From the Record:
Home prices down in most major US cities
Home prices in the New York metropolitan area, including North Jersey, dropped 2 percent in the 12 months ended in October, the Standard & Poor’s Case-Shiller index reported Tuesday.
Nationally, home prices dropped 3.4 percent.
Home prices in the region are back to the levels of spring 2004, and are about 22 percent off their mid-2006 peaks, while national prices have returned to the levels of mid-2003, and are 32 percent off their 2006 peaks.
Home sales and prices have been under pressure from a slow economy and high unemployment. Potential buyers are also concerned that prices may be pulled down further by distressed sales, which are expected to hit the market once the foreclosure pipeline gets moving again after last year’s “robo-signing” reports.
Single-family homes in Bergen County sold for a median $380,000 during the month, down 14.4 percent from a year earlier, while the number of sales dropped 3.3 percent. Home prices declined 18.6 percent in Passaic County, to a median $245,297, as the number of sales plunged almost 20 percent.
From CNN:
Foreclosure free ride: 3 years, no payments
Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.
Among the tactics: Challenging the bank’s actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.
Nationwide, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.
It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.
And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren’t paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.
Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.
“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.
…
A Staten Island, N.Y. man who owed $300,000 on his mortgage and hadn’t made a payment in two years, said his attorney used the robo-signing issue to fight his foreclosure.
“It looks like I’ll be in my home for some time to come,” said the homeowner, who asked to remain anonymous. He said he is currently not making any payments on his home.
Zandi is pretty bullish these days. For those that don’t remember back to the peaky days of the bubble, Zandi from Moody’s was part of the first group of major economists to speak out about the bubble. (Although one wonders if he just wants a seat in the Obama administration). Anyway, here goes, from NPR:
‘Slow, Plodding’ Economy Stalled By Housing Market
A Good Time To Buy …
Still, there is at least one sort of bright spot to talk about — that is, for anyone looking to buy a home.
“House prices have fallen about 35 percent from the peak, the peak being just about six years ago,” says Mark Zandi, chief economist at Moody’s Analytics. “Because of that decline, single-family housing is really quite affordable by historical standards in most markets.”
Also, interest rates are lower than they’ve been in decades. So Zandi says if you’ve been thinking about buying a house, now might be the time.
“I think the housing market’s at bottom. I think the single-family market is going to come back,” he says. “Not [right away], but if your horizon is three, four, five, six years, and you’re thinking about buying a single-family home, I’d start thinking about it right now.”
While the table is being set for a recovery, the party hasn’t really gotten started yet. Home sales were up 4 percent last month, but Zandi says, they’ve pretty much been bouncing along the bottom without really gaining much traction.
Good Morning New Jersey
Miss a few payments on a new automobile and Onstar kills the ignition
Start getting your 2012 predictions together folks! (But don’t post them just yet!)
If this guy gets thrown out of his home for not making payments I will take him in open arms! http://www.youtube.com/watch_popup?v=P9Fyey4D5hg
Lots of chatter lately about the Obama administration putting together a program to facilitate large-scale REO sales to mega-investors.
Waiting for foreclosures to slaughter the market? Keep waiting, Wall Street will own the REO market now, literally.
Songs For The Season http://www.youtube.com/watch?v=diDIhbMIKkg&feature=youtu.be
For home prices to return to sanity, the clock needs to reset to 1998.
9 – No, it doesn’t. I’ve said it before, from a pricing perspective, the 94-97 period was possibly the best time in recent history to buy a home in NJ. It was not in any way “sane” or “normal” pricing, it was a bargain, a completely ridiculous Crazy Eddie style blowout (in retrospect). If I showed you mid-90s pricing in haughty BC towns, you would literally shit yourself. On the heels of the bursting of the late 80s bubble, buyers were extremely cautious. It wasn’t until the early 00’s did buyers finally realize the bottom was in.
History rhymes anyone?
From the NY Times (look at the dates, I bet if I changed the dates on these and posted them on the main page, nobody would even question them.):
An Uptick for Home Sales in the Region
By NICK RAVO
Published: June 7, 1992
http://query.nytimes.com/gst/fullpage.html?res=9E0CE0D6153BF934A35755C0A964958260
SPURRED by low interest rates and lower prices, the residential real estate market in the New York metropolitan region, which has been dramatically deflated by a three-year recession and rapidly changing demographics, appears, for the most part, to be taking a slight upward turn.
Few real estate analysts, however, expect a sharp rise in sales volume for one-family homes, co-op apartments or condominiums anytime soon. Nor do they expect sale prices in the foreseeable future to return to the heights of the middle to late 80’s.
Surge in Home Foreclosures and Evictions Shattering Families
By NICK RAVO
Published: November 15, 1992
http://query.nytimes.com/gst/fullpage.html?res=9E0CE1D81E3DF936A25752C1A964958260
The number of homes in foreclosure in New York, New Jersey and Connecticut has almost doubled since the middle of last year, rising to levels not seen in decades.
The sudden surge in foreclosures, after a steady climb since the late 1980’s, reflects the region’s job losses, falling real-estate values and a growing backlog of cases that have clogged the courts, delaying some foreclosures for months and even years, lenders and lawyers say.
Have Suburban Prices Hit the Bottom?
By NICK RAVO
Published: February 28, 1993
http://query.nytimes.com/gst/fullpage.html?res=9F0CE7D9153CF93BA15751C0A965958260
THE market for one-family homes in the suburban New York metropolitan region, much of which has been in decline for the last five years, appears to have bottomed out in most areas, and, in some places, such as Northern New Jersey, a modest recovery seems to be under way.
Real estate brokers attribute the trend to low mortgage interest rates, realistic prices set by sellers, the dearth of new construction and a small surge of first-time buyers who were priced out of the market in the mid-80’s and frightened out in the late 80’s and early 90’s.
Residential Real Estate Market Rebounds in New York Region
By NICK RAVO
Published: January 23, 1994
http://query.nytimes.com/gst/fullpage.html?res=9801E6DF1030F930A15752C0A962958260
After five years of slumping sales and plummeting prices, the residential real estate market in the New York region is starting to rebound, according to housing analysts.
Though the recovery is not as robust as in other parts of the country, like the Southeast and the Rocky Mountain states, the precipitous slide that saw home values in the region plunge by double-digit rates in the late 1980’s and early 1990’s appears to be ending.
New York Housing: Sellers Finally Sell
By NICK RAVO
Published: February 26, 1995
http://query.nytimes.com/gst/fullpage.html?res=990CE6DC153BF935A15751C0A963958260
OWNERS of residential real estate in New York City, particularly those with co-ops, may look back on 1994 as the year when it once again became possible to sell their homes — even studios and one-bedroom apartments. It still wasn’t easy, and the big profits of the 1980’s remained only a memory, but the increased demand and stable prices were a substantial improvement over the early 1990’s, when market activity slowed drastically and prices fell.
For Home Buyers, Patience Has Paid Off
By NICK RAVO
Published: May 21, 1995
INTEREST rates are falling. Interest rates are falling. It’s a mantra being intoned by almost every real estate broker, mortgage banker and potential home buyer these days. And unlike other industry slogans — like “now is a good time to buy” or “prices are rising” — this one is unarguable, at least for now.
Spring Housing-Sales Climate Is Chilly
By NICK RAVO
Published: June 18, 1995
http://query.nytimes.com/gst/fullpage.html?res=990CE5D7153FF93BA25755C0A963958260
SPRING is the time of year when residential real estate markets often blossom. This spring, though, the market’s climate in most of the New York metropolitan region has been cool.
House closing figures — which typically reflect contracts signed one to three months earlier — have been below those of a year ago in most areas and sale prices have been somewhat lower for many types of houses.
