From the Record/Herald News:
A call to cut state workers’ perks
By JOHN P. McALPIN
“Three South Jersey lawmakers demanded Thursday that unionized state employees give up raises, scale back benefits and work longer hours with fewer holidays to help balance the budget and avoid tax increases.”
“The legislators, led by a powerful senator who is also a prominent labor union boss, openly derided Governor Corzine and legislative leaders for lacking the will to challenge the unions and their members even as they cut programs for the poor and raise taxes.”
“‘We’re scrubbing and scrubbing everywhere we possibly can to find savings so we don’t have to do a tax increase, and this big pool of money is on the table and we’re not even taking a look at it,’ said Sweeney, the business manager for Ironworkers Union Local 399 and chairman of the Senate Labor Committee.”
“Sweeney pointed out that state workers enjoy a range of concessions that many private-sector employees only dream of – a 35-hour workweek, 17 paid holidays on top of their paid vacations and retirement eligibility at 55 with complete health benefits for life.”
“He said the state should raise the retirement age, cut the number of holidays and ask workers to stay longer than their seven-hour day. Union members should also pay more for health care benefits, he said.”
“Those moves could save the state at least $700 million over time, Sweeney said.”
“Yet, in New Jersey, the state’s 70,000 union workers now enjoy salaries, benefits and other perks that far outstrip those of their counterparts in the private world, the lawmakers said.”
Huge surpise at Pulte Homes (PHM) this morning.
Pulte Homes Slashes 2006 Forecast as Orders Fall 29%
Pulte Homes Inc., the largest U.S. homebuilder, cut its 2006 earnings forecast after orders in April and May fell 29 percent from a year earlier.
The company expects to earn $4.70 to $5 a share for the year, down from its previous forecast of $6 to $6.25 a share. Earnings in the second quarter will be 85 cents to 95 cents a share, the Bloomfield Hills, Michigan-based company said today in a statement.
Someone asked a question on homebuilder stocks through the last downturn.
I’d warn against using the Homebuilders as any kind of proxy for the housing market or vice versa.
I’m posting this information because I believe the new order and cancellation numbers do offer some insight into the market. But these numbers differ radically from revenues and profitability.
grim
The change in new orders and cancellation rates for Pulte over April/May are nothing short of incredible.
Pulte Homes, Inc.
Preliminary Net New Order Data
April/May
Northeast
2005 – 871
2006 – 514
National
2005 – 9,128
2006 – 6,447
Cancellation Rate
2005 – 14.8%
2006 – 27.4%
http://biz.yahoo.com/bw/060602/20060602005078.html?.v=1
FILM REVIEW
By JOE MORGENSTERN
So Split, Already: Lovers Duel In ‘Break-Up,’ but the Condo They Own Is More Interesting
In Dreary Comedy, Boorish Vaughn,
Miscast Aniston Fail to Connect;
French ‘B13’ Is Feverish Yet Flat
June 2, 2006; Page W1
It’s not a good sign when a movie is called “The Break-Up” and you can’t wait for the couple to split so they’ll get some relief from one another, and give the audience some relief from them. The couple in question is Vince Vaughn and Jennifer Aniston. He plays Gary, a Chicago tour-bus guide with a big mouth and a sour personality. She plays Brooke, an art gallery manager — do they find these job descriptions in the Yellow Pages? — who must have seen something in him that we can’t.
Once they do break up there’s still no relief, because they continue to live as bickering roommates — neither of the combatants is willing to surrender the condo they have shared, and jointly own. It’s the dim conceit of this dreary comedy that their attachment to the condo symbolizes a continued commitment to their relationship, but that’s a reach, since no relationship is in evidence. The real, albeit unexplored subject is the condo, which symbolizes the eternal verities of contemporary life. I wanted to know more about such things as its square footage, location, purchase price, asking price, and whether the place would sell in a changing market.
Grim,
The Pulte numbers shouldn’t come as that big of a surprise considering Ryland said their sales were down 35% so far for the 2Q, HOV indicated their sales are down 30% (on a same community basis – sales were 11 per community for the quarter vs 16 last year), TOL said that May was also weak, and now Pulte.
Everyone is joining the party.
DebtVulture
I don’t expect to see major cuts for NJ state employees right now. In the future, state employees will see cuts as there will be no way to pay them all. The state pension problem will be interesting.
