From the Financial Times:
Data point to uncertainty in US housing
Policymakers and bond market investors alike appear more confident about the resilience of the broad US economy in 2007, with its still-thriving service sector, strong jobs market and improving exports.
Yet there remains much uncertainty as to what will happen to the housing market, and what effect, if any, the housing correction may yet have on consumer spending and growth.
The data are mixed, with some measures suggesting that the housing market is bottoming out, while others point to further weakness to come.
We do know that in the final months of 2006 demand for housing – which had been falling sharply – started to level out.
Mortgage applications, measured by the Mortgage Bankers Association index, picked up both for purchases and refinancing. New-home sales, meanwhile, stabilised, inching up from an annualised rate of 979,000 in July to 1,047,000 in November.
“There is no question that over the last few months the housing market has stabilised,” says David Bernstein, chief economist at Fannie Mae, the government-sponsored home finance institution.
“The question is: is this the bottom? Or is there another downward leg to come?” he adds.
Mr Bernstein thinks demand could weaken again, as investors pull out of the housing market.
According to the latest data – which admittedly, are several months out of date – the investor share of home purchases remains unusually high, at about 10 per cent. A warm autumn and mild winter may also have kept demand artificially high in late 2006 and into 2007.
Even if demand does remain stable at current levels, both construction and house prices could face continued weakness because of the large overhang of unsold homes – 6.3 months of sales for new homes in November (more if adjusted for cancellations).
Jan Hatzius, chief US economist at Goldman Sachs, says home starts need to fall considerably from their present level to clear the inventory backlog, which Goldman estimates could be as high as 900,000 houses, including vacant homes not presently offered for sale.
…
Even if – as seems likely – prices do not decline significantly nationwide, there may still be serious problems in local markets and in the sub-prime market, which caters to marginal buyers.Delinquency rates on subprime mortgages have already shot up, and credit spreads on sub-prime mortgage pools have widened considerably.
…
All the same, it is too early to sound the all-clear on housing. Even if a bottoming-out process is already under way, it could take the best part of a year to work through. Given the likely time-frame, the lack of spill-over effect so far from weaker housing on consumer spending is at best encouraging, rather than conclusive.
…
If the bond market decides it has overestimated the likelihood of Fed rate cuts, or reverts to a more normal- term premium (charging more for longer-term debt) bond yields and mortgage rates could jerk upwards, kicking away one of the main props supporting demand for homes.That could set in train a whole new round of housing market declines.
From MarketWatch:
Centex expects to swing to loss, cuts land valuation
Home builder Centex Corp. said it expects to swing to a third-quarter loss from continuing operations of $2.00 per share, from a profit of $2.52 a share a year ago. The company said it will record land valuation adjustments of around $300 million due to the declining housing market. It has also decided not to exercise land option contracts on 37,000 lots, which will result in walk-away costs of around $150 million. Centex added it will increase its provision for taxes by around $60 million in connection with its previously disclosed ongoing federal tax audit. Excluding these costs, Centex said it expects adjusted earnings for the quarter to be 75 cents a share. Analysts polled by Thomson First Call were expecting earnings of 81 cents a share. For the quarter, Centex said home closings fell 12% to 8,360 and net orders fell 24% to 6,139.
UK price pressures increased dramatically this month, could we be facing another round of global price pressures (and resulting global rate hikes).
From MarketWatch:
British consumer-level inflation climbs to 3%
British inflation rose to 3% in December, according to statistics released Tuesday, a figure that helps explain the Bank of England’s surprise rate hike last week.
The consumer price index rose to 3% in December from 2.7% in November, the Office for National Statistics said, the highest inflation rate since CPI figures started being kept in January 1997.
Tax hikes on fuel, rising air fares in Europe and increased furniture and computer game prices lifted inflation, the statistics office said.
Though CPI was more than the 2.9% predicted by economists, there had been speculation after the Bank of England made a surprise quarter-point rate hike to 5.25% last week that inflation could have climbed to as much as 3.1%.
The central bank is required to write a letter to the Chancellor of the Exchequer if inflation is either more than 1% above or 1% below the target of 2%.
The Bank of England knew the inflation data prior to making its interest-rate decision last week, but wasn’t allowed to disclose that figure due to a confidentiality agreement with the statistics office.
Can a realtor with the licence from the other state access NJ GMLS and NJMLS listings???
I have a retired friend in Florida who just kept her Reator licence so she can keep helping her frinds and family
S&L IndyMac misses forecast, blames deteriorating housing and mortgage market. From BusinessWire:
IndyMac Provides Update on 2006 Results
Unfortunately, we are starting the year off with some bad news.
Based on the earnings forecast we provided after the end of last
quarter, we anticipated that our EPS for the fourth quarter would be
$1.35 (in a range of $1.30 to $1.40). However, last week, as we began
to complete our quarterly accounting “roll-up,” it became clear that
our Q4 earnings would be substantially below our forecast. While our
internal quarterly accounting certification process is not yet
complete and adjustments could still be made as we finalize our
accounting, we now expect to report approximately $0.97 EPS for the
quarter when we release earnings as scheduled on January 25th.
This shortfall reflects the challenging times being faced by the
mortgage and housing industries and the difficult nature of
forecasting earnings in our business. I have stated many times before
that Indymac is not immune to deteriorating mortgage industry
conditions, and it is clear now that during the fourth quarter
industry conditions continued to erode.
As far as uncertainty – it seems like the bubble states are affected a lot less right now than the so called no-bubble states – such as texas – housing was cheap and they are really suffering now, AZ, some southern states and some north-wester ones.
In my mind it was clearly connected to the people living california and east, espetially north east. If you can sell your 3bdr/1bathroom home in california for 700K (let’s say you had 250K remaining mortage), buy 2x larger home house somewhere west for 150K, still put 300K in the bank – probably at least 15K (if go with CD’s ) or more like 60K/year is bought into some better performnig mutual funds last year – they can basically quit their job and live a lot bettere that they were living in California!!!!
Similar applies for leaving NJ.
So right now houses in California/north eastr just do not sell – no expatriats driving prices up in cheaper states and salaris there were very much linked to construction jobs….
SO thouse places are hit really hard. In turn people who can not sell in North East/California are not selling – they’d rather go through bankrupsy/FK to avoid possible tax implications. SO it will take a lot longer to feel the affect of the bubble deflating.
I guess I will follow Clot’s advice and will start llearining of buying FK properties – generally they are sold at up to 30% discount (generally at 15-20% of comparable market values).
With this type of discount and proper home inspection before the auction, even if something wong with the house I will be able afford fixing it…
Anyways I do not helieve people can even say that correction is finished as prices basically dropped what 1.2% last year!!!!
OMG that make house soo much more affordable. ohh wait what about 7% increase in property taxes in NJ last year!!!! ohh yea they are federal income taces deductible, so it was ONLY about 5% increase in taxes last year!!!
Just out of curiosity -what are IndyMac’s shares trading at right now??
Can a realtor with the licence from the other state access NJ GMLS and NJMLS listings???
Yes, but she will need to keep her NJ license and MLS memberships active. She also needs to keep her license parked with a NJ broker. Residency is not a requirement for holding a NJ real estate salesperson license, but NJ licensure is a requirement for access to the MLS. She might want to consider parking her license with a referral agency to minimize her costs. I’m sure she isn’t planning on flying back up to show houses or present offers, so keeping her referral contacts current will be important. She will receive a portion of the commission on a purchase or sale via referral.
jb
“considerably from their present level to clear the inventory backlog, which Goldman estimates could be as high as 900,000 houses”
We are selling at the rate of 1 mil new homes per year. How are they expecting 900K houses be sold in 6 months? Moreover, new home starts are at aprrox 1.5 mln/year which means an additional inventory growth of 500K!
How much would it cost to (approximatelly) to
parking her license with a referral agency to minimize her costs. per year?? I might consider paying for it myself.
As far as not flying over here – they are visiting us in 4 month no matter if we are buying a house or not:)
Flights from Florida are dirt cheap right now.
