From the Herald News:
Ex-city dwellers see new light in suburbs
Charlene Drakeford had a few bones to pick last November. She said during a Prospect Park Borough Council meeting that a brick had been thrown through the rear window of her car, she couldn’t get the library books she wanted, and there was no streetlight in front of her house — making it “real dark.”
She and her husband had moved to the borough a year earlier from Paterson to become first-time homeowners.
“I didn’t come out of Paterson for this,” Drakeford said.
…
People have been moving from cities to suburbs for decades, in search of more space, more quiet, less crime, better schools and a slower pace of life. During interviews with several Patersonians who’ve relocated to nearby towns, they said that despite financial sacrifice they got what they wanted — and sometimes more, as with the Drakefords, who benefited from the personal nature of small-town life.But moving from the city isn’t without negatives. And over time, some said, a rise in crime, school overcrowding and property neglect around town made them feel that the place they moved to had become like the place they had left.
Rutgers University experts said urban blight is creeping into historic New Jersey suburbs. Michael Greenberg, Edward J. Blaustein School of Planning and Public Policy associate dean of faculty, said some inner suburbs around Newark, Jersey City and Paterson now suffer from poor schools, physical decay and crime.
“(Suburb-bound people) have a lot of perception, some of which is not borne out by reality,” said Greenberg, who carried out a study on perceptions of neighborhood quality.
…
Mary Pendergast moved to Clifton for the schools in 1988. With the move, her rent doubled from $300 to $600, but Pendergast was impressed with Clifton schools.An officer showed up at her house when her daughter enrolled at the local high school to ensure she was a city resident. The district seemed “very strict,” she said.
But Clifton’s a different place today, she said. Pendergast still lives in the city but her granddaughter, Hannah, 7, attends a Catholic school. Clifton public schools have gotten too overcrowded, Pendergast said.
And the main streets of “The City That Cares” — as some Clifton street signs read — are full of litter, she said.
“Now I’m a grandparent, and I see how Clifton changed,” said Pendergast, a trucking company employee and part-time waitress.
Clifton Mayor James Anzaldi said there’s more litter in town today than he remembers as a child, as well, but that’s the case in any town these days.
One hell of a computer “glitch” on the Nikkei this morning.
jb
Drat! Moderated at the end of “Weekend Discussion”. A good Monday AM rage against the machine…
Hoping for no “handheld glitches” on the NYSE floor today. Will be interesting to see what their IT gang got done over the weekend.
The ‘YouTubing’ of real estate marketing
By Les Christie, CNNMoney.com staff writer
Nearly 80 percent of home buyers start their search on the Internet – soon they’ll have more to look at.
On its Web site, the Peninsula on Indian River Bay development in Delaware has begun using high-quality, television news-style presentation to sell homes. On the site, viewers take interactive tours of the property, led by two on-line hosts, through different site “channels.”
http://biz.yahoo.com/cnnm/070302/030107_new_house_marketing_method.html?.v=1&.pf=real-estate
From the NY Post:
GMAC’S SUBPRIME STAKE MAY HURT CERBERUS
The subprime mortgage market collapse just might give private-equity titan Cerberus a headache for the forseeable future.
As the headlines mount about woes in the subprime sector, Park Avenue-based Cerberus’ 51 percent stake in GMAC – the owner of a massive subprime mortgage portfolio – is looking increasingly problematic.
With its GMAC stake, Cerberus also got one of the largest subprime players: a lender named ResCap Capital.
Cerberus, along with Citigroup and Aozora Bank, acquired the GMAC stake in November for $7.9 billion.
The deal seemed a masterstroke at the time: GMAC parent General Motors, reeling from troubles at its core auto unit, got billions in cash and dividends from the deal.
Cerberus, meanwhile, scored what was seen as one of the crown jewels of the financial world, an asset that reliably threw off billions in cash and earnings.
But ResCap could sharply reduce GMAC’s luster. ResCap has $57 billion in subprime loans on its books as of Sept. 30, or a staggering 77 percent of a $73 billion portfolio.
HSBC eliminating second lien purchases.
jb
From Seeking Alpha:
Stifel: Subprime Mortage Sector in ‘Downward Spiral’
Stifel is out with a Subprime Mortgage Sector downgrade saying that following meetings with three mortgage lenders last week (CFC, NDE, and IMH) and several recent negative developments in the sector, they are taking a significantly more bearish stance on the industry.
