This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing bubble, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From MarketWatch:
Credit Suisse exploring purchase of lender ResMae Financial
Credit Suisse Group (CS) has signed an “option agreement” to buy subprime mortgage lender ResMae Financial Corp., which is partly owned by a private-equity firm affiliated with Thomas H. Lee Partners and Putnam Investments, the investment bank confirmed Thursday.
The pact, signed on Tuesday, gives Credit Suisse the exclusive right to purchase 100% of the outstanding shares, or certain agreed-upon assets of ResMae, Credit Suisse said in a statement. “Any potential transaction is subject to completion of full due diligence, and the negotiation of final terms with ResMae and its stakeholders,” the statement said. The option will expire on Feb. 9. No other details of the agreement were disclosed.
…
ResMae, ranked among the top 20 subprime lenders in the U.S., was founded in 2003 by M. Jack Mayesh, Ed Resendez and Bill Komperda – the former executive management team of Long Beach Mortgage Co., which is now owned by Washington Mutual Inc. (WM). It caters to borrowers with poor or limited credit histories, or with high debt levels.
Thought this was an interesting piece, since I’ve used a similar methodology in the past. I know this was posted yesterday..
Condo prices reveal housing trends
In trying to get a read on how much real estate markets are slumping, some people may be looking at the wrong indicator.
The National Association of Realtors (NAR) tracks sales of both single-family homes and condos.
the third quarter of 2005, NAR stats for single-family homes show that prices fell 1.2 percent from a year earlier, with 30 percent of markets showing declines.
Condo prices not only dropped more steeply, 2.1 percent, but 46 percent of markets showed declines.
Which gives a truer picture? Adam Koval, a former investment banker who now runs SocketSite.com, which covers San Francisco’s real estate market, insists condos are the way to go.
“Look at the same building six or eight months after the first sales were made,” he says. “The prices then will be a pretty good indicator of what’s going on.”
The reason: It’s an apples-to-apples comparison. With condos, there’s, “no adding floor space or big improvements,” says Koval. If you see a price change, it’s usually pure appreciation – or depreciation.
…
Chief economist for the Mortgage Bankers Association, Doug Duncan, says there are several reasons why condo prices are more accurate.
“A smaller percentage of people who own condos occupy them; many are bought as second homes and for investment purposes,” he says. “There’s less friction in that market; it’s more liquid.”
More condo sellers react to market changes and act quicker than owners of single family homes, who tend to hang onto property in the face of lower prices.
…
looking back over the historical data of when the national housing market peaked, Duncan pinpointed July 2005 as the top. He also found it was the first month in four years that condo price appreciation was less than that of existing single-family houses.
Of course, condo stats have their own imperfections. Jonathan Miller, of the New York appraisal firm, Miller Samuels, says when markets slump, the mix of apartment sales changes. Many of the units that sell are the ones with the best views and the finest features. In happier days (for sellers) these would have sold at higher prices. That makes the market look stronger than it actually is.
Too, condo developers, like their counterparts among single-family house builders, will offer inducements to buyers that, effectively, lower condo prices without showing up in the stats.
Miller argues that the condo market is too different from the rest of the housing market to be a viable stand-in for it. He says, “Because of the investor component, condo prices show more volatility.”
A 7am start on the weekent discussion??? Off today Jim? Hey no thats not it– you want to make that elusive 500 comments! You will.
KL
From the Star Ledger:
Redefining the real-estate boom
It’s official.
The most expensive home sold in the United States in 2006 is located right here in New Jersey, according to the Institute for Luxury Home Marketing. The 7,000-square-foot home, which sits on 63 acres of woods and rolling meadows in Alpine, Bergen County, sold for $58 million on Jan. 5 last year.
…
The buyer, Richard Kurtz, is the founder of Englewood Cliffs-based Kamson, a privately held firm that owns dozens of apartment complexes.
Apparently, Kurtz got quite a deal: The original asking price was $85 million.
…
Kurtz plans on slicing and dicing the property into smaller parcels and constructing several dozen houses along Closter Dock Road, just north of the Alpine Country Club, according to the institute.
While I admit I was tempted to take the day off when I saw the snow, it’s not yet my weekend.
It’s just an observation, but I think that keeping the comments together keeps the discussion more active (lively, heated, pick any of them). I suppose that discussion really does breed discussion.
Unfortunately, once we hit that 200-300 mark, following the discussion does become difficult. I’ve considered using nested comments, you might have seen that style on Ben Jones’ blog, but that seems equally confusing to me.
jb
The looting continues. Bonuses will be paid
to the NJSEA executives.
What a disgrace. No shame whatsoever.
I have been out shopping for a home over the last 2-3 weeks. We have seen about 20-25 homes. I put a bid in on one home for 10% off the LP which was slightly more than 12% off 2005 purchase price. Someone outbid me by bidding only slightly lower than the LP. The LP was set lower than the 2005 purchase price. The realtors at the open houses say that things are picking up. The open houses that I have visited have been attracting quite a few people. I wonder if this is just a bump in activity, or the begining of a new trend.
ck986 (7)-
This topic got bounced around in one of yesterday’s threads. For now, showing and sales activity is up; no doubt about it.
Will it last? Let’s see what happens when a big slug of inventory hits the market (like in about 6-8 weeks). If sellers continue to show willingness to meet the market, things should continue to move. If not, this recent burst will- in retrospect- seem to be more “dead cat” than “recovery”.
Sales of new and existing homes will continue their slide this year, due largely to investors pulling out of the housing market, mortgage-finance company Fannie Mae said Wednesday. In an economic and housing outlook, Fannie Mae said sales of new homes are expected to drop by 7.1% in 2007, while sales of existing homes are expected to drop 8.1% this year. Fannie Mae’s projections follow similar estimates released Tuesday by the Mortgage Bankers Association. The trade group forecast declines in 2007 of 7% in existing-home sales and 8% in new-home sales.
http://homes.wsj.com/buysell/markettrends/20070119-schroeder2.html
Economic Trends for 2007 by Inman News
#1: The demise of the real estate ATM machine and the high cost to consumers
One of the most serious concerns for 2007 is the high percentage of debt that today’s consumers are carrying. In 1950, the average consumer’s debt was 18 percent of his/her annual income. In 2006, that number was 117 percent. For those who have equity in their homes, we have turned our houses into ATM machines to buy cars, to pay for college, and to finance big-screen televisions or other non-essential purchases. The challenge for many homeowners is that the ATM machine has closed. They no longer have the ability to refinance their homes because of market stagnation or market depreciation. This means that unless many homeowners change their spending patterns, their debt will continue to increase. Since they can no longer use low-interest mortgage rates to finance their excessive spending, their ability to meet their fixed obligations such as mortgage, taxes, insurance and car payments may be in jeopardy.
#2: Foreclosure and short sales: new income streams for your business
With more than 9 million loans readjusting in 2007, many owners will not be able to afford the increase in their interest rates. Equally disturbing is the high percentage of homeowners who have opted for 100 percent financing options or who have elected interest-only loans. If these owners have to sell, they are already in a short-sale situation even if there has been no decline in prices. A typical sale requires approximately 8 percent in seller fees (i.e. 6 percent commission plus 2 percent in closing costs.) On a $200,000 property, this means the seller nets $184,000. This will not be enough to pay off the loan balance unless the seller puts 10 percent down or has owned the property long enough to pay down the loan or to experience appreciation.
From MarketWatch:
Fed’s Lacker see real GDP growth averaging 2.5%-2.75% in ’07
Lacker: Growth to start ’07 on low side, above 3% by yr-end
Lacker: Possible core inflation spike biggest economic risk
Lacker: Many months needed to see if inflation has moderated
People who bought pre-bubble have been patting themselves on the back for their smart financial decision to “invest” in a house. It is easy to commend oneself.
CK,
Every market in transition, rollover/changing hands, experiences the same actions. Those that missed the run, feel validated/vindicated that they are now buying at lower prices. There are many who are convinced that these prices/incentives are a steal. Greed/fear, they feel that they missed the boat in 2001-2005, this is their chance to get on board, before the next moon-shot. Believe me, if the public can actually get into bidding wars and pay 100-150k over asking, they will certainly fall for the buy buzz during the nar’s spring bargain campaign. There will some busy buying periods, it may look like the low is in. Don’t be fooled. There is so much structural damage in this market that a flurry of buying for a month or two will not/can not repair.
Just look at the most recent reports from Lennar, Centex, Ryland. What are they saying??? Their main concern, at this time, is cash flow not profits. They are doing anything to make sure the sale closes, pulling tricks out of their hat at/near closing. Of course the public will fall for this. Better falling for this than getting in a bidding war in 2004-2005. But how does the existing homeowner compete with that??? How about you bought new within the last 3-4 years?? Do you want to compete with a H-Builder who has just puked out $200-300 million of land options???
Clot is right, transactions will continue. IMO, all along the trend line down. Now, every trend line down will see a reaction. That’s what the spring buying will represent, a reaction/relief rally. Back in 1990 or 1991, there was on onslaught of media hype that the decline was over, great time to buy. I think someone posted NYT’s article from back then. Whomever it was, do you still have that article???
It will take a long time for the smoke to clear. Wait until all the lawsuits hit and new regulations are put into place. There are too many holes in this dike for instant reparation. That being said, it doesn’t mean many will step head first into the fire.
From MW:
Fed’s Lacker: Many months before inflation worries can ease
It will take many more months of economic data before the Federal Reserve could signal the ‘all-clear’ on inflation, said Jeffrey Lacker, the president of the Richmond Federal Reserve Bank. Lacker, who dissented at the last four FOMC meetings of 2006 in favor of further rate hikes to combat inflation, said the risk that core inflation surges again remains “the predominant macroeconomic policy risk.” Lacker said he expects that real GDP growth will average between 2.5% – 2.75% in 2007. Growth will start the year on the low side, but should be back above 3% by the end of the year as the drag eases from the weak housing market.
“Lacker: Possible core inflation spike biggest economic risk”
JB,
Come on, we should not listen to this rhetoric/spin from the fed.
BC,
I thought this was required reading for everyone:
Home Prices Do Fall
I believe this is the article you are talking about, they called “bottom” about 3-4 years too early.
Bottom of the Housing Slump Is Seen in the New York Area
By THOMAS J. LUECK
Published: March 1, 1991
jb
Just look at the most recent reports from Lennar, Centex, Ryland. What are they saying???
Don’t forget about Pulte, who warned last night:
Pulte Homes Inc. Thursday evening cut its view for the fourth-quarter, and now sees the per-share result from continuing operations ranging from a loss of 5 cents to income of 5 cents. Previously, the Bloomfield Hills, Mich.-based home builder had expected per-share income at the lower end of a range from 30 cents to 70 cents. Pulte said it now expects fourth-quarter impairments and land-related charges of $330 million to $350 million, or 83 cents to 88 cents per share. The company had previously expected $150 million in impairments and land-related charges.
JB,
That’s the one. Thanks again!!
Two big things to watch in the upcoming months:
1) Collapse of subprime mtg market. How bad does it get? And, how badly does it bleed the everyday operations of the big banks? Washington Mutual’s latest quarter was a stinking, rotten corpse…most of it caused by the subprime devastaton of its Long Beach Mtg subsidiary. Trial lawyers circling like vultures won’t help, either. Funny things are gonna happen if buyers need 620+ FICOS and 33/30 ratios to qualify (like back in the day).
2) How far will the HBs sink? I’m shocked that companies I believed to be flush with cash are hemmorhaging at such a rate that their depleted reserves are going to trigger credit downgrades. That’s why these guys are wheeling and dealing all the way to the closing table…they’ve got to get cashinto the bank at all costs. If these guys are looking at higher borrowing costs on top of shirinking sales/margins, lookout Fred & Ethel, trying to sell their 3/2 rancher. KHOV and LEN can go low harder, faster and better than any individual homeowner. If resales get into lockstep with a plunging new homes market…oh, sh$%.
RE: JB’s post #17,
“Home prices do fall”, you are right,mandatory reading.
Clot,
Bingo, I would hate to try to compete with a H-Builder in an enviroment like this. They don’t hold out for “their” price. They must move inventory. Sobering thought for those long new houses and trying to sell at a profit.
We’ll be cooking over open flames in oil drums & singing Woody Guthrie songs…and Lacker will still be talking up “inflation”.
All bluff and feint from these Fed guys. Got to give Bernanke credit, though. He’s already figured out how to bamboozle those dopes on Capitol Hill. He can spend his whole term on the attack against entitlement programs and never have to answer a real question again.
I think this NYT piece by Nick Ravo was closest to picking the bottom of the market, it was published 2 years after (1993) the NYT piece posted above (1991).
I think this is by far the most sobering article from the group.
Have Suburban Prices Hit the Bottom?
THE market for one-family homes in the suburban New York metropolitan region, much of which has been in decline for the last five years, appears to have bottomed out in most areas, and, in some places, such as Northern New Jersey, a modest recovery seems to be under way.
Real estate brokers attribute the trend to low mortgage interest rates, realistic prices set by sellers, the dearth of new construction and a small surge of first-time buyers who were priced out of the market in the mid-80’s and frightened out in the late 80’s and early 90’s.
They caution, though, that because of the suburban region’s continued economic weakness and changing demographics, home sale prices are expected to increase at a far slower pace than the double-digit gains achieved by many homeowners in the Northeast in the early and mid-80’s.
…
Some brokers also believe that sales prices are already rising in early 1993.
Lonnie Shapiro, a broker with William Pitt Real Estate in Ridgefield, Conn., recently acted as the agent for a deal involving a five-bedroom, 3,300-square-foot colonial on two acres for which the original buyer paid $365,000 in August of 1987, the peak of the market.
Ms. Shapiro said she had placed the home on the market in February 1992 for $365,000, then dropping the asking price to $345,000, to $339,000, to $329,000 and, finally, to $319,000. The house ultimately sold last December for $307,000.
I don’t think this article was posted anywhere yet.
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk1JmZnYmVsN2Y3dnFlZUVFeXk3MDYwNDc5JnlyaXJ5N2Y3MTdmN3ZxZWVFRXl5Mg==
We’ll be cooking over open flames in oil drums & singing Woody Guthrie songs…and Lacker will still be talking up “inflation”.
For fear the hearts of men are failing,
For these are latter days we know.
The Great Depression now is spreading,
God’s word declared it would be so.
I’m going where there’s no depression,
To the lovely land that’s free from care.
I’ll leave this world of toil and trouble,
My home’s in Heaven, I’m going there.
In that bright land, there’ll be no hunger,
No orphan children cryin’ for bread,
No weeping widows, toil or struggle,
No shrouds, no coffins, and no death.
This dark hour of midnight nearing
And tribulation time will come.
The storms will hurl the midnight fears
And sweep lost millions to their doom.
No Depression
A.P. Carter
Recorded 6/9/1936
New York, NY
Clotpoll Says:
January 19th, 2007 at 8:13 am
ck986 (7)-
This topic got bounced around in one of yesterday’s threads. For now, showing and sales activity is up; no doubt about it.
Will it last? Let’s see what happens when a big slug of inventory hits the market (like in about 6-8 weeks). If sellers continue to show willingness to meet the market, things should continue to move. If not, this recent burst will- in retrospect- seem to be more “dead cat” than “recovery”.
Clot: post such as this one really boost your cred around here……
grim:
What about CondoShack?
I’ve lost almost all faith that New Jerseyans have any financial intelligence at all.
I was in a parking garage the other night, it’s one I park in often. They recently changed increased their prices, no problem (inflation?). However, they went from even dollar amounts ($1 – 1/2 hour, $2 – 1 hour, etc) to amounts that have a decimal component.
All fine and dandy, except that the machines run out of change very quickly, probably because they don’t accept coins for payment.
So, instead of dispensing change, they print out a short-receipt, redeemable for cash in the main office.
Now, of course I didn’t know this until it was my turn to pay. While in line, I did notice people mumbling and grumbling while paying, as well as a large number of paper slips all over the floor and on the machine.
So, I try to pay and out comes my short receipt, 85 cents to be exact. No problem, I think to myself, I’ll just redeem it at another time. Then it hits me, I look around, nothing but short receipts everywhere, stacked on the machine, on the floor, in the garbage.
I pick one up, look at it, 35 cents redeemable. At this point, it’s only myself and another woman in the room, she is paying at another machine.
I think she came to the same conclusion that I did. We scooped up as many short pay receipts as we could found, and split them.
I made just about $35 dollars, she made a few more. The folks at the desk in the main office were hesitant to pay us, but we had the slips.
Not bad, I got paid $30 to park there for 4 hours, and to take 2 minutes to walk down into the main office.
jb
LOL – they thought they had a nice little side buisness going and here comes the “smart A$$” stealing their loot ;)
If you see a faded sign by the side of the road that says
”Open House” at the… Condo Shack! Condo Shack yeah
I’m headin’ down the Jersey Turnpike, lookin’ for the real estate giveaway
Heading for the real estate giveaway,
They’ll throw in a car, it’s as big as a whale and maintenance is free
at the Condo Shack
I leased me a Beemer, it seats about 20
So hurry up and bring your monopoly money
The Condo Shack is a little old place where we can foreclose together
Condo Shack baby, Condo Shack bay-bee.
Condo baby, that’s where it’s at, Ooo condo baby, that’s where it’s at
Sign says.. Woo… stay away fools, ’cause ARMs rules at the Condo Shack!
Well it’s set at back, of the railroad tracks,
With cap on the toxic crap, and I gotta get a map
“Clot: post such as this one really boost your cred around here……”
Chi,
Don’t blow smoke up his *ss. He’s not seeking credibility, only transactions and a Pat’s win.
I’m new to this site. I just moved to this area, and have been looking in Millburn/Short Hills. There’s no doubt that prices on many houses have come down a lot from their original asking price (I started looking at prices before I moved last spring) – but I also notice that some houses that seem overpriced go to contract quickly. For example, I saw on a site that 49 Pine St. in Millburn sold for 450 in October (after languishing for a while). A few weeks ago, I saw it listed again at 650. From the pictures, it didn’t look like much was done to it. Anyway, I saw it went under contract already. Unless my information is wrong, I don’t get it.
Anyone looking to rent in Staten Island? Was sent to me from a friend.
Offered for either short term or long term rental is a 3 bedroom townhouse with 2 car garage on Staten Island. Close to expressway, express and local buses, shopping, banks, parks, schools, etc. Very convenient location. Development amenities include swimming pool, club-house, and playground. $1800 per month. Available after March 1st. Pls call me at 917-364-4005 if interested.
>>I’ve lost almost all faith that New Jerseyans have any financial intelligence at all.
i learned a long time ago never overestimate the general populace. if you are above average intelligence don’t assume the public is the same and would think and act as you do. many here are quoting facts and figures to support a sizable correction in housing. people often times don’t think with their head.
#29
how deep in the trash can did you have to dig?
Can anyone suggest a good lender ? looking for 30/15 fixed .Found one http://www.penfed.org but wants to do some comparison.Don’t want to go via bankrate.com
Thank you
JB,
Is it possible to generate a unique link for each post? This way, responders can paste the unique link and not worry about the post #. Readers can use the unique link to navigate easily.
Post # based reference can get messed up because we sometimes delete duplicate posts and other times approve a post which was up for moderation.
BC Bob (32)-
You’re half-right. I do want transactions; however, I’ll settle for a Pats cover (+3).
I am amazed that any sports book on Earth will give Brady points in a playoff game. I am equally amazed that any sports bettor will lay them.
“Can anyone suggest a good lender ? looking for 30/15 fixed .Found one http://www.penfed.org but wants to do some comparison.Don’t want to go via bankrate.com”
I know Spencer Savings has had good rates in the past.
Is it possible to generate a unique link for each post? This way, responders can paste the unique link and not worry about the post #. Readers can use the unique link to navigate easily.
The permalink is already there, it’s hidden in the Date/Time of each comment. Just mouse-over the Date/Time and do a “Copy Shortcut”.
For example:
https://njrereport.com/index.php/2007/01/19/weekend-open-discussion-49/#comment-72225
jb
#29
how deep in the trash can did you have to dig?
All the way down baby! That garbage can was full of money.
But then again, the guys I know in carting tell me the same thing.
jb
Clot, I mean Tar Heel,
Is the game just about the cover??? LOL!! By the way, what do you think of the over??