After looking at few available houses and learning, that phrase seller is very flexibe in pricing means they are ready to take off 10K on 300K+ house (wopping 3%).
I am slowly abandoning the idea of buying right now, and in a month or so will stop looking all together for a while, due to other upcoming events in my life.
Anyways,
The more I learn about MLS systm and NAR, the more I wonder – why does US antitrust committee
does not get involved?? Seems like huge monopoly to me. But I guess they are having a strong lobby in the congress/donate a lot of money to presidential campains.
Ohh yes and she does not have an active NJ licence – she only have Florida and Colorado ones right now. Does it mean she can not get into NJ MLS?
A few questions related to the Centrex post. What is the likely impact of HB options dumping on the market for developable land? The argument could be made that this would represent a decline in demand with a downward pressure on values. Just speaking from my own observations, I have noticed over the last several years that the cost of land in Burlington, Cumberland and Salem counties has tracked at a faster rate on the upside than residential real estate. Does anyone know of any sources for statistics which might reveal what is currently happening in this market? Thanks.
More on Centex;
“We are navigating through one of the most challenging housing environments in the past 25 years,” Eller said in the statement.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3poHe9K.DVk&refer=home
TO comment on #8 post:
Mortgage applications, measured by the Mortgage Bankers Association index, picked up both for purchases and refinancing. New-home sales, meanwhile, stabilised, inching up from an annualised rate of 979,000 in July to 1,047,000 in November.
Even if demand does remain stable at current levels, both construction and house prices could face continued weakness because of the large overhang of unsold homes – 6.3 months of sales for new homes in November (more if adjusted for cancellations).
Jan Hatzius, chief US economist at Goldman Sachs, says home starts need to fall considerably from their present level to clear the inventory backlog, which Goldman estimates could be as high as 900,000 houses, including vacant homes not presently offered for sale.
Interesting how they calculate it:
900000/1,047,000 = 0.859
0.859*12month=10.3month
So the backlog is at 10 month. Which means if NO new homes come on the market it will take 10.3 month.
how did they come up with teh 6.3month figure?? anybody dare to explain where have I gone wrong?
Centex added closings for the quarter dropped 12% to 8,360 and net orders slumped 24% to 6,139.
In a statement, Chairman and Chief Executive Tim Eller said, “We are navigating through one of the most challenging housing environments in the past 25 years. We are responding by reducing our land position and inventory, aligning our workforce to the current sales pace and improving our overall cost structure.”
================================
“We are navigating through one of the most challenging housing environments in the past 25 years.”
spin it Crabby bunch.
Here come the hungary lawyers.
http://prweb.com/releases/2007/1/prweb497285.htm
this is in its infancy…
BOOOOOOOOOOOOOOOYAAAAAAAAAAA (“sick” moaning 1/2 yell)
Can u feel the pain?
Bob – Happy content home(s)owner eventhough prices are deBloating
Foxtons has an incert in today papers.
Prices still seem out of line to me.
but then, nj real estate has always been a
good investment
BOOOOYAAAAA,
You are right about the legal aspect. We are in about the 3rd inning of the RE decline. The hungry lawyers??? Just getting started. This[lawsuits] will be the predominant news in 2007.
new homes are 15% of the market and don’t have much effect on the markets around here unless you’re looking at a tear down/build up. that is if you’re within 90 minutes of NYC.
A few questions I’ll throw out there related to the Centex post. What is the likely impact of HB options dumping on the market for developable land? The argument could be made that this would represent a decline in demand with a downward pressure on values. Just speaking from my own observations, I have noticed over the last several years that the cost of land in Burlington, Cumberland and Salem counties has tracked at a faster rate on the upside than residential real estate. Does anyone know of any sources for statistics which might reveal what is currently happening in this market? Thanks.
Al-
Only NJ licensees can practice in NJ.
I have a message trapped in moderation. Are messages moderated on the basis of writing style or something, I can not figure out the reason behind the hold.
That’s not exactly true though Richard – there are a ton of towns in the “outlying” areas where they do nothing BUT build new homes – my sister in law lives in lower Orange County, NY (an hour from NYC by commuter bus) and there are new homes everywhere you look. The one next to hers has been vacant for almost 2 years, with no takers. And while they aren’t single family, condos around here are all new and in abundance, and not just in Hoboken and Jersey City.
Besides, aren’t most tear downs small builders? If that business stops, a lot of small builders could get hurt. The effect is there – it’s certainly nowhere near as great as in Vegas or Miami, but it’s not a non-issue by any means.
“new homes are 15% of the market and don’t have much effect on the markets ”
New homes are good comp killers.
“that is if you’re within 90 minutes of NYC. ”
I live 45 min from NYC and i see lots of vacant land.
Al-
IMO, you’re fishing in the wrong pond. Take your smarts and energy, and learn how to hit pre-foreclosures.
If you’re looking for certain merchandise at a certain price, you’ve got to shop at the right store.
NJrebear (21)-
Any idea how much of that land is deed-restricted against further development?
The first time I ever drove thru Hunterdon, I was drooling…until the person with me mentioned that all the open land around us was Green Acred.
For all practical purposes, this state is built out. That’s why so much energy and attention has turned toward commuter villages and infill.
All-clear?
Hah!
National lenders will continue to stink up the local markets w/ cheap money, like it or not.
Bagholders will be put into homes they simply can’t afford.
Expect future sheriff fire sales to feature a different lender for each victm.
A question related to the Centex post.
What is the likely impact of HB option cancellations on the market for developable land? The argument could be made that this would represent a decline in demand with a downward pressure on values.
HELP!! I had signed a 6 month contract with my buying agent back in september but she hasnt been much help. In fact she already mislead us on a property once before and we had stopped using her. I currently work with another agent who has been pretty proactive with helping us. We have no found a listing thru this second agent that we’d like to pursue but our buyers contract ends only in march. so the question is.. is there any way out (buyers contract states 45 days notice to terminate).
This is in Bucks County PA
Centex sees 3rd-qtr loss from operations
NEW YORK, Jan 16 (Reuters) – Major U.S. home builder Centex Corp. said it would record a quarterly loss from continuing operations and reported a 12-percent drop in home closings and a 24-percent decrease in net sales.
“We are navigating through one of the most challenging housing environments in the past 25 years,” Chief Executive Tim Eller said in a statement.
Centex said on Tuesday it expects a loss of $2 per share from continuing operations, including option deposit and walk-away costs and adjustments for land valuation and a tax provision.
Analysts polled by Reuters Estimates were expecting a profit of 81 cents a share. It was not immediately clear if those figures were comparable.
“We are responding by reducing our land position and inventory, aligning our workforce to the current sales pace and improving our overall cost structure,” Eller said.
It expects a profit of 75 cents a share before certain items.
Centex said it recorded 8,360 home closings in the quarter, a decrease of 12 percent from the same quarter last year. Net sales for the quarter were down 24 percent to 6,139, Centex said.
Centex has canceled or intends not to exercise land option contracts related to about 37,000 controlled lots because of the decline of housing activity, it said.
It also plans to record land valuation adjustments of about $300 million, about one-third of that in joint ventures.
It also said it is increasing by $60 million its provision for taxes in connection with its previously disclosed federal tax audit.
Centex plans to release its third-quarter financial results on Jan. 23.
FLASH: New York Times – “the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed”
http://housingpanic.blogspot.com/2007/01/flash-new-york-times-frenzied.html
Moody’s predicts first national home price decline since the Great Depression. Any questions?
http://housingpanic.blogspot.com/2007/01/moodys-predicts-first-national-home.html
Speaking from my own observations, I have noticed over the last several years during the run up that the cost of land in central and
southern counties has tracked at a faster rate than residential real estate.
Does anyone know of any sources for statistics which might reveal what is currently happening in this market?
Clotpoll Says:
January 16th, 2007 at 10:18 am
Al-
IMO, you’re fishing in the wrong pond. Take your smarts and energy, and learn how to hit pre-foreclosures.
If you’re looking for certain merchandise at a certain price, you’ve got to shop at the right store
Thanks I will look into it.
