From the Center for Responsible Lending:
In this report, the Center for Responsible Lending presents research on how homeowners have fared
with subprime mortgages. Analyzing the performance of more than six million subprime mortgages made from 1998 through the third quarter of 2006 and taking into account changes in housing prices, we find that foreclosure risk in the subprime market has escalated in recent years, and is likely to grow even worse in many areas.As this year ends, 2.2 million households in the subprime market either have lost their homes to foreclosure or hold subprime mortgages that will fail over the next several years. These foreclosures will cost homeowners as much as $164 billion, primarily in lost home equity. We project that one out of five (19 percent) subprime mortgages originated during the past two years will end in foreclosure. This rate is nearly double the projected rate of subprime loans made in 2002, and it exceeds the worst foreclosure experience in the modern mortgage market, which occurred during the “Oil Patch” disaster of the 1980s.
From Forbes:
A record-high 19% of high-cost mortgages originated during the past two years will end in foreclosure, a consequence of the growth in risky mortgage products, according to new data compiled by an industry group.
The nonpartisan Center for Responsible Lending predicts 2.2 million households in this mortgage segment, known as subprime borrowers, either have lost their homes or hold mortgages doomed for foreclosure in the next few years. This estimate comes a week after a grim survey from Fitch Ratings, which studies residential mortgage securities, showing a 16-fold increase in past-due subprime loans in the third quarter of 2006, compared with 1998.
…
This is the largest rash of mortgage foreclosures in the modern mortgage market,” says Michael Calhoun, president of the Center for Responsible Lending.The worst-hit areas for rising foreclosures include cities in California, Nevada, New York, New Jersey and the greater Washington, D.C., area that recorded steep housing price appreciation in the past few years. As the market cools, homeowners will find it harder to tap their homes for bigger lines of credit or to take cash out in refinancing.
From BusinessWeek Hot Property:
The Center for Responsible Lending is an arm of the Center for Community Self-Help, a Durham (N.C.) non-profit organization operating primarily in North Carolina that makes mortgage loans as well as loans to small businesses. It serves the same kinds of clients as subprime lenders do, so you could argue that its report is just a criticism of the competition.
To their credit, the study’s authors–Ellen Schloemer, Wei Li, Keith Ernst, and Kathleen Keest–aren’t just plucking numbers out of the thin blue sky. Their methodology resembles one used by Anthony Pennington-Cross, a senior economist at the Federal Reserve Bank of St. Louis. Here’s a link to something Pennington-Cross wrote on this topic earlier this year.
Naturally, though, the overlap in methodology doesn’t mean Pennington-Cross agrees with the findings of this study.
From the New York Times:
Study Predicts Foreclosure for 1 in 5 Subprime Loans
From the Connecticut Post:
Conn. housing market continues decline
The number of homes and condominiums sold in Connecticut dropped at a steeper rate in October than the median sales prices, but the rates varied greatly across the counties.
In Tuesday’s report, The Warren Group compared October 2005 figures to October 2006, as well as to-date numbers for each year. The Boston-based company publishes The Commercial Record; its workers make monthly trips to the state’s 169 city and town halls to take down single-family home and condo sale information.
“You’re doing much better than Massachusetts,” CEO Tim Warren said of Connecticut’s figures. This year, the median sale price in Connecticut is up 1.83 percent to $278,000; in Massachusetts, it’s down about 5 percent.
His company compiles results in Massachusetts, Rhode Island and Connecticut and is beginning to get figures from the northern New England states.
“I don’t think we’re seeing the same magnitude” of slowdown as other states, such as Florida and California, said Todd Martin, economic adviser to People’s Bank.
Connecticut’s home prices are high relative to the rest of the country, he said, but the percentage increases never approached the 30-to-50 percent price hikes of other states.
Overall, Connecticut home sales were down 7.7 percent in October, and more than 14.5 percent for the full year. October’s median price was down 2.39 percent, to $265,000, from October 2005, but the year-to-date price was up 1.8 percent, to $278,000.
from CR,
http://calculatedrisk.blogspot.com/2006/12/mba-mortgage-applications-decrease.html
The Market Composite Index, a measure of mortgage loan application volume, was 647.6, a decrease of 10.2 percent on a seasonally adjusted basis from 721.2 one week earlier. On an unadjusted basis, the Index decreased 11.6 percent compared with the previous week and was up 13.9 percent compared with the same week one year earlier.
The seasonally adjusted Refinance Index decreased by 14.6 percent to 1968.8 from 2304.4 the previous week and the Purchase Index decreased by 5.9 percent to 436.5 from 463.8 one week earlier.
Mortgage rates increased:
The average contract interest rate for 30-year fixed-rate mortgages increased to 6.10 from 6.02 percent …
The average contract interest rate for one-year ARMs increased to 5.82 percent from 5.76 …
…
The refinance share of mortgage activity decreased to 50.8 percent of total applications from 52.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 23.6 from 24.9 percent of total applications from the previous week. The ARM share is at its lowest level since October 2003.
Last week Bank of America commented on the recent surge in refinance activity:
“Strong MBA application activity … We think its just bringing forward ’07 refi’s and see little help for riskier credits.”
from CR,
http://calculatedrisk.blogspot.com/2006/12/nar-concerned-over-foreclosures.html
NAR: Concerned Over Foreclosures
The National Association of Realtors(R) said it is concerned over the rising rate of defaults and foreclosures occurring in many areas around the country, and many Realtors(R) believe that some families don’t understand the risks of taking out “exotic” mortgages.
In a conference call today with the Center for Responsible Lending and the Leadership Conference on Civil Rights, NAR President Pat Vredevoogd Combs urged consumers to make sure they understand the risks and rewards of all types of mortgages before they make a decision on a loan. …
Foreclosures are not only a disaster for families but also for communities. Problematic loans are often made in concentrated areas, and high foreclosure rates of single-family homes can seriously threaten a neighborhood’s stability and a community’s well being. “Foreclosures can lead to high vacancy rates, which in turn, can cause all homes in the neighborhood to lose value,” said Combs.
Adding the purchase index numbers:
The MBA’s seasonally adjusted purchase index fell 5.9 percent to 436.5. The index was also below its year-ago level of 453.1.
Thanks for the links njrebear.
jb
http://www.responsiblelending.org/issues/mortgage/reports/page.jsp?itemID=31214551
Center for Reponsible lending-
• 2.2 million subprime home loans made in recent years have already failed or will end in foreclosure.
• These foreclosures will cost homeowners as much as $164 billion.
• One out of five subprime mortgages originated during the past two years will end in foreclosure
• 25% of total mortgage market is subprime.
• 16-20% of subprime loans in New Jersey will face foreclosure.
Top 15 MSA Projected Foreclosure Rates for Subprime Loans Originated in 2006
Rank MSA Foreclosure Rate (%)
1 Merced, CA 25.0
2 Bakersfield, CA 24.2
3 Vallejo-Fairfield, CA 23.8
5 Ocean City, NJ 23.5
13 Atlantic City, NJ 22.2
15 Nassau-Suffolk, NY 22.0
>>
This is a repost from yesterday on subject topic. Apologies if you already read it.
NAR Concerned Over Foreclosures
Yeah… okay! How many times have I heard from *most* realtors that ARM and IO mortgages were okay because
* you can always refinance
* great if you are going to move in a few years
* make your house “pay for itself”
For the uninformed buyers so desperate to get in to the hot real estate market they now care about.
I’m home from work for the second consecutive day with a really nasty cold (which has put me in sort of a nasty mood) so I have a lot of time to read through these posts.
I love all the data and information here but what exactly are predictions going to do as far as substantially lowering the price of houses in Northern New Jersey? I mean, shouldn’t we be staging some sort of million person march boycotting the purchase of homes in Northern New Jersey? You know, one of those activist type things ala Al Sharpton that makes the 6:00 news. Can we get Boyaaa Bob in front leading the charge with a mega phone?
Humor me, I’m a little “slow”. Again, I looked at the Sunday listings, I look at the houses online and I’m still laughing at the insanity. Please, tell me, what am I missing?
Following up on # 5, no link.
The MBA mortgage applications report fell -10.2% in the latest week, reversing most of last week’s +11.4% gain to a new 2-year high. The refinancing index fell -14.6%, reversing most of last week’s +15.7% gain. The purchase index fell -5.9%, reversing most of last week’s +8.7% gain to a new 11-month high. Today’s report dampened hopes that last week’s big increase in mortgage activity might indicate some stabilization in the US housing market. The market consensus is for small declines next week for the Nov new and existing home sales reports. The 30-year mortgage rate fell by 69 bp since July to the 11-month low posted in the week ended Dec 12. In the most recent week, the 30-year mortgage rate rose slightly by 1 bp to 6.12%.
They estimate that 20% of the subprime over the last 2 years will end up in foreclosure!! Now it’s starting to get scary. For all those that are complaining that their lowballs are not being accepted. Did you ever think that they can’t come down any lower because there’s no room for them to maneuver. It’s either sell to a sucker like you or foreclose. Be patient!!
njrebear,
Sorry, didn’t see your post,#3, regarding mba.
Close on my house next week. Paying $350,000
Just found on the MLS today, the same type home in a worse town (Bergenfield) with oil heat, 1 old bathroom, and no garage reduced to $399,000 from $419,000 with much higher taxes.
The house I am buying is in a much better town with Blue Ribbon schools, a huge garage and gas heat. Yeah, I think $350,000 isn’t so bad especially since it has a new roof, kitchen and bathrooms. And the house across the street sold for $430,000 last year.
With that said, a builder just purchased a complete tear down for $411,000 in River Edge. $411,000 for land? I can’t wait to see what goes there and how long it stays on the market for.
…and trust me, by “Tear Down” I don’t mean what most of you think a tear down is. This house had a very sad history.
thatbigwindow,
350k!!! What a great price, that must be 30-40% off 2005. What town??? Congrats!!!!!!!!!!!!
TBW,
Do you mind sharing the MLS#? If not, would you mind sharing it with me via email?
jb
>>I love all the data and information here but what exactly are predictions going to do as far as substantially lowering the price of houses in Northern New Jersey?
Sorry but not much IMO.
I would rather remain anon as to where I will be living, but I will email you the MLS # james
thatbigwindow: Congratulations, what town if you do not mind my asking.
Where was that tear down in River Edge? I follow the market there closely, and was not aware of it.
I do know that inventory is sitting, and nothimng in town has sold for months.
