From the Asbury Park Press:
Clouds gather over housing market
If nothing else, 2006 will be remembered as the year the housing market came back down to earth.
Area home prices, which nearly doubled in the first five years of the decade, rose more modestly in ’06 and, in at least one quarter, declined. Homes that would have been snapped up in a matter of weeks a year earlier, sat on the market for months. Realtors and home builders alike struggled to attract buyers who, sensing that the market was turning down, sat on the sidelines waiting for the dust to settle.
And then in October, in the most graphic example of how quickly the market had declined, Kara Homes Inc., one of the state and region’s largest home builders, went into bankruptcy court, seeking protection from creditors who were owed $270 million in loans, bills and back wages. Among the creditors: about 300 customers who had made hefty downpayments on their homes and now wondered if they would ever move in or recoup their deposits.
“The psychology changed dramatically from “I have to get on board the housing train before it leaves the station’ to “Am I going to be a peak-of-market buyer and is the market way, way overpriced?’ ” said economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “We switched from that fear or greed of not being able to participate in the boom to fear that the market is going to slide downward.”
The situation was evident in the numbers:
The median sales price for an existing home in the region that includes Monmouth and Ocean counties rose 9 percent in the first quarter, fell 0.1 percent in the second quarter before rising 7.3 percent in the third quarter, according to the National Association of Realtors.
Those were down from the double-digit increases in the previous five years.
Economists pointed to rising mortgage rates earlier in the year and said that income levels had not kept pace with the increases in home prices.
The number of unsold homes on the market increased in Monmouth and Ocean counties, according to the latest figures from The Otteau Valuation Group Inc. of East Brunswick.
In the third quarter, 6,919 homes were for sale in Monmouth County, up 51 percent from the 4,594 on the market in the same period in 2005. In Ocean County, 6,870 homes were for sale, up 53 percent from the 4,499 on the market in the third quarter in ’05.
It amounted to an 11-month supply of houses in both counties. In the same quarter a year ago, the market had a five-month supply, according to The Otteau Report.
Meanwhile, the number of homes sales fell. In Monmouth County, the average number of monthly sales in the third quarter was 621, down 29 percent from the average of 871 homes sold in the same period in 2005. In Ocean County, there were an average 654 sales a month in the third quarter, also down 29 percent from the average of 915 sold in the third quarter of ’05, The Otteau Report states.
two realtors from monmouth county have said the phones are ringing off the hook and they’re showing houses again its picking up
red>
Is that the county where Lucent is supposed to close their headquarteres and move elsewhere?
I graphed Decemeber data provided by ‘Rich In NJ’ for Bergen county.
http://www.geocities.com/njrebear/
Things to look for –
1] The all important median price is skewed because the total percentage of condos sold in 2006 is way less than last year. 41% of all sales in 2005 Dec was Condo. The percent of condo sales in Dec 2006 is 29%. A 30% YOY decrease in condo sales has caused the median prices to artificially hold up!!!
2] As expected condo sales and price are crashing.
3] Sales of SFH is at record lows. Note as per Rich, 1995 numbers may not be complete!
>>
I’m sorry if you already seen it.
i think headquaters is in Short Hills. I do know there is a huge complex in middletown
when is Lucent closing shop?
Sorry i thought Holmdel was the headquarters. Bell Labs is supposed to move out of Holmdel after LU – Alcatel merger closes.
http://www.goprea.com/news/pdfs/06_3-24_GlobeSt_Lucent.pdf
Lucent’s headquarters is in Murray Hill….roughly Exit/Milepost 42-43 off of Route 78 a few miles north.
There is a big complex off of the GSP at Exit 114, but I have heard that it has been hollowing out conisderably over time.
Jersey shore agents see a hugh inflow of buyers looking to get ahead of the spring rush ….I can’t believe all the buyers seem to come out of the woodwork
sally
wall st bonuses!
why not wait for more inventory to choose from in the spring?
The “huge inflow” of buyers this spring just isn’t going to happen. Reason is relatively simple. It relates to the term “able” when defining the nature of a real buyer (not a lookielu). The key missing component of a real estate transaction, that “ready, willing, and able buyer,” is I suspect by spring going to be on the endangered species list.
Those subprime lenders who created so many “able” buyers with their inventive financing schemes are disappearing at an alarming rate. For example,
— Ownit Mortgage Solutions, one of the nation’s largest sub-prime lenders of which 15-20 percent was owned by Merrill Lynch, closed its doors on December 5th, 2006. It appears that Ownit ran out of cash when it was required to buy back the loans it originated that ultimately went into default.
— Tax advice company H&R Block, Inc., reported a $157 million dollar loss in the 2nd quarter, primarily due to losses from its subsidiary, Option One Mortgage, a large national sub-prime lender. H&R Block is now considering selling Option One.
— Sebring Capital, a Texas based sub-prime lender with 325 employees, abruptly closed its doors on December 1st.
— Atlanta based NetBank closed its sub-prime lending branch, Meritage Mortgage, in November.
— Ameriquest Mortgage, once the nation’s largest sub-prime lender, recently paid $325 million to settle predatory lending practices. It then proceeded to cut 3,800 jobs.
— Accredited Home Lenders, another sub-prime giant, has seen its stock drop from over $50 a year ago to about $26 today.
— Harbourton Mortgage Investment Corp., Mclean-based Harbourton’s wholly owned mortgage banking subsidiary, stopped funding new mortgage loans and began winding down its operations.
more on 9]
As JB pointed out yesterday
>>MLN (Mortgage Lenders Network) http://www.mlnusa.com shuts down..
http://forum.brokeroutpost.com/loans/forum/topic.asp?TOPIC_ID=81847&whichpage=1
MLN’s production goal for 2006 is over $12.1 Billion with 80% subprime.
WELCOME TO 2007 SPRING HOUSING MASSACRE….
IT WILL BE FUN WATCHING THE RATS JUMP SHIP!
BOOOOOOOOOOOOOOOOOYAAAAAAAAA (half moaning yell)
Bob
MLN USA also stopped funding residential mortgages last week – that’s another subprime lender down the tubes.
Ownit filed for bankruptcy last week, saying that it owed about 170 million and has 1 – 10 million in assets. It looks like Merrill Lynch will lose its entire 100 million stake in the company, plus take at least 30% losses from the 93 million in mortgages it wanted Ownit to buy back.
The pain is going to disseminate through to the big financial corporations too.
Hey Starving bunch……
looking forward to a miserable year for ya….
you deserve it…
BLEED’EM DRY!