Citigroup 4th qtr results – bad credit problems.
http://biz.yahoo.com/ap/070119/earns_citigroup.html?.v=8
“Like other banks reporting this week, Citigroup faced some deterioration in credit quality. It raised provisions for losses to $2.3 billion in the fourth quarter from $2.1 billion in the third period.”
>> Isn’t Citigroup one of the top 5 in exotic mortgage origination?
JB,
https://njrereport.com/index.php/2007/01/19/weekend-open-discussion-49/#comment-72228
Henceforth, i will try using the ‘perma link’ link if it’s the only link in my post.
Thank you
From MarketWatch:
Consumer sentiment best in 3 years
U.S. consumers’ attitudes about the economy brightened in January, with a key gauge of consumer sentiment rising to its highest level in three years.
The University of Michigan consumer sentiment index jumped to 98.0 in January from 91.7 in December, according to Reuters, which has an arrangement to publish the index. It’s the highest since January 2004 and was well above the 92.0 expected by economists surveyed by MarketWatch.
Consumers were more upbeat about the present and future economy. The current conditions index rose from 108.1 to 112.5, the highest since July 2005, just before oil prices spiked higher.
The expectations index rose from 81.2 to 88.7, the highest since December 2004.
The only negative note in the report came from a slight increase in consumers’ inflation expectation over the next 12 months to 3% from 2.9%. The five-year inflation expectation remained at 3%.
Economists caution that the consumer sentiment index does not necessarily predict consumer behavior. However, the expectations index is one of 10 indicators that make up the index of leading economic indicators.
They expected 92 and got 98? Nice.
Clot,
From your perspective are the buyers you’re seeing, first time home buyers or people upgrading?
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0uqSyVKVINY&refer=home
The Reading, Pennsylvania, school district, which has 18,323 students, this week must pay $230,000 to Deutsche Bank AG, Germany’s largest bank, because it’s on the losing side of a wager that long-term interest rates will rise faster than short- term interest rates.
…
While Reading’s taxpayers are liable for the loss, bankers and advisers already have pocketed $1 million in fees for arranging the swap
Yes, 1987 = 2005, so we are replaying 1989 now.
I still have the NYT articles where they showed the yoy change in housing prices in metro area. Colors went dark blue for loss to red for gain. Early 90’s were many years of blue and few light orange
take indy and the over. easy money. this is indy’s year. i’ll be sure to brag a little after this occurs.
When a property is sold, does it automatically come off GSMLS?
sync,
The listing agent is responsible for updating the status of a listing in a timely manner.
I’ve got to assume by GSMLS, you are talking about the public website. I believe listings that go under Attorney Review will continue to be displayed, however, once a property goes Under Contract it will no longer be displayed.
jb
Listings will “disappear” if they are withdrawn or expire as well.
jb
Also, many MLS listings have the prior year taxes instead of the current year. Very misleading.
Thanks, JB.
We’ve been discussing the ‘subprime shakeout’ for at least the past two weeks now.
I’m beginning to wonder if the shakeout has anything to do with delinquencies or credit quality at all.
Perhaps it has more to do with the hedgies and banks wanting a bigger piece of the action. Why else would there have been a buying spree on the originators lately? Heck, even Barclays announced a subprime purchase today.
The move is simple, first cut off originator credit lines, which for all intents and purposes will put them out of operation. Let them flounder a bit, and pick them up for pennies on the dollar. At that point, cut off credit to competitors, and when they fail buy them up as well.
Is the subprime shakeout really just a move by the banking and hedge fund industry to take over the (very lucrative) subprime lending industry?
jb
JB,
https://njrereport.com/index.php/2007/01/19/weekend-open-discussion-49/#comment-72247
I agree, but something tells me that big banks enforce more restrictive rules when originating exotic loans.
BC Bob (43)-
For me, it’s all about the cover. The NFL is nothing more than a vehicle for gambling. That’s the best thing they have going. For real thrills & entertainment, I’m all about soccer (now sitting here waiting for the shelling to begin).
Reechard (51)-
If it’s Indy’s year, hats off. However, I’ve got close to 6 years of unblemished record backing the Pats in every conceivable playoff situation (amazingly, many of them as underdogs). They’re as money as the Steelers or 49ers in their heyday. That’s a wagering proposition you don’t walk away from until a series of playoff losses (vs. the spread) tells you the dance is over.
Hard Place (48)-
The buyers are a mix; but the ones I see with a winning game plan for action are the trade-downs. They’re the ones with so much equity in their former homes that they can slash prices, get their sale done and move on.
Soccer is a lot more fun to play than it is to watch, IMO. It’s kind of like golf that way. I’d rather play than watch.
sync: sounds like commercial taxes…
Grim (57)-
Hedge fund as racketeering enterprise…interesting concept.
hedge fund = pyramid scam
JB
thanks for the shorcut, I won’t have to use italics and forget to close them anymore.
With regard to taxes – The taxes on the listing are usually the taxes in the gsmls/njmls records, but they are not as up to date as they should be, because of all the increased taxed in the last year especially it is our office policy to check the town tax records either by calling or going to the tax department. So our listings have the most recent taxes.
KL
https://njrereport.com/index.php/2007/01/19/weekend-open-discussion-49/#comment-72245
Spend a Saturday in Manchester, Liverpool or Newcastle when they’re the home side.
Makes an NFL tailgate look like a kids’ birthday party.
Of course, the riots that sometimes ensue can get a little dodgy.
Somehow I screwed that up got the wrong link in …. oh well I probaly go back to italics )-:
KL
They say Rio is the place to be during the World Cup.
I’d like to ask a completely off topic question (and only b/c I’m curious not b/c I’m buying/selling)… this is the weekend open discussion, right.
what is going on with real estate down the shore? Most of the discussion here is north jersey and the shore never really comes up. I’m curious since there’s so much new construction down there and I always hear of people looking to buy there (either second homes or b/c it’s cheaper than up here or as a retirement home) if/when prices have come down the same way they have here, etc.
Clot, it’s trade-downs now, and probably a lot more to come in the future. So, do you think a first time buyer who buys a ranch or cape (that has a bedroom on the first floor) will fare better? My thinking was that if I did that, and wanted to eventually upgrade, I would find A LOT of boomers looking for the smaller space in a few years, and especially space where stairs are not involved – I would be more likely to make back my money than if I bought a starter colonial or something. My mom has arthritis, and dad has his own issues, so I know a ranch or cape with a first floor room will be ideal for them for the future, and I can’t assume they’re alone in that.
Of course, I could (and may) just buy a forever house, but since you just never know, I was thinking about that.
“Perhaps it has more to do with the hedgies and banks wanting a bigger piece of the action.”
Why now?
Don Corleone doesn’t muscle in at the 11th hour to take over the corner pawn shop, unless there is a pressing business reason. Don never wants to get his own hands dirty, as long as his cut is there.
1. Don thinks that eliminating all the little guys will streamline recovery….nawww, too dirty, and not enough reward.
2. All the other Big Don’s are doing it…must be something going on here, so he does it too. Maybe.
3. Don smells fresh bailout coming…the biggest fish will get the biggest share. Sounds about right.
NJGal (70)-
Excellent idea. Look at the huge wave of boomers getting old and wanting no part of stairs. Everywhere else in the US, one-level living is king. Why not here in NJ? I’ll never figure that one out…but mark my words, that one-level living demand WILL hit here!
I wouldn’t think in terms of “forever house”. That’s just not reality anymore; kinda sounds like “job for life”. I’ve seen a lot of people get burned- even in up markets- by thinking their current home purchase wil be their last one.
What’s a forever house?
Nevermind, I get it now.
Sync (68)-
Rio is the place to be during Carneval.
#70, njgal –
my first house was a ranch. I picked a ranch over colonials and when i sold, an old lady with plenty of cash bought the house out-right.
this was another state another time – but I’m sure it applies just as much now in NJ.
Ok Clot, I am going with ranch or cape with first floor bedroom. I started thinking about that a while ago — what would happen if I planned to move in 10 years but I had to move in 4? And with so many people hitting retirement soon, I thought something without stairs or with fewer stairs would be more attractive to the aging population, not all of whom want to live in a condo.
I agree – it’s kind of unreasonable to expect to stay in one place forever. I don’t want to buy tiny, and I want to leave room to grow, but I won’t be looking for a permanent place.
LurkerA,
Have you checked out The Jersey Shore Real Estate Bubble blog?
Rich
#78 – Thank you
Hat tip to Barry Ritholtz for this very interesting link:
http://www.monitor110.com/
I’d love to know what everyones thoughts are on the “new information dissemination cycle”.
Personally, while I think the graph is somehwhat accurate, I think it is missing a key component, the change credibility and accuracy of the information changes as it flows forward through time.
“Joe Blogger” is without a doubt the least credible and most inaccurate source. So while he might be “first” on a topic, how often is “Joe Blogger” both first to break a story and correct as well?
jb
What to do when students aren’t doing well? Change their grades of course! (It’s cheaper and easier than actually trying to educate them)
Administrator in Camden schools suspended over alleged cheating
The school board here has suspended the administrator responsible for overseeing all standardized testing as a result of a probe into test-score rigging in the impoverished school district.
The school board on Thursday voted 7-0 to suspend Roger M. Robinson with pay after a report said that Robinson was involved with altering test scores.
The report recommended firing Robinson, who denied doing anything wrong. “I need an attorney. I’ll see them in court,” Robinson said.
The investigation by former Camden County Prosecutor Edward F. Borden Jr. at the school board’s behest found that there was “illicit tampering” of tests in 2004 and 2005 at Brimm Medical Arts High School. Borden said the former principal there, Joseph Carruth, lied when he claimed last year that he was pressured by assistant superintendent Louis Pagan to change answers students gave on a math test.
…
Cheating allegations are widespread in the Camden schools.
Last year, the state found “adult interference” led to unusually high test scores at two elementary schools. Last year, one administrator was fired and another was suspended on allegations of changing students’ grades in separate incidents.
http://www.twincities.com/mld/twincities/news/local/16497650.htm?source=rss&channel=twincities_local
“Minnesota Attorney General Lori Swanson on Thursday announced an aggressive plan for cracking down on abusive home loans, saying they’re partly to blame for a surge of foreclosures….
Commerce Department spokesman Bill Walsh said the department doesn’t comment on legislative proposals. He said it was “illogical” that Commerce wasn’t asked to participate on a task force about mortgage lending abuses. Gerlach agreed: “They’re teeing up the issue in a very poor manner.”
However, the proposed legislation could gain traction since Democrats control both houses for the first time in eight years.”
JB – ” information dissemination cycle”.
I would agree with your analysis.
The blogger as citizen journalist fad is just that to me – a fad. There seems to be a trend right now to assume that whatever is on a blog is automatically the unvarnished truth, but people fail to realize that a blog is the ultimate in subjective information.
That is not to say that is a bad thing, but just that it is wise to view them as PART of the media and one source of very personal information. They certainly have their uses though (see right here on this blog).
“Of course, the riots that sometimes ensue can get a little dodgy.”
Ah, the “hooligan’s”.
Cheers Mate.
lisoosh, the only difference is that in a blog the presentation is not as calculated as in the media. i would tend to agree more with grass-roots view(eg. this blog) to a corporate media(eg.NAR website) anyday.
James Bednar Says:
January 19th, 2007 at 10:48 am
We’ve been discussing the ’subprime shakeout’ for at least the past two weeks now.Is the subprime shakeout really just a move by the banking and hedge fund industry to take over the (very lucrative) subprime lending industry? jb
grim: while you are not wrong….go more primal….look at post 49 – lesson? bankers are toll takers and get paid in CASH
look at post 60 – Clot-zoi backing the PATS…lesson – find something that works, keep using it religiously until it doesn’t work…..
LESSON 1 + LESSON 2 = real estate financing industry as authored by investment banks since 2002 or so.
Bankers know when the spigot gets turn off, it takes YEARS for it to come back on. The make the MOST money in the last weeks and months before everyhting craters, as you find the increasing desperate and emotional actors making suboptimal decisions. You are witness on the periphery an upheaval. The names and faces of the characters we won’t find out until 6-24 months from now, so sooner if something blows up.
I find all of this incredibly fascinating and exciting. I’m glad I don’t have skin in this particular game…….but damn sdure I going to find a way to outperform in light of it.
chicago
From the Stamford Advocate:
Connecticut seeks $7M fine against mortgage lender
State banking regulators said Friday they are seeking fines that could exceed $7 million in a multi-state effort against a troubled mortgage lender that works primarily with people with poor credit.
The Banking Department issued a temporary cease-and-desist order against Middletown-based Mortgage Lenders Network USA Inc., saying it failed to fund loan transactions in a timely manner, imposed excessive prepaid finance charges and failed to provide information requested by the state.
Friday’s order doesn’t prevent the company from operating, but Mortgage Lenders has promised not to make loans while the matter is pending, banking officials said. The privately-held company bills itself as one of the country’s top subprime mortgage lenders, with a portfolio of $17.8 billion.
With all the talk that the economy will save the RE market, who’s really receiving the benefit; corp profits or the average worker??? We have received a huge influx of petro dollars and liquidity from the carry trade. This finds it way into our asset prices. Besides keeping rates artifically low and juicing up asset prices, what has been the real benefit to the American worker??? It’s obvious that longer term lower rates is not the answer, why the big problem with the subprime. Are we just experiencing a market on steriods, that will in no way, shape or form trickle down to the avg worker???
“His union on Jan. 14 accepted a three-year contract almost identical to the one that sparked the strike: 3 percent annual raises and higher health-care premiums. The deal came after Raytheon posted eight straight quarters of profit growth and awarded missile unit President Louise Francesconi a 19 percent raise to $1.7 million — including restricted stock — in 2005.”
“U.S. workers are only beginning to recover lost ground. After inflation, median family income of $56,643 hasn’t grown since 2001, says economist Jared Bernstein of the Washington- based Economic Policy Institute, which is funded by foundations, companies and labor unions.”
“The typical family could end this recovery behind where they started,” Bernstein says. “That’s a hell of an indictment given how much income we’ve created.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a99pHYE4LMXk&refer=home
RentLard (85)-
You think the overriding tenor of this blog doesn’t come from one side of the fence? C’mon. Kudos to Grim for posting all comers, but there is an editorial bias here.
“Is the subprime shakeout really just a move by the banking and hedge fund industry to take over the (very lucrative) subprime lending industry?’
JB,
Create synergies with securitzation and trading operations, then add distribution.
BC Bob (84)-
Time for a bit of the ultra-violence, my little droogies! The most surreal thing in sports is the crowd at a Liverpool FC match singing “You’ll Never Walk Alone” after consuming about a million gallons of high-octane beer. Probably not what Rodgers and Hammerstein had in mind when they wrote the song.
Clot,
I can only imagine. I may prefer Jet’s tailgates, when the high octane induced females get into a topless contest, on the truck, during
Aerosmith’s, “Walk this way”
backstroke lover always hidin’ ‘neath the covers
till I talked to your daddy, he say
he said “you ain’t seen nothin’ till you’re down on a muffin
then you’re sure to be a-changin’ your ways”
I met a cheerleader, was a real young bleeder
oh, the times I could reminisce
’cause the best things of lovin’ with her sister and her cousin
only started with a little kiss
like this!
Cloth (89),
There’s far more truth in this blog than all the realtor propaganda and the media combined.
I believe in numbers and the numbers are best crunched here.
Cloth,
Obviously RE is on the downturn and anyone who buys now will burn.
Let’s take a look at this example again – shall we?
Example:
ML# 711577; Renting at $2500. Asking price $559K.
# Commercial RE Consultant Says:
January 11th, 2007 at 4:36 pm
…lets break this down from an investment standpoint:
$2,500 per month = $30,000 in potential gross income. Lets deduct $8,500 in real estate taxes, $600 insurance and $500 in maintenance expenses. Lets also consider a reserve for items that may break or need replacement in the future..lets be real conservative $200 per year. (Boiler roof, new drive way etc.)
This is what we have
PGI $30,000
Expenses $9,800
Net Income = $20,200
Anybody familiar with capitalization rates. Lets be super agressive and use 5.0% most apartment properties trade at 6.0% or higher in Northern NJ. This reflects a Value of $404,000…We didnt even account for a mangament or a vacancy and collection loss deduction…Anybody who purchased a house for investment purposes (non-flippers) in the last couple of years (unless they got an amazing deal) is an idiot!!! Time will punish you!
—
Now, a wolf is a wolf even if its clothed like a sheep.
“inexperienced bought homes because they say how easy it was to make money flipping. Ordinary people getting their realtor or mortgage license because it was easy to do a few deals a month and make some money”
2008,
Bull markets, especially mania’s, tend to turn life long idiots into overnight geniuses.
Thank god we have so few problems in New Jersey that we can focus on the important issues..
New Jersey aims to crack down on yakking bicyclists
New Jersey may have unresolved problems with taxes, child welfare and gangs, but lawmakers are ready to crack down on one perceived danger: talking on a cell phone while riding a bike.
A legislative committee has approved a bill that would make it illegal for people to use a hand-held telephone while riding a bicycle on a public road. Hands-free devices would be allowed and lawbreakers would face fines ranging from $100 to $250.
Assemblyman Jon Bramnick, a bill sponsor, said the measure is meant to protect bicyclists and the people they may strike when riding and yakking at the same time.
off topic:
my wife got a ticket because she did not have the NJ registration handy. The car still had expired plate from another state (the new number plate was in the other car).
Any sense is talking to the judge to reduce the hefty fine?
How are traffic judges here? brutal? This was at intersection of Rt 27 and cozzens ln.
2008 Buyer Says:
January 19th, 2007 at 1:49 pm
To reiterate and restate some of my earlier post 86.
Underwriters need product to package. A stand alone sub-prime mortgage company can be a money loser to the point of [forced] default. However, bolt it on an originator of MBS, and it becomes a loss leader, or better described as merely an expense line on its income statement. The MBS originator has a lower cost of capital and the losses generated by the sub-prime mortgage company are irrelevant when viewed holistically.
It’s called “market failure”. When an upstream supplier threatens you ability to run your business [not providing reliable inputs], then corporate strategy dictates that you acquire it, even though in prototype conditions would suggest that suppliers that are not part of a company’s core competency be maintained as separate entities.
The fact that the i-bankers are possible able to lead the mortgage comapanies to the slaughterhouse is all part of the hubris. Actually, it is probably akin to being assimilated by the Borg.
chicago
“RentLord Says:
January 19th, 2007 at 12:49 pm
lisoosh, the only difference is that in a blog the presentation is not as calculated as in the media. i would tend to agree more with grass-roots view(eg. this blog) to a corporate media(eg.NAR website) anyday.”
NAR isn’t the media, it is a private organization that represents a specific interest group. It is a mistake to view it as anything else.
Blogs tend to focus on one viewpoint and attract people with a similar viewpoint, magnifying it. Just look at the conspiracy theory nuts out there with blogs focused on UFO’s and 9/11. (And that is not to say that some of the people here who call themselves “contrarians” really are, several are just clever trolls).
That’s not to say that this blog doesn’t present some helpful, contrary information, it does, and it does a great job balancing out the “rah rah real estate” pronouncements of lobby groups such as NAR. It provides balance and a differing viewpoint. My point is merely that it is good to look at blogs as part of a whole selection of information sources, rather than as a lone information source.
RentLord,
Was the ticket for failure to show documents or for expired registration (i.e. the car wasn’t registered)?
If the ticket is for failure to show documents, just pay the fine. If it is for driving an unregistered vehicle, but the vehicle was actually registered and you just didn’t have the right documents, you should talk to the prosecutor.
What is the % selling cost in NJ?
From reading the NYTimes articles that JB posted yesterday, it seems it is close to 9%. Breakdown
6% realtor fee
2% closing costs
1% NJ fee
Is the no. above true??
So for a 500K house, a seller has to fork out 45K just for costs and nets only 455K?
If above is true – how did the flippers ever flourish in NJ??
Are we able to give an address for a house on the MLS. I am looking for the address and how long this house has been on the market. MLS#2325915 in Warren nj. Thanks any info would be greatly appreciated.
Also whats up why does it seem as if there have been NO new listings lately it is DEAD!! with the same old junk on MLS everyday. Im looking in Berkeley Heights, Warren area and Nothing, I mean Nothing new on the market in months.
Whats happening, and also i do not see much in prices dropping i hompe something happens soon because everything is still Way Way to expensive for what im looking for.
thanks in advance.