I was seriously going to start bidding next year, but now with this whole regional school thing with Oradell, I am not so sure.
“I love all the data and information here but what exactly are predictions going to do as far as substantially lowering the price of houses in Northern New Jersey?”
Gary,
Just read post # 12. In my town,bc, closed sales are off approx 10-15% off their 2005 highs. JB reported some homes priced at 99 prices with 4% trendline inflation. Just follow the inventory/sales data. You don’t need an opinion, the market is telling you that prices are declining.
You know what Richard, you’re absolutely correct. Prices will remain flat long enough to allow asset appreciation to fall back in line with the mean. The only way to play this game is to save like hell and adjust your purchasing timeline up another year or two (or three).
BC Bob,
I posted the same time you did. I receive emails everyday from a couple of realtors with updates and they’re still listing houses with uncomprehensible prices. I would love to be proven wrong, believe me.
From the Morning Call:
After peak, Valley sees home prices, sales drop
Average home prices in the Lehigh Valley fell last month, the surest sign yet that the local home market is in retreat from the sales frenzy of the past few years.
The drop, the first in more than two years, was small: The average cost of an existing home in Lehigh and Northampton counties fell 2 percent to $208,000, compared with November 2005.
It’s unclear if the trend will continue. The peak selling season, when home prices are highest, is in spring and summer. Real estate agents and other housing market observers are hesitant to predict whether prices would drop farther.
But they all agree: The market has changed.
Other key indicators have been pointing to a slowdown, including the number of homes sold, which has fallen six consecutive months. But until November, average home prices continued to rise, albeit by small amounts.
The dip in prices means homeowners who are trying to sell their properties might not be getting as much as they had hoped. Buyers, on the other hand, have their pick of properties, and agents say they can make offers that are below the listing price.
”The sellers who are getting good buyers are pricing their homes very competitively, because buyers have just so many options they will walk away and go to the next house,” said Ellen Shaughnessy, a real estate agent with Prudential Paul Ford Realtors in Easton.
bergenbubblebust: The tear down in River Edge never made it to the MLS. The transaction was handled by the attorney for the estate of the man who owned the house. Basically, long story made short: man never gets over death of wife, becomes reclusive for 30 years and never does anything to the house including cleaning it. So, you can imagine what this house looked like inside and out (well from the front it doesnt look too bad…but that is very deceiving) The house is off of Van Saun Drive.
NAR Concerned Over Foreclosures
HAHAHAHAHAHA!
THIS ORGANIZATION IS A ABSOLUTE DISGRACE. THEY HAVE HURT MANY FAMILIES AND SHOULD NEVER BE TRUSTED!
Avoid realtors Bid directly to homeowners.
It’s payback time baby!
BOOOOOOOOOOOOOOYAAAAAAAAAA
Bob
Thatbigwindow, I’m sorry, but I am SO curious as to the sad history of the teardown! That is probably completely wrong of me, but it makes me think about a house my parents almost bought before they ended up with the one they are in now – they looked at a big beautiful home in a lovely area of our town, but as my mom said, it just didn’t feel right to her. Gave her the heebie-jeebies, so to speak. Turns out someone was murdered in it. I myself had the same experience with a place in Maplewood – boom time, and this house was not selling and I could have gotten a deal. But hubby and I could not get out of there fast enough. We don’t know if anything bad happened there but the mojo was just off.
Yes, it’s off topic, but I am always fascinated with the history of houses.
Just saw your post – that is a sad history.
To rational homebuyers:
Just want to let you know prices are tumbling behind the propaganda being spewed….trying to confuse you. Patience.
Hey Gary, go ahead and buy near asking.
BLEED”EM DRY!
Take at least 25% off 2005 peak prices
NJGal: I know what you mean…we looked at many houses, and some just have that “heavy” feeling to them…
Interesting report from Center for Responsible Lending states that 2 Million Americans will lose their homes due to foreclosures.
http://www.responsiblelending.org/pdfs/FC-paper-12-19-new-cover-1.pdf
thatbigwindow: That is a sad story. I too am fascinated with the history of houses.
I too belive that houses do have vibes. The one I used to own nevr felt right. It needed a ton of work, which we did.
I know it seems crazy, but after we moved there, things just seemed to go down hill. Was laid off from job, after being there many years etc etc. I heard from an old timer on the block, that soemthing evry unpleasant happened there with a teenage girl, 15 years before I bought it.
Anyhow sold the house because the taxes (River Edge) just skyrocketed, and I basically had to start over at 40, after being laid off.
Fortunatley we were able to sell it at a huge profit, and are now renting and watching the prices drop.
Would move, but my younger kid love the town schools, and it would not be fair to move now, as older kid wnet through the whole school system. I have to do something next year, as the owner is selling the house I rent and retiring to Florida.
i drive by my old house form time to time, and now notice that the new owners are not taking care of it, it is falling back into decline;perhaps the bad vibes are still there
bought a house in Clifton, Allwood area for $405,000 with 4 bd, 2bath & year 2004 roof,year 2006 central air, whole 2nd floor built up in 2004. Is this price looks reasonable?
We are in unchartered territory. I expect 2 mil forecasts to be optimistic.Ican’t imagine all the folks who work in RE related food chain companies are not in a world of hurt now. If you didn’t save and build an emergency fund you are toast.
Lots and lots of people taken advantage of in this massive historical credit bubble.
Think think think….for yourself. Nonone is going to do it for you and put your best interest in mind except yourself.
Take at least 25% off 2005 peak prices
Is this price looks reasonable?
Well is it 25% off of 2005 peak prices?
You should know! If it is near 2005 bloated prices you did NOT do well…you are a bagholder!
BOOOOOOOOYAAAAAA
Bob
Is this price looks reasonable?
shane,
Why bother asking that question after you already purchased it?
jb
To rational buyers:
The propaganda machine is in full force. BEWARE!
Avoid a realtor go direct and Take at least 25% off 2005 peak prices
Draw up a letter and take emotion out of the equation.
bergenbubble: if you dont mind me asking, where in River Edge was this house?
Hey shane No commish in last 6 months.
Beware of spin!
Take at least 25% off 2005 peak prices
JB,
I am not closed yet. Still under attorney review. OLP is $469,000 than reduce it to $449,000.
tahtbigwindow: Millbrook
The one possible affect I see is a tightening of lending standards and as a consequence a drop in the number of potential buyers. As I mentioned before I have a friend who is a mortgage broker who told me that after his local company was bought by a national mortgage co they raised the underwriting standards and he and the other brokers are getting killed. I think in bubble markets like those on the coasts that this will be the impact (fewer qualified mortgage applicants = fewer buyers = less demand = eventual price drops).
Ok, so many acknowledge homes have bad vibes – I can never get a clear answer on this – is an agent required to disclose a strange history to you, not required, or not allowed? I have heard “not allowed.” I know that the agent told my parents, but that was in the mid-70s, so maybe things have changed. I still don’t know if the people down the block from us know that my neighbor committed suicide in their house but they have been there for a while without a comment. Anyone know for sure?
“If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years,” said David Lereah, chief economist of the National Association of Realtors and author of “Are You Missing the Real Estate Boom?” “It’s as if you had 500,000 dollar bills stuffed in your mattress.
“He called it “very unsophisticated.” (Los Angeles Times Aug 28th, 2005)
bought a house in Clifton, Allwood area for $405,000 with 4 bd, 2bath & year 2004 roof,year 2006 central air, whole 2nd floor built up in 2004.
Give your comments dudes; butterfly is flying in my stomach.
NJGal: No, what happened in the house prior is not required to be disclosed to the buyer.
Shane, I can’t find the match in the MLS, is it GSMLS listed?
jb
Dammit, spit my coffee out on my new LCD. You’ll probably do the same when you see this headline, which just rolled across the MarketWatch news ticker:
Bush: ‘I encourage you all to go shopping more’
JB,
Listing was expired and now has only private listing with listing agent. House was built in 1950 and renovated in 2004. lot size is 50*151 and built up area is aprox. 1400 sq. ft. near by house with 8 years old roof sold at $400,000.
I don’t think the agent/owner is required to disclose such instances in most places, but there’s nothing to stop you from requiring the seller to warrant that no one was murdered, committed suicide, etc in the contract
Drop me an email, I live in the Athenia section.
jb
Thanks. If it’s not required, I guess you can ask. I just find it interesting – I’m someone who probably would not buy a house with that kind of history, but I imagine that it’s a big selling point to many, to find out that something infamous happened in a place, or that it’s haunted.
Hey Bergenbubblebust: just curious..did that house happen to have a high bathroom ceiling?
There was a house that we looked at in Rivervale.. Seemed to be very heavy nice property but on the market a long time.. We finally asked what the deal was because it seemed like a deal and apparently the someone murdered someone in the house..Can’t remember the real story.. But the house was great but felt really creepy.. It sold and I wonder if the buyers know about what happened there
Broker that I know told me a story about a home in Bergen County with a grave in the backyard. The seller believed the house was haunted, but by good spirits.
When selling the house, they were concerned about scaring away potential buyers.
When touring the home during an open house, the buyer saw the grave and asked the listing agent if the home was haunted. The listing agent said yes, but that the spirits were good (repeated what the seller had told them, verbatim).
The potential buyer responded, quite enthusiastically, “Oh Good!, I’m a medium and I very much enjoy meeting new spirits”.
Needless to say, the house was sold shortly thereafter.
jb
ok, so how will this avalanche of subprime defaults affect the non-subprime market? higher mortgage rates across the board? lower prices across the board? or will this be about as relevant to most of us as the cost of housing in Buffalo?
Increased for sale inventory
Increased foreclosure inventory
Tighter lending standards
Lower demand due to a smaller pool of buyers
Other possible outcomes?
Higher mortgage rates on subprime loans as MBS buyers demand higher risk premiums. Theoretically, we could the same happen to prime loans as well.
jb
Having lived grown up in a house that people have claimed to see ghosts and peed in thier pants and won’t go in .. (my chilhood home was built on top of what they think was a slave burial ground). I couldn’t sleep there by myself so I prefer a ghost free house.
spiral effect caused by housing job losses (100s of thousands in the next 4 months per NPR)
tighter lending standards can’t come soon enough. if the money is available, people will borrow to buy
From the WSJ (can someone send me a link?):
HSBC Sours on American Loans
HSBC Holdings PLC is learning that the U.S. lending business may not be so easy.