Lesson 3: Do NOT trust a starving realtor.
NO SPRING MAGIC….SPRING MISERY.
BRING IT ON.
By about February the greedy green smirks will soon turn to papapapPANIC.
Just wait ’til 2008 the Misery index will climb and sentiment will be extremely negative.
Sure houses/condoshacks will sell to bagholders, but houses/condoshacks sold in 1993 too.
Don’t be fooled by all the hyping by the starving bunch.
Just go out and abuse a few of’em. Make foolish statements let’em know.
im in Sussex county and i’m seeing people pay full or close to full price. i think it could be the migration from the eastern counties that are much more expensive and people think its a great bargin to move here so they’ll pay closer to asking and compare it to Bergen co. and its true
Hey 25% and everyone else.
Happy New (more affordable RE) Year – and 5 more to come.
Waiting for the next notch down this coming spring….
I will consider buying in again when the 25%-30% point is reached – no earlier. Keep up the good work reminding me (and the rest of the potential buyers) NOT to go in a aingle % point earlier.
two realtors from monmouth county have said the phones are ringing off the hook and they’re showing houses again its picking up
None of the agents I’ve spoken to in the last week share that sentiment. However, it’s important to note that we’re in the middle of what is typically the slowest period of the year.
jb
First. Happy New Year to all regardless on which side of the fence you sit and whatever words we may have exchanged. May you all have a great 07. Thanks to you JB for your continued dedication.
Do folks out there believe there will be a number of shoppers headed into the spring market with little to no idea that there will not be many subprime lenders ready, able and willing to write them up? I would suspect that a number of potential buyers are in the dark and believe that anybody can easily get a mortgage. Although this is still somewhat true as not all of the subprime lenders are gone.
From the Journal News:
Trend of ever-rising prices for homes halts
Listings are the low-hanging fruit of real estate. When a home is sold, the listing agent knows she’ll get a commission.
So why did J.P. Endres, a partner in David Endres Realty Group Ltd. in Scarsdale, start turning away some listings last spring?
She’s concluded that the would-be sellers wanted too much money for their homes.
“I said, ‘No thank you,'” Endres said Friday about the first listing she turned down. “It would have been a pure-dollar-loss for me.”
The potential customer wanted $2 million in an area where the highest selling price had been $1.75 million.
The home went on the market with another agent securing the listing. The price was lowered three times before the listing expired with the house unsold.
That’s just one of the many stories The Journal News’ business staff heard over the past year in selecting the local housing market as its top story for 2006.
Though housing inventories climbed throughout most of the year and sales softened, the median sales price actually continued rising to record highs in Westchester County. The quarterly high was set in the third quarter at $716,125, which was up 25.5 percent from $570,750 in the third quarter of 2002.
Fourth quarter data won’t be in until late this month, but it’s likely prices will be lower in both Westchester and Rockland counties.
Preliminary numbers from the New York State Association of Realtors last week showed Westchester’s median was down to $595,000 in November – normally a weaker month for sales, but still down 8.5 percent from $650,000 in November 2005.
Rockland’s median fell 3.1 percent to $482,000, while Putnam County’s median rose for a second-straight month, 4.4 percent to $415,000.
Endres, who’s wrapping up a year as the president of the Westchester County Board of Realtors, said 2006 actually ended up being more of a normal year after five years of “insanity,” but she still thinks most of the homes for sale are overpriced.
“Only about a third of the inventory is priced right,” she said, estimating that the remaining two-thirds is overpriced by 10 percent or more.
“There’s still a segment of sellers who feels that their house is worth more.”
You know…when the trolls show up here with their insipid and baseless sound bites, it just reminds me how much the Booya Bob stuff is so real, visceral and needed. Booya is such a wonderful antidote to that trash. Yeah, it is over the top.
It also reflects why Clot is vital around here.
First of all Happy New Year to all!!
From Jan 1 issue of Barron’s; Sorry no link.
Cancellations normally run about 15% for publicly owned home builders. They have not only increased but have soared in the 3rd quarter of 2006;
Centex-37%
DR Horton-40%
KB Home-53%
Lennar-31%
Pulte-36%
Beazer-57%
Hovanian-35%
MDC-49%
Standard Pacific-50%
Since the Census Bureau does not adjust for cancellations, sales are highly overstated while inventory in understated.
This, in conjunction with the spreads continuing to widen for the subprime,[hedge funds are bombing the derivatives that back these bonds]continues to shed a very ominous picture for this industry at this time.
It’s no wonder we continue to hear the words never, ever, usually, etc, from the HB’s.
Why is everyone so negative??? Yesterday in Monmouth Co I have seen so many brand new Mercedes’, I though I was in Germany for a second. OH or IN may be bad but people in NJ so much cash to blow away.
Happy New Year!!!!
Happy New Year!
Does anyone know the story behind 44 Meadowbrook in Short Hills?
JB’s Sales-Dec06 spreadsheet has it sold @$670k with closing date 12/19/06 (olp 794k), but now it appears on craigslist for sale @$670k as of 12/27/06. (http://newjersey.craigslist.org/rfs/254104667.html)
BC Bob Says:
January 1st, 2007 at 11:25 am
Bost: ya’ got Toll Brothers in there?
SC Professor,
Stick around. Your posts are very informative and revealing.
to #25:
“Second mortgages underwritten by the same bank that originated the first loan are termed ’silent seconds’ because the loan-to-value ratio lenders report includes only the first mortgage.”
That’s how your homedebtor can buy a property (brand new Mercedes included) he or she couldn’t otherwise afford.
I hear a helicopter coming … and what the heck is that accompanying “thud” noise anyway???
the above story concludes with:
The good news for homeowners is that the market is nowhere near the depths that it sank to in the early 1990s when inventories were higher. Endres said she had about five prospective buyers back then and 55 listings. She now has 15 to 17 listings and about 200 customers wanting to buy.
Prices may edge lower by 5 percent or so in the fourth quarter of 2006 and the first quarter of this year, Endres said, but she expects median prices to start edging higher again later in the year.
Jean Lowinger, a certified real estate appraiser and partner in J&S Appraisals in Congers, said Friday that “it’s definitely a buyers’ market” in Rockland. “I think the sellers are a lot more realistic.”
Lowinger also sees signs that the worst of the downturn may be over. “Houses that have been on the market for 120 days are starting to sell more,” she said.
chi,
For some reason Toll was not included. I’ll double check.