However pre-foreclosure have disadvatgae of being priced quite a bit higher – of course they are covering better quality/broader range of homes.
However if i do decide to go through pre-foreclosure or foreclosure rout it will be slow and painfull process with quite a bit of disappointments on the way. And I will not even start doing so untill may be next fall…
thealchemyblog.blogspot.com:
Why have the courts found it to be a “right” that everyone must be able to live everywhere?
I have a question for you.
Why should local Municipalities control how many houses are built and where and which type etc…? If the need is for Infrastructure or Environment then make only those laws, no need for each town to approve housing, right !!!
Every developer can provide their share of fee for development of additions to schools that will be needed for new families, and same for new roads that may be needed. Why Township need to approve which type of houses and where etc…
I firmly believe if total free market is allowed, you don’t need any of this Affordable housing crap.
Re #31,
As with all other information, special attention should be paid to the details. The “here” refers to Washington DC, not New York. The article then goes on at length about the DC market. There is a brief mention of how the Manhattan market has bucked the trend at the high end.
“Why Township need to approve which type of houses and where etc…”
So every town doesn’t look like Queens, with “houses” packed a few feet apart.
>The effect is there – it’s certainly nowhere near as great as in Vegas or Miami, but it’s not a non-issue by any means.
that was more my point. i do believe small builders are going to get hurt the most around here. then again i know a couple of homes where the profit is $250k and these are homes priced in the mid $800’s.
the RE market IMO is going to have a continual cushion via low interest rates. if the economy starts hitting the skids the money spigots will open wider. it’s the way the fed has always fought weakness. to think anyone believes their jawboning around fighting inflation over stability/growth i have a nice bridge to sell you.
my investment outlook for 2007 (if anyone cares). i got 4 things to say.
japan
commodities (ex-energy)
large cap growth
tech
Still hearing from a stalker realtor, starving for a commission check, that “Now is a good time to buy,” and that “It’s different here.”
Lots of free time on her hands, it seems.
Fraud Cases Are Rising, F.B.I. Says
By BOB TEDESCHI
Published: January 14, 2007
MORTGAGE fraud has continued its climb over the last year, according to new statistics from the Federal Bureau of Investigation, despite increased attention from the financial industry and law enforcement agencies.
We recognize its a growing problem, so weve redoubled our efforts to work with the industry and other law enforcement agencies to address it, said William Stern, the F.B.I.s mortgage fraud coordinator. Were seeing it spill over to things like organized crime and gangs, which concerns us, too.
Mr. Stern said that as of early January, the bureau had 938 pending mortgage-fraud investigations, compared with 818 at the end of September and 721 in September 2005. The F.B.I. estimated that the actual number of cases was closer to 36,000 for the year ended Sept. 30, compared with 22,000 the previous year.
The bureaus cases typically involve so-called fraud for profit, which happens when criminals seek to make off with the funds from a loan. Criminals will buy a house, often using a stolen identity, from a legitimate seller, then immediately put the house up for sale. Others in the crime ring will then pose as buyers and work with a corrupt appraiser to assign an inflated value to the house. After finding a mortgage at the inflated value, the buyers split the proceeds from the fraudulent mortgage with the sellers.
The other major category of mortgage fraud involves fraud for property. In these cases, borrowers typically inflate their incomes on mortgage applications so that they can qualify for loans that would otherwise be outside their reach. Although borrowers can be held legally liable for misstatements, that rarely happens since the authorities say it is much more important for them to pursue fraud for profit cases.
Mr. Stern said lenders and other victims were losing bigger amounts to mortgage fraud rings. This year, the F.B.I. began closely tracking victims losses and found that in 54 percent of the cases they lost more than $1 million. Weve seen a steady rise in both the complexity of the cases and the loss amounts, he said.
http://homefinance.nytimes.com/nyt/article/mortgage-column-by-bob-tedeschi/2007.01.14.fraud-cases-are-rising-fbi-says/?ref=realestate
Most ridiculous Craigslist posting of the day?
http://newjersey.craigslist.org/rfs/262999765.html
10 Ridge Terrace
Short Hills, NJ 07078
Charming 3 bedroom, 3.5 bath Tudor in Short Hills.
1/4 acre lot, paved parking area in rear.
Paid $749,000 (Jan 2003), now available for $950,000.
Hot water/electric heat.
MLS # 2363958
Grade School: Glenwood
Middle School: Millburn
High School: Millburn
“the RE market IMO is going to have a continual cushion via low interest rates. if the economy starts hitting the skids the money spigots will open wider. it’s the way the fed has always fought weakness.”
That would assume that anyone will admit the economy is bad. The Fed is so far behind that if they do drop rates, it will likely be too late. I don’t think that the current state of things is bad enough for any drops right now. They are in watch and wait mode. Besides, with the sheer lack of affordability for first time buyers, are rates really the issue anymore? I don’t think they are at all.
Ricahrd: The Fed is more concerned with being able to finance the country’s debt. If they have to sacrifice growth, then they will.
If you believe other wise, I have another nice bridge for sale next to yours.
Clayton, that’s an OFFENSIVE listing. I paid 750 3 years ago. Now give me 200K for doing nothing. What do you mean no? NO??! But look at my cute doggie!
regarding #23 – out of curiosity and naivete, why would they advertised what they paid for it? To me, it’s like advertising that they’re trying to rip off a buyer.
When they rented the dog from the staging company, they should have rented one that didn’t need treats to make it sit, and also a smaller one that didn’t make the kitchen look so small.
lurkerA Says:
January 16th, 2007 at 11:55 am
regarding #23 – out of curiosity and naivete, why would they advertised what they paid for it? To me, it’s like advertising that they’re trying to rip off a buyer.
May be it is another way of saying, “We will take all offers but you can’t offer lower than my 2003 purchase price??????
CC
#43. Ad continues:
Or rent for $2500/month
first months rent free
no credit check
dog not included
;-)
#40
no RE???
“to think anyone believes their jawboning around fighting inflation over stability/growth i have a nice bridge to sell you.”
Richard,
That’s what they said about the BOE. Why don’t you bring that brige to the floor of the Chicago pits, where they have been selling[rates rising] off the 10 year. Maybe even bring the bridge to California, Bill Gross. He just starting selling some of his huge treasury position, concern over rising rates.
bear, #51,
Good point.
Clot # 26,
“Any idea how much of that land is deed-restricted against further development?”
Until couple of years back, oil drilling in Alaska was restricted. Affordability changed the equation. I feel the same will happen in NJ.
JNJ to layoff 400 at NNJ location, PFE ready to chop some more. These jobs are higher than avg paying jobs.
But who needs liquid assets these days?
To buy a house?
A car?
A plasma TV?
A sharecropper society.
BOOOOOOOOYAAAAAAAA (sick maoning 1/3 yell)
(the pain)
Bob — Happy home(s)owner even as housing deBLOATs in price
But seriously, that dog is the best part of the ad.
Good afternoon Crabby bunch.
BOOOOOOOOOOOYAAAAAAAAAA
Bob
“the RE market IMO is going to have a continual cushion via low interest rates. if the economy starts hitting the skids the money spigots will open wider. it’s the way the fed has always fought weakness.”
Artificially low interest rates have already been factored into the housing market. Even with ultra-low rates, many buyers still couldn’t afford the fully amortized monthly payment and had to resort to the use of creating financing.
You are also assuming that the Fed controls mortgage rates. Spreads are set by prevailing market conditions. As housing weakens, investors will demand a greater risk premium to hold mortgage backed securities. Also, the Fed is still wrestling with higher than comfortable levels of inflation. If the Fed is seen as backing down, interest rates could rise to offset inflation risk.
BC Bob Says:
January 16th, 2007 at 12:14 pm
Richard,
That’s what they said about the BOE. Why don’t you bring that brige to the floor of the Chicago pits, where they have been selling[rates rising] off the 10 year. Maybe even bring the bridge to California, Bill Gross. He just starting selling some of his huge treasury position, concern over rising rates.