About Real Estate; Agents Say Home Sales Remain in the Doldrums
By TRACIE ROZHON
Published: July 28, 1995
http://query.nytimes.com/gst/fullpage.html?res=990CEEDF1131F93BA15754C0A963958260
As the summer doldrums settle in, real estate agents across the metropolitan New York region are hoping for cooler weather — and more sales.
Among the reasons for the decline, she said, were that ” Wall Street bonuses were significantly lower and there were a lot of layoffs in industry here.” New listings of properties for sale are “twice what’s going off,” she said.
Confidence in the mid 90’s was no better than today. Anyone who was active in the market during that period, please chime in. But from what I could gather, nobody really cared much about real estate.
Between ’92 and ’93, unemployment in NJ was above 7.5%, was peaking at around 8.5% in late ’92. By ’95 it had only improved to around 6.5%, still significantly higher than the pre-bubble unemployment rates. It wasn’t until immediately before the 2001 recession that unemployment was hitting lows in the 4’s. By the time that the household income numbers were showing clear year over year growth again (97ish?) the price recovery was well underway.
http://www.businessinsider.com/morgan-stanley-cuts-580-jobs-in-nyc-2011-12
Help.
It really wasn’t until 1998 that folks started forgetting about the bubble and jumping back in, by 1999 the buzz had already started, and by 2000 people were talking “boom” again. In the 99/00 period, the NY times was back to bragging about price application again (there was a 2 year period in the late 90s where there wasn’t a single article that talked about the NJ real estate market).
By 2002, the media was littered with anecdotal stories about the new road to riches.
Okay, who had Cheetah the Chimp in their dead pool?
http://content.usatoday.com/communities/ondeadline/post/2011/12/cheetah-the-chimp-star-of-tarzan-movies-dies-at-age-80/1
Cheetah the Chimp, who appeared in classic Tarzan movies in the early 1930s, has died of kidney failure at the age of 80, WTSP TV reports reports.
The Suncoast Primate Sanctuary in Palm Harbor, Fla., says the community “has lost a dear friend and family member” with the death of Cheetah on Dec. 24.
Sanctuary outreach director Debbie Cobb tells The Tampa Tribune that the chimp was outgoing, loved finger-painting and liked to see people laugh.
Cobb says Cheetah came to the sanctuary from the estate of Johnny Weissmuller, former American Olympic gold medal swimmer who played Tarzan in the 1930s.
Cheetan played Tarzan’s comic sidekick from 1932 to 1934, the sanctuary tells WTSP.
snip
For reference, from a nominal pricing perspective (actual prices, not adjusted for inflation) the “bottom” was hit in ’91.
Took the “buyers” 7 years to realize it.
Freedy 12 That’s why Mr. Zandi the economist says it’s a good time to buy, there’s 580 people from Morgan Stanley in the metro area that will not be competing for that single family home and maybe putting theirs up for grabs , sprucing up the inventory. If the employees of MS are lucky they’ll have a spouse working at Sears or Kmart helping with bills. Buy now or be priced out forever.
grim,
If I showed you mid-90s pricing in haughty BC towns, you would literally shit yourself.
In 1995, my brother bought a 4/2.5 expanded cape in Glen Rock for (drum roll) $235,000. In 2001 he sold it for $470,000. The insanity was already underway. I was standing on lines to get into open houses as early as 2000. Houses were being listed in the morning and multiple offers were being submitted in the afternoon.
Single-family homes in Bergen County sold for a median $380,000 during the month, down 14.4 percent from a year earlier, while the number of sales dropped 3.3 percent.
Dear sellers, put down the pancake syrup and write this sentence above 500 times.
“Because of that decline, single-family housing is really quite affordable by historical standards in most markets.”
Uh, well, if one only considers the bubble years as one’s historical standard and ignores the role of taxes on affordability calculations, maybe; however, the prices are still out of wack with the long-term trend line. If one then consideres the effect of taxes, this solvent citizen fails to see RE in most places in the NJ area as “quite affordable.”
Shore [19],
Exactly.
Before heading off to the salt mine, how long do people think it would take the US Navy to dispatch the technological “marvel” that is the Iranian Navy?
http://nationalpostnews.files.wordpress.com/2011/12/iran5.jpg?w=620
Interesting part of most of NJ is assessed values. In Nassau county they re-assess home values every year using an independent outside third party. You can see grieve but must be based on some form of evidence. The Grieve Process is managed once again by an independent outside third party. So two separate outside parties. If both fail in their assessment you can still grieve to town directly or a court.
Jersey is carzy. Most towns rarely re-assess. Which means underassessed homes stay underassessed as home owner ain’t going to mention it. Over assessed home owners will grieve. But grieving process is a joke, friend did it in NJ and assessor was just some lady who lived in nieghborhood, busy body was like going to my friends comps, oh year he got transferred and home was messy, that was estate sale, that houses had a bad location and bad taxes, she picked on every comp he used then she pulled a slightly lower number out of thin air and said take it or leave it.
If we have a correction in home values that goes on for another 2-3 years NJ homes are going to be wildly out of assessment. You will be overwhelmed with grievances and class action law suits.
Here you go John:
http://www.msnbc.msn.com/id/45753034/ns/us_news-life/
From the “peace on Earth and goodwill towards man — except THOSE, over ther there” files:
http://content.usatoday.com/communities/ondeadline/post/2011/12/clerics-clash-in-bethlehem-brawl-at-jesus-birthplace/1
Up to 100 Greek Orthodox and Armenian Apostolic priests and monks swinging brooms clashed inside the Church of Nativity today in Bethlehem in a frenzied turf battle, the Associated Press reports.
snip
NEW YORK (AP) — Of the 1,600 job cuts announced earlier this month by Morgan Stanley, 580 will be at its home base in New York.
The relentless tug of the dismal economy is hitting employees in the banking sector hard, and it’s no surprise that many of the job cuts are hitting the epicenter of the financial industry.
Thank goodness we’re insulated. :o
Grim
In 1995 when I was building I had a general contractor tell me he would forgo his fee just to keep his subs working. Meanwhile the subs were submitting bids to me with the labor at minimum wage. I bought the materials myself, I would price something then go to Home Depot who said they would beat any competitor by 10%. Things were that bad.
19 – Agree, many measures of affordability don’t take into account property taxes as a factor, however the NAHB/Wells Fargo HOI does take into account estimates by MSA, which is about as close as we could hope for.
For the New York-White Plains-Wayne, NY-NJ MSA, we’ve got the following.
1991 – Post bubble pricing low, hits 12.6
1994 – Recovers back to the 40s
1996 to 2001 – Affordability 40 and higher, peaks at 66 in 1998
2001 to 2005 – Affordability falls from 50+ in 2001 to single digits in 2005
2006 – Affordability hits a low of 5.1
2009 – Affordability returns to the 20’s
2011 – Affordability ranging from 23.3 to 25.5
Just for context, press release from the NAHB:
As More Markets Stabilize, Housing Affordability Nears Record Levels for 10th Consecutive Quarter
New York-White Plains-Wayne, N.Y.-N.J., led the nation as the least affordable major housing market during the third quarter of 2011. In New York, 23.3 percent of all homes sold during the quarter were affordable to those earning the area’s median income of $67,400. The New York metropolitan division has held the least affordable market position for the last 14 quarters.
Also, are the overall changes in housing stock size (read: larger houses) going to make returning to prior affordability levels more difficult, simply because the relative value of the housing stock is higher?
I have a question.
re: “History sometimes Rhymes”
Few things to consider Grim. Are we really talking about the lag period between bubbles are we not?
