys looking for starter house do not have any Political backing. I & am guessing most of us on this board, do not have much political voice at all. We are a minority in election politics and are not organized to change anything.
If you read the article carefully, one can quash NO LAND argument. What is really lacking is smart planning. With smart planning, you can satisfy majority, but that planning has to supported from top.
Fair enough, but did the Secaucus Junction actually reduced commute times
Yes. For a number of Bergen county and Essex County towns, you needed to go to Hoboken and change to the Path there. Now you can do via the Junction. Its much easier and better for Midtown customers.
Also, in theory you can change between different lines as well even if not going to NYC, but that is probably rare.
The Light Rail benefits a few towns (Hoboken and Jersey City), but has minimal net effect for NNJ overall. (Also, there was a PATH train before, which still runs.)
It benefits some other towns in Hudson and Bergen County (Edgewater, North Bergen, Union City as well).
I agree in general with the idea of the bubble, but I think there definitely have been some significant NJ Transit improvements.
Grim, regarding Boroson: The most effective action that you and all other posters here could take is to never mention him again. He is odious.
The attention that he gets from this blog, letters to editor, etc., may lead people to believe that he is someone important. He’s not.
I’m just going back through some earlier comments and responding to a few I have a problem with:
From Unrealtor:
What kind of patriot celebrates that a great many low, middle, and high income families can’t afford to buy a house in NJ?
Don’t try to call my patriotism into question with a lie. I never celebrated someone not affording a house. This is just another figment of your imagination…and you have the nerve to say I’m not playing with a full deck.
Not everyone can afford a Mercedes. Do you have a problem with that? I don’t see you bemoaning that or anything else that is beyond a given person’s affordability. There’s a whole bunch of things that some people can’t or shouldn’t afford.
The brutal truth is that there are some price points that are beyond the reach of some people and rather than sit around moaning about it and wishing ill for others, some people need to move or do something different.
i have to tell everyone i’ve been watching the RE market for the past 6 years. heck i even thought it was overpriced 3 years ago! what is different today is i’m definitely seeing alot more for sale signs on people’s lawns than ever before. will there be enough demand to sop it up? i can’t say, but judging from the growing inventory it appears there isn’t. the question is what’s next? will sellers get stubborn and not lower prices to move their properties? could happen. will buyers come out of nowhere and buy on a small dip? probably. i think we’re in a new place with exotic lending and a much bigger population able to afford a house due to such. also factor in 9/11 and maybe just maybe there’s a bit more importance placed on home and family.
bottom line, while i see history and can see today rhyming with it, i don’t see an exact repeat. nothing would really surprise me anymore.
And what kind of patriot mistakes My Country Tis of Thee for the National Anthem?
I mispoke. So the hell what?
Your kind makes my blood boil. How dare you take any icon of this country and parody it? How low and disrepectful can you get?
I’d like to see how you’d fare in Iran parodying the Koran. If I could, I arrange to have your behind sent right there. After a couple of weeks, you kiss the gound upon rearriving in the USA. Bet you’d have all the parodying out of your system.
Your kind makes my blood boil. How dare you take any icon of this country and parody it? How low and disrepectful can you get?
Yeah, parody. How awful. Take the man out behind the woodshed and shoot him !!
I’d like to see how you’d fare in Iran parodying the Koran. If I could, I arrange to have your behind sent right there. After a couple of weeks, you kiss the gound upon rearriving in the USA. Bet you’d have all the parodying out of your system
You’re a frigging lunatic.
From Grim Ghost:
“Those mechanisms only work as long as the market goes up 10% or so. Once it stops doing so, the whole process unravels.
Historically, periods of loose credit and a lack of attention to risk have led to crashes.
You’re banking on a once in a century event like the great depression. Crashes will not be allowed to get out of hand nowadays. There won’t be crash to begin with anyway.
As far as the financing mechanisms are concerned, increases in asset values aren’t required. People finance cars 100% and lose 20% after driving off the lot with no deleterious impact on the economy. If someone is underwater on a house, there’s no impact. The banks and mortage institutions will work with anyone who is in trouble, so being underwater or even being behind doesn’t mean that there will be defaults cascading throughout the financial system.
You’re a frigging lunatic.
Please. I’m just don’t let playing around with this country’s icons pass without comment. I don’t think any American should. If that’s being a lunatic, then I’m guilty as accused.
You’re banking on a once in a century event like the great depression.
There were several crashes before the great depression and there were severe downturns after that as well.
I’m just don’t let playing around with this country’s icons pass without comment.
