From the Record:
Skyrocketing prices come back to earth
John and Susan Scerbo put their five-bedroom Ramsey house on the market more than a year ago, expecting to sell within a few months.
But the house is still for sale, even after the couple cut the asking price from $695,000 to $649,000.
“We got caught in a tough market,” said John Scerbo, a financial consultant. “Buyers are slow to act, and there’s enough inventory out there that they can take their time looking.”
As the Scerbos have discovered, the overheated 1999-2005 housing market cooled quickly in 2006.
And real estate experts expect property prices and sales to remain slow in 2007, both nationally and in northern New Jersey.
“A lot happened during the boom, and we have some paying back to do yet,” said David Seiders, chief economist with the National Association of Realtors.
Or, in the words of Oradell Realtor Margrit Vogler: “We had a very good run, we saw beautiful price appreciation, but how could it continue like that? If it did, a little Cape Cod would cost a million dollars. Who’s going to buy that?”
In North Jersey, house prices are expected to be flat or down slightly — around 3 percent or less — in 2007. But even with the downturn in prices and sales volume, 2007 is likely to be a historically solid year — just not as over-the-top as the record-breaking years we’ve seen recently, both nationally and in New Jersey.
…
Although the National Association of Realtors has not yet produced its final price data for 2006, Karl Kern of Kern & Rogers Realty Inc. in Wyckoff and Mark DeLuca of Mark DeLuca Realtors in Teaneck both say prices in the Bergen County area dropped about 5 percent in 2006. Both said another drop of 3 percent or so is possible in ’07.“Inventory is still very high, and inventory puts a whammy on prices,” said Kern.
Tough as the softer prices may be on sellers, they come as welcome news for buyers.
…
Walters predicts that prices will remain soft for 2007 and 2008. Kern has a similar view. After 2007, Kern predicts the housing bear market will become an “inchworm” market, with prices inching forward slowly.“I think it’s the nature of the cycle of real estate that we’re not going to have a boom again for a long time,” Kern said.
From MarketWatch:
Port Authority of NY and NJ may sell Freedom Tower: WSJ
The Port Authority of New York and New Jersey is in talks to sell part or all of the Freedom Tower, the $3 billion central building in the new complex on the World Trade Center site, to private-equity and hedge funds, The Wall Street Journal Online reported, citing people familiar with the situation. The project has so far relied for development on government funding and insurance proceeds. Investors and analysts told the paper that a number of investment firms would want equity in the Freedom Tower, which is to rise a symbolic 1,776 feet and is set for completion in 2012. Separately, the people familar with the situation told the WSJ that the Port Authority is in talks to sell development rights to one of the five towers planned for the WTC site to J.P. Morgan.
From Bloomberg:
Merrill Loaded for Bear in Mortgage Market That Humiliated HSBC
Merrill Lynch & Co. Chief Executive Officer Stanley O’Neal was willing to lose $230 million to catch Bear Stearns Cos. and the shakeout is just beginning.
That’s because Merrill is determined to capture a dominant share of trading in bonds backed by home loans, the fastest- growing debt market since 1995 and this year’s most troubled. O’Neal’s enthusiasm for mortgages to potentially delinquent borrowers coincides with the highest default rate in more than six years, a record contraction in demand for so-called subprime loans and descending bond prices.
Merrill already has bankrolled two home lenders that subsequently failed and purchased a third, First Franklin Financial Corp., for $1.3 billion, just before HSBC Holdings Plc disclosed that its bad-loan provisions increased 20 percent because of the unraveling U.S. subprime market.
“You’ve got to remember” that New York-based Bear Stearns, the perennial leader in mortgage bonds with only a quarter of Merrill’s 56,000 headcount, “got into this business at the height of the boom, when you could not lose,” Angelo Mozilo, Countrywide Financial Corp.’s CEO, said in a telephone interview from his office in Calabasas, California.
“The real test will come for these new players in how they do in this new cycle,” Mozilo said. “A couple may do fine and a couple won’t do fine. Just because it’s Wall Street and they’ve got into the origination business doesn’t mean they automatically win.”
Employees in the town of River Edge seem to be in with the builders. Apparently one of the town employees in the building dept accepted a land survey by the builder for property he did not own yet. The town employee was very defensive of the builder and was harsh on a neighboring home owner when questioned on property lines.
Also, I heard that at one of the town meetings, some of the younger residents were saying that River Edge is an upper class town now, and the small cape cods and ranches should not be in the town because they don’t want people to think River Edge is a starter town.
But back to the town employee, who also knew specifics about neighboring properties…odd don’t you think?
In North Jersey, house prices are expected to be flat or down slightly — around 3 percent or less — in 2007.
Or come on – 3% – what are we to worry about!!!
I will still list my house at highest 2006 price – someone will buy it – the other houses will be priced the same or only 3% less. We are in NJ and there is a lot of rich people here…
IT’s only 2 hours from NYC.
REal estate in NJ only goes up. Plus if i do not make 200K on the house how the hell am i going to pay for my crediut cards debt, car and move out of NJ and by house elswhere for free??
Buy my house and pay for my retirement/car/big screen TV. I deserve it. I am the homeowner and you are abitter crywannabehomeowner renter! Loosers!
Al,
Careful there. You’re starting to sound bitter.
Starter town thats great, In my town I bet they want to get rid of my development because we are bringing down the average property value…
What snobs, but then no money no Northern Jersey for you.
Hillary/Obama ’08
A slam dunk for the GOP!
LOL
That was a post to replace some of the trolls activity on this blog.
Did I do good ??
Anyways, yesterday I told my realtor that we are not interested in buying this year. She was very disappointed and say just make an offer. When iI told her my offer (100K below listing price) amount she said that I have been unreasonable. I came back with calculation of the fair price based on the rents of comparable homes +5% premium(so actually you will be loosing money if you decide to rent it out, and thats counting 100% accupancy and never problem with tenants not paying!!!) (BTW taxes in NJ are B#$% they really kill any hope of affordability/rental profitability.)
She got quiet for a minute and than said – well I am sorry you are feeling this way, I will contact you if prices ever get into your price range or feel free to contact me if you see anything you like arount here. She was a nice person and spent quite a bit of time with us, and I do feel sorry for her, since she is no the one who is setting the prices up – realtors are hostages of home owners right now…
P.S.Out of the 10 houses we looked at 8 were on the market for 120 days or more, total prices reductions: 5K on One house, 20K on the other(the biggest and nicest of them all) and other 6 are listed at the same price as in the very beginning of 2006.
3 more houses came on the market last week inthe same price range. I think there will be no spring surge n this samll town, since almost all listings stayed active through winter…
Also 6 out of old 8 listings came up as new with 0 day on the market after superball. They were withdrawn, and relisted ans new listings next week – I thought you can not do that and it has to be at least 30 days before relisting???
Watching some of the new inventory come on market it appears sellers still seem disillusioned. The prices are just as high as inventory that has been idling on the market for months. Sorry sellers, but you’ll have to wait just like the sellers before you get my money, unless the price cuts are substantial. The only places that have drawn any interest from me are the places that are priced lower than market and where I have seen price cuts from 2005 of at least 15%. The only bid I placed was on a home that was dropped from $750k to $600k. The neighbors house sold for $750k in 2005. THis will get buyer interest. Not small 3% price cuts. This is the point where some interest was drawn to this house. It wasn’t even a major bidding war, only one other buyer and I dropped out of the bidding. Eventually I just didn’t pursue the house thinking I would wait it out until this fall to see even better deals.
re: bigwindow :#3 #4
I don’t understand what you mean by “accepted a land survey” or “..also knew specifics about neighboring properties…” ??
A Construction Code Official or sub code or ‘building inspector’ is in a true sense NOT a boro employee in this State of NJ—-All operations of the Building Department are paid for by inspection permit fees and fines…The only input by the borough is the appointment of the various inspectors—Full and part-time… After three years of full-time employment they are granted job tenure (Just like NJ teachers are granted tenure)
The Building Department has a lot of power within a Borough and basically just has to ‘answer’ to the STATE through the Dept of Community Affairs and Justice Dept….
Bob Reiss
“If it did, a little Cape Cod would cost a million dollars. Who’s going to buy that?”
Maybe it’s just me, I wonder why anybody would pay 450-500k for a little Cape Cod???
Re: Hillary/Obama ‘08
I would be quite suprised if that ticket won the election!
BC Bob Says:
February 12th, 2007 at 8:10 am
“If it did, a little Cape Cod would cost a million dollars. Who’s going to buy that?”
Maybe it’s just me, I wonder why anybody would pay 450-500k for a little Cape Cod???