Bost: I heard about that one…he selling UST and piling into MBS…..I’m thinking WTF? Do you have a take on what his rationale might be…..if the call is a FI selloff, why would he put himself in a position to miss a flight to quality and have to eat a blowout in spreads….? I must be missing his fundamental driver…..
BTW – as usual, Reechard knows just enough to be a danger to himself and others.
excellent article about NJ..
http://www.city-journal.org/html/16_2_new_jersey.html
The Mob That Whacked Jersey
Steven Malanga
How rapacious government withered the Garden State
..
The state flourished.
But today Jersey is a cautionary example of how to cripple a thriving state. Increasingly muscular public-sector unions have won billions in outlandish benefits and wages from compliant officeholders. A powerful public education cartel has driven school spending skyward, making Jersey among the nation’s biggest education spenders, even as student achievement lags. Inept, often corrupt, politicians have squandered yet more billions wrung from suburban taxpayers, supposedly to uplift the poor in the state’s troubled cities, which have nevertheless continued to crumble despite the record spending. To fund this extravagance, the state has relentlessly raised taxes on both residents and businesses, while localities have jacked up property taxes furiously. Jersey’s cost advantage over its free-spending neighbors has vanished: it is now among the nation’s most heavily taxed places. And despite the extra levies, new governor Jon Corzine faces a $4.5 billion deficit and a stagnant economy during a national boom.
Unless Garden State leaders can stand up to entrenched interests—and the signs aren’t promising—the state may find itself permanently relegated to second-class economic status. New Jersey “could become the next California, with budget problems too big to solve without a lot of pain,” warns former Jersey City mayor Bret Schundler. “The old way of raising taxes to solve budget problems has been tried, and it’s done nothing but make things worse.”
I saw an honest way to attract buyers this weekend. (But a rental teacup poodle might be appropriate for the kitchen on this one, as well.)
Just give all the buyers the data they need. For example, keep the old prices in the listing after a reduction:
http://www.mlsfinder.com/nj_trend/kwsouth/index.cfm?action=email_listing_detail&property_id=4833221
I’m hoping they start adding actual DOM to the listing, too.
Off topic:
I want to get into ETFs with a low cost broker like ScottTrade. I would like to buy 2 or 3 and use limit orders to hedge against a downward slide.
I think the markets may rise over the next 6 months. I can keep adjusting the limit order to protect my profit.
Will this strategy work?
Is this question off the exam?
#46 NJ Gal
;) just kiddin
>>He just starting selling some of his huge treasury position, concern over rising rates
yada yada yada. these false starts are all too common. gross can try to bend the market all he wants. i don’t see anything north of 5% barring some global exogenous shock.
#46 NJ Gal
As much as I think real estate is overpriced in these markets, I would have to disagree with you on this MLS listing. First of all the expected gain of $200K is over 4 years not 3 years; secondly, that $200K translates into an annual appreciation of slightly over 6%. Now you may argue with that and claim that 6% annual appreciation is twice the inflation rate, and so on and so forth, but having seen the markets over last 5 years, an expectation of an annual 6% appreciation is not something out of the ordinary for housing in desirable NJ neighbourhoods.
thank god chicago chimed in since he’s a success proven wall street economist pulling down 7-figures. go back into your hole.
Some listings from Maplewood, check the property taxes:
http://newmls.gsmls.com/public/show_public_report_rpt.do?report=clientfull&Id=12051097_36576
$14,029 in annual property taxes on a house listed at $575,000 (MLS 2362574).
You’d have to be pretty brain-dead to buy that house.
Unless this town cleans up it’s fiscal act, the flight out of there by sensible commuters will continue, and Maplewood will become the next South Orange, or worse.
Richard:
Large Cap growth. Good call. I piled into some in early 2005. I think there is still more upside.
With this type of discount and proper home inspection before the auction, even if something wong with the house I will be able afford fixing it…
Al, you cannot inspect foreclosure houses before an auction and you would be taking a large risk. Some foreclosed homeowners trash the house out of anger before moving out. I have to agree with Clotpoll, go with pre-foreclosure or bank owned properties.
TO post #61 from Jamil:
hey man, do not post posts like this one – makes me more and more depressed….
Such reckless taxing and spending will surely intensify the flight from a state that once drew residents from elsewhere in the U.S. The Garden State recorded the fourth-highest net domestic out-migration in the country from 1995 to 2000—losing 182,000 more residents to other states than it gained. Every one of the state’s 21 counties lost more residents to other states than it gained, a bleak contrast from the 1960 census, which estimated that Jersey had a net in-migration of more than 500,000 residents.
#61 Jamil Says:
That’s what happens when a liberal state puts their party above their state and elects a bunch of morons and criminals to run the govt. Most decent candidate in this state will just cause they are republican !!
That’s what people get for voting against Bush and not for their state.
I am renting so they can jack up property taxes all they want to pad their pockets. I don’t care a damn. None of my investments are tied to future of NJ.
“As much as I think real estate is overpriced in these markets, I would have to disagree with you on this MLS listing [from post #43]. First of all the expected gain of $200K is over 4 years not 3 years;”
Actually, from 2003 to 2005 would be two years appreciation.
From 2005 to today, we’ve seen price declines, and at best, flat prices.
This seller is living in La La Land.
Chi,
MBS[I would guess it’s not subprime] normally outperform treasuries in an environment of rising rates. Homeowners less likely to prepay loans. It seems to be a shift in his stance regarding recession to growth/higher rates???
#67 # Richard Says:
“yada yada yada. these false starts are all too common. gross can try to bend the market all he wants. i don’t see anything north of 5% barring some global exogenous shock.”
I disagree. I think it will go north of 5% but non overnight. When those who are long 10 year stop wishful thinking that fed will cut rates to save housing as long as inflation remains above their comfort zone and the rest of the economy and job picture is looking decent.
Remember even with housing you are talking about the 20% or so of the home owners who jumped in with 0 down option arms in the last couple of years. Most homeowners are still going to be fine. They may not get 2005 prices for their homes but I think they will do okay.
The excess will wring out of housing just as it is happening with oil trades. It just takes longer for housing to correct.
Ok Jay, I see your point, but I still think 6% is a bit high (and I keep forgetting it’s 2007, hence the 3 yr thing). I suppose if we keep the past few years in perspective, 6% is not bad. But the whole point of the idea of the bubble and prices being out of whack is that the past few years were unnatural. So if you believe that, then appreciation should track inflation, and their asking is too high.
# 76 Unrealtor
You can pick and choose a timeframe you want (selective bias)- but broadly speaking over the total time that the existing owner has had that house, 6% is the number. And for the sake of argument, even if you were to claim that last 2 years has seen no price appreciation (which I don’t agree), the price is within a range where you can put in a bid, say at $900K (and given the inventory in Short Hills, it could be well received) would give you a sub 10% appreciation for 2 years (2003-2005) and flat from there on.
The point I was making it that the price asked is not too far from what would seem to be a “fair price”. Just making sure that the facts don’t got lost in the hype
Jay,
You assumption is that the owner didn’t over pay in 2003.
More Realtor BS (pertains to Northern VA mkt)
A lot of things have to be in alignment to make the perfect home purchase — great house, low price, low mortgage interest rate, desperate seller, and so on. The chances of finding all of those things in one package are slim. You may find a great house, but the seller isn’t desperate enough to let you have it for nothing…..Sooner or later, someone else is going to step in and buy that house you say you want. They’ll pay more than you’re willing to pay, but they’re going to get the house. And it’s people like that who will turn the market around. When you see enough homes slipping through your fingers, you’ll wish you had acted sooner.
http://realtytimes.com/rtapages/20070115_northvirginia.htm
Pat #75, That would certainly be an opportunity, especially if you stop by to say hello and can peek inside, or at least try to get a sense if this is the type of person that would wreck the house. You risk would be substantially reduced. But you still have to do a title search to see what liens you will be responsible for after the sale.
US housing slump getting worse, says Goldmans
The Daily Telegraph (London) – 15 Jan 2007 – By Ambrose Evans-Pritchard
Copyright (C) 2007 The Daily Telegraph; Source: World Reporter (TM)
The US Federal Reserve will need to slash interest rates three times this year as the housing slump goes from bad to worse and the American consumer begins to buckle, Goldman Sachs has warned.