I am a condo owner, bought in 2005.
I live in it, I think the price will decline on my condo. I have a 5 year ARM.
I will probably go into foreclosure if I cant sell.
When my blood flows in the street you guys are going to be hovering over me.
Hope that makes you feel good.
I thought owning was the way to go.
Anyway hope u enjoy my condo; hopfully I can get an apartment and find a roomate.
Have a good life bloggers
Chi,
Fiscal 4th quarter;
Toll said on Nov. 7 that orders slid 58 percent in the fiscal fourth quarter as more than one-third of customer contracts were canceled.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aSByM6dk2Mcc&refer=home
Red,
I looked at the sales speadsheet provided by Jim last week and the way I see it Vernon List Price and Sales Prices were very close but the other municipalities were all over the place. What part of Sussex are you from and are you in the RE biz?
http://housingpanic.blogspot.com/2006/12/housingpanic-stupid-question-of-day_31.html
Dee Says:
January 1st, 2007 at 11:59 am
I am a condo owner, bought in 2005.
I live in it, I think the price will decline on my condo. I have a 5 year ARM.
I will probably go into foreclosure if I cant sell.
When my blood flows in the street you guys are going to be hovering over me.
Hope that makes you feel good.
I thought owning was the way to go.
Anyway hope u enjoy my condo; hopfully I can get an apartment and find a roomate.
Have a good life bloggers
======================
Your just part of the lesson many will learn from a mania. This blog probably has saved a number of dummies from mortgaging their life away. A bunch of dummies back in 1988-1990 didn’t have blogs just the spin spin spin from the bought media.
BOOOOOOOOOOOYAAAAAAAA
Bob
The good news for homeowners is that the market is nowhere near the depths that it sank to in the early 1990s when inventories were higher. Endres said she had about five prospective buyers back then and 55 listings. She now has 15 to 17 listings and about 200 customers wanting to buy.
Prices may edge lower by 5 percent or so in the fourth quarter of 2006 and the first quarter of this year, Endres said, but she expects median prices to start edging higher again later in the year.
Jean Lowinger, a certified real estate appraiser and partner in J&S Appraisals in Congers, said Friday that “it’s definitely a buyers’ market” in Rockland. “I think the sellers are a lot more realistic.”
Lowinger also sees signs that the worst of the downturn may be over. “Houses that have been on the market for 120 days are starting to sell more,” she said.
=======================
Your post is horse@#$!
I participated in last bubble market in early 1990’s and vultured a number of properties.
What we have gone thru the last 5 years ending summer 2005 was absolutely insanity compared to 1988-1990.
The amount of mtg leverage out there is enormous.
Keep convincing yourself it is okay. It is NOT. it is ugly and sentiment is going to get more negative going into the depths of misery spring 2008.
The Journal News always ends every article on RE by saying things aren’t as bad as they seem.
I’m more interested in candid statements such as where the realtor said that 2/3 of Westchester properties are overpriced by 10% or more.
This is basically an invitation for buyers to come out with deep lowballs. If the number of buyers was at a “normal level,” you would never hear anything like this.
Bottom line is that prices already 8-10% below the 2005 peak in the official numbers, and realtors are telling buyers to bid an additional 10%+ off.
Frank Says:
January 1st, 2007 at 11:26 am
Why is everyone so negative??? Yesterday in Monmouth Co I have seen so many brand new Mercedes’, I though I was in Germany for a second. OH or IN may be bad but people in NJ so much cash to blow away.
Happy New Year!!!!
=======================
Yeah I just drove past a Brand new foreclosure ( house probably built about 1 1/2 year ago. I have seen a new $35,000 car sitting in the driveway. Who needs any money these days?
How’s the new diet starving bunch?
http://photos1.blogger.com/x/blogger/6089/1833/1600/921974/2997_thumb.jpg
BOOOOOOYAAAA, #37,
You are absolutley right. I remember it well. This bust will make that one look like a walk in the park.
32. Dee Says:
I am a condo owner, bought in 2005.
When my blood flows in the street you guys are going to be hovering over me.
Hope that makes you feel good.
==============================
Dee, you have a long list of people you already made ‘feel good’:
NAR, Greenscum, Ben Helicopter Bernake, greedy grubbers etc.
Prices correcting?
Let the free markets work as they should.
I feel sorry for any FTB heading for negative equity and condemned for a generation as were buyers in the late 80’s.
bunch of dummies back in 1988-1990 didn’t have blogs just the spin spin spin from the bought media.
Dear Dee
That was mee
But did the worse thing
walked away on the upswing
did’nt know
how high it would go
KL
I was simply posting the conclusion of the article as posted by grim from the journal news:
And given the quality of your redundant rants I’m not sure you should be callings others posts horse@#$!
Take at least 25% off 2005 peak prices for houses/more for Condoshacks Says:
Your post is horse@#$!
I participated in last bubble market in early 1990’s and vultured a number of properties.
What we have gone thru the last 5 years ending summer 2005 was absolutely insanity compared to 1988-1990.
The amount of mtg leverage out there is enormous.
Keep convincing yourself it is okay. It is NOT. it is ugly and sentiment is going to get more negative going into the depths of misery spring 2008.
Again, I hear lots of speculation but when I see the prices for a decent home in a decent town, I’m still shaking my head. I’ll believe it when I see it.
I think Grim correctly edited out the fluff from the Journal News article. Anyway, we now know how the article ends. You can choose to believe the platitudes at the end or the more substantive portion that precedes it.
On another note, I just read the CR piece and I wonder if most hear agree that RE will see single digit percent declines in price this year.
Obviously, we all know what the right path to take is if there is to be a sudden collapse, but the prospect of waiting out a slow grind to the bottom is difficult.
anon Says:
January 1st, 2007 at 12:42 pm
I was simply posting the conclusion of the article as posted by grim from the journal news:
And given the quality of your redundant rants I’m not sure you should be callings others posts horse@#$!
======================
It’s working…
Lean times call for tough decisions.
http://photos1.blogger.com/x/blogger/6089/1833/1600/921974/2997_thumb.jpg
hehehehehehehehehehe (Muttley sick laugh)
Great site here! I stumbled upon it while deciding if now was the time to mortgage a major stake in my future on the today’s RE prices. Truth be told, I was never that close to buying(or even viewing), I see some “red flags” when analyzing the Morris County market.
I am not an economist or nor do I have any experience with real estate, so I could sound a bit naive. But the bottom line is that housing is unaffordable with an above median income and I’m not comfortable with having to “count on” future earnings and other speculative projections in order to buy a property.