The London bank is facing rising problems with its U.S. consumer-loans portfolio nearly four years after its acquisition of Household International Inc., a U.S. lender that specialized in subprime loans, or loans to people with spotty credit records. The acquisition has been well-received because it raised HSBC’s U.S. profit, complementing its huge Europe and Asia businesses.
Last month, the U.S. unit said a portfolio of consumer loans it acquired recently had quickly soured. This month, HSBC underscored the loan situation was worsening. That has led to an unexpected rise in delinquency rates in mortgage-related debt. These loans are secured with collateral, so the bank’s ultimate losses may be pared. Still, it could portend further losses in unsecured credit-card loans. The problems have arisen despite HSBC’s having one of banking’s best computerized systems for analyzing consumer risk.
“Our concern is that next year, the worsening is going to spread beyond the secured-loan book and actually going to start impacting the unsecured book,” said Antony Broadbent, a bank analyst at Sanford C. Bernstein in London. “And economically, that is a far bigger deal because of the amount of unsecured lending that HSBC has and, frankly, because the loss rates on that business are much higher.”
The problems have arisen despite HSBC’s having one of banking’s best computerized systems for analyzing consumer risk.
I wonder if these models have been tested through an actual downturn?
jb
Do you guys think in the future that McMansions will be haunted by ghosts who cry “Option ARMssssss” in the night:)
thatbigwindow: not sure how high the ceiling was, probably 8 feet. I would tell you the exact house, but have to be careful, if there are people in mt town to lurk on this site, I would rather they not know who I am.
Apparently the story goes that there was a party at the house, no adults home, lots of drinking, and then the incident with this younbg teenage girl. I believe it was the late 80’s when it occurred.
Do you have any advice as far as my staying in River Edge.
Risk Model
if loan == mortgage {
risk = ‘none’
}
We don’t understand why the model failed. The model performed perfectly over the past 5 years.
jb
JB,
I was listening to the broadcast live at my desk and heard Bush say “I encourage you all to go shopping more”. I almost fell off my chair.
in my town, sellers seem to have dug in for the season. Listings now sit with no price reductions, all very stale. Hardly any turnover, rarely anything new. Looks to me like sellers are holding their collective breath and waiting to try again next year.
We’ll see where inventory goes. With tighter lending standards, subprime pressure, I wonder if the lower end will continue to hold up? A reasonably priced SFH can sell if it has a decent location and good condition. I’ve looked at a few that have. Most of what is sitting has one bath…always a harder sell.
Advice for staying in River Edge? Well I couldn’t afford the taxes in River Edge so I left and am not looking back. There are towns with nice schools and lower taxes in Bergen County. I am sorry, but $9,400 yearly taxes for a 1 bathroom 3 bedroom ranch is simply insane. Seems like everyone is leaving River Edge because of the taxes. Same thing is happening to Bergenfield. Their taxes are higher than River Edge, except Bergenfield is a wasteland.
I’ve been going back and forth with the folks at the NJ Department of Banking and Insurance on adopting the CSBS non-traditional mortgage guidance.
jb
Dear Mr. Bednar,
The Department is in the process of review all on the information in
reference to the above subject. When the review has been completed, a
decision will be made on how best to proceed forward. We appreciate your
interest in this matter, and it is the Department’s intention to arrive at
a decision shortly.
Terry K. McEwen, Director
NJ Department of Banking & Insurance
#46>
It won’t be long before we hear “i enocurage you all to go house shopping”
Bush: Spend
Paulson: Save
Mo: Slap, Slap
re: Bush encourages shopping
I thought the Treasury Sect. recently said the US had to increase its savings rate? Which is it? Can’t the Administration get its story straight?
Perhaps a fireside chat telling us it’s our civic duty to buy houses?
jb
Grim,
Here’s the link:
http://online.wsj.com/article/SB116658293042555361-se
arch.html?KEYWORDS=HSBC&COLLECTION=wsjie/6month
Bush: Spend
Paulson: Save
Mo: Slap, Slap
nice
thatbigwindow: Yeah you are right, and I know it, I am just caught between a rock and a hard place right now.
As far as insane taxes, it has not even started yet, you have the 15 new class rooms coming to Cherry Hill, with all that entails, new teacher hiring, teachers aides, custodians, heating,and lighting etc.
Now you have the whole possible dissolution of the River Dell district, with another potential hugh tax increase. Sadly we are not to talk about this, otherwise we are anti-River Edge, that is the mind set in town.
It is a shame the way the town is going, but at least I get to say I told you so.
If I could go tomorrow, my choice would be Wyckoff, I had the opportunity to buy there 10 years ago; I m sorry now that I did not.
this is where the bonus money is going…..
http://www.bloomberg.com/apps/news?pid=20601103&sid=a9b9kNFst8uU&refer=us
I am now utterly convinced that the Presidency & entire executive branch exist only for the purpose of public entertainment.
The US is effectively being run by a loose cartel of interests that include Halliburton, Goldman Sachs, integrated oil companies, money center banks, big pharma and the religious right.
anyone have any idea why my Vanguard Int’l Value Fund dropped 9% yesterday?
What a choice quote..
Hammacher Schlemmer, the 158-year-old purveyor of gifts such as $13,000 hand-carved rocking horses, this year is offering Zoltar fortune-telling machines similar to the one in the Tom Hanks movie “Big.” So far it has sold nine of the $10,000, 6.5- foot (2-meter) robotic seers, said manager Linda Drummond. Zoltar is the gift of choice for several hedge funds, she said.
skep,
Thai currency control fiasco?
jb
From Bloomberg:
Emerging-Market Stocks Gain; Thailand Rescinds Capital Control
Emerging-market stocks rallied from the biggest drop in three months after Thailand’s decision to rescind day-old currency controls spurred expectations developing nations will be less willing to limit investment in capital markets.
Thailand’s SET Index jumped 11 percent in Bangkok after the government exempted equity from restrictions on foreign investment that had sent the benchmark on its biggest slide in 16 years yesterday, wiping out $23 billion in market value. South Africa’s main index rose to record, South Korea’s advanced to a seven-month high, and stocks in Malaysia had the biggest gain in three weeks.
Central banks in Malaysia, the Philippines and Indonesia responded to the rout in Thailand by saying they wouldn’t use capital restrictions to control their currencies. The Morgan Stanley Capital International Emerging Markets Index, which tracks 25 markets, added 1.3 percent, after falling 1.6 percent yesterday.
“It’s positive for emerging markets because it shows governments in this asset class are now quick to change unpopular decisions,” said Matthias Siller, who helps oversee $6 billion in global emerging-market assets at Baring Investment Service in London. “That wouldn’t have been the case 10 years ago.”
cf from 75,
I don’t see any real estate on that list :)
As of now we know of 4 home purchases .. unconfirmed of course LOL
“I thought the Treasury Sect. recently said the US had to increase its savings rate? Which is it? Can’t the Administration get its story straight?
”
Both the Treasury sect and the President are right. The President wants you to spend whatever you saved since the Treasury Sect asked you to start saving!
>>in my town, sellers seem to have dug in for the season. Listings now sit with no price reductions, all very stale. Hardly any turnover, rarely anything new. Looks to me like sellers are holding their collective breath and waiting to try again next year.
agreed, i’m seeing the same thing in my parts. i’ve talked to two of these sellers and i got the same story. our house is already under what we know it’s worth so we’ll sit tight and wait until the right buyer comes along, after all it only takes one. note i’m in a ‘desirable’ town so there’s a bit more smugness around here.
skep-tic,
Could be an annual distribution, or Asian sell off from the Thai fiasco yesterday. One of my int’l funds did the same thing, but the last distribution was 12/20/05 so I think this one is too, although it has not yet been reflected in the account.
Richard #83,
Glad to have some company here. I’m looking in a “desirable” town too, and seller smugness rules!
My bet it is Thai.
Clot, #76,
You forgot the PPT.
Bergenbubblebust,
Run away form Holland/Wyckoff. Why would you want to live in a town that is ruled by a mayor that is not elected by the people? Wyckoff is the posterboy for why we need change in NJ.
Wyckoff is where NJ Senator Henrey P.McNamara (R) who serves the 40th districe lives. MacNamara even though he is a Republican has been fleecing the fine taxpayers of this State since 1985. That’s over 20 years of suckling on the teat of the NJ taxpayer. Henry McNama Jr has been serving on the fine council in Wyckoff in excess of 10 years. We need change on the local and State level if we ever want to see TAX RELIEF!!! VOTE EVERYONE OUT AND START FRESH!
That bonus money article is absolutely amazing. Is it true that some Wall Street broker is going to buy and bulldoze everything north of exit 165 on the Parkway in order to build his own country?
Off topic post, but time sensitive question!
I was posting this scenario the other day under one of the other postings.
MLS 2351629. Priced at $335K, taxes $6700 for a house that needs at least $50K in work (new kitchen and bath for starters).
Selling with a BEST and FINAL offer by today at 5pm. My realtor found out that there will be 2 other offers. She said it is almost guaranteed we will not get this house for under list price, and if we do that, we’re just wasting time. We don’t think the house is really worth $335K – even though we can afford that, with the amount of work it needs, it seems pricey.
And, I feel like asking for best and final with no room for negotiation with the seller is just not right.
I know I’ve asked before (so, Clotpoll, not comments on my whining!!!), but final thoughts on passing this one up before I do it?
One of the listings I was following just went off the realtor website.
How do I know whether it was sold or it was simply taken off to post again in spring??
lina: what is it about this house that is so special?
Lina,
Maybe there are offers that are above yours maybe there are none. Unless you trust your Realtor wholeheartedly all you have to go buy is your gut. If you REALLY must have THIS house and you think it is fair to pay over and beyond what it is worth then do it. If this is not the one, revisit in 2007 where there will be more houses to look at.
Being careful not to stare into my crystal ball for this: i would say there is a distinct possiblity of inventories climbing right after super sunday. There will be others. From previous posts i know you are not keen on going into a bidding war of sorts over this place.
Well, location (sort of, but not really, given that it’s west of Boyden in Maplewood which is not the best area). And the house has lots of potential – old molding, stained glass windows, etc. Size of bedrooms are good, too. And, the neighbor on one side of it has their backyard bordering our property line, so it only has the one neighbor on the right, and open space on the left.
But I don’t think it’s worth more than $320-$325K, given the amount of work it needs.
