This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing bubble, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From the Long Island Business News:
LI’s economy good, but fragile
Economist Irwin Kellner on Friday said Long Island’s financial outlook is the same as the nation’s: It’s good, but factors that could sour it loom on the horizon.
“We are in a virtuous cycle,” he told members of the Long Island Association at an executive breakfast held at Woodbury’s Crest Hollow Country Club.
…
The housing market, a particularly volatile industry on Long Island, could wreak havoc on our economic status, Kellner said.
“Long Island in one of the real bubble markets,” he said. And the number of unsold homes on Long Island is 86 percent greater than last year. Normally, that number gains 5 percent a year.
“It would take 16-and-a-half months to exhaust inventory, the highest since 1991.”
From the Record:
‘Abandoned’ property can be seized
A two-story Victorian home damaged by a fire more than four years ago. An empty auto shop speckled with graffiti. An unoccupied Main Street bank building.
These are among 27 residential and commercial properties that Hackensack officials have deemed “abandoned” under a new ordinance. If owners don’t fix the properties, the city could end up seizing them.
The ordinance, passed this year, springs from a state law adopted in 2004 that gives municipalities the right to take control of blighted properties. A number of communities in New Jersey have adopted or introduced similar laws, most recently Cherry Hill and Vineland. Hackensack is believed to be the first North Jersey town.
City Attorney Joseph Zisa said municipal officials adopted the ordinance to show they are serious about getting rid of unkempt buildings.
“I feel it gives the city more teeth in acting upon this,” Zisa said.
Critics say the measure infringes on property owners’ rights.
“This is a free country,” declared Peter Tucci, a developer who has two properties that have been deemed abandoned. “If I want to leave it empty, then I should be able to leave it empty. Don’t come on my side of the fence and tell me what to do with my property.”
To be considered abandoned, properties in Hackensack must be unoccupied for six months or more and meet one of several criteria, including being declared a nuisance, in need of rehabilitation or have unpaid taxes.
From the AP:
Treasurer: No new taxes next year, but no new ideas either
The administration of Gov. Jon S. Corzine isn’t considering increasing taxes to resolve a $2 billion budget deficit projected for next fiscal year, the state treasurer said Friday. But he also cautioned the state has no new ideas on how to plug the hole.
“We need lots of innovation,” Treasurer Bradley Abelow told a meeting of the New Jersey Association of Counties.
The budget, slated to be introduced in about three months, will be the second unveiled by Corzine, a Democrat whose first budget came earlier this year amid a projected $4.5 billion budget deficit.
To close that gap, Corzine proposed about $2 billion in tax increases, most notably boosting the sales tax from 6 percent to 7 percent. Democrats who control the Legislature opposed the increases, sparking a weeklong July government shutdown when the state missed a deadline to adopt a budget.
The sales tax increase was approved, but Abelow said the administration isn’t considering tax increases this time.
“We think there’s enough tax pain going on out there and we’re in grave risk of choking the economy,” Abelow said.
He said the projected deficit for next fiscal year, which begins July 1, ranges from $1.5 billion to $2 billion, which he described as “a measure of progress.”
“The bad news is we used up all of our good ideas,” Abelow said.
Just a little story about my housing search. I’m not willing to buy until at the soonest next fall. I’ve been going occassionally to open homes or check out properties that look nice. My broker came back to me on one property that I saw three weeks ago. It was a nice Tudor except it was smallish (3 BR), on a somewhat busy street and it was right next to the parking lot by the train station. They bought the house 10 years ago. I remember this house being for sale in the summer/spring 2006 and looks like they’ve relisted and come down in price by 10%. The house next door sold for their original asking price + 50k and it’s almost similar in size except w/ 10% bigger lot. They said the owner has moved and would love to see us put in an offer. When we went their was a total of 3 broker business cards left behind, our broker, their broker and another broker. They won’t be getting a bid from us. Too bad for the guy next door and good luck to this person selling.
http://www.weichert.com/search/realestate/PropertyListing.aspx?P=7805721&countyid=34280&ptypeid=32&maxpr=400&minbr=2&minba=3&pg=7
This “townhome” Looks exactly like my apartment. My rent is 1200$/month….
What are some of the best up and coming towns with easy access to “The City”? The Kid needs to find a nice town. Top 5 will do.
The Kid
What a day for the 10Y.
jb
From Bloomberg:
Sub-Prime Mortgage Derivatives Fall as Lenders Fail
Sub-prime mortgage bonds had their worst week of the year on concern about the failure of two lenders, the slowing housing market and the ability of borrowers to repay the loans, derivatives based on the securities suggest.
Credit-default swaps based on an index of bonds rated BBB- and consisting of sub-prime mortgages made this year fell 2.3 percent, to 95.50 today, according to Deutsche Bank AG. Credit- default swaps are financial instruments based on bonds and loans that are used to speculate on the odds the debt will be repaid.
Traders reacted after two sub-prime lenders, Agoura Hills, California-based Ownit Mortgage Solutions Inc. and Sebring Capital Partners LP of Carrollton, Texas, closed this week, said Andrew Chow, who manages $5.5 billion of asset-backed bonds and credit derivatives at Seneca Capital Management in San Francisco.
“The information that has been released about the state of the U.S. mortgage market is not dramatically different than it was one month ago, two month ago or three months ago,” said Paul Ullman, chief executive officer of Highland Financial Corp., a New York hedge fund specializing in mortgage bonds and managing about $1 billion. “What is different is the state of the industry.”
…
Defaults on adjustable-rate mortgages made this year to the riskiest borrowers and packaged into bonds surged 25 percent last month to the highest level for new loans in five years, Friedman Billings Ramsey Group Inc. said in Nov. 17 report.
The percentage of sub-prime loans delinquent by 90 days or more, in foreclosure or turned into repossessed properties rose to 2.52 percent in October from 2.01 percent in the prior month, the Arlington, Virginia-based investment bank said Nov. 17. The rate for loans from last year gained 9.7 percent to 5.79 percent, the worst performance of any year’s loans at same age since 2002.
This year “is turning out to be a doozy of a year” in terms of sub-prime loan quality and “slowing home prices are no longer allowing borrowers to hide behind the covers of a rising housing market,” Gyan Sinha, a senior managing director at Bear Stearns Cos. in New York, wrote in a Dec. 6 report.
…
There is a risk that sub-prime loans from this year will experience higher cumulative losses than the 2000 vintage, the worst-performing ever, which as of today are around 5.5 percent, Michael Youngblood, an analyst at Friedman Billings, said at a conference on Nov. 28. Poised to hurt the loans are weakening California job markets and the extent of “payment shocks” when the loans’ rates begin to adjust, he said.
With concerns rising in recent months, investors have discriminated more among different issuers, “a long overdue change in behavior,” Youngblood said in an interview today.
some good news from the NYT:
“The average hourly wage for workers below management level — everyone from school bus drivers to stockbrokers — rose 2.8 percent from October 2005 to October of this year, after being adjusted for inflation, according to the Bureau of Labor Statistics. Only a year ago, it was falling by 1.5 percent.”
the secondary market needs to feel real pain for credit to dry up. sounds like next year is going to be a disaster for MBS
CH914 ,
Is that data for NY or NJ?
someone made an interesting post over at CR that the reason housing turned is because the consumer finally tapped out (you usually hear the reverse–consumers will be tapped when housing stops appreciating).
seems to me this fits with our monthly payment plan culture. I know there’s been a lot of MEW, but it’s hard to believe that there are legions of people out there who make their everyday buying decisions based on the relative value of their homes. the survey that came out this week that showed 2/3 people don’t take their home values into account for most purchases would seem to confirm this
Off Topic, I unexpectedly need to buy a new car, prefer small SUV, (Honda CRV, Toyota Rav 4)
Do not want to pay cash (although I could),as that money is my house/savings money.
it has been a long time since I bought a newe car, do not wnat big monthly payment, should I look at leasing, buying, I have looked at 2/3 year old cars with 30 or 40K miles already on them, and they seem almost as much as brand new.
i dread the thought of having to dealwith car sales people etc. Any thoughts/advice would be appreciated
BBB-
The Kid is doing a ton of research for a car right now. Actually the same type of smallish SUV as you.
Here’s what I’ve found.
Advantages of Leasing
You can drive a better car for less money
You can drive a new car every few years
No trade-in hassles at the end of the lease
Advantages of Buying
When interest rates are low, it makes more financial sense to own a car rather than lease it
No mileage penalty
Increased flexibility — you can sell the car whenever you want
My advice: ChiFinance is right. Purchase a certified used car. 2-3 years old and 30K-40K miles on it. The majority of the value of the car has already depreciated (about 30%). Thus, providing more bang for the buck. Let The Kid know how things work out.
The Kid
what happened to our “friend” make money?
I suspect school is no longer in session after 3.
ok, back to RE.
; )
SAS
If you are looking for a SUV, Jeeps are having a great sale right now.
but, not a big fan of the SUV, prefer the wagons myself.
SAS
BBB-
Just reread your note on not wanting big monthly payments. This may help too.
A lease requires little or no money up front and offers lower monthly payments. But when the lease ends you are left without a car and a need to replace it.
Buying a car is more expensive initially and the monthly payments are higher. But at the end of the loan, you will own a car you can still drive or sell.
If you have AAA, you may want to call them to ask about certification inspections for used vehicles.
http://www.aaamidatlantic.com/automotive/auto_buying.asp
Your insurance company may also be able to help out there.
We bought a new Toyota last Spring and got zilch trying to negotiate…looked at various geographic dealerships.
I second the manufacturer cert on the leasing idea.
Under no circumstances buy a car from a rental agency [Enterprise, Hertz, Avis etc.]. Those cars have the worst lives.
Leases are, bar none, THE MOST EXPENSIVE, [can I also say expensive?] and also the most expensive way to finance a car. Additionally, it can be expensive as well.
Don’t fall for the monthly payment ruse.
Lookie…..
in this dumb bloated piece of pork barrel crap, a nugget of real estate trivia…….
House Passes Tax Breaks for Corporations, Individuals (Update2)
…….
It creates new laws allowing private mortgage insurance premiums to be deducted by homeowners…..
I haven’t searched the online used car sites in a few years. I didn’t do much in-depth hunting, but there seem to be some very attractive deals available.
On a more depressing note, I seem to have taken an incredible loss due to depreciation.
C’est la vie! I was planning on driving this thing into the ground anyway..
jb
It creates new laws allowing private mortgage insurance premiums to be deducted by homeowners…
I’m sure it’s all in the name of promoting homeownership.. wink wink..
I’d like to think that the insurers had to lobby hard to get that included, but I’m sure it’s not the case.
jb
A must-read piece over at CR:
http://calculatedrisk.blogspot.com/2006/12/freddie-mac-anatomy-of-housing.html
This is totally off-topic ( but this is weekend forum) Can you all help with cell phone matters. I am 2 weeks away from being able to finally get rid of sprint! I have already had t-mobild and att ( back in the day) I am going with verizon. Any thoughts, especially on the phones -my husband is very hard on phones….very hard. He has broken totally in 1/2 3 flip phones. Is the razor tender? any good sturdy phones ( not too expensive please)
Any help is appreciated
KL
KL, I don’t have a razor, but everyone I know who does hates it because they are constantly dropping calls. Maybe they exagerate, I don’t know.
In any case, yesterday, at work, they had one of those events where the vendors from the different phone companies try and sell their wares. The guy from T-mobile acknowledged that he gets complaints about the razor pretty often even as he was trying to push his “sign up for two years and get a free razor” deals.
It’s not the mobile, it’s the service.
Go with Motorola. Think Krzr.
;-)
Truly, more times then not it’s not the mobile but the service.
http://photos1.blogger.com/hello/243/2888/640/GDPMEWQ22006.1.jpg
If you want to know the effect of MEW (Mortgage Equity Withdrawal ) on GDP, check out the above graph from “calculated risk”.