ChicagoFinance….good assessment..assimilating like the borg.
The MBS market is huge and you need to feed the beast!!! With such a voracious appetite sometime it makes sense to buy a farm and grow your own than to go to the store.
housingcrash,
MLS 2325915 is on William Penn Rd. 110 Days on Market. Status is currently pending, might be in attorney review.
jb
If above is true – how did the flippers ever flourish in NJ??
All you need is 20% appreciation. Also a lot of people bought smaller homes with big lods, divided them in half and sold the empty half….
#57
“Is the subprime shakeout really just a move by the banking and hedge fund industry to take over the (very lucrative) subprime lending industry?”
It’s an interesting idea, but I really think originators are getting their credit pulled because of defaults.
Crippling an originator by pulling credit may present a long term opportunity from an acquisition point of view, but in the short term it hurt’s the IB’s securitization business, swaps, etc.
MBS have been very profitable for a decade, and many banks already have originitions in house. I would think that the ones who haven’t brought origination in house up to this point have had a good reason for not doing so. If they are acquiring originators now, I’d tend to think it because the originators are courting them rather than vice versa.
Fellow bloggers.
Just to refresh myself, here is my rent vs buy calculations for myself:
Owning
House (500K house with 6% 30 year loan):
Mortgage payment = $36K per annum
Taxes = 7K
Repairs (assuming house is 25-30 yrs old) – 5K
Increased heating/ utilities vs my current apt = 1.5K
Insurance = 1K
Increased tolls (since need to drive car to a NY borough) = 1K
Taxes saved (on interest payment/taxes beyond 10.5K standard deduction) = 8K (28% tax bracket, 32k interest, 7k tax, 10.5K standard deduction)
Total house owning cost = 36 + 7+ 5 + 1.5 + 1 + 1 – 8 = 43.5K
Rent
Rent (2bd, 2bth) = 16K per annum
Investment gain on differential of rent/own = 2K (8% of (43.5-16)K)
Total cost to rent = 14K
Assuming house price remains constant, owning would cost about 30K more per annum to me (or 2.5K more per month).
Is there anything else or some other expense that I need to consider and forgot in my analysis above??
Side notes:
1) My rent is guaranteed to remain constant for next few years, but I know taxes in NJ are guaranteed to grow min. 4% each year (if tax reforms do become law).
2) I know I’m not comparing apples to apples (4bdr house to 2bdr apt.) – but hey – for my current needs, apt is sufficient.
3) Assuming house prices are going to be cheaper 2 years down the road, renting seems even more lucrative.
“Any sense is talking to the judge to reduce the hefty fine?
How are traffic judges here? brutal?”
Rentlord,
Contest it. There’s a good chance the officer who wrote the ticket does not show at court. If this is the case, you may get lucky. If the officer does show, bring the new number plate and the date of the registration, this will indicate that you were in possession of it at the time of the infraction. Admit to the judge it was your mistake by forgetting to place the new plates on the car. The judge may be lenient, especially if he’s assured that you had the new plates in your possession at the time.
“Total house owning cost = 36 + 7+ 5 + 1.5 + 1 + 1 – 8 = 43.5K Total cost to rent = 14K”
ATT,
If your needs are met at this time, do you need to say more??
“Motorola Inc., the world’s second- largest mobile-phone maker, will eliminate 3,500 jobs after fourth-quarter profit slid 48 percent and handset prices tumbled.”
“Profit margins are being squeezed by waning demand in the U.S. and Europe and rising sales in India and China, where phones are cheaper. Motorola and Espoo, Finland-based Nokia have introduced phones in emerging markets that cost less than $50.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=ao9_yNX_08YY&refer=home
RentLard (92)-
There’s lies, damned lies…then statistics.
-Mark Twain
http://www.unitedvanlines.com/mover/united-newsroom/press-releases/2007/2006-united-migration-study-04-07.htm
Americans Head West, Southeast; Say ‘Goodbye’ to Central Northeast Region
United Van Lines Releases 2006 Migration Study
NJgal –
Everyone in my family who’s ever had a house with stairs, sooner or later, the stairs become an issue.
The people who’ve had ranches have been able to live in them very happily through old age.
So I think your instincts are right, including if it’s a two-story, make it a two-story with a first-floor bedroom and bathroom.
Several people in our family kept their houses, but later in life, they were restricted to the first floor.
BC Bob,
“Motorola Inc., the world’s second- largest mobile-phone maker, will eliminate 3,500 jobs…”
And then there was this from Reuters:
“Executives said the job cuts would affect middle managers.”
GULP!
Rich
PS Guess who I work for and what type of position I hold.
Go ahead, guess.
Scribe, I know my parents would love a ranch. They love their house, but due to health issues the stairs are a problem. And I can’t lie – we are thinking of having kids soon. It would be nice to not have to carry a baby up and down the stairs, or worry about the stairs with a toddler. I have to really see what’s out there – I have seen some that aren’t horrible 1970s ranches. Some are nice, and have some charm. I prefer old so my choices are somewhat limited but if I found one, I would definitely seriously consider it.
#101 housingcrash Says:
Berkeley Heights had the same unsold crap that has been on the market for over a year. These houses are not going to sell for the prices being asked. Any resonably priced home will go into contract in a couple of weeks. I see some new inventory trickle in to beat the spring rush.
BC Bob ( #108).
I posted my rent vs buy calculations (#106), just to solicit opinions if there is anything that I missed out on any expenses (either in rent or owning). Since the bloggers are pertty savvy on RE calculations, I thought I might get to know of something new that I didnt think earlier.
As far as decision is concerned, I’ve already made my decision by signing a rental lease agreement last week.
cloth (110),
you forgot the “useless quotes”.
by the way, where are your attack dogs – Reechard and listen?
Read an article in the WSJ that net migration out of New York from 2005 to 2006 was approx 11% of the population. But then again NY is a big state and many could be from upstate loosing manufacturing jobs.
The Subprime Tsunami
Here is the scenario: China is creating wealth at record levels. Its central bank has invested more than $1 trillion in U.S. Treasuries and mortgaged-back securities. In fact, it is the largest investor in MBSs. The fastest-growing piece of MBSs has been subprime loans.
Years ago, Wall Street figured out it could make a mint off mortgages and began packaging them as fast as the Chinese were building high-rises in Shanghai.
But the supply was constrained, so the Street urged originators to originate more home loans, as they had plenty of investors, including deep pockets from China (and Japan as well).
Then along came the minority/immigrant home-buying market as an opportunity. Promoting home ownership to this crowd became the rallying cry of President Clinton, President Bush, Congress, the Realtors, the home builders, mortgage bankers and the average bus boy who until now could not afford to buy a house. It was an apple-pie bandwagon that no one could resist.
But how do you dig deep into this market unless you permit nothing-down loans, low-cost ARMs and loose underwriting? You can’t.
Hello subprime mortgage market. Bingo — it became the formula for the biggest property-ownership push since the Homestead Act. The politicians fed off the phenomenon and the industry lapped up transactions. Sitting behind the curtain was Wall Street, of course, which made a boat load of money.
Add careless underwriting on refinancings and credit lines and the money that came from China to help make more loans goes right back to the Chinese shores as consumers use their houses to buy depreciating assets like cars, clothes, toys and all sorts of stuff.
Now for the hangover: the upside-down homeowner. Mortgage payments for many homeowners are doubling, inflation won’t fill the gap, and many in this new class of homeowners are in trouble. Writing risky loans to unqualified home buyers is generally stupid. Inflation covered up the mess for awhile but not anymore.
This summer much of this nonsense will come to a head.
It is like all financial scandals that involve Wall Street and real estate (remember the Savings & Loan crisis): there are severe consequences. Generally, consumers pay the cost of other people’s gains.
This is how the subprime tsunami works. The ocean recedes, people run to the beach and go WOW, then the big wave destroys them and the property behind them.
Is it really this dire? I hope not.
What do you think?
Rich NNJ,
If I knew, I would not have posted.
RentLard (117)-
Don’t need to run with the herd. No problem with sticking my neck out on my own. I really have never had a bone to pick with the bear camp here…just those whose minds are so congested that the thought of a market outcome other than the one they’ve pre-ordained sends them into spasms of revulsion.
Keep selecting the numbers you need to pump whatever theory you’re pushing. It’s really pretty harmless, as propaganda goes.
Certainly a lot better than “stay the course” and the new one, “surge”.
“Is it really this dire? I hope not.”
we’re still talking about a fairly small portion of homeowners overall. 5% of all homeowners defaulting is probably the absolute worst case scenario.
the question is whether this is enough to take down the wider economy.
credit is still very cheap by historical standards. It is arguable that there is a good deal of room for spreads to widen w/o choking off growth.
this year will be interesting though
“Is it really this dire? I hope not. What do you think?”
2008,
I guess the definition of dire is relative. IMO[don’t need to reiterate why], the biggest financial bust in our lifetime. Much bigger than the dot com [multiplier effect], will make the past S&L crisis seem like a walk in the park. This summer coming to a head??? Impossible to time this.
Rich in NNJ- As I have seen motorola has gone through more cycles of hiring and lay-offs than any other company (there may be others, but I follow motorola more closely)
When I graduated, after a round of phone interviews I was called to their HQ in chicago. I was whisked away in a grand limo and treated pretty good (it was different then i guess). When I started talking about the actual position with my would-be manager.. he said:
“Oh, by the way, that position is no longer available. But we have this other great opportunity for you…”
By the time I took a plane and arrived at HQ, the position was eliminated ;-)
i never took the job ofcourse
BC,
are you envisioning some kind of sudden shock? I just can’t see how this could unwind all at once
James, re #96
Well that explains why they were working to remove the word “idiot” from the state constitution ;)
skeptic,
Sudden shock??? It’s certainly feasible.
However, my time frame is [always was] a 5-7 year period, from the peak, of slowly declining prices, Chinese water tortue.
Pfizer is expected to announce major job cuts on Monday. They could cut 10% of their workforce and may announce plant closures. They haven’t said if any of the 3,300 Pfizer jobs in NJ will be impacted.
2008 Buyer Says:
January 19th, 2007 at 3:52 pm
Is it really this dire? I hope not.
What do you think?
2008: just a cost of doing business; a freaking write-off against an already expensed allowance account
Do the banks care? No. Will lawyers come after them? Who cares, they will be bought off in a settlement. We move on…..
RentLord Says:
January 19th, 2007 at 4:05 pm
By the time I took a plane and arrived at HQ, the position was eliminated ;-)
i never took the job ofcourse
Rent: when I was a senior in college, we went to the Drexel recruiting presentation; they filed for bankruptcy the next day
JB,
Didn’t see that article. The floor[nyse,amex] will become extinct, maybe turned into condo’s.There is no floor for the Nasdaq. By the way, have you ever heard of the Cincy Stock Exchange??? It’s a box in JC.
James Bednar Says:
January 19th, 2007 at 4:18 pm
grim:
When I was a dot-bomber, my team designed and built this……
http://www.equilend.com/about.html
I’m sorry I can’t take credit for that article…its from Inman News forgot to post the writer’s name.
And I hope its not that dire.
Chi,
Equilend, any direct access to ecn’s??
FWIW, I have decided to renew my lease and rent for another year.
Although I tend to think that housing will mildly underperform for 10+ yrs while incomes catch up, if there is ever going to be an epic down year, I think 2007 will be it.
If it happens, I think it will be the result of a banking crisis
BC Bob Says:
January 19th, 2007 at 4:48 pm
Chi,Equilend, any direct access to ecn’s??
Bost: it’s a closed securities lending market…..trustees with inventories of various stocks and bonds posting prices on the market with proprietary traders, hedge funds and large inventors agreeing on borrowing terms. Completely non-public. Facilitates shorting at an efficient cost of carry.
Most of the bigger banks resisted because this business was a huge money maker due to opaqueness [jst like RE] and the ability to mark-up inventory with basically no recourse. However, we worked with some upstarts to gain the critical mass necessary to break the log jam.
“Facilitates shorting at an efficient cost of carry”
Chi,
……and Clot calls this the LOD’s.
By the way, short individual stocks on a down tick??
“the money that came from China to help make more loans goes right back to the Chinese shores as consumers use their houses to buy depreciating assets like cars, clothes, toys and all sorts of stuff.”
2008,
The American consumer is addicted and China is our pusher.
China is our co-dependent, and we are their enabler. We have much more of an addict/pusher thing going on with OPEC countries.
At least, that’s what the addict-in-chief tells me.
Clot, don’t drive, ride a bike.
Can anyone get me the sale price of MLS 705773? I believe it closed several weeks ago (maybe as far back as Nov) and I have been calling the tax assesor’s office, but they don’t have the new deed yet.
Thanks for the help.
AK
Was searching on Internet on any articles on why RE is high in some areas. Came across following one.
The Politics of Sky-High House Prices
How government jacks up the price of owning your home.
Joel Miller
http://www.reason.com/news/show/36930.html
Edward L. Glaeser and Joseph Gyourko explored the problem in a paper prepared for the Federal Reserve Bank of New York, which hosted a conference on affordable housing in 2002. Glaeser, an economist at Harvard, and Gyourko, a professor of real estate and finance at the Wharton School of Business, wanted to find out whether the country was facing a shortage of affordable housing and what might be causing such a shortage. What they discovered was that the nation as a whole has no real shortage of cheap digs; it’s just that the cost of land and homes in certain areas has gone through the roof, mainly because zoning and other land use restrictions have made usable land scarcer.
I would say this is true in NNJ as well. What does everyone think on this board?
First Horizon profits fall, hurt by mortgage unit
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070117:MTFH20492_2007-01-17_22-52-40_N17372776&type=comktNews&rpc=44
First Horizon National Corp. (FHN.N: Quote, Profile , Research) said on Wednesday quarterly earnings fell a steeper-than-expected 28 percent as mortgage banking revenue plunged
equibanc shuts down.
http://www.equibanc.com/
Wachovia recently conducted an intensive strategic review of its mortgage business which has altered the company’s approach to the origination of non-conforming loans. As a result, Wachovia has elected to close EquiBanc Mortgage – Wachovia’s only business dedicated solely to non-conforming loans.
I have been trying to buy a home in NNJ for the past 6 months but failing. We are thinking the bubble is bursting, but in reality prices are still sky high. They reduce probably 10 to 15 k from their LP.That’s it. I am really frustrated and depressed. Seriously thinking to get the hell of new jersey.
Sorry I didnt respond, My work blocked this site so I can only read it during breakfast and after work.
I am in no rush, I can renew my lease for 3-6 months at a time so am not worried. This property offered a great deal if I could have had it at 10% off the listing price. The people that bought it put 40-50% down because they were prior home owners, where-as we are first time buyers. They bid just under the LP which seemed strange to me. Why bid under at all, what is 1-2%.
A lot of lowball offers are being flung around is another tidbit I have heard. I have been shooting for 10% off of 2005 sales. I feel like I have looked at every house in Bergen county and will tell you that if a house is priced well and is a quality home it will sell. If it has some quirk you better price below market otherwise it will sit. In 05 the house I bid on sold in 5 days and was bid up 40K. It was on the market for over 120 days before it sold this year.
NJ Bear
Wachovia also bought Golden West so that it has no shortage of write-offs in the future.
ck986]
I don’t think Golden West is into subprime.
ck986 (148)-
Golden West…all kinds of yummy California ARM exposure. Was a well-run, respectable outfit when that mom & pop owned it, though.
Golden West is not into subprime, but def. lots of ARM. That’s been their calling card from day 1.
clot]
i agree.
Antitrump
Do you think berkeley heights is just a desirable town in this area (union county)? I really like the area but Nothing, Nothing is available for months and months. What is the logic behind that?
Are you looking in that area?
Right now (10:00PM) on ABC’s 20/20:
“Debt and Borrowing in America”
First segment discussed people swamped with credit card debt.
Next segment talks to a “frugal family” who buys everything used.
Hopefully they’ll cover exotic mortgages.
Channel 7, 10PM to 11PM.
Initial environmental OK given to new Hudson rail tunnel
A plan to build a $7 billion rail tunnel between New York and New Jersey has cleared a regulatory hurdle, with federal officials giving initial approval to the project’s effects on the environment.
The two-track tunnel, a massive project discussed for more than a decade, would double commuter rail capacity between the two states. Construction could begin as soon as 2009 and be complete by 2015.
[…]
The approval allows the two states to begin scheduling public hearings. The next step would be final approval of the environmental impact statement.
After a federal decision expected next year, the states would be able to begin negotiating how much cash the federal government would kick in.
Woman admits role in real-estate fraud
WOODBRIDGE — The onetime employee of a defunct township real estate investment company pleaded guilty to conspiracy Wednesday in connection with a scheme that bilked investors out of millions.
Katrina Arrington, 34, of Hillside is the third employee of N.J. Affordable Homes to admit guilt in the case. The company had offices on West Pond Road and Main Street in Woodbridge.
In October, John Kurzel, 55, of New Brunswick and Lucesita Santiago, 37, of Woodbridge both pleaded guilty to conspiracy for participating in the Ponzi scheme that all three said defrauded investors out of more than $7 million, authorities said.
Sentencing is scheduled for April 26. Arrington, Kurzel and Santiago all face up to five years in prison and a $250,000 fine.
Arrington is free on a $25,000 unsecured bond.
At her plea hearing in U.S. District Court in Newark, Arrington admitted she participated in a conspiracy at the direction of N.J. Affordable’s president to submit bogus loan applications to mortgage lenders, authorities said. The loan applications falsified the incomes, assets and employment statuses of supposed borrowers of property that N.J. Affordable Homes was selling, authorities said. The applications also inflated appraisals and used photos that were altered to create the false impression the properties had improvements such as new windows and siding, authorities said.
The U.S. Security and Exchange Commission filed a lawsuit in September 2005 alleging the company and its president, Wayne Puff, sold $40 million in notes to more than 490 investors in the United States, making empty promises of 15 to 20 percent returns. N.J. Affordable Homes and Puff told investors they would use their money to purchase, renovate and resell real estate, according to the SEC.
The company and Puff actually paid off old investors with money from new investors and generated fictitious revenue by selling properties to insiders, investors and others, according to the SEC.
The SEC received a restraining order, and the company was ordered into receivership and then bankruptcy.
Clot,
I like ” I am the decider, so I decide” so much better than yours.
KL
https://njrereport.com/index.php/2007/01/19/weekend-open-discussion-49/#comment-72345
In the 1991 article that BC asked JB to post “Bottom of the Housing Slump Seen”,
http://query.nytimes.com/gst/fullpage.html?res=9D0CE1DD103BF932A35750C0A967958260
Michael Aronstein of Comstock partners correctly predicts that the late 80’s housing bust would last until the late 90’s.
In searching further, I found the following excerpt from an interesting piece written about him:
“Never dreaming that interest rates would go stratospheric before the seventies were finished, lenders began the decade by lending at long-term rates that were much too low. People invented new ways to pay for things they could not afford. Consumer credit exploded. Between 1970 and 1980 credit card receivables grew several-fold. Fifty years ago few people took out mortgages, which matured anyway in less than five years. So people did not buy houses that cost four times their incomes and pay them off over 30 years. That was a natural restraint on the price of residential real estate.”
“Rules changed once credit began to dominate the picture. Home buyers put down less and less cash. By the early eighties, lenders were accepting five percent down and lending customers the closing costs. It went largely unnoticed that money and credit were becoming interchangeable. “People weren’t buying homes,” says Aronstein. “They were buying mortgages.” Instead of goods, people were buying credit to acquire the goods. The cost of the credit, not the price tag, determined affordability.”
“Nothing could beat letting individuals put down a tiny fraction of the purchase price for a house, the bedrock of American life. Ancillary to that were office buildings and shopping centers. America was becoming a gigantic real estate bazaar, rife with speculation. The accumulated credit worked itself to a point where it had to expand even more rapidly in order to keep what had gone before from imploding. And the door was open to using credit as anybody saw fit. Credit intended for building soon embraced less tangible activities, like taking over companies.”
You financial guys like BC, Chicago, etc. should read the whole article, it’s fascinating.
http://www.capitalideasonline.com/articles/index.php?id=2117
But nothing beats “Every nation has to either be with us, or against us.”
http://www.wavsource.com/news/20010911a.htm
(third item)
Jay (160)-
“…correctly predict that the late 80s housing bust would last until the late ’90s.”