I know the answer is to walk from it, but it’s frustrating to have now bid/seriously wanted to bid on 4 homes, none of which worked out (granted, we lowballed on the 3 we’ve already bid on).
bought a house in Clifton, Allwood area for $405,000 with 4 bd, 2bath & year 2004 roof,year 2006 central air, whole 2nd floor built up in 2004.
Give your comments dudes; butterfly is flying in my stomach.
Shane,
I rent in the Dutch Hill Section. Not quite as nice as JB’s neighborhood, but not bad.
What are your property taxes?
Lina.
I’d just give it a pass. You’re falling for the trap of the unnatural time constraint that is created by the seller. I’m a great non-believer of the theory ‘buy now – since supplies are limited’.
Would you be OK in scenario if this house would be selling for 270K in 2008?? Can you absorb that loss of 65K and still be at peace (Note: you would have spent about 60K in these 2 years for interest, property tax and upkeep – I did not even include the 50K renovation that you mention is needed for it). Would you be OK with a loss of (65 + 60) = 125K in 2 years?
But ultimately it is your money and your decision. But if you choose not buy, the next move of your’s should be to fire your realtor, who seems to be a real arshole.
att,
Email or post the MLS, someone with agent access will look it up for you, only takes a minute.
jb
Sorry, i meant to say it’s EAST of boyden, bordering Irvington.
From Bloomberg:
Sub-Prime Mortgage Bonds May Fall as Fannie Cuts Back
Bonds backed by mortgages to the riskiest borrowers may weaken next year as Fannie Mae and Freddie Mac, the largest providers of money for U.S. home loans, cut their purchases, according to Friedman Billings Ramsey Group Inc.
The federal regulator of the government-chartered companies this month told them to tighten standards on “nontraditional” mortgages they finance. Waning interest by Fannie Mae and Freddie Mac in so-called sub-prime mortgage bonds may boost the yield premium investors demand to own them, Friedman Billings said.
“Spreads of sub-prime securities may widen unless the origination of sub-prime loans in 2007 falls in concert,” Friedman Billings analysts led by Michael D. Youngblood said in a Dec. 15 report. Friedman Billings, based in Arlington, Virginia, is an investment bank and money manager with a focus on mortgage companies and assets. It also owns a sub-prime home lender.
…
Fannie Mae and Freddie Mac, which own about 15 percent of the $10 trillion U.S. residential mortgage market, last year bought $221.3 billion of “non-agency” mortgage securities, or those not issued by them or government agencies such as Ginnie Mae, according to Friedman Billings. Assuming all the purchases were of sub-prime mortgage bonds, they bought 37 percent of the total new volume, the firm said.
The Office of Federal Housing Enterprise Oversight told Fannie Mae and Freddie Mac on Dec. 8 to create policies on nontraditional loans that mimic what federal regulators asked of banking companies three months ago, including that lenders assume borrowers face higher payments than initially required in evaluating the consumers’ ability to pay off the debt.
…
Non-agency securities make up about 40 percent of the U.S. mortgage-bond market. About 15 percent of Fannie Mae’s $725.5 billion mortgage portfolio, or $108.6 billion, was made up of such securities on Sept. 30, compared with 13 percent, or $97.8 billion, a year earlier. About 33 percent of Freddie Mac’s portfolio, or $235.7 billion, was made up of them on Oct. 31, compared with 34 percent, or $232.4 billion, a year earlier.
Sellers of sub-prime bonds to them include Countrywide Financial Corp., New Century Financial Corp., H&R Block Inc.’s Option One Mortgage, ACC Capital Holdings’ Ameriquest Mortgage, General Electric Co.’s WMC Mortgage, Fremont General Corp. and Novastar Financial Inc., according to Friedman Billings.
I dont have the mls. It was a 593K 4Bdr 2.5Bath 1973 built SFH in north edison.
It was there day before yesterday and today morning it is gone.
Can you search on it?
U.S. reports capture of al Qaeda in Iraq leader
http://www.cnn.com/2006/WORLD/meast/12/20/iraq.capture.ap/index.html
att
I don’t see any ads in NJ.com for a house in Edison at $593,000 … but maybe you should look in NJ.com and see if that house is there with a slightly different price?
Do you remember the realtor?
Lina,
“But I don’t think it’s worth more than $320-$325K, given the amount of work it needs.”
There – you answered your own question. If you like the property and would be happy living there, then make an offer based on what you think the property is worth. Don’t let the agent or seller pressure you into offering anything more. There’s more to an offer than simply the price, such as ability to get a loan and likelihood the loan will close.
If your offer falls short of the market value, there will be other houses that meet your needs.
Sounds like your agent is an idiot, and perhaps colluding with the listing agent to make you think there is ‘demand’ for this house. Find someone who truly represents your interests.
Scribe.
Tried searching the njmls website too. The house is not there too.
Dont remember the realtor.
Yeah that collusion happens alot on Hoboken between the agents.
Well, I would put in an offer for $320-$325, but my agent won’t do it. She said we’re wasting time if we put in an offer under list price.
So, screw it, I told her we’re not going to put in an offer, and I called the listing agent and left him a message. If I can, I’ll put the offer in directly with him.
Is that legal for me to do?
Lina.
Not sure about legality.
But if I remember clotpoll’s various posts correctly, there is a 3 month ‘protection’ timeframe for the agent. At the same time in one of the other posts clot also mentioned that the NJ buyer-agent agreements are non-enforcable. That is why the agent has to be agressive and toss out a buyer, he thinks is just using him to gain knowledge.
I think in your case since the agent is refusing to put in an offer, it should be OK to put an offer directly.
JB / Clot / KL – comments?
Lina, I second them on giving up on this house. Do not buy on the border of Irvington. A little patience will benefit you, as listings are soon to increase in the spring.
As to your second question about putting in the offer with the listing agent, I was also wondering about that – if you have an agent that is just not doing it for you, can you do that?
Yeah, who needs the headache of using another agent at this point.
It’s done, and I’m going to now enjoy my holidays with no buyers remorse!
Thanks for all the great advice (and support) on this board….
Lina.
Also it seems that you’re fixated on this house (much to the bewilderment of everyone here).
If you have to have put an offer, why not put an offer which seems right to you rather than what (imaginary?) others are putting. How about putting in an offer at 325 (original list price) – 50K (amount of fixing required) = 275.
What’s wrong in putting in an offer at 275K if you have to put an offer?
If there really are other offers at 335K, you’d lose even when bidding 325K. But if it were a hoax, you’d look like a fool paying 325K.
Also bidding at 275K – you’ll have the satisfaction that you did the ‘right thing’ rather than follow the mad rat race.
lina: Don’t walk away form it, run, run fast. And please why this obsession with Maplewood, do not repeat do not buy there, huge mistake.
“Spreads of sub-prime securities may widen unless the origination of sub-prime loans in 2007 falls in concert,’’
They are and will continue to widen.
Lina,
When you are at peace with yourself, you then know you made the right decision. Listen to your gut.
nwbergen: I am sure it has problems, but the taxes are a whole lot better than River Edge, and it is lsess crowded and congested, and does not have all the multi-family houisng. ALso it is surrounded by all nice towns.
Wyckoff may have its problems, but it has got to be head and shoulders over River Edge.
Mc Namara, is he the same guy that used to own the car dealership?
Experts.
How long is the seller’s agreement with his agent? Is it 3 months or 6 months?
How about – if you’re looking at a house which has been sitting there for few months. You’d know that the seller’s contract with his agent is about to expire. Can a buyer send an offer directly to seller telling him once his agent agreement expires, here’s my offer @ 84% of the list price (10% discount he would have been giving even with agent, and 6% off since there is no middleman after the expiry of contract).
Is there any catch with the above? Seems like doable to me.
Sheesh, more Halliburton conspiracies…
Sad most people don’t know that President Clinton used Halliburton extensively with “no-bid” contracts (see LOGCAP) during the 1990s war against Balkan countries that didn’t attack or threaten the United States.
Lina,
Something else to think about, you put $50K into a house (notify the town and get a permit) your taxes are going up once you’re done. I put a $150K addition on my old house (I added beds and baths, not just kitchen makeover) and my taxes went from $5,500 to $11K, I fought the assessment with the county and they dropped it to $10,500, woo hoo! thanks guys. I now rent.
BergenBuyer
I meant to add, adding beds and baths are tax killers as I think they have a higher rate than just a makeover. Taking your house from a 2 bed to a 4 bed is a big deal tax wise.
skep-tic Says:
December 20th, 2006 at 11:53 am
anyone have any idea why my Vanguard Int’l Value Fund dropped 9% yesterday?
https://flagship.vanguard.com/VGApp/hnw/FundsDistributions?FundId=0046&FundIntExt=INT
“Also it seems that you’re fixated on this house (much to the bewilderment of everyone here).”
Well, I can understand that – you put in a lot of time and effort to look for place, after making the difficult decision (plus emotional and financial committment) to buy in the first place. It’s hard not to get attached to places. I got attached to a place we lost in Maplewood once – I am way over it now that I am not in that process anymore, as logic has taken over and I realize that the house would not have suited my needs at all (although who can worry? Emotions will soon t work in buyers’ favor again. Psychology that drove the market up will take it down again).
att
I was referring to NJ.com – the site that carries the online version of the ads from the Star-Ledger and other newspapers, not njmls.
Sometimes, houses disappear from the mls, but the ads are still there.
I am fine with my decision. My gut tells me it’s wrong to bid asking or over asking, and my gut has not done me wrong yet in my life.
So there it is. My realtor is probably aggravated, but I’m even more aggravated with her!
>>As of now we know of 4 home purchases .. unconfirmed of course LOL
you’re comparing some news article to peer-to-peer experience? real funny dope.
For what its worth lina i think you did the right thing. If your agent was aggravated then too bad. Some of those guys/gals are long overdue for a deep blast of smelling salts.
make that a 5th house i just heard from an acquaintenance who’s a bond trader for oppenheimer that is going under contract on friday due to bonus money in summit. of course this must also be alie since they don’t fit your pet theories.
Dammit, spit my coffee out on my new LCD. You’ll probably do the same when you see this headline, which just rolled across the MarketWatch news ticker:
Bush: ‘I encourage you all to go shopping more’
What do you expect from a guy who was always bailed out in life? He thinks milk costs $5 a gallon…that’s how out of touch with reality the guy is.
about the contract period with a buyers agent.. my experience:
I am working with a Wiechert agent and the agreement says that I have to send in a return request terminating my contract, and once they receive it, I cannot use another agent to buy any house she showed for 180 days.