I can’t justify max-ing out every form of savings I can muster(retirement savings, regular savings, other securities) just to get the 20% DP. Then once I’m in, have to subside on the Ramen noodle diet, and watch property taxes increase year after year.
Life is good now, no thanks to shelling out 300% of my current rent payment just to keep up. If there is no major correction in the next year or two, I’ll return to western PA where there is no bubble and either get a telecommuting job or just drive a coal truck. For me, a house/condo is just a place to live.
I’ll just sit back and keep watching for the next year or so. Thanks for all of the informed opinions.
gary Says:
January 1st, 2007 at 12:47 pm
Again, I hear lots of speculation but when I see the prices for a decent home in a decent town, I’m still shaking my head. I’ll believe it when I see it.
=========================
Even when prices go down 25-30% for houses many will still be shaking their heads. Prices are not cheap in this area. prices have already fallen about 12%+ or so and it is known , someone mentioned above slice another 10% off. This price correction is happening faster than early 1990’s bubble imo.
BOOOOOOOOOOOYAAAAAAAAAA (half moaning yell)
Bob
I’m not taking issue with any editing done by Grim;
only with boyaa boob who claims that by posting the conclusion my post was horse!@#$.
NickfromPAinNJ Says:
January 1st, 2007 at 12:58 pm
Fantastic post. Good luck to you. Prices will come down 25-30% for houses BUT bargains NOT!
It just goes that on this bloghow how any contrary view to the dominant paradigm results in name calling.
anon Says:
January 1st, 2007 at 1:02 pm
==================
You sound a little crabby. Alot of crabby harassing starving bunch back in early 1990’s also.
http://photos1.blogger.com/x/blogger/6089/1833/1600/921974/2997_thumb.jpg tasty?
hehehehehehehehehe
What makes you think I am in a difficult financial situation? I wont brag, but I think you’d be surprised.
All I did was post the conclusion to an article orginally posted by grim.
metro,
no im not in the biz
and im currently renting in Sparta ( lake mohawk). i’m looking at the lower end $400,000 and below. anything decent is going close to asking if they wern’t outrageous w/ the olp. at these prices its a bargain for Bergen co. as i stated earlier.
I’ve been looking since March of 05. When I looked at comps from 05 it seemed 06 listings had %10-%20 added on and im only now starting to see adjustments to the olp but that said i’m not seeing aggresive low balling coming out in the sold #’s and to be more specific 3 br
my feeling is the westward migration will keep prices inflated a little longer out here. i origanally thought we would see price declines 1st
red]
If you rent in Sparta NJ, and you are not in the ‘biz’, then how do you know that the phones of two realtors in Monmouth county is ringing off the hook???
reference to post #1 and #56.
also
“im in Sussex county and i’m seeing people pay full or close to full price”
Can you post a link?
Anecdotal quotes from my realtor (not that any one realtors voice echoes the sentiment of the entire lot):
“We will see if the market picks up in a few months.”
My personal interpretation: “Market is dead, nothing is moving, listings are expiring, I can’t talk my sellers into lowering their prices, maybe once some foreclosures force the prices down a bit, they will move on price.”
“I encourage you to make any offer, even if you think its low.”
My interpretation: “I need to at least bring some kind of offers to the table for my sellers so they feel like I am earning my commission. Also, your lowball offer that they won’t accept will make an offer that is 10% off asking seem great.”
Happy New Year everyone!
“What makes you think I am in a difficult financial situation? I wont brag, but I think you’d be surprised.”
Looks like it will be another year of folks claiming they are NOT bragging about their money while actually bragging about their money! Some things never change…
njbear
i know 2 realtors in monmouth co.
going on their word
recent sales in sparta info from my realtor
what would you like a link to?
and it looks like it will be another year of the bears saying wait till next year, or the next year, I mean the next year.
some things never change….
I predict in in 2009 boyaa boob’s new name will be “Take at least 25% off 2007 peak prices for houses”.
NjGal Says:
Looks like it will be another year of folks claiming they are NOT bragging about their money while actually bragging about their money! Some things never change…
For those on this blog who are able to tolerate different scenarios that differ from their same old same old posts:
http://www.fdic.gov/bank/analytical/fyi/2005/021005fyi.html
60]
“Take at least 25% off 2007 peak prices for houses”
Which is 35% off 2005 prices. I like it.
Anon,
The flippers are gone, the specs are gone, real investors are gone, the subprime is getting sheared. “Next year or the next year”??? No, more like how long/how bad. “Next year”?? No, maybe 5-7 years.
The bulls stated that there was never a bubble. Do you know what they are referring to regarding soft landing, stabilization, at or near the bottom?? After all there was never a bubble.
Bears??? More like a 800 LB. gorilla on your granite counter tops.
“More like a 800 LB. gorilla on your granite counter tops.”
and he’s pissed because all he found was raman noodle.
Those who think that they are somehow influencing the market by posting here, you are just wasting your time, bulls and bears alike. The readership of this blog is an almost inconsequential part of the market.
Please, don’t waste your time (or ours) by posting nonsense. Like I said before, this applies to both sides of the discussion.
jb
anon, # 60.
Thanks for providing that article. From the same article;
“However, it is likely that the longer and higher home prices rise, the more they may become out of line with economic fundamentals, which could make them more vulnerable to economic shocks. Should a shock occur, it seems reasonable to expect that home prices would be more likely to decline, and perhaps even bust, in those markets where prices have recently boomed.”
There has never been a RE market more out of line with its underlying fundamentals than this current market. Could the shock your article refers to be something like post # 9?? I know this market is shocking to Toll, Hov. and DR Horton, they have all expressed this repeatedly. Kind of shocking also to Kara, its employees, its sub contractors and its customers. Some still waiting for the windows to be adjusted on their 1.25 mil house.
anon –
“For those on this blog who are able to tolerate different scenarios that differ from their same old same old posts:
”
Posted article uses housing data from 1978-2003. 25% off 2005 prices is early 2003 prices. Therefore the article you posted agrees with boyaa Bob’s 25% off approach.
So what different scenarios are you talking about??
The article further mentions –
1] We are in unchartered territory with respect to subprime lending.
2] Subprime borrowers are susuptible to foreclosures. preaching to choir???
how much does the subprime market contribute to overall NJ re?
FYI, I dont own but rent and am looking to buy
Spleunker: LOL; that’s funny.