Unemployment, underemployment and wages back in the mid 1990s.
Who was buying a house on $7 an hour? Back in 96 just over four million workers who were employed part-time said that they wanted to work full-time but could not find full-time jobs. 10 million worked full-time year-round but for less than $7.00 an hour. These two groups of workers, all of them counted as employed, amount to twice the seven million workers who held no job and were classified as unemployed. Together they total 21 million workers, not seven million as generally reported in BLS stats.
The Dot Com bubble from 1995–2000
1) Created immense demand (arguably artificial)
2) Created wage inflation and millions of new jobs. Entry-level staffers were paid unrealistically high salaries during the original dot-com bubble, when over-funded companies were desperate to hire any warm body that walked in the door. Experienced staffers were also paid much more during the bubble.
The dot com bubble created artificial demand and wage inflation.
The housing bubble created similar artificial demand as well as wage inflation.
Are we in a lag period like 1992-1999? Are we hitting bottom now waiting for the NEXT BUBBLE to drive demand?
The New York metropolitan division has held the least affordable market position for the last 14 quarters.
Realtors, you are advising your sellers in regards to the property tax factor, correct? You are explaining that we’re an anomaly here in Northern NJ and that property taxes will continue to drive down prices substantially. Right? Right? Right?
Also the key to it all?
Unemployment
U-3 8.6%
U-6 15.6%
Unofficial 22.5%
25 – Management has figured out how to outsource all those back-office and analyst jobs to computers located in data centers in Clifton, NJ (Northern NJ being the new center of the data center universe, turns out all those vacant offices and warehouses are useful for something, too bad these don’t come with jobs).
grim [34],
I’m well aware of it. Pretty f*cking sadistic in a way, isn’t it?
NEW YORK (AP) — Of the 1,600 job cuts announced earlier this month by Morgan Stanley, 580 will be at its home base in New York.
The relentless tug of the dismal economy is hitting employees in the banking sector hard, and it’s no surprise that many of the job cuts are hitting the epicenter of the financial industry. Citigroup, with its headquarters a seven-minute drive up Park Ave. from Morgan Stanley in Manhattan, said recently that it would eliminate 4,500 jobs, or about 1.5 percent of its global work force of 267,000, over the next few quarters.
But jobs are being slashed by banks almost everywhere.
In September, Bank of America Corp., based in Charlotte, N.C., said it would cut 30,000 jobs over the next few years. Swiss lender UBS is downsizing its investment bank to 16,000 people from the current 18,000 as it reduces its exposure to risk.
Morgan Stanley disclosed in a filing with the Labor Department on Wednesday that the cuts will be made at four New York locations: 1221 Ave. of the Americas, 1 New York Plaza, 1585 Broadway and 750 Seventh Ave.
The investment bank said that the layoffs — which began two weeks ago and will represent 2.6 percent of its work force — will hit all levels of the company and would go on through the first three months of next year.
Morgan Stanley had more than 62,000 employees at September’s end.
The .dot com bubble helped out a lot of really good workers long term. Maybe a college educated worker hard worker who graduated college between 1987 and 1995 were stuck in dead end jobs with low pay increases with no chance of promotion as no one was expanding, new jobs were not being created and no one was making money. When I look at SS statements from 1989-1998 it is sad how little annual raises were.
Folks like me were in great demand from 1998 to 2001 and from 2003-2007. Old enough to have good experience, young enough to be promoted. The good ones held onto those raises and promotions and are still enjoying the fruits of the dot.com bubble. The HS dropout mortgage brokers or dot .com back office staff workers got flushed out.
1999, 2000, 2001, 2004, 2005, 2006, 2007 I got the largest raises/promotions in my career. Guess what me and nearly all my friends still have them, everyyear for the rest of my life. The peak of the dot come era I got a 26% raise one year. On flip side folks who were investing the max in the 401k in 2002, 2003, 2009,2010 got to see some gains in their account quickly.
Who got screwed, I know people who got let go in 2002 and in 2008. They lost their big raises and promos and got knocked down income ladder and 401Ks suffered as when stocks were cheap in 2002/2003 and 2009 they were out of work. They only every buy stocks in 401K high cause in recessions they are marginal employees who get let go.
“Uh, well, if one only considers the bubble years as one’s historical standard and ignores the role of taxes on affordability calculations, maybe; however, the prices are still out of wack with the long-term trend line.”
– exactly. wish I could look at the macro snapshot of mid nineties (median income/avg prop taxes, CPI) and come up with a % of income spent on housing, then comp it to today at the “bottom” prices. This also solvent fellow would wager a buck they are not close. In 1995, i was a freshman in college in NYC, and could find a way to eat pretty ok on $25-30 a week (thank you Koronet’s). Today, that would last me 2 days eating at McDonalds. Point is, we all know and need to often be reminded that housing like gravity will always trend to being reflective of a society’s overall income level after necessities have been accounted for. Just not seeing the foundation of a bottom yet, and can easily see the story play out with another massive step down. Seriously, where is the blood (yet)? Squatters, postponed M2M accounting…
The bubble should have never existed in the first place. It was not a reflection of income, but a temporary manipulated shock. I’m with SG and will lean towards a 100 year trendline first.
31 – From the NY Times: Technology Footprint: Starting Up in New York
An analysis of public records shows that more than 400 technology start-ups in New York City have raised money from investors in the last two years. The vast majority of these companies have landed in Midtown South, within blocks of venture capital investors and veteran start-ups. The area’s affordable rent and popular restaurants and bars are a big draw. Many of the companies are working to use technology to reshape the city’s established industries, like retail, finance, health care and entertainment.
In 1995, i was a freshman in college in NYC, and could find a way to eat pretty ok on $25-30 a week (thank you Koronet’s). Today, that would last me 2 days eating at McDonalds. Point is, we all know and need to often be reminded that housing like gravity will always trend to being reflective of a society’s overall income level after necessities have been accounted for.
So why is it that food doesn’t need to return to historical trendlines, but housing does? Food bubble too? Arguable that food should be linked to incomes even more tightly than housing, so why hasn’t the price of a Big Mac fallen?
The bubble should have never existed in the first place. It was not a reflection of income, but a temporary manipulated shock.
Looking back at recent history, the bubble/bust cycle in real estate appears to be the norm, and not an anomaly at all. In fact, it is the “normal market” that might be the myth here. We’ve been in a bubble/bust mode since what, at least the mid-70s?
You know, back in the good ol’ days when we all walked 7 miles to school, in the snow, barefoot. Times were better back then.
re: #25 – Banks typically will lay off people before Christmas and the bonus pay day, however it is not your momma’s recession since this is the 4th year in a row of layoffs for most of the big banks and they are expecting to shed another 10k jobs in NY alone and 200k worldwide.
Perhaps it is time to consider taking that job in Singapore or Hong Kong or Brazil?
BearsFan [38],
Common sense prevails, for some. No asset has ever failed to revert to the mean and it never will. We’re in the middle of the 5th inning.
Grim,
1) Is food an asset or commodity? 2) Did our food bill double in price in the span of 7 years like houses? Just asking.
Shiller not optimistic:
http://www.youtube.com/watch?feature=player_embedded&v=Psx3rhX3euc
The biggest inflation in NYC for young singles I would say is drinks, cover charges, cost of dates and Hampton shares. In 1992 although I was broke. I could always find a decent place with no cover, or a cheap cover charge and places with $2 dollar pints. Also could find $700 dollar half shares in Hamptons that included all three holiday weekends.
$25 dollar cover charges, $14 Martinis and $5,000 Hampton shares really crimp a singles night life more than cans of tuna going from $2 bucks to $4 bucks.