It is not just you….
GO to realtor.com, dype denver in the city window and 175K in price window and check what kind of houses and how many will come up.
In NJ huge amount of little towns masking a really Humongous inventory – you are not searching withing 10 miles radius – you are searching withing sometims 600 feet!!!!
with jobs leaving the state with alarming rate I do not see anybody paying more that in other states… and NJ taxes… they are beautifull…. we never just pay anymore… we pay a lot…and we are going to pay more …. and more…. and than some more…
BLEED’EM DRY
BOOOOOOOOOOOYAAAAAAAAA
Bob
Leaving NJ is always an option.
For those who have been fiscally responsible savers in NJ, it is likely that you have saved a substantial nest egg. That nest egg, or even your 20% down payment (NJ), would allow you to put down more than 50%, if not purchase outright in many other parts of the country.
Unfortunately, you will have had to be a saver to play this game. By buying down a significant portion of your home price, you’ll be able to take the pay cut that will likely come with relocation. If you haven’t been a saver, it’s likely that you’ll find the same types of affordability issues all over the country.
“Live cheap, save big, get out.”
jb
Housing Still on Down Slope,Recovery Is Months Away
By Steve Kerch From MarketWatch
The U.S. housing market has not reached bottom and will likely not begin to recover until the middle of this year, three housing economists said this week…The weakness will extend to existing-home and new-home sales and housing starts as well as to home prices, which are likely to show their first full-year decline nationally since records have been kept, the economists told home builders at their annual convention here…”I don’t think we’ve seen the bottom,” said David Berson, chief economist for Fannie Mae. “We’re going to see a much bigger drop in investor demand this year. But by the second half of the year the market will stabilize, if investors pull out quickly
http://homes.wsj.com/buysell/markettrends/20070212-kerch.html
“Leaving NJ is always an option.”
JB,
Sometimes I struggle with this. When analyzing this market it’s a monster with two heads, at least to me.
1)Prices, that will be resolved over time.
2)The state of the state, taxes?? The continuing migration of high paying, quality jobs. In conjunction with this, you have the future wave of baby boomers retiring. Do they stay put or do they overwhelm this industry with inventory?? I’m talking about a 10 year horizon. What about the future pipeline of buyers???
Item #2 is much more perplexing/troubling to me.
“But by the second half of the year the market will stabilize, if investors pull out quickly”
From post 17,
Am I missing something??? Does he mean if investors capitulate, causing big price drops, buyers will come off the sidelines???
“A lot happened during the boom, and we have some paying back to do yet,” said David Seiders, chief economist with the National Association of Realtors.
I missed it, what happened to David Lereah?
“The state of the state”
I’ve asked a similar question before. Even if prices fall, and homes become “affordable”, would a bleak outlook for the state change the mind of buyers?
It’s one of the reasons I focus my attention closely on the economic future of the state. Falling home prices will do no one good if those lower prices are accompanied by a statewide (or regional) economic slump. High taxes and an even higher cost of living are taking their toll. It’s hard to argue with the significant outmigration of both people and jobs.
jb
I missed it, what happened to David Lereah?
As far as I know, Seiders is the chief economist for the NAHB (National Association of Home Builders), not the NAR.
Seems the Record made a blunder.
jb
Al (8)-
Bulldukey. Perhaps there are individual Realtors held hostage by homeowners, due to their inability to paint a convincing portrait of market realities in order to help sellers price accordingly. However, other sellers are deciding to meet the market and are moving on with their lives.
Those “hostage” listing agents are as hopelessly out-of-the-loop (and, therefore just as unlikely to sell) as your own buyer’s agent, who somehow expected (or hoped) that you would magically decide to meet today’s market…then decide to do what is required to purchase today. I’m sure your agent was courteous, knowledgable…and absolutely nuts not to have probed enough to realize that you are not a TODAY buyer. Telling a buyer “just make an offer” is not a plan for success…and reeks of desperation. That’s why lots of us work for free, I guess.
Today’s market will NOT reward the retail buyer with tomorrow’s price. I still think you would do well to learn the pre-foreclosure game. That’s the arena in which you’ll find those below-market prices right now.
“Live cheap, save big, get out.”
Exactly my thoughts these days.
I estimate by end of next year I will have 60% of a place paid for back in Nashville or Charlotte. I won’t have to worry about finding a good paying job b/c my mortgage payments will be less than my current rent. I can do a 10-year mortgage and be mortgage free by 45 years old. I have to seriously consider if it is worth staying in NJ just because I finally found a company that I love.
BTW, the pay cut to relocate isn’t always the case. I got a 15% increase in actual pay to move to TN from NJ.
Rachel
Welcome Back Boooyaaa
Tell us where you were.
KL
KL (26)-
My guess is Hagedorn Psychiatric for a little electroshock “tune-up”.
RE: “But by the second half of the year the market will stabilize, if investors pull out quickly”
BC Bob…you got me there.
My guess is that the investors are the ones suffering the most pain right now. Then there are the people who used fancy financing to get into a house next in line.
Maybe he thinks that there are still some investors out there HOPING for a slight spring rebound. The investors who can’t easily flip the property or having trouble renting it out, once you get them out of the market (maybe they are the ones keeping prices up) home prices may even out.
Of course I haven’t had my coffee yet..so I just pulling it out my…
“A lot happened during the boom, and we have some paying back to do yet,” said David Seiders, chief economist with the National Association of Realtors.
What happened to David Lereah? Why suddenly different Economist now???
Here’s a new one: a broker open house, with lunch, provided by a flat-fee, no-skill internet broker:
http://webmail.att.net/wmc/v/wm/45D078DA0003142F000029AA21602813029C0A08099A08D29F07080C?cmd=Show&no=27&uid=287261&sid=c0
Jam a chunk of lasagna down a bunch of agents’ gullets…that’ll sell this POS! Yeah, right…
#e tbw: Yes there was talk at the meeeting about RE being a starter town, but local realtors were saying that, if RE limited the size of McMansions/remodels people would not move to the town, as they would consider it a starter town.
And of course there are people in town who are now of the opinion that RE is an upper middle class affluent town, and the town should be reflecting that. I do not understand how people can say that, while one third of the towns housing stock is lower income rental apartments.
Meanwhile Oradell moves haed with its plan to dissove the River Dell district.
In talking to other people I know the realtiy is now accepted that prices are dropping. I have heard some stores of big drops in Wyckoff and Ho Ho Kus.
However in River Edge the new reality has not been accepted, people still seem to be in denial. Lots of McMansions for sale that have been sitting, quite a fe more that will soon be ready to coem on the market, and there are still some houses geing sold as tear downs too builders who for some bizzare reason have not got the message yet.
Re: Hillary/Obama ‘08
I would be quite suprised if that ticket won the election!
It really depends on who the Republicans run. Giuliani or McCain would blow Hillary/Obama away. The question is; can either of these guys make it out of a Republican primary? While both are popular with the general public, neither is particularly popular with the conservative Republicans in their own party; especially social conservatives. If the Republicans nominate a Bush type, Hillay/Obama stand a very good chance of winning.
here’s what I’m seeing:
inventory about the same, might change up or down one or two in my town by the week.
many listings sitting on the market from last summer or earlier. a few re-lists are creeping back after having been w/drawn over the holidays, price reductions 5-7%.
pricing is all over the map. there are some full 2005 asking prices (sitting); some more realistic, a few aggressive.
still looks like a stand-off btw buyers and sellers to me. the few that sell might be 5% off ask, (after a 5% reduction) but that’s as low as they’ll go in SFH.
$100K off ask? Not likely to happen in my view. A recession, combined with higher unemployment and/or higher interest rates might start the ball rolling, but for now it looks like the soft landing scenario is playing out.
GSMLS inventory just crossed 29K, so inventory pressure is building. if inventory gets truly bloated, sales volume continues anemic, sellers might start to respond to pressure from the market and their realtors.
for now, most sellers are holding out. properties are priced w/in the prevailing range, based on comparable asking and features of house, location etc. No one wants to start the underpricing game, anyone that did would sell in a matter of days. (but then we’d have a comp killer on the books, which would probably be dismissed as an anomaly.)
happy hunting, gang.
long term trend for RE in the NE is very negative.
flat, aging population; eroding job base; high taxes that are only getting higher; declining infrastructure and gov’t services
the NE does have greater supply restrictions than other regions, but the lack of population growth negates this.
it will be interesting to see how the NE states deal with the baby boom retirement over the next 5 yrs. mass exodus of highest taxbrackets is entirely possible. yet the entitlement liabilities will remain
Today’s market will NOT reward the retail buyer with tomorrow’s price. I still think you would do well to learn the pre-foreclosure game. That’s the arena in which you’ll find those below-market prices right now.