From what I remember, 80-85% of my property tax goes to our school system. I am all for education. However, the teachers in my town gets paid around $100K plus $10K bonus a year for working 180 days a year in addition to sick days, etc.
I don’t think my town needs to pay $100K plus to attract good teachers. No wonder that last year, when there was one opening for a teaching job, 300 people applied.
Chicago,
I just read the same review on WSJ and almost spilled my coffee on the last line!
Andy
“My family has a 2nd home that we’re unloading. Have owned it for 20 years. We just listed it with a top Long Island realtor today, and we had a candid discussion about the state of the housing market.
He observed that the market shifted noticeably about 40 days ago. (?) Suddenly a lot of inventory started piling up and the buyers were less motivated. No news there, but he did mention that the problems are worse than the media is letting on.
He said it actually felt like the news media was downplaying the seriousness of the slowdown, which is surprising considering all the bubble talk we’ve heard. Obviously LIBOR (Long Island Board of Realtors) has a vested interest in whitewashing this downturn, as do all other realtors’ groups.
Based on his experience in the late 80’s, he feels that home values will decline 5%-10% per year for the next two or three years. He hopes that Newsday (the major LI paper) won’t release a front-page panic story like they did back then, or all hell will break loose in the local market. He is also extremely concerned about the generous appraisals being granted for refi’s just to get the loans approved. Lenders could be in big trouble in a few years.
Of course, if we were interested in buying I’m sure he’d have a slightly different story for us, but that’s what he said FWIW. If anyone has other observations from industry insiders I’d love to hear them.”
Like everyone else here, I have a friend who…
Actually, he and his family are very close friends and he happens to be a realtor.
He said the most amazing thing to me last night. He believes the media created this slow down with all the negative news.
It was at that point that he confirmed what I already knew. He knows MUCH less about the real estate market than I do and this is his “area”.
But maybe, just maybe I’m wrong. So I asked about yesterday’s pending homes sales report.
Reply, “What’s that?”
Ouch.
He’s motivated, organized and intelligent. He just obviously should find something he enjoys doing. Because if you don’t know YOUR industry (banker, baker, et al), you’re in the wrong game.
I’m a little disappointed in Martha’s acumen (she waited too long):
“Martha on the market
Domestic diva Stewart plans to sell her longtime home in Westport, Conn.”
http://money.cnn.com/2006/06/01/real_estate/Martha_moving_on_out/index.htm
Pat
My wife’s uncle is a builder in Bergen county and has advised us to wait to buy for the last couple of years. I spoke with him the other day and he commented that things are really slowing down and that he is just hoping to get rid of his current projects or he might be forced to rent them out instead. He has a different cost structure than an average buyer so being a landlord probably isn’t the worst thing in the world, but not his preference. He also mentioned that because inventory is climbing so much that we should start looking – might be able to find a good deal or have a lowball offer accepted. I personally think it would be better to wait a couple more months or 2007, but can’t hurt to look.
bts
2007 is when things will be real bad.
Then it’s payback time.
Huge price reduction NOT some phoney gimmicky little amnipulative price drop.
25%+ drops from peak 2005 prices.
Don’t be a bagholder and be fooled. catching a falling knife can hurt so no rush.
BOYCOTT Ponzi scam Houses
bob
It is easy to kick state workers around, but the bigger problem is pay to play, legislators holding state and local posts creating vast conflicts of interest, and the privitization of public functions to private firms wherein government officals grant contracts to companies that pay their workers sub-standard wages and over-pay their exectutives, with little government oversight.
No rush.
do NOT bid NO BIDS! NADA. ZERO!
let’em starve and think about it?
who?
REALTORS!
Start working for buyers or NOTH””ING!
No commissions maybe bread lines for you manipulative spinmeisters.
so start manipulating money grubbing sellers to really drop prices down to rational levels. Some of these money grubbing sellers paid ONLY $20k $50k $100k or $200k for their houses. Talk some sense into these greedy money grubbbers. Like 30% lower than summer 2005 peak prices.
Then just maybe JUST MAYBE a few Just a few buyers wilol emerge.
BOOOOOOOOYAAAAAAAA
Bob
I happen to be one of those state workers. And in the private sector I would be making a lot more in salary. The cut in pay justifies the so-called perks.