#13 bergenbubbleburst Says:
The problem with buying a used recent model toyota or honda is that the depreicate very little over the first two years.
If you want to buy new, check the True Market Value on http://www.edmunds.com. My rule of thumb is 1000 above invoice for a hot mode and 500 to 750 above invoice for others.
http://www.edmunds.com is a good website to do your car research.
If you find some realtors sleazy you will find that car salesmen trained them.
Clotpoll: no offence to good realtors. The guy I worked with was terrific and would recommend him any day.
Used car vs. new
If you have some good cash down payment to go with, then by all means get a new car. You can check the invoice prices and work down during negotiation.
You can buy used cars two ways: Dealer or private. If you go private the price is lower, but no warranty. I went to check out a honda accord with a private seller, it turned out that the lady had the car rigged by a mechanic to hide the check engine light. Car had exhaust problems and it showed up on my OBD-II scanner :)
Dealers: what can I say, they rip you off on used cars like crazy. You’re not going to get a good deal easily.
New car: You can bargain the shit out of your dealer until he agrees to your price or you walk way. remember to take cash down payment or check to encourage your dealer to sell you the car. Slap cash on his face and say take this offer to your boss now.
If you go with 2-4 year car, you’re not saving money, cert cars are full of shit, because they fix things that they know you’ll check like tires, wipers, clean interior etc. you won’t know the break condition (they tell u its safe), engine wear, trans wear, etc.
You should check price of new car vs. 2-4 year old and approx depreciation to figure out what price you need to pay (used car at dealer). Again, used car is bad idea unless you are getting a killer deal. Once you top 50K miles…you need to start putting money into your car. I’m happy with my new car, it was under 20K so it was comfortable for me to pay down. anyway, good luck
Housing Bubble vs. Great Depression
http://www.youtube.com/watch?v=pLjo7-J1qho
snippets of comments made in 1929 vs those being made today.
http://www.youtube.com/watch?v=Ubsd-tWYmZw
for those of you who remember “Suzanne Researched This” Commercial :)
About the risks in leasing:
http://www.masslegalhelp.org/consumer/buy-or-lease-your-car
and another thing: Buy a new car and run it into the ground.
KL..us too on looking for phone quality. We haven’t had a contract in years, but have these little LGs that were so sturdy, we hate to give them up, even in exchange for picture phones. My husband is extremely hard on them, and hasn’t had one issue in years. The only problem is that the batteries keep wearing out after maybe a year of use. I don’t know if that’s normal. But we get new ones on E-bay for 9.99 from a place in CA that has the real thing.
I know there are a lot of insightful inputs in this forum, so I would like to ask your opinion:
I am renting a 2 bd room apartment for the last 7 years, we both have professional jobs, in 1999 our combined annual salary was around 100K, today we are combined ~ 200K. The reason we did not buy a house was because there were instability in his position, and we thought we would wait. But the market has gone crazy till 2005.
Recently the market stopped climbing up, we also havd a baby girl in Augst. I really would like to buy a house, because in-laws are coming to visit and also help with the baby, the apt. really gets crowded.
I think if I buy sth in the mid 500K, it would be very easy for us, becasue the only upside for not buying a house is we had a sizable downpayment from savings, around 250K.
I looked at few newer developments, gave two offers. $550k for a LP of $620K. Realtors told me they are still going to have a open house on this property this Sunday, so far they did not give us a response.
I am wondering whether my offer was too low? I would think buyers are scarce these days, how come sellers (in this case, seller is the relocation company) still arrogant?
Any comments or suggestions would be helpful..
Thanks
What’s STH…townhouse?
sorry, sth refers to something, it is a single family house. 4 br, 2.5 bath, with finished basement, 5 yr young, good school system. small lot.
“Recently the market stopped climbing up, we also havd a baby girl in Augst. I really would like to buy a house, because in-laws are coming to visit and also help with the baby, the apt. really gets crowded”
Sounds like you are making an emotional decision.
Use caution, because things can come back to bite you in this market.
And your in-laws won’t be there to help clean your wounds.
SAS
KL
Wife and I have both have Verizon with a razor no issues since June. No dropped calls. Maybe it is the service for some folks?
As for lease vs buy a car. I wouldn’t lease again. i use to love it until i moved miles away and drove up the miles. I had to eat the car because returning it would have been a pretty penny on the mile overage. At the time i just never foresaw having to move so far. Lots can change in a year sometimes.
I agree with SS. Buy a new car and run it to the ground. There are some deals by way of nice finance terms and/or price out there with year end and month end upon us.
“Recently the market stopped climbing up”
yes, and now its on the decline.
SAS
CNJ. I’ve been in your shoes.
You want me and my cousin Vinnie to go over to the open house on Sunday and put in a $350K offer? That oughtta smell like expresso.
Just kidding.
If you haven’t been putting in many lowballs, have you considered working more than one house at a time, or giving yourself the next six months with the same strategy before you up your bid on the first house that you see?
Thanks for the replys on the phones, I too believe its the service that causes dropped calls not the phone. I have sprint they drop calls all the time!! Verizon service seems to be the best and the fact that so many people I talk to have it it allows me more free airtime. It is the phone sturdiness I worry about. I have heard some complaints about the razors.
Thanks
KL
Central NJ Says:
I know this is probably not the answer you want to hear, but I really hope that you can hold of for another year. Is renting a bigger place an option? Even if it is a little more than what your are paying in rent now, it will buy you time and you won’t be pressed for space when in-laws visit.
I sold January of 2005. Our baby was due in a few months. I considered getting an apartment but ended up renting a townhouse with a finshed basement and deck. My rational at that time was that I could save a couple of hundreds bucks a month on an apartment, but I’d run out of space with the kids and inlaws and I would be under *emotional pressure* to buy. But now I have all the space I need and it’s fun to watch the carnage from the bench.
If you really have to buy, I guess you can, but check out some larger places for rent in and around the towns you are looking, do the math to compare it with your mortgage and do what makes you happy.
Are you looking around the priceton suburbs?
rhymingrealtor
I have had Verizon for moon and moons now. I would honestly recommend going with an LG phone. I’d reccomend the LG 8300. Most people I know who have bought a razar or Kazar say they are Junk. I have always had LG up until now, I have got the moto Q becuase I am a big dork and I wanted an internet phone (which now the new Moto Q’s are great as compared to when the first came out) My wife has an LG 8100 and has dropped in numerous times and it still works great.
——————————————
bergenbubbleburst
Might I reccommend leasing a pontiac vibe. My wife is leasing a 2005 pontiac vibe. It gets great milage and its actually bigger than it looks. I know its almost idnetical to the Toyota matrix, but the Matrix has a bit of a different body style and looks quite corny. We have had it for a little over a year. Its a great car and are payemtns are cheap becuause we put about 6000.00 down on it, so we pay 157.00/month for 4 years. I was against it at first but seeing how big it was on the inside we got it and I am glad.
—————————————–
Central NJ
Stick to your guns if you wanna offer 550 dont let the realtor try and manipulate you. I would find out more info on the history of the home. Find out what similare priced places went for in 05 than offer 30 % less or more. Don’t let realtors discorage you and say your nuts. Be aggresive and say if you wont put in my offer I will get an agent who will.
Just remember if in 5 years you wanna sell or even 10 years you wanna sell if you by something for 550 now, just consider that you may only be able to sell it for 400k in 5 years, and that 150k you have to eat. Its your money don’t let realtors try to rip you off just because they are greedy and want more money. They could care less if you lose money on the place. So if that same place fetched 600k in 05 I’d reccommend offering 25% off 600k which is 450k. If I have learned anything from people here on this site its to not let realtors think you are not offering enough. 1 offer at 25% is better than no offer for 6 months. And there are plenty of places out there that may take a lower offer
Buyers buy on emotion, then use facts to justify the emotional decision they just made. This holds true not only for RE, but just about any big ticket purchase.
It is funny seeing posters here trying to talk down someone who is about to make the grave mistake of making a home purchase at a price deemed unsuitable by one or more of the resident “experts”. This must be what an AA meeting is like.
Someone has a child on the way, relatives who’ll be visiting more and a need for more space…and it’s smart to transition into yet another rental? And for what? A future “savings’ that is in no way guaranteed? The satisfaction of grinding down a seller at the bottom of a collapsed RE market? I especially enjoy the suggestion of a push from Mom and Dad to purchase as being tantamount to peer pressure. Resist…or you’ll be hooked! Please.
Everyone looking to purchase a primary residence doesn’t share the common goal (at least around this blog) of getting it at the absolute lowest possible price. It’s amusing seeing the amount of vitriol tossed at investors who post, when it seems to me many in the Legion of Doom here share the same brass-tacks, dollars-for-square feet mindset.
Don’t we always rail the hardest at the traits of those who most resemble us?
Clotpoll says:
“Everyone looking to purchase a primary residence doesn’t share the common goal (at least around this blog) of getting it at the absolute lowest possible price.”
I don’t share that goal of getting it at the absolute lowest price either, but I am confident that I can do better next year so I wait, but if someone’s personal situations requires them to buy now and they can afford it, why not? All I am saying is, to think through your decision.
jonny430
Another vote for Verizon (have had AT&T and Sprint).
Razr seems fine – there is a setting for area coverage which many people fail to set correctly, which may lead to bad connectivity. Don’t know about sturdiness.
Another vote for buying a new car and driving it into the ground. Buying cuts down on having to deal with car salespeople (apologies to you car salesfolks, but I’d rather deal with a realtor any day).
Re: Cell phone service
It must depend on where you live. I have had Verizon for years and I cannot stand it. I don’t get service in many areas, calls are dropped all the time. We are planning on going with Singular when our contract is up.
Re:Cars
I am financing a Honda that I will pay off early. I absolutely love my car, payments are reasonable, the car is reliable so I know it will be many years before it dies. My husband is financing a Toyota. While I feel it was too much money, it is also very reliable. In a few years we can sell the cars and furnish some of the house we might buy one day.
Overall, looking on craigslist I only see house prices dropping slightly. It’s still not enough for us to afford comfortably. If/when prices come down substantially more, we will seriously begin to look.
jb
interesting tax deduction on PMI priv mtg ins, not only encourages home buying but home buying with less than 20% down — ugh what a joke! like people need even more debt….
sl
I don’t exactly know how PMI works but won’t the lenders let you roll PMI into a mortgage?
Clotpoll, what’s wrong with advising someone to develop a bidding strategy, including a timeframe to permit assessment between points, and sticking with it for maximum knowledge of market?
I’d say that would work for many decisions. Why does that seem to be talking down a purchase?
Clotpoll, you seem to forget that this is the bubble blog. If you want to optomistic views about real estate, there are other venues.
Zac (from #56):
I am neither optimistic nor pessimistic about RE “markets”. In fact, I don’t care about the big-picture “market”…not only are RE markets local, they are really personal. The right time for one person to buy may be disastrous for another; however, there are opportunities for some who may choose to buy now.
All the different and conflicting motivations make the horse race. Take a good look at BC Bob and AntiTrump’s posts…they have a very good feel for both sides of the trade.
Thanks for the invitation to leave, but this is (unless Booyah Bob is around) a much more intelligent place to hang out.
where is this article you guys are referencing re: PMI?
“Everyone looking to purchase a primary residence doesn’t share the common goal (at least around this blog) of getting it at the absolute lowest possible price.”
Clot,
You are right about sharing common goals. However, many on this site are not looking for the absolute lowest price/bottom. You can not pick the top or bottom in this market. I am not looking for a crash, just a return to 2000 pricing. What is more important to me, is the excess that still permeates throughout this industry. We all know RE is different as compared to other markets. Nevertheless, when speculation/mania reaches such whimsical heights it takes on a life of its own, then it can be compared to other irrational markets. I am not waiting to buy the bottom, just paying attention to the excess. When it is apparent that this is being wrung out, it will be the time to take action. By the way, I always talk in general terms, never give advice regarding specific situations.