Specifically, despite valuations that are well below book value, the firm sees increasing evidence that this industry is now in a downward spiral whereby each negative development fuels additional deterioration in key fundamentals including origination volume, pricing, credit ” and most importantly “funding”.
Firm believes recent developments have led to a “crisis in confidence” that has put unbelievable pressure on secondary market demand with bids for loan pools and ABS bonds nearly evaporating. With the NEW and FMT news late Friday, the firm believes this risk is only increasing further, and they now expect profitability will be severely strained until conditions stabilize. They expect this to make it difficult for even higher quality players like LEND to remain solvent and all remaining subprime lenders will need to obtain significant covenant waivers to remain operational.
“Obviously what started in Asia spread to the weak European bourses. The real nitty-gritty of the decline is the fear factor that is increasing.”
lovin’ my 5.1% CDs right now.
http://money.cnn.com/2007/03/05/markets/stockswatch/index.htm?cnn=yes
From Bloomberg:
New Century’s Fate May Depend on Funding From Securities Firms
The fate of New Century Financial Corp. may rest with securities firms including Morgan Stanley and UBS AG that once staked the U.S. mortgage company to more than $17 billion and bought its loans by the thousands.
New Century, the Irvine, California-based home lender in default because of losses from bad loans, said March 2 that U.S. prosecutors have begun a criminal probe of accounting errors and trading in its securities. The company also said it may not survive unless lenders ease terms for providing new financing.
“These credit lines are the lifeblood of subprime mortgage companies,” said Vince Arscott, an analyst in the structured- finance division of Fitch Ratings. “It’s really going to be up to the respective credit committees of the banks, whether they want to be exposed to this risk. They may just slowly start to turn off the nozzle.”
New Century (NEW) down 56% in pre-market trading.
jb
Fremont (FMT) down 41%
“HSBC eliminating second lien purchases.”
These changes will impact many purchases. Consider someone looking to buy an older house that needs work.
In the past, prospective buyers had two main choices to make the purchase work:
1) Have substantial savings $$$, which at bubble prices would be unlikely after the closing papers are signed.
2) Use an 80/20 loan for 100% financing, and then dump the savings $$$ into the remodel.
Option #2 is fast becoming a thing of the past.
March 5, 2007
Mortgage Crisis Spirals, and Casualties Mount
By JULIE CRESWELL and VIKAS BAJAJ
Even in affluent Orange County, Calif., the growing wealth of executives and brokers in the booming mortgage industry was hard to miss.
For Kal Elsayed, a former executive at New Century Financial, a large lender based in Irvine, driving a red convertible Ferrari to work at a company that provided home loans to people with low incomes and weak credit might have appeared ostentatious, he now acknowledges. But, he says, that was nothing compared with the private jets that executives at other companies had.
“You just lost touch with reality after a while because that’s just how people were living,” said Mr. Elsayed, 42, who spent nine years at New Century before leaving to start his own mortgage firm in 2005. “We made so much money you couldn’t believe it. And you didn’t have to do anything. You just had to show up.”
Just as the technology boom of the late 1990s turned twenty-something programmers into dot-com billionaires, and leveraged buyouts a decade earlier turned Wall Street bankers into Masters of the Universe, the explosive growth in subprime lending turned mortgage bankers and brokers into multimillionaires seemingly overnight.
Now an escalating crisis in the market, which seemed to reach a new crescendo late last week, is threatening a wide band of people. Foremost are the poor and minority homeowners who used easy credit to buy houses that are turning out to be too expensive for them now that mortgage rates are going up, but the pain is also being felt widely throughout the business world.
read more http://www.nytimes.com/2007/03/05/business/05lender.html?_r=1&ref=business&pagewanted=print&oref=slogin
Subprime shops sounding more and more like boiler room operations..
From the NY Times:
Mortgage Crisis Spirals, and Casualties Mount
Even in affluent Orange County, Calif., the growing wealth of executives and brokers in the booming mortgage industry was hard to miss.
For Kal Elsayed, a former executive at New Century Financial, a large lender based in Irvine, driving a red convertible Ferrari to work at a company that provided home loans to people with low incomes and weak credit might have appeared ostentatious, he now acknowledges. But, he says, that was nothing compared with the private jets that executives at other companies had.
“You just lost touch with reality after a while because that’s just how people were living,” said Mr. Elsayed, 42, who spent nine years at New Century before leaving to start his own mortgage firm in 2005. “We made so much money you couldn’t believe it. And you didn’t have to do anything. You just had to show up.”