BC Bob, I think the article attempts to be balanced and yest states yes the market may decline but what I’m saying the article allows for scenarios different than the bust bust bust theories that permeate here:
“So, must a bust always follow a boom? Based on our look at history, our answer must be “no.” Only infrequently do home price booms lead to busts, at least by our criteria. According to the evidence in Table 1, in just 9 of 54 unique boom episodes prior to 1998, or roughly 17 percent of all such events, did a bust subsequently occur within a five-year window. Clearly, the lion’s share of home price booms have not ended in busts historically.
How Do Booms Typically End?
If it is relatively rare for housing booms to result in a price bust, how do booms usually end? Our look at history suggests that stagnation in home prices is often the most likely outcome. Of the 54 boom episodes prior to 1998, 45 did not see a subsequent bust. In these cases, nominal home prices rose by an average of 2 percent per year during the five years after the boom ended. The equivalent figure for real home prices was a modest 2 percent per year decline. So for 83 percent of our post-boom cities, nominal prices continued to inch up and any declines after inflation were very modest. Home prices in these markets simply stagnated, or stalled out, following their booms rather than going bust.”
Red,
It has been my observation that at the end of the earth in Warren County is that prices have been going down. Sparta (Sparter for those of you who know who you are) is IMO actually just a satellite of Morris County, in other words it is not really Sussex County but a very special subset thereof. Out here in the periphery I have noticed that the commute times/costs are eating into the cost savings.
anon,
Table 1 in that article referes to data from 1998-2003. The analysis therefore ignores greed that swept the market from early 2004 to mid 2006.
metro
i work w/ someone from Warren co. he has tried to convince me to move out there stating price declines in his area which i dont know the town.
i agree w/ Sparta being part of Morris co. which is why peolpe may see it as a bargain as i said earlier but used Bergen co. as an example of price difference
just to add to your observation: ” I have noticed that the commute times/costs are eating into the cost savings”.
I would think quality of life is effected as well as in time w/ family. and i do expect to see gas prices up again this year
red,
According to the Center for responsible lending
1]
foreclosure in Ocean City, NJ & Atlantic City, NJ
is among the top 15 MSA projected foreclosure rates for subprime loans.
2] 19.2% of Subprime loans in NJ will fail.
http://www.responsiblelending.org/pdfs/FC-paper-12-19-new-cover-1.pdf
Saw a property recently close @ $850K, down from an asking price of $1M.
Good deal right? Only if you ignore that the house sold for $275K in May of 2000.
Some bagholder paid over triple what a house sold for 5 years ago.
Property is MLS 2316161 located at 30 Richard Drive in Short Hills NJ. This house was not renovated one bit in those 5 years. Here are photos, all vintage 1960s and 1970s decor:
http://newmls.gsmls.com/public/runReport.rpt?sysid=3624883&ptype=RES&report=res_media&fromPublic=PUBLIC
People have lost their minds these last few years.
anon # 60,
Thanks for the link. Fascinating read!
red,
Subprime Refinance Lending in NJ during 2005 was ~25%.
http://www.consumerfed.org/pdfs/SubprimeLocationsStudy090506.pdf
“how do booms usually end? Our look at history suggests that stagnation in home prices is often the most likely outcome.”
The facts don’t support that claim:
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Yeah, red. That FDIC link is a little like watching an old episode of Star Trek. Amazing how the creative little things that appear as sidenotes or afterthoughts are the true future. Those last three paragraphs should be the thesis, not the butt-covering afterthought.
It’s comical to read stuff like that or the Harvard report and then call my relative in Rancho Santa Fe (built new house on ocean ’97) and just laugh. Fortunately, she has an artist’s appreciation of irony.
Have you read that one?
http://www.jchs.harvard.edu/publications/markets/son2006/son2006.pdf
I also happen to think there could be stagnation, but that’s a pretty miserable outcome for recent buyers, ARM holders and anyone who extracted equity. And there is no guarantee that stagnation will be only 5 years long after a 10 year boom…to me stagnation is a pretty “grim” scenario, and I dislike when people try to present it as a “just peachy” outcome to the boom.
76.
You have shown this chart many times and claerly it shows the problem – but also add to it the increase in taxes, utilities – that are out of proportion to the past affordablility. (or is this taken into account in the chart?)
Bubblewatcher, I believe the chart focuses solely on home price. You raise a good point on expenses such taxes, as they have risen considerably in many NJ towns over the last 5 years.
In towns such as Montclair, taxes on a fairly modest home can easily approach $20,000 a year.
Take at least 25% off 2005 peak prices for houses/more for Condoshacks Says:
January 1st, 2007 at 12:56 pm
hehehehehehehehehehe (Muttley sick laugh)
Yo’ Boo’s:
http://www.youtube.com/watch?v=oibk9Zk1_yI
http://money.cnn.com/popups/2006/moneymag/bestidea_2007/2.html
Best idea for home buyers
It’s a buyer’s market. Drive a hard bargain.
Real estate in 2006 turned a corner – and not a good one. In the past year, home prices have dropped 2.2%. In this kind of a market, once you’ve found the house you want, start the bidding at least 15% below the asking price. Barry Miller, a broker and owner of Denver-based Buyers Only America Realty, says that’s the average discount his clients are getting.
Paying a buyer’s agent an agreed-upon fee, if you can in your area, makes sense as well. Having a negotiator who is working for you will probably lead to a lower price.
Other ideas
Buy from a builder. Many homeowners will wait out the bust. Builders can’t afford to. Besides a lower price, many are offering thousands in upgrades. Skip the stuff and ask the builder to buy down your mortgage rate. That’s worth more than any perk in the long run.
Get a second opinion. If you are still not sure you got the best deal, spend $350 to hire your own appraiser. Often the appraiser brought in by the lender is motivated to inflate the price so the bank can make the largest loan possible. If your appraisal comes in at less than the agreed price, renegotiate. And if the seller won’t budge, walk. You can find another house.
– Stephen Gandel, Money Magazine senior writer
how come everyone is so bearish on the housing market? Are most of the bears on this site renters hoping for prices to fall? Are you jealous because you missed the greatest bull market in the history of the US? Because dopes making 50k a year just cashed out 250k by happening to be long real estate at an opportune time? The trade is over. You are not going to see 10-20% decline in home prices. Even if we got to a point where that potential existed, the Fed would slash rates so fast that demand would be back in supply. Give up, game over. Save your pennies and go buy.
Hi; are you new ???