Think about a 50 something guy who used to buy a home as a trade up which was a great investment and he could borrow against it and save on taxes. Well that does not happen anymore. Today he can put 24K in 401K, 10K a year in IBonds for Kids to pay for tuition and interest is tax free, 10K in 529, 5k in flex spending for kids and can buy muni bonds. Most 50 something with kids soon to college has plenty of ways to save and plenty of tax deductions without a house. Home prices must rise greater than inflation every year to make sense even with tax breaks. Until then no guy is looking to trade up at 50 with three kids going to college in a few years ago. In 1999 the opposite was true, he would be nuts not to trade up as mortgages were 7% and homes were rising 20% a year and he had leverage to boot. Leverage works both ways people now realize.
re: Predictions for 2012
I am working on mine for housing.
Grim Mentioned “Lots of chatter lately about the Obama administration putting together a program to facilitate large-scale REO sales to mega-investors.”
Grim , yeah a fire sale for the arsonists. Already happening in Europe. Banks in Europe cannot raise cash by issuing new shares since their stock prices are too low so they are having a fire sale of sorts about 3 trillion in assets to divest. Problem here in the USA is the assets the banks hold in the US namely the 1.6 million shadow REO homes are tied to MERS and MBS lawsuits. Attached to that whole mess is the stalled settlement with the AGs of all 50 states. Bankers are soon to face prosecution or a settlement in 2012, so that is a good prediction to make. O wants to win re-election, I gather O will reach out to Bernake since Congress won’t budge. How about a Fed prediction. Who is to say Bernake won’t buy them all out? His doing so prevents the fire sale of the assets and the deflation of the assets prices.
There are also still 11 million additional underwater homes with a trillion in negative equity. What % the rest of the underwater homeowners will begin to stop paying their mortgage? From my last vacation trip I learned of three new families that experienced layoffs, current on mortgage but no job prospect in sight.
Mark to infinity on the Feds balance sheet? Is that the solution? The new Bubble?
Grim,
The biggest cost driver in food is noit the food itself but fuel and transportation costs.
not, even friggern android “noit”
There are also still 11 million additional underwater homes with a trillion in negative equity. What % the rest of the underwater homeowners will begin to stop paying their mortgage?
Owners no longer need to “walk away” from an underwater property to make themselves whole again, they can simply stop paying the mortgage and remain in the property for 2 to 3 years without paying for the use it. I’d wager that most families can dramatically improve their own balance sheets by simply redirecting those mortgage payments towards alternate debt service or savings.
In this scenario, does the percentage of underwater properties really matter at all? In another year, we’re going to hear of people being in properties for 4 years, or even 5, without making a single payment. Just playing a numbers game, $2,500 a month means they’ll be freeing up $120k in 4 years. That’ll pay back their down payments, service a ton of credit card, he/loc, auto debt, etc.
Not to mention that those properties never hit the market as available inventory, even though we keep pointing to them as shadow.
5 years later, the banks dispose in bulk, and the “owners” get the choice to stay and rent their properties, for what will likely be pennies compared to their old mortgage rates.
Win win win for everyone but you.
50 – that is somewhat of a nightmare scenario for me.
The dot com bubble actually contributed to the housing bubble. Not everyone lost their shirts, plenty cashed in on time. I was actively looking to add to my holdings in 2000-2001 and rental and flip market was being flooded by those same as@holes who smoked cigars and talked loudly about the next IPO at your neighbor’s party back in 1999. Funny watching their properties deteriorate in just two years and watch them scratching their heads in disbelief in front of their rental while I was doing the weekly yard work, etc.
grim, I cited the cost of food as part of a relative relationship to income. People have to eat. They don’t have to buy houses (but they do need shelter, yes). The point I was trying to make was that housing prices will be a relative reflection of income. If wages are flat (which is why I said I would love to see a median income chart/avg prop tax chart) and comp that to today. If people are spending a larger majority of their income on food and cost to own, and their wages are flat/declining, what would be the catalyst for a bottom to emerge. I know you have not suggested prices will rebound, but I do think you are hinting that they are bottoming.
Inflation and stagflation are not the same thing.
re # 50- Grim “Win win win for everyone but you.”
Grim I disagree. Kicking the can another 5 years did nothing for the asset prices in Japan. They have been kicking the can for more than 20 years now and the assets prices continue to decline.
Barry Ritholtz did a simple chart recently on US vs Japan housing indexes.
http://www.ritholtz.com/blog/2011/12/us-housing-prices-mirror-japan%E2%80%99s-experience/
and I wouldn’t consider the last 10 years on this chart to be the norm. the 70’s and 90’s booms you referenced look nothing like the very large one at the end…just sayin’
http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/
BearsFan [55],
That chart is the bible. Nothing else required.
grim: I think today is the most posting I’ve seen from you in a single morning for at least 3 or 4 years. You usually set the thread up in the morning and leave it on autopilot……good to see you active here…..
52 – I’d say the dot com bubble had 3 distinct impacts on the housing market
1. During the run-up, folks made money, wealth increased, some of that was driven into housing, triggering the early stages of the run up (this (synergistically) adding to the impact that came from the recovery from the 80s recession, which made the 90s one of the longest periods of uninterrupted growth in the US economy).
2. Post-collapse, most retail investors (read: the entire US population) had such a distaste for equities and the financial markets in general, they herded into alternative asset classes, namely real estate, which didn’t so much as blip during the dot come blowout. If #1 was the spark, this was the gasoline.
3. Longer-term impact is that there was indeed something to this internet thing, although the timelines were significantly longer than anyone anticipated. Not everyone went back to flipping burgers, there has been some serious economic growth here.
ChiFi,
Peyton Manning to the Jets, goodbye Sanchez. Besides, brother Eli (ahem… all pro QB) is here.
55 – That’s because the chart is tracking national real estate prices. The “nationalization” of the housing market is a relatively recent phenomenon (Other than massive economic events through history: Great depression, war, etc). Previously, the boom and bust cycles were largely local in nature. Farmland booms, oil booms, various local land booms (Florida in the 1920s is a well documented case), and booms and busts associated with regional industrialization/economies. From a purely statistical perspective, these local booms would largely be muted in any kind of national statistic.
Brunell is retiring, the Jets need a new back-up QB. Unlike Luck, Sanchez is shakey. Payten if he backs up Sanchez he can easily steal job from him within a few weeks. Plus Sanchez might stay anyone and learn from Payton as a back up for a year, Payton is supergreat and may have a superbowl left in him. But he is old with a bad neck. One monster hit he is done.
Payton Manning/Elie Manning in 2014 Superbowl in NJ in a Jets vs. Giants game, UD seats starting at 10K a ticket.
Tokyo gary says:
December 28, 2011 at 11:38 am
ChiFi,
Peyton Manning to the Jets, goodbye Sanchez. Besides, brother Eli (ahem… all pro QB) is here.
Grim,
The only difference now is that no one has any cash to have to worry about. Yay, cause that was a headache…
re: dot com bubble impacts “there was indeed something to this internet thing.”
About 12 years ago the talking heads were predicting the death of brick and mortar and here we are today online retail sales are only 7% of retail purchases.
Perhaps a dot com 3.0 will save us by createing millions of new jobs virtualizing online sales so companies like Home Dept can sell tens of millions of appliances on the internet?
In 1995, my family was loaded up on Class A office buildings that we purchased during RTC for a song (all in Memphis area). Our vacancy rate was close to 0, and we were basically charging whatever we wanted, everything triple net.
Those were the days.
We sold off the entire portfolio, beginning in 2004. My dad died shortly thereafter, and his former business partner bought my dad’s interest in their shared office building shortly after his death.