How do one start??
And what kind of investment is needed to search for thouse preperties?? As I said before – there are huge risks of outstanding liens and second mortages in pre-foreclosure. I think I would be more comfortable in actual Foreclosure sale.
Hence another year: FK will start climing up in 2007/08 even more that they were last year.
I’m still trying to convince my parents to “cash out and get out”.
A number of family friends are doing the same. One set of friends moving down to Florida, others down to San Antonio. The San Anton’ folks are the parents of our friends, who moved out a little over a year ago. They are part of the biggest exodus group, at least local 5 families that were part of their clan (aunts, cousins, uncles, etc) have moved down to TX, with more on the way. Another set is planning on making the move out to Arizona, their daughter moved out there about 3 years ago, son followed, they’ll move to be near the grandkids. Another family member is planning on making a move down to NC or FL shortly, he is an anesthesiologist who just finished his residency. He has mentioned that his job prospects are very good out of this area.
jb
Another question – in a few starter homes which I have visited the owner mentioned that they have had 5 years of fixed taxes, due to some rule/exclusion?? How does this work – how would one get 5 years fixed taxes?? Is there a rule in some towns that is you buy abandoned/battered property you get this tax fix?? (it was in South Bruinswik).
I think the owners called it something like tax exclusion, but did not explain why they got it?
…you’ll be able to take the pay cut that will likely come with relocation… If you haven’t been a saver, it’s likely that you’ll find the same types of affordability issues all over the country
JB,
Even if you haven’t been a saver (I have been), affordability is still much better in other parts of the country. For example, a $400k starter cape in NJ would run about $175 in Raleigh.
The level of pay cut really depends on your job. While NJ is touted as having much higher salaries than the rest of the country, much of this is attributable to a high level of unionization in NJ. NJ is only one of 4 states with over 20% of its working population unionized. Union jobs like teacher, police officer, plumber or electrician pay much more in NJ than in other states. Police officer jobs probably pay double.
For many middle management, engineer or analyst type jobs, the salary differential is not as great as one might expect. For example, according to salary.com, I could expect a 10% pay cut if I moved to Raleigh. I would make up half of that on property tax savings alone. The reduced mortgage payment would make up for the pay cut many times over.
Al (34)-
Just find a good real estate investment club in your area (Google for a list). Go to some meetings and learn the basics. It is not hard, but you must learn- and follow- a precise procedure to play the game right.
Part of that procedure is learning how to discover lurking liens and title defects. Again, it is not hard. Resources for this activity run the gamut, from skip-tracing to conventional title searches.
IMO, properties that actually make it to a Sheriff Sale are much more suspect than those you can pick off at the beginning of the foreclosure process. Also, in the Sheriff Sale, you are in a competitive bidding environment and up against some very, very sharp people who probably know the game better than you. When you find someone at the start of foreclosure, you can usually get a good shot at making a deal with no competition whatsoever.
Clot [38]
What are your thoughts regarding Realty Trac???
Isn’t it safer to buy REO, i.e., from a bank?
Do you not get as big a discount as from a pre-foreclosure?
Overall, my impression is this area of the market, either pre-FK, FK or REO is for experts.
“Homebuilder Woes”
“Shares of homebuilders and mortgage companies fell last week after Toll Brothers Inc., the largest U.S. builder of luxury homes, said orders had plunged and London-based HSBC Holdings Plc said bad home loans increased in the U.S.”
“Despite what people might say in terms of the bottoming in the housing market, if we are at the bottom, we’re not going to get off this bottom for at least a year or two,” Ernie Ankrim, chief investment strategist at Russell Investment Group in Tacoma, Washington, said Feb. 8. ”
http://www.bloomberg.com/apps/news?pid=20601109&sid=ate8AR_Bbrhc&refer=home
January foreclosures jump 42% YOY in NJ. From RealtyTrac:
Foreclosures Increase 19 Percent in January According to RealtyTrac(TM) U.S. Foreclosure Market Report
January’s foreclosure number represented the highest monthly number
we’ve seen since we began issuing this report two years ago,” said James J.
Saccacio, chief executive officer of RealtyTrac. “The month-over-month
increase is similar to what we saw last January, when foreclosures shot up
27 percent from the previous month; however, the year-over-year increase of
25 percent is well below the 45 percent annual increase we saw in January
last year.”
…
Other states
with foreclosure rates among the nation’s 10 highest included Arizona,
Texas, Ohio, Florida, Illinois and New Jersey.
Sunday papers real estate section… prices still look insane.
Hi All,
After lurking on the board for a while, I’ve learned a lot and confirmed my suspicions about the market. Man, this thing is a great resource.
I have a question that I was hoping to throw out there:
Right now, I have a sweet rental share in Hoboken for which I pay $750/mo. Obviously i’m riding it out and salting away about $1k/mo to buy in the next 2-5 years.
My question is, I have about $35k in student loans, with federal consolidated at ~2% and private from 6-8%. I’ve also got $25k in an ING account.
In your estimation(s), should I:
– Pay of student loan debt quicker, maximizing my aggregate return but minimizing monthly savings?
– Keep saving for a larger down payment, while paying the minimum on my student loans?
Thanks,
Lincoln78
RealtyTrac (Rick Sharga) was nice enough to provide me with detailed foreclosure statistics around this time last year, so I do have January data for 2005 and 2006.
NJ Foreclosures (total)
Jan 2005 – 2,282
Jan 2006 – 3,474 (Up 52%)
Jan 2007 – 4,952 (up 42%)
Source: RealtyTrac
jb
The biggest issue with paid foreclosure sites is that the best or most viable prospects don’t ever make it there.
I’ve found that most foreclosure hawks will have contacted pre-foreclosure buyers prior to that property making it’s way to RealtyTrac database.
How?
The hawks will spend their days with the records clerk, looking through the newest Lis Pendens.
By the time these records make their way to the big databases, they’ve been picked clean by the folks that make their living doing this.
jb
http://ml-implode.com/
#44
“- Pay of student loan debt quicker, maximizing my aggregate return but minimizing monthly savings?
– Keep saving for a larger down payment, while paying the minimum on my student loans?”
IMO, it really depends on how big of a priority buying a house is for you, and how soon you feel you need to do it.
Paying off the higher interest student loans first is probably the smartest thing to do from a strictly financial point of view, but your debt isn’t so extreme that you must pay it off ASAP at all cost
Hi all,
We will need to change the venue for Friday meeting. Just talked with folks at JR Cigar, they said, the place is normally very full on Friday evening and they don’t make reservations. The chance of getting table for 13 people on Friday evening is very small, unless someone goes there by 4:30 pm or so.
Do let me know if know of any other place. Or else, we may have to cancel this time and try sometime later.
Thanks Skep-tic.
What I should have added to my question is that I’m also thinking of it from a mortgage rate perspective (i.e. Lower student debt = better rate?).
My credit score is pretty good (700’s).
Lincoln – Pay off your debts first, they cost you money.
SG – if you wanted to stay with a Cigar Bar, try the Side Bar in Motown. http://www.famishedfrog.com/thesidebar/
sg,
Richie mentioned the Hotel bar in the Tara in Parsippany.
We aren’t really planning on sitting down for dinner, are we?
jb
JB: No sitting down dinner. Just bar to hang around.
I think Tara in Parsippany is good option. I will change the EVITE.
http://www.starwoodhotels.com/sheraton/property/dining/index.html?propertyID=865
I think the Side Bar is an ideal alternative. They have a non-smoking bar there as well, and plenty of space. Also, its walking distance from the NJ Transit stop in MoTown.
Lincoln, having gone through this, pay the private loans (which I just paid off – woo hoo!). At 8%, you’re losing more money than you can make in a good savings account. As for the federal, take your sweet time. A 2% interest rate is practically free money, and since they’re federal, you have a lot of time to pay them without that sweet rate rising. Not that I like having debt either, but at 2%, you can afford to pay those slowly and use your cash for other things.
For our student loans we have paid double payments or more untill we got ot the equivalent of 48 payments (that was the vcriteria of 0.5% rate drop).
Now student loans are at over 2% lower rate than CD’s rate….
There is no reason to keep paying them off….
SO pay off private 6% loans and pay the 2% loans as slow as possible.
After that pay minimum possible on 2% loans, and save, save, save….
At least this is the way we are doing it.
anybody sees drawbacks of not paying minimal payments on student loans if they are well below CD’s/bonds/savings accounts rates???