NIce piece of subtle revisionism there, bud. From where I sat, the bonanza started in ’96, and pretty much ran unabated thru ’05.
I can remember mortgage rates getting up around 9% (pre-Asian flu) and scores of buyers taking down homes with no trepidations whatsoever. Funny, but back then, I’d mention the elevated rates to the occasional buyer who seemed to be “stretching”. Know what they’d say?
“I can refinance later.”
KL, UnCola (159, 161)-
Only Dan Quayle comes close to the assault with intent to kill that Dubya perpetrates on the English language:
“What a waste it is to lose one’s mind.”
Did anyone ever figure out that he was married to a horse?
jonny2
http://biz.yahoo.com/ap/070119/coast_financial_mover.html
Coast Financial Warns of Impairments
….the bank said borrowers of $110 million in mortgage loans may not be able to repay their debt.
A local builder contracted by 482 borrowers halted construction on single-family residential properties, for which the bank has committed funding, due to insufficient resources. More than half of the loans had already been paid out to the borrowers. Liens were placed on some of the projects.
Clinton to Launch 2008 Presidential Bid
http://www.cnn.com/
LOL MSNBC just played the video where she announces the launch of her exploratory committee. She wants to have a “chat” with us. She sounds so damn artificial.
I don’t know what Obama stands for but he sounds real. Edwards too. Either one of them would be better than Hillary.
Hillary -I will not have sex with a man is a loser …Obama is our only chance
During last weekends open discussion, JB looked up MLS # 2310126 (from gsmls.com) for me and said it was in attorney review. Can anyone tell me if it is still in AR?
Sink (169)-
#2310126 still in AR.
Thanks, cp.
Buyers Scarce, Many Condos Are for Rent (NYTimes, Jan. 16th): “Since the middle of 2006, the frenzied condominium market here and in several other big cities like Las Vegas, Miami and Boston has collapsed. Once roaring sales have slowed to a trickle, sparse inventory has mushroomed into a glut and soaring prices have flattened out and started falling… Banks have significantly scaled back loans to condominium builders, some demanding that developers sell half or more of the units in a building before beginning construction. Hundreds of developers are looking to the strong market for apartments, while waiting for today’s condo surplus to shrink.”
http://www.tuscaloosanews.com/apps/pbcs.dll/article?AID=/20070116/ZNYT01/701160393
Please please Hillary and Obama run, I make too much money to be democratic anymore ( Above 30K ) and I want to see the republicans win so I keep my tax cuts.
I does not matter if they ran Jeb or a Jackass ( with hooves ) a woman or a black man is not getting into the white house.
On Yahoo you can track developments in the housing market and homebuilder stocks by bookmarking our Housing coverage
http://biz.yahoo.com/seekingalpha/070119/24609_id.html?.v=1
I make too much money to be democratic anymore ( Above 30K ) and I want to see the republicans win so I keep my tax cuts.
Too true. I can’t afford to pay more in federal taxes. I’m being gouged on property taxes as it is. That’s a bottom line issue for me, it beats any feelings I may have on Iraq or anything.
SG Says:
January 19th, 2007 at 7:07 pm
I would say this is true in NNJ as well. What does everyone think on this board?
I think they are stretching to prove a point. And to be honest, what does it matter? I wouldn’t want to live somewhere with endless tract houses, no control, no green spaces or farms to break the monotony. If you want to see what that looks like, go visit the Valley and the rest of the LA area. Absolutely soulless.
R Patrick Says:
January 20th, 2007 at 10:08 am
Please please Hillary and Obama run, I make too much money to be democratic anymore ( Above 30K ) and I want to see the republicans win so I keep my tax cuts.
B.S. The biggest problem was the out of control spending of the Republican Congress. You have your tax cuts but the country is swimming in debt. Can’t go on forever.
A reinstatement of the draft might sharpen your thinking on Iraq. As the father of two adolescents, it certainly has focused mine.
Taxation and money issues are, indeed, important. However, they pale in comparison to the fact that our administration is pursuing reckless and uninformed actions all over the world that do nothing to advance our interests and actually serve to impoverish us, diminish our reputation and render us more vulnerable to attack than at any time in our history.
The draft isn’t going to be reinstated. That’s just a political scare tactic. While I agree that Iraq was unnecessary and foolish, I disagree that it makes us more vulnerable to attack. That claim also strikes me as a political scare tactic, right up there with “if we don’t hit Saddam now, he’ll nuke an American city”. It’s the same bs, just from the different side.
for those that don’t believe in a mid-west housing bubble …
http://madisonhousingbubble.blogspot.com/
Clot #163
the bottom was actually 1997 for house prices per the the famous Schiller/NY Times chart that unrealtor likes to post. That qualifies as late 90’s to me.
I personally experienced it. Bought in ’92, sold for loss in ’97. Of course the subsequent house I bought in ’97 and sold in 2005 did very well. I also still own a multi-family I bought in 1986 with a 12% mortgage, which I refinanced several times at lower rates throughout the 90’s.
My experiences in the 80’s and 90’s caused me to sell my primary residence in 2005. The deja vu feeling was overwhelming.
Clot #162 I mean
Clotpoll Says:
January 20th, 2007 at 10:03 am
However, on a depressing note, if his candidacy gains any traction, what do you think his chances are of making it to November ‘08 without an assassination attempt?
Clot: From what I’ve heard, this issue is one of the prime considerations, and also one of the deciding reasons that Powell’s wife wouldn’t let him run. Although popular thought was that she did have all her marbles together.
I put in an offer on a property and worked with agent to do that.I signed “Consumer Information Statement of NJ Real Estate Relationship” with broker.I didn’t sign any other contract.Does it make the agent as my BUYERS AGENT for anything else I want to buy.There ar no dates on it.How does a Buyers Agent contract look like ?I am looking in NY now and not working with that agent.Off course I could ask the agent but will be great some one can educate
edit – “did not” have
“Rules changed once credit began to dominate the picture. Home buyers put down less and less cash. By the early eighties, lenders were accepting five percent down and lending customers the closing costs. It went largely unnoticed that money and credit were becoming interchangeable. “People weren’t buying homes,” says Aronstein. “They were buying mortgages.” Instead of goods, people were buying credit to acquire the goods. The cost of the credit, not the price tag, determined affordability”
Jay, #160,
Like Bruce says; “Well now everything dies baby that’s a fact,
But maybe everything that dies someday comes back”
Clot #163, GWB sucks at public speaking, no doubt about that. But at least you know where GWB stands, and he doesn’t denigrate the troops he voted to send into Iraq, like Kerry:
“You know, education — if you make the most of it, you study hard, you do your homework, and you make an effort to be smart, you can do well. If you don’t, you get stuck in Iraq.”
http://www.youtube.com/watch?v=vLuMWiQ6r2o
Syncmaster #180 writes:
That claim also strikes me as a political scare tactic, right up there with “if we don’t hit Saddam now, he’ll nuke an American city”
The only person I recall making such a claim is Richard Gephardt, Democratic congressman and presidential candidate:
BOB SCHIEFFER, Chief Washington Correspondent:
And with us now is the Democratic presidential candidate Dick Gephardt. Congressman, you supported taking military action in Iraq. Do you think now it was the right thing to do?
REP. RICHARD GEPHARDT, D-MO, Democratic Presidential Candidate:
I do. I base my determination on what I heard from the CIA. I went out there a couple of times and talked to everybody, including George Tenet. I talked to people in the Clinton administration.
SCHIEFFER:
Well, let me just ask you, do you feel, Congressman, that you were misled?
GEPHARDT:
I don’t. I asked very direct questions of the top people in the CIA and people who’d served in the Clinton administration. And they said they believed that Saddam Hussein either had weapons or had the components of weapons or the ability to quickly make weapons of mass destruction. What we’re worried about is an A-bomb in a Ryder truck in New York, in Washington and St. Louis. It cannot happen. We have to prevent it from happening. And it was on that basis that I voted to do this.
Congressman Richard Gephardt (Democrat, Montana)
Interviewed on CBS News “Face the Nation”
November 2, 2003
http://www.cbsnews.com/stories/2003/11/03/ftn/printable581509.shtml
Jay (182)-
Accepting any economist’s opinion on housing (including David Lereah’s) is like allowing your plumber to do stomach surgery.
Accepting the NY Times’ (as fun a read as it is) take on anything economic is to accept a Bolshevik’s description of capitalism. Have they ever encountered a wealth-building idea that they like? The NY Times sells doom, gloom and Schadenfreude to an audience that can’t get enough of it.
I think your ’92-’97 upside-down experience may not necessarily be a universal example. And you certianly seem to have had a couple of more typical RE experiences post-’96.
UnReal (188)-
The guy who pumps my gas also butchers the English language. And, after a couple of years, I think I know exactly where HE stands on a number of issues (including what kinds of women get him going…ugh!).
That does not qualify him to be President.
Nor does my dislike of Dubya automatically make me a supporter of Kerry.
Now this one is for Bob — look at this Greedy Grubber. This is a brand new custom home, there were no improvements made.
434 Old Short Hills Rd, 07078
$2,295,000 – Apr 2005 (MLS 2230762)
$1,960,000 – Dec 2005 (Sold)
Now, less than a year later:
$2,675,000 – Jan 2007 (MLS 2365882)
That’s $715K for nothing.
Complete greed/market tone deafness, or is everyone entitled to 36.5% appreciation every few months?
To expand on the Middle East;
What are everybody’s thoughts regarding the naming of Admiral Fallon as the top commander in the Middle East. This represents the first time that a naval officer heads central command.
This ironically coincides with the departure of the USS Stennis, heading to the Gulf to join the USS Eisenhower along with cruisers, destroyers and supply ships. Does this just represent a show of force with Iran or are tomahawks getting ready to be launched within a few months?? Is this possibly supporting Israel and their attack against Iran???
Aren’t markets funny?? At the same time crude sells off precipitously. Is some nation opening the spigot, buying our defense or maybe our offense??
Clot- Are you seeing activity pick up? I have 4 appointments set up to look at my house tomorrow. I’m in AR right now, but this is great!
“That does not qualify him to be President.”
Before being elected twice as US President, GWB graduated from Harvard and Yale (with higher grades than Kerry), and was a very successful state Governor.
I’m actually puzzled at why people have so much venom for the man. He absolutely sucks at public speaking, no doubt about that, but his critics all voted for the war (because it was politically expedient?), and then today denounce the war and troops (because it’s politically expedient?). But I guess they’re “articulate” as they play politics at the sake of the nation.
These are serious times, and many of GWB’s critics, while “articulate,” have no core beliefs and no plan or intention to reform the Mideast. Previous critics of Reagan, for example, didn’t understand the Cold War either, and mocked him as a “simpleton.”
RE: Greedy Grubber in post #192
That greedy seller sold a year later, not “months,” my saved notes on the listing were inconsistent. Fixed.
All the dates were correct:
434 Old Short Hills Rd, 07078
$2,295,000 – Apr 2005 (MLS 2230762)
$1,960,000 – Dec 2005 (Sold)
Now, a year later:
$2,675,000 – Jan 2007 (MLS 2365882)
That’s $715K (36.5%) for nothing.
My first impression is that putting the navy in charge of the middle east sounds smart.
If you control the persian gulf, you control the world oil trade. You can cripple every country in the region at any moment you choose.
Accepting the NY Times’ (as fun a read as it is) take on anything economic is to accept a Bolshevik’s description of capitalism.
Clot 190
Where did you get this idea that if something is published in the NY Times it is immediately suspect? Perhaps you just don’t like their politics.
In any case, if you are referring to the Schiller chart in your post, this has nothing to do with the NY Times. They just re-published Schiller’s housing data which has become the basis for trading housing futures, and its accuracy is critical.
Do you have any data that shows an earlier end to the 90’s housing disinflation than 1997, other than anecdotal?
skep-tic,
What about sea ports and fragile governments that control most of the oil in that region? If we withdraw land based forces, the region as a whole will go into chaos.
UnReal – please!
(i’m referring to your position w/ dubya)
Clotpoll Says:
January 20th, 2007 at 12:19 pm
I think your ‘92-’97 upside-down experience may not necessarily be a universal example.
I know quite a few people that took losses during those years. And historical housing price data shows these losses clearly.
And you certianly seem to have had a couple of more typical RE experiences post-’96.
yes, typical bubble.
Re: GWB
The people who hate him the most are his Ivy League classmates from the 60s. There is a tremedous amount of self-loathing among this group.
The reason the media focuses on W’s privilege so much is because he has never been ashamed of it. It is an affront to the sensibilities of the NY Times editorial page that you could be born wealthy and not feel ashamed.
You don’t actually have to give all of your money away or not join Skull & Bones; you just have to hate yourself a bit. Both Gore and Kerry were every bit as privileged as he was, but they seemed appropriately apologetic. Thus, they get a pass.
If Obama has put forward anything original, it is the idea that we need to get past the old battles from the 1960s once and for all. All of this bickering between the cool kids and the losers from Yale in 1969 is annoying.
Jay (202)-
Please don’t send me digging for statistics. I find them much less interesting than the personal stories of real individuals, like you. What does it matter what the trend is in RE if you’re personally taking a drubbing…or making a killing? Just like any other market- and as Cramer says- the bull is always running somewhere.
I’m sure your ’92 buy/’97 sell upside-down scenario applies to others, too. I’m sure you know other people in that boat. However, back then, the average “itch cycle” (the amount of time the average homeowner stayed in his home) in NJ residential RE was more like 7-8 years.
Were you the “average” homeowner buying in ’92, you would have stayed thru, say, 1999 or 2000…thus overcoming the negative equity position you were in at the time of your ’97 sale. And, please, give yourself a little more credit for the good things that have come your way from RE; attributing your successes to the “bubble” is damnation of your own smarts with faint praise.
As far as the NY Times goes: I LIKE this paper! It’s a great read, full of neat stuff and generally worth the coin. Every media outlet in the US has a political or social agenda…why should they be deprived of theirs? However, if you don’t think that they trade on fear, class envy and resentment toward the economic realities of living in the US, you’re tuning out the subtext of a great deal of their writing.
Home Seller (194)-
Yes, activity’s up. However, watch it on any multiple offer situation that might arise around your sale. Not all multiple offer scenarios play out well…especially ones that occur in the context of a weak selling environment (which we are def still in).
Rhode Island in a heap of trouble… Coming to a theater near you?
from the Providence Journal:
“More than 5,600 home loans made in Rhode Island were delinquent during the third quarter of last year, an increase of 46 percent from the same period in 2005, according to the latest survey by the Mortgage Bankers Association.”
And now back to real estate in New Jersey…
Jay And Clot,
MLS data for Bergen County shows that in 1997 the average price increase for the year was 0.8%
It wasn’t until 1998 that the market started to improve with an average price increase of 5.9%
So I’d have to agree with Jay that the bottom was 1997. Unless you have data that shows other Northern NJ counties faired better in 1997?
Rich
I just eAppraised my condo on ditech.com and… wow. Last time I did this (last summer) they gave me a range of 320-380k. Today they are giving me a range of 298k-360k. 298k, wow!! Psychologically, that feels low.
1990’s RE,
If I recall correctly, if you bought in 1988, you were even in 1997. Approx peak to trough; 20-25% sfh, close to 40-50% condos. That was a typical housing decline, brought on by recession. This one??? Imploding on its own absurdity. A recession to follow???
Where’s BOOOYAAAAA or Listen???
BC Bob,
I’ve seen the HPI numbers, which I understand do not include condos/townhomes? What is the source of the information that there was a 40-50% decline in condo prices trough-to-trough? Thanks.
Clotpoll, would you further explain your #205 comment ? I’m not in the biz and cannot surmise what you mean, thanks.
Skeptic,
The Times tore Gore to pieces. Don’t know what you’re talking about.
AdAgencyWoman,
E. Madison Ave:
They were originally asking $825k for that home back in May 2006 and dropped to $750k before relisting it in July for $685k.
The listing expired and then listed with a new realtor starting at $699k and now $649k. They sprayed that styrofoam-stucco on the house, updated the appliances and cleared away a lot of crap.
Rich
Sorry i meant peak-to-trough
Just ran into this site, it looks interesting. Anyone have any thoughts on credibility?
http://www.housingtracker.net/askingprices/NewJersey/NewYork-NorthernNewJersey-LongIsland/Edison
Zac (212)-
Sometimes, in order to draw another offer, sellers actively continue to market their homes during attorney review. Since no contract is binding until attorney review is complete, the seller does have every right to look for another buyer.
However, not all multiple offer situations turn out well for the seller. In a weak environment, the original offering party may get wind of the seller’s attempt to find more buyers and just walk away.
Hey thanks.
syncmaster,
No specific data source. It’s what I remember. If you do a detailed search, I’m sure you can find close to exact #’s
sync,
1992 article,ny;
Thomas I. Purcell, the executive director of the Stamford Board of Realtors, said that condominium prices in the area have been dropping 10 percent a year for for the last four years, as opposed to 5 percent annual drops for one-family homes. “They are just so hard to get rid of,” he said.
http://query.nytimes.com/gst/fullpage.html?res=9E0CE0D6153BF934A35755C0A964958260&sec=&spon=&pagewanted=print
217
Clot- I do agree 100%. It would be great if there was an offer that came above my asking, but in the back of my mind I still have the feeling of “why upset the apple….etc” I have a very good deal in place (Qualified way above their mortgage, they will put more than 30% down, etc…).
My main point was that very recently it seemed like activity has shot up…
A couple of replys/comments in one post.
Reagarding GWB’s manner of speaking as acceptable, sorry! Speaking clearly is a not luxury it is a necessity. It is part of the job, speaking to the american public, speaking to leaders of other countries, speaking to the senate and congress, come on when is it ever okay for someone not to be able to do certain aspects of their job? But it’s okay because at least he sticks with what he said, wrong or not?
I don’t know where I read it but the quote was something like ” George Bush says the same thing on Wednesday that he said on Monday. Of course this is without regard to what happened on Tuesday! The ability to be stubborn is not an admirable trait. We all have it, we usually try to overcome it, not revel in it.
Regarding top and bottom of last boom, I was lucky enough to participate in both the bottom and the top. Bought at top – lost at bottom. Does’nt get any better than that! 89/97
Regarding Consumer Inf Statement signed. Not a buyer agent contract. Read what you sign.
KL
BC Bob,
Thanks, that is interesting. 10% for four years is a total decrease of about 35%. Great info!
There was something further down that article that really caught my eye:
“Things are better than they have been the past couple of years,” Mr. Purcell said. “Prices are down about as low as they are going to get. People are not reducing them as much as they were before. And I think it all has to do with the interest rates, and the banks giving people the opportunity to buy.
“But I don’t think you are ever going to see prices like those of 1985,” he said. “It would take a miracle to get prices up that high again.”
sync,
Remember that is 1992. I can’t specifically recall what year was the absolute bottom.
Clot 204
And, please, give yourself a little more credit for the good things that have come your way from RE
I give myself credit for recognizing the last two bubbles and acting accordingly. In 1997 I took a small loss on that house I sold to buy a house triple the price. I thought this was finally the bottom from the 80’s bubble, and the best time to move up to maximize investment return. And I was correct. The same instinct said sell in July of 2005, the top of the market, and again correct.
And my judgement today is that we are nowhere near the bottom.
Don’t get me wrong, I love real estate. But there is a right time to buy and a stupid time. Guess what time it is right now?
“In 1997 I took a small loss”
Jay,
Some of the best trades I ever made were losing trades. Knew when I was wrong and maneuvered to avoid big hits.
by CR,
”
What would change my mind?
Since I’ve just turned bearish on the general economy, I’d like to note what would change my mind.
”
http://calculatedrisk.blogspot.com/2007/01/what-would-change-my-mind.html
”
1] Show me several hundred thousand residential construction jobs lost, and little or no impact on the general economy.
2]Show me mortgage equity withdrawal (MEW) at less than 3% of disposable personal income (DPI), with little or no impact on consumer spending.
3]Show me near record foreclosure activity, with little or no impact on lenders or the general economy. I’ll have more on foreclosure activity this week.
I don’t ask for much.
“
HI all.
Today was my next house-hunting day.
Met new realtor today. – She did check my pre-approval letter… yes I caved in – bet before I asked her why – she told me that the first thing seller’s agent will ask about before will consider an offer – is the pre-approval letter.