My dad’s former partner is now in bankruptcy, with roughly 40mm in liabilities over assets. Still has 100 luxury building lots ready to go in a ritzy suburb, but no takers at any price.
Home depot can sell virtual stoves on-line to Simms Characters.
Please send me your home address so I can pass it on to Occupy Wall Street.
There Went Meat says:
December 28, 2011 at 11:51 am
In 1995, my family was loaded up on Class A office buildings that we purchased during RTC for a song (all in Memphis area). Our vacancy rate was close to 0, and we were basically charging whatever we wanted, everything triple net.
Those were the days.
We sold off the entire portfolio, beginning in 2004. My dad died shortly thereafter, and his former business partner bought my dad’s interest in their shared office building shortly after his death.
My dad’s former partner is now in bankruptcy, with roughly 40mm in liabilities over assets. Still has 100 luxury building lots ready to go in a ritzy suburb, but no takers at any price.
We’re at about 1000 homes sold in Northern NJ with a closing price of over a million so far this year. The 400 or so in Bergen come to $679 million, a pretty good chunk. Somebody’s got the cash, it’s just not me.
Just for some anecdotal perspective, the property I bought in 1999 was bought by the previous owner in 1989. I paid what he paid.
juice (31)-
The only bubble left is the one in fiat paper. We already see how this one is going to end (in tears).
Bernank and his crew of cranks has basically tried every trick in the book to spark any kind of bubble…in any kind of asset. So far, their pop guns haven’t worked. Nor will they work.
No more bubbles. Only tears.
Peyton should hang it up. A paralyzed Peyton Manning would not be good for the NFL, no matter how big his ego is. I know two people that had minimally invasive spinal fusion surgery, neither one would be willing or able to take a hit from a Lawrence Timmons or Ray Lewis no matter how much they are getting paid.
Just one more data point from Bergen (since I’m logged into NJMLS right now).
Total of 6221 sales (SFH, Townhouse/Condo, 2-4 Family) so far this year with a total market value of $3.1 billion.
re # 69 – Bubble machine is broken but only for a while. Banks are busy with recapitalization. Once they are well then that money needs to go somewhere. Money sloshes around the world, always has and always will.
grim [71],
Is that good? What’s that data compared to? This time last year was the same? How about that data compared to same period in 2005 or 2006?
re: 67 Grim Cash? – vulture funds plucking the bones?
Here are last years predictions
https://njrereport.com/index.php/2010/12/28/predictions-2011/
I agree, two years ago Elie was playing in a meaningless Jet Preseason game and you have the rookies amped up trying to make the team treating it like the superbowl. Ellie got pounded in head so hard by a nobody he walked by me in a complete daze bleeding from his head. If that was payton taking that hit he would be in a wheelchair. Sanchez sucks, but honsestly Jets O line lets him get sacked way too much but for most of season he was only 23 years old. Payton is an old man next to 23 if he was on Jets he would be getting sacked a lot too, his neck can’t handle it. But to be honest if he is cut and jets are stupid enough to give him a few million bucks to back up sanchez and to play occassionally and he can play in same stadium as brother and his brothers family lives nearby why not. It is selling out his legacy somewhat but easy money. I rather do that than be second fiddle in my own stadium to a 21 year old.
Juice Box says:
December 28, 2011 at 11:56 am
Peyton should hang it up. A paralyzed Peyton Manning would not be good for the NFL, no matter how big his ego is. I know two people that had minimally invasive spinal fusion surgery, neither one would be willing or able to take a hit from a Lawrence Timmons or Ray Lewis no matter how much they are getting paid.
box (72)-
Only problem is, banksters are “recapitalizing” out of my pocket (and yours).
This should have some interesting knock-on effects as we move forward.
73 – No, it sucks, but it’s still $3 billion dollars of spend on real estate in a single county in NJ. Clearly, we’re not talking about Armageddon here.
For reference, peak dollars for Bergen County were around $6 billion in 2006. We were below $2 billion in 1995, at $2.4 billion in 1997, and $3 billion in 2000.
…the Case-Shiller NYXR for Oct 2011 is 165.
The NYXR average since 1987 is 122 (range 74-215).
The last time it hit 165-ish was in 2004 (on way up).
Married with this chart, which for arguments sake is not subject to being localized:
http://www.mortgagenewsdaily.com/mortgage_rates/charts.asp
i think we’re running out of road…true “growth” or faux credit fueled..?
changing gears…been hearing a lot of Jets fans beating on Sanchez lately. I don’t think he is the problem, and I would suggest that would become evident when Schottenheimer is hopefully gone. Having Holmes and Burress and not stretching the field more with Holmes is unacceptable, and I don’t think it’s the QBs fault. D Mason should be the light that goes off that something isn’t right there. Sanchez’s head is screwed up right now. The kid has “it”. He’ll be fine. Schottenheimer has to go.
Take away the expansion of credit…put the economy on a cash basis…doom is nigh.
We’re re-living 1929, with a better social safety net.
1 in 6 Amerikans on food stamps. Without that and some other soci@l programs, we’ve got millions of Tom Joads, aimlessly heading west in their breaking-down Dodge minivans.
The number of people on food assistance in my county (Hunterdon, richest in the US by median family income) has doubled in one year.
Meat [82],
Yeah, but they still have granite, stainless and tumbled marble backsplash.
Granite makes the government cheese taste better.
I am amazed that Ron Paul has the lead in Iowa. Have to figure that the average Rethuglican voter there is better-equipped than the average dope to handle the fallout from what would transpire should he actually get elected.
I attended this function and heard quite a bit about this issue…..
http://cen.cornell.edu/index.cfm/events.details?eventID=583®ionID=0&srchType=past
First the Tech VC’s have open lines of credit and hoards of investor money to put to use thanks to Bernanke. Basically funding everything with a pulse. However, there is basically no tech talent in NYC, so despite all the stuff you hear, a good number of companies have little interest in putting down roots. This issue is the whole point of Bloomberg’s Cornell Tech Campus. There is a further issue, which is most Tech Start-Ups is CA & Boston have the attitude….here’s my great idea..my vision…give me money for my pie in the sky…..in NYC, most tech start-ups are backward looking with the Bloomberg Information Services being the prototype. There is a major need in the NYC financial services sector, and basically someone creates a service that fulfills that need. The company then gets built out on the back on one or two core clients.
grim says:
December 28, 2011 at 10:09 am
31 – From the NY Times: Technology Footprint: Starting Up in New York
An analysis of public records shows that more than 400 technology start-ups in New York City have raised money from investors in the last two years. The vast majority of these companies have landed in Midtown South, within blocks of venture capital investors and veteran start-ups. The area’s affordable rent and popular restaurants and bars are a big draw. Many of the companies are working to use technology to reshape the city’s established industries, like retail, finance, health care and entertainment.
Granite and stainless are all great…until the vandals rip it out.
Personally, I’d rather have Pennington back up Sanchez…..everyone loves that guy and it is EXACTLY what you need to get Sanchez off the mat if that is possible…..he is one of the favs once you go a notch below the Namath, Klecko, Chrebet, Martin level…
JJ says:
December 28, 2011 at 11:46 am
Brunell is retiring, the Jets need a new back-up QB. Unlike Luck, Sanchez is shakey. Payten if he backs up Sanchez he can easily steal job from him within a few weeks. Plus Sanchez might stay anyone and learn from Payton as a back up for a year, Payton is supergreat and may have a superbowl left in him. But he is old with a bad neck. One monster hit he is done.
Payton Manning/Elie Manning in 2014 Superbowl in NJ in a Jets vs. Giants game, UD seats starting at 10K a ticket.