Basically: if you have 25K savings and owe 50K in student loans interest alone from your 25K in savings will allow you to make student loan payments… So is there any reason to put this 25K down to principal of the student loan??? you loose your 25K, you still have to make payments…….
JB # 35 – Doctors outside of major metro areas are in high demand.
“anybody sees drawbacks of not paying minimal payments on student loans if they are well below CD’s/bonds/savings accounts rates???”
Nope, I’m with you, especially when the loans are so low. Why pay them off when you will eventually anyway and you can do better things with your cash?
Now, if I won the lottery they’d be the first to go, but since I haven’t yet, we’re doing exactly what you’re doing.
RentinginNJ you forget that the democrats are going to be realy running against George Bush no matter who the republicans nominate.
BC Bob # 11,
I’m a first time buyer with enough to buy a moveup home in a top neighborhood, but refuse to do so at these prices. Even w/ a child I’m still renting in an affordable area living below my means. I’d rather bunker in than buy a place I can grow into that’s overpriced. Sure some of my family wonder why I don’t just buy “real estate doesn’t go down”. Funny thing is they are the same ones who got burned in the late 80’s early 90’s and suffer from amnesia after the experience.
ahhhhhhhhhhh Starwood
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BC (39)-
Grim’s answer in #46 is precisely my answer. Their trailing stats are great, but the “pre-foreclosure” info offered by any company is, on its face, dated material.
The only way to buy pre-foreclosures is to develop your own leads. A once-weekly cruise thru the County Clerk’s office can reveal a wealth of info.
2x shy (40)-
REO can be okay & can yield some deals…as long as the bank has a bad marketer flogging the listings. If they have a sharp Realtor working them hard, you’re gonna be in the midst of a competitive bidding environment. A good rule of thumb in the foreclosure game is to always try and avoid competitive bidding environments.
Lincoln, Al, NJG:
It has been my experience that really any systematic method that draws money away from spending and drives it toward savings/paying down debt is successful. You aren’t going to make a meaningful difference by splitting hairs. Ultimately, if it provides you with psychic satisfaction, emotional gratification or some sense of accomplishment…great….but really just give yourself kudos for the amount that you are socking away every pay cycle.
You want a piece of advice? How much ever you are diverting…..add $250 to it!
RE: Student loans
I’d put at least $1K a month towards them, focusing on the higher interest ones first.
That will provide a good cushion for your current living expenses, let you keep your savings, and also reduce the interest paid out.
You’ll have them fully paid off in 2-3 years tops, and will have a solid credit score (including debt to income ratio) when it comes time to buy a house.
Al (54)-
There is a baseline of effort you’re gonna have to put in to pull off a pre-foreclosure deal. There is no retail or REO outlet that I’m aware of that is making it easy to buy homes for 100K+ off current market value. Sweet deals ain’t gonna fall in your lap.
You don’t have to be a stone-cold pro to do it, and the game is NOT stacked against the less-experienced. It DOES reward those who are persistent and are good at basic research and sleuthing. I know several people who do it as a part-time thing.
Most of the mortgage servicing companies have REO departments. It can be draining looking through them but nothing worth while is ever easy. The REOs are only increasing in this market.
http://www.njsheriffsales.com/default.aspx
http://apps.indymacbank.com/individuals/realestate/
http://www.1800fremont.com/REO/ReoProperties_Available.asp
http://www.ocwen.com/reo/home.cfm
http://www.premierereo.com/consumerSvlt//nav/ConsumerNavL1.jsp/requestPage/consumer/PropertySearch.jsp
http://www.reo.com/reosearch/homesearch.asp
http://www.countrywide.com/purchase/f_reo.asp
http://www.homebuyingrealestate.com/Homes/Home_Foreclosures.htm
http://www.snsc.com/ReoProperties.aspx
A good rule of thumb in the foreclosure game is to always try and avoid competitive bidding environments.
Winner’s curse.
jb
JB #16 “moving out of state”.
I have several friends who are considering and have done it. A couple moved down to Charlotte, making about 15% less than NYC. They live in equivalent housing to NJ that is more than 50% cheaper. Talk about getting your money’s worth. Friend who is considering Atlanta and can sell their 800k house and buy larger one for 500k. He said he could live simpler down there instead of working corporate. Of course you can also move to a emerging economy. A buddy moved out to HK, though housing stock is different there. He lives in one of the nicest neighborhoods in the city, not in the suburbs and can afford a nanny on a low six figure salary.
Thanks all for the advice.
One last question – If I choose to keep saving, will the student loan debt severly affect my mortgage rate (For arguments’ sake $30k vs. $15k; all other things being equal)
Lincoln
Thanks ChiFi – we’re banking 5K or more a month now (house/car fund) and paying about 700 to loans. Do you think I need to throw an extra $250 toward the loans? Just paid off what had been about 50K in private loans when I got out of school. That felt so good, that I treated myself to a nice Brunello:) Really, there is nothing that feels so good to me as being debt free, and one day, I will be there loan-wise.
Clot (40)-
Thanks. Sounds like good advice. For me, I don’t want to mess with this area. I still feel I’d be at a disadvantage with my limited RE experience. Another problem is I’m stuck with only one town for now with a school-age kid.
For others who might still be interested in the REO option: must your bid be all cash? can you bid with an inspection contingency?
my #74 goofed. should be Clot (65) sorry.
hate when that happens!
From CNN/Money:
Mortgage defaults: Latest woe for housing
Just as the struggling real estate market seems to be stabilizing, a fresh problem is brewing far from real estate offices or home construction sites: a jump in defaults by higher-risk borrowers.
News of rising default rates by buyers with less than stellar credit could put a crimp in financing for home purchases – and prices. That’s because the rapid growth of new types of mortgages was one of the key factors behind the boom that sent home buying, and prices, to record highs for five straight years through 2005.
…
“Investors in lower-rated (mortgage securities) will demand higher yields, or alternately they’ll pay less for the securities, which will force the underwriters of this product to demand higher quality mortgage loans.”
McMahon and other experts say either move is likely to stop some potential home buyers from having the financing the need to buy a home that they might have been able to get in recent years.
“At the margins what this is doing is making mortgage credit less accessible to some people,” said Bose George, an analyst with Keefe, Bruyette & Woods who follows New Century and other subprime lenders. “Maybe it’s a cohort that shouldn’t be borrowing in the first place. But it will mean less money to buy homes.”
…
“It’s not like subprime loans are going to go away completely – it won’t be anything that drastic,” said George. “But I think there is going to be an impact on home purchases, even if it’s hard to quantify at the moment. In the past few years there’s been an explosion in mortgage credit. It makes sense there would be some retrenchment.”
To all:
Since we are on how much to pay debt vs. saving. I want to follow-up with the following.
Where is a good place to park my down payment saving???
I probably will buy in 3 – 5 years. I have no debt in 25% tax bracket.
Most of my saving is Citibank E-saving earning 4.75% APY.
I know some of you have T-Bills via Treasurydirect.gov. If I can get 4.75% from Citi, does it make sense to put it in T-Bills.
How about NJ municipal bond fund?????
Vanguard New Jersey Tax-Exempt Money Market Fund or Vanguard New Jersey Long-Term Tax-Exempt Fund.
Please let me know what are you guys doing with down-payment savings.
CC
I have a friend who recommends Vanguard. I just haven’t gotten around to it. Right now I am split between HSBC and ING on-line, with some money in the stock market that I’ve had for ages (blue chip, gets dividends). I plan to eventually put something into a CD, for a rainy day. But because we may buy this year, I want the majority to be liquid.
If a property is owned by REO, then does it imply that property was purchased at Auction by the REO company?
If yes, how can one find out how much the REO company paid for the property at Auction?
Shorter term treasuries are paying more than the 4.75% you mention. The last 26-week paid a bit more than 4.9%, the last 2-year paid out around the same. Also keep in mind the tax implications.
I think you can do a little better than 4.75% in CDs. Hudson City is paying out 5.15% APY on a 7mo, 5% on a 1y. If you don’t mind exposure to the housing market, World Savings has a 7mo paying out 5.40% APY, they also have a internet product paying 5.45% APY for 10mo. A number of the web-based banks are paying out about 5.3% APY on 1y products.
If you ladder a number of these products, you’ll find that you can still get high yield while retaining sufficient liquidity to let you jump on a deal should one arise.
I’m not in a position to recommend anything more risky than CDs or Treasuries.
jb
CC,
Check out “orange electric” by ING. 5.3% on a checking account. Rate is based on balance.
“how much the REO company paid for the property at Auction?”
It’s public information — the Town Hall will provide it for free, but you generally have to go in person and ask.