Clot,
I like to hear your views anytime. You and KL offer great perspective from the other side. I don’t share other views that if you are optimistic you should post elsewhere. If everybody read your posts thoroughly, they would understand that your goal is to put buyers and sellers together, not caring if the market goes up or down. By the way, after the pom poms were laid to rest, was there anything of substanse delivered at the convention???
Central Jersey:
Please also consider the cost of moving twice in a short period of time. I was shocked at how much moving cost (as my friends are getting up in age, we have to weigh the possibility of temporary or permanent diability from moving ourselves against the cost of hiring a pro!) Remember that your security deposit will probably be in a non-interest bearing account during your tenancy. That it will take time and effort to set up/change all your accounts, and time to arrange for and complete multiple moves if you rent and then buy again in the next few years. Think about how friendly your rental coomunity will be to children, long-term visitors, and pets (if applicable)–they vary widely. I sold my house in October and have been astonished at the time and expense a move entailed. I don’t relish the thought of moving again in a few months.
On an unrelated note, I am surprised that so many folks here are encouraging purchase, not “rental” (lease) of a NEW car. I just am.
Zillow Knows That Everyone Has A Price
Thu, 2006-12-07 05:00
Home listing site Zillow is making it possible to shop for homes that are not necessarily for sale with their new Make Me Move function, which launches on Thursday. Home owners who may have no intention of moving, but certainly would for the right price, can list information about their homes on Make Me Move so that gutsy buyers can try to make a deal.
“What number would it take for you to call the movers and hand over your keys?” said Lloyd Frink, Zillow’s co-founder and president, in a release about the new function. “Make Me Move is our twist on the traditional ‘For Sale’ sign.”
A homeowner can post a Make Me Move price without exposing any personal information. Zillow then enables interested buyers to contact the owner through an email “anonymizer.” The service is free.
Free is the magic word at Zillow lately because the company also announced that it will provide free listings for all home owners and realtors. Listings can include photos, and realtors can also create Web sites for each listing.
Zillow’s third new function is the Real Estate Wiki, which has hundreds of articles on buying, selling, financing, or any topic a owner/buyer might need. Wiki visitors can edit or comment on articles, or create new articles.
These new new announcements are undoubtedly Zillow’s efforts to continue hosting as much real estate information on their site as possible. It’s a sign that they have enough traffic to sell ads and do not need user money to survive. The company launched in early 2006 and has made major announcements all year, including 3D maps, open APIs, and many large rounds of funding. The company claimed 3.2 million users and 70 million home listings as of November.
Contrarian views are welcome to me, regardless of the focus of the blog. What is distrubing, though, is the idea that buying on emotion and under the sway of others emotions is just fine. It is a recommendation of infantilism.
Anyone asking here about a property deal is not completely in the throes of their emotions. If they were, they wouldn’t bother.
The desire to provide a comfortable environment for our children has a partly emotional base. We did a lot of fix-up in our apartment during the months before our daughter’s birth.
Our decision when she was two to pick a town and move from the country was based on the idea that it would provide more opportunity for building friendships and an easier access to schools.
Wanting space for grandma is perfectly logical, but can be accomodated in a number of ways, such as leasing a house.
Planning to have more children, want to have a workshop, want a garden, enjoy fixing things? All these suggest at least a home lease, if not a purchase.
Timing of a purchase is about weighing risk. If your home value might drop by $50,000 after purchase is that Ok with you? How about $10,000 or $100,000?
No one can help you with this judgement, really. Everyone just has an opinion based on experience and such opinions are not logically reliable because they expect the future to follow from the past.
BC Bob,
To be honest with you, I only go to the convention to party and hang with friends. I detest the “trick-or-treating” of cruising the aisles and stuffing a bag with crap I’m just going to throw away later. No amount of database software, personal promotion gimmicks or magnet calendars is going to make me a better marketing person.
Aside from the tidal wave of physical garbage that gets passed out, there’s the “motivational” excrement of the Tony Robbins “rah-rah” crowd. This year’s keynote session featured Ronan Tynan (the guy who sings during the 7th inning stretch at Yankees games). Great singer, inspirational story…but what the hell does this have to do with RE? If you need extra inspiration to get out of bed and go to work every day, RE is the wrong profession for you.
Frankly, the only event I attended is Allan Dalton’s (the CEO of Move.com, parent company of Realtor.com) annual talk. Even though I’ve seen a few posters here trash him, he is a thoroughly pro-consumer guy who is truly committed to raising the bar and dragging RE out of the “service” sector into the professional sector. He is the best friend buyers and sellers of residential RE have. Of course, 99% of the rank-and-file resists him like the plague…only about 150 people at his talk. Their loss.
Long story short, the current downturn appears to be doing more to thin the bad actors from our ranks. As you’d expect, much smaller turnout this year than years past.
Clot,
can you tell me why I would ever want a buyer’s agent? seems like their interests are aligned against me.
thanks
“Anyone asking here about a property deal is not completely in the throes of their emotions. If they were, they wouldn’t bother”
Hugh??
“Timing of a purchase is about weighing risk. If your home value might drop by $50,000 after purchase is that Ok with you? How about $10,000 or $100,000”
whew… I was worried for a minute, now that makes sense. But expect a bigger haircut, more like 100-150k with a 5 yr period.
If one is emoitional now about a home purchase, just wait and see how emotional you will be when your loan is worth more than your house. i.e being upside down. You wanna talk about emotions….
What makes alot (not all, but most) of people on these blogs think tomorrow is always going to be a brighter day for them financially and economically??
what say you?
SAS
Skep-tic:
It all depends on the quality of the agent. A good one practices with YOU as his principal and fiduciary. That means not disclosing things to the other side that you have not authorized and strong negotiation and advocacy. Unfortunately, many agents are more focused on a fast sale than the best possible outcome for you. I know that because commissions are technically paid by the seller at closing, it seems as though there’s a built-in conflict of interest; however, that mode of payment is just a function of the accounting at settlement. You- the buyer- are actually paying the commission, as it’s been baked into the price of the home.
What is troublesome- and goes largely undisclosed- are the mechanics of a dual agency transaction. That’s when two agents- from the same company- do the deal; one reps the seller, another the buyer. Both buyer and seller usually BELIEVE they have a strong advocate, because each has his own “agent”; however, since both agents are from the same company, both seller and buyer have the SAME agent (all salespersons in NJ are subagents of their broker…in this case, the same broker)! Each agent is specifically and legally precluded from negotiating on behalf of his client; disclosed dual agency precludes agents from the same company from favoring either party in a proposed transaction. In fact, NJ statute states that dual agency should be a rare occurrence and that agents facing a potential dual agency situation SHOULD recommend that one principal obtain an agent from another company in order to be afforded the fullest possible advocacy.
You can imagine what happens when two agents- in the same, big, cut-throat, old-fashioned RE office- are faced with a possible dual agency (Weichert actually used to pay their agents bonuses for generating dual agency deals until the RE Commission forced an end to the practice!). Sorta like two T-Rexes sizing up a baby Brontosaurus…
One provision of NJ law that I really like- but is rarely used- allows buyers to compensate their own agents rather than having those agents accept compensation from sellers at closing. Perhaps if you find an agent you like, you can offer this arrangement. Put it in writing, and you’ll have an extra guarantee of loyalty and effort. I think as buyers become more educated to the process, we’ll see more arrangements like this occur.
To SAS (from #66):
To you I say: can I borrow your crystal ball? Who says the future outcome you predict will come to pass?
Thanks. From what you’re saying, it seems to me that, short of finding a reliable/ethical buyer’s agent (and how would you really know this, anyway?), the best approach is to sign up for the “dual agency,” but treat the “dual agent” as an opposing party. that way, you reap the benefit of the agent’s desire for the double commission, but don’t sacrifice any negotiating leverage. Maybe hire a RE attorney if you think you’ll be out of your depth. am I missing something here?
Skep-tic,
You could try to work the dual agency to your advantage by going thru the listing agent (same situation as having two agents from the same company), but what happens in 99% of those situations is that the seller has beaten you to the punch and has already negotiated a discount for himself if the dual agency produces a deal. There’s nothing left for you.
I still believe a good buyer’s agent is your best bet. The market does, too: over 93% of all GSMLS transactions are via a buyer’s agent. Get the full, undiluted bang of a good advocate.
Ask friends, realtives, people at work…they should be able to help you find a good agent.
“To you I say: can I borrow your crystal ball? Who says the future outcome you predict will come to pass?”
I am not saying anything will for sure come to pass 100%, but I do say, if one knows their history and knows it well and understands fundamentals, thats about as close as you will get to a crystal ball.
There is a reason for the saying “history repeats itself”.
Am I always right? No, I am not saying that at all. Because I can interpret it wrong, or things can really be “different this time” or I can just be flat out wrong. Just one man’s opinion.
But more often than not, history usually does repeat itself.
SAS
To add to my #66 post,
Here is my 6 major economic problems (coming to major media publication near you.. hint…hint):
1) consumer debt- americans spend more than they make. During the RE bubble, (most)people bought homes with no intention of ever paying it off. I won’t even touch borrow on time cards i.e credit cards.
2) low to none consumer savings rate. You are going to work till you drop over dead.
3) Trade imbalance- creates a weak dollar, less confidence in the dollar.
4) Federal budget- I can go on all day about this one.
5) Loss of maufactoring base- For the middle class, credit cards have replaced a decent middle class salary. Outscorcing..etc…etc..
6) Oil dependance (OPEC, Katrina, low milage standards). The middle east has us by the short and curleys.
Future isn’t so bright if one researches these topics and ties them together. I havn’t even touched health care & social security.
But in any case, I need to go for a jog along the river. Ta ta….
SAS
Clot, excellent posts on dual agencies. Thanks!
You said “One provision of NJ law that I really like- but is rarely used- allows buyers to compensate their own agents rather than having those agents accept compensation from sellers at closing. Perhaps if you find an agent you like, you can offer this arrangement. Put it in writing, and you’ll have an extra guarantee of loyalty and effort.”
I have had this thought for a long time, and even talked to several agents about this – but no one is willing to work on a compensation from me.
Now, what is the right approach to this (buyer compensates his agent)?
and What do you think is fair?
An hourly rate? A fixed commission from the seller? ie., making my agent take no more than say 1.5% commission from seller?
Any other suggestions/comments?
Thanks
Found house with listing price of $795k.
Interesting thing is the realtor is advertising it in the paper at $639k.
Grim,
I posted this on another thread, and it ended up at the very bottom as No. 118 – so I’m not sure you saw it.
Grim,
Were you able to get any info on 55 Warwick Street in Iselin, 08830?
That’s the newly built house that’s listed on realtor.com as having been sold on 8/4/2006 for $636,920, but it was still in the MLS with an asking price of about $699,000 as recently as early or mid-November.
When houses are sold – to the point where there’s a closing – do the ads sometimes stay online in the MLS long after the fact?
I was trying to find out if that one was sold once in August and re-listed for more – someone trying for a flip – or whether the $699,000 number was the original asking price and someone bought it with a lowball of about $637,000 …and maybe the ad wasn’t removed until much later (?)
The MLS number was back in the original posting but I’ve lost track of that thread.
Sas,
Post #73, point #3;
“China central bank sees risk of US dollar slide on asset sell-off -”
‘If the US current account deficit growth continues to be higher than GDP growth, the investment value of US assets will be questioned by global investors, and the willingness of investors to continue holding and buying US financial products may weaken,’ the central bank said.
http://www.forbes.com/business/feeds/afx/2006/12/07/afx3235275.html
That was post #72, point 3
Clot writes:
“Long story short, the current downturn appears to be doing more to thin the bad actors from our ranks.”