I am not happy with this agent but I have not fired her yet. Not happy because if I low-ball an offer, the offer is never going to the seller.
And, inspite my saying, the offer is not sent in writing.. always over the phone and once it was by Fax.
The problem with firing this agent is that she’s my 3rd agent.. and they all turn out to be assholes.
More recently, I have just started contacting the Listing agent directly.
More importantly… all this drama has just put me off buying a house. I just ‘remodelled’ my rental – rugs, paintings, new storage boxes, converted the garage(it’s a condo) to storage..
Happy Holidays everyone!
wall street bonuses directly tied to RE prices according to miller samuels. i found some other articles that talk about price but not volume.
http://www.biggerpockets.com/renewsblog/2006/12/18/congratulations-wall-street-and-ny-real-estate-brokers/
>>The problem with firing this agent is that she’s my 3rd agent.. and they all turn out to be assholes.
RE agents are like fine wines, they’re isn’t too many of them. if i might make a broad suggestion. look for someone that comes from a respectable firm that’s been doing business for 20+ years through the ups and downs. i also prefer females as they tend to be more sensitive to this type of transaction. just my 2.
But Richard this article talks about the bonus recipients buying in NY, not in Summit or anywhere in NJ for that matter.
Richard Says:
December 20th, 2006 at 3:38 pm
make that a 5th house i just heard from an acquaintenance who’s a bond trader for oppenheimer that is going under contract on friday due to bonus money in summit. of course this must also be alie since they don’t fit your pet theories.
Ree-chard:
Well here’s 5 stupid transactions from someone with deep pockets as well. What’s your point? Omar Minaya and Brian Cashman are laying low because they know that come next winter, they will be bailing out these idiots for shelling out top dollar at the wrong time.
The Cubs
December 19, 2006 Signed pitcher Jason Marquis who had been with the St. Louis Cardinals to a three-year deal worth $21M.
December 15, 2006 Agreed to terms with pitcher Ted Lilly on a four-year contract worth $40M.
November 21, 2006 Agreed to terms with outfielder Alfonso Soriano, who had been with the Washington Nationals, on an eight-year contract worth $136M.
November 14, 2006 Signed infielder Mark DeRosa, who had been with the Texas Rangers, to a three-year contract worth $13M.
November 12, 2006 Resigned infielder Aramis Ramirez to a five-year contract worth $73M.
Richard; I think it is more hype. Will it effect soem trophy properties in some premier neighborhoods in NYC, I am sure, but do not be so sure these bonus guys will over pay either, its not just the money, its the game.
As far as the 500K crap boxes in north Jersey,and Westchester, CT, and LI, this bonus money money means absolutely nothing. I have seen and lived it all before.
Richard – Thanks.
Actually I used very similar criteria.
I called up Wiechert (reputable?) and asked for someone with minimum 10 yrs experience in the area.
fine whine… indeed.
I have to admit – I have worked with agents in another state (Georgia).. and believe me the service I got there was far better – and the house I bought there was less than 200k (ranch on 1/2 acre 5yrs ago)
chicago, try reading a couple of articles. the rest of you do the same. groupthink doesn’t make you right.
richard: I certainly am not saying you are lying, in fact I really do not care, but to assume that a few bonus guys are buying, and extrapolate from that that this means the real estate market is fine, is a stretch.
Do you know what these guys are paying, are they out bidding each other. You also need to understand the mindset.
Believe me these when they sit around on a slow Firday afternoon and chat, will chat about the deals they made, its not just a money thing.
There is nothing better then a trader/banker that buys this year would love to say to a trader/banker who say bought last year, that he got a better deal then him.
These guys are not stupid, yes they will buy the cars, and all big screen TV’s, and 25K watches etc, but they are not necessarily going to over pay for houses, they want bragging rights.
And lets not forget all the inventory that is out there, and yes the very few numbers of people who will be getting these lage bonuses.
“make that a 5th house i just heard from an acquaintenance who’s a bond trader for oppenheimer that is going under contract on friday due to bonus money in summit. of course this must also be alie since they don’t fit your pet theories.”
Aren’t you also committing “group think” by claiming that bonus money is propping up the real estate market? Yes, you are indeed – you along with thousands of realtors for years have claimed this, and even the Miller Samuel article talks about PRICE in the LUXURY NYC market. Not some dump in Summit. It’s volume that counts, and if sales are down and inventories increase (and they always do in the spring), the market continues to die.
Besides, A LOT of people get bonuses, and I am sure that some do indeed use it for real estate or other things, but again, it’s so spread out as to be no more than what Clotpoll once called “a blip.”
ChiFi, I laugh every single time you call him Ree-chard.
>>As far as the 500K crap boxes in north Jersey,and Westchester, CT, and LI, this bonus money money means absolutely nothing. I have seen and lived it all before.
not so sure. the younger guys on the street don’t make the mega bonuses. they get the $50k-$125k variety. that’s a good chunk and could provide a downpayment and enough left over to do some work. of course every situation is different. i don’t know how we’ll ever definitively know how people are financing their purchases hence why i used my own everyday experiences as a data point.
Richard,
How were bonuses last year? Wasn’t last year the best year on record (as was the year before)?
jb
You know, there was a whole lot of talk about Wall Street bonuses saving the market last year at this time..
Plenty of articles like the following:
http://money.cnn.com/2006/01/11/markets/job_bonuses/index.htm
Wall Street bonuses set a new record of $21.5 billion in 2005, surpassing the previous record of $19.5 billion set in 2000 during the peak of the last bull market, according to a report released Wednesday by New York State Comptroller Alan G. Hevesi.
The big bonuses didn’t save the North Jersey market last spring, what makes you think they are going to save the market this year?
jb
From the AP:
Top Biz News of ’06: Housing’s Decline
The nation’s house party ended with a thud in 2006, leaving everyone from condo flippers to Federal Reserve chairman Ben Bernanke waiting to see what would happen next.
The sudden stall in home sales, home construction and home prices — and what that will mean for the economy — was voted the top business story of the year by U.S. newspaper and broadcast editors surveyed by The Associated Press.
At the housing market’s peak, buyers rushed to open houses, blank checks in hand. Lenders gave big-money mortgages to people who could barely afford their monthly payments. That ended in 2006, when home builders scuttled projects, walked away from land they’d hoped to develop and would-be buyers canceled orders.
The story bumped high energy prices from the top of the list, where it had been for the past two years. Many of the year’s other top business stories were the latest installments of years’-long sagas, such as U.S. auto makers’ woes and the unraveling of Enron Corp.
NJGal and Chick-ago, these houses are recently under contract BECAUSE of wall street bonuses and no they aren’t ‘luxury’. sorry to burst your bubble (no pun intended), but i have some facts here and you got squat. any other pet theories with no facts to counter?
MLS #
2299185
2292627
2326315
The young analysts and associates getting the “$50k-$125k variety” don’t live in the suburbs. They work too many hours to commute from further than Brooklyn or Hoboken.
oh i’m sorry i forgot another one (#2337680). this was on the market orig. at $700k about 5 months ago and relisted twice. just went under contract due to bonus money. i know this because i know the broker that sold it.
as i’ve said before, wall street money will have varying impacts depending on the town. westfield has a great commute to wall street hence the increased interest. i would also expect to see towns on the midtown direct line to see increased activity as well.
JB: There was huge bonus money in 1992-93 in Fixed Income, big,big money at the time, and it did ntot save the marrket then either.
I am exhasuted trying to get this point across to non Wall St people. If people do not work in the industry, they just do not understand it, it is as simple as that. I have seen it and lived it all before.
“Omar Minaya and Brian Cashman are laying low because they know that come next winter, they will be bailing out these idiots for shelling out top dollar at the wrong time.”
Chi,
No money for Rickey???
It’s official: Yahoo Finance has named the housing market decline as the #1 Business story of the year. So we’re all not just imagining things.
Actually, I think the decline only started in Q3, so we’re about six months in. How about #1 story for the second half of the year? Seems to me these cycles typically take longer than half a year to play out, but I’m probably deluded by group-think. Sorry.
Don’t remember too many people at the beginning of ’06 predicting the housing market decline would be the year’s big story. Maybe Schiller, but he was probably at least a year early.
“NJGal and Chick-ago, these houses are recently under contract BECAUSE of wall street bonuses and no they aren’t ‘luxury’. sorry to burst your bubble (no pun intended), but i have some facts here and you got squat. any other pet theories with no facts to counter?”
You have a few houses sold because of bonus money in ONE town. It’s a fact but one that is not dispositive of anything except that in one town some bonus folks bought some houses. It’s an anecdote. Now, how will that anecdote matter if those are the ONLY 5 houses that sell because of Wall St. bonuses? It won’t. I’m not suggesting that will be the case, but only to make the point that your small fact really shows nothing in light of the Miller Samuel article and others I have read (but cannot find – NY Sun? Observer) as well as stats showing that the bonus myth is just a myth.
Plus, you never responded to Grim’s point about how last year was ALSO a record bonus year, and people like you made the same argument and were completely wrong as to the effect on the real estate market.
Richard.
You seem to be a realtor in Wesfield area. Wouldnt you have a vested interest in propping up the Westfield real estate?
Also I checked the commute time (since you mentioned it has a great commute to NY) on njtransit website. It takes on average 58 mins from Westfield station to new york penn station. There is a transfer involved in this commute. Also you’d have to include the commute time from home to work (car/walk etc) – I think it would be close to 1.5 hrs one way. So as far as your commute argument is concerned, I think it BS.
Also why all the MLS# you are giving us still showing up on realtor website? If they are bought or under contract, I would expect they would not appear on that website?
Even if we assume that wall st. bonus is propping real estate in some towns, why Westfield with it’s 1.5 hr one way commute?? Just because Richard is a very nice realtor over there??
Anyone want to take a stab at explaining the impact of lottery winners on the NJ real estate market?
There seem to be an appreciable number of winners here.
http://www.state.nj.us/lottery/games/1-3-3_jc5_history.shtml
http://www.state.nj.us/lottery/games/1-2-3_p6_history.shtml
jb
“You know, there was a whole lot of talk about Wall Street bonuses saving the market last year at this time..”
JB,
The bonus pool has increased from 20.5B last year to 23.9B this year. If 20.5B was a non factor last year the same will occur this year, another total yawn, actually a waste of good blog space. The below from E Financial may be a little more scientific as compared to somebody who knows a whopping total of 5 Wall Streeter’s who are going to contract.