JB #76 I am amazed at the amount of articels that i am seeing where the presumption si that the market is stabalizing, if it was may or June at this point, then I would agree, but we are only in Feb.
The spring onslaught of inventory has not even started yet.
Seems to be some confusion about REO. REO signifies that a property is owned by the lender. Some companies will enlist REO servicing firms to sell their REO properties, however, it’s always the bank that owns a REO.
If the property was purchased at auction by a third party, or sold to a third party by the bank or owner, it’s another story all together.
Typically, a property will go REO when it doesn’t sell at auction. Typically due to the fact that the outstanding mortgage balance, taxes, etc are greater than the current market value of the property.
jb
Off topic here; I am still int he market for a car, taking me forever, but just do nto want to pay that much.
I was at a dealer over the weekend, and I over heard a couple (OK I listened in on purpose) discussing getting the vehicle with the heated seats etc, and how they oculd take a 7 year loan.
A 7 year car loan? Has the world gone truly mad. I am not that old, it is amazing to me how much the mindset has changed.
And I afurther amazed at the amount of debt people are carrying. I undestatd that people have used theri homes as ATM’s i know family and friends who have done it.
But what I do not understand is how theyr service their monthly debt? Where is that money coming from?
bbb,
G.19 is your friend..
http://www.federalreserve.gov/Releases/G19/Current/
2006
New car loans at auto finance companies
Maturity: 62.3 months
Loan to Value Ratio: 91%
Amount Financed: $25,958
A 5-year loan is the average. In Q3 of last year the maturity was up to 64.2 months, almost 5 1/2 years.
jb
If you extrapolate the average purchase price and down payment, the picture gets even more depressing (or enlightening depending on your viewpoint).
jb
“Typically, a property will go REO when it doesn’t sell at auction. Typically due to the fact that the outstanding mortgage balance, taxes, etc are greater than the current market value of the property.” (Grim)
That doesn’t sound like much of a deal to me. Don’t think it’d be worth the time, risk and effort.
NJG, Bear & JB,
Thank you for your input in downpayment parking.
CC
Market watch article on Don’t worry about the yield curve!
#85
I can’t even imagine paying off a car for 7 years! The only brand new car I have ever bought was a 1987 Toyota Tercel for $8,000. After that, every car has been used. Once you drive a new car off the lot, it is worth so much less.
From CNN/Money & Business 2.0:
Where not to buy (at least for the next year or so) (slide #3)
The Jersey Shore
Atlantic City, Ocean City
Prices here soared as Philadelphia commuters bid for condos against second-home buyers from across the Eastern Seaboard. But the latter group usually tries to get out from under mortgage No. 2 when interest rates start climbing.
JB #87 Absolutely amazing (depressing), but again it leads me to the same question, how are people servicing their monthly debt?
Mtg pymt property taxes , car pymt, car insurance, commutation, gas & elec cable, phone and internet, HELOC (because everybody I know who owns a home, except for elderly parents and in laws) has at least one home equity loan, or HELOC),
credit card bills, day care;the fixed expeneses are large.
I just don’t get it, how are these people servicing their monthly debt?
NJ is very bearish.
Check this out:
http://www.cnn.com/2007/US/02/12/bear.in.tree.ap/index.html
#91 Willow The last time I purchased new was almost 10 years ago. Kids were young, and wanted new and relaible.
I am looking at late model cars, but even those prices appear very high to me. In many instances the asking prices do not appear to reflect any depreciation, and incredibly the delares appear not to budge, when I bid 2k off the asking price, I expect to at least get a counter bid instead of not onterested.
And what is amazing, is that all the car dealers up and down Rt 17 are loaded with inventory, I mean loaded. You would think these guys would want to make a deal.
#93
Credit card shuffling?
I just don’t get it, how are these people servicing their monthly debt?
By selling a house to you at an greatly inflated price???
and If htey can not sell it they would channel most of hteir debt into credit cards, declare personal bankruptsy, keep the house, and let you(taxpayer) pick up the tab anyways…
#95
I don’t get that they won’t budge with prices. Kind of sounds like the current home sellers – holding out for their price.
We tend to drive our cars forever. We kept the Tercel until the 2nd child was born (1997) and then only got rid of it because we needed a four door car (our other car was also two door). It was still running very well and getting 35 mpg. One of our cars is a 1997 Volvo wagon which is still going very strong (this was the last year before Ford bought Volvo and quality suffered). I think next time we need to buy a car, we’ll go with Toyota again – they just go and go.
I just don’t get it, how are these people servicing their monthly debt?
Sad to say, but in today’s society, everything comes down to “What would my monthly payment be?”.
If they can’t afford the monthly on a traditional length term, they simply stretch the term until they can afford the monthly nut.
jb
while we are in the topic of car-buying, I have a stupid question about car dealership offering 0% APR for 12 or 24 months.
Could I potentially paid off the whole car after 12 or 24months? In that sense, am I getting a 20K loan (0% APR) without paying interest. it does not make too much sense to me…
#101
Usually, they don’t discount the cars as much when they offer 0% financing. In the offer, it’s usually this or a lower total cost. Figure out which one will cost you less in the long run.
God, we’re all in the market for cars! I am trying to get my parents to “downsize” and sell me their 2005 SUV. Otherwise I’m going to look for a certified pre-owned. No need for a new car, but I do need a big car to accomodate a large dog and eventually kids.
Just playing with the numbers… The average car buyer is going to pay more than $4,000 in interest over those 62+ months. Push that to 7 years and the interest payments begin to get close to $6,000.
jb
cc,
I find that Citi takes a long time to clear checks. It’s 10 days since i presented a check and the check has not yet cleared. They also have limits on ACH transfers to external accounts.
i have heard great things about Toyota, ans everybody i know who has one is happy, but theri pre -owned price ranes are anywhere from 19k to 21k on cars with 40 to 50K miles. I know they are Totoya’s but I do not feel like paying that kind of money for a car with that many miles.
I looke at e Totota Highlanders SUV’s with any where from 36K to 55K miles from 03 through 05.
The prices seemed very hight to me along wit the mileage.
When buying a car, put down half or more, finance the rest, and send whatever is needed each month to pay off the loan in less than a year.
You’ll pay minimal interest, and your credit score will increase.
Wow..
http://calculatedrisk.blogspot.com/2007/02/fremont-lending-changes.html
An email from Fremont Investment & Loan:
Sent: Monday, February 12, 2007 1:54 PM
Subject: PLEASE READ – IMPORTANT PROGRAM CHANGES at FREMONT
Importance: High
Due to general negative Industry sentiment, due to recent articles in the media, and the ripple effect to the secondary market, Fremont has made the difficult decision to speed up some changes that were set to take place later in the year. PLS READ BELOW.
2nd MORTGAGES ELIMINATED effective TODAY!!!!!
Any Prequals out there that are 80/20 or combo loans, pls contact me by email asap for new pricing, with an outside second if available from IBC or other lender, or as a 100% or straight one loan
AA CUT BACKS AND HUGE CHANGES – any files that have been priced on the AA program need to be looked at ASAP, pls email me and attach a copy of the prequal with 1003 and Credit
Note: Fremont is typically at the forefront when making changes to programs, I would urge you to expect our competitors to be making similar changes in the next few weeks. Fremont ’s goal is to be here for the long term, thankfully we are self funded with tons of capital and reserves….We will be here to close your loans.
Thank you for your patience and understanding in these tough times in the industry.
More Details will be communicated later today … I apologize for the barrage of emails, but I wanted to make sure that everyone is aware of what is going on …
Thank you.
Fremont Investment & Loan
I have to say, I like Toyotas, but they don’t offer the best deals because they just don’t have to. They sell like hotcakes because they’re good cars. My parents have pretty much driven Lexus or Toyota since I had a Camry we loved in college.
Yes, keep it at the Sheraton Tara that way I can go. :)
#109
Sounds interesting. Guess, it would have tremondous impact on the house prices if 2nd mortgages are totally eliminated by all the lenders.
Unrealror #108 I plan to put down 50 to 60%, but that did not apparently impress the dealers i have had dealings with.
About a year ago, we bought a new car for my wife. As we sat at the desk filling out paperwork, I was amazed at listening to the negotiations taking place between the salesman and buyer at the desk next to us. They were negotiating monthly payments. No discussion of total price, interest rates or the length of the loan, just “I can put you in this car for $550 per month”…”No, I wont pay more than $500 per month…”…”Okay, okay we can do $520 if you get a cosigner, otherwise with your credit, the best we can do is $540”…
#80 JB
Tbanks for the rate info. I think short term municipal roll overs are the best deal for those in the higest tax brackets. Pay out has been jumping around 3 1/2-4% triple tax free. Plus your money is liquid every 7 days, so no long term commitment.