Given that you advise people to buy at or near the 100-year peak, call others who disagree nazis, and lie, one can only hope the thinning moves in your direction. If you’re what counts as an ethical realtor, I’m not impressed.
In reality, you’re a subtle troll, trying to sound reasonable, and shift opinion on this board. I’m not fooled.
Your income is based on people buying things from you, and all your statements should be viewed through that prism.
http://www.hyphenologist.co.uk/killfile/anti_troll_faq.htm
The real estate bubble has burst, get used to it.
One of Chicago’s TOP 10 NJ RE Report Quotes:
“Aside from the tidal wave of physical garbage that gets passed out, there’s the “motivational” excrement of the Tony Robbins “rah-rah” crowd.”
Thanks Clot!
Not quite “READ MY LIPS YOU SCHMUCK”, but a solid triple with bases loaded.
Scummy realtors at it again. Dropping listing and relisting with Dom reset to 0. See it still happening after the practice was questioned.
Lookign forward to the aspring Bloodbath and the attitude adjustment needed with the industry. Realtors disgust me.
It was fun back in 1993 tooling on them after they harassed you depserately saying anything to sell a property.Then you put in a bid much lower than their wish price.Then you hear the moaning you can;t do that. BS. Bid $1000 more than moan price. Grind it all the way until they give in.
The good ole days of 1993 are coming soon.
BOOOOOOOOOOOOOOOYAAAAAAAAA
Bob
Wonder how the cry fest in AC is going?
To you stupid dummy buyers. You pay anywhere near asking with some toxic loan you deserve the pummeling heading your way.
It is going to be very lonely when Mr. Collector come knocking on the door.
BOOOOOOOOYAAAAAAAA
Bob
READ MY LIPS STARVING SPIINING REALTORS…
NO REBOUND…SPRING 2007 HOUSING MASSACRE COMING TO A HOOD NEAR YOU.
AND NO IT IS NOT A GOOD TIME TO BUY A HOUSE…LIARS!
ONLY A GOOD TIME TO BUY IF….YOU BUY “AT LEAST” 25% OFF OF PEAK 2005 PHONEY PRICES.
BOOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
ONLY A GOOD TIME TO BUY IF….YOU BUY “AT LEAST” 25% OFF OF PEAK 2005 PHONEY PRICES.
FOR HOUSES ONLY….DOES NOT INCLUDE CONDOSHACKS…CONDOS 35% OFF OF PHONEY 2005 PEAK PRICES.
BOOOOOOOOOOOOYAAAAAAAAAA
Bob
Clothole the almighty god puts himself on a pedestal with all his wise comments. Hey BOY a few out here lived thru the last housing bubble and realize this one is of epic proportions in comparison and are trying to teach those that this happened before and avoid the realtor rap. The rap is BS! It is self serving rap.
Anyone buying a house anywhere near asking prices is going to lose imo if they have to sell within the next 10 years. Their choice,but just trying to give them insights to protect their financial well being.
You Clothole are a typical hotshot realtor. When the spring massacre comes you will spin it how you predicted it or protected all the buyers on this board.
SPRING 2007 HOUSING MASSACRE BRING IT ON! IT IS COMING. THE INTERNET IS THE EQUALIZER AGAINST THESE SHYSTERS. IT WILL BE FUN WATCHING THE REALTOR ANTI-TRUST CASE UNFOLD.
BOOOOOOOOOOOYAAAAAAA
Bob
BLEED’EM DRY!
Make’em pay…It’s payback time baby for years of “Trashing” buyers.
READ MY KIPS: IT IS NOT A GOOD TIME TO BUY…… UNLESS you know the Line.
BABABABABBA
What is with all the “I hate Clotpoll” posts? To your average onlooker, all it does it make you all look unhinged.
FWIW, I enjoy reading Clotpoll’s posts. Keep ’em coming!
https://njrereport.com/images/overlay-nov06.gif
From the graph it looks like spring RE season season starts somewhere between mid-december and end of january.
Countdown to massacre has begun.
BOOOOOOOOOOOYAAAAAAA
I also enjoy Clotpoll’s posts, although I must admit that I find his advice re: the use of buyers’ agents dubious.
the fact that most people use them could mean that they work, or it could just reflect the public’s acquiescence to the monopoly realtors have over information.
I’m not saying that all realtors are bad actors, I’m just saying that so many of them have proven themselves to be so that it seems a greater risk to put your trust in them than to go it alone as a buyer.
As always…subtle, well-considered, nuanced opinions from UnRealtor and Booyah Bob. I live for this.
UnRealtor, if you were a Kerry guy, he really needed your help last election. You sound just like Rove…keep attributing statements to me that I’ve never made, then keep repeating them over and over. Eventually people will accept them as truth.
Except I get the feeling that there are only a few sheep here. UnRealtor and his crowd can only accuse me of posing as a voice of reason because they are so entrenched in indefensible and inflexible positions. Where you sit is where you stand. I’m still waiting for someone to pull out statements I’ve made that are a blanket endorsement of buying in this market…
To Another CentralJ (from #73):
What’s reasonable to pay your own buyer’s agent? I dunno, but top salespeople generally want more incentive, not less. Why would you offer an agent LESS than he could make by just working in the “normal” fashion?
Good agents are not cost centers…they add value. They should save you money, time and worry. If you want someone of top quality, don’t cut him off at the knees. Cut him in.
If you end up thinking that you can do better than most agents you meet, you’re right. You probably can. Go it on your own…maybe learn a little about pre-foreclosure buying. You’ll do fine as long as you arm yourself with knowledge. There are a zillion seller reps out there that aren’t really working to get their clients more, so as long as you’re in front of those types, you should do fine.
Clothole is just another industry insider protecting his turf. Voice of reason? HAHAHA How funny. Your here for one reason promote your own self interest.
Keep manipulating the public. It’s not working boy. Sentiment is shifting negative and houses for the avg person/family are unaffordable…..but IT’S A GREAT TIME TO BUY! AND SELL!!!!!!!!!!!
Clothole just won’t look at the facts. The facts are screaming “WARNING”, BUT RE IS THE BEST ASSET CLASS EVERYDAY EVERY WEEK EVERY MONTH EVERY YEAR EVERY DECADE….NOT!!!!!!!!
SPRING 2007 HOUSING MASSACRE BRING IT ON.
BOOOOOOOOOOOYAAAAAAAAAA
Bob
Booyah-
“Industry insider”? Protecting WHAT turf? So I’m posting here to try and change the minds of five people who couldn’t be influenced by being held at gunpoint?
Sorry, Bud. One guy posting at a blog isn’t going to move a market. I may disagree with you, but I’m not stupid…and I don’t waste my time tilting at windmills.
However, I do really enjoy pi**ing you off.
2005-2015 A BAD 10 YEARS FOR RE.
2004-2005 BUYERS WILL PROBABLY LOSE MONEY IF HAVE TO SELL. ACTUALLY MOST ARE LOSING MONEY RIGHT NOW AND THEY ARE PROBABLY IN LALALA LAND ABOUT IT.
BUT THEY PUT THEMSELVES IN THE POSITION. IN THE END, NO MATTER HOW MUCH SCHEMING CONNING MANIPULATING BY THE INDUSTRY, THE BUYER IS HOLDING THE BAG!!!
Expect a lifestyle and an attitude change this spring. where’s my annoyed clone?
Good weekend to all except starving realtors.(attitude adjustment reuqired)
Another slow starving bleeding’em dry weekend. KABOOM– Spring 2007 housing massacre.
BOOOOOOOOOYAAAAAAAA
Bob
I don’t know why there is an anti-Clot movement on this site. I never once heard him say that our facts regarding this market are distorted, never once heard him say you are a bunch of losers for renting,never once heard him say how much he made the last 5 years (make money). As a matter of fact I remember him saying that presently he has more and more clients buying at 20% off 2005 highs. IMO, he must be convincing the sellers that the times are a changing. Maybe if there were more like him (KL, also) sellers would have a much more realistic view of this market and everybody would be thrilled that their lowball would be accepted.
Clot,
>> Why would you offer an agent LESS than he could make by just working in the “normal” fashion?
1. Because I feel the “normal” $30000+ is too much commission. Heck, my wife’s a Ph.D and she makes less than $50k/yr.
2. Because I’ve do most of the homework on a house myself and need a buyer’s agent (or a dual agent) only for the transaction
>> Good agents are not cost centers…they add value. They should save you money, time and worry.
I disagree.
I would argue that I’m giving good business, and the agent should be happy that they are getting my business.
>> Go it on your own
I can’t. I’m not a US citizen (can’t get fingerprinted for the license, etc)
I don’t know if this has been posted. If yes, sorry!!
“Market opinion is clearly grounded on a fairly negative view regarding the fortunes of the bonds backing the ABX [index],” said Gyan Sinha, mortgage strategist at Bear Stearns.
He said problems are pronounced for bonds backed by 2006 mortgages, which cost almost 100 basis points more to insure than bonds that are backed by 2005 mortgages.
Other signs of weakness include higher delinquency and foreclosure rates for 2006 vintage bonds.
Moody’s put a handful of 2006 subprime deals on watch for downgrade – the first negative ratings activity for bonds originated in these years.
http://biz.yahoo.com/ft/061207/fto120720062004177556.html?.v=1
Another CentralJ (from #95):
You don’t need citizenship to purchase RE on your own. Welcome to America (if you’re new here).
If you’re doing most of the “homework” yourself and think you need an agent only for the transaction…you don’t. The bad agent who is willing to work for you only as a facilitator or paperwork handler isn’t worth one penny. That agent is willing to do it at a cut rate because he can’t sustain himself in the value-added world. Agents like that will also screw up the paperwork and the “nuts and bolts” of the deal. Do it yourself.
You may choose not to believe it, but top agents select their clients…not vice-versa. We are happy to work with whom we choose and not so happy to accept the crumbs of whatever bad arrangement gets pitched our way. Even in this market, there are plenty of clients willing to pay for our skills.
A salesperson who is grateful to work for compensation he finds unacceptable is not a salesperson. A salesperson that is willing to work for compensation that will not even cover his cost structure is an idiot.
As a matter of fact I remember him saying that presently he has more and more clients buying at 20% off 2005 highs. IMO, he must be convincing the sellers that the times are a changing. Maybe if there were more like him (KL, also)
I’m glad he’s selling at 20% off I’m just getting bi@@ch slapped out there )-:
KL
>> Welcome to America (if you’re new here).
Thanks! Been here 10+ yrs and this will be my 3rd house in the US. So, it’s not like I don’t know how it works.
>> The bad agent who is willing to work for you only as a facilitator or paperwork handler isn’t worth one penny.
So, the agent who works for less is automatically a ‘bad agent’?
Do you know what other agents in other countries charge – as a percentage?
(I’ll try to compile that.. but it’s usually less than 2%)
“Heck, my wife’s a Ph.D and she makes less than $50k/yr”
Man, you are doing something wrong. I know PhDs don’t make alot of money, and they will never earn back what it took to get that PhD, but come on…. you CAN do better than that.
I don’t want to sound harsh, but that is your fault why your wife’s wage is low, and not the job markets.
Unless, she is doing a post doc, then thats a different story, and you should say as such so people won’t think you are smoking some bad grass.
;)
SAS
RealEstate agents commissions in other countries:
UK: 2-3%
Australia: 2%+VAT
SAS, yes.. she’s a post-doc in Genetics
But I know Professors with many yrs experience who make 65k/yr
Wish I was smoking though ;-)
To Another CentralJ (from #99):
I won’t say agents who work at a cut rate are all bad. Unlike a few other posters here, I don’t indict whole classes of people I don’t know. There are a few out there who have compressed their cost structure to the point of being able to eke out a living on a smaller revenue stream (and how badly do you want representation from someone “eking it out”?). However, expecting any degree of care or expertise from such an agent is wishful thinking. They either do not posess- or do not exercise- the skills necessary to add value to a transaction. You can’t get Armani at WalMart prices.