[13],
Hey Kal, I assume there will be a different mode of trasportation coming in the very near future.
a bk for new ,,, likely today
That seems to be the buzz on NEW today..
Analysts warn New Century may not survive
Several analysts agreed Monday that New Century Financial Corp., one of the nation’s largest subprime mortgage lenders, likely faces liquidation or bankruptcy following revelations that it’s under criminal investigation and in violation of debt covenants with several lenders.
“New Century is more likely to enter the death spiral we had feared, as filing delays, financial difficulties, likely restricted liquidity and regulatory/criminal investigations could conspire to limit its options outside of bankruptcy,” Merrill Lynch analysts wrote early Monday.
More on NEW;
“The fate of New Century Financial Corp. may rest with securities firms including Morgan Stanley and UBS AG that once staked the U.S. mortgage company to more than $17 billion and bought its loans by the thousands.”
“These credit lines are the lifeblood of subprime mortgage companies,” said Vince Arscott, an analyst in the structured- finance division of Fitch Ratings. “It’s really going to be up to the respective credit committees of the banks, whether they want to be exposed to this risk. They may just slowly start to turn off the nozzle.”
“Right now it’s 50-50” whether the investment banks pull financing for subprime lenders including New Century, said Bose George, an analyst at Keefe Bruyette & Woods in New York. “If things get better, it’s possible they survive. If things get worse, the possibility that warehouse lines get pulled is real.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAMfmOrhC6.E&refer=home
http://www.usatoday.com/money/economy/housing/2007-03-04-mortgages-1a-usat_N.htm
It will be interesting to see where the ABX indicies end the day.
jb
HSBHSBC Says Profit Rise in 2006
C Holdings PLC, Europe’s largest bank by market value, reported Monday that profit rose 5 percent in 2006 despite losses in its mortgage operation in the United States that led to the removal of two senior executives.
Chief Executive Michael Geoghegan attempted to fend off criticism that the bank had provided loans in the United States to people who were not in a position to pay their debts.
“This is not trailer park lending,” Geoghegan said, adding that the typical HSBC Finance (nyse: HTN – news – people ) customer has average household income of $83,000, is 41 years old, has two children and a home worth $190,000. “This is Main Street America.”
http://www.forbes.com/feeds/ap/2007/03/05/ap3484224.html
Is he talking about folks who took subprime in last 4 years??? The demographic he says should not need to take sub-prime. The Home is only 2.5 times the income !!!
This guy has very BCBob-like views ;-) :
Peter Schiff, president of Euro Pacific Capital.
What do you guys think of his book?
http://www.amazon.com/Crash-Proof-Profit-Economic-Collapse/dp/0470043601/ref=pd_bbs_sr_1/104-3912077-4970322?ie=UTF8&s=books&qid=1173106118&sr=8-1
Thanks
From the above article, #18
To stem their losses, lenders nationwide are notifying mortgage brokers to cancel loan programs. Many of them are:
•Reducing loans for 100% of the purchase price.
•Reducing the number of “piggyback” loans, whereby a lender makes one loan for 80% of the purchase price and a second loan for the remaining 20% of the price at a higher interest rate.
•Raising the required credit score.
•Requiring more documentation of a borrower’s income and scrutinizing the appraisal and comparable-home sales data.
“Some of these companies are yanking away six, eight (loan) products at a time, and the reps are just hanging on the phone with their mouths open, saying, ‘What are we going to sell?’ ” says Dave Tucker, owner of MileHighMortgage.com in Castle Rock, Colo.
This guy has said it all. I’ll take it one step further. When new listings start hitting realtor’s offices, the question will be; “Sell?, to whom?”
Hey Clot, if you’re around –
We made our offer, almost 10% off list. The sellers “slept” on it – we expect to hear from them today. Our agent seems to think they will counter. If they do, we will counter – we expect that. What happens after that, and how long should this take? I am afraid that my bid will be used to shop offers, and I’m not interested in that.
ISM comes in weaker than expected.. From the AP:
Services Show Slower Growth in February
The nation’s service sector expanded in February, a trade group said Monday, but the 54.3 reading was slower than analysts had been expecting.
The Institute for Supply Management, which is based in Tempe, Ariz., said its index of business activity in the service sector was down from 59.0 in January. Wall Street analysts had expected a reading of at least 57.0 for the latest month.
#22 NJ Gal What area?
NJGal, what’s your hurry? With a market trending down, subprime imploding, the economy (in my view) heading into recession . . . why are you intent on buying right now?
You’re looking at zero appreciation (if you’re lucky) over the next three to five years.