She said that every agent in the area talking their clients into lowering prices by 10% from what they are listed at, but they want to deal ony with REAL buyers…..
I had to say that she was a very different experience from two realtors.
In addition – I did see about 10% reduction from last year summer prices… wheither it is enough for me to buy or not – it is another matter.
Also – huge discrepancy in quality of the starter home listed withing 5K from each other in the same area….
You will find a complete fixer upper for 5k MORE than completelly remodeled house with brand new appliences, of the same sqft and floorplan …
So it is slowly gettign more affordaable….
According to realtor, right now the inventory is bigger than last summer almost no activity, but she is definitelly seeing coming uptick in activity.
She said she would be happy to submit any offer I am willing to make – we saw few estate sales – where the original family bought the house over 20 years ago, so tey might be willing to negotiate the price.
The only problem – you are dealing not with one kid by with the whole family……
Anyways now I have to decide if I am going to buy a house or not…..
Al-
Glad you found someone you’re comfortable with.
“Knew when I was wrong and maneuvered to avoid big hits.”
BC,
worked for me in RE but not in the tech crash of 2000. The stock market is much more irrational and difficult to judge (at least to me) than RE.
I hear from a frined whose parents trying to sell but absolutely no bids. Nothing. Houses are just sitting and sellers are getting worried.
in bloomfield
I’m looking at the same crop of houses since July. One was 885 now 699. Another 830 now 675. And the list goes on and on and on and on and on. Inquired over the phone about one listed at 565 and the second sentence out of the realtors mouth was that it can be had for 500.
#231, #232
you didn’t say how long the house has been on the market.
Are they with a realtor or FSBO?
yes. realtor. I do not know how long on market but assume it has been some time because they are worried that they cannot even get a bid or any interest. No bids no activity and realtor had mentioned dropping the price like 20%, which was surprising to me.
He said the current price is near 2003 price.
fyi.
I don’t know all the details but somewhere the price set seems too high. Whether it was the realtor’s fault or the people wanting to keep the price high, well I don’t know who’s at fault.
I’d prob give it another week or two max and if there’s no interest than it would seem something needs to be done (ie lower price).
How long is the contract w/the current realtor?
Good article from Ben Stein today at yahoo http://finance.yahoo.com/expert/article/yourlife/21845;_ylt=AkI70zZ0akrBEqJ5Ie3rvzyER4V4 in which he debunks RE as a great investment. I enjoy his articles because he seems to me to be the embodiment of common sense but I would have to agree with the commenter (yes he has a blog of sorts) that leverage is everything so as to magnify up legs of the market but as this group keenly is aware will serve the same effect on the downside. As I’ve noted before the RE phenomenon of late is almost entirely attributable to credit and once the banks, feds, or economy start the downward leg this will get ugly fast but the effects will not be limited to RE. I’m interested in how others of like mind intend to protect themselves and please do not offer up commodities.
BC (#210)
Nice to see I’ve been missed. Just hasn’t been much RE talk here the last few days that piques my interest. It’s much the same drivel, RE advice and data outlyers coming from crybabywannabes, finance dicussion that is beyond wailing over, and some politics.
Until I read…
Al (#228),
Good to see you are making progress in your home search. No one here who owns a home is surprised by your findings. Finding homes in the same size and price range that vary wildly in physical condition and updating is common. This reflects any RE market. You will find clean, updated homes that will sell, and another dilapidated turd box that probably won’t. Was the same way 30 years ago, 20 years ago, back in 2003 and 2004, and now. It’s up to you and a good realtor to find the gems. The good homes are out there.
Two agents who I know and trust say the market is picking up – inquiries, open houses, showings. Just another small indicator here, but not the market..
Homeowners can provide you with good input on the decision to buy or not to buy. You might look, in addition to this blog, elsewhere for an objective assessment on the pros and cons of buying an owning a home. I have yet to meet a responsible – note the word responsible – homeowner who regrets his/her decision to buy.
Don’t let the crybabywannabes get you down!
WAAAAAAAAAAAAAH!!!
Lets talk about the same ‘ol drivel, RE advice, data and finance and politics again.
Listen,
From what I’ve read, other than the politics (which don’t belong here), everyone HAS been talking about real estate and data.
Yet you call it drivel. Why?
I’ve seriously yet to read anything you’ve posted other than opinion yourself.
What’s the difference between your “drivel” and others? Hell, you’ve proven that in your 2nd paragraph.
I’m with Zac (excluding politics).
Rich
Rich
I see higher prices than 05. Though by checking address with tax records I have seen that at least 5 homes in were purchased in late 04(asking =1.25X ) and 05(asking 1.15X).
As someone who has moved around a bit, I don’t understand all of this house flipping.
Moving is very annoying.
so are salespeople
listentothecrybabywannabehomeowners Says:
January 20th, 2007 at 8:04 pm
I just do not believe anything you have to say.
Things in Bloomfield stink for sellers.got firsthand info not some lies.
listentothecrybabywannabehomeowners Says:
January 20th, 2007 at 8:04 pm
I sense some real anger at this blog and smart buyers. I am starting to believe you are a homeowner that cannot sell their house. It will sell just lower your high price back to reality.
Common Cent $,
A nice article, thanks for the recommendation. I see one flaw with Mr. Stein’s bearish reasoning. He compares the purchase price of the home with the Dow. The buyer’s down payment is the initial investment, and hence the real comparison point.
A typical homeowner, back in the early 80s, put down 20% of the home purchase price (at a godawful interest rate, too). So looking at the 1982 $125K home that is listed for $345K in 2007, the net result over the last 25 years is a $25K downpayment growing to ($345K-$25K=$320K). This growth is within the 10-20 times the Dow has grown since then. Still doesn’t equal the Dow with dividends, but the Dow doesn’t put a roof over your head or help reduce your yearly payment to the Taxman. But in any case, comparing $25K growing to $320K in 2007 is most accurate.
Come to think of it, Mr. Stein should have included capital gains taxes and transaction costs in his comparison to the Dow. But that is another issue.
Anyway, a homebuyer’s (are there any here?)initial investment is the down payment, now often 10% or less, and not the home purchase price. Return on the down payment is relevant measurement over time.
This argument does not include buying and selling costs, any property ownership changes since 1982, etc. It just makes the point that there is another way to look at Mr. Stein’s analysis.
Mr Stein, bearish analysis aside, is a homeowner, and definitely not a crybabywannabe. Perhaps he has shorted some RE stocks lately.
This outta get BC going.
WAAAAAAAAAAAAAAH!!!
crybaby:
is that the best case you can make for purchasing RE? Some feedback from RE sales people? Your comments are a joke. Anyone who listens to your b.s. is a fool and deserves to lose money in this continuing bust.
Interesting,
I merely state that getting feedback from sources in addition to this site is a good idea to a prospective buyer, that some agents I know are seeing a small uptick in interest, and that the postings the last few days have been the same old drivel. Sorry if anyone finds that offensive.
Nowhere have I said the market is rising or falling. Seems like the anger here is from the wannabes.
WAAAAAAAAAAAAAAAH!!!
Rich (#240)
I apologize for the word drivel. Poor choice and I will refrain from using it again.
WAAAAAAAAAAAAAAH!!!
listentothecrybabywannabehomeowners
(
post #245).
Your maths in that post seems to be flawed. A person who put $25K down on $125K house, still has a loan of 100K which needs to be paid off. The total payments on it come close to $215K depending on apr. So your comment that $25K grew to 320K is hard to understand.
Beyond this, you also have to think that we’re just coming off a historic run in RE prices. If historically RE barely mirrors inflation, and last 5 years were abnormally high appreciation rates, it would either come off or needs time to digest the gains. Assuming the same appreciation rates would continue is as childish as some commentators/statesticians showing that dow gained 25% average on last x years, and at this rate in next 10 years u’d be a millionaire if you remain invested in dow (Prudent investors would be exiting at that moment). Remember the famous Abbey Joseph Cohen (star analyst of Goldman Sachs in year 2000) liked juniper networks stock @200$?? That stock can be had today for $20 (some lucky people even got it at $4).
crybaby:
what end of the real estate business are you involved in?
jay
Sometime back I had read an article on rent vs buy (dont remember the name of author or have a link). The author there too debunked the myth that renting is for loosers and owning ur own home is a no brainer. He reasoned that this was true in days when cost of rent was almost equal or a little less than mortgage payment of a place. But it would not make sense at all times, no matter what the buying price is. Esp. with RE runup in recent years, he reasoned it might make more sense to buy.
For making decisons based on numbers, his advice was if the mortgage payment is more than 1.25 times the rent of same place, it is prudent to rent it.
listen boy.. tell us if you have a house to sell or just another agent?
c’mon listen boy tell us
Jay,
Not in RE business at all. Merely a homeowner.
WAAAAAAAAAAAAAH!!!
listen (253) – tell us how negative equity feels like. How does Ramen taste these days?
HAAAAAAAAAAAAAAAAAW!!!
att #251
Interesting rule, and probably reasonable. May vary a bit depending on the cost of money.
WAAAAAAAAAAAAAAH!!!
If you do not subscribe to the whole premise of this blog then why are here agitating people? Do get get some sort of perverse satisfaction from it ?
rentlord,
With you as a crybabywannabe and me as a homeowner, rest assured that my equity – and net worth – far exceed yours. You hard earned rent money merely serves to increase the net worth of your landlord. It does get you the utility of a roof over your head, however.
There are the haves and the have nots. Enjoy your ramen.
WAAAAAAAAAAAAAAAH!!!
Issues with W:
He basically was on vacation until he was 40 years old.
Has done a great job of spending other people’s money with minimal success in the private and public sectors.
Clearly not a person who is intellectually curious, which is both irritating and troubling, because major decisions with multiple variables and tremendous nuance are being made with a perfunctory review.
Clearly raised by a series of nurses, nannies, and headmasters, because he lacks any real interpersonal skills beyond trite pleasantries, and is loathe to accept anyone questioning his authority. If you know people who have been raised by hired help, you know what I mean.
listen boy –
good to see you making a fool of yourself again!
rest assured that my equity – and net worth – far exceed yours
please tell us about your equity (or lack of). We are all ears
You see why speaking skills are so important. Chicago articulates my points so much clearer. I expect that from my leaders.
https://njrereport.com/index.php/2007/01/20/weekend-open-discussion-49/#comment-72910
KL
Ben Stein? This is what passes for reasoned opinion here now? A second-string flack for Richard Nixon, who has pulled a second career out of his butt by portraying a sundry array of dorks (note the affinity to some of the LOD here) in semi-hip, already-dated ’80s teen movies (Bueller?…Bueller?)?
And to top it all off: this guy makes blanket recommendations- age irregardless- to put $$$ into “balanced” and indexed mutual funds. Well, goooleee…there’s a gutsy call. Dump your life savings into a churning pit of hedge where every incremental advance will be countered by an equal- and de minimus- retreat. And don’t even get me started about his love of annuities. This guy is living proof that any pantload in LA with an Ivy League degree and one film credit can be declared a genius and spend the rest of his life on cruise control. He is living proof that people in LA- outside of David Geffen and Kirk Kerkorian- rapidly and steadily lose intelligence from the day they arrive there.
I’m sorry that torturous game show, “Win This Goober’s Money”- or whatever the hell they called it- isn’t still on TV. I’d love to have gone on there, punked his sorry a** and given a forearm shiv to that fat sidekick of his.
Oh…and he seems to have changed his colors on RE lately. Which opinion is really yours, Ben? Check out this article, in which he gets into some pretty thick praise of RE:
http://www.bankrate.com/brm/news/investing/20040416a2.asp
Up, down or sideways market, who cares? At least back up arguments with some bloody red meat…not the pablum of Ben Stein.
Sheesh.
NY Times – in a nutshell…..a financially troubled rag, which has been living off of its past reputation while selling out its integrity to advertisers.
I find its lack of brevity in reporting very offensive. It makes very clear that despite a broad circulation, it essentially panders to a small core of independently wealthy arm-chair liberals in Manhattan, with limitless time to read the thing.
In comparison to other choices, of course it is of higher quality, but is the damned thing useful day-in and day-out? No, of course not. Its value rings hollow consistently.
Overrated by a long shot.
# IAN Says:
January 19th, 2007 at 8:40 pm
I have been trying to buy a home in NNJ for the past 6 months but failing. We are thinking the bubble is bursting, but in reality prices are still sky high. They reduce probably 10 to 15 k from their LP.That’s it. I am really frustrated and depressed. Seriously thinking to get the hell of new jersey.
===
From what i’m seeing anything over 650k is dropping hard with houses that were 800 going for 600k. In the low end area of condos near 350ish… its really not going anywhere…. cept for 12 to 15k drops.
Zac,
I appreciate your question.
NJ RE REPORT is part of the blogosphere, not some membership only, pay to play website. The web is in the public realm, the blog is here to influence the NJ public realm, and I am here to play in that realm.
My postings merely state my interpretation of information and certain opinions, laced with a bit of sarcasm. I cannot be responsible if that agitates some people. Nothing what I contribute is personal.
I make no apologies for my views challenging what is presented here. Or for my views that others find outside their comfort zone or find ridiculous.
Some of the this blog’s commentary and data points masquerading as the RE market suggest a large group of crybabywannabes venting their anger and frustration at a system they feel unable to buy into. Perhaps if they shout THE SKY IS FALLING loud enough, the RE market will follow. That is the power of the internet. But many of these same crybabywannabes will still be angry and frustrated.
I challenge some of what people present here. I agree with some of it. People challenge what I say. Some taunt me about my fondness for ramen… Welcome to the world of the internet!
Other than my provocative name and somewhat sarcastic commentary, look for more input from listentothecrybabywannabehomeowners.
Zac,
I appreciate your question.
NJ RE REPORT is part of the blogosphere, not some membership only, pay to play website. The web is in the public realm, the blog is here to influence the NJ public realm, and I am here to play in that realm.
My postings merely state my interpretation of information and certain opinions, laced with a bit of sarcasm. I cannot be responsible if that agitates some people. Nothing what I contribute is personal.
I make no apologies for my views challenging what is presented here. Or for my views that others find outside their comfort zone or find ridiculous.
Some of the this blog’s commentary and data points masquerading as the RE market suggest a large group of crybabywannabes venting their anger and frustration at a system they feel unable to buy into. Perhaps if they shout THE SKY IS FALLING loud enough, the RE market will follow. That is the power of the internet. But many of these same crybabywannabes will still be angry and frustrated.
I challenge some of what people present here. I agree with some of it. People challenge what I say. Some taunt me about my fondness for ramen… Welcome to the world of the internet!
Other than my provocative name and somewhat sarcastic commentary, look for more input from listentothecrybabywannabehomeowners.
WAAAAAAAAAAAAAAAH!!!
I sent my NY Times rant to my buddies Wilburr and Steve L. Let’s see if we get any response….they may not see it until Monday morning though…
LOOK PEOPLE
Nj is over… either pay up the absurd prices and keep the broken machine that is NJ up and running by being a slave for the rest of your life.
The answer is SIMPLE. Get The Fug OUT of NJ!
More info: http://www.city-data.com/forum/north-carolina/280-considering-relocating-nc-2.html
rentlord,
Just how much did you pay down your landlord’s mortgaget this year? Great use of hard earned money.
WAAAAAAAAAAAAAH!!!
uh ok,if you need that much attention perhaps starting you own blog might help
Generally speaking, I would agree that the average NC Public School is at a lesser level than average schools in the Northeast.
As far as the “Yankee” factor goes, I’ve found residents to be very friendly to Northerners except the ones who attempt recreate their outside culture here by demanding various government services and practices that are common in the North but not in NC. There’s a reason NC taxes are much lower here than in the Northeast. Great public schools and government services cost money. Some Northerners don’t seem to understand that and are unwelcome by the life-long residents. This attitude is more prevalent in the more rural areas of the state than in the urban areas such as Raleigh-Durham and Charlotte with their high concentration of Northern transplants.
NC is very diverse state in regards to climate. While Summer is hazy, hot and humid in the Eastern part of the state, the Western part of the state is much cooler. The average high for July in Asheville is 83 degrees, while Fayetteville is in the mid to high 90s. Total Winter snowfall in Fayetteville is trace amounts while Asheville is normally around 15″.
I lived in the Northeast for 40 years and NC for 15 years. I do not miss the North and would never consider moving back. The best advice I have for anyone considering a move to NC, would be to pick your specific area of NC very carefully based on your family’s personal priorities, such as climate, schools, heathcare, tax burden, population density, race, religion, recreation and available government services. NC has it all, but not all in the same local area.
LeavingFLSoon,
Have you looked at Raleigh/Cary area? My wife and I are outta here to NC as soon as we can sell our house (no easy task right now). I’m in the mortgage banking business myself so I know what your husband is going thru in the Title Biz. I know job cuts and reduction in hours are here. Raleigh/Cary Real Estate is doing well in terms of job growth.
I’m in the Stuart, FL area (Treasure Coast) and the market has tanked big time here. I’m ready for a change.
Hi,
I’ve been reading the postings in this forum for a few months. I wanted to say something about the comments made about NYers and how rude or snobby
we are. I am a native New Yorker who is considering a move to North Carolina next year. The reason I’m leaving New York, the place I was born and grew up in, is because it’s too crowded with A LOT of transplants coming to the city. It is those transplants who are the rude ones, not the natives. These transplants behave that way because they think that’s the way a New Yorker behaves, but that’s not true. I know plenty of New Yorkers who are friendly and will take the shirt off their back if you need help. I think the New Yorkers everyone is posting about are the ones who come to the city and try to act rude to fit in. The city is very fast paced and crowded. You are constantly in someone’s space. If you had to live like that on a daily basis, you would have an attitude too. I’m leaving because I can’t live like that anymore. I need to stretch my arms out and not have anybody touching them. In my twenties, I could go and hang out in crowded restaurants and bars and not feel claustraphobic, but now I’m in my thirties (late thirties), with a child. I’m a homebody now, who wants my child to grow up without feeling rushed all the time and be able to play in big backyard with her friends and our pets. Your perception of the general population of New Yorkers is just not true. I like making eye contact and saying hi to people. I guess that’s why people are always surprised when I tell them I’m a native NYer.
Just my two cents…I promise when I move to North Carolina, I’ll be sure to say hi and smile!
ValVal
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My husband and I (and our 2 boys, ages 2 and 3) are looking to relocate to the Raleigh-Durham-Cary or Charlotte area within the next year. We are looking for information on the following:
-employment in the IT field (best places to work)
-christian private schools and day cares
-real estate (not too far from the business district and not in rural areas); also how are new housing developments vs. older homes appreciating in these days
-comparioson between the two areas
We are planning a trip to NC (from NJ) in two weeks and are contemplating what city to look into first – Charlotte or the RTP area.
I appreciate any feedback.
Either Raleigh or Charlotte will work for you. Reason I say this is a lot of New Englanders and Californians (let’s say blue states) people are moving down there, and in general they tend to be more liberal and they have been exposed to these things as part of culture from where they are from. Not to say NC’s won’t adopt it or want it, but you will have a ready made base for you in these 2 towns. In Raleigh area, Cary is probably the place to set up shop as this seems to be the haven for North east US refugees. I read a post in Charlotte forum that 9 of the 20 houses in his block (in Union County I believe) were people from Long Island. So you get the idea.
If you plan on having a physical location (studio) – then just open it up next to a Trader’s Joe or Whole Food Market as these seem to be the “must haves” for the folks moving down from the NE.
In all seriousness with the huge influx of people from these areas, it sounds like a good business model to bring services from the north that are not commonplace in the south. Maybe I am being naive and there could already be a ton of alternative health services already in RTP or Charlotte but I assume not.
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I posted the below awhile back. I know there are many new people on this site. When I read someone from Stuart, Fla., I thought this may be worthwhile;
Why is it that many things old someday become new again???
http://www.stock-market-crash.net/florida.htm
I lived in Essex County, NJ and am now in York County, SC (just south of Charlotte). It’s different in a lot of ways, but yet the same for us.
Different in that it’s mostly cheaper (mortgage and utilities, specifically – other things like water and groceries are actually MORE expensive, and daycare is the same cost). Our neighbors are as great here as they were in NoNJ. Our church is just as great. The main difference is the STRESS LEVEL. The stress just rolled off our backs the minute we moved into our house. That’s the major difference for us. Less traffic, less rudeness on the roads, less hustle and bustle – you would think it doesn’t mean much, but it DOES.