“Americans have shown a complete lack of self-control,” said David Kostin, the investment bank’s US strategist. “The personal savings rate is at its lowest point ever and has actually been negative since April 2005. We believe that housing will soon become the proverbial ‘straw that breaks the camel’s back’.”
Goldman Sachs said homeowners had treated windfall gains from rising house prices as if they were “recurring income”, using home equity withdrawls to subsidize over-stretched lifestyles.
This artificial boost to spending has already dropped from 7pc to 4pc of GDP over the past year and is likely to be half that this year. Mortgage equity withdrawal will fall from 13pc of “discretionary household cash flow” in 2006 to 7pc this year, causing spending power to contract for the first time since the dotcom bust.
The bank predicted in its closely-watched global outlook that the US would stave off recession, notching up growth of 2.1pc in 2007. Interest rates will fall briskly from 5.25pc to 4.5pc by the end of the year.
Jim O’Neill, head of global economic research, said Europe, Japan and above all the emergent “BRIC” quartet of Brazil, Russia, India and China would seize the growth baton, giving the world a fifth consecutive year of blistering growth above 4pc – and even a sixth in 2008.
Mr O’Neill said he is watching the bank’s Global Leading Indicators (GLI) index “very closely”, after it turned negative in December for the first time in four years, but he still thinks outlook remains extraordinarily benign.
“People worry too much,” he said. “What they seem to ignore is that the globalised world has been a [positive] shock allowing the growth trend to pick up. If ever there was a good time for the US to slow, this is it. Miracle of miracles, even Germany is back. They are at last doing something un-German, which is employing people.”
Goldman Sachs expected the BRIC four to grow at 8.5pc this year, helping to soak up global exports and gradually bring America’s trade deficit under control.
“We’re seeing better signs on US trade now than at any time in the last 20 years,” said Mr O’Neill.
BRIC demand – and demand from the new “Non-BRIC 11” copycats, such as Vietnam – will soon fuel a rebound in crude oil prices, which have tumbled by a third since peaking in May.
“This winter has been extraordinary warm,” said Jeffrey Currie, the bank’s commodities chief. “We’ve had temperatures of 72 degress with flowers blooming in New York. The impact on energy has been enormous,” he said.
The bank said El Nino currents may have set off the New Year plunge, but it was speculators who then finished the job with a vengeance.
“Everything hit the market at once,” he said. “We had the perfect storm, but the long-term story is very intact.”
Mr Currie said the US oil giant Conoco had come up with “zero” in its latest exploration drive.
Russia was in a “stand-off” with western oil firms; Venezuela was threatening “to nationalize the entire energy sector” and North Sea oil output was falling relentlessly.
“The global market is in very sharp deficit,” Mr Currie said. “The investment climate is much more hostile than anything we’ve seen before.”
Far from over, the bull market in oil has five or 10 years more to run.
Yes, assuming no liens and never a rental.
I’m just wondering if in a post-peak market, there will be many homes that are not trashed, if they were strictly being used as a cash cow during the uptick.
Therefore, maybe more opportunities than in a “normal” market to go foreclosure instead of REO.
Not sure.
“You can pick and choose a timeframe you want…”
Not if we’re going to talk about reality — the party ended in 2005.
Broadly speaking, an owner who has owned a home for several years during a bust will make 0%, or even negative X%.
You’re saying they’re guaranteed 6% regardless of boom or bust? That’s not how the market works.
Pre-foreclosure are almost impossible to close because of owners are changing their minds every minute and there is no agent to babysit them. In additon theer are other problems: outstanding liens, taxes, cash loans against the house equity and so on… And do not even get me started on buying the home from a person with not Finalized divorce papers……
When all rounded up and summarized – FK auction is the way to go – you just have to have some idea on property condition – normally you can contact board of trustees and asl for private inspection appointments. Bank officials are usually very cooperative in this case.
Plus there is a official report on home conditions in which they have to disclose all mojor problems – not the canse with pre-foreclosure buying.
In the end Pre-foreclosure just seems like one big roulette which have 100 chances to go wrong and 1 to go right.
FK auction – is only one chance – house have some MAJOR structural problems with it…… Since FK auctions usially are at least 20% off market value you can easilly afford fixing minor/medium problems.
About loose lending and not being able to get 100% financing – just got it in my mailbox:
Hello my name is ########## I work for Wachovia Mortgage. I work with ######## Realty….. I received a message that you already have a pre-approval from ########## when you are ready please contact me direct to learn about our loan programs… Currently we are offering a “BUYER’S ASSISTANT’S GRANT” of $1500.00 yeh! $1500.00 It’s a gift…..We also offer many first time buyer programs that offer 100% financing… Some with no PMI…. (Mortgage Insurance)… Contact me direct @ ###-###-####to learn more… Thanks ############.
P.S. Two more Realtors upon Initial contact asked me if I am pre-approved or not and how much…
DO they have a problem with people not being pre-approved or financing falling through or they just want to know, what is the most expensive house they can sell me with 1% NEG ARM???
al,
I refuse to work with realtors who require pre-qulaification. There are realtors out there who don’t mind taking you around without requiring a pre-approval.
I would suggest going with REO as opposed to foreclosure for all of the legal -related reasons you listed in #88. You will still have all of the structural issues as you would with a foreclosure but no legal hassles as the bank/mortgage company owes the house outright. And with foreclosures increasing, subsequently going into REO, there will be bargains there.
another bust story from NYT:
http://www.nytimes.com/2007/01/16/realestate/16rentals.html?ex=1326603600&en=10a4951456536469&ei=5088
How do you respond to ” Oh! there is an another offer, so give your best ” like creating a bidding war!
FT:
I would get hold of the seller directly and offer what you think is right!
I think legally, all offers are to be presented to the seller, but I know most agents don’t present all the offers
Ian Morris, chief economist at HSBC Securities USA Inc., talks with Bloomberg’s Tom Keene from New York about the U.S. housing market and the outlook for the U.S. economy in 2007. Morris says house prices are still way too high and have “a long way down to go”.
http://media.bloomberg.com/bb/avfile/vvB71auuOZR4.mp3
First Time,
Go back with a lower bid, play their game.
BC Bob Says:
January 16th, 2007 at 1:38 pm
Chi,MBS[I would guess it’s not subprime] normally outperform treasuries in an environment of rising rates. Homeowners less likely to prepay loans.
Bost: yes…agreed…should have thought of that
I’m just wondering if in a post-peak market, there will be many homes that are not trashed
Probably true, foreclosed investors would have little motivation to wreck the place. You would need to figure out a way to determine if properties on the block were investor owned. Perhaps by tax records showing a different owner address from property in question.
First Time,
Pull your bid and say you’re not interested in a bidding war.
Or, if you really like the place you probably have a fair price in mind. Throw it at them and stick to it. If you lose, there will be other houses.
“How do you respond to ‘Oh! there is an another offer, so give your best’ like creating a bidding war!”
Tell them “I have” and that you’ll be making offers on several other similar properties so, they should respond with their best.
njrebear Says:
January 16th, 2007 at 2:39 pm
al,
I refuse to work with realtors who require pre-qulaification. There are realtors out there who don’t mind taking you around without requiring a pre-approval.
lol realtor I guess do not trust me when I told him I am pre-approved, he wants to see my pre approval letter:
here is the copy of the email:
How about we meet this Sun. at my office at 10:30am. We will go from there, please bring a copy of the preapproval letter with you. I will take you out and show you some homes. If you get lost, my cell###### -#### . See you Sunday. ###
I don’t think I have your phone number, just in case?
But hey at least right now realtors are very open to email communications – all 3 I have contacted so far are very prompt in answering their email…
please bring a copy of the preapproval letter with you.
Tell him your dog ate it.
sync…that’s good. Here’s what I was thinking:
Agent: “Hi, Al, ready to go in my tricked-out new car? Oh, by the way, where’s that pre-approval letter? Can’t get past those lockboxes without the ole’ pre-approval letter, ar ar, just a joke, there, big guy.”