109 JB,
I just read that at CR and i was thrilled :)
I would say that the market will start moving down when the mortgage rates hit 7.5%+. Not any time soon? Is China still investing in US? Yes it is, but guess what, not as much as UK. Is this something that is usually overlooked?
MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES
Country Nov2006 Nov2005
—— ——
Japan 637.4 667.9
China, Mainland 346.5 303.9
United Kingdom 2/ 223.5 135.5
Unrealror #108 I plan to put down 50 to 60%, but that did not apparently impress the dealers i have had dealings with.
Profit margins on sales have been squeezed due to the internet giving buyers more transparent pricing info. Commissions on financing have become a bigger profit center for dealers. They want you to finance as much as possible through them. Whether you write the check or the bank writes the check, they get paid in full anyway.
They would much rather have an idiot buyer with bad credit negotiating monthly lease payments.
Unrealror #108 I plan to put down 50 to 60%, but that did not apparently impress the dealers i have had dealings with.
Why should it? Those are nothing but numbers on a loan app to them.
jb
When dealing with car dealers its easier to go with your own financing and just haggle over the purchase price. Also go at the beginning of the month. As it gets closer (last 3 days) to the end of the month, the sales guys get a little antsy and want to move some cars and will be more willing to work with you. The majority of their pay is commission based and the # of cars sold determines it.
The only issue is that you have to either go back there at the end of the month or give them your phone # which they will consistantly be calling you throughout the month.
My mom had a 1990 Toyota Camry that my brother bought when she died. He still has it and it’s running great at 17 years old.
Yep, they are expensive but they last forever. My husband wants a used Toyota FJ Cruiser once his volvo goes.
JB #121 I guess I am old school, therre was a time when that meant something, there would be comfort level on theri part that the applicant was qualified. Lost in the 80’s I guess.
I have to put down my car buying experiences.. it’s just too much fun to think back:
My first car in college was a Ford. Bought for $2000 and I used it to commute to my first job after college as well. Sold it two years later for $2400. sweet!
For my second car, I decided to buy a 2/3yr used from a dealer. I thought the sales guy was the nicest guy on the planet, was very happy with the car I picked and sat down with the ‘loan guy’. It was late in the day so they said I could take the car home and come back the next day and my interest rate would be around 8%. The idiot I was, I went home very proud of myself.
Next day – big shock. “Oh, I’m sorry but we cannot give you the loan for 8% because yada yada yada”. The interest rate was going to be 13%!
I was so mad, I saved tooth and nail and paid up the amount – about $10000 in less than 6 months – and I was making less than $50k.
I am cautiously optimistic on a Nissn 06 Altima, just herd back from the dealer quotes it at 16K, 500 less than cars direct.
Now 16K new is reaosnable, and I understand that the Altima is a good car too.
First time for non-american for me, so getting up to speed.
“UnRealtor Says:
February 12th, 2007 at 2:57 pm
When buying a car, put down half or more, finance the rest, and send whatever is needed each month to pay off the loan in less than a year.”
I did something similar with mine (half down, half financed) the loan was 5 years because the interest rate was the same for 2 (I liked the base of low payments, just in case of some disaster) and paid it off in 18 months. When my husband bought used truck (4 year loan paid in 1 year, same reason) the salesman asked how he managed to have such a good credit rating! DUH.
Sorry should be Nissan.
Talking about toyota… any one know about the reliability of Prius, the hydrid from toyota (or other hybrids) for the that matter
MJ #117 Prices are falling now, I do not think we will have to wait for rates to get a 7 handle.
#109 JB:
“Subject: PLEASE READ – IMPORTANT PROGRAM CHANGES at FREMONT
2nd MORTGAGES ELIMINATED effective TODAY!!!!”
=================
If this isn’t a hoax, this is a one-way wrecking ball, let’em bagholders dig their heels in deeper.
Talking about toyota… any one know about the reliability of Prius, the hydrid from toyota (or other hybrids) for the that matter
The Prius is a very good car and well rated. I think most hybrids are rated well.
The problem is that you will be hard pressed to get a good deal on one. They are already more expensive than their conventional counterparts and you are probably going to pay sticker price on top of that.
The fuel savings in the real world are less than advertised. If you want to do something good for the environment, then go for a Prius. However, as a purely financial decision, the fuel savings probably won’t make up for the increased cost.
NNJJeff, I have heard that the Prius is good, but I am not sold on the hybrid yet, as apparently the cost to replace the battery is very high. Also, I have a feeling that with people concentrating on this kind of technology, advances will come fast, like with computers. I feel like by the time I buy it, something better will come out, and I can’t just change cars like you do computers.
New Car buying tips from my guru Clark Howard:
http://clarkhoward.com/shownotes/category/5/124/179/
I really like the new Lexus IS250, Who knows…maybe in 6-10 yrs I can score a used one!
When buying a new car, keep the following in mind:
1. Shop only at month-end when dealers meet quotas. Any sale is a good sale for a dealer; it’s called ‘turn and earn’
2. Find out what factory to dealer incentives are (you can get them off the Net for a subscription). I know instances of late models BMWs having year-end $5000 incentive. So if you bought at invoice, the dealer cleared $5000!
3. Deal with Internet dept of dealerships since their incentives are based on volume. Go to the manufacturer website, hit Dealer Locator and blast out emails to them saying you’re willing to buy within the week, list your options/color and ask them to get back to you with their best price. Every new car with same features is a commodity on the lot – Econ 101 class.
4. Line up your financing from a credit union, and see if the dealer can beat it. If they can, tell them you’ll take it if they throw in a couple of accessories for free. They usually bite!
5. Always negotiate the sales price and financing separately, otherwise you will be taken to the cleaners if shopping on a monthly payment. Sell your old car separately, unless there is an advantage where the drive-out price from dealership(sales tax is paid on only the difference of the new car price less yur trade in) is less than buying new (pay sales tax on entire amount) less amount recd from private party sale.
6. Remember, depreciation is the biggest expense to buying a new car. Rebates by manufacturers affect resale price dollar for dollar.
Buy a reliable Honda or Toyota and run it to the ground. I can’t get myself to buy a GM or Ford where $1,500 per car is spent on healthcare and pensions that could have been spent on R&D. GM spends $50 million a year on Viagra for its retirees….
It’s hard getting a ‘great’ deal on a used Honda or Toyota for a 2-3 gently used car, since there aren’t many around. There is a bigger upfront cost involved in owning Japanese, but it rewards you over the longer run.
Question unrelated to cars…any thoughts on buying a house located across from a town park (park includes parking lots, baseball fields, open space, tennis, etc.)
The Rise of Real Estate Bubble Blogs (they missed NJ report)
The list reads like a prophecy for real estate Armageddon: The Housing Bubble, Housing Panic, Housing Doom, Ready to Burst, Bubble Meter, Southern California Real Estate Bubble Crash, Seattle Bubble, The Jersey Shore Real Estate Bubble, Southern Maryland Housing Bubble News — and the list goes on and on.
These are titles for real estate blog sites among a giant genre that is devoted to a discussion on housing bubbles and the possibility of a real estate market crash. Despite the sensationalist blog names, the creators say their aim is not to scare people into hiding. Rather, they want to empower consumers with information and commentary about real estate and economic statistics so that they can make more informed decisions about housing.
The content at these sites can range from whimsical to analytical to cynical and everything in between. Some of these “bubble bloggers” attempt to poke holes in industry statistics and throw punches at industry practices, which can provoke heated responses from industry professionals who criticize their sites and question their motives.
But these blogs are obviously filling a need that has not been served by the real estate industry and traditional media, and they have built up a loyal following among consumers and some industry professionals alike. Some of these blogs are even generating income through online advertising.
http://www.inman.com/hstory.aspx?ID=62166
Uh, that article fails to mention the great car chat on RE bubble blogs.
Anyway, I’m up against an interpersonal communications challenge pertaining to cars.
My husband doesn’t completely stop rolling when shifting the automatic transmission (D to R or R to P) in his fairly new Toyota. Once I asked him to come to a complete stop, and it was like watching Mt. Vesuvius and waiting for the explosion…
Any suggestions on how to approach this delicate issue gracefully, so that it’s not forever there every time we’re in the car? Should I just let the tranny get smashed as a learning experience? I’m wincing every time he does this. He never did this with his big old Buick (shifter on column) only with the shifter between the seats.
Thanks for any suggestions.