My impression is that many of the people on the site were actually quite wealthy, or were types that had a 20% downpayment saved up, or, in a few cases, those who already sold. Not starving renters, anyway.
We own our place free and clear. I may invest in RE once this is over, but that would be a few years in the future.
Once you have significant capital, your psychology is very different from the person who is ready to buy with 0 or 5% down in the hopes of getting some appreciation. You become much more conservative in several ways.
…or perhaps; blind dumb and deaf.
njbear,
do you think the subprime market is what will take the nj market down? or do you think the more traditional mass job loss in the area will bring it down?
i dont think NJ is overbuilt like other markets that are in free faqll
and with the financial sector which is one of the strongest parts of the economy right now supporting the re market it seems NJ might not take as bad a hit as these other markets. or could take longer to unwind
or are we still living by the rule of thumb that we’re 6 months to a year behind California????
the sub-prime market is dust
I guess a bunch of people have made a New Year’s resolution to troll us………..
Perhaps Grim is wrong about the influence of his blog
James, people flock here for reason.
UnRealtor Says:
“The facts don’t support that claim:”
what that graph fails to demonstrate is that cost of raw materials have increased substantially, most of which is not captured in CPI. Also, margin requirements are a lot less (ie down payments), banks can lay off risk to 3rd parties, banks can more accurately measure mortgage risks, banks can more easily diversify mortgage portfolios. banks have streamlined the mortgage process, real interest rates are extremely low and most likely will stay low, inflation expectations are well maintained and are the single most important job of the fed, M3 is growing dramatically, there are more potential buyers, homes are bigger.
So, you cant take a graph at face value.
Following are the results of Bloomberg’s survey, conducted from Dec. 18 to Dec. 28:
Firm Fed Fed Two-Year 10-Year
Q1 Q4 Q1 Q4 Q1 Q4
BNP Paribas 4.75 3 4 3.05 4.2 3.8
Banc of America 5.25 5 4.8 5.1 4.7 5
Barclays Capital 5.25 6 4.85 5.35 4.65 5.05
Bear Stearns 5.25 5.75 5.1 5.5 5 5.4
Cantor Fitzgerald 5.25 4.75 4.65 4 4.625 4.25
CIBC 5.25 4.5 4.7 4.25 4.6 4.5
Citigroup 5.25 5 n/a n/a 4.6 4.9
Countrywide 5 4.5 4.4 4.5 4.45 4.5
Credit Suisse 5.25 5.25 4.6 4.5 4.5 4.4
Daiwa Securities 5.25 5.25 4.85 5.3 4.65 5
Deutsche Bank 5 4.25 4.25 4.1 4.25 4.6
Dresdner Kleinwort 5 4.25 4.45 4.3 4.4 4.5
Goldman Sachs 5.25 4.5 4.6 4.5 4.5 4.6
Greenwich Capital 5.25 4.5 4.75 4 4.85 4.2
HSBC Securities 5.25 4 4.5 3.8 4.5 4.3
J.P. Morgan 5.25 5.75 4.55 5.4 4.4 5
Lehman Brothers 5.25 5.25 5 5 4.8 4.8
Merrill Lynch 5 4 4.5 3.9 4.45 4.25
Mizuho 5.25 5 4.8 4.6 4.65 4.5
Morgan Stanley 5.25 5 4.65 4.55 4.6 4.75
Nomura Securities 5.25 4.75 4.8 4.75 4.75 4.85
UBS 5 4.25 4.2 3.9 4.4 4.4
Zac #86,
Perhaps you could post something substantive instead of name calling.
Ya’know – people like to quote numbers to prove an argument. It’s the oldest trick in the book. Fact is however: Human emotion is the strongest force.
Welcome to the machine.
red,
“do you think the subprime market is what will take the nj market down? or do you think the more traditional mass job loss in the area will bring it down? ”
I was watching CNBC the other day, Maria Bartiromo asked a subprime guru about repercussions of a 20% failure in subprime loans as projected by the Center for Responsible lending. The subprime guru didn’t want to answer that question. He kept saying that no more than 10% of subprime loans will go belly up. In other words the financial markets are not ready to handle a 20% foreclosure rate on subprime mortgages. IMO, It is going to be subprime initially but then some of the tranditionals who have maxed out their mortgage equity will also be hit.
” it seems NJ might not take as bad a hit as these other markets. or could take longer to unwind”
IMO, unlike the previous downturn, NJ’s economy this time is not doing good. Job growth is dismal and real weekly wage growth is negative compared to last year. With the expected housing layoffs in the range of 400k-1 Mil to hit next year, unemployment is bound to grow. Part of NYC financial jobs can be attributed to the housing boom. For example, I’m speculating that when subprime lender Ownit Mortgage went down, a ripple effect may have been felt in Merill Lynch.
IMO, the acquisition of LU by Alcatel could cause a ripple effect through NJ. Many of LU’s subcontractors/partners may not get deals like they are used to.
>>
I’m a pessimist. My knowledge of financial markets is based on my reading of reports published by different agencies. I don’t have any formal education in economics and my understanding of published reports could be flawed.
“there are more potential buyers”
Is there any evidence to support this claim?
Roger Waters; “Amused To Death.”
“So, you cant take a graph at face value.”
Thanks, now that $700K 3 bedroom Cape Cod seems like a bargain. Not.
The party is over, get used to it.
http://graphics10.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
I hear Macys is looking for perfume squirters.
Funny you should mention retail fragrance opportunities…check out their job opps page. It’s like perfume picks up as people get down.
Job Title: Beauty Advisor
Department: Sales-Cosmetics
Requisition Number: ME00009240
Location: NJ-Paramus-Garden State Plaza Mall
Job Description:
Beauty Advisor
Overview:
As a Beauty Advisor, you will be a part of our vibrant and fast paced cosmetics department. All we ask is for you to bring your smile and positive attitude and your opportunities are endless. With extensive selling and product training, you will practice superior selling techniques through advanced product knowledge and outstanding customer service. You will personally assist customers in makeup and skin care selections while ensuring quick and efficient register transactions. In addition, you will work to present merchandise that is signed clearly and accurately while maintaining a neat, clean and organized shopping environment. This position leads to various roles with greater responsibility within or outside of the Cosmetics/Fragrance Division.
[including perfume squirting???]
NJbear
affordability seems to be the culprit for 06. Rates went up as high as what 6.85? and this slowed volume in NJ.