Al: “Preapproval Letter? I thought you meant prenuptual agreement. My wife and I do not have such thing, so I did not bring, ar ar, big guy!”
London retains crown as global property costs capital
For the seventh consecutive year, London’s West End has retained its position as the world’s most expensive office location.
[…]
DTZ’s tenth annual Global Office Occupancy Costs (GOOCs) Survey 2007, published today, is a guide to total occupancy costs across 131 business districts in 46 countries worldwide divided into six regions.
[…]
The top ten most expensive office locations by occupancy costs in the 2007 survey:
1. London West End USD 23,260
2. Hong Kong USD 19,730
3. Paris USD 17,770
4. London City USD 17,690
5. New York (mid-town) USD 16,400
6. Dublin USD 15,810
7. Washington DC USD 14,580
8. Tokyo USD 13,470
9. Frankfurt USD 13,410
10. Geneva USD 13,070
Average space utilisation increased by 1% in North America and remained highest amongst the six global regions at 22 square metres, while Asia Pacific and Western Europe dropped marginally by 1% to 13 square metres and 18 square metres respectively.
[…]
In North America, 87% of locations became costlier, especially those in the top ten, as a result of demand, particularly in the USA. Canada’s locations recorded mixed results, with Toronto recording a 6% drop.
IndyMac Bancorp, is the largest savings and loan in Los Angeles and the 9th largest mortgage originator in the nation. Indymac Bank, operating as a hybrid thrift/mortgage banker, provides cost-efficient financing for the acquisition, development, and improvement of single-family homes. Indymac also provides financing secured by single-family homes and other banking products to facilitate consumers’ “personal financial goals”.
>>
Well Indymac lowered guidance today.
http://biz.yahoo.com/bizj/070116/1403368.html?.v=1
“..that the bank’s stock would not earn the anticipated $1.35 per share, but rather would be in the 97-cent range.”
big decline!
syncmaster Says:
Tell him your dog ate it.
Man thats spooky – how did you know I had a dog?
more on 104
“Increased credit costs linked to the reserve for loan losses, reserves for secondary market loans and appraising delinquent loans. Reduction of net interest margin on loans held for sale due to the yield curve inversion in financial markets for almost a year; Decline of servicing income. A forecasted sale of securities that did not occur.
“
A pre-approval is a useful exercise to do once to see if you’re in the right range on price. They’re only good for a limited time, so I don’t think they really suit patient buyers. You can get a good idea on service from the bank that qualifies you, and the disclosures can be an eyeopener for first-time buyers.
I would never produce one for the convenience of an agent. Every time you apply for one, they are registered on your credit report and you expose yourself to the risk of ID theft as you have to divulge SSI #s.
I got one. It lapsed. And I won’t bother again for the sake of viewing properties that are languishing on the market. Nothing wrong with having your offer contingent on financing, IMO.
Al, you’re cracking me up.
It’s like…tell the agent your computer crashed. (aka “My dog ate my homework.”)
follow up to #107..
Question- once you get a pre-approval letter (after giving all yours and your dogs private information) is the loan shark obliged to any specific privacy policy?
After the letter expires can the loan company sell your information to other parties for purposes other than the loan?
RentLord #109,
That’s a good question and I don’t know the answer. (I didn’t read the fine print.) I did, however, take a pre-approval with the bank where I have my account, so they already have a large amount of data on us anyway. I do think it pays to be careful, especially over the internet. Reading the fine print doesn’t hurt either.
NJrebear (54)-
Green Acres deed restrictions against further development on a property run forever.
This type of deed restriction, by law, can NEVER be overturned.
NJRebear (89)-
So, if YOU sold things for a living, would you find it a smart activity to spend time, money and effort developing a prospect that might not be financially able to buy your product?
Give me a break. Are you for real? Geez, an agent doesn’t need to run a D&B on you! You don’t think that person deserves to be assured that you’re actually able to purchase? And, God forbid, the agent gets to know something about your finances…and then suggests smart mortgage choices for you that could save you some money.
Believe it or not, a good agent can help you. However, as long as you expect incompetence, that’s what you’ll get. I can assure you that only a pluperfect idiot of an agent would take a flyer on someone who couldn’t- or wouldn’t- present some bonafides.
Of course, if you are a control freak who just wants a gofer…or you secretly want to confirm your bias against agents, you have selected a terrific plan of action.
Whatever happened to trust? Someone tells an agent they want to see some houses, and they’ve selected some that will work.
No doc, no see? Even the mortgage guys haven’t needed doc over the last few years…why would the salesperson?
good one Pat.
I am ambivalent about pre-approval letters.
In an inexpensive market like mid-west or the south, sometimes you may not want to show how much you can afford – ‘cuz agents are notorious for showing houses at the extreme high end (inspite of you telling what range you really want)
On the other hand, I can understand why an agent would want to see such a letter in an expensive market like NJ. (crap, I’m agreeing on something with clot; wassup with me!)
113 Clot]
Do you think most Realtors out there today would want to ‘insult’ buyers by asking them for a pre-approval letter?
With all kinds of ‘smart financing’ available i don’t think today’s Realtors should be even worried about buyer financing.
I don’t know if a ‘good agent’ can help. The jury is still out on that one. Even if they can help, how do i identify a good agent agent before seeing the ‘goods’? How do i trust them?
But for the restricted MLS access, i honestly don’t believe any one would even consider paying 6% commission.
I am just wondering about following points:
1 I am meeting with seller’s agents. By disclosing my pre-approval and loan terms realtor will not y financial position and if i can pay moe or less – how “fair ” is it.
So, if YOU sold things for a living, would you find it a smart activity to spend time, money and effort developing a prospect that might not be financially able to buy your product?
Give me a break. Are you for real? Geez, an agent doesn’t need to run a D&B on you! You don’t think that person deserves to be assured that you’re actually able to purchase? And, God forbid, the agent gets to know something about your finances…and then suggests smart mortgage choices for you that could save you some money.
I wonder – so now when we are entering a store before we can go look at TV’s or computers we will need to present information about credit cards limits and funds avaailable???
Give me a break. Are you for real?
And, God forbid, the agent gets to know something about your finances…
How about this : I walk in and ask an Agent for his tax returns for last 5 years???
and then suggests smart mortgage choices for you that could save you some money
Like Neg ARM for 2 years???
I have enough educaton and if i need financial advice I will go to the mortage lender. nobody knows my finance better than me. The only agent who will know my pre-approval limits is the one iI will sign buyer’s agent agreement with. So far I havent met an agent who struck me as trustworthy or professional. And I am sorry but question – about money in your wallet is really turning me off.
Clot – you are the one, who tries to portray realtors as highly professional workers who bring VALUE to the table.
Right now the ones I talked to behaved like new car’s salesman. (sorry I have no respect for ones I met, I assume there are good ones there too but I guess it was just my luck.)
As I said before – I deal with customers and potential customers quite a bit in my company, I also see other people dealing with customers:
our first question is: how can I help you?
Our second ouestion is: here is our product, how can we make it better suit your needs??
After that we are letting our clients to come to ask and usually they are saying: you have showed us great sevice and product – how much would it cost?? (We have about 20 huge clients, 500 average sized clients and over 1500 small clients/one time purchasers from whom we will never hear again and they do not bring any profits – mostly we are just breaking even on small orders.)
However we are treating all of them the same way – because every happy client – potential for new referrals (and could anybody predict that two dorky scientists studying math will be 3rd mrichest people in america – check out google founders – can you imagine being their buyer’s agent when they are buying their next house???)
and finally, REPUTATION is PRICElESS….
Apparently not for realtors…
OT for George. Karma of the week. Hit some of those median folks too..but you’re almost getting it.