You said you wished you could send such people to Iran. That is the sign of a raving lunatic. You also said the same about people who care calling for a real estate crash.
Looks like you’re heavily leveraged and desperately hoping the market doesn’t crash.
“The entry level is higher now mainly because of the out migration of New Yorkers into NNJ. There will be plenty of entry point buyers, it’s just that their economic status will be much different that the traditional entry point buyer.”
NJ, and especially NNJ, is experiencing a strong trend of negative NET migration. While some people may me moving into NJ from NYC, there are more people leaving. In other words, there are not enough people moving into NJ from NYC to make up for the number of people leaving for other states. Even if these buyers are wealthy, most people still only really need one house. The measly population growth that we do have comes from births and international immigration. Some counties such as Essex and Hudson are actually losing population.
Why can’t prices level off for a longer period of time? What evidence other than “it has happened befer” is there that the market HAS to correct 30%? And if prices level off and do not drop, then the ARM adjustments should be handled better by a larger number of people. I have to agree with the NJ is a new borough of NY argument, with the additional point that commuting is much easier than it was 20 years ago and further back. Yes, it is not any better than it was 5 years ago, but RE cycles takes a long time, and 9/11 was a catalyst to get families out of cities. I know its getting old, and I’ll stop using it soon, but – you want to live in NJ? Turn out those pockets.
I’m not saying RE is going up anymore, just that it won’t plummet.
I posted this under the Demise of th enortheast thread.
This puts a big hole in reinvestor101’s theories.
Go to http://realestatebook.com and compare the following. Edgewater, NJ 07020 to Concord, NC 28027 (a bedroom community of Charlotte). You will find that while housing costs 3 to 5 times more in Edgewater, both the average and median incomes are only 30% higher. (Click on the More Info link for a house and then Neighborhood Information to get the demographics.) Factor in prop taxes are only about 1% in Concord and you will see why people are moving out of NJ.
Try it with your town and for other areas in Charlotte or Raleigh and it is quite amazing.
I will say it again. Sorry…
The remaining 30% or so that do not own a home are the interesting variable. (34% + in NJ) That is out side of those marginal borrowers of the last 5 years who borrowed on I/O or ARMs to get into a house.
NJ where njtransit serves is a borough of NYC as far as I am concerned.(I am a transpo planner so I speak with a little knowledge.)
“The issue in last 2 decade has been that while Jobs have increased in NJ & NY, not much new housing has been built in that proportion.”
Shailesh, right now there are almost 20,000 homes for sale in Northern NJ alone. There is no housing shortage.
The housing crisis began 5 years ago, not 20 years ago.
Regarding the “Frank R. Lautenberg Rail Station at Secaucus Junction” and the Light Rail in Hoboken…
For the sake of argument, let’s say they are a minor (very minor) contributor to the local NJ real estate bubble.
That was just one of the 7 things I listed above, and the practice of corporations “outsourcing” top jobs to India probably makes any gain seen there a wash.
The fact is, nothing has really changed, only the price of housing.
The prices have gone up not because of “good schools,” or “good commutes,” etc, etc, because those factors have long been in play, and did not magically appear 5 years ago.
Prices have gone up because of low interest rates, and the availability of suicide loans from lenders.
The party is over, and the guests are slowly stumbling out the door.
In 12-18 months cash is king, and those $200K underwater as their ARM adjusts will be screwed, and ripe pickins.
The remaining 30% or so that do not own a home are the interesting variable.
Agree. And being part of that 30%, we are scoping out Raleigh/Cary NC over Memorial Day Weekend. My wife was initially very resistant, but has come to terms with the idea after looking at some open houses up here. Now she is really excited about it. We can own a really nice house for about the same we pay in rent up here. Her parents own 2 properties in NNJ and are considering moving down with us. Even with a pay cut, I would come out way ahead.
We are willing to pay a premium to stay here close to family and friends, but enough is enough. I’m not willing to struggle every month to pay a mortgage & property taxes on some 1950’s cracker box in a so-so neighborhood, when I can own a nice home and my wife can even take a little time off when we have kids.
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Reinvestor101 – you sound like Boroson…are you?
What’s with all the patriotic nonsense, I’m here to learn so I can make informed decisions in the coming years for my family.
I’d wish everyone would just ignore this thin dead air, leave it alone, it’s a shouting match to which there is no end. Really, it’s not helpful to me and I’m sure it’s not helpful for others looking to learn and rise above the flat, stale news we’re fed on a daily basis.