JMHO, no offense intended.
how long should this take
It totally depends on how aggressive both you and the seller are. If you want to prevent the seller from shopping your offer, either accept the counter offer or counter the counter offer, put a 24 hour expiration date on it and be prepare to walk.
How long was the place listed? If it’s new, they might be more incline to feel things out a bit. If it has been around for a while, they are more likely to know what their bottom line is and give you a yes or no.
NJGal – Good luck! We are about to do the same today. I know the market is going down but we are out of space currently and expect to be in this house (if we get it) at least 10-15 years. We are also prepared to walk rather than exceed our max price.
The house has been on since Oct. – about 150 days. It’s priced a little below comps, has been through several price cuts, and as I said, we made a low offer. Plus it’s on a cul de sac not too far from the train where there are even bigger houses. We are definitely willing to walk though, and I was thinking about putting a time limit on my offer to avoid the shopping. I will not haggle over 5-10K at this point, but if the sellers turn out to be unwilling to negotiate, oh well, their loss.
Good luck PossibleBuyer – let us know how it goes. Where are you looking?
Feb sales + March contract number will be interesting to see considering we are experiencing
a] a mini credit crunch +
b] mini stock market collapse (as of yet)
By the way, how have the blue chips been holding up through this? That’s pretty much what I have. I wonder what the outlook for those are. For ex., I hold a significant amount of JP Morgan. It pays a decent divident. I’m wondering if I should sell or ride it out.
NJGal,
I am closing on a house a this Friday. The situation isn’t exactly the same because it’s a townhouse and is in South NJ (Mount Laurel). It had been listed since August of last year (289k) but when I put in an offer it was listed at 244k.
I put in an offer because I need the space (like you). I have been living in a one bed apartment for five years and have recently got married. I plan on staying in this place for 10 years, so I can ride out any real downturns, if needed.
I offered 230k originally and the seller’s agent came back with “multiple offers, need last and best offer”. I expected that this was just BS but offered what I felt would net me the house. I ended up offering 236k and the seller agreed on the price.
The whole process from first offer to counter offer and then Seller agreement to offer was about 4 days. The last part of the offer (counter and Seller agreement) was done over the phone in about a 4 hour segment of time.
Feb sales + March contract number will be interesting to see considering we are experiencing
Too short of a timeframe, more like 6-12 months out. The curbs on subprime purchases by Freddie are going to take place on September 1st. The new OCC/Fed/FDIC subprime guidance won’t likely make it down to state banking regulators any earlier than the end of the year.
jb
(semi-repeat from late last night, down in the 450 range)– Based on what my wife (a NJ native) was familiar with, we have been looking in some of the Northern NJ “A” towns — (Ridgewood, Upper Saddle Riv., Glen Rock, Short Hills, Chatham, Madison). Someone mentioned to us Oradell and River Edge. Any insight on these towns- how is the train (to commute to NYC-appears to be limited schedule), schools, friendliness of neighbors, safety, taxes, city services and amenities, etc.?
Thanks a bunch.
Eagle
NJGAL (#28)–
That house sounds like an one that I’ve had my eye on in Millburn/Wyoming. That is…150 days, price cuts, not too far from train…except that I believe they are asking above comps. I’m not sure 10% is considered a lowball. Is it off the OLP or current LP? Keep us posted on the outcome!
Justin thanks for the input – mysteriously your offer was accepted – do you think there actually were other offers? Or do you just think yours was either the highest or most attractive for some other reason? For ex., we have nothing to sell and can close on their schedule. I think in this market that is attractive. Plus, we’re approved for a mortgage for 200K more than we’d need, which I also think will help (although I’m not telling them that – I have a great mortgage broker who won’t give a letter because he doesn’t think they need to know my business, but will assure them that I am guaranteed a mortgage because we are in the prime market). And if this happens, I hope it will be done before the weekend. Otherwise I will keep looking!
BuyNextYear, it’s 10% off of the price now, almost 100K total off of the OP. And there are plenty of places still listed at this house’s OLP, and they’re not as well located.
NJGal – We are looking in one of those overpriced towns that we started renting in 4 years ago. We know we are paying a premium to buy here, but don’t feel like doing the new schools/new friends thing to our children and to us. The house we have our eye on has some weird issues and hasn’t been able to sell for 1.5 years. But someday it could be amazing. We’ll see. I’ll keep my fingers crossed for you too.
Always love reading internal memos. This one from Fremont VP Brian Daily..