Ohh wait. building reputation takes time and hard work, which dooes not fit well into get rich quick scheme…
http://www.marketwatch.com/news/story/credit-quality-weakens-big-us/story.aspx?guid=%7B55676289%2D7BD0%2D4F15%2D80C5%2DCC2C4C146A79%7D
Credit quality weakens at big U.S. regional banks
“It’s finally happening,” said David Hendler, an analyst at CreditSights Inc., an independent research firm, who has long warned of a weakening in credit quality.He said the pain is likely to be felt disproportionately by small- and mid-sized banks that are less diversified and over-reliant on construction and mortgage lending.
Industry observers said the problems cropping up in the fourth quarter could show up across the industry as more banks report earnings over the next week. While bank executives downplayed the severity of the problems, they acknowledged that more losses likely lie ahead.
..
The comparisons to last year – at Wells and other banks – are starker than they initially appear. In late 2005, a surge in bankruptcy filings in advance of a law making it harder for people to wipe away their debts caused banks to write off an abnormally high level of loans. At San Francisco-based Wells, $171 million of its year-ago losses were due to that one-time spike.
http://www.ny.frb.org/research/regional_economy/mfg_survey/1_2007.pdf
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers softened in January. The general business conditions index fell sharply to 9.1.
Clot,
Can you get bank to set the amount in the pre-approval letter. The bank would want to set it higher than what I am shopping for and I agree with Al and can see no benefit in it. I think its best stated my my first morgage lender I tend to be “debt phobic”.
Al, NJRebear (rebar?)…and et al,
Let me fill in some blanks here:
1) The consumer goods/retail store analogy is just so friggin’ played. Stop it. If you can’t understand the difference between a Circuit City full of sh*t that breaks and the purchase of a home, just stop what you’re doing now.
2) It is not an “insult” to get a little basic financial info from someone you could be representing in the biggest financial transaction of his life. An agent who DOESN’T ask should raise all kinds of red flags in the mind of a prospect. And, yes, you can find zillions of crummy agents out there right now who will defer to your every whim and kiss your culo while driving you all over kingdom come every Saturday and Sunday. But…if that agent is so cavalier with his own time and that inattentive to the details of your financial life, just imagine what he’ll do when he presents your offer to a seller.
3) How do you find a good agent? How do you find good people in any other profession? Ask some friends, family or co-workers. Surf the web, and note the agents who have sites that aren’t the same old drek. Get a list together. Then, call or meet 2-3 of the agents who sound best, and just talk to them a little while. No pressure, no commitment. Who listens instead of talks? Who listens, then asks the best follow-up questions? Who offers references from past clients? You’re the interviewer, and you’re in control. If you pick badly after all that legwork, well, your bad. The worst thing that can happen is you’ll have to pick a new agent.
4) If you’re so knowledgeable about mortgages, financing, the offer process and how to play the game, why don’t you own a home yet? If you don’t- at least- need a second opinion on these subjects, what are you doing hanging out in these parts? You should be out there turning deals (not deal, deals) right now. If you…as a buyer or seller…right now…cannot construct and analyze a simple, laddered seller concession scenario, you are potentially shortchanging yourself. You could get $20,000 in free advice just by interviewing a couple of good agents.
5) RE is NOT a service industry. It’s nice when an agent is prompt, respectful and businesslike. In fact, those traits should be expected. A great agent will ask “how can I help you?” and “how can we make what we do suit your needs?”; however, you need to give us a little information, too. But, bottom line: when your financial life hangs in the balance, do you want a good result, or do you want “have a nice day”? The RE biz is totally wack by stressing our “service” to the public, but that doesn’t mean you have to buy into this lame-o line of crap.
6) If you continue to randomly access RE agents in the usual forums that don’t work (ie: open houses, randomly calling offices, anonymous internet inquiries or responding to print media ads), you have an outstanding mathematical chance of meeting an average RE agent…that is, a mouth-breathing, double-digit IQ’d tub of space-consuming lard who could easily be replaced by a fairly apt primate. If you were going to invest, say, $400,000 in a hedge fund, would you select a money manager in the same fashion?
If you don’t believe that a good agent can help you, or that there is even such as thing as a “good agent”…please proceed on your own. I will not debate you.
I will, however, pray like hell that I end up across the table from you.
Shopping around (123)-
Yes, you can get your lender to set the stated amount of your approval in the letter.
Amazing how many here are so paranoid about letting a seller know the full extent of their buying power.
I think it’s a powerful statement- especially in this market- to let a seller know just how much punch you pack…and WHY, given that purchasing power, you still have chosen to come in lower.
Better to be the confident, financially-capable buyer about to walk away than the guy who’s “stretching” just to get the offer on the table.
shopping around,
you can get the lender to set a lower amount than you would actually be approved for. Countrywide would’ve pre-approved me for 1.5 million however I only had them pre-approve me for 700K. That way agent doesnt know what you can afford only what you want to spend.
“I will, however, pray like hell that I end up across the table from you. ”
You are making an assumption that a realtor will be at the table.
Why would it matter in a negotiation, if I can buy 800K or 500k, if I want $350?
What does it really do for ME to have a slew of folks knowing details about my personal finances? Let’s say I bid on just three houses in the course of my adventures in paradise.
That’s potentially 10 plus people (owners, their agents, plus all the agents sitting around the office when my paper comes in), who have absolutely no need for this information. They will have that information not just now, but for a loooooong time. They may pass this information on. They may know others who know me. Paranoia, maybe.
If I look at it from the other side of the mirror – cash – what do I see? Nobody gets anything about me they don’t need. I’m doing a cash deal. Nobody knows if I have a penny more than $350/fees/comm.
So why should someone getting a mortgage have to pony up more? I’m having some serious doubts about the value of releasing information that is not needed.
NJrebear (127)-
No, I’m not. If you wanted to offer through me on one of my listings, I could always choose not to go disclosed dual, then ask you to- at the bare minimum- work thru a transaction agent.
Then I could fully represent my seller, with no fiduciary duties owed to you.
Pat (128)-
You don’t have to disclose more than you’re comfortable with. If you want to buy 350K, then a 350K approval is just fine.
However, your biggest worry shouldn’t be who might get your info and data-mine you at the time the approval is issued…or even when you make offers. If the offer goes nowhere, the average agent gets pi**ed and throws everything away (even though brokers are supposed to keep “dead” transaction files for six months).
The data-mining happens when you close on a purchase and unwittingly allow the agents to have a copy of your HUD-1 statement. THOSE little pieces of paper- and the valuable personal info therein- then get distributed all over the financial world.
To Clot or other agents, I understand that their are good agents out there who may offer many valuable services to future homebuyers. However, even with these “good agents”, how do I a buyer ensure the benefit they provide to me outweighs their own personal incentives. I have seen many times that you have pronounced the need for transactions, and when it comes down to it I want the best deal I can drive. Interview, ask for references etc. it does not change the fact that the agents goal and my goals are generally misaligned. I am skeptical and was hoping to understand why I should leave my future in the hands of another “negotiations etc.” when I can at least ensure that I am representing myself in a way that guarntees my interests are the sole driver of negtoiations. Essentially how does your experience outweigh the obvious agency issues “presumably you are out for yourself first” which present themself for any indivdual working with RE agent.
129 Clot]
“I could always choose not to go disclosed dual”
That’s the very reason i’m against providing realtors with any information that can benefit sellers in the future .
ResCap cuts 1,000 jobs,cites tough mortgage market
http://today.reuters.com/news/articlebusiness.aspx?type=bankingFinancial&storyID=nN16236878&imageid=&cap
In its filing with the SEC, ResCap cited slower mortgage originations, a weakening trend for U.S. home prices and weakness in the sub-prime sector of the lending market as reasons for the job cuts.
>>
ResCap is
The No. 1 non-conforming and 10th largest producer of residential mortgage loans in the United Kingdom, originating $12.5 billion of such loans in 2005
The 5th largest producer of residential mortgage loans in the United States, producing $159.1 billion in residential mortgage loans in 2005
Breaking on the Drudge Report….