We just moved to Hickory from Monmouth County.
I grew up in Essex county.
I could give you a book of reasons why living here is so great,
but my message is:
GET OUT OF DODGE BEFORE NJ IS IN BOTH YOUR POCKETS!!!!
We love living here and do not miss Nj at all except for family.
“In all seriousness with the huge influx of people from these areas, it sounds like a good business model to bring services from the north that are not commonplace in the south.”
How about taylor ham and cheese??? At least some good old fashioned, gas burgers from White Castle.
Li-Sung
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I think more people would stay in NJ if they could only afford to live in NJ. I’m not sure how people can afford first time home that cost 300 thousand or more. Then pay taxes and then raise a family. NJ is not affordable and people are moving south to breathe as you say. Living in the south doesn’t have all the answers, but its easy to want to leave NJ because of all the crowds and expense.
“I lived in Essex County, NJ and am now in York County, SC”
“We just moved to Hickory from Monmouth County.”
“I am a native New Yorker who is considering a move to North Carolina next year.”
Drop it,
To borrow a phrase form the great Admiral Stockdale; “Who am I, Why am I here”??
You have me confused, unless you are a flipper.
My husband and I have been discussing a move to NC for ten years. It first came up when we first got married and a job opportunity presented itself. At the time, we did not have children, and I wasn’t ready for such a change. We did, however, understand that we someday would most likely be moving there.
It’s ten years later, and for about two years now, we have been visiting and researching NC. There are many reasons why we most likely will be moving to this area.
For the people who have lived in NC all their lives and have many issues with the changes:
I come from a small town in NJ. I grew up here and still live here, as does most of my family and friends. My husband grew up here, too. But it is not the town I remember. I grew up with farms and small classes in school, and little mom and pop stores.
But I understand time changes things, population grows, economy changes, trends change, etc. Over the course of twenty years, we have become quite the busy town: no more farms and little businesses. Housing developments, overrun roads, etc had come in. Now the town is maxed and other towns are getting hit (think Marlboro, Holmdel, Colts Neck).
Over the years we adapted. You can say we had been invaded by New York, and we dealt with many of the complaints that have been listed above.
Bottom line though: Everyone is allowed to better their lives and make a new home and make new roots for themselves. So many people that came in are fantastic, and love to hear about the town history and do their part to keep our town clean and safe. In no way can I blame the person from Staten Island for all the strip malls. They were coming whether he/she moved here or not. And I shop in those stores, also. Not that I don’t want to find the little small shop, but it isn’t there. And such and such store is.
Now as we leave our town that we grew up in, and decide for my children to let them have a new place to take root, this will be my home, too. I will respect and care about my new community. It will be my home just as much as someone that has had generations of families there. And in no way will I feel blame for stores or schools or any problems that some people want to place blame on for newcomers.
I’ve been through small town changes on a personal level, and it isn’t any individual’s fault. I admire the people that came to do what was best for their families. And most people want to be respectful and a part of the community. Human nature, there are the mostly good and a few bad apples. The town is all our homes. I don’t have any more title or claim to the area as they do.
So good luck to all those moving. To those there, thanks for any help you can provide in learning about the area!
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spect036
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we are from nj also and will be moving to nc in 6-8 weeks.i just wish nj housing cost were as reasonable as nc because in some areas of nj,they have a lot to offer as far as jobs.
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We are moving to NC as well. We hope to go down there by May or June. The housing and job market is just ridiculous around here. We are so excited for the change.
Wow looks like NC is the place to go
NJmomof2
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Us too we are moving to Union County NC hopefully sooner than opposed to in June….I already put my house on the market
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http://www.city-data.com/forum/new-jersey/36792-if-you-plan-moving-nj.html
CJ-FROM-NJ
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I can tell you why I want to move to NC. I can’t afford to breathe in NJ anymore. I will never own a home, the taxes are crazy, our state is becoming more and more corrupt by the hour, people are nasty, traffic is insane, if I stay I’ll have a nervous breakdown, welfare is draining the state. I want my own home, with my own yard, and my own BBQ grill in MY Backyard.
I am tired of paying $1200 a month in rent and owning NOTHING! I am tired of the air polution, hmmm what else….Oh and everyone is miserable here because the stress of life is killing them slowly.
This is a link to a very well written & informative article regarding the present situation in NJ and how we got here. It’s a bit long, too long to cut and past in here I’d say. It’s well worth the read however if you wanna know the ugly truth of politics and corruption in NJ.
http://www.city-journal.org/html/16_2_new_jersey.html
Cp,
Whats your point other than you don’t care for Stein? I shared his editorial as a popular columnist providing some balance to the often obsessive, autodidactic posts found here. If you chose to speak to his argument, you will note that SFH RE is not a great investment but rather a commodity with both utility and romance. I would advise those of you looking for a home, as distinguished from a roof over your head, to keep this in mind. If you believe the market is overvalued, as I did when I bought in 2001, buy less home and invest the balance elsewhere. If you think timing the purchase is going to create some windfall you are as deluded as those who thought the were going to get rich leveraging themselves to the hilt. If you learn anything from the RE market data it is that it is a very large ship that does not turn on a dime. Try to maintain some balance, a home is a depreciating asset on top of an appreciating one hopefully (land) which value is determined by both regional and global influences you have very little ability to anticipate nor control.
The Mob That Whacked Jersey
Steven Malanga
How rapacious government withered the Garden State
When Cy Thannikary left India to come work at the UN in Manhattan, he settled in Flushing, Queens, and loved the excitement of living in the city. After starting a family, though, he traded New York’s hubbub for Freehold, New Jersey, a quiet suburb with lower taxes and affordable housing. That was 25 years ago. These days, Thannikary sometimes feels like he’s back in Gotham as he watches his taxes soar and hears neighbors grumble. He has started a new group, Citizens for Property Tax Reform, to fight the special interests that have turned both state and local government into profligate spenders. “Politicians in New Jersey have treated their citizens as ATMs,” he complains. “They have no idea how to restrain spending, and more and more people are saying they can’t afford to live here anymore.”
For more than a century and a half, New Jersey, nestled between New York City and Philadelphia, offered commuters like Thannikary affordable living in pleasant communities. Wall Street tycoons, middle managers fleeing high-priced Gotham once they’d married and had kids, and immigrants who settled first in New York but quickly discovered that they could pursue the American dream more easily across the Hudson—all flocked into the Garden State. Eventually, New Jersey’s congenial living attracted even corporations escaping New York’s rising crime and taxes. 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.”
Once a farming corridor connecting New York and Philadelphia, the state that Benjamin Franklin called “a keg tapped at both ends” began its rapid evolution in the nineteenth century, spurred by the growth of the railroads. Enterprising New Yorkers like merchant Matthias Ogden Halsted led the way. In 1837, he repossessed a 100-acre farm in Orange, New Jersey—about 12 miles west of Manhattan—and built a magnificent mansion, featuring Corinthian columns that one historian celebrated as “unlike anything the area had ever seen.” He subdivided the rest of the farm to provide homes for city friends. These new suburban commuters even chipped in to help build a railway station on the nearby Lackawanna train line—a stop that still serves commuters today.
In 1853, following Halsted’s example, Manhattan drug wholesaler Llewellyn Solomon Haskell bought land along a ridge of the Orange Mountains, laid down roads, and built grand homes. Thus was born Llewellyn Park, America’s first gated community. Described by the New York Times in 1865 as “a rough, shaggy mountain site, now transformed into an enchanted ground,” Llewellyn Park soon attracted such eminent residents as Thomas Edison, and it boasted magnificent houses designed by noted architects, including Stanford White, Charles McKim, and Calvert Vaux. Soon the entire area around the Oranges blossomed, with stylish homes on broad boulevards. Fashionable New York stores like B. Altman and Best & Co. turned the area’s dazzling main shopping strip into the rightly nicknamed “Fifth Avenue of the suburbs.”
Jersey’s development accelerated during the second half of the nineteenth and the early twentieth centuries, as more and more workers opted for suburban comfort. A new railroad line here, a bridge or road there, would unlock a whole new swath of the state to commuters, igniting countless mini-real-estate booms.
Two rail lines transformed Montclair in the mid-nineteenth century from a sleepy trading post into a bustling New York commuter town, filled with spacious Tudor- and Queen Anne–style homes. Montclair’s biggest houses, on a ridge at the foot of the Watchung Mountains facing New York, would one day house many of Gotham’s financial elite, including, during the late 1980s, the chief executives of three of Manhattan’s biggest banks. In the same way, a causeway over the Shrewsbury River in 1870, linking farmland communities like Fair Haven and Rumson to ferries on the Atlantic, prompted a number of New York financiers, including Jacob Schiff, to build estates in the area and begin commuting across New York harbor to work.
Some 60 miles north of Rumson and 50 years later, construction of the George Washington Bridge, connecting upper Manhattan and the Bronx to northern New Jersey, led to a different kind of housing boom in places like Teaneck, a middle-class town where developers erected English Tudors, Dutch Colonials, and smaller houses of stucco and brick. In the decade leading up to the bridge’s opening, Teaneck’s population grew fourfold, part of a population upsurge that remade northern Jersey.
As inexpensive mass transportation expanded, Jersey sprouted a dense network of middle-class suburbs, home to many Manhattan middle managers—the traders, back-office managers, and salesmen who serve as corporate New York’s foot soldiers. In the 1960s, the Levitt family, famous for converting Long Island farmland into the middle-class suburb of Levittown after World War II, replicated the project on a more modest scale in Somerset, New Jersey, building nearly 1,000 houses in William Levitt’s classic Cape Cod design. Middle-income New Yorkers came in droves. Farther north, in Hillsdale, where the Hackensack & New York Railroad once had a terminus, hundreds of modest two- and three-bedroom prewar colonial houses, originally built for railroad workers, formed the core of a housing market dominated by Manhattan commuters. Eisenhower-era ranch houses in Middleton, Morristown townhouse developments, condos on former industrial land in Jersey City and Secaucus—all attracted commuters, so that now more than 300,000 Gotham workers call Jersey home.
Jersey would even cultivate its own patrician dynasties of Gothamites. Shortly before launching the New York–based financial magazine bearing his name in 1917, B. C. Forbes moved his family from Bay Ridge, Brooklyn, to Englewood, New Jersey, on the western slope of the Palisades. After his magazine took off and Forbes became prominent within Englewood—by then home to many of Manhattan’s financial elite—his son Malcolm married one of the town’s finest, Roberta Laidlaw, whose family owned the New York investment firm Laidlaw & Co. The pair moved into a baronial estate in the rolling hills of Somerset County, deep in the Jersey heartland. Among their neighbors: Aristotle and Jacqueline Kennedy Onassis, former secretary of state Cyrus Vance, and longtime Dillon Read chairman and ex–treasury secretary Douglas Dillon.
The commuters have given New Jersey the highest average family income in the country—$74,000-plus a year. In one five-year period during the mid-1990s, Jersey had a net gain of $2.8 billion in family income from New York, thanks to between-state migration, the Empire State Foundation found.
The ex–New Yorkers who formed the Jersey towns favored small government and low taxes, which came to define the state’s politics. As early as 1840, the mayor of Jersey City—then a settlement of just over 3,000—boasted of his town’s “small amount of taxes levied to support state, county and city government compared to New York and Brooklyn” (an independent municipality at the time). Jerseyans could be downright ornery about taxation. During the Depression, the state’s Republican governor, Harold Hoffman, enacted a sales tax; so great was the backlash that the legislature quickly rescinded the levy. By the early 1960s, Jersey was one of only two states without a sales or an income tax; New York had both. Jersey ranked 40th among states in total tax burden, 13 percent below the national average.
The presence of a white-collar commuting workforce—and the low-tax economic climate it helped create—would help New Jersey lure firms fleeing New York. By 1910, more than half the state’s urban and suburban residents worked in office jobs, as clerks, typists, managers, and executives. When Gotham’s corporations, at first seeking space and then, beginning in the sixties, pushed by high taxes and escalating crime, began to abandon the city, Jersey was an attractive option. AT&T, Chubb Insurance, American Standard, Bristol-Myers Squibb, and others began flocking to where many of their employees already lived. Technological advances also helped Jersey draw the back-office operations of major finance players like Merrill Lynch, which kept its Manhattan headquarters but now employed thousands of support workers in cheaper Garden State digs, connected by phone and computer.
The New York corporate exiles nourished New Jersey’s economy, just as the commuters did. Starting in the 1950s, Jersey’s economy began growing at twice the pace of New York State’s and easily outperformed it for most of the rest of the century. Even in finance, New York City’s economic engine, New Jersey has almost matched Gotham’s growth in recent decades. It added 143,000 financial-sector jobs between 1970 and 2000, compared with 154,000 new jobs in New York City over the same period, as financial wizards no longer chose only to live in the Garden State but also to work there. Even soon-to-be New York mayor Michael Bloomberg got in on the action. From a small Princeton office in the late 1980s, the mayor’s company, Bloomberg LP, grew to employ 1,500 in New Jersey by the early twenty-first century.
The features that lured commuters and firms to the Garden State began slowly to erode in the late 1960s, as an expanding state government started shoveling massive amounts of taxpayer money into urban anti-poverty programs and education, usually with little result. Two interlocking forces drove the spending: first, the rise of powerful public-sector unions that pushed effectively for higher pay and benefits, bloating municipal and school budgets and blocking needed reforms not just in cities but across the state; second, the growth in Jersey cities of a new kind of political machine that diverted federal and state urban aid into political favors and patronage, wasting billions on useless and often crooked programs, and turning the cities into expensive wards of the state.
Until the 1960s, Jersey’s cities, though small, had been self-sustaining and relatively successful, playing a minor role in the larger regional economy governed by New York. Newark, for instance, became a port town, with a small manufacturing hub that, at its peak in 1930, employed some 66,000 workers out of the city’s 450,000 inhabitants. But when race riots and unrest broke out in Newark, Camden, and other Jersey cities during the late 1960s, many residents and businesses fled to the same suburbs that New Yorkers had been flooding into for decades. Cities like Newark ended up with little economic life and mostly indigent populations.
Further encouraging the exodus was the widespread awareness that the cities had fallen into the grip of corrupt, rapacious political machines. After Newark’s riots, federal prosecutors bore down on then-mayor Hugh Addonizio, who had given control of much of the city to Mafia bosses Ruggiero “Richie the Boot” Boiardo (whose crime family inspired The Sopranos) and Ray DeCarlo. After the feds convicted Addonizio and several subordinates for corruption, the “reformers” who took over were anything but. New mayor Kenneth Gibson, pledging to end the sleaze and revive Newark, faced ceaseless investigations into his administration, resulting in a string of indictments—including his own on charges of providing a no-show job. Though never convicted, Gibson left office a failure.
Corruption probes into the administration of the next mayor, Sharpe James, over nearly 20 years brought down city councilmen, the mayor’s own chief of staff, and the police commissioner, who pled guilty in 1996 to pillaging a fund that financed undercover narcotics investigations. Nor was Camden any less shady: since 1981, three of its mayors have been convicted of corruption and deposed.
The persistent corruption, vaporizing billions of taxpayer dollars, gave public-sector unions the leverage to wrest control of the state’s urban agenda for their own benefit, leading to even greater waste. Newark’s teachers’ union, for example, used Gibson’s legal woes to seize control of the schools from the mayor and deliver it to a school board—which the union, with more than 4,000 voting members, could easily elect. The result: a long period of school-system mismanagement and fraud, documented in a damning 1994 state investigation, which culminated in state takeover of the system the next year. In his book Black Mayors and School Politics, political scientist Wilbur Rich blames the school failure on “the public education cartel” and says that claims by teachers and board members that poverty caused the system to fail “is an insult to the Newark community.”
Jersey’s cities have never recovered. Newark now has only 280,000 residents, down from 450,000 in happier times. State taxpayers pay about three-quarters of a billion dollars annually to prop up the city’s schools and its municipal government. Crime is rampant, jobs scarce. Newark’s problems have radiated to neighboring towns, too, blighting once-healthy communities. East Orange—where Matthias Ogden Halsted brought his Manhattan pals—seethes with gang violence, with a crime rate three times the national average. Family income is less than half the state average; once-grand homes sit abandoned and boarded up. Irvington, which Philip Roth in Portnoy’s Complaint depicted as filled with alluring shiksas living in Norman Rockwellesque tranquillity, is today one of New Jersey’s poorest communities, wracked by double-digit unemployment and a crime rate as bad as East Orange’s.
In Camden, the nation’s murder capital, the state had to take over the failed school system and the city’s out-of-control finances. Trenton, Paterson, and other Jersey cities are similarly dysfunctional.
The latest installment of this ruinously expensive mess is a court-ordered state effort to rebuild dysfunctional urban school systems. In a series of decisions beginning in the 1990s, the New Jersey Supreme Court has forced the state to boost spending dramatically in city schools. Going beyond fiscal equity cases in other states, which demand that prosperous suburban residents contribute more to poor urban school systems, the Jersey supremes mandated that each district be able to spend as much as the state’s richest jurisdictions—up to $18,000 per pupil. The court also required the state to establish universal preschool and to embark on a $2 billion school building program.
Once the courts decreed this modern-day exercise in taxation without representation, union-backed pols piled on. In 2001, the state legislature inflated the school construction program to a budget-busting $8.6 billion—a gift not only to the education lobby but also to the construction unions and other tax eaters. To evade voter approval (which the state constitution requires) for the lavish spending, the legislature created a largely unaccountable bond-issuing authority, a constitutional dodge that Jersey’s courts blessed. The patronage-ridden authority proved so corrupt that it quickly spent all its borrowed money, while completing only half of its building projects, leaving taxpayers under court order to pour in yet more funds.
By the 2003–04 school year, state taxpayers, in a colossal income transfer, were handing over a jaw-dropping $4 billion annually to support education spending in Jersey cities. Taxpayers from elsewhere in the state footed fully 90 percent of Camden’s education bill, while the city itself contributed a mere 2 percent, says the school reform group EducateNJ. In Trenton, state taxpayers paid 82 percent of the education bill; local sources ponied up just 8 percent.
Yet even as Garden State taxpayers have showered nearly $30 billion on city schools over the last decade, neither the courts nor the officials overseeing the urban school districts have demanded fundamental reform of the school bureaucracies, let alone innovative solutions like vouchers. The money thus has made little difference. True, state tests show a recent uptick in fourth-grade reading and math proficiency (though little gain for eighth-graders and high school students). But the improvements, such as they are, result at least partially from the state dumbing down its tests over the last few years. Soberingly, on national tests, Jersey students show insignificant gains for all grade levels since 1992 and considerably lower levels of math and reading proficiency than the state tests claim.
In recent state legislative testimony, the vice president of Newark’s Public School Advisory Board starkly framed the lack of progress. “There has been little, if any, real success that the minority and low-income children of my city can claim,” she said, thanks to the “abysmal failure of our system.” In Camden and Newark, that system spends nearly $1 billion in state funds annually—to produce a scant 2,000 high school grads a year.
It’s hard to overstate the might that public-sector unions—the teachers’ union, above all—now wield in New Jersey. With 62 percent of its state and local workers organized, New Jersey has the second-highest level of public-sector unionization in the country, behind only New York, according to unionstats.com.
The unions have wielded their clout to win among the richest benefits and highest pay of government workers anywhere. Teachers earn an average of $56,000 a year, with some of the highest salaries going to teachers in the state-financed urban districts. Not only are health and pension benefits for state workers—including the possibility of retiring at 55 with cost-of-living pension adjustments for life—plusher than the private-sector norm; on average, they’re 10 to 15 percent above what other state governments grant workers. Last year, pension and health benefits cost the state $2.5 billion, or 9 percent of the total budget. By 2008, the tab will grow to nearly $5 billion, and by 2010, $6.7 billion—21 percent of the projected state budget.
The unions ferociously protect their spoils. The New Jersey Education Association was the prime mover of a $300,000 ad campaign opposing a thus-far-unsuccessful effort by taxpayer groups to call a constitutional convention to fix Jersey’s tax woes. Two years ago, facing taxpayer pressure, the state legislature took up a bill to limit annual school spending hikes to 2.5 percent, or the rate of inflation, whichever was less. The teachers’ union leaned on legislators and got the word “less” changed to “greater,” inverting the bill’s intent. The Communications Workers of America, representing government employees, strongly backed a recent $1 billion increase in taxes on Jersey businesses, running radio ads demanding that firms pay their “fair share.”