No Link;
“When it comes to spending bonuses, eFinancialCareers users put their
money where their mouths are: Nearly a third say they’ll invest most of
their bonuses. About 22 percent plan to pay off their student loans,
while 14 percent are off to buy a house. (We hear real estate agents in
New York are very excited about bonus season this year.) Nearly 13
percent plan to splurge on their family, and more than 18 percent are
going to spend their money on “something else.”
Richard’s arguments remind me of what Realtors in Seattle area used to say. Hey Microsoft employees are paid millions in bonuses and stock options and they are hiring – that is why it is rising. Buy now, or the Microsoft millionaires will price you out forever.
Well having worked for Microsoft myself I know for a fact that the average annual increase is 3% and bonus is 6%. All the Microsoftees who became millionaire, essentially had joined it before 1995. I got options that were worthless. Nothing justified prices there increasing from 300 to 600 in last 3 years.
Richard’s story is just another variant of the story above.
I must commend you Richard – you are good at telling stories and unwavering. But try this on the hapless buyers who are trying to use your services and who rely on realtors to give advice on what to buy/ how much to pay. It wont cut ice with us – since we rely on hard numbers.
Only if you show us that the sales ticked up, inventories shrinked, we’ll listen to you. Otherwise you are just one of the whole crowd of realtors who have pre-cooked stories about why real estate will never founder, with added spice of some knowledge of your local area.
Att,
I have to agree with you – all of this from Richard seems to be a Westfield ad. To me, 1.5 hrs is NOT a good commute at all when one works Wall St. hours. And I didn’t like any of those houses – for 659 (which apparently seems to be the price ALL of Richard’s pals paid for some reason) you can get something closer in a good town and equally as nice if those are supposed to count as “nice” houses.
ATT (from #113)-
Listing agreements do not have a set length of time. The listing period is negotiable.
Sending the homeowner a communication offering to consummate a transaction after the 90-day “protection period” of the listing expires sounds like the sort of underhanded thing my crowd gets accused of around these parts. You’re also making a big leap in assuming that the seller would reasonably believe that his chances for the best possible sale rests in the hands of: a) an unknown prospect, who has: b) submitted a non-binding offer whose completion is contingent upon the expiration of both a listing and its trailing protection period.
Furthermore, any successful negotiation you might directly undertake with the seller- along with escrow being opened (you surely don’t believe the seller would accept your offer without deposits being made, do you?)- would constitute an “offer and acceptance” during the listing phase. This is significant, because virtually all NJ residential listings are “exclusive right to sell”…that is, if an offer-and-acceptance occurs during the listing period- EVEN IF THE LISTING AGENT IS NOT INVOLVED IN THE PROCESS- the listing broker is due a commission.
There are plenty of FSBOs and pre-foreclosure owners out there if you want to go face-to-face with a seller. Why resort to proposing a gambit that is both dishonest and represents nothing but risk to a seller engaged in a listing agreement?
“The bonus pool has increased from 20.5B last year to 23.9B this year. If 20.5B was a non factor last year the same will occur this year, another total yawn, actually a waste of good blog space. The below from E Financial may be a little more scientific as compared to somebody who knows a whopping total of 5 Wall Streeter’s who are going to contract.”
That says it all. Last year was a record bonus year, where were all the frigging real estate sales in 2006??? Come on now realtors fill me in???
Clotpoll (post # 151)
So how much commission is due to the ‘listing broker’ once listing agent’s 90 day period has expired??
I assume it is 1.5% – that still represents 4.5% that I’m able to wipe out due to middleman’s cost.
Also how come if I offer directly without involving a buyer’s agent, my offer would be non-binding?? I really dont understand when an offer is binding and when is it non-binding??
Is there any such “protection period” between the buyer and his agent. For e.g. on this board a blogger named ‘Lina’ wanted to submit a lowball offer for a house. But her realtor would not do it. Cant she just go alone and offer directly. Would the realtor be able to sue her – since she showed her the house??
Thanks for your inputs.
Yo’ Reech: Before you start flapping your gums with allegations of “groupthink”. You know damn well that the ultimate “groupthinkers” are the guys on the street. Basically it’s a closed society. The all live, work, play in the same places, and the running joke they have is “….doesn’t everyone in New York work on the Street or is married to someone on the Street”. The point being that they know they live in a different world and all run in the same circles. The junior guys don’t get it. The senior guys do after awhile.
Put a lid on it please.
50k bonus after tax isnt a down payment on an overpriced pos house in nnj. Now we are scraping the bottom of the barrel there richie. Try another one.
Sure, that Wall Street Money is big and I am sure some homes will be purchased as a result of the bonuses, but…
– Jobs in securities only account for 4.7% of NYC jobs (about 170k jobs)
– Many of these people don’t make big bonuses. My wife has a friend with a back office job (counted in the 4.7% above) getting a $3,000 bonus.
– Many of these people don’t live in Jersey. I’ve heard estimates that about 25% live in Jersey.
– Many already own homes. Many others are content renters because they work too many hours to worry about owning. Others, being financially savvy, simply don’t want to throw hard earned money away on a depreciating asset.
Finally, Wall Street employment is down since 2000. If there were a correlation between Wall Street incomes and housing prices, housing prices should have fallen after the dot.com bubble burst. In fact, the opposite happened; suggesting no correlation between the two. In other words, the loss of Wall Street jobs didn’t kill the housing market 5 years ago and the growth of bonuses won’t save it today.
there’s as much ‘fact’ articles to wall street money driving RE as their are counter arguments. i said earlier we’ll never know so i go with local experience. RE is local and all i really care about at the end of the day is my property value holding up. who cares what happens in west bumpkin land except for intellectual banter?
westfield ad? nope. i’m attempting to back my argument that RE is very local.
me a realtor? LOL! sorry i’m not. oh and the commute to wall street doesn’t go through penn. you get off at newark broad and take the rail. please people get educated first before you jump into the conversation.
i do think its funny whenever someone doesn’t agree with all the permabears here they must be a realtor, part of some conspiracy or uneducated on the facts. you people crack me up. this board is becoming more of a cult than one where intellectual discourse is encouraged.
Seems to be a lot of confusion about buyer agency agreements here. Let me try to clear up some of it:
1. Every company has its own version. Their unifying trait is that they are ALL almost completely unenforceable. I like the earlier post referencing a Weichert agreement banning buyers who fire a Weichert agent from making an offer on any toured property for 180 days…diabolical!
2. Most companies will admit (with a little pressure applied) that these agreements are used to either force- or test- a prospective buyer’s loyalty.
3. The ONLY concept that matters when it comes to a buyer’s agency that leads to an accepted offer is called “procuring cause”. This means that the agent who represents the buyer must initiate an UNBROKEN CHAIN OF EVENTS that leads to an accepted offer. ANY event (such as a buyer’s deciding that Agent “A” stinks, so he engages Agent “B” to write an offer…even if Agent “A” introduced the buyer to the subject property and showed it to him multiple times!) that breaks this chain of events ends the agency. Period.
4. Many companies- and agents- will claim there is a “threshold rule”. Basically, they insist that an agent who crosses the threshold of a property with a buyer is the only agent who can then represent that buyer. Baloney (see #3)!!!
it’s sad that some people here think in a year or two you’ll get properties for $50k-$150k off today’s list prices. you’re completely deluding yourself, it’ll never happen barring armageddon. and please don’t quote me asking prices. they mean nothing, sales prices do. do yourself a favor. if you want a house save your money and buy when you can comfortably afford it. if you can’t get into that town you wanted to but could’ve 5 years ago i’m sorry to say but tough. the market won’t come down because you can’t afford it. you have to adjust your expectations, build some equity and maybe get there down the road. crying over prices won’t change anything.
“this board is becoming more of a cult than one where intellectual discourse is encouraged.”
Still waiting for that from the other side. I have not heard one compelling reason to buy at this time. I’m all ears, can close tomorrow.
Richard,
Explain to me how this theory works? From what I see last year bonus pay-outs were a record at that time and yet 2006 was the first time in recent memory that housing prices in New Jersey did not rise and in fact in many communities they fell. Where was all the activity last year? Certainly last year there was less economic uncertainty than there is today? According to your theory last year should have been off the charts???
Please Richard explain??? Pleeeaaase!
“it’s sad that some people here think in a year or two you’ll get properties for $50k-$150k off today’s list prices. you’re completely deluding yourself”
Go read post #12, 80k off a 2005 comp.
Right now in my town it’s running about 50-70k off 2005 prices. These are closed sales.
I am waiting to be enlightened?
Richard (post #159)
You said:
it’s sad that some people here think in a year or two you’ll get properties for $50k-$150k off today’s list prices. you’re completely deluding yourself, it’ll never happen barring armageddon.
Well Richard – I would have believed you if JB wasnt providing the data. But have you ever looked at the lowball sections posted on this site every month? They show 100K+ getting chopped off on houses. I feel sad for you that you are just a homeowner and not a realtor, and still cannot come over the propaganda that realtors spewed in last 5 years.
“barring armageddon”
If the March Dollar Index breaks 80 and closes there for a week??????????????
ATT (#153):
I’m reminded of the Polish joke about launching an expedition to the Sun…the punch line is: “we’re going at night”.
Where do you come up with this stuff? “Assume it’s 1.5%”? I don’t understand where you’re going with that, but I’m guessing you want to know what the listing brokerage would be due once it’s discovered an offer-and-acceptance was negotiated during the agency period. The answer is: the ENTIRE commission (both sides).
I termed your desire to submit an offer that would be triggered at the expiration of a listing’s protection period as non-binding because you did not mention either a) putting any deposit money into escrow or b) presenting the seller with your financial qualifications. Offers like these are termed non-qualified…it has nothing to do with having the offer presented by an agent.
Anecdotally, I’ve been doing RE a long time, and this wild idea of yours is something I’ve heard tossed around now and then. However, I’ve never heard of it actually being attempted. Not that we’re so great…but a seller would have to be an absolute moron to entertain such an approach. It’s a no-win situation.
In Lina’s situation, she’s free to use ANY agent she chooses- including the listing agent- to submit her offer. The fact that her buyer’s agent refused to present her offer completely removes that agent’s ability to lay claim to a commission at a later date. The “chain of events” (see post #158) required for that agent to claim to be the procuring cause of the transaction would’ve been broken by that agent’s own actions.