NYC MAYOR PLANS PROPERTY TAX CUT, END TO CLOTHING SALES TAX… DEVELOPING…
Bloomberg is proposing to cut property taxes by roughly 5 percent and eliminate the city sales tax on clothing and footwear as New York enjoys the bounty from its booming economy and real estate market
Franklin tries to age well
Several years ago, the township began actively encouraging developers to bring active-adult communities to Franklin, and five enclaves are recently completed, under construction or about to begin construction, bringing thousands of new residents to the once-rural municipality.
Township officials say they have gained valued citizens who aren’t putting additional strain on community services, including schools, for this township of nearly 60,000. And seniors say they are finding homes that meet their particular needs.
[…]
…many of the people buying these homes are coming here for the convenient location and the ability to stay close to children and grandchildren. Being close to Interstate 287 ties them to communities throughout the state, and today’s grandparents want to stay close to extended families, she said.
Some of them are also continuing to work, as Smith herself does.
[…]
The homes seem to be holding their value, she added, with most selling between $300,000 and $500,000. Until the market slowed so dramatically during the last quarter of 2006, resales in the communities were generally selling above their initial price, she said, and she expects this trend will continue, despite the recent market softness.
Some land-development experts question the value of creating so much age-restricted housing in a single community. New Jersey Future, a Trenton-based organization that advocates smart growth, looked at once-rural places now largely dominated by retirement communities in South Jersey and concluded in a report that these communities “are planned in ways that fit the very definition of sprawl: inhospitable to anyone without a car, composed entirely of housing and sited miles from the nearest stores and offices.”
Franklin officials feel they’ve planned better than that.
Some of the communities, such as Canal Walk, will have shuttle-bus service for shopping. Township Administrator Ken Daley and Councilman James Vassanella have worked with Saint Peter’s University Medical Center to anticipate and meet the needs of Franklin’s seniors with flu shots and numerous health screenings. Somerset Run has played host to health fairs for residents.
And in May, the township entered into an agreement with Robert Wood Johnson University Hospital in New Brunswick for ambulance service because it was difficult for the rescue squad to find sufficient volunteers for daytime needs.
For Levine, the age-restricted communities were simply smart planning.
“This was privately owned land that someone could build on,” he said of the nearly 1,000 acres on which these various communities are built or being built. “We had to plan our community intelligently. When we have a proposal for a new community with an influx of children, I’d personally want to discuss that with the Board of Education and plan accordingly. With these communities, we have to plan for other needs.”
Planning Board Chairman Ted Chase said these communities have been welcomed, in part because they would bring in tax money without bringing more children to the schools.
Some are concerned the demand for these homes will drop as the baby boomers die or move to assisted-living facilities and the next generation, which is considerably smaller, moves to take their place.
Chase said that at that point, if residents want to remove the age restrictions on their communities, they’d have to come back to the township for permission. The government would then have to consider the impact of more schoolchildren coming to the township.
(((129 Clot]
“I could always choose not to go disclosed dual”
That’s the very reason i’m against providing realtors with any information that can benefit sellers in the future . ))))))
NJBEAR
You have twisted clots words ( a pick and choose) You neglected to add the part where he said he would have client use another agent as opposed to dual. If you have been around long enough you would have read the many times I stated I do not do dual agent. I am not the only one and neither is he. When I state I do not do dual agent it is because I do not work with a buyer who wants my listing. I refer another agent to them.
The above twist of words is the reason I usually do not get involved with the back and forth with some folks.
KL
136 rhymingrealtor ]
Per Clot, i would be asked to work with a Transaction Agent ….
Do you think a ‘Transaction Agent’ will promote my cause at the table? Whose side is the ‘Transaction Agent’ on?
Answer : A ‘Transaction Agent’ doesn’t need to favor anyside. He can still divulge my financial details to the seller’s agent.
TO post 124
4) If you’re so knowledgeable about mortgages, financing, the offer process and how to play the game, why don’t you own a home yet?
Hey I can answer ith your own words here:
“why don’t you have a house??” is just so friggin’ played. Stop it.
Some people are…. YOUNG!!! You do not buy a house at 16. You do not buy a house while in school. You do not buy a house if you know you are going to move in 2 years. Noet everybody a realtor who “knows” that he will be living in the area forever. Some peopel career path choices forces them to go to school for 4 years, gotto etra schooling for another 2-6 years, do something like residency (if you are MD).
So mahy people are in their early 30th and just getting to their final job.. DO you suggest:
1. Buy a house when you are 18 and enrolling into colledge.
2. Sell you house in 4 years and buy next one for Professional school.
3. sell your house and buy next one for the first temporary job you are getting.
4. Sell it in 3 years and buy your next house .
I bet you’d love it – 4 extra trasnactions for you!!!
really….
But…if that agent is so cavalier with his own time and that inattentive to the details of your financial life, just imagine what he’ll do when he presents your offer to a seller.
Ohh so it is cavalier: spending 2 hours of their time with potential to earn 18K (on cheao 300K house in NJ), yea after taxes, fee’s brokerage fee’s and so on and stuff you only may be get 4K for 2 hours of showing me the houses….. But ohh wait RE is different. Agents are too good to waste their time in search of leads like most of other service industry is doing…
Once again RE is different!!!! Right???
RE is NOT a service industry. Now I am convinced, that you are a starving agent and very bad one at that – come on RE agent tells me that he(she) is not working as a SELLER for the owner of the property – that he(she) does not provide services?????
How is it different from any other salesperson??? the only differece is the volume of you transactions. The only way you are going to increase your volume is by pursuing more leads. (that is unless you are the only person with access to some products).
And do not tell me that houses are unique and blah blah blah.
There was a good definition of the house:
A house is: a wooden/brick/particle board box whch stands on the patch of land and slowly rots.
It is a building just as any warehous, store, office space, outhouse. It is slightly different from TV’s, but if you think about it, as resource it is extremelly available – there are over 900K of just new housing available in the country right now!!! In addition:
Without again addressing the specifics of some of the above comments from various members of the League of Dorks, here’s my takeaway:
Managing the potential downside of any business deal you’re looking to undertake is a completely valid way of doing things. Keeping information close to the vest, not being anyone’s fool and viewing the opinions of others with a jaundiced eye will provide you with an excellent “pad” against things that can go badly.
However, as in many walks of business- and life- if all your energy and time is spent managing the downside risk, you’ll never spot the upside opportunities that might present themselves.
Believe it or not, there are many business people who make it a practice to give first-and possibly, give more than they get- in order to establish trust and goodwill with prospects.
The successful people I’ve met in my life pretty much share this trait…so much so, that I’ve come to believe it’s part of what it takes to be successful in business.
So, why would an entire industry be completely devoid of quality people like this?
I’m not saying all RE are great. Far from it. This industry has a LOT of people problems. But if you keep coming a crapper in finding competent RE help, you need to examine how and where you’re looking, because your problem might be you.
Al (138)-
I normally refrain from tooting my own horn, but I feel compelled to offer some sort of rebuttal to the theory that I’m a member of the “starving bunch”, as it seems as though the insinuation that I’m going broke has become the catch-all retort to any comment I make. So here:
1. I entered the RE business with $90,000 in debt and no real assets, other than a term life insurance policy. I was worth more dead than alive…and I knew it.
2. Four years after getting into RE, I started my own company in a strip mall/storefront situation…again going completely into hock to get it off the ground. Things went well, so:
3. Three years ago, I bought a dilapidated office building, went completely into hock again, renovated the property and rented out the excess space. The property generates a positive cash flow, so we’ve got a lot of protection against the day-to-day flucuations of the RE market.
4. I don’t have a lot of agents. I do, however, have the best agents. Right now, we average about 15 years’ experience, and I’m proud to say a couple of people here forgot more about RE than I’ll ever know. When I need expert advice on things, it’s nice to know it’s available in-house. I can also assure you that a 20-year career in this business- as in any other- is not built by habitually scr**ing people. The public is not stupid.
5. Because I’ve got good people around me and taken advantage of the opportunities described above, I’ve been successful enough to now be able to devote some time to community and charitable work. I look forward to doing more of that in the future.
I have nothing to hide. My life is an open book. I have no problem with anyone who wishes to vehemently disagree with me…and even get personal. However, if you want to get personal with me, just make sure you get the facts right.