Show us real data or leave us, find another forum to listen to your stale drone.
Unrealtor:
Right now there are almost 20,000 homes for sale in Northern NJ alone. There is no housing shortage.
Those 20,000 houses are ridiculously over priced. Also read the article at link I posted. It gives in detail analysis on why there is not much housing in NJ that is affordable to most.
Combining that with all other factors, such as Interest rates going down, Creative financing, changes in law for Cap gains from house sales, 911 fears, stock market crash, large speculation etc… contributed to housing boom. I am not discounting all other factors, and as already higher interest rates and market psychology is increasing inventory & reducing demand.
But I can bet that prices are not going back to 2001 ( or even 2003 ) level. At the most they will come down to 2004 or 2005 level. That will still leave many folks out of the housing market.
At the end of the day, NJ has to decide how much of housing they want to allow. I am not talking about McMansions here, I am talking about simple houses that a worker earning Median income can afford.
“But I can bet that prices are not going back to 2001 ( or even 2003 ) level. At the most they will come down to 2004 or 2005 level.”
Have prior real estate busts only rolled back prices one year? This would be the first.
This bubble pop will be worse than prior busts, because in prior busts people had ‘normal’ mortgages, and put 20% down. Today, people are leveraged to the max, with payments scheduled to go up, and home values going down.
“At the end of the day, NJ has to decide how much of housing they want to allow. I am not talking about McMansions here, I am talking about simple houses that a worker earning Median income can afford.”
You mean like in 2001, when essentially the same number of houses existed in Northern NJ?
The problem is not number of houses, but the price. There are plenty of houses already built.
To add, as this real estate ponzi scheme comes to close, the flippers and “investors” will jump ship (i.e., sell at a loss, or enter foreclosure), and there wil be even more inventory of existing homes.
I think the flippers are already gone. If they aren’t they are renting out their places and holding tight.
flippers renting their places out?
At what negative cashflow!!!!!
Good luck losing money every month and then the value of your investment starts sinking month by month.
Shailesh,
How long have you lived in NNJ???
I left here 10 years ago, and came back to find massive portions of forests razed to the ground for gigantic house farms. Take a drive around Lake Hopatcong for instance, and you’ll find scads and scads and SCADS of newer homes in the $500-$600K range. Or take a look at pre-existing homes for sale. In Jefferson Township alone (the twp Lake Hopatcong is in) there are 129 houses for sale UNDER $500K according to the GSMLS, 93 of which are under $400K of which a number is in the $250-350 range. I’m not saying they’re not overvalued in today’s market but still, these are not expensive mcmansions.
I dont’ know why you think we need to clear cut the remaining trees in this state for more houses. That’s been going on a furious pace. Stop focusing on where the houses AREN’T and take a look at where they already are.
michelle: I agree with you 100% percent, I am very much supportive of environmental protection.
The trend that I am opposed to is building of McMansions. You & I agree that we don’t make land, right? So, lets say if 10 acre of open land is available, wouldn’t it be better if town built a Townhouse complex for 500 families, than just 10 McMansion. In fact with the money that you generate from 500 families, the town can preserve more Forest land and keep them more prestine.
But if you look today, due to Fiscal zoning of last decade, more and more McMansions are coming up only.
Unrealtor: This bubble pop will be worse than prior busts, because in prior busts people had ‘normal’ mortgages, and put 20% down. Today, people are leveraged to the max, with payments scheduled to go up, and home values going down.
I respect your opinion, but I beg to differ. Yes, I do agree we are in bubble zone and prices will have to come down to match demand. But, for prices to go back more then 2 years is probably not realistic. You have factors such as good employment, cap limits on ARM loans etc.. Also 40% of houses are free from Mortgage.
In my opinion, let market forces work, but this is the time when some strategic changes can also be done. My posts with respect to Housing shortage etc.. is not to encourage removal of Forest and building McMansions. I think NJ needs more denser more planned communities. The trouble at present is that local Towns are adopting policies that do not match what is needed from the State development perspective.
“9/11 was a catalyst to get families out of cities.”
You know what’s interesting about this? Many of the pro-Hoboken people argue just the opposite – that many younger families are moving into more urban areas for the short commute. It does seem to be true in places like Brooklyn. However, it can’t go both ways. I think people got into the “had to buy” mentality, weren’t ready for the ‘burbs, bought in Hoboken and are now praying that they made the right choice. Had there been no boom, I think it’s likely those people would have rented and then moved to the ‘burbs.