Yo’ Lionhearted:
“the market won’t come down because you can’t afford it”
Isn’t that what is happening in aggregate? Isn’t that the reason we have a real estate slowdown amidst a rather resilient economy as a backdrop?
Clot: watch it >:-(
Chifi-
Well put.
Chifi-
Well put (#168). Couldn’t resist the Polish joke earlier.
I am a bad person.
You forget that Ivan Putski [old WWF reference] runs the board.
Some of my best friends are Polish.
sorry…
http://en.wikipedia.org/wiki/Ivan_Putski
Total coincidence: Ivan Putski’s real last name is “Bednarski” :)
Clotpoll (#167)
Thanks for your reply.
I came with the no. 1.5% since I thought that the commission is split 4 ways. And since there is only one party left (viz listing broker) after you cut out the buyer’s agent, listing agent etc. I assumed only 1.5% would need to be paid.
This seems to be a cartel, where even if you remove the middleman from in between, as long as there is just ONE middleman, he’ll claim entire commission which otherwise would have been distributed amongst an entire array of people. Wondering why no law firm looked into this and brought a lawsuit against the nj listing association (or whatever it’s called).
So the only way to cut the middleman’s fee is to throw out the buyer’s agent by throwing him out, applying some ‘grease’ to get the listing agent to reduce fees.
Other than that, it is just the fsbo’s and/or pre-foreclosures. But heard that fsbo sellers are pretty hard nosed. Also most of the fsbo listings that I see are sitting there forever, leading me to think that those sellers are refusing to come down on price.
You want creative. I know of a person who is getting effectively a 3% mortgage rate by spreading half his mortgage out on about 10 different 0% credit cards. He has a Heloc as a back up in case he misses a payment and the credit card company tries to jack-up the card’s interest rate, in which case he pays off the balance on the particular card with his Heloc and then finds another 0% from another credit card vendor. He has them staggered so that the 0% offers don’t all end in the same month and half the time when he’s going to make the switch to a new card the initial vendor will tell him he can stay on their card at 0%. I am not making this up.
Who could ever forget the “Polish Hammer”? Better than Brady’s 2-minute drill vs. the Rams in the Super Bowl!
Richard #159
You go girl!!
Clot.
How long is the listing brokerage’s ‘agency period’.
What if I see the house during the listing period. But offer the seller only after this ‘agency period’ has ended?? Wouldnt I be able to cut all the middlemen in this case?
BC Bob Says:
December 20th, 2006 at 4:26 pm
“Omar Minaya and Brian Cashman are laying low because they know that come next winter, they will be bailing out these idiots for shelling out top dollar at the wrong time.”
Chi,
No money for Rickey???
Bost: “…..he is well known for his malapropisms…for example, calling Padres GM Kevin Towers to inquire about a contract and leaving a message starting “this is Rickey, calling on behalf of Rickey….”
Henderson has also been reported to take practice swings in the locker room in front of a mirror completely naked while repeatedly saying “Rickey’s the best! You tha man, Rickey!”
ATT (#176):
You are becoming tiresome. No law firm has looked into this because the idea you’ve described would lead to the seller’s breach of a legal agreement with his broker!!!
Your misguided opinion of us as a legally-protected racket is certainly your right, but it does not justify acts that violate OUR contractual rights.
It may come as a surprise to you, but the vast majority of sellers who engage our services actually work WITH us and fully WANT us to handle the marketing of their homes from beginning to end.
Westfield commute — 1 hr 5 min to 1 hr 10 min. to downtown. Richard — you take train to Newark Penn and then the PATH — not Broad street and then the “rail”
Totally off topic post – does anyone know where I can access the property tax over the past 3 years of a specific house (it’s a NY property, not NJ)?
Richard: But son the prices are coming down, even in the so called desireable towns. Asking prices in my so called desireable Bergen Co town are now back to 04 levels, and in some cases 03. And yes i asm seeing huge drops in asking prices 50k to 150K or more.
Do you mean to tell me all these sellers said well this is our fantasty price, if we get we will go. I do not think so. I believe most of these people had no idea that they would have to drop prices so smuch, and yet they still sit.
I do not know if you are a realtor, nor do I care, but you have to face facts, and the facts are the market is changing, dramatically.
You amke a broad statement that prices will never drop, I ask as I ahve so many others why/ Why will they not drop, why can they not drop?
Why was it perfectly normal for prices to increase 25% ot more for 4 or 5 years, whcih translates into dollar amount of 30k, 40k 50k 75k etc and more. Again I ask why?
I ahve yet to recieve a reaosnable answere, and in fact in most cases I get a blank stare.
Fear, greed and loose lending standards drove this amrket to the highs that it reached, now th trip down is starting.
And Yes Virginia (Richard) house prices do fall, and they will continue to fall, until the sanity is restored to the real estate market.
Clot (#183)
Well you are neglecting the fact why it is a cartel. The listing service’s rates have not come down although property values doubled. 6% of 500K is actually double of 6% on 250. Also I heard that the agent who works for lesser fee (3-5%) is generally boycotted by all other agents.
Visa/ Mastercard are doing business legally and charging for their services – which is their legal right. But if you’re unaware, there are plenty of lawsuits against them for being anti-competitive. I think it would take some investigative journalist to catch this on camera how an agent who works for lesser commission is boycotted/discriminated , to make this case.
How come I’m not noticing these ’03 prices?
What would you do with 60k?
You are planning to buy a property in the next year. You also have significant tax burden on April 15, which ideally you can lower via a sep ira, up to 25%. You are estimating the tax burden to be about 35k, before the sep ira is played.
One of the more investment savvy members in your family has suggested you take out a loan to pay your taxes, invest min 50% in sep ira, and use the rest for down payment on property. The assumption being that the ira would appreciate and counter the interest on the loan. You’d basically be deferring your tax burden via the loan, using your cash to put money down on the property.
What would you do?
“To manage household debt, Americans have used such moves to pull over $2 trillion out of their homes in the past five years. In the first six months of 2006, consumers extracted over $500 billion.
On Wall Street, risky mortgages get bundled into large pools of mortgage-backed securities, which now account for 23% of all bond market debt outstanding, making it the largest single segment of the U.S bond market.”
down the road could money markets take a hit from this?
How ironic, W was telling everybody to go out and spend. From a 3/06 article;
“Vice President Dick Cheney urged Americans Thursday to do a better job of saving and challenged policymakers to strengthen pensions and fix Social Security to help people in their golden years.”
http://www.usatoday.com/news/washington/2006-03-02-cheney-saving_x.htm
“if you can’t get into that town you wanted to but could’ve 5 years ago i’m sorry to say but tough.”
Richard,
Whoa!!!! What about those that got into the towns they wanted 5, 10 or 15 years ago and subsequently gave gotten out???
prof- ensure 60k taxable (life ins dist vs. 1099beneficiary dist/reg income; file extension 4868 4/15/07; you have a 401(k) that allows one final lump in ’06/separate check? If estate 60k, review state tax requirements. Bonus? can you move it to 07 check date?
Seek professional guidance on this one.
Good luck.
Westfield to World Trade Center is 20 minutes on NJ Transit to Newark Penn then 22 minutes to WTC. time to station + 42 min + station to work is probably an hour each way. not a bad commute at all from the burbs hence the popularity of the town. silly me i don’t even work in NYC but i pay the premium nonetheless. my wife likes the downtown what can i say.
ATT-
Cartels generally close ranks against competitors and enforce capricious price increases. Let’s look at Realtors:
1. Our fee- as a percentage of selling price- has decreased over the last 40 years. The average national RE fee- once 6%- is now 5%. This is in the face of staggering increases in E & O insurance, health insurance, technology and public demand for expensive, cutting-edge marketing. The explosion of cost centers in RE agency far outpaces gains in income via housing price appreciation. If you don’t believe this, look at major companies like Realogy or Weichert; they treat RE as a “loss leader” and only see the RE transaction as an introdution to an audience that can be sold other services and goods that are actually profitable (like financing, insurance, rental cars and hotel packages). I hope you don’t believe that the gross commission is pocketed as pure profit by agents (many people do). An agent who can manage a profit-before-taxes of around 40% of gross commisions is managing quite well.
2. The availability of RE info is ubiquitous. There are sites that provide it and break it down nine ways to Sunday. To my knowledge, my industry has done nothing to suppress this proliferation of information. In fact, the wide availablity of RE info has empowered the public and forced us to raise our game. This is all for the good…and, it’s a secondary reason so many agents are getting blown out of the business.
3. There is- admittedly- a minority “dinosaur” contingent within RE that has actively worked to boycott the competition. The Justice Department has already brought several offenders before the bar, and there will be more prosecutions. I applaud this. Neither I, nor the good practitioners in my industry need to resort to illegal anti-competitive activities to defeat the challenge from the limited-skill contingent; their general lack (or withholding) of ability to stage property, to market or to negotiate has doomed them to microscopic market penetration in virtually all US markets.
I’m sure a lot of the seething resentment vs agents around here comes from the belief that we control a rigged game. Nothing could be further from the truth…and, the game is only becoming more transparent.
Anyone here sell their own home? Any tips ? The realtor i’ve been speaking with suggested i do it myself and save some money.
Zac,
You don’t need any tips. Anyone can make a sale.
Then why do most people sell their homes with a realtor ?
…Zac taps foot.
zzz..oh! Anyone can make a sale, to a buyer. But, if you want your home professionally marketed, to the RIGHT buyer…different story.
A good agent is added value, not a cost center.
lina,
if your agent is in breach of your agreement (e.g., by refusing to submit bids), you do not have to perform.
have a look at your contract and see what his duties are. chances are that he is in breach of something.
Zac, most people buy AND sell with a “GOOD” realtor in order to make the deal go through properly…BUT to find a GOOD ONE , that’s the problem, along with finding a GOOD home inspector and a GOOD lawyer to represent your interests ……….
When I want to rent out one of my properties, I can do it myself,but I use a good realtor to find a few prospective tenants and properly put together the proper paperwork….This way I can go on and do what I do best to earn money in my own field
My personal experience with the realtors,lawyers and inspectors –(Years before I had the knowledge and education to become an inspector/contractor and construction code official)– was disappointment in their so-called professionalism. I am sure that some people here have their own stories, especially “BO-YA BOB”..
Bob Reiss
thanks.
So – since i cannot list my own home on the MLS or Realtor.com, whats the next best place to home-market a home ?