Hardball #136 That is what I am doing, The number I have in my head is 14k, for that I want no more than 2 years old with a max of 20K miles on the carr. I think I have a good shot at this with the Nissan Altima.
109 – great article on Fremont.
Luxury market is already stalling due to excess inventory and lack of buyers.
With the decline in prices speculators are leaving the market.
Now with tighter financing standards, the marginal buyers are now taken out of the picture.
I feel we’ve got a perfect storm brewing. Any hint of recession or rate rise (i don’t think we’ll need both) and this catalyst will capsize the housing market. Otherwise it will slowly drift downward until incomes catch up.
I’d almost bet that it will be some hedge fund debacle that will cause some serious problems. We’re already seen some issues pop up w/ Amaranth, Bayou, Red Kite, Beacon…
Any suggestions on how to approach this delicate issue gracefully
There is no way to approach the issue delicately. Even a delicate attempt will come off as questioning his ability to drive.
My wife would just nag me until I finally relented. I get annoyed, but eventually it’s just easier to capitulate. “Fine, I will stop moving the shifter if it will make you happy”.
“NEW YORK, Feb 12 (Reuters) – WCI Communities Inc. (WCI.N: Quote, Profile , Research), a Florida upscale home and condominium builder, on Monday said it hired Goldman Sachs & Co. (GS.N: Quote, Profile , Research) to explore a possible sale of the company, sending shares up nearly 7 percent.”
http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2007-02-12T185907Z_01_N12371187_RTRIDST_0_WCI-ALTERNATIVES-UPDATE-2.XML&rpc=66&type=qcna
138 – bergenbubble.
find out how much the car sells for at Mannheim auto auctions. Make sure the used car is not marked up too much from that number ($500 to $1000). There are some services that will buy you a car from Mannheim auction for a set profit above auction price. I prefer to have the dealer take the risk and buy it. Once I see it on their lot and I test drive it than I give them a tough negotiation. If they don’t like my price, I’ll find someone who will sell it to me at that price. I’ll also expand my search zone to several hundered miles. I bought my last car in Md. I test drive the car hard too to make sure there are no problems.
(they missed NJ report)
Since we made the transition to the new format and URL, we’re no longer a “bubble blog”, although we do discuss it quite a bit.
jb
Any suggestions on how to approach this delicate issue gracefully, so that it’s not forever there every time we’re in the car?
Well Pat how long have you been married? I am going to guess less than 10 years, why do I guess this, it is due to the fact you want to approach gracefully.
Being in this situation myself ( my car, he has a company car)
I just say ” Stop Changing the F@@@ing gears till it stops, you F@@@ing **$%@&& I tell you that everytime you drive the G## D## Car. You think this is a F@@@ing stick shift.
However this method does’nt work, but neither does gracefully.
Good luck to ya
KL
Good News From the Kannekt Kondo Shillers:
This is an update I received from an agent.
As of February 9th, 2005, over 383 properties within Hoboken and Jersey City have listed themselves with current brokerages in the Hudson County Multiple Listing Service. Of these already 65 have gone under contract and in simple terms, it means that the market is still moving, and still selling.
What we are experiencing is that the hot commodity are the one bedrooms priced at $399,000 or lower. Just last week, we had 2 in Hoboken that went into a “Highest and Best”, meaning there were multiple offers within days and sold. Rates are slowly rising, but not at a pace that would indicate a year end double digit ending. This is a very good indication that the market is shifting, but not collapsing as people have feared.
HEHEHE (145)
As we all know, Jersey City is a biiiiiiiig place with various neighborhoods. I wonder how many of the 65 under contract are in, say, Hamilton Park/Newport vs. JCMC vs. Journal Square.
BTW, my buddy lives in the Heights and apparently, the nickname for JC is “Chilltown.”
LINCOLN78
Pat, bring a piece of broken gear into the house and say “Look what I found in the driveway!”
Maybe a salvage yard would have something for $1.
I personally refer to Jersey City as Jersey Sh*tty but that’s me. I find it amazing 65 are under contract and only 2 got higher than asking. As if that’s a sign of a healthy market????
So much for the high paying IT jobs in NJ.
From EWeek:
Report: IT Service Jobs to Take Biggest Offshoring Hit
While the loss of service jobs to offshoring in the near future will be modest, metropolitan areas with large concentrations of IT and back-office jobs will be harder hit, finds a report released Feb. 12 by the Brookings Institution, a Washington-based independent research group.
Noting that public fervor and coverage of offshoring has noticeably died down since the 2004 elections, U.S. companies continue to seek offshore solutions for a range of jobs only expected to grow in the next decade. Using occupational data, the study investigated the implications in job losses of service offshoring for 246 U.S. metropolitan economies between 2004 and 2015.
…
It was metropolitan areas with high concentrations of IT jobs, however, that were expected to be the hardest hit by service offshoring. Between 2004 and 2015, these IT-focused areas were expected to lose 2.6 percent of their jobs to offshoring, 2.4 percent in metropolitan areas that specialize in back-office services but only 1.9 percent of jobs in other metropolitan areas.
At least 17 percent of computer programming, software engineering and data entry jobs were likely to be offshored in these IT-concentrated metropolitan areas, including Bergen-Passaic and Newark in New Jersey; Boston; Boulder, Colo.; Danbury, Stamford and Hartford in Connecticut; Minneapolis; Orange County, San Francisco and San Jose in California and Wilmington, Del.
JB #149, these corporate ‘geniuses’ looking for short-term profits as the sell out their country are in for a big surprise when management moves offshore.
“But everybody’s doing it, we have to keep up!”
Right, uh huh, keep digging.
Will there be bidding wars to work at McDonalds when all our top jobs and know-how are exported to 3rd World countries?
The short-sightedness in this area is truly stunning.
Plus why would a dealer be happy with you putting a lot of money down, they usually like you to finance through them and make even more money. from what I understand, they do not like when you pay in full for a car because that is how they make the smallest amount on a sale
KL and Un, thanks for the laughs.
KL…2 years living together, and married 7 this year. Hahahaha. One of my co-workers suggested I offer him the cost of the new transmission as a Valentine’s present, together with 2 tix to the Mets spring training home opener at the end of the month, in exchange for his promise to stop doing that.
The guy with the student loans –
I’m not sure if the kind of loans you have are entered on your credit report.
But if they are, a history where you’ve made your monthly payments on a timely basis is a big plus for your credit score and in terms of getting a better mortgage rate.
I might as well chime in. It’s been a while. Here’s some more info on foreclosures from citibank.
http://shrinkster.com/lza
I hope that link works. If it doesn’t, the article says:
The number of U.S. homes entering the foreclosure process because of nonpayment on mortgages rose to 130,511 in January, 25% more than in January 2006, according to data released Monday by Realtytrac Inc.
The foreclosure rate was one for every 886 U.S. households.
The 130,511 foreclosures is the highest monthly total since the firm began tracking national foreclosures two years ago. Foreclosures were up 19% compared with December.
Also, regarding foreclosures, here’s a link to a recent Journal article
http://online.wsj.com/article/SB117106966309504248-email.html
And lastly, to Chaoticchild from #77. If you’ve looked into Vanguard then you should read the prospectus. One of the first pages explains how to figure out the tax equivalent yield. It goes like this:
Subtract your federal bracket from 100%, then multiply that by your state bracket. That gives you your effective state bracket. Add your federal and effective state bracket. Then divide the fund’s yield by the difference between 100% and your combined bracket. This gives you your taxable equivalent yield.
If you’re in the 25% bracket then you’re probably like me. I already figured it out. Those Vanguard funds aren’t worth it. The taxable equivalent yield, for the NJ tax exempt money market, is 5.06666% assuming 25% federal and 10% state brackets. You can earn more than that in money market accounts. You should read the Journal. They post the highest yields they find I think. UFB, at ufbdirect.com, offers a 5.31% yield money market account no minumum or fees. I hope this helps and I hope I didn’t write this too late. It’s 7PM. Otherwise, I’ll try to repost this tomorrow.
“Take a look at the massive short position in WCI”
Clot,
Goldman is playing that card.
Word to the wise: if it is that obvious, people are all over it and there is no opportunity
that’s not to say you won’t make money if things work out the way you envision, but just because you might make money on it doesn’t mean it is the right thing to do
you will probably need to overpay to take the position you want, even if it is not apparent when you do so
sorry for being a wet umbrella :(
to be clear…..current market conditions reflect all appropriate economic outcomes and their likelihood of occurring (EMH in this case)
When buying a new car, keep the following in mind:
1. Shop only at month-end when dealers meet quotas. Any sale is a good sale for a dealer; it’s called ‘turn and earn’
2. Find out what factory to dealer incentives are (you can get them off the Net for a subscription). I know instances of late models BMWs having year-end $5000 incentive. So if you bought at invoice, the dealer cleared $5000!