Personally, I do not care about RE fees in other countries. Their practices, cost structures and expectations from their respective clienteles do not- in any way- correlate to the US, so the implication that US agents are somehow overpaid within the context of the world RE market is specious.
I price my skills at a point well-between break even and the most the market will bear. It is profitable, which is why I keep doing it.
Clot & KL seem to be the few realtors that understand that this board is good for the market. The quicker prices come down and volume picks up, the more coin can funnel into their pockets. On top of the fact that they are both civil and bring much needed sophisticated and informed balance to the discussion.
Boooyaa as it were…..
chicagofinance-
Thanks…and, likewise.
another CentralJ,
Since your wife is a post doc, wouldn’t it make more sense to look for a home once she is done and making more money? Also, she may not get a job around here as many pharma jobs are leaving NJ. She may have to go where the jobs are located. i.e out of NJ.
Or it may take awhile for her to get a job, longer than you may think it will.
Might want to hold…
SAS
Clotpoll, have you gotten any clients from THIS blog ? If not, be honest, are you trying ?
Psychology doesn’t play a role???
“Many flippers bought multiple properties. When in the history of the world have we ever seen the housing industry conduct business like a stock exchange? We had bidding wars. We had lotteries on new developments, just like we had allocations for new tech offerings during the late ’90s. And just like the tech boom, the buyers were not making decisions based on fundamentals.
“Foreclosures and delinquencies have “no place to go but up.” That is the key message that Morgan, Duncan, and I have been saying for quite some time. No, there will not be a hard landing. Housing will crash.”
http://www.moneyweek.com/file/18903/could-the-us-housing-market-crash.html
Zac-
From the first day I posted here, I have stated unequivocally that I will not accept anyone who posts here as a client. I’m not using this blog to troll for business.
The silence is deafening.
Hey, let’s play word association! I’ll start:
Carla Katz
overpriced
Dick Codey…
“I have stated unequivocally that I will not accept anyone who posts here as a client.”
I’m insulted. On the flip (no pun intended) side possibly it’s skewed somewhat similar to George Sr., and you are really implying, “Read my lips”.
Nah. Mr. Moderator has chosen not to monetize this site, so I’d feel like a glommer if I used it for commerce.
Clot, is your photograph on you business card ?
Is this some sort of set-up?
I think Mr. Moderator can make certain exceptions, you are not hit and run like others and you know how to read a chart. Suppose we come up with 49 points and bring it up to the moderator, if that doesn’t work we can always go to the real power, the unions.
You mean, Governor Katz…eh, Corzine?
I have no idea what you boys are talking about.
what did I miss?
SAS
Hey, here’s an idea: Grim is about to get his RE license. He can hang it at a referral agency, and I’ll kick him back big fees for every poster here that he can toss my way. Then, I’ll jam them into condoshacks marketed by all my flipper friends. I’ll also flush all these vics thru my in-house title company and have my mortgage guy jam them with I/O’s and option ARMs (lots of points for everyone!). We’ll reignite the market in no time!!! I’ll cut you in, too…
Sorry, SAS. I think my wife has slipped polonium into my drink.
Quoteing SAS from post #71
But more often than not, history usually does repeat itself.
This is an interesting article about the Denver RE market.
“Nov. metro home sales drop 13.7%”
http://www.denverpost.com/economy/ci_4800299
SAS
“But more often than not, history usually does repeat itself”
yes, history usually does repeat itself, and when it doesn’t…. it usually means that it was recorded correctly.
Remember this about history: “the victor writes history”
The question is how much has history been changed to make the victors look good.
ex. The Civil War, ask many they will say it was about slaves. But the truth was, North didn’t give a shit about slavery, they just wanted the money from the trade routes that ran through the South.
I am going off, sorry, I just wanted to throw a philisophical curve ball at you blokes.
back to RE. If one was to look at the trends in the last RE bust and compare it to now, you would see a mirror image.
SAS
anyone have this article?
“The 1985 to 1994 Global Real Estate Cycle: An Overview
Journal Journal of Real Estate Literature
Volume 5, Number 1 / January, 1997
THanks,
SAS
Efforting that now…I think it’s next to my collection of Girls Gone Wild…just a minute…
Clotpoll,
I thought maybe someone who is google savy would be able to get it in no time…
Also, this is a very well referenced article.
Why u watch those girls gone wild flicks?
Can’t you meet a women in the bars?
he he… just kidding.
Speaking of bars, its almost time to meet my VFW buddies for some scotch and water.
SAS
Chicago gunman was upset over invention.
http://www.cnn.com/2006/US/12/08/chicago.shooting.ap/index.html
——————————
What are the chances of an ARMer going postal next year?
rhymingrealtor,
I second the vote for an LG 8300 – it’s my favorite phone.
—
chicagofinance,
I disagree with not buying a former rental car. I bought one with 10500 miles on it and it looks and feels brand new. Had a mechanic inspect it and he said it had no issues.
One reason why I wasn’t worried about the purchase is that it still has the manufacturer warranty for 31 months or up to 39000 miles.
Clot (post # 104)
You said:
However, expecting any degree of care or expertise from such an agent is wishful thinking. They either do not posess- or do not exercise- the skills necessary to add value to a transaction. You can’t get Armani at WalMart prices.
My question is how do I find a good buyer’s agent? What questions should I ask him before selecting him as agent. Also what value does a buyer’s agent really add??
I’m a bit new to the RE and just wanted to understand the above basics.
Here, SAS
http://cbeweb-1.fullerton.edu/finance/jrel/papers/abstract/past/v5n01/v5n0101.htm
Is it worth it to ask a bank that recently had an appraisal done on my home for a copy of the appraisal?
I already know what dollar amount the appraisal came out to, are there other additional details that might be worth looking at?
(Also on CR)
http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0612/document/us1206.pdf
[Historically]The average [housing expenditure]decline is 25%; the median decline in 22%. Through the third quarter of this year, these expenditures are down only 7.9%.
…We continue to hear that the weakness in housing has not spread to other parts of the economy. To that we say “Not so” and “You ain’t seen nothin’ yet.”
…
combined real personal consumption and business equipment/software expenditures, at 3.1% in the third quarter, is the slowest since the second quarter 2003 and is down 130 basis points from its year-ago growth.
…
after peaking at an annual rate of $730.5 billion in the third quarter 2005, MEW has slowed to an annual rate of $214.2 billion in the third quarter this year.
…..
In the third quarter, corporations “retired” a record $566 billion of their equities at an annual rate, which represented a record 5.9% of disposable personal income. Why has the stock market been rising as economic growth weakens? Because corporations have been reducing the supply of their equities at a record pace.
…..
In sum, we believe that sub-par economic growth lies ahead, inflationary pressures are subsiding and the Fed most likely will begin a cumulative 100 basis point decrease in the federal funds rate
RE: North didn’t give a shit about slavery, they just wanted the money from the trade routes that ran through the South.
So.. The South seceeded because why? Gee, I thought Lincoln’s opinions about slavery had something to do with it.
Now I find out that the South just didn’t want the North using the Mississippi. Go figure.
my previous post is up for moderation :(
What has the Fed Usually Done in this Situation?
http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/0612/document/us1206.pdf
I also enjoy your posts Clot;
People here who are criticizing you, especially unrealtor, simply cannot digest any viewpoint contrary to their own. Thus they resort to name calling and factual distortion.
#61 cj sellout Says:
Cost of a move?
It doesn’t make sense to sell and rent for the short term. It only makes sense if you have made enough profit in your house to sell, dig in and wait for a correction. I didn’t find my move all that expenive.
My kids love my rental community. There’s a pool, play ground, etc.
About the cost of moving. I used a queens based moving company. They only charged about 500 bucks for a single family house. They don’t charge by the hour. You fax email them a list of stuff you want moved and they quote you a rate for it and stick with the quote + tolls to get to your place. You can find them on http://www.nycmoving.net/.
About your comment:
“On an unrelated note, I am surprised that so many folks here are encouraging purchase, not “rental” (lease) of a NEW car. I just am.”
If it cost you $50000 to buy the car and 250 to *rent* lease the car. I would suggest *rent* the car.
#74 lisoosh Says:
I have seen a bunch of these posts to where the price in the newspaper is lower than the MLS listing (same address). I don’t really read the star ledger, I only get it to monitor the weekend real-estate section.
Like I said, the victor writes the history books.
If one was to really study the civil war, one may have a different view rather than what we have been “told”.
btw- if the USA is so much against slavery, why do we shop at WalMart, buy Nikes, and buy oil from countris in Africa?
Also, Lincoln’s monetary policies were brillant.
In any case, back to RE.
SAS
Pat,
Thank you. I will read this tomorrow morning over coffee.
I had too much Scotch & water at the VFW lodge to read right now. he…he….
:)
SAS
All I want to know is when the house prices are going to drop through the f***ing floor. And if they’re not, then you just better keep saving every goddamn dime you can and be prepared to put at least 20% or better down if you want to have a shot at having the house you want, where you want it.
I’m still stark raving mad that a whole bunch of idiots ran the home prices through the roof because they drank the koolaid the realtors, lenders and appraisers were dishing out.
If that’s the game, then save like hell and lowball, lowball, lowball.
#87 Skeptic:
“also enjoy Clotpoll’s posts, although I must admit that I find his advice re: the use of buyers’ agents dubious.
What most of us consider The buying agent is not a true buyers agent in the sense that he has no legal obligation to protect your interests. Thy work for himselves and get paid a percentage of the commission they buyer indirectly pays as part of the sale price. A good agent will protect your interest even if he is not legally bound. If you want a true buyers agent, kind of like a finanial advisor, then you can get into a buyers agent aggrement with a realtor and pay him a fee to represent you. Only then is he bound to protect your interest by law.
A shout out to Al way back in post #5:
Using the website’s own calculator, a 6.25 interest rate and a downpayment over 20% I got a monthly payment of $1,900. Just wanted to give credit where credit is due, that is a great illustration of the problems in this market.
“All I want to know is when the house prices are going to drop through the f***ing floor”
baby steps….. baby steps…..
Last bust had price declines and flat years for about 7 years straight, there was a little spike, then back down again slightly.
In the meantime, save, get out of debt, raise emergency cash, and get ready to pick something up in a couple of years.
If you want some interesting reads, do a google article search of the last RE bust in this area.
SAS
clotpoll says: “From the first day I posted here, I have stated unequivocally that I will not accept anyone who posts here as a client. I’m not using this blog to troll for business.”
I second that. I have’t seen him try to use this forum to drum up business. But if wanted a knowledge able agent, I might go with him ;-).
bergenbubbleburst (post 13):
The last time I purchased (2002) I used Carsdirect.com.
It worked out great. I got a guaranteed price on the car in question (Civic, I’m a frugal guy)from a dealer on 22.
I could have gone up there and picked it up, but I went to a local dealer and told them I could get the car for a price $300 lower than the carsdirect price. It took a couple ofdays, but they gave me that price. It will be paid off in June.
If you want to do some back-up on the price pay Consumer Reports for a rundown on the invoice. I think it cost about $15.
WHat will be really interesting to see if we have a stock market crash within the next 5 years too.
If we do, ouch….
WHat would be the trigger???
SAS
by crash I mean a 400-500 pt drop in one day.
these days… not even sure if that would be condidered a crash? The damn dow is so propped up on funny money from the hedge funds and mutuals anyways…
SAS
WHat would be the trigger???
consumer spending accounts for 2/3rds of the economy. If majority of the consumer spending was with money borrowed from *Home Equity Bank”, it maybe the trigger.
Why I don’t think there will be a huge correction in the storm market is because there is so much excess money sloshing around the hedge funds, pension funds etc and it has to find a home. Not home as in 700K flipper cape.
SAS,
Yes, I know, patience.