And, for God’s sake, avoid any agent who doesn’t at least have the idiot confidence to believe that he can add value.
Agents who tell you you can save money selling on your own are more pathetic than the ones who tell you they’re in RE…then immediately tell you what they did before, as though they have to apologize for what they do.
This agent is a close friend. She will be working for a different broker soon and doesn’t want to leave me at the old broker as she moves to a new agency. She just suggested that i try it myself in the interim. So… any suggestions?
If she’s good, wait for her to set up shop at the new company. However, don’t hire her if she’s a great friend and a lousy agent. At the end of your experience, she’ll still be a lousy agent & won’t be your friend anymore.
Kinda like selling your old car to a close friend.
It may come as a surprise to you, but the vast majority of sellers who engage our services actually work WITH us and fully WANT us to handle the marketing of their homes from beginning to end.
And Buyers too!
Thank you clot, as I have said before you have wonderful writing skills, and make clear and concise points. I usually just roll my eyes and ignore.
I am not here to convince anyone on this blog of my worthiness, I am here because the information I seek, is gathered for me. I contribute when possible w/info that is easy for me to obtain, and I enjoy the banter, most of the time.And sometimes(only sometimes) when Bob is on a tear he will even make an exception for me. That’s really sweet o-:
KL
http://www.observer.com/20061225/20061225_Tom_Acitelli_finance_thelab.asp
the highlights:
The Year the Bubble Didn’t Burst in Manhattan
By Tom Acitelli
At the end of the third quarter of 2005, the average sales price was $1,149,813; up it went the following third quarter, to $1,288,748, according to the appraisal firm Miller Samuel, which releases a quarterly report on the borough’s housing market with one of Manhattan’s biggest brokerages, Prudential Douglas Elliman. This third-quarter 2006 average was also up over the year-end 2005 average of $1,221,265.
The first-quarter 2006 average was a sharp increase over the fourth-quarter average of 2005: $1,187,404 to $1,300,928. The average Manhattan apartment price, in fact, increased year over year in each of the first three quarters of 2006, and it looks likely to do so in the fourth, which ends Dec. 31.
The median price—a better indicator of the market than the average—was $750,000 in the third quarter of 2005, and it rose to more than $845,000 in the third quarter of 2006. The median increased year over year during the first three quarters of 2006, in one case particularly sharply: It set an all-time Manhattan record of $880,000 in the second quarter.
While they didn’t spike like prices, sales either increased slightly or stayed generally steady this year. In the first quarter, Manhattan condo and co-op sales dipped slightly year over year, according to Miller Samuel, and in the second quarter, they dropped more than 11 percent. But in the third, sales were up nearly 6 percent between 2005 and 2006.
re post#99
Yes. gsmls listing can appear and vanish. It happened to a property we were looking at in basking ridge. Vanished in 12 hrs. Luckily I printed the sheet when I saw it.
Called and saw the house the next day — coincidentally couldn’t find it on the website but was able to arrange to see it.
While in the kitchen the agent tells me “it’s under contract already”
Was “sold” to another real estate agent and her “luxury home builder” husband.
(Can you read “inside deal”)
BTW- was 10 acres of land in Basking Ridge. Just above rte 78. A gorgeous lot with pond, old mansion from the 1930’s etc, etc, etc…. sold for less than what it was really worth
Overall– couldn’t care less now —
much thanks!!! to the folks here.
Took a chunk of the downpayment dough and invested as a full shareholder (partner) in my firm instead-
Financial security vs what might have been a moneypit.
almost forgot… asked the RE about why it wasn’t listed anymore…. the [shrewd] buyer’s contract required the [stupid] seller to pull the listing while it was in attorney review.
dollars to doughnuts, the prop your talking about got snagged by a shrewd RE who smelled a steal and a deal.
BTW:
(apologies to the nearly non existent honest REs….) but almost ALL of them disgust me in ways you can’t imagine.
gary; Do not know wher you are l, but in some of the so called best BC towns, I am seeing quite a few houses with 2003 asking prices.
still_looking:
Been there. We bid on a four-year old townhouse one night, late in ’03 or ’04. Bid three times the original purchase price. Lost it. There were four other bidders, we were told. Didn’t use the agent again, because something didn’t seem right.
When the sale was published, it was that agency who outbid us…by $1,000. They must have been waiting to see what we bid.
Then they turned around and resold the place a few months later for +50k. It’s been flipped twice since then.
Sucks. We would have been living in that house for four years, as part of that neighborhood. Four of my daughter’s schoolmates live there.
Funny, now I see the end unit next to it is on sheriff’s sale in January, for less than we bid.
Financial security vs what might have been a moneypit…you’re absolutely on target with this.
Richard, can you pinpoint when in your life you turned into Henry Potter from It’s a Wonderful Life…. a “warped, frustrated old man.” Why is it that you take such pleasure in the fact that there is now a great disparity between home prices and income levels?
>> “i’m sorry to say but tough”
I suspect you wouldn’t know an investment banker if one punched you in the face. The younger bankers making bonuses less than 200k (which translates into less than 100k after taxes) aren’t buying up all the houses in Westfield. They are analysts or associates who work 90+ hours a week and they live in the city because they can afford the rent and don’t much care if they aren’t living in a palatial loft since they never get to be home anyway. When the bigger money comes they either upgrade to better apartments/condos in the city or if they have started a family, they buy a house in places like Chappaqua, Mendham and yes, Westfield. But you see, the bigger money comes with VP titles and above, and at that point, they aren’t buying $600k homes, they are in the $2 mil.+ range by then. If they are buying $600k homes it would be for an investment and none of them are stupid enough to invest in SFH home RE right now as an investment.
If you want anecdotes that people will believe in, BE an investment banker or BE best friends with investment bankers. Don’t spew what your realtor friends sisters husband told you about some guy trading bonds who made a huge bonus this year and bought a $600k crap box in Westfield. $600k in Westfield = mediocre house on a mediocre lot, not the prime homes off Lawrence Ave.
Seneca #215,
As a looker in Westfield, I beg to differ. MLS #2337680, that Richard cited, is a lovely place, IMO. You can find it still posted on Realtor.com, asking $670. Check it out and let us know what you think.
Richard’s facts are right on this one. A buy near or below 650 would be a good one. It is on the south side, on a quiet street, but for $770 you can get crappy new construction on crappy lot. This one’s got class and elegance, and if a bonus baby grabbed it, good for him or her.
I am surprised how long it stayed on the market. Shows how soft the market is. This one deserved to sell.
Amen Seneca.
The other thing that always bugs me about Richard’s posts is the assumption that we’re all priced out of top towns, which is just a way of him saying “I’m the best, nobody beats me!” Richard, when I look, I’ll be looking above the 659 range (which seems to be some kind of bragging range to you), and in “top towns,” whatever those might be (although Westfied was not a name I’d ever heard of when I hear of top towns in NJ). Being able to afford something doesn’t mean that I am going to buy something when I don’t think the value is there. It’s doesn’t make me bitter or whatever you want to think.
twice – I think the house has a lot of character and that goes a long way in my book. However, its also only got one and a half baths. Call me crazy but you should get 2 full baths when you are paying over 500k nevermind over 650! 60×119 lot is not very big. I would have to check it out in person to make a final call but with radiant heat and a 1930’s build, one can only imagine the potential for structural issues. South side of town is not THE place to be if you are into the general snob sensibilities of the town. Don’t get me wrong, the house might seem very reasonably priced compared to the past year and half of comps but to me it still seems like too much. If a bonus beneficiary DID buy the house, I would have to guess that s/he plans to spend a nice chunk of change on upgrades (the kitchen is circa 1973). That being said, whoever bought or buys the house, I wish them well and hope they have a lifetime of joy in the home.
I am not really debating the worth of that particular home, just the smugness that Richard feels he is entitled to. We will see what happens come spring. There is a sucker born every minute and maybe he will snag one. If sellers want to sit on their homes for two years at the same price while inflation catches up to that price, its fine with me.
NJGal – I think many of the trollish people who come to this blog assume those who are waiting it out can’t afford the one million dollar house. It never seems to cross their mind that we might be able to afford the two million dollar house right now for cash, but that we choose not to buy now because we are smart with our money. After all, how do you think we managed to save that much in the first place?
thanks Seneca. I’ll reconsider my “value” criteria, which are always subject to change in these market conditions. But you provided a very cogent and educated analysis.
I’m wondering what the North/South premium equals in dollars. 50K? 100k? I know this thread is getting old, but if you’re still here (or anyone else) does Cranford ever attract any Street types? It’s two stops closer on the train, does have flooding issues in the NE quad, schools not has highly rated as Westfield. Any cache at all, or to be avoided?
twice – good question on the North side premium. I have no idea what the answer is but I am very familiar with the Union County towns (decades of experience and lets leave it at that) and there really is a ‘wrong side of the tracks’ mentality amongst some, some of the residents. I think its all nonsense but it exists. It has something do do with living close to the Conrail freight line which runs along Lamberts Mill Road. The further south you go towards Clark, the closer you get to that freight line and it can be noisy if you are sensitive to that sort of thing.
I have several friends who have purchased in Cranford over the past 5 years (and I am being heavily recruited to do the same now), none of them are Street types. Flooding aside, Cranford has a very good reputation and the #12 ranking in NJ monthly’s top towns list. Generally safe and with good schools. I think there is some spillover into Cranford for those who couldn’t afford Westfield prices so Cranford has really gotten pricier as well. I think a banker type could find a nice home there and feel comfortable. The new parking garage is also going to make things interesting in Cranford.
Westfield has a major parking problem in that monthly spaces have a 4-5 year wait list (last time I checked a year ago) for the station, residents only. I know a few people who “rent” a spot in nearby gas stations and the like. Thats a big negative if you have money to buy a spot but no way to cut the line in Westfield. Could be a boon to Cranford to have plentiful parking now.
FYI, Westfield residents vote down any parking expansion opportunities. I have had realtors tell me that I can buy in Westfield and just drive to Linden or Rahway train station where parking is plentiful, it only takes 5 minutes. Right, try more like 15-20 minutes on a good day.
Seneca,
Glad you’re still here. You’re a veritable treasure trove of information. I also agree Cranford poses an interesting opportunity due to the factors you mentioned, but especially the new parking facility. Also, new mixed used retail/condo adjacent and more investment in the town. Westfield’s had every opportunity to address its parking problem, but keeps voting it down and probably will continue to do so.
jonny124
huh?
>>jonny124
This is great!