All the union- and court-driven spending and misspending has burdened New Jersey citizens and firms with heavy taxes and led to a multi-billion-dollar redistribution of income from suburban counties to the state’s urban core—and from private to public employees. Jersey’s wealth belt—six adjacent counties in the state’s center (Hunterdon, Mercer, Middlesex, Monmouth, Morris, and Somerset)—handed over $4.2 billion in sales and income taxes in 2003 but got just $2.2 billion back from the state in spending, a Rutgers University study found. By contrast, Jersey’s most urban counties—Camden, Essex, Hudson, Passaic—paid $1.6 billion in taxes in 2003 but enjoyed $3.6 billion in aid.
Jersey’s progressive income tax accounts for much of this skewed distribution. Statewide, families making $150,000 a year or more are just 9 percent of tax filers but pay 55 percent of income taxes—a percentage likely to rise after last year’s levying of a so-called millionaires’ tax that hiked rates for residents making $500,000 or more, giving them a top rate of nearly 9 percent. (Neighboring Pennsylvania has a flat 3.07 percent rate for all taxpayers.)
Since their residents get precious little in return for their state taxes, most of Jersey’s suburban governments must finance their operations through property taxes—one reason those taxes are the nation’s highest, according to the Tax Foundation. Today, Jersey suburbanites find themselves paying for two sets of local governments and two school systems: their own (through property taxes) and those of cities like Camden and Newark (through income and sales taxes).
Many ordinary, hardworking New Jersey residents feel like the taxman won’t rest until he’s pushed them out of the state. Citizens for Property Tax Reform member Jo-Anne David lives in a small duplex on a 3,000-foot lot in rural Jamesburg but pays some $5,000 a year in property taxes. She bluntly sums up her situation: “I can’t wait to retire and get out of this state. I can’t afford to live here, and it’s a shame.” Leaving Jersey has become the sensible option for middle-class retirees, says Lou Albright of suburban Gloucester Township. “I have lived and worked in New Jersey all my life and now in retirement can no longer afford to live here,” he observes. “In so many ways the state tells you when you have completed your working life: We don’t want you—move on to Delaware or some other tax-friendly state.”
Hefty tax hikes are also leading many New York workers to reconsider their choice to live in Jersey. When Jerry Cantrell moved to Randolph, New Jersey, from a Pennsylvania suburb ten years ago so that his wife could take a New York corporate job, he knew that his property taxes would go up—from $1,800 in Pennsylvania to $5,000 in Jersey. But he didn’t expect them to keep rising—nearly 50 percent since he moved, so that he now shells out nearly $7,500 a year. “Somehow you don’t believe they can keep going up so much,” complains Cantrell, who leads the Silver Brigade, another taxpayer rights group. Cantrell has gotten more than he bargained for in Jersey in other ways. After leading a campaign to defeat a $45 million school building plan that the local education establishment supported, he had his house pelted with eggs and found threatening notes stuffed in his mailbox.
Jersey’s taxes have arced upward for 40 years, interrupted only briefly by then-governor Christine Todd Whitman’s mid-1990s income tax cuts. But state taxes rose most radically from 2002 through 2004, after Democrat James McGreevey became governor and the Dems, with union backing, seized control of the legislature.
McGreevey jacked up taxes and fees 33 times—totaling a whopping $3.6 billion—during his short tenure, which ended in less than three years, after the public learned that he had given a state job to his purported homosexual lover. Though his new “millionaires’ tax” got most of the attention, the middle class has taken a hard hit. McGreevey hugely hiked the tax on home sales, for instance, affecting some 140,000 families yearly, most of them middle-class. A Jerseyan who sells his $450,000 home must now pay a whopping $3,695 tax, an 80 percent increase; selling a modest $300,000 house would require shelling out $2,200, a 72 percent hike.
Under McGreevey, New Jersey also instituted its own estate tax, kicking in at $675,000 in assets, well below the $2 million starting point for the federal death tax. Now a Jersey resident dying with $1.9 million in savings will owe the state nearly $100,000—an egregious levy that makes Jersey Number One in the country in per-capita death-tax collections. Perhaps to protect its residents from dying with too much wealth, the state also raised taxes on retirees with $100,000 or more in annual income, charging them extra to help pay public-sector retirees.
Spending as wildly as he taxed, McGreevey borrowed nearly $2 billion to finance a colossal 17 percent increase in his last budget. Though the state supreme court judged that move unconstitutional, it let the action stand, because the money had already been appropriated.
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.
The shift isn’t just costing the state its residents. In 2004 alone, New Jersey netted a loss of more than $1 billion in personal income from out-migration, according to Internal Revenue Service data. “Jersey has blown a golden opportunity,” says former Republican presidential candidate Steve Forbes, a resident of Far Hills, New Jersey. “It could have been like Hong Kong, a haven for wealth and industry among high-tax neighbors like New York. Instead, Jersey’s now losing its own residents to places like North Carolina.”
McGreevey also chilled the state’s already inhospitable business climate. He boosted corporate taxes and ended the ability of struggling companies to deduct losses from their tax bills—one of the most ruinous corporate tax schemes in the nation. When the head of Cincinnati-based Federated Department Stores, one of Jersey’s biggest employers, noted that its state tax bill would more than double (to $10 million) and that it would reconsider any further expansion in the state, McGreevey attacked the company, challenging it to slash executive pay. His tax regime “drastically alters New Jersey’s corporate tax landscape, making it inhospitable to large corporations,” observed Glenn Newman, former deputy commissioner in New York City’s Department of Finance.
Meanwhile, Democratic legislative leaders installed as heads of the assembly and senate labor committees two lawmakers who also are union officials—thereby putting labor legislation into the hands of union bosses. Since then, the legislature has passed draconian new laws that require companies on public projects to pay union wages and that subject violators to criminal charges, not just civil fines. Jersey solons have also passed an “instant unionization” bill that lets union locals organize workplaces simply by getting a majority of workers to sign cards—no need for a secret ballot anymore. “It seems Trenton looks for ways to discourage firms from moving here or expanding here,” corporate CEO Fred Barré told a gathering of the state’s manufacturers last fall.
Not surprisingly, a place that big employers once viewed as a safe haven now ranks low on the list of places to do business. The Beacon Hill Institute, an economic research group, recently ranked New Jersey as the seventh-worst state in the country for business—and noted that Jersey had fallen more than any state since its previous survey a couple of years back. The Tax Foundation finds the state’s business-tax burden the country’s second-worst. Economy.com calculates the cost of doing business there the third-highest in the U.S.
The higher taxes and tangle of new regulations have nearly halted what was once a regional jobs locomotive. Though the state’s economy easily outperformed the rest of its region for the past 50 years (and occasionally even outpaced the nation), it has grown at only one-half its 1990s rate, and only one-third the rate of its 1980s boom, during the current robust national expansion. In a report issued late last year, Rutgers economists James Hughes and Joseph Seneca identified as a chief culprit in Jersey’s economic decline the state’s “recent intense focus on income redistribution.”
Can New Jersey break the stranglehold that unions have on its government? Might it restrain spending, cut taxes, and improve the state’s dismal business climate? So far, Jersey doesn’t seem headed in that direction under the new Democratic governor, Jon Corzine.
During his five years as U.S. senator from New Jersey, the former Wall Street executive was consistently one of the Senate’s most liberal members, with a long record of favoring higher taxes and greater spending. He won the 2005 Jersey gubernatorial election on a platform that promised over $1 billion in tax relief to property owners, but—just like his hapless Republican opponent, Douglas Forrester—he identified no significant cuts in state spending to free up that revenue. The money would come from revenue growth, he claimed—an unrealistic goal in a state with a struggling economy and a colossal deficit. Faced with the reality of governing, Corzine has acknowledged that the state’s fiscal condition is worse than he thought, and his advisors have begun floating tax increases as a solution.
Corzine unfortunately gives no sign of taking on the culture of political bosses and corruption that plagues the state. In a dismaying early move, he selected as his Senate replacement Representative Robert Menendez, the de facto leader of the Hudson County Democratic political machine. Even the liberal New York Times objected.
A crucial question for Jersey’s future is whether taxpayers can force Corzine to stick to his campaign pledges on taxes and corruption. The state’s growing taxpayer movement is not as effective as the revolt against Democratic governor Jim Florio’s 1991 tax hikes, which sparked a Republican takeover of the legislature the next year and Florio’s own electoral loss to Whitman in 1993. Today, angry Jersey taxpayer groups feel frustrated, having watched better-organized unions block their constitutional-convention plans. Like taxpayer groups around the country, Jersey taxpayers are discovering that, since the last big taxpayer revolt of the early 1990s, their opponents, especially the public-sector unions, have grown stronger and smarter, making ad hoc citizen anti-tax campaigns more difficult. Aided by the courts and the vast expansion of budgets during the flush 1990s, New Jersey’s tax eaters have little by little created a full-fledged example of the kind of regional government that the Left touts these days—a government that forces businesses and residents who have fled the dysfunction of the cities to pay the tab for those urban problems, whether they like it or not.
Further, Jersey is part of a cultural shift that is changing politics in many northeastern areas, as some high earners abandon traditional middle- and upper-class fiscally conservative values and vote liberal instead. In national elections, Jersey today is now reliably in the “blue” column. The trend is also showing up in local elections, where longtime Republican strongholds like Millburn, Summit, and Madison have elected Democratic city councils and mayors for the first time. Jersey may soon resemble its neighbor, New York City, as a place where the rich who tolerate high taxes or consider them a social obligation live side by side with the poor, but with a shrinking middle class.
In short, it may be that New Jersey, having for years enthusiastically welcomed New York’s residents and jobs, is now watching the Empire State take a measure of revenge as its neighbor settles into a familiar high-tax, low-growth inertia. Jersey has caught a bad case of the blue-state blues.
U.S. Census Bureau
2006 Median Income for a four person family
New Jersey: $87,412
North Carolina: $56,712
N.A.R. Median Sale Price of Existing Homes, Q3 2006:
NY/NNJ/Long Island NY/NJ/PA Metro Area: $477.7K
NY/Wayne/White Plains NJ/NY Metro Area: $558.6K
NY: Edison, NJ Metro Area: $415.1K
Raleigh/Cary, NC Metro Area: $213.5K
Charlotte/Gastonic/Concord, NC Metro Area: $198.3K
Wonder if NJ’s 53% higher median income has anything to do with higher median home sales prices?
WAAAAAAAAAAAAAAAH!!!
“Wonder if NJ’s 53% higher median income has anything to do with higher median home sales prices?”
Nope, because you overlooked alot of details.
For example, income taxes, property taxes, cost of living.
And as we know, or perhaps a stats person can back me, the “median” isn’t really that useful of a stat.
SAS
My first thought when reading this is that…..these Puerto Ricans are very racist.
What would happen if in my neighborhood, we had alot of Puerto Ricans moving in, and I went to the NYT and cried…. “We whites are in crisis mode now that the Puerto Ricans are moving in”
“As East Harlem Develops, Its Accent Starts to Change”
http://tinyurl.com/2w95gg
drop it,
Paste the link next time.
SAS
Keep in mind:
Real estate is tangible but not liquid.
Shares and bonds are liquid but not tangible.
Precious metals are assets that are both tangible and liquid.
SAS
CommonCriminal (289)-
Not like Ben Stein? However did you get the idea I didn’t like him?
His outlook on housing is just fine…except that the average person, by dint of the act of purchasing ONE house, has just made it the centerpiece of his financial life. Right now, the average American homeowner has over 70% of his net worth tied up in his house. And yes, historically, RE does a little better than keep pace with inflation. Preaching diversification into other financial vehicles that are just slightly higher-yielding than putting money under your mattress is just plain bad advice…not to mention that “indexing” and “balanced” are mutual fund code-words for “lousy returns”. If your biggest financial asset is a super-slow grower, then a younger homeowner needs diversification into something with a little more stroke…not another “granny” investment.
On the flip side, I’m not advocating that anyone begin playing stocks like a drunken sailor or dive into the pink sheets looking for big returns. It’s just an unavoidable fact that if you want to generate some real financial security (esp. in a high cost-of-living area like NJ), you need to tap a “multiplier” of some kind. It would also help that said “multiplier” does not feature the avalanche of fees, loads, distributions and adverse tax consequence that is the hallmark of most mutual funds (never mind the fact that your average sleepy little mutual fund is also trying to get the gov’t to allow it to operate more and more like a hedge fund). Investors often overlook the adverse consequences of compounding when it comes to examining these annoyances on the debit side of the ledger. Basically, you can’t get rich by splitting your money with other people.
Finally, who in his right mind can accept advice from Ferris Bueller’s principal (Bueller?…Bueller?)?
Anybody confused beside me regarding Drop it? What is he posting, were we spammed?
KL
all, looks like we are being spammed by ‘drop it’.. he’s copy-paste’ing from another blog – dont want to name it lest I increase traffic there (they look pretty desperate indeed)!
KL,
I thought the same, spammed. I asked Drop It [#281], Who am I, why am I here???
By the way,where is that distinguished road???
Is Drop-It’s blog a splog? I don’t wanna go there.
#155 housingcrash:
My first preference is Summit/Short Hills/Milburn. However the I would never every pay $800K for the crap that is being offered for that price. New Providence and Berkeley Heights offers you much newer and nicer properties in that range, if you can find one.
For example:
This is what you get in the $700K to $1 Mil range in Berkeley Heights and New Providence.
http://tinyurl.com/ywupdb
And in Summit and Short Hills/Milburn.
http://tinyurl.com/244c2o
If you are interested in New Providence there was a fsbo listing in today’s NY times. It is well priced compared to current inventory.
“New Providence. B Bed/2.5 Bath, very spacious walk-through split level: Central Air, Attached 2 car extended Garage; many upgrades, walk to schools, close to transit. $619k. Owner 908 464 0479”
Drop it is hinting at a way other blogs allow users to rate participant comments as a way to rid the riff-faff.
By golly, the masses are correct. We’ve been spammed!
WAAAAAAAAAAAAAAAH!!!
…and then there were three.
…there goes the neighborhood.
#192 UnRealtor:
We must accept that sellers don’t do charity work. The are entitled to ask what they want for their property. As Home Seller pointed out, there will always be uninformed sellers and buyers in the market. And if you are a smart seller and find an uninformed buyer, why not??
If I had a property to offload, I would hope that they haven’t heard about this blog.
I live in the Pompton Plains, NJ. On My block alone there are 3 houses for sale. One that is new. Been listed for at least a year. The others have been listed for 6 months. I see no activity at all. The new house has had open house every sunday for the past year. Is this town no longer desirable, or have home sales gone to a complete halt here. Anybody have data on Pompton Plains? Thanks. Thinking of selling here, but not sure, if houses are not being bought up.
Weird weekend blog, but one that has me thinking about possibilities.
Some guy’s trying to tell people to move to NC for some reason. Haven’t most of the runners ran already? NJ’s at the point in which fixes start.
Maybe the people left are the ones who are going to be part of the solution, not the problem. [Then all the runners can go back home, once everything is fixed.]
I’m not trying to say that the people on this blog have all the answers, but a few get tossed around, that’s for sure. I personally made the decision to hop over to PA (maybe a mile) but I have a vested interest in seeing NJ find a high-quality, long-term solution to being a NYC/Philly go-between.
Maybe the answer is redefining itself away from the go-between status. Viewing income from NYC more as gravy than the meat of the state. Putting in more commuter lines and transit villages is treating NYC as the meat. It’s investing funds away from NJ. A temporary money fix.
Internally, representatives must find tools to work with too-powerful unions, rather than allowing its non-union citizens to act like little chihuahas barking at the legs of huge dobermans, then turning tail and running somewhere else when the big dogs get out of control. Eventually, the big dogs will start to fight each other when the scraps get small enough. All the little dogs need a strategy, other than blasting unions in the media for being too large.
Nope. Mob, Unions, Corrupt politicians all have a TIGHT grip in the state’s piggy bank. There is no solution. If we cut out property tax in half imagine the choas in the school system. Imagine if we cut the state’s sale tax imagine the pension, benefit chaos. The machine is broken and unless you are among the elite or already have your house paid in full … game over.. or you are a rich laywer,doctor surgeon. But for 9-5 ham and egger blue collar workers that make less than 60K a year.. there is no hope except for shacking up with other people… do you want to raise a family like that?
sorry to add on… not to be a doom and gloomer but I haven’t seen any significant price drops on condos that are around 300 to 350k. The drops are on prices for homes above 650k which is beyond my affordability for a starter home.
i’ve been tracking about 80 properties in the $500k-$900k range for sale since 3rd quarter 2006 in the nyc commuter towns in union, essex and morris. contracts are sizably up since early december. properties are definitely starting to move. overall inventory is starting to crawl up. from what i’m seeing coming out a good portion seem to be more appropriately priced to market value. curious to see what happens on the inventory side come end of feb.
#303
Why would you buy a house for 800K in Union County if you can the same house in Monmouth county for 400K?? The same commute to NYC.
#311
Too bad our governor sleeps with the unions, otherwise thing could change in NJ. Since he got 500M+ from Goldman, he has no incentive to look after the little guy.
any chance of NJ becoming a “right to work” state?
To all the inventory gurus out there, any idea why the inventory in Manchester, NJ 08759 and Berkeley, NJ 08757 dropped by %50 last week??
We are talking 500+ properties.
#312 drop it:
You are correct. Price drops have started from the top. I saw fairly steep 20% price drops in the $1 mil and above range last year. I see a lot more decent properties in the $700K range this year. Spring will give a clearer picture. If you are in the 300K to 500K range, price drops are only under 10% unless ofcourse the place is total crap and the seller has his head tucked in to his ….
This is why I have said before that this correction will be a multi year thing given there is no other shocks to the economy.
I have started to see value in my price range, and I do believe I will have a better choice this year than I had last year. If I was serious about buying, I would have started bidding for properties now. There are two reasons that I don’t want to buy now. The first is that my rent is only about 5% of my gross annual income. (My wife is a stay at home mom). This gives me a lot of cash to put aside for other investments and a possible down payment. I know I will cut out a huge amount to the IRS come april but it’s a small price to pay for freedom.
The second reason is that I have two young kids. Son is 22 months and daughter is 8 months. With my work and kids, I have absolutely no time to search for homes and maintain a home. I am renting a townhouse now so that I don’t have to deal with snow/yard/repairs etc. I don’t really want to buy until 2009 or so when my kids are old enough to start using the yard, etc.
to each his own in what they find important in life, but to me here are key things you’ll miss by moving out of NYC area
pizza
bagels
egg and cheese on a roll (what kind of roll they’ll ask)
a real deli sandwich
the energy
cultural/ethnic diversity in all it’s forms (neighborhoods, culture etc.. e.g. i once met a witch doctor from africa at a party)
quality of education
5 boroughs – being able to eat just about any kind of food at any time of day…all within a block or two
#313 Richard:
Though I disagree with your outlook on the realestate and general economy. I do see the same thing in the 800K to $1mil price range. Good homes prices fairly get lifted in a few weeks. If a home is on the market for more than 2 months, the it’s either crap or not priced correctly.
>>From what i’m seeing anything over 650k is dropping hard with houses that were 800 going for 600k.
this observation is completely contrary to anything i’ve seen on actual data from the GSMLS. where are you talking about and is this just a feeling or do you have hard data to validate?
Richard #319
Make that 4 boroughs- you can’t get anything but Italian and Chinese in SI. Oh wait, there is 1 good Indian restaurant.
chicago on #262 / NY Times. here’s one thing i can agree with you 100%
drop it, you sound like you work for the NC tourism or hospitality board. as bc bob said, come clean on your contradictory posts.
NJ as a right-to-work state? Kinda like Norma Rae in reverse.
LOL!
Clot,
My interest in this blog is that of a barometer of sentiment in the SFH RE market. There is very little so called data on the site, most attributable to the laudable efforts of JB, but certainly even less context by which to evaluate the anecdotal evidence presented here so often. Similarly a popular columnist, be it Stein or others, provide just such an indicator and as you note he has flipped as of late.