From: Brian Daily
Sent: Sunday, March 04, 2007 4:22 AM
To: *Tampa 2 Office; *Tampa 1 Office; *ResRe Tampa 1 AE
Subject: Fremont ceasing doing business.
Teams,
It is with great regret that I must inform you that Fremont Investment and Loan will cease funding loans and doing business.
At 12:35 (pst) Saturday, Fremont General received notice from the FDIC that they are not permitting any more loans to be funded by Fremont. In short, our funding available was terminated by the Federal Home bank.
The suddenness of the change and the shift from our communication literally less then 24 hours previously simply perplexes me. However, this simply validates the volatility on our business. None of us in Hawaii realized or appreciated the gravity of the situation we were facing.
There are many questions that many of you have. There is a conference call that will be conducted on Monday that will answer many of these questions that you will have.
Jerry Casanova will be able to communicate with you more specifics on Monday morning. Please show up for work to receive these instructions. I will be leaving the meeting here in Hawaii early and attempting to return to the office sometime on Monday.
In order to assist our clients with some instructions- I have listed some Q and A’s to assist you in your communications:
Q: Do I continue to solicit loans?
A: No. As of the 3rd, we are no longer sourcing new business.
Q: Will I close what is in the pipeline?
A: This will be clarified on Monday. I would suggest to sent back all loans to the broker
Q: What do I tell the brokers?
A: Fremont Investment and loan is no longer conducting business. Any files that are pending or have been submitted will be returned to you.
Q: Will I get paid for the loans closed?
A: Yes.
Q: Does termination take effect immediately?
A: Clarification on this item will be determined on Monday.
Q: What about benefits and severance?
A: This will all be clarified on Monday or the early part of the week.
Everyone, I cannot tell you how sadly I am disappointed this industry has trended so deeply in this direction. You all have accepted me so warmly upon my arrival at Fremont and I will always cherish those relationships forever. At this point, I wish I had more information to share with all of you but I simply do not. My travel logistics are extremely complicated right now and hopefully I will have more information in the next 24 hours.
So I do not lose valuable contact with any of you, please forward to Jo Haynes your cell phone, home phone and home address. I would like to keep this information as we begin to search for alternative strategies to consider.
JB,
IMO we will see a phased tightening over the next six months. Lending standards will match Feddie’s new standards by Sep 1st. Tightening standards overnight will be too severe.
I’m not saying we’re not seeing standards shift overnight, we are. The question is, are these moves nothing more than attempts to placate the banks that fund these firms? Some lenders have been talking tough, but have only raised minimum FICOs 10 points. I can’t imagine a move like this pricing a significant number of marginal buyers out of the market. I agree that lending standards are tightening, I’m just unsure if the changes thus far will have any significant impact on sales.
The subprime guidance and moves by Freddie, IMHO, have more teeth than what we’ve seen to date. I believe these two changes *will* impact the market. So, unless the subprime shakeout continues to worsen, I feel it will still be a number of months until the market feels the impact of these changes.
jb
from the Motley Foll website:
http://tinyurl.com/27hn6h
NJGal(#36),
At the time of my “last and best offer”, I was under the impression that it was BS and my offer was the only offer. They were cutting the price about 3/4k every month or so. The last cut was about 2 days before my offer (I didn’t even know about it).
I ended up going halfway between the last Seller’s price and my original offer, just in case of another magical offer. I really wanted the house and it was bigger/better than most I looked at.
I ended up asking myself this question, Is the difference in my offer versus the current listing price enough to make me walk? I probably could have got the house for 230k but it wasn’t worth the chance of losing it (very limit inventory at the moment) and I couldn’t justify losing a house for 5k (plus interest, I know) over a period of 10 years.
Another nail in Fremont’s coffin.. From Reuters:
Fitch downgrades Fremont General Corp. ratings
Fitch Ratings on Monday said it downgraded Fremont General Corp. (FMT.N: Quote, Profile , Research) ratings deeper into junk status after the subprime mortgage lender announced it would shutter its business amid regulatory pressure.
Fremont’s long-term issuer default rating was cut to “CCC” from “B+” and its long-term senior debt rating was lowered to “CC” from “B,” Fitch said in a statement. More downgrades are possible, Fitch added.
Fremont General, which runs the second-largest independent subprime lender, on Friday said it received a cease-and-desist order from the Federal Deposit Insurance Corp., and that the regulator noted violations in some company transactions. Fremont also said it may sell its subprime business.