Don’t want to see the markets crash but read this weeks Barrons for a slew of things that can trigger a major slide.
I guess we don’t do irony here. Score another victory for pinhead university.
The fact that so many do not recognize that buy, or lease, you are basically buying the car surprises me.
People who lease can easily find themselves upside down on the lease if anything goes wrong.
How do you think it is possible to buy a new car, paying full price plus the leasing company profit, and still have a lower payment?
Please read about and understand the risks before entering into any car lease.
The reason for the Civil War was the dispute over state’s rights. Namely whether a state had the right to secede from the Union. The South’s position was yea the North’s nea. That was why the war was fought. The economic and social aspects such as slavery were only issues surrounding the reason the war was fought.
“WHat would be the trigger???”
SAS,
Don’t know happened to my last post, so be it. How about a housing bubble,a debt bubble,a credit bubble, a dollar onslaught,(watch the 80 level on the dollar index), a yen carry trade, petro dollars,and yuan. Just to name a few!!! However, you are right, funny money will prevail, for the time being. Just ride GS’s, they rule the world, for now!!
JB,
Why can some troll post about “Nazi’s” but my post regarding market timing, “h*rny” gets captured??
reading Clotpoll’s posts,
I’m not sure what is the “value” that he brings to the table
I look at the house using public sites,
I go to Open houses and decide the one I like
I check out the school districts and reduce the selection list or prioritize it
I know my income and know how much I can take on the loan
I go to the back/CU and get approval for the loan
I’ll inteview an inspector and hire him to do the interview
Some of these steps have happened before even I contacted Clotpoll (another “good” agent)
Now , why should I call him
let us say to present the offer…..
I can get a RE attorney to do it or hire Clotpoll and give him $50 to prepare the offer. It should be a standard one, with all contingencies written one. It should be even be able to down load from the web or take it from a book
It takes three months for me make 30000. I give him that much for an hour’s worth of work (Clotpoll’s may want to chip in here about the work to write an offer)
Also for that kind of money is going to take any liability? if something goes wrong with the contract, I’ll be the one who will be in trouble because I signed it. will Clotpoll be on the hook for anything at all?
I just want to know , why should I hire a realtor?
#
From the Record:
The ordinance, passed this year, springs from a state law adopted in 2004 that gives municipalities the right to take control of blighted properties. A number of communities in New Jersey have adopted or introduced similar laws, most recently Cherry Hill and Vineland. Hackensack is believed to be the first North Jersey town……..
Grim,
On I-80 in Parsippany you can see the bones of a building rusting there. That is what gave rise to the state law. Eyesores that are derilect sites should be controlled. It is the equivalent to the broken windows approach to law enforcement with zoning imo.
desi,
I think you might be overstating the commission a bit, or perhaps not realizing the way it’s split.
Seller of a $600,000 home agrees to pay a 5% commission upon listing. The total commission paid would be $30,000. However, half goes to the agency that represents the seller and half to the agency that represents the buyer ($15,000 and $15,000). The commission at each agency will then be split betweeen broker and agent. Those splits are usually predetermined (at time of hiring, etc). For the sake of argument, let the split be 50/50. Both brokers get $7,500, both agents get $7,500. It doesn’t end there, however, if the lead came in via referral or some other fee-based lead system, the a portion of that commission might be due to the lead provider. Also, some offices might deduct fees from that commission instead of asking that agent to pay those fees up front (advertisng, e&o insurance, etc).
There are lots of folks with there hands in the commission pie, not just the buyers agent.
Realize that commissions are negotiable as well. When looking for an agent, ask them if they are will cut their commission.
jb
Jb,
i still need to pay … i don’t care how they split my money. It’s a problem because of their association with the ‘collective’.
Additional 15K towards downpayment will save me 30K of mortgage payments :)
Can a buyer negotiate commission as well?
addition to #136 >
http://money.cnn.com/2006/12/09/news/economy/opecoversupply.reut/index.htm?postversion=2006120911
OPEC’s acting chief sees oil oversupply
The cartel will take measures to balance the market at its Dec. 14 meeting.
LAGOS, (Reuters) — The global oil market is over-supplied by over 500,000 barrels per day (bpd) and OPEC will take appropriate measures to balance it at its Dec. 14 meeting, the cartel’s acting secretary-general said on Saturday.
>> How can the feds hope to cut 100 basis points if oil prices continue to climb?
Desidude (from #159):
If you are really going to do everything a Realtor would, you don’t need an agent. If you pay an agent $1 in the scenario you described…you’ve paid too much.
The only question I have is: could I walk into your place of work, sit behind your desk or machine…and with no skill or training, do your job as well as you?
RE is simple. That doesn’t mean it’s easy.
Desidude,
You are wasting your energy fighting something that just is. “If you can’t beat em join em”.
I know of agents that aquired their license for the sole purpose of buying a home for themselves, just do it dude.
KL
This is why I won’t buy a house right now.
New York- Northern New Jersey-Long Island, NY-NJ-PA Median Multiple
(Median Multiple defined as the Median House Price to Median Household Income Ratio)
1995 – 3.6
2005 – 7.9
(Source: http://www.demographia.com/db-haff19952005us.htm)
The 2000 median multiple for this MSA is around 4.0. Thus, that charming cape cod I could have easily afforded just five years ago is now something I would have to settle for today. Buying in 2000 made no sense for me as I was moving around the country.
I am ready to buy now and will wait for the median multiple to adjust to a more sustainable level.
Those of you who think that 7.9 is sustainable, by all means, buy now. Miami’s median multiple hit 8.8 in 2005 and you all should know what is happening in that RE market now.
To quote JB quoting Latin property law doctrine “Caveat emptor!”
166- from a year ago, real weekly wage growth in NJ is negative.
“RE is simple. That doesn’t mean it’s easy.”
Excellent distinction. In another life I was managing a team of recent college grads, and some were complaining about the menial tasks required in their positions. On remarked “I could have done this work in high school.”
My response: it is easy to do this job, and very difficult to do it well.
v (#167),
And thats why I am still waiting to buy. If my salary doubles in 2007, I’m golden. Absent significant generosity from the Fortune Global 100 company I work for, I am placing my bets on median home prices coming down.
Can anyone tell me what “house has wonderful potential” might mean in Realtor-speak? All ideas, guesses welcome. thanks.
1] reminds me of “flipper nation”.
2]I guess the property is currently inhabitable.
Seneca,
It is not entirely correct to state/imply that the median salary should be able to afford a house.
Not everyone buys real estate, and even fewer live in 2000 sq ft homes. Therefore, the median income has less to do with home prices than your post suggests.
For instance, median income is meaningless in context of homeowners. (Retired folks, low income folks, etc) These people are not buyng homes.
Look at the median income of homebuyers in the past 10 or 5 or 3 years.
“Can anyone tell me what “house has wonderful potential” might mean”
Better marketing as compared to “sold as is” as compared to a current POS.
“RE is simple. That doesn’t mean it’s easy.”
High paid Tour guides….
Think for yourself…especially when it comes to your largest purchase ever….Very Few commissioned reps (any industry) will look after your best interests.
Wakeup and do not trust a realtors….Just listened what they are saying…
IT’S A GOOD TIME TO BUY OR SELL A HOUSE..
DOES ANYONE BELIEVE THIS BS?
RAISE YOUR HAND IF YOU DO CUZ YOU NEED TO SHAKEN INTO REALITY.
BABABABA
See plenty of open house signs…gotta be pretty desperate to be having open houses this late in the year…The panic is showing….WOORIED ABOUT THE GLUT OF RETUNRING INVENTORY TO THE MARKET IS A FEW SHORT WEEKS…PAPAPAPAPANIC!
BOOOOOOOOOOOOOYAAAAAAAAAA
Bob
New York- Northern New Jersey-Long Island, NY-NJ-PA Median Multiple
(Median Multiple defined as the Median House Price to Median Household Income Ratio)
1995 – 3.6
2005 – 7.9
a couple of points regarding the income/price multiple.
Housing was arguable undervalued in 1995.
second, there has been huge growth in financing options since 1995. even if you think many of these options are foolish, it is hard to deny that they have increased purchasing power for many people.
Of course it’s possible, but I personally would not wait for this multiple to return to the sub-4 level. A drop to 5x median income would represent a huge decline in prices that would likely bring in many buyers
Your right it was a good time to buy in 1993-1997.
TODAY THE FACTS SPEAK FOR THEMSELVES…HOUSE PRICES ARE OVER INFLATED AND UNAFFORDABLE FOR THE AVG PERSON/FAMILY.
READ MY LIPS: IT IS “NOT” A GOOD TIME TO BUY UNLESS……….Take “at least” 25% off 2005 peak prices FOR A HOUSE only!!!
Boooooooooooyaaaaaaaaa
Bob
CH914,
“Look at the median income of homebuyers in the past 10 or 5 or 3 years. ”
I’m OK with 10 and 5 but what’s 3 doing there? Isn’t what happened 3 years back causing subprime lenders to shut down?
“For instance, median income is meaningless in context of homeowners. (Retired folks, low income folks, etc) These people are not buyng homes.”
who do you consider “low income”?
#164
The only question I have is: could I walk into your place of work, sit behind your desk or machine…and with no skill or training, do your job as well as you?
>>>>>my comment
You are assuming that I dont have the knowledge(not exp) that you have. I’ve spent last three years in studying the bubble and hence related aspects.
So if you know DB admin knowledge you can do my job. But i’ve hired three people at my job for my team , even now I ‘ve over see/supervise so that they dont make a mistake that would cost 100s of thousands dollars to the company.
In the scenario I described, I asked what is your “Value” addition, that you expect me to part with 1000s of dollars.
Jim,
I understand that it is split 5/6 ways. but 30000 is a cost to me and left to me I could ask a reduction in price by the same amt.
Question was what is the value addition…..
I know many people take RE license to sell a home. I’ve read/heard that it is liability issue from some agents(“Good” or not).
Actually when I buy a home , may in 2008, I’d negotiate with the sellers agent to reduce his commission also or the seller has to reduce 5% ontop of the negotiated price.
I am only sayING lets get back to about 2002 prices, but it is funny how the shysters call THIS MARKET “normal”.
WHO THE HELL CALLS THIS MARKET NORMAL?
JUST LOOK WHERE THIS BS “NORMAL” IS COMING FROM.
it is complete lunacy…dummies with no money buying something they can;t afford. It’s all about greed.
The sub-prime firms are closing shop and the financing of these ponzi scams are drying up. So the dummy money is not there. Back to the basics of home ownwership. Buy to provide shelter not some short term trading vehicle with hige transactional cost cuz about every snake has their hands in your pockets in the whole process.
Take “at least” 25% off 2005 peak prices for a home ONLY Condoshacks gotta take off more
Oh I forgot IT’S A BUYERS MARKET.
HAHAHAHAHAHA
WHAT A FANTASY.
Take “at least” 25% off 2005 peak prices
fROM HOUSING BUBBLE BLOG
A housing report from the Washington Post. “Lisa and Reggie Starr thought they were getting a good deal when they signed a contract to buy a new six-bedroom house in Woodbridge almost a year ago. But after they had trouble selling their own house and wanted to get out of the deal, the fine print in their contract became a very big obstacle.”
“‘There’s no contingency for the sale of your home. There’s no contingency for financing. ‘No refund will be due to you’ — it’s clearly written in the contract,’ said Lisa Starr, who admits that she did not fully understand the document when she signed it.”
“The Starrs and many other would-be new-home buyers are finding that the sales agreements they so enthusiastically signed just a year or two ago have left them little wiggle room as settlement day approaches. Indeed, some consumer advocates and real estate lawyers who have been fielding calls from remorseful buyers in recent months say few contracts are as rigid and one-sided as those for new home sales.”