Tokyo gary says:
December 28, 2011 at 11:38 am
ChiFi,
Peyton Manning to the Jets, goodbye Sanchez. Besides, brother Eli (ahem… all pro QB) is here.
Hunterdon also has the most expenses. My friend lives there and his town is on average 100K income. Sounds good. Sounds good but his area is 3 acre zoning with 18K on average property tax. Plus everything is far away. They drive like 30K miles a year on their two cars, heating, lawn, snow maint on the big house plus expensive bus ticket to city. Plus NJ has high property taxes.
Last time I had an household income of 100K I was a newlywed in a coop in queens, no heat bill, no gas bill, no maint, total monthly cost for unit including property tax, was $701 a month and we walked to train and had a Camry we were putting 2k miles a year on.
Hunterdon is an expensive remote place to live in. Even with no mortgage it is expensive.
100K in 2011 if you take subway to work from your 1K a month apt in Queens is pretty good money. 100K running a 3 acre house with 18k in taxes and two cars in Hunterdom you need food stamps to survive.
There Went Meat says:
December 28, 2011 at 12:37 pm
The number of people on food assistance in my county (Hunterdon, richest in the US by median family income) has doubled in one year.
Do you go to games ever? we got to meet up in green room next year at game and hang out with the other pseudo celebs like us.
At jets/chiefs game the wife of coach of chiefs was sitting in seat next to my seats. Now that is a pseudo celeb.
chicagofinance says:
December 28, 2011 at 12:59 pm
Personally, I’d rather have Pennington back up Sanchez…..everyone loves that guy and it is EXACTLY what you need to get Sanchez off the mat if that is possible…..he is one of the favs once you go a notch below the Namath, Klecko, Chrebet, Martin level…
Chip – How much of the increase in Hunterdon food stamps isn’t so much due to an increase in poverty, but a decrease in pride?
Because we all know, if Graydon and Ellery’s friends found out their parents got food stamps, they were on FamilyCare, it would be the end for them.
How many of these families have been burning through savings out of pride (or even ignorance of what might be available to them)? Unemployment isn’t a big thing these days, but the leap to food stamps is a pretty big one.
Grim,
The government cheese meme was big in the 80’s. This band was started by the ex-boyfriend of my ex-girlfriend from Smith.
http://www.tommywomack.com/
92. Know the guy. And that crowd pretty well.
grim (91)-
I have no idea. My neighbors are so far away, I can only communicate with them via smoke signals (at least, that’s what jj says).
We all pay 18K in property taxes and require half the propane in Texas to heat our homes, too.
re: #85 – Meat – Don’t believe the Hype.
From the Iowa Corn Growers association. (lobby for subsidies)
Newt Gingrich earned straight A’s on agriculture, energy, trade and other policies. Rick Santorum got an A-minus and President Barrack Obama and Mitt Romney got B’s. Ron Paul and Herman Cain got D’s from the Corn Growers, who based their grades on surveys submitted by candidates and also on media reports of candidates’ quotes and comments on various issues. Michele Bachmann earned a D-plus.
http://www.iowacorn.org/index.cfm?nodeID=33275&audienceID=1
Only thing in texas is steers and $$$$$$ or yea and George Bush
re # 78 – Grim your reference to 1995.
2 Billion in 1995 Dollars is about 3 Billion today. I would think the dollars spent should be somewhat adjusted for inflation no?
Grim [91];
Not Hunterdon, but relevant: Suburban food pantries seeing different clientelle lately.
http://www.businessinsider.com/guess-americas-best-kept-housing-secret-2011-12
I also live in Hunterdon county. Yes, my taxes are, well, er, you guessed it – $18k a year. Could be lower as I paid $6k in 1992. My brother lives in Colts Neck and he pays $30k. Oops. $27k. Appealed it. I don’t mind for my size lot/house. And I GC’ed it. 6″ walls, super insulation,etc. Last heating bill was $170 and that includes gas dryer and stoves. Cutting my lawn is $40 for 2 acres. Plowing 200 ft long driveway is $35. No water bills. No sewer bills. Have room to build 50 solar panels facing south. Now for taxes. it’s all relative. It keeps the riff-Raff out of here. Sure, we spend on gas, having 6 cars/trucks. But, we don’t bother with NYC nor that culture. Not a part of our lifestyle. It’s just a nice place for us to visit.
http://www.bloomberg.com/news/2011-12-28/giants-cowboys-tickets-selling-for-2-500-to-match-nfl-postseason-prices.html
Hunterdom has no sewers, water, no High School, Limited Garbage pick up etc. 18K in taxes. To me that is high regardless of size of house. With those type of services you should be paying 3k a year. Out in hamptons homes in towns with limited services only pay like 3k. Where is money going?
xolepa says:
December 28, 2011 at 2:06 pm
I also live in Hunterdon county. Yes, my taxes are, well, er, you guessed it – $18k a year. Could be lower as I paid $6k in 1992. My brother lives in Colts Neck and he pays $30k. Oops. $27k. Appealed it. I don’t mind for my size lot/house. And I GC’ed it. 6″ walls, super insulation,etc. Last heating bill was $170 and that includes gas dryer and stoves. Cutting my lawn is $40 for 2 acres. Plowing 200 ft long driveway is $35. No water bills. No sewer bills. Have room to build 50 solar panels facing south. Now for taxes. it’s all relative. It keeps the riff-Raff out of here. Sure, we spend on gas, having 6 cars/trucks. But, we don’t bother with NYC nor that culture. Not a part of our lifestyle. It’s just a nice place for us to visit.
Jets should bring back Vinny T. I am sure he still has a decent arm and it’s not like old age could make him any slower than he was when he played.
…and I don’t have to pay tolls unless I go into Pa (some bridges, not many) or NYC. Parkway is avoided as we can take 31S to 195 across state or 295S to 55 to AC/Cape area. Turnpike is avoidable altogether. When I worked at Wall Street area last, took me 5 minutes to local train station, plenty of free parking. Near express to Newark along RV line. From home to Wall Street in 1 1/2 hours. The RV line is not the same though. And on weekends to Holland tunnel is about 50 minutes.
I live in Hunterdon. I have public water and sewer.
The taxes are high, because we support the same lazy bureaucracy, crony network and wasteful spending as every other county in NJ.
Only our county is Rethuglican controlled, so we have to listen to incumbents bleat about how much they’ve saved us every time they’re up for re-election.
My ass is raw from how much the Rethuglicans have saved for me.
It is not the tolls it is the driving that gets expensive and gas out there. I bought my house ten years ago. The majority of neighbors have the same cars from ten years ago. My one neighbor recently did two new cars, but she had an 88 Taurus and a 91 Lumina. My buddies in NJ go through tires, oil, gas, etc and cars quite a lot. For example my friend in Hunterdom has a 2005 car, claims it is falling apart and old. It has 110K miles on it, by contrast I have a 2005 with 20k on it. Those hidden costs add up. For instance on my station car I buy gas six times a year. My friend in NJ on his station car buys gas 52 times a year. This is reason I did not trade up, I can afford house, but main kills. me. Plus I shovel own snow and up to recently mowed my own lawn. Right there is some good money saved. Plus you cant really fix a big house by yourself. Heck I remember one weekend me and my brother borrowed neighbors ladder, Mom gave us some beers and pizza and we painted the whole outside of her house. Another time we changed the windows. We used to go over there and do big projects in a few hours with hand tools. Changing windows on a 1,400 square foot house on a 40×100 plot is easy. Heck I would do my Moms lawn in 15 minutes, sometimes with hand mower to save on gas. Right now I get up 15 minutes early when there is heavy snow to shovel. Just use a plain old shovel. I want a big house and I often curse my small house. But when I do a small project at home and it is over in 15 minutes my wife reminds me if I had a 5,000 square foot house on two acres I would be out there all day I am happy.
xolepa says:
December 28, 2011 at 2:16 pm
…and I don’t have to pay tolls unless I go into Pa (some bridges, not many) or NYC. Parkway is avoided as we can take 31S to 195 across state or 295S to 55 to AC/Cape area. Turnpike is avoidable altogether. When I worked at Wall Street area last, took me 5 minutes to local train station, plenty of free parking. Near express to Newark along RV line. From home to Wall Street in 1 1/2 hours. The RV line is not the same though. And on weekends to Holland tunnel is about 50 minutes.