Psychology has changed but not completely. Most people I know are urging me to buy. Of course the 2 realtors i mentioned earlier but other people i work w/ as well. They all seem to feel the market only stopped to take a breather. And I have to think there are alot more people like me getting bad advice I guess we’ll see what happens in the spring.
The state of the NJ economy is in bad shape indeed but all the points you make may take till after the spring to take hold and hurt the NJ market the Lucent/alcatel merger. the loss of construction jobs.
Also the tightrning of lending standards could take a while. Has NJ adopted the guidlines for states yet?? If not you could see quite a few people w/ plenty of credit running out to buy in the NAR’s buyer’s market.
I don’t know who is left to buy but i’m trying to wait as long as the house i’m renting does’nt go up for sale i’m in good position
#83,
” You are not going to see 10-20% decline in home prices. Even if we got to a point where that potential existed, the Fed would slash rates so fast that demand would be back in supply. Give up, game over. Save your pennies and go buy.
”
Let’s forget the fact that rate cuts take 3-4 quarters to be felt in the economy.
IMO, even if the feds start cutting rate like you said, the bearish sentiment will keep buyers and mainly investors away from housing for few more years. Didn’t it take 8 years last time without having to deal with a 25% subprime market?
We are already seeing around 10% declne. You should visit this site more often.
It’ll be interesting to see how many houses will go on the market once the new property tax bill comes out after recent prop re-eval. Of course the re-eval was performed at the market peak. Gee, what a convenient coincidence.
Question for Hi
You said “…what that graph fails to demonstrate is that cost of raw materials have increased substantially, most of which is not captured in CPI.”
I know that after Katrina, there were some hefty increases throughout the raw material supply chain for homebuilders. But the data doesn’t seem to support that overall, the increase in raw mats has had a real impact on homebuilders over the long run.
I am looking specifically at BLS data/ Producer Price Index on Materials and components for construction. Since 1999, raw mats have increased 27%, less than 4% a year increase for the builders. That doesn’t seem so bad compared to the double digit increase in new home prices they are charging over the past few years.
http://www.bls.gov
Do you have any data to support that builders faced those substantial increases when looking at the past five years? I know you can quote some selected months where there were double digit increases month to month due to Katrina, but many of those prices stabilized quickly.
I am a data junky, please link me!
red,
“Psychology has changed but not completely. Most people I know are urging me to buy. Of course the 2 realtors i mentioned earlier but other people i work w/ as well.”
ask them for data.
“Also the tightrning of lending standards could take a while. Has NJ adopted the guidlines for states yet?? ”
I don’t have any information as to when guidelines for states is going to be enforced. The more subprime lenders that get into this market the harder the market is going to be the fall. Unless the markets correct by itself – refer post #9.
prices are down over 10%+ from peak already. the board is being overrun by a few bored realtors.
http://photos1.blogger.com/x/blogger/2825/754/1600/948941/inventorydec2006.jpg
found this interesting
Great piece over at BubbleMeter:
Lereah ‘It appears we’ve hit bottom’ Again!
Seems Lereah has called “bottom” at least 3 times in 2006. First called bottom in May of ’06, called bottom a second time in September of ’06, and has called bottom for what is at least the third time in December..
When is a bottom not a bottom?
jb
When you’re stuck in a riptide at 9 and the lifeguards (gubmint paid) don’t come on duty ’til 10.
James Bednar Says:
January 1st, 2007 at 9:14 pm
When is a bottom not a bottom?
jb
grim: when it’s a ……. taa daa “false bottom” ;-)
btw grim: back off with this bottom stuff……between the diaper rash, lasinoh wipes and desitin…..no more please!
Enron economics
I’ve always thought that a great name for a punk band would be Negative Amortization. Amortization sounds bad enough, like something that a sinful priest would do to himself to get right with God, but negative amortization? Serious Dark Arts territory.
I have since learned that negative amortization is not that hard a concept to grasp. For homeowners paying off a mortgage, it means that your monthly payments are not covering the interest due on your principal. This means that your total amount owed to the bank is actually rising each month. Not a good place to be.
Negative amortization is in the news right now because, as interest rates rise, holders of “option ARMs” — adjustable rate mortgages that entice consumers with very low initial payments — are falling into negative amortization territory.
A link from a post at EconBrowser to an extremely downbeat post at the Big Picture summarizes some relevant data from an article in the current Barron’s. By the end of 2003, only 1 percent of Washington Mutual’s option arms “were in negative amortization. 2004, the percentage jumped to 21 percent. 2005, the percentage jumped again to 47 percent.”
That’s bad enough — an expanding mushroom cloud of debt that can only bode ill for the overall economy. But here’s the kicker. Washington Mutual has been booking this ballooning consumer debt as earnings.
Yes, that’s right, in the first quarter of 2005, Washington Mutual booked $25 million of negative amortization as earnings. In the first quarter of 2006 the number was $203 million.
We’re talking about debt here that may never be repaid — foreclosures are already spiking all over the country. But Washington Mutual — and it can hardly be alone — is counting this debt as cash in the bank. That’s Enron economics, folks, and we all remember what happened to that company.
Update: Reader Chris Doggett offers some very useful additional information on negative amortization and bank behavior.
— Andrew Leonard
http://www.salon.com/tech/htww/2006/08/24/enron_economics/index.html
[17:23 EDT, Aug. 24, 2006]
Yup..2 month Destitin duty. It’s the best, though. Huggies/Huggies free wipes.
Too bad it might mean he’s gonna teeth early…4 mos. Yikes.
Quiv: The WSJ did a hatch job on WaMu and their ilk in the summer of 2005. Yes, we will see this mass of capola come to pass……wait…wait..we will come to see this pass of capola mass….yeah, better
errata: hatch….hachet
Pat Says:
January 1st, 2007 at 9:46 pm
Yup..2 month Destitin duty. It’s the best, though. Huggies/Huggies free wipes.
Too bad it might mean he’s gonna teeth early…4 mos. Yikes.
Pat: whaaaaa?
thanks for the heads up chicago.
i did a google news search for “Negative Amortization”. ugly just ugly
“Psychology has changed but not completely. Most people I know are urging me to buy. Of course the 2 realtors i mentioned earlier but other people i work w/ as well. They all seem to feel the market only stopped to take a breather.”
Red,
Are any of these part of the 35-50% that have cancelled contracts with HB’s?? Remember, no market goes from peak to trough in a single vertical decline, straight line down. There will be periods of buying, when it appears that the bottom is in. Will it be a bottom or one of many failed upswings?? I guess soft landing is out, new buzz word, “at or near the bottom”.