“The contracts are ‘written in a way to give every possible edge to the home builder,’ said Allen J. Fishbein, at the Consumer Federation of America. Some developers have added certain provisions that further strengthen the contracts, bit by bit, over the past decade, some attorneys said.”
“As a result, contracts became more prevalent during the frenzied real estate boom that block consumers from getting any ‘remedy’ beyond reimbursement of their earnest money, or that prevent them from taking the dispute to court but instead force them into arbitration, when differences of opinion arise.”
“But some buyers are trying to get back their deposits just the same, and at times are finding that persistence can prevail. There have not yet been judgments or verdicts in these cases, but some would-be buyers are getting settlements instead. In one case settled recently in Fairfax County Circuit Court, 16 home buyers in a McLean subdivision sued to get back deposits on homes contracted for a collective $20 million.”
“Robert M. Diamond, a real estate lawyer in Falls Church, said some buyers are grabbing at straws, even protesting changes favorable to them, such as when the developer added extra parking in a condominium complex. Buyers and their attorneys have alleged that these adjustments are ‘material adverse changes,’ even though the contracts clearly permit developers to make certain changes as needed to their projects.”
“‘It didn’t matter what the change was; these are excuses,’ said Diamond, adding that many of the buyers who want out are speculators who decided their investments had turned sour or buyers worried that they had overpaid.”
“The Starrs said they are hardly trying to slither out of the deal just because they were having second thoughts. They say their backs are against the wall: They couldn’t get good enough financing terms, and the builder had lowered the price of nearby homes.”
“The Starrs finally got a contract on the home they were selling, but at a price that is $150,000 less than they expected when they bought the new house. Reggie Starr marveled at just how quickly the real estate market had turned. ‘It was not even like a slight decline,’ he said. ‘It was like a big curve.’”
“‘You need to have legal representation, and you need a real estate agent,’ Lisa Starr said.”
“No matter how reputable the builder may be, buyers should seek out a lawyer before signing the deal because new-home sales agreements can be ‘loaded with all sorts of hidden land mines,’ Fishbein said.”
“During the boom, however, many builders refused to pay sales commissions to real estate agents representing buyers because builders could sell the houses without any help. And buyers risked losing out on a coveted contract if they took it to a lawyer rather than signing right then and there.”
“Jeffrey Silverstein, a real estate lawyer based in Burke, said he recently had two buyers bring him their contracts before signing. ‘When the real estate market was hot, everybody thought they had to sign right now or they’d lose the place. And that was probably true. Lawyers just weren’t in the loop anymore,’ Silverstein said. ‘Now, it’s coming back a little. They [builders] listen now. If you have reasonable changes to make the contracts more equal-handed, they’re willing to listen.’”
These buyers deserve the pounding they deserve. You signed a contract and your asking the builder to take all the risk?
More and more dummies getting pummeled from their greed blinded decisions.
BOOOOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
V,
Okay, then lets look at the median income for homebuyers for the last 5 or 10 years; I suspect it will be considerably higher than the overall mean for the same periods and my point remains valid.
From the weekend NY Times:
Women Unafraid of Condo Commitment
some excerpts:
In the last five months, single women spent more than $30 million out of the $100 million or so in sales in the 299-unit condominium. In fact, single women bought 72 of the first 165 apartments sold. Spending by these women far surpassed that of single men, who accounted for $19 million. Married couples accounted for about $45 million in sales, and investors $5 million.
Mr. Walentas has done so well that he has been able to raise his prices twice. He also sees more married women writing the $60,000-to-$100,000 deposit checks. “It’s the women’s checks,” he said. “It’s not like a dual account — Joe and Suzy. It’s Suzy. I’m amazed.”
As the overall New York City housing market slows down and buyers are far more cautious about making deals, the one segment that is still buying feverishly appears to be women. While Manhattan developers say they are seeing more female buyers, the highest concentration seems to be in Brooklyn.
Brokers say that women are betting that even if they buy in a declining market, the values won’t drop as much as they would have spent on rent. They’re more comfortable buying in the same neighborhoods and buildings as their friends do. By purchasing condominiums that they could eventually rent out if they needed to move, they’re also hoping that they can hold on to these properties until the market improves.
“A woman will say, ‘I’m still saving money in the long term.’ ” said JoAnn Schwimmer, an associate real estate broker at DJK Residential. “They’re able to see the bigger picture, while a guy says, ‘I have to get the best deal.’ ” She said that her female clients who bought four years ago have male friends still waiting for prices to drop.
The impact of female buyers may be most pronounced in the Brooklyn condominium market, because properties are less expensive than they would be in Manhattan and the deposits are as low as 10 percent of the purchase price. That means that more women who are first-time home buyers can break into the market more easily and that women who own apartments in Manhattan can sell and buy larger apartments in Brooklyn.
Skep-tic, allow me to quote myself: ” I am placing my bets on median home prices coming down.”
Key words “prices coming down”. I never said I was going to wait for a return to the 1995 multiplier.
Increased purchasing power, you bet. I seem to be one of the few people out there who thinks that just because someone will lend you a million dollars means you should borrow it. And 30 years rates were around 7.3% in 1995 so its not like buyers faced double digit rates back then.
CH914, I never stated nor implied that the median salary should be able to afford a house. The median salary in New York City could not afford to buy a storage space in the Big Apple.
The median multiplier is an indicator of a trend; that trend being that housing has become increasingly unaffordable in more markets for more (if not most) people.
I don’t expect the multiplier to hit 4.x anytime in the near future. I do, however, think the currnt 7.9 will drop. And since I am not worried its going to jump much higher, I am a sidelined buyer taking a wait and see approach. There will be plenty of homes for me to choose from in 2007, 2008 and beyond even if the multiplier stays where it is.
Desidude (from #179)-
So you’ve spent three years as a RE voyeur…congratulations! You now have a ton of information and still no skill with which to apply it. In those three years, I’ve brokered about 310 (+/-)transactions. You are delusional if you think you have the skills of a top agent. Please get out there and start “wheeling & dealing”…I hope you hit on one of my listings.
In fact, you should HOPE you hit on one of my listings, because I won’t cut your guts out. A lot of RE hustlers love dealing with marks like you who are so focused on what they PAY that they can’t understand what they GET. That mindset is the necessary element for starting just about every scam ever devised.
Time for my Ipecac gargle.
Seneca,
I agree completely that 7.9x is totally unsustainable. Just saying that there are some aspects of this RE boom that really are diff’t, such as the increased financing options. But it would be foolish to think that this alone has allowed affordability to double
#164
My question would be “what do agents (especially buyer’s agent) do that a buyer can’t?” In this day and age, pretty much all the info on a house is availabe thru public sites, and you don’t have to be a realtor to be able to digest those data and make a sound decision based on those. Besides, without a buyer’s agent, one will have more room to negotiate on the purchase price.
>>>RE is simple. That doesn’t mean it’s easy.
continued from #187
>>>RE is simple. That doesn’t mean it’s easy.
‘easy’ is a relative term. It surely doesn’t take much to be RE agent, for sure. My sis-in-law, for one, is a RE agent, hehe.
DesiDude (#179)
Well said.
Question to all.
1) If I’m making an offer on a 600K house without a buyer’s agent, wouldnt my lowball have a higher chance of success, since I’ll be telling the seller’s agent that they will not have to split their commission. My bid would mean that seller’s agent would not have to split his commission, so I suspect he’d really lean on his client to sell it to me rather than another bidder with buyer’s agent.
2) This extra 15K loan means $32,374 over the life of loan(6%, 30 years fixed). If I think how much time it will take me to save 32K , after meeting all my monthly expenses/taxes etc. – it will probably take me about 10 months. Now why the hell would I hand over my 10 months of savings to buyer’s agent, when I could well do the homework, learn skills/knowledge of RE buying process in my spare time and avoid it??
3) Also repeating desi’s question, what is the value addition by having buyer’s agent, if you have done your homework ??
Clot/Anyone – do you have answer to this.
Continued from #189
In question 2, the 15K is coming from the split that you have to give to buyer’s agency, in case a buyer is represented by buyer’s agent. In my question i assumed that this extra loan would not be there if I dont have a buyer’s agent.
ATT-
Go do it. I’m not here to change your mind.
Two biggest reasons people use buyers’ agents:
1. Save time.
2. Save hassle.
With no experience & no training, you think you can do it…go ahead.
The four stages of mastering a job:
1) Unconscious incompetence.
2) Conscious incompetence.
3) Conscious competence.
4) Unconscious competence.
JB, Clotpoll, SAS, BC Bob and others,
Learning a lot from all of you on this forum. I’m thinking of looking into foreclosure properties in central NJ area. Any suggestions/pitfalls to avoid? Is buying a foreclosed property a good idea? Should I even consider spending any time on it or go with the traditional route?
I plan to buy in next 6-8 months.
-Sagi
Clot (post 191, 192)
Thanks for your response.
I was thinking about it and this idea came to my mind. True – I’m not currently an expert of what to look for from buyer’s agent perspective. So I’m at level #2 (concious incompetence).
But I can use a buyer’s agent just to look at properties and learn the skills. I dont really have to buy anything to have a buyer’s agent right (or lowball at 50% so that indirectly I dont have to buy). I’m inclining towards not buying till 2008 anyway. Why not spend some part of next 20 months (before I buy) with a buyer’s agent and learn skills as well as get a sense of market.
Does anyone see any pitfall with the above approach?
…the Peter Principle.
From post # 191
Two biggest reasons people use buyers’ agents:
1. Save time.
2. Save hassle.
Let’s see how much time would I save by using an agent. The agent’s job would be to contact the seller’s agent and shortlist/show me properties. Once ready to offer, he will prepare offer. If I do it myself and provided I have good feel of market as well as what I want and learn how to make an offer, this might be somewhere between 30-50 hrs of work for me (10 hrs to research properties, 15-20 hrs of actually seeing property (assuming 4-5 properties to be seen), 10 hrs to prepare offers).
point # 2 – Saves hassle – what hassle?? I’m free on weekends, and I spend quite a couple of hours reseraching housing and reading blogs anyway. So I’m doing this anyway.
Bottomline – For 30-50 hrs of work – I can save 10 months of my future savings. Also 50 hrs would save me 32300$ in next 30 years. That is a return of $626/ hour (and you think lawyers earn obscene amount per hr :) ). 50 hrs is really 6 days of regular work (@8hrs per day and 5 day week).
So roughly one weeks work would save me next 10 months of savings – Wow why would anyone not go for it???? Is there ANYONE here on the blog who would give away 10 months saving just to save (1) time (2) hassle (which togather is really one week effort)????
Clot (post# 191) :
With no experience & no training, you think you can do it…go ahead.
Clot – Can you give me a good e.g. of where a buyer’s agent really did something, where if the buyer did not have it he would have been screwed. I mean stuff beside’s the inspector/ attorney, where a buyer can hire on hourly rate rather than 6% commission. To me it seems like if you know which area you want to buy, what a house there normally sells for, after that you just need the inspector and attorney. Where am I wrong?
ATT
I got to that point about April, 2005. I had invested more than 400 learning hours, and handled a couple of my own bids.
What I found out, once I did find a buyer’s agent who really knew the market, was that there were contacts I would not be able to make, and hidden knowledge I couldn’t get unless I ponied up.
For example, on one property, besides just knowing the sales history of the specific neighborhood [pre-Zillow] the buyer’s agent had somebody who knew somebody, who knew exactly why the seller was selling, which could potentially save exactly the commission amount. Now, that was a very competitive time.
Like KL says, most buyers bite the bullet because of such things, when there is a sense of missing information.
I’m not sure what the hidden knowledge advantage is in the current market. We’re eating popcorn until next year.
if i make 100k a year, and lets say i have the ability to put 20% down, how much home could I afford? and how much home should i buy? any thoughts?