As for your suggestion that you are going to outsmart the RE market and multiply your gains by means of leverage (your term multiplier), and yes it is a market with two sides to the trade,is analogous to the mutual funds you deride or worst yet the dot boom daytraders employing margin. I’m not advocating managed mutual funds, 80% or more which under perform the market, but simply diversification. What I respect about this community is that from I can tell most members have concluded that their finances should be both diversified and sound before deciding to enjoy the expense of homeownership. Why don’t we focus on deriving our income from being the most competitive and successful members of our chosen industry. Oh, thats right your industry is RE and despite your skepticism you too have a vested interest in seeing members churn the market despite its direction. This stand-off must be killing someone who otherwise provides so little value to their industry. Remember slow and steady wins the race.
#314 Frank Says:
Monmouth and Union county are not the same commute to NYC. Check the train frequency/timings on http://www.njtransit.com. Besides I drive and need access to the I-78. There is a reason why you pay a premium for the good towns in Essex/Union county.
Speaking of slow and steady, see today’s NYT article on indexing http://www.nytimes.com/2007/01/21/business/yourmoney/21etfs.html?_r=1&oref=slogin
#327
I commute from Monmouth Co. to NYC and it takes me the same amount of time as it used to from Union Co. 400K is a high premium to pay for access to I-78.
>>I commute from Monmouth Co. to NYC and it takes me the same amount of time as it used to from Union Co. 400K is a high premium to pay for access to I-78.
tell us how you commuted (e.g. car, train, bus) and from what town in monmouth versus union you are comparing.
#329 Frank:
I really hadn’t considered Monmouth county.I am open to suggestions and will look look into this option if the commute works out. I don’t want to buy for atleast another year so I have plenty of time to consider my options.
Frank Says:
January 21st, 2007 at 9:53 am
Why would you buy a house for 800K in Union County if you can the same house in Monmouth county for 400K?? The same commute to NYC.
Frank: if you live in range of the ferry and work downtown, I would argue that Monmouth’s commute is SUBSTANTIALLY better
The pricing gap has dropped dramatically as a result.
Drop It:
Basically North Carolina is New Jersey circa-1990. Don’t you think that some of the same issues will follow the masses there? If you had looked at NYC in 1990, you would have said poke it with a fork.
New Jersey is going to get its a55 kicked in the next decade. However, from decimation breeds opportunity.
True but… here we are at the ground floor.. buy your home in a nice area in NC, or GA or DE or whereever and let the masses come 20 years later… you already have your home and you are set or sell when the price becomes inflated. NYC is centralized, NJ’s problem is so spread out it’s impossible to fix. Manhattan never looked like newark,camden, trenton.
See the problem I have is renting a townhome in Franklin twp,nj or anywhere near New Brunswick train station costs around 1700 ish. Now I want to buy a townhome for 350 ish. If the drops are 10% then it would be better to buy a townhouse at an inflated price but if I do.. the greedy grubbers win and i just added to the problems of nj. I wish I could move further north but the North east corridor train is PACKED past New brunswick in the morning. I lived near metropark nj and so many times the train would be packed and you could not get in and you had to wait for another train and that would be almost packed and getting in would be a dangerous shoving match.. considering the huge gap between the platform and train.
Antitrump, 5% on rent is amazing! kudos
I spend about 14% on my townhouse – and I have similar aged kids
“Manhattan never looked like newark,camden, trenton.”
Obviously, you never visited in the ’70s.
outlook for 2007 (a.k.a. year of the bagholder):
In the red corner, wearing wearing a dark suit and dark glasses with a weight of 800 lbs – Da’Homebuildeeerr !!!
In the blue corner, being very carefully massaged by the NAR, with a weight of 150 lbs – Da’HomeDebtooorr !!!
Let’s Get Ready To Rumble!
(hint: da’ Homebuilder wins by KO in the first round)
“I lived in Essex County, NJ and am now in York County, SC”
“We just moved to Hickory from Monmouth County.”
“I am a native New Yorker who is considering a move to North Carolina next year.”
“See the problem I have is renting a townhome in Franklin twp,nj or anywhere near New Brunswick train station costs around 1700 ish. Now I want to buy a townhome for 350 ish”
Drop it,
All your posts. These are more confusing than figuring out how CMO’s are sliced/stripped and how the indivdual tranches are priced. What the hell gives???
Al, you said, in regard to estate sales:
The only problem – you are dealing not with one kid by with the whole family……
Not necessarily. Usually, one person will be the executor, and usually, the family wants to expedite the sale. You can’t leave a house vacant for very long. Every homeowner’s insurance policy has the same stipulation – for the insurance to be in effect, the house has to be occupied. So there’s a concern about vandalism, break-ins, etc., if the house is empty. Someone has to check up on the house constantly, which is burdensome. And the house has on-going expenses.
If someone has lived in the house long-term – and the house has been maintained over the years and upgraded, not with an eye towards reselling but for the owner’s comfort, what the real estate types call “pride of ownership” – those might be exactly the kinds of houses you want – the houses that come on the market once in a lifetime because they’re good houses, in good neighborhoods, with good neighbors.
Lowball,
Regarding the 800lb. gorilla in the red corner, tko in the first few seconds of the round. Cash flow/survival is in, profits are secondary at this time. Good luck to recent buyers of new homes,[the past few years],now looking to sell vs. the H-Builder.
“Moody’s Investors Service is considering lowering its rating on a number of home builders over concerns about sharply falling cash flows.”
“In a report, released Monday, the agency said the ‘worse-than-expected housing slump’ is causing a number of builders to generate negative cash flows, making it tougher for them to cover interest charges.”
‘There’s always the danger that if incentives are removed or phased out, the buyers will stay on the sidelines.’
http://www.beurs.nl/nieuws/artikel.php?id=190591&taal=US
#331
I live in Matawan, NJ, right by the train station, it takes me 50 minutes to get to 42nd St. by bus or 50 minutes by train/Path to downtown. 4bdr house with a pool sells for about 400K down here.
Scribe,
You are exactly right. I would rather deal with an estate that had numerous benefactors. For example let’s take a house that is listed at 500k and there are 10 benefactors. Say it ultimately sells for 400k, it’s a difference of 10k each, minimal to say the least. On the other hand if there is one benefactor it is a difference of 100k, a cause for much greater resistance. It all comes down to how you present it to the trustee, with multiple benefactors.
China forex regulator says intl payments imbalance pressuring exchange rate
http://www.forbes.com/afxnewslimited/feeds/afx/2007/01/21/afx3346670.html
‘This year’s focus is to gradually ease limits on the size and products of institutions and individuals’ overseas financial investment and to try to make breakthroughs in expanding outbound financial investment,’
The regulator also said that it will ‘actively explore and expand the ways and channels to use foreign exchange reserves.’
This link is from Hovnanian back in 2000. Notice the prices of new construction in various communities. Pretty sickening, Huh? Salivating at the thought of paying those prices today? Now consider what homeowners are asking for their p*ss smelling POS dumps. It’s easy to brain wash the masses, isn’t it? I’m telling you, make a stand, organize and refuse to pay these ridiculous prices.
Oops.. here’s the link: http://web.archive.org/web/20000301224111/www.khov.com/homes/njcpage.htm
JB,
My post is up for moderation.
BC,
But the other factor – if the house is a good one, and the house is coming on the market for the first and only time in decades, there could be a lot of interest.
We had two estate sales in our family over the last few years. My relatives who were nearby started getting calls almost immediately – before the houses were even listed. Both houses sold very fast at full asking price – in December and January.
The truly desireable houses come on the market rarely. So I would not assume that an estate can be lowballed all that easily. With one of the houses, my relatives and their real estate agent had a lot of people who tried to haggle and lowball, knowing it was an estate, and they got left in the dust pretty fast – woke up and found the house had already been sold at full asking. This was in a little neighborhood considered highly desirable where very few houses ever come on the market. Usually, houses are available only when it is an estate situation.
In both cases, my relatives might have been able to get more, if they had been willing to go through more of a process. But they got good real estate agents to establish a fair asking price, and once that price was obtained – done.
“Mob, Unions, Corrupt politicians all have a TIGHT grip in the state’s piggy bank. There is no solution.”
your god damn right about that….
SAS
back in the 70s the Times Square was the biggest red ligt district this side of Hong Kong.
Now, Times Square area is nothing but Disney and Espn.
BUT…
that is slowly starting to change. There are more and more strip clubs and dirty book stores starting to pop up.
Times square… like Vegas….. is starting to put the “family” theme behind and goes with what sells best– SEX.
SAS
Moderated twice today…think it’s for using the Communism-lite word, “soc***ism”.
Sorry…that’s the only way I can describe NJ. Although I suppose “welfare state” is a good alternative.
Fellas when I say TIGHT I mean if you try to take their gravy train away they will A) fuq you up with a bat B) trash your home and threaten your family C)Run around and protest in Trenton. My mom works for the state in Trenton (ewing) and when reforms were coming down for pensions.. emails, word of mouth,faxes started pooring out trying to get people to come down. Its like a informal mob/union… how many came into trenton that day? I forget but it was a story on the main site here.
er wait:
http://www.truthout.org/cgi-bin/artman/exec/view.cgi/67/24440
Outside the State House, as many as 10,000 teachers, state employees, firefighters and other workers staged a two-hour rally denouncing the Legislature’s attempts to overhaul the state’s pension and health benefits system as part of a property tax reform package.
Bottom line: we are fuqed… there is no fixing this all these people are accustomed to obnoxious high salary,pensions and benefits and will fight till the death to keep it that way. NJ is the welfare state. You think cozine is going to take these people head on? NOPE. He has a family to worry about and who knows what dirt the mob/unions have on him.
Just drop it and leave….the games over.
This is the problem:
http://graphics10.nytimes.com/images/2006/12/11/nyregion/11trenton600.jpg
http://www.nytimes.com/2006/12/11/nyregion/11cnd-jersey.html?ex=1323493200&en=590e9d6c1e836285&ei=5090&partner=rssuserland&emc=rss
Other attendees said pension and benefits were crucial in their decision to teach.
“I sacrificed all of my career working for less money because I knew I had a decent pension,” said Maureen Lord-Benson, 57, a resource-room teacher at Dr. Charles E. Brimm Medical Arts High in Camden.
Duane Raroha, 49, an auto-technology teacher at Camden County Vocational and Technical School, said he left working at auto dealerships and took a $15,000 pay cut to teach nine years ago in hopes of having a rewarding career – and good health benefits and pension.
“You don’t come into this job looking for a lot of money,” Raroha said. “You look for retirement benefits.”
Time for another round of “My Favorite Things About the South”:
1) Tractor pulls.
2) Burgoo. If you don’t know, don’t ask.
3) Bass fishing as a professional spectator sport.
4) Brunswick Stew. Especially “heirloom” recipes featuring squirrel meat.
5) People wearing coats & ties and cocktail dresses to football games.
6) Those same people getting hammered out of their brains and barfing on their dates.
7) Krystal. Ratburgers and skillet scabs for everybody! Like White Castle with no food quality or sanitation standards.
8) Grits. Move it to NYC, put an ounce of greasy meat in the middle, call it “polenta” and charge $37 a plate.
9) The Kentucky Derby. Legitimately the most exciting 2 minutes in sport.
10) Larry the Cable Guy (who is actually from Nebraska).
Moderated again…jeez, I’m not cursing!
#344 Frank:
I have a friend who bought a new construction in oldbridge. He mentioned that it is hard to get a parking space in aberdeen/matawan so his wife drops him off and picks him up from Matawan. He tried the ferry but the monthly pass was some crazy amount and the frequency was not that great in the evening. I think the last one leaves at 7:30 or so. If you drive apparently you have to go a couple of miles on country roads before you get the parkway and that takes him a long time just to get to the parkway.
http://www.suntimes.com/classifieds/homes/homelife/221450,CST-NWS-lend21.article
“Gov. Blagojevich on Friday suspended a law requiring counseling..
…in the wake of decreasing home sales in those communities and mounting criticism from community leaders such as the Rev. Jesse Jackson, who say the law, aimed at curbing predatory lending, is hurting those trying to buy or sell homes in these communities…”
I’m going to rant right now…..I’ll sum up living in NJ:
1. 52% of your property taxes will fund 31 school disctricts.
2. Taxes in 1986: $300 a year. Taxes in 2006: $7,500 a year.
3. No more open space, but tons more strip malls
4. Unhealthy air quality in most of the state
5. Our major cities are dangerous and some have been proven to be breeding grounds for terrorists.
6. Major industries, such as Johnson and Johnson, are pulling out of state
7. No decent housing, statewide, for a family of 4 for under $400k
8. Worst traffic anywhere in the east, road rage rampant
9. All but the richest towns have a horrible school system
10. Highest auto insurance in the US
I am extremely frustrated living in NJ. Everything said on this forum about NJ is absolutely true. This state is so f’in corrupt it’s ridiculous. If you investigate a bit in NJ, you’ll find that 52% of your property taxes in NJ go toward funding 31 schools!!! These are so called “Abbott Districts”, and we pay nearly $20,000 per student! And all of these schools regularly fail in testing. The solution- raise taxes because there isn’t enough money. I’m sick of it.
I make about $50,000 a year, a decent salary almost anywhere else in the country. I cannot afford to live here. My entire family lives here (with a small number in Upstate NY). I work 60 hours a week just to keep up. I see nothing but unhappy people working so hard just to afford a shack here. Then the government steps in and removes $7,000 in property taxes from you.
I wouldn’t mind staying, but the fact is that in my field, I’m at top rate in salary. My wife and I have few other options but to leave, as many people we talk to here are in the same position. We are not going south, we are moving north to Upstate NY. For us, we just like the climate and culture better in the north than the south. The rat race is moving south, believe me. We very nearly moved to Virginia (I got a job there at 10k higher than here) but we rescinded the offer because the writing was on the wall there. We witnessed the changes over the years in NJ from a great state to the epitome of the rat race. It is happening in VA right now exactly as it happened in NJ. We didn’t want to move somewhere that we would have to leave again in 10 years.
“I lived in Essex County, NJ and am now in York County, SC”
“We just moved to Hickory from Monmouth County.”
“I am a native New Yorker who is considering a move to North Carolina next year.”
“See the problem I have is renting a townhome in Franklin twp,nj or anywhere near New Brunswick train station costs around 1700 ish. Now I want to buy a townhome for 350 ish”
“We are not going south, we are moving north to Upstate NY.”
Drop it,
What the f*ck?? You have more freaking loopholes than our legislators.
Why even acknowledge drop it. He is full of it.
I really hope that blog that DropIt came in from isn’t a splog (spam blog) or a blammer (bombards other blogs with spam).
Grim,
Are you getting an abnormal amount of trackback pings? This DropIt guy is trolling in a very strange way.
Drop it crawled up from under this rock: http://www.city-data.com/forum.
Just another ‘value added’ feature I bring to the table…
:)
Clot,
Nothing strange that I can tell.
jb
However, *this* is interesting.
http://www.redbankgreen.com/redbankgreen/2007/01/hovnanian_hairc.html#more
“OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher.”
“Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4 percent, or $10.1 billion, of their U.S. government debt securities in the three months ended in November, according to Treasury Department data.”
China, the second-largest holder of U.S. debt, also is cutting back holdings. The central bank, which owned $346.5 billion of Treasuries as of November, trimmed purchases by 1.7 percent in the first 10 months of 2006, Treasury figures show.
“The Chinese are slowing down their buying, so that leaves a big hole after the oil money,” said Brenner at Hapoalim Securities.
http://bloomberg.com/apps/news?pid=20601087&sid=aqnC4ssoiBFc&refer=home
Was just about to post that BC..
jb
“Bottom line: we are fuqed… there is no fixing this all these people are accustomed to obnoxious high salary,pensions and benefits and will fight till the death to keep it that way. NJ is the welfare state. You think cozine is going to take these people head on? NOPE. He has a family to worry about and who knows what dirt the mob/unions have on him.
Just drop it and leave….the games over”
This fellow is right on the money. I have to agree with him.
SAS
>>I live in Matawan, NJ, right by the train station, it takes me 50 minutes to get to 42nd St. by bus or 50 minutes by train/Path to downtown. 4bdr house with a pool sells for about 400K down here.
by train it’s 55 minutes or longer to penn, 42nd obviously another 15 minutes since you have to hop on the 1/2/3/9. i can’t see a bus taking you 50 minutes during rush hour unless you’re leaving butt early. still most of union county will get you to NYC faster and trying to compare matawan to most union county towns is well just silly.
Clotpoll,
Are you kidding? I hope so, or you have a big misconception of the south. no offense. I just don’t agree with your post. Of course, there are your typical hicks down there, but not as bad as you paint.
SAS
Here is my Bergen county open house report for the weekend. I visited 5 houses in Glen Rock, Ridgewood, and Oradell this weekend, and each house with exception to one in Ridgewood had wuite a bit of activity. One of the houses had 3 pages of names on the sign in sheet and the first house we saw, in ridgewood had about 2 couples show up while we were there.
all shills
BC Bob Says:
January 21st, 2007 at 8:38 pm
“OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher.”
Bost: did I make this call? We still haven’t seen a material move in the yields. The selloff has to maintain….which can happen, but we are in for a cold stretch of weather……also, to much celebrating by people…demand is rising
Still, the Saudis would love to stick it to Chavez and Iran
SAS (374)-
Not to be repetitive: I grew up in Memphis, school at UNC. Nothing in my “favorites” lists is anything but the unvarnished truth (and a little comic relief, I hope). And, I had a great childhood there…no resentments or bones to pick. Believe me, Southerners are the first to laugh at ourselves.
And, I got a million more cued up and ready to go. Sleep on these:
1) Mudcatting. Take your four-wheeler into a swamp, and deliberately try to get stuck in the mud. Good times.
2) Peaches marinated in moonshine. The equivalent of Owsley/Merry Pranksters LSD (not that I would know…).
3) Taxidermy as a respected, white-collar profession.
4) Frog-gigging. AKA defending yourself from copperheads.
5) Chiggers.
6) Enough rice-eating and ancestor-worship to convince outsiders that we’re a lost tribe of Chinese people.
7) Fried Snickers bars.
8) Dixie Beer.
9) Chain-gang road crews. Just like in Cool Hand Luke.
10) Inbreeding.
Clot #358,
aren’t you forgetting something on your list?
Where’s your Woodford Reserve?
I mean if your going to put the Derby up there, you should at least include a proper beverage!!!!
“OPEC nations are unloading Treasuries at the fastest pace in more than three years as crude oil prices tumble, sending bond yields higher.”
BC,
Still long gold?
Profuscious (380)-
Right you are. I’m totally hooked on Knob Creek, though.
“Bost: did I make this call?”
Chi,
Asking who ought to be the boss is like asking who ought to be the tenor in the quartet? Obviously, the man who can sing tenor.
Jay,
How many times have we heard Goldilocks??? They should just stop after the first 4 letters. To answer your question, yes. IMO, will be a combination of dot com and RE, wrapped into one trade. However, will be extremely volatile. At this time, there is huge physical demand showing up on $20-40 breaks.
Again just an opinion, not a recommendation.
BC,
And if commodities continue to fall, do you think gold will follow? It is part commodity after all, as well as store of value.
Of course just looking for an opinion, not a recommendation!
Jay,
What really has impressed me is that copper and crude got blasted while the dollar rallied. Gold held like a rock, tested $600 and rallied, in an environment where it should have sold off. Remember, it is a precious metal, not an indusrial metal. It’s is a quasi currency play. China only has approx 1% of their foreign reserves in gold, much,much less their trading partners. They are very slowly diversifying out of the dollar. Say, over time they increase their % up to 5% in gold, this represents approx 2/3 of the world’s current supply. There is a finite amount of gold in the ground without further exploration, which takes years and years. There is an unlimited amount of dollars circulating throughout the world. What is our dollar really worth?? No ones knows how much is in circulation. But we do know the world is buried in dollars. I view it as a dollar play rather than a commodity play.
It will be very volatile, the nature of the beast. At this time, after every selloff, there has been great physical buying in overseas markets. This is the type of buying that supports trends. Remember, this could change with an emerging market blow up. That being said,I think it will be much higher in 3-5 years. I’ve been long since 2003 and hedged.
I am in futures,options and stocks. I don’t own gold coins. I don’t recommend anybody going into futures unless they are well schooled in the technicals. This is not the market to buy and ignore, unless you have a bullish long term view and are buying bars/coins, dollar cost averaging.
Remember this is just an opinion. I emphatically state that no one should be in futures unless they understand the risk parameters/technicals completely and are prepared to lose $.