3. Deal with Internet dept of dealerships since their incentives are based on volume. Go to the manufacturer website, hit Dealer Locator and blast out emails to them saying you’re willing to buy within the week, list your options/color and ask them to get back to you with their best price. Every new car with same features is a commodity on the lot – Econ 101 class.
4. Line up your financing from a credit union, and see if the dealer can beat it. If they can, tell them you’ll take it if they throw in a couple of accessories for free. They usually bite!
5. Always negotiate the sales price and financing separately, otherwise you will be taken to the cleaners if shopping on a monthly payment. Sell your old car separately, unless there is an advantage where the drive-out price from dealership(sales tax is paid on only the difference of the new car price less yur trade in) is less than buying new (pay sales tax on entire amount) less amount recd from private party sale.
6. Remember, depreciation is the biggest expense to buying a new car. Rebates by manufacturers affect resale price dollar for dollar.
Buy a reliable Honda or Toyota and run it to the ground. I can’t get myself to buy a GM or Ford where $1,500 per car is spent on healthcare and pensions that could have been spent on R&D. GM spends $50 million a year on Vi@gr@ for its retirees….
It’s hard getting a ‘good’ price on a used Honda or Toyota for a 2-3 gently used car, since there aren’t many around. There is a bigger upfront cost involved in owning Japanese, but it rewards you over the longer run.
I sold my house 6 months ago(made 200k). Living with inlaws and saving 50% of our income in a 5% account. The reason while all our money is in this account. We plan to have 400k by the end of this year. Ill be going to school and after I graduate in a few years. The wife, the kid and the inlaws are packing up and getting out of this state. Our friends just bought a ranch in kinnelon for 525,000 with 8k tax, dirt road. Dont know where were going but its going to be where 400k buys a nice home and the taxes no more than 6k. I think will find that. Were excited about leaving this state. Its going to be a 2 class state, Millionairs and welfare receipients.
Tim,
Congratulations. You didn’t ask, but I’d suggest that you have a talk with a good financial planner.
jb
James,
Do you know of any? Have over 300k sitting in a vangaurd account, but its all for the house. I am not sure if this is the right way to go. But want to keep the money safe and ready to use. Do you or anybody else have any suggestions. By the way i have been a reader of your blog for over a year and have followed the advice from it. And want to thank all the regulars for that.
Thank you.
At least 17 percent of computer programming, software engineering and data entry jobs were likely to be offshored in these IT-concentrated metropolitan areas, including Bergen-Passaic and Newark in New Jersey; Boston; Boulder, Colo.; Danbury, Stamford and Hartford in Connecticut; Minneapolis; Orange County, San Francisco and San Jose in California and Wilmington, Del.
First of all, why is data entry being lumped together with software engineering and programming? Given the huge skill differential between data entry staff and skilled programming staff, I suspect this may have been the only way for the author of this article to make her point sound as extreme as she wanted it to sound.
Secondly, duh. Of course these areas are going to lose the most jobs. Every large employer of IT staff I’m aware of in this area is in the midst of two concurrent shifts – one of IT jobs overseas and the other of IT staff from NJ to less expensive states. I see it everywhere.
That said, there are still high-paying IT jobs in New Jersey for people with experience. But there are a lot fewer entry-level IT jobs. They’re almost gone. Not sure what to make of that.
The new name is simply because that’s how i feel. Getting hitched in April. We’ve got our 20% and then some all set.
And now I’m seeing prices still not falling. I would love to own again (bought and sold – not technically a flip, but close – in Fla a few years ago), but the soon-to-be wife doesn’t see prices coming down far enough.
Which sucks.
We’re looking at 450k houses now and aim to pay about 350k-375k max come this summer. We’re definitely not going to over-extend ourselves, in case we want to have kids or i want to pursue a freelance writing career.
Come on owners … lower your prices! Don’t you need to cash out?
Tim,
Read my post #155 about tax equivalent returns and such. That’s the only advice I can offer. That hsbdirect account offers 5.31%, so that’s a 6.2% increase in interest before taxes over your 5%. I wish I had 300K. Feel like being a VC with your down payment?!
jason b
Frustrated,
You’re in a staring match with the collective owners of New Jersey. Who will blink first?
you boys change the RE block party, as much as I change wives… wink wink….
What is the final story? Some us have to work in the morning (just kidding).
SAS
Hey John Scerbo, financial consultant….
You smoken some bad grass? Why are you so behind the 8 ball? Were you sleeping during class in your college days?
Yikes.
SAS
sync – you know the wives always call the shots … we wont buy until we find a deal. we’re not hard-up to move just want.
We want to, but don’t need to.
The top reason to move:
… we simply wont have room for any wedding gifts
There are other, less important reason – live in a noisy area of brooklyn … dont like having a landlord … annoyed that we dont have enough space … dont feel like we have enough room to entertain guests …
Foreclosure filings soar in Brooklyn, Queens
http://www.crainsny.com/apps/pbcs.dll/article?AID=/20070212/FREE/70212009/1048
The number of homes in foreclosure rose 18% in the last six months of 2006 compared with the same period of 2005, according to data from RealtyTrac. More worrisome is the fact that filings tabulated by Profiles Publications show that 100 homes in both Brooklyn and Queens are entering the foreclosure process each week — double the numbers of a year ago.
We are currently doing all IT placements offshore. The experience is not what upper management was expecting. The local expartiate developers from India find the offshoring from there most inexplicable.
We are completing a complex pilot project where much of the development was to be provided from India. They have proved unable to build the plan and much of the work has been pulled back here to try to meet the timeline. The develpers we deal with seem like children; just no initiative at all.
Another major part of the difficulty is the time difference. This kept delaying progress as the ‘experts’ there made little effort to discover the causes of repeated failures in their code. Finally, a line by line marathon code review by one of our VPs located the problems.
The MDs are starting to look at cheap domestic locations and captive shops as an alternative.
There are serious bonuses available for those willing to locate overseas to handle these projects.
Perhaps highly structured by-the-book development efforts can be successfull, but when it comes to high-demand, short-timeline , fast-turnaround development, forget it.
I find the suggestion that management will be offshored very funny. That is probably the one area where offshoring might yield better results.
…highly structured by-the-book development efforts can be successfull
In my experience, that’s precisely what the most successful IT offshoring engagements consist of.
Look at this thread…it looks like the flippers in Hoboken are going to get squeezed.
http://www.hobokenx.com/html/modules/newbb/viewtopic.php?topic_id=7023&forum=5&post_id=73631#forumpost73631
OMIGOD…. for the love of pete,
I am moderated yet *again~*
sl
still_looking Says: Your comment is awaiting moderation.
February 13th, 2007 at 12:36 am
Just got to the computer now… it’s been a long day…..
To back track to some much earlier topics:
Those looking to invest. If you need to stay very liquid, treasurydirect.gov has 4 week treasury bills that lately are over 5% — and as someone else noted- banks are offering good interest rates, too.
as for REOs. When the bank takes a property at a foreclosure, they pay a nominal ($100 in NJ) amount.
Third party buyers (aka “vultures”) are usually professional RE investors who (of what I have seen) are a scary bunch. I saw a guy who probably got burned on a prop in Saddle River — “won” it at auction for 1.25M in March 06. The upset price was in the mid 400K range. I saw he had it listed for 1.45M (Friedman RE in Bergen) I don’t know if he ever sold or recouped his money – maybe those with access might know: it’s vacant, so I don’t know if I should disclose the full address 7* Woodcliff Lake Rd.
At foreclosure sales there is a senior lien holder — usually the mortgage company. Almost all liens (secondary mortgages, contractors, others owed money) are junior to them with the exception of municipal and federally owed monies. The “upset” price is the amount usually owed to the senior lien holder. If the prop is worth less than the upset price – usually no one wants it and it gets “sold” to the bank for what’s owed and the token $100 (in NJ.)
If a junior lien holder shows up for the bidding and has a significant interest (a lot of money owed) in the prop, they may bid to push the price up: any $$ left over after the senior lien holder and sheriff’s fees are paid go to the junior lien holders.
Just some info on FKs.
I’m seeing a LOT of re-listings with new 237—- numbers on gsmls.
WOW… a cameo appearance from BooYaBob.
and finally Thanks!!! for all the car buying info…what an awesome resource.
and…jb, for your anesthesiology relative: If not constrained by family, etc, locum tenens work (temporary doc work) is hugely lucrative but involves a lot of travel and a good accountant.
sl