People went from city living to suburban living in the 1950s, and there’s no reason it can’t change again. However, with the world being a more dangerous places, I think eventually, after condos become less appealing, people will return to the suburbs for the space, cleaner air and nicer way of life. Being around so many people in tight quarters can get to you after a while, especially if you’re living in the #1 terrorist target in the US.
“Stop focusing on where the houses AREN’T and take a look at where they already are.”
Well said.
“But, for prices to go back more then 2 years is probably not realistic.”
Was it realistic during the last bust? It happened. Are you saying people are better suited financially today with regards to mortgages, than the previous bust?
You can’t be serious.
“I think NJ needs more denser more planned communities.”
I don’t. I would never live in a “denser more planned community,” and want space between my house and my neighbor’s house. People are willing to pay a premium for that space, it doesn’t come for free (nor should it).
If you don’t want to pay such a premium, there are already plenty of “denser more planned communities” in Hoboken, Jersey City, etc, for people such as yourself that aren’t concerned with over-crowding, not having a yard, etc.
“So, lets say if 10 acre of open land is available, wouldn’t it be better if town built a Townhouse complex for 500 families, than just 10 McMansion.”
You leave out the middle ground. Putting good-sized houses on 1/3 acre, would give you 30 homes. Not everything has to be a “McMansion.”
Many people don’t want to live in an over-crowded condo complex.
Have you ever driven through Bridgewater township? It’s one condo complex after another. That town is ruined in my opinion, and I’d never buy a house there because of all the condo developments.
UnRealtor said…
Not everything has to be a “McMansion.”
Actually it does. The developer is maximizing his/her utility by putting the most expensive thing the market will bear in that place if it is a single lot. Towns don’t want modest affordable places. Condos and TH developments are fought against because it is assumed that the development will be a magnet for young families (read kids).
Metro, having 30 higher-end homes on 1/3 acre lots would be worth equal or more than 10 McMansions, no?
$500K x 3 = $1.5M
$1.5M x 1 = $1.5M
Should be fairly close.
As for condos, the problem with having “affordable” condos, is often the people who live in them, rather than just kids. I had a condo, in a solid town, and a crazy neighbor moved in with two daughters who may as well have been running a brothel.
Punks and noise at all hours (and I mean all hours), fist fights in the parking lot, police showing up at 4:00AM, the list goes on. This was a nice community before they arrived!
All the other residents were screwed. The condo board did nothing, and within a year, every normal resident in that building moved out.
I’ll never go through that again. Imagine if that occurred during a housing downturn — people would be stuck there with that madness.
Aside from that madness, architecturally, condos are an eyesore. Masses of vinyl siding, they all look the same, etc.
These are the reasons I would fight against condo developments, but I’m sure others may feel differently.
UnRealtor said…
Metro, having 30 higher-end homes on 1/3 acre lots would be worth equal or more than 10 McMansions, no?
$500K x 3 = $1.5M
$1.5M x 1 = $1.5M
Should be fairly close.
Thats not my point. Maybe I should have explained it better. A developer often has to subdivide the property. (or someone else does and he buys it from them) When he goes to build he already has a big nut that he is paying interest on or that he is losing the opportunity costs of his money tied up in the land. Regardless, He wants to maximize his return. When he goes to build he will build on each of those parcels a house that is likely to give him a higher return. These days the appetite has been for big houses. which is fine. The old formula used to be 1/4 to 1/3 building material costs and $50K for the parcel. Both of those have gone up so what is a builder to do but make a bigger house that will throw off more profit.
Also a developer I g know has said why would I build a modest house when the effort to subdivide is the same. He is essentially paying himself less for the effort.
Unrealtor: You leave out the middle ground. Putting good-sized houses on 1/3 acre, would give you 30 homes. Not everything has to be a “McMansion.”
Unrealtor: Don’t take it personally. These is a debate, and only understanding other opinion makes it rich.
Well, if you look at any new community development, decent house with 1/3 acre are not available. What you have in NJ is houses with 1 acre land, 5 bed & 3.5 bath McMansions.
I do agree doing anything over is bad. For e.g. overbuilding condos is also bad. So, my main complain is, when McMansions can be built, why not Single Family houses over 1/4 acre lot ??? I think what Metro said about development has some truth to it. Also I feel, towns are not very keen on 4 houses but like only 1 McMansion.
“Don’t take it personally. These is a debate, and only understanding other opinion makes it rich.”
Nothing taken personally at all, just chattin’. Hope the reverse is true.
Have a great weekend, and stay away from those open houses!