Bob, the only thing I disagree with you on is ‘no bidding’. Nothing wrong with letting them know their properties are only worth what someone else is willing to pay. Bid 2005 prices-40% so it starts to sink in!
anon @10:39
I have to agree with Bob. I tried bidding 33% lower than the list price but nobody seems to be interested.
Why waste time researching and later get aggravated for no reason? I have asked couple of realtors to give me a call when they find a property that matches my general description, price range and area.
VB
I work for gov’t too. Ditto, I could make another $10-20K in the private sector.
The perqs and the satisfaction from involvement and doing good is what keeps me here. BTW I already [pay part of my healthcare. As for the pensions, there is a need for reform from the abusers. But tyhe system should not be abolished.
NO BIDS! NADA ZERO!
Go Look all you want….AND make DAMN sure you criticize and verbalize it all you want.
If a house is a 50 yr old POS CR@PBOX —Old Tiny and Ridiculously overpriced Then say it.
No Bids NO NOTT”””ING.
Pyschology plays a big role.
Realtor/seller MISERY CLIMBING.
If you can’t help your freakin self then go ahead bid 35% less off of peak 2005 prices. Watch the money grubbing sellers trying to put another 5-10% above peak summer 2005 prices. Don’t be an idiot and payup .
The drop has only started.
F”””” WAIT a LITTLE!
BOB!
Job growth slows
VB
“Welcome to the new home of Garden State MLS’ public search engine. Currently, there are 29,975 properties advertised for sale in NJ on our site”
From GSML website
30 grand herezzz we come.
GRIND!!!!!!!!!
GRIND!!!!!!!!!
Inventory GINDING HIGHER!
STARVE BABY STARVE!
Boycott BIDDING!
Bob
VB, it all depends on your attitude. If I’m bottom fishing at 40% below asking price, I don’t expect everyone to seriously consider my offer. But I only need 1 seller to accept, not the approval of the rest of the mkt. Even if it takes 100 ‘no’s’, all I need is one ‘yes’.
I know the area where I want to buy and what I think is a good price (maybe 30-40% below ask). If I can get it now at those levels, I’d take it. I can’t call the exact mkt bottom, but 40% off list price would do, now or later.
VB, 33% low ball on my house would be 7% less than what I bought it for 2 years ago, so that seems too harsh. (especially considering new kitchen & bath I put in) And if property value depreciates like that, that can’t be a good indication of healthy economy either.
IKY
2007 is when things will be real bad.
I thought it was this year…
wait until the spring
then…
wait til the summer when it gets really bad
whatever.
just keep waiting. by 2100, prices will be $100 per acre anywhere in NJ due to flooding.
Anonymous said…
anon @10:39
I have to agree with Bob. I tried bidding 33% lower than the list price but nobody seems to be interested.
Why waste time researching and later get aggravated for no reason?
VB
10:49 AM
Don’t get discouraged. Think about it in the same way as looking for a job. In order to land a job, you need to be researched and prepared. You can miss on 10 job interviews, but you only need one person to say “yes”. Lowballs are the same. No one is going to advertise “Hi. I am willing to accept your lowball.” However, as they say in the NY Lottery, “you gotta be in it to win it.” You never know when someone has been softened up by circumstance before you ever entered the picture.
You see something you like, go forward with a price that YOU BELIEVE IS REASONABLE based on your view of the market. No one is looking out for your interests, so be aggressive. Booooyaaaaaaa et al.
chicago
Anonymous said…
2007 is when things will be real bad.
I thought it was this year…
wait until the spring
then…
wait til the summer when it gets really bad
whatever.
just keep waiting. by 2100, prices will be $100 per acre anywhere in NJ due to flooding.
11:07 AM
nervous, eh?
VB – ditto on your behavior.
We recently found a reputable (with references) buyer’s agent.
Gave her our absolute max price and street boundaries within which we would consider.
At first, she sounded very cautious about any success at that price.
We gave her a couple of sample listings in the neighborhood we would consider, that were listed at approximately $50k to $100k over our price. I specifically told her that one of them (an FSBO) would NEVER get the price they were asking. I told her when it had been originally listed.
Funny, but the house showed up two weeks later on HER company’s listing. With a big price drop.
It’s now within $30k.
Hmmmm. Dat’s gotta make ya wonder.