You rich folk. Being rich is a state of mind. I am dirt poor. My favorite of all time and a true story is I was talking to a guy who personally made 100 million in a single year when he did an IPO of a company he founded and was hired to stay on at 5 million a year refer to the rich folk. He is a down to earth middle class working guy. Lives in a blue collar neighborhood, shops at Kohls and drives an american car. To him middle class is a state of mind, so what if he makes two million a week income that year, he was a middle class guy. You rich folk need to be blue collar like me.
There Went Meat says:
December 28, 2011 at 2:27 pm
I live in Hunterdon. I have public water and sewer.
The taxes are high, because we support the same lazy bureaucracy, crony network and wasteful spending as every other county in NJ.
Only our county is Rethuglican controlled, so we have to listen to incumbents bleat about how much they’ve saved us every time they’re up for re-election.
Sold for $910,000 in July, 2007 and current asking is $749,000; forever on the market. Sell? F*cking sell to whom?
http://www.trulia.com/property/3039377123-131-Miller-Rd-Mahwah-NJ-07430
Gary – It’s got crown molding, that’s the new granite.
re: #100 – JJ I am now seeing an ask of $850 for my row on Stubhub.
I invited a co-worker and his wife to come to the game, unfortunately before I knew I could sell those two seats for 2x or 3x what I paid. He has not paid me for the tickets yet and I am still in possession of all 4.
My choices are
1) Ask him to split difference instead of $275 say pay $550 for $825 seats
2) Stiff him and sell them online for $825
3) Give him tickets for what I paid $275
4) Stiff him, his wife and my wife and go to Scores and invite a stripper?
Decisions Decisions.
gary (108)-
Funny what happens when you discard the assumption of expanding credit to infinity.
I wonder how this number compares to prior years. Or to the inventory currently priced at that level or higher. All the same, rather sobering for someone pricing their middle-class mansion in BC anywhere near a cool three-quarter mil.
http://www.zerohedge.com/news/less-500-new-homes-sold-over-750000-bracket-4th-month-row
grim/meat,
Does crown molding mean I’ll be prestgious? If so, I’ll make an offer. :o
Here ya go… reduced $50,000, 65 years on the market and a f*cking a steal, I tell ya!
http://www.trulia.com/property/3033066920-Single-Family-Home-Mahwah-NJ-07430
Gary [108];
I like how that price dropped from $759k to $749k. I’m sure it was that $10k that disuaded someone from making an offer.
So you should do it right from the beginning. I was fortunate that at that stage of my life when I had time and less obligations, I was able to GC my house. I paid to build the strongest footing, foundations, sticks, windows and insulation. Paid for top of the line (then) HVAC system, oversize pumps, electricals and passive water diversion system. The house has remained solid and has needed only typical low-cost maintenance. Nothing has broken in twenty years, but I keep my fingers crossed. Those savings do add up. On the other hand, I work a lot from home now. Those gas costs are mainly soccer mom style excursions. Each family situation is different, but most of my neighbors are business owners or self-employed professionals. Their businesses are close by.
Moose [112],
Incredible!
Moose [115],
Yes, I have my checkbook and I’m typing this on a blackberry as I run!! I didn’t even want to drive, I had no time to get in the car. I’m running… like Forrest Gump!!
116 – And you’ll never recoup what you put into the house, since nobody cares about 2×6 framing these days. They’ll pay more for chipboard joists, metal studs, 1/2″ engineered flooring and 3/8ths Chinese drywall. Buyers are generally idiots and will pay more attention to paint color and your furniture choices than the actual build quality of the home.
Came across a home similar to yours, incredible construction quality, the owner owned a successful car dealership and spared no expense. Unbelievable construction quality, fantastic home. I tried like hell to pitch it to my client base, because the house was a steal. You wouldn’t be able to build it today for any less than 50% more than he was asking.
No takers. He finally gave up, took it off the market, and decided to say instead of down-sizing.
Reason it didn’t sell (and price wasn’t it). It didn’t have 10′ ceilings on the first floor, a cavernous 3 story entrance with butterfly staircases and a 62 bulb chandelier, walk-in closets in the walk-in closets, 5 bathrooms, vessel sinks, etc.
You have to have a board GTG here, where you can walk to the Hunterpoint Station to take the train home.
http://alewifequeens.wordpress.com/draught-list/
JJ says:
December 28, 2011 at 1:11 pm
Do you go to games ever? we got to meet up in green room next year at game and hang out with the other pseudo celebs like us.
113 – Read it, it’s “CROWN” molding, like a king you’ll be. Now off with you, go claim your rightful throne.
112 – If an area can support a real “new construction” market (think south), chances are that $750k is an enormous amount of money to be spending on a house.
grim,
I need CROWN molding and 10′ ceilings on the first floor, a cavernous 3 story entrance with butterfly staircases and a 62 bulb chandelier, walk-in closets in the walk-in closets, 5 bathrooms and vessel sinks or else I don’t make an offer.
Bottom line if Giants lost last week to Jets and it was pouring rain and Manning was not even starting would he show up and pay you face still? Or would he bail?
If any chance he would bail I would sell. Whole thing is odd. I go with a buddy who picks a game or two at start of season. But I know he will always go. Took him to two games that I could have sold for triple face at face. However, another buddy I cut off, he back-peddled on Dolphin game on me when it looked like Jets were on a losing streak and Dolphins were losing all the games. If you buddy would never stiff you if game was worthless or try to backpeddle take him.
I don’t know why wives are going to that game. It starts at 8:30pm and ends almost at midnight. It is a January game it is going to be freezing out there an then you are not getting home till almost two am. Unless the wifes really love football kind of silly to take them.
BTW Section 134 of stadium upper rows at Jets games anyhow lots of good comp sightings. At Jets/Giants Game Lindsy Lohan and the Guy from Sorpranos were in a high row in section 134. There is a restaurant behind 134 called Green Room they sit in high rows as easy in and out to restaurant and Jets saved seats up there. Dont know about Giants.
Juice Box says:
December 28, 2011 at 2:46 pm
re: #100 – JJ I am now seeing an ask of $850 for my row on Stubhub.
I invited a co-worker and his wife to come to the game, unfortunately before I knew I could sell those two seats for 2x or 3x what I paid. He has not paid me for the tickets yet and I am still in possession of all 4.
My choices are
1) Ask him to split difference instead of $275 say pay $550 for $825 seats
2) Stiff him and sell them online for $825
3) Give him tickets for what I paid $275
4) Stiff him, his wife and my wife and go to Scores and invite a stripper?
Decisions Decisions.
I could do a beer at Hunterpoint easy. I can catch train from there.
chicagofinance says:
December 28, 2011 at 3:03 pm
You have to have a board GTG here, where you can walk to the Hunterpoint Station to take the train home.
http://alewifequeens.wordpress.com/draught-list/
JJ says:
December 28, 2011 at 1:11 pm
Do you go to games ever? we got to meet up in green room next year at game and hang out with the other pseudo celebs like us.