IMO, after 80-100% of irrational gains we are not close to a bottom. That being said, many people feel that a bargain is 10% off 2005, or a plethora of incentives. Many felt the same when the nasdaq declined from 5000 to 3400 during its first down leg. The subsequent moves to 4000 [twice] were just failed upswings.
>>You know…when the trolls show up here with their insipid and baseless sound bites
plenty of that coming from the board regulars too.
good lord, are all of these new years’ trolls kannekt.com klowns who just discovered this blog?
Richard #120,
True.
bc bob
i don’t know how we can call 05 the bottom. sales volune yes but not price NJ is still gaining right? is KB homes NJ exclusive is that 35-50 in NJ? no way to tell.
What I’m saying is NJ seems to be a hold out and I’m expecting the spring to be better then I hoped for thats all. I know the market will go down here its just taking longer then say Mass. Booya Bob was anticipating blood in the streets this year 06 did that happen? it slowed %25-30 volume but prices held or they only gained %7 so will the spring be the massacre this year or next?
125]
Red,
Prices are not holding. In Certain markets the total percentage of condos sold in 2006 is way less than last year.
In Bergen county, 41% of all sales in 2005 Dec was condo/Town house. The percent of Condo/Town house sales in Dec 2006 is 29%. Condo/Townhouse sales are 30% down YOY as a percentage of total sales. This has caused the median price to artificially hold up.
Condo sales numbers themselves are down nearly 50%.
njrebear,
Interesting thought, It didn’t occur to me to look at the SFH vs. Condo/Townhome breakdown in that way before.
jb
Red,
You are confusing me.
bc bob
“i don’t know how we can call 05 the bottom.”
??????
jb,
I’m hoping there is a SFH median price decline if we break down 3 vs 4 vs 5 bedroom sales.
Hi,
This is an interesting link.
http://valueinvestorblog.blogspot.com/2006/09/little-gem-among-subprime-lenders.html
Not that I (or any of you) would care that much about the company this person is looking at, but he does have some interesting things to say about mortage lenders and the investment value of their loan holdings.
ChiFi, other financial pundits, would love to hear comments on this guy’s take, not on valuing that company inparticular, but some of the insight into how mortgages are valued as investments.
JM
Sorry, let me reword my question. Would love to hear feedback on his explanation of the mechanizations of turning mortgages into securities…
JM
http://en.wikipedia.org/wiki/Mortgage-backed_security
review:
Finding the theoretical fair value
also types of MBS
bear in mind that the author writes about splitting MBS into “tranches” [don’t get caught up in terminology – just a classification] based on probability of prepayment – somewhere although I don’t see it referenced, should be a discussion of pricing based on credit default probability as well.
It is possible that entire deals are done in one credit category, just tiered by prepayment risk.
Any questions – ask
Seneca Says: (post #107)
Senaca – u need only look at the cost of materials, lumber at all time highs, copper at all time highs, oil/fuel at all time highs. these are commodities that dont funnel into ppi nor cpi to the extent that they would affect home costs. i would say that you cant rely on broad indexes/indicators to determine secular adjustments. take a look at the crb index. its a measure of all commodities. this is the real inflation gauge that feeds into housing costs. if u are a data junky, track copper and lumber costs and the companies who supply these raw materials (wy,ip, pd). read there q’s and k’s. its much more informative than listening to the knuckleheads on cnbc…and to a lesser extent on this blog..
“its much more informative than listening to the knuckleheads on cnbc…and to a lesser extent on this blog.. ”
Hi, #133,
FYI, you should know that Jan.lumber is 40% off its high while March copper is approx 35% off its high. However, you are right about the crb index.
This just in…
test
Grim can’t seem to post a Bloomberg article excerpt…
Don’t know why those were falling into moderation.
jb
CRB Index, are you kidding? Why would I want to noise from cocoa, coffee, corn, cotton, gold, lean hogs, live cattle, orange juice, soybeans, sugar and wheat clouding my opinion on building materials commodoties?
I am going to dig up some prices on say gypsum, lumber and copper and get back to you all…. stay tuned.
Producer Price Index – Commodites for Lumber and Wood Products, series wpu08, November index
data.bls.gov
YOY Change
1996 180.2
1997 181.8 1%
1998 175.2 -4%
1999 181.6 4%
2000 173.2 -5%
2001 171.5 -1%
2002 171.8 0%
2003 184.4 7%
2004 191.9 4%
2005 194.1 1%
2006 189.1 -3%
PPI Index for just Lumber (as opposed to Lumber and Wood Products), Nov. index wpu081
data.bls.gov
YOY Change
1996 190.3
1997 188.5 -1%
1998 170.4 -10%
1999 185.6 9%
2000 170.4 -8%
2001 166.1 -3%
2002 167.6 1%
2003 180.2 8%
2004 193.6 7%
2005 191.5 -1%
2006 171.7 -10%
Copper
“Metals – Copper plummets on follow through selling as LME stocks swell”
“Copper prices hit an 8 month low on Friday…”
http://www.bloomberg.com/apps/news?pid=20601082&sid=aIENMPZxQxtY&refer=canada
Now, to be fair, it does seem that copper had a wild ride in 2006, up 43-44% for the year.
This historical chart gives some indication of prices changes over past five years
http://www.kitcometals.com/charts/copper_historical_large.html#5years
But, prices seemed fairly steady right up until 2006.
The bloomberg article is interesting because it points directly yo North AMerican housing market as causing the current weakness in price.
Seneca,
You are right about copper, off about 35% from its highs.
http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&org=stk&sym=HGH7&data=E&code=BSTK&evnt=adv
BC Bob, my copper comments are awaiting moderation because I had two links but I basically admit that while copper has been off its high for a while, it did see quite a rise up throughout 2006.
I am still not buying into the whole cost to build theory and I am sure somewhere out there, there is a chart that shows market price index for the home builders basket of goods, if you will. I just can’t find it.
Seneca,
There was a huge sell off in copper in the second half of 2006, supporting your position. I don’t know of any chart/index reflecting a HB’s crb index. I’ll look.
Seneca,
Your gypsum numbers should be interesting. Lots of players speculating on US Gypsum (USG) along with the homebuilders. It’s also a Buffett play.
I’ll bet there’s a big disconnect between raw gypsum and the stocks in that sector.
Clot –
Work got in the way of my blogging this afternoon. I was having a hard time finding some gypsum data but think I may have something by tomorrow.
will keep you posted on whatever the hot topic is tomorrow