Pat
Anonymous said…
VB, 33% low ball on my house would be 7% less than what I bought it for 2 years ago, so that seems too harsh. (especially considering new kitchen & bath I put in) And if property value depreciates like that, that can’t be a good indication of healthy economy either.
IKY
11:06 AM
Sunk cost fallacy
OT pulte homes fresh 52 week low.
PHM
crap grim beat me to it
OT – a question here about buying foreclosure properties?
Is it the responsibility of the buyer of a foreclosed property to pay property taxes due on the foreclosed property? If yes at what rate…the assessed value of the property pre foreclosure or post foreclosure?
Appreciate your insight?
SUM.
lets face it. the state of nj
did the EEO thing. go to any
angency and you will find it loaded with people who do nothing.
nobody has got a set big enough
to start cutting.
and the nerve of a state worker
to want us to believe that they could make more in the private sector.
thats a dream,, nj state workers
are among the highest paid in the country and the perks are next to none.
No private sector company would allow this to go on.
Lifetime health care,,, those days are over.
ask the Lucent folks, etc.
EVERYONE REREAD THIS POST and reread and MAKE A COPY OF IT!!!!!!!!
“VB, it all depends on your attitude. If I’m bottom fishing at 40% below asking price, I don’t expect everyone to seriously consider my offer. But I only need 1 seller to accept, not the approval of the rest of the mkt. Even if it takes 100 ‘no’s’, all I need is one ‘yes’.
I know the area where I want to buy and what I think is a good price (maybe 30-40% below ask). If I can get it now at those levels, I’d take it. I can’t call the exact mkt bottom, but 40% off (“2005 Peak prices”) list price would do, now or later.
11:06 AM ”
Bob approves!
and in nj most towns budget are
being eaten up by the town workers
and all the benefits.
Thats most towns not just a few.
Its killing the budgets and many of the benefits are mandated by
law. so they cant be cut and are
just passed on to the homeowners.
It’s payback time.
Old Bob got a desperate seller…selling a motorized vehicle, but the seller sez it’s worth this, “but” needs a very “fast” sale.
Well old bob has the cash and threw a number out and let the desperate in over his head person sweat it out a little while longer until i call back and make same offer again.
I bet I get it.
Lots and Lots of people in trouble next 3 years. Cash = bargains.
BOYCOTT HOUSES!
Bob
From the Pulte Homes article…
“Demand has been impacted by a number of factors including an increase in available inventory of new and existing homes, higher cancellation rates and higher interest rates,” Richard J. Dugas Jr., president and chief executive, said in a statement.
Uhh, what about the ridiculous cost of housing? Doesn’t that factor in to it at all?
-Richie
the usual response from public workers is they’d make so much more $$$ in the private sector. while this might’ve been true 15-20 years ago you need to look at overall compensation cost.
over the past 10 years costs have increased significantly for benefits while raises have stagnated for the private sector. public employees have had to pay little if anything to cover these increases therefore in terms of overall compensation the gap has narrowed considerably. be interesting to see a study, but the days of using salary gaps as a reason for the difference are behind us and will only narrow more causing additional angst to an already difficult budget situation, particularly for coastal states.
the overall comp. pks of these
public workers has killed the
bugets.
and it has reached a point where
they expect it.
and of course they resent the taxpayers who complain.
and that air you hear is the bubble .
and pay for play, well thats nj
way of looting the taxpayers
“a 35-hour workweek”
They work half a week?
“Uhh, what about the ridiculous cost of housing? Doesn’t that factor in to it at all?”
Of course not, everyone makes $300,000 a year.
grim
I think with these workers, the problem isn’t always how much they make, but how many there are. You could probably slash about 25% of workers statewide and still get the same amount of work done.
But Suzanne researched this!
http://www.SuzanneResearchedThis.com
Classic. Suzanne.
“‘Suzanne researched this,’ says the wife in exasperation. As we’re wondering who Suzanne is, the ad cuts to an image of the couple’s kitchen telephone. ‘This listing is special, John,’ says the voice of their real estate agent over the speakerphone. ‘You guys can do this. ’ The husband caves. ‘This is awesome,’ says the wife. We see a picture of the agent’s Century 21 business card.”
They cut one part out..
‘You guys can do this…you can buy the house for $800,000 and immediately take out a $200,000 HELOC loan for updates. Interest only loans only go down, but house prices only go up!!’
-Richie
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