#119 – Grim -re:
” It didn’t have 10′ ceilings on the first floor, a cavernous 3 story entrance with butterfly staircases and a 62 bulb chandelier, walk-in closets in the walk-in closets, 5 bathrooms, vessel sinks, etc.”
Sounds like one of my nightmares from a few years back, except you forgot to include the lady of the manor and her dog.
http://www.nytimes.com/imagepages/2009/05/27/garden/28house.1.ready.html
I’ve actually set up a condo-of-sorts under the raised flooring in the data center I’ve been enslaved, err, employed at. See, this way I have JJ beat, I don’t actually have to pay for housing, or even commute. I just pull up a floor tile, and slither away down into my abode for the evening. I’ve got a door man (I just tell him I’m working late again), and 24 hour amenities (snack machine). I’ve got everything I need.. A soft pillow on which to lay my head, and a floor grate to urinate in (took a while to learn how to pee lying sideways under the tiles).
Piker – I bet there aren’t even 40 lights in that foyer.
167 – lmao !
Grim,
Those 2x6s were not for the next buyer. They were for me. I assumed that house was to last my working years and the additional comfort added by spending the extra $ up front was well worth it. No noises, wind blows hard and I don’t even feel it. Rains real hard, not a drop inside anywhere. No sump pumps needed. We didn’t add frivolous trappings. And as to cost, that house cost me $65 psf to build. Lot cost not included, but did include price of well and septic. It helps when you know what it takes to build a home from scratch. My ceiling heights aren’t that either. And that doesn’t matter anyway. What matters as to how much you can get from a house is whether you sell it in an up or down market. I bought and built at the nadir. I do see now that I have to wait longer than expected to sell in an up market, whenever, that reappears.
Good move, with gold prices crashing makes sense. If I was single I could see me sleeping in my office now and then. I have my own office, door locks and the gym is right nearby. Bruce Willis in Moonlighting would often sleep in his office, but then again he had a bathroom in his office. Sometimes on weekends I stop by with family so they have a place to hang out for a bit. Come to think of it my office has a doorman an my corner office has a high floor water view.
grim says:
December 28, 2011 at 3:22 pm
I’ve actually set up a condo-of-sorts under the raised flooring in the data center I’ve been enslaved, err, employed at. See, this way I have JJ beat, I don’t actually have to pay for housing, or even commute. I just pull up a floor tile, and slither away down into my abode for the evening. I’ve got a door man (I just tell him I’m working late again), and 24 hour amenities (snack machine). I’ve got everything I need.. A soft pillow on which to lay my head, and a floor grate to urinate in (took a while to learn how to pee lying sideways).
Xeolepa [116];
I saw a nice property that MIGHT have represented a buld from sctratch opportunity, but I blinked.
Among recreational (General Aviation) pilots, you can fly/own/operate certificated aircraft built under close scrutiny of federal regulation — which means that very little in the technology had changed in 50 years or so because what was certified is still certified and few new things ju$tify the co$t of $ertification — or you can go “experimental” which means building from scratch or plans or kits, and also gives the builder/owner/operator a great deal more lattitude in components, etc.
However, building an airplane is an endeavor; an ordeal even. The saying is if you want to build a plane, build an experimental… but if you you want to fly a plane, buy a certficated. I view building a house as much the same. All I want is a comfortable place to plant my family in at a price that isn’t most accurately described as “How much you got?”, not a lengthy and unpredicatable process of building a house.
Gold at $1552. Another stratagem hoisted upon the masses to bilk their money to an even greater degree. Predator bullion “companies” just love to sell the panic while operating on a 30% spread. Now, the sucka who bought in the $1700 range thinking it was a dip-buying opportunity is sitting there with his pants around his ankles applying balm to his bum.
Gary – Retail sales of gold eagles volume month over month down about 20% for the year. Fed said that they will not print, ECB is not willing to print so merry Christmas shorts options expire on the 30th.
If you remember back in 2008 gold crashed 30% in a couple of months. Hedge funds were to blame back then as they were liquidating their office furniture and anything else they could lay their hands on to meet redemptions.
This time around we have the mandated trillion dollar de-leveraging of the Euro Banks. I wonder how much Nazi gold is trading hands over there these last few weeks?
Lucky for me I got my eagles back in 2000 and my paper at 85.
http://finance.yahoo.com/echarts?s=GLD+Interactive#chart2:symbol=gld;range=5y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Go ahead and short the paper if you are confident you won’t get taken to the cleaners or the Central Banks won’t start up the presses in the next quarter.
I do agree that building from scratch is risky for most. If you have just rudimentary knowledge of plumbing. electrical, HVAC, etc., it won’t suffice. You need a combination of many skill sets in your tool box to be able to pull it off. I wouldn’t have even attempted to do it in good years because the subcontractors would have walked off the job first chance they got. My neighbor always said never trust a man with a pickup truck. He was damn right. But since the building conditions, economically, were worse in 1991 than today, I convinced my wife to take the plunge. From the day the bulldozer started clearing the lot to our CO, it took exactly 6 months. It did help when the assistant building inspector in town graduated from a neighboring high school same year as I…..Any GC types on this forum?
Building isn’t a problem at all, go for it, as long as you have time and money. Those are really the only two requirements. Patience helps a bit too.
6 months is aggressive these days, not saying it isn’t possible, but 6 months is a best case scenario for a owner/GC these days. However, for a newbie, it’s not the construction time that is the wildcard, it’s the time from when you close on the lot, until you can start building. Need a variance? Engineering? Good luck getting your permits approved in anything less than a few months. Beginners luck means you’ll get your approvals to start digging in January. Can easily drag out to 12 months or more from closing. Likewise, if you have a demanding job, your husband/wife better be able to get over to the site at a moments notice to deal with problems. Building your own house in 6 months is a full-time job, even if you aren’t swinging a hammer.
Really comes down to money, not very many first timers can simultaneously juggle a rental, while laying out cash for a lot, and juggling the mortgage associated with the construction loan, especially when the timeline can easily approach 12 months or more.
Likewise, new construction scale in NJ needs to be relatively large to be economical for the new owner. You just can’t build a 2.5k square foot new construction home these days. Well, you can, but you’ll take a bath on the resale and be paying out the nose. Buildable lots in decent towns are still going for $300k+ these days. You’ll need to be building something on the order of 4k with a final value approaching a million to hit the cost/square sweet spot. (if you can keep costs low, you’ll end up with a hundred or two in equity once you get your CO). Even though it sounds like a lot of profit, once you start backing out your overhead and carrying costs, as well as your own time (and your spouse), you’ll be lucky to net out positive.
Now for imporant stuff, going to city with wife/kids radio city, rock center FAO Schwartz, Tree, Rink type stuff, where is a good place to go to lunch in the 50s in Manhatan around 5th to 6th avenue to take kids without getting too ripped off, but a nice place.
JJ – Food Hall downstairs of the Plaza.
xolepa [130];
$65 psf
That’s pretty impressive. My mental spitball calculations were twice that before cost overruns, presuming 2.5k-3k sf and good (but not great) finish grades.
(137) JJ,
Last week, wife did same trip and liked Azya (sp?) Wine bar. She went with kids from 8 to 15.
Jason Taylor will reportedly retire after Sunday. But I would not be surprised if the Patriots lured him out of retirement w/ a one year deal sometime in the late spring or early summer.
grim [15]
Back to the 90s: appreciation was almost nil till about 1997-98… We bought in 1991 with 10% down, and refinanced a couple of times through the 1990s as the rates were dropping (back in 1991 it was 9.5%) – but were able to get rid of PMI only in 1998, before this the appraisals had been coming at above 80% LTV.
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