ATT-
If you’re looking- without a buyer’s agent- at listed properties, the listing agent on properties you choose to offer on will become your de facto buyer’s agent (actually, it’ll be a disclosed dual agency…meaning the agent cannot negotiate on your behalf, as he can favor neither the seller nor the buyer).
The scenarios you’ve described earlier today in which you get the agent to cut you a discount- or some variation of same- sound great; in practice, they rarely occur. Usually, the seller has pre-negotiated discounts for himself should a dual agency arise. There’s little to nothing left for the buyer. Not to say you can’t apply some grease and get things turned your way, but I don’t often see it.
You sound as though you’ve done enough homework to move the ball on your idea; just understand that the vast majority of buyers out there don’t have the time to do their own homework or the inclination to engage in face-to-face haggling. Most people are terrified of negotiating anything! That’s why they use buyer agents to save time and hassle. You just don’t fit the profile of “average buyer”. Good luck to you.
ATT (from #197)-
Sorry, I didn’t answer this question. Since the years 1997-2005 represented an inventory-starved market, most of the instances I can recount of buyers’ agents making a big difference revolve around their being able to write superior, tighter offers and helping their clients prevail in multi-offer situations. Getting buyers safely under contract was- in and of itself- no mean feat in those days.
However, I’ve also witnessed (and brokered) plenty of deals in which a buyer agent’s local knowledge (especially politics, schools, Superfund sites and taxes) have helped steer an unwitting buyer away from a house of horrors. Sometimes the best deal you make is the one you walk away from…unless the buyer has supreme knowledge of the local scene, plenty of pitfalls can await in some of our crummier communities.
Hi, doesn’t that depend on your other payments and taxes, both current and expected?
There’s a huge range there, but if you have kids and usually have a car payment, maybe no more than $275?
Hi: You can play here:
http://www.dinkytown.net/java/MortgageLoan.html
Hit the drop down on the right for the calculator you need, including rent vs. own.
if i followed the advice of the majority of the posters on this blog 3 years ago, i’d be behind in home price appreciation a good 30%. never ever overestimate the stupidity of the mass market. most people just aren’t that smart so see what the majority are saying and use it wisely.
Clot (post #200, 201).
Thanks for your posts. They were pretty info to know.
So ‘generally’ buyer – even if he does not use buyer’s agent would not get any discount. That is why most buyers use an agent anyway.
From this it would seem like the FSBO properties would make the most sense, since there is no agent involved at all. But from ths blog I learn that fsbo owners are generally hard nosed and already would be pricing their property higher than market.
Hmmmm. – seems like a vicious cycle, which a buyer would find hard to avoid. Maybe FSBO properties would be discounted ‘properly’ in 2008, once this bubble deflation is in full swing. That time probably the best one to buy.
Clot – What does a typical buyer’s agent contract look like? I mean if 3 months go by and I dont like the agent, or the agent refuses to present lowball offers on my behalf, can I just ditch the agent and sign up with another agent? Or even possibly go alone at that point?
Is there a penalty for that?
Richard Says: but i disagree.
Guess what he is suggesting is that real estate went up 30% during the last three years. so expect it to go up 30% for the next three years. That means the house that most people can’t afford now will be 30% more in three years.
Past performance is no guarantee for future results. Although realestate had had a positive return over a very long period, there have been periods of price declines and corrections. Based on the data out there, I really think we are in the begening of a prolonged period of declining/stagnant market.
Ofcourse it’s your money and not Richards so spend wisely.
Hey, Richard:
It’s all in how you look at it. If I DIDN’T follow the advice on this blog, and bought 9/05, I would have paid about 20% more for a house than I needed to.
“if i followed the advice of the majority of the posters on this blog 3 years ago, i’d be behind in home price appreciation a good 30%.”
2003??? Who said to sell then?? I owned for 2 more years after that.
“never ever overestimate the stupidity of the mass market.”
Richard,
You’re right, the mass market plowed into this market any which way possible. The mass market got into bidding wars. Now the mass market is trapped. Couldn’t agree with you more.
if i followed the advice of the majority of the posters on this blog 3 years ago
Impossible Richard, this blog was started in September of 2005.
jb
Richard = Desperate home seller who needs to sell his home urgently :)
JB
I posted a post, which I think would be helpful for other bloggers here too. It is awaiting moderation.
Can you please look at it and take action.
lol Grim.
My dearest Richard,
Tell you what, why don’t you no longer come to his blog and listein to anyone, and come back in 3 years, and report how your RE is doing.
aye?
Rememer this as well, you haven’t made a penny until you have the money in the bank.
Real estate = tangible, but not liquid. If you don’t believe me, go ask anyone whom as their house on the market right now.
Yawn…. next……
SAS
lol SAS
(Sometimes the best deal you make is the one you walk away from)
Clot, you say it so well, I happen to be a realtor in a town i was born and raised in, most buyers are coming in from out of this town, I know this town like the back of my hand.
I noticed you mentioned teh hey day years, and structuring offers so they would be accepted, don’t forget calling buyers before the ink was dry on the listing agreement. That was helpful just a little.
I haven’t had a buyer yet unhappy with my services. Sellers… on occasion, ( more things out of my control) buyers never.
KL
Richard Says:
December 10th, 2006 at 7:08 pm
if i followed the advice of the majority of the posters on this blog 3 years ago, i’d be behind in home price appreciation a good 30%.
Yeah. I’ve had everything tied up in the stock markets. Damn, I blew it.
Yawn….next….
;-)
I fail to see how a buyers agent costs the buyer anything. The commission is being paid by the seller. That is not part of their deal.
If I have an axe to grind with the establishment, I can lower my offer 6% to ‘stick it to the man’. But my satisfaction will not change the process.
So if I’m a seller things change. I can go after a lower commission if I think that the Internet has made the process easier. However, I believe that you get what you pay for. If the top quality agent that I want needs 6% instead of 4%, I’ll gladly pay.
D2B (post #220)
Similar analogy – you’d fail to see how come Social security tax actually is 13% rather than 6.5%. You only see the latter deducted from your paycheck.
But if uncle sam were not taking it from my employer, that extra 6.5% would have come to me.
So you see how buyer’s agent is costing the buyer?
Thanks for all the advice on the new car search. I wnet to DCHonda in Tenafly, the Honda CRV is apparently extremely popular, adn jsy flying out the door (ccording to the sales man) no special financing or leasing rates on that vehicle at this time. Looked at a 2004 asking price 18,900, coulr probably get it for about 1000 less. has 28K miles on it.
Still not sure what to do, but I am still looking. I just saw last night that Toyota is offering 0% financing for up to 5 years, that is very unusual for Toyota, maybe they are starting to hurt too.
I will keep you guys posted.
ATT-
To mulch thru your last batch of questions:
FSBOs are a great place to troll for values. Most are hard-headed…but you have a great opportunity to negotiate face-to-face and apply superior skill to get what you want. Virtually every FSBO shares avarice as his primary motivator; that makes ’em sitting ducks. Overpriced properties ALWAYS end up selling for less than they could have, had they been priced properly from the beginning. Be aware that about 9 in 10 FSBOs fail and end up listing, so if you see a mark you want to hit, move fast.
Standard NJ Buyer Agreements are laughable. Very few agents even use them anymore, as they are largely unenforceable. However, no quality agent is going to let you “hang around” long enough to learn what they do. The really good ones are going to interview you throughly before showing you even one house. Even if you manage to get into a good agent’s car, 2-3 weeks and no offer…or your first crazy lowball…and you’ll be tossed off a cliff.
Attorneys make lousy Realtors. The biggest problem is that they are trained to work in an adversarial environment. RE requires a cooperative mindset. Big difference.
An attorney might be able to advise on schools, taxes, politics, Superfund sites, etc. However, any attorney going that far into detail will be charging you on an hourly (not flat fee) basis. And, what if your attorney doesn’t live in the area where you’re purchasing? Given that most RE attorneys go for $150-$400 an hour, this can add up. Also, be aware that an attorney working on a flat fee basis will not review a contract until it is fully executed by both parties. If you engage an attorney to write a contract from scratch and assist in negotiation, he will charge an hourly rate. I am a lousy attorney; most attorneys I know are lousy RE agents.
Very interesting to see so many anti-buyer agent comments here; it’s just like a couple of years ago when lots of sellers thought they could go it on their own. You don’t see too many sellers saying that now!
Anyone can make a purchase or a sale. However, I’ve been around long enough to know that there’s a difference between that and making the RIGHT purchase or sale. The problem with RE is that sellers and buyers sometimes won’t truly know how well their last purchase or sale went until 15-20 years have passed.
Bergen,
I bought an 05 CRV last May for $1100 below invoice (around $18,400 for a 4 wheel drive then; struck a great deal) for wife and baby. I bought new because it’s really hard to get a good price on a 2-3 yr used Toyota or Honda, so I did the month-end trick. All I did was go to the Honda website, email 20 dealers (took 5 mins with copy-paste) telling them I was ready to drive out in 3 days to the guy who gave me the lowest price. No need to deal with scummy floor salesmen this way.
Fast forward to 06. The CRV is paid off, and I needed a second car since I was tired of the commute into the city, and I took a NJ job. Again, impossible to get a low mileage Honda or Toyota for a decent price. So I got an 04 Hyundai Elantra commuter car for 40% of its original price (high mileage though). They have lousy resale value, but their quality rankings have really jumped the last 2 years.
PS – don’t expect to pay lower than sticker for the redesigned 07 CRV for a while.
clot: “The trouble is buyers or sellers will not know until 15 or 20 years out whether it was the right purchase or sale.”
That is a get out of jail free card for realtors, you guys do not have to answer for your performance until 15 or 20 years out?
Well it is like this, once you over pay, you will have alwasy over paid, even if in 15 or 20 years out you end up maing money.
If somebody over pays today 50 to 100k or more, ans stays int he house for 15 or 20 years, that is 50 to 100k more they will have paid, plus all the additional interest on that extra 50 to 100k.
No thanks, I will do the research myself, my attorney can handle the rest. He will be working for me, and only me, and he will get paid either way.
What did the PhD candidate in Womens’ Studies with a Masters in Comparative Religion say to the person who dropped out of a BSCS program?
“Would you like fries with that?”
Bergenbubleburst-
You must be in cahoots with UnRealtor. Misquote me out of context, then bash. What I said was: “…SOMETIMES won’t truly know how well their last purchase or sale went until 15-20 years have passed.”. Big difference between that and your clever splice-and-dice.
I don’t need a “get out of jail card”. I pay a king’s ransom in E & O insurance for that.
When you come to retirement time and end up having to wear a blue smock and greet people at WalMart, remember my words. I know plenty of people who thought they knew better than everyone, and the only difference among them is whether their smocks are blue or orange.
If you’d use an attorney as a RE agent, would you use a plumber for stomach surgery?
People use their attorney for investments :P
Clot:
Help me out because I don’t quite understand.
“…SOMETIMES won’t truly know how well their last purchase or sale went until 15-20 years have passed.”
I would think that the wrong sale would show up way before then. I would also think that the wrong sale could become right over time. Further, the wrong sale would really need to be wrong to make me have to work at WalMart.
d2B-
You are right. I spoke in way too general terms. What I should’ve said was that I know many people who have made a series of purchases and sales over the course of an adult lifetime in which they’ve repeatedly gotten the short end of the stick (usually the result of resisting professional advice). When retirement time came, they had not “maxed out” their RE investment, and paid the price.
Funny, but a lot of these same people got killed in the NASDAQ bust as well.
clot: I did not bash you as you say, but I stand behind my response to your original post. Giving yourself 15 to 20 years to make a determination as to wheter a purchase or sale worked out or not, is a get of jail free card.
As far as attorneys go, a good real estate attorney is worth very dime and then some. A Relator brings little to the table. Like I said, I can do the research and know more about my town, than any local realtor.
Not picking on you personally , perhapps you are a good as you say ;me persoanlly, I have never met a realtor I was impressed with.
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