“Fitch also believes that FMT’s financial flexibility will weaken further and the prospects for receiving a reasonable value for the subprime business are low,” Fitch analysts said.
“I ended up asking myself this question, Is the difference in my offer versus the current listing price enough to make me walk? I probably could have got the house for 230k but it wasn’t worth the chance of losing it (very limit inventory at the moment) and I couldn’t justify losing a house for 5k (plus interest, I know) over a period of 10 years.”
EXACTLY what our parents have said, and they all have the experience of buying and selling over the years. 50K might make me walk, but 5-10? If you want it, it’s worth it to compromise on an amount like that. Sounds like you were the only offer, but congrats anyway!
PossibleBuyer, I’m not sure I would move kids either – I can see your point. And frankly, there are reasons that “top towns” are “top” – usually good schools, good commute, nice community. I don’t think there’s anything wrong with paying a premium to live in certain towns if that town is the right choice for you.
I will be relocating from Prague, CZ, in about four months. My relo agent is recommending Northvale, Norwood, and Harrington Park, for the schools and proximity to NYC. Trains are not an issue, as I will be provided transportation.
Is this a good area for a family with two children 7 & 9.
NJGal –
“I don’t think there’s anything wrong with paying a premium to live in certain towns if that town is the right choice for you.”
That’s a forward looking statement
italics off ?
njgal:
i thought you and i discussed that were you looking in westchester. if so, what town did you make the offer in and which school district was it in?
thanks. and good luck.
Totally off topic, but made aware of it by this board, I watched “Street Fight” (The documentary about the 02 Newark election between Sharpe James & Corey Booker).
I knew it was a crazy election but.. WOW! Very interesting to watch. Now that he’s been in office for a little while, anyone have an opinion on Booker’s job so far?
“50K might make me walk, but 5-10?”
$5-10K off what? Compare someone who bought last year at “$10K off” with someone who bought last week at “150K off”:
113 Short Hills Ave – Closed $750K last year.
115 Short Hills Ave – Closed $599K last week.
Very similar houses, probably ‘worth’ within $10-20K of each other, all things equal.
“I will be relocating from Prague, CZ, in about four months. My relo agent is recommending Northvale, Norwood, and Harrington Park, for the schools and proximity to NYC. Trains are not an issue, as I will be provided transportation.
Is this a good area for a family with two children 7 & 9.”
I have to admit that I didn’t even know where these towns were and I’ve lived in NJ all my life. They are close to NY and I guess you would be driven down the Palisades Pkwy to The George Washington Bridge but where in NYC will you be going? Once you go over the bridge, it could take you a long time to get to midtown or downtown. If you take the Palisades Pkwy to 95 and then go through the Lincoln Tunnel you’ll be hitting a lot of traffic on the NJ side of the river.
I’m not sure what you’re asking unrealtor.
Apparently you didn’t read my post – I’m not buying something for 10K off – more like 100K off. I’m talking about not quibbling over 5-10K when you’ve come close in negotiations. Not buying something for 10K off the asking price.
from my perspective……..THIS is news…….and really bad news at that….
http://www.bloomberg.com/apps/news?pid=20601103&sid=aiCSKvYZJmAg&refer=us
I looked up Harrington Park on google and came up with this link:
http://www.city-data.com/city/Harrington-Park-New-Jersey.html
Looks like there might be a ferry close by because it says there is an Amtrak station 7 miles away in Yonkers NY but the only way it’s 7 miles away is by ferry.
I’ll be managing some of the steel erection for DCM, we’re putting up the Goldman Sachs tower across from the WTC site. My hours are long and odd,usually with a 7AM start, so I’m told the inbound traffic will use the West Side Highway.
Actually, I was hoping to hear about those towns, my commutes are always the twilight Zone.
The kid’s schools and safety are the issues that I was hoping to hear about from real residents, rather than real-estate types.
thank you.
I’m not a “real estate type” but my advice is to find a town that is closer to downtown. There are plenty of great small towns with good schools in locations that would make your life easier.
Willow, thank you for your replies.
The R-E-type remark was referring to my Relocation Agent.
Your input, I imagine, is from a resident, and I again thank you.
Prague,
Have you been here before, how familiar are you with the area? Any other amenities important to you?
jb
“115 Short Hills Ave – Closed $599K last week.”
Unrealtor — Did this really close or did the deal fall apart? I see it posted on craigslist for 599k on March 2nd.
http://newjersey.craigslist.org/rfs/287455985.html
BuyNextYear, it closed last week at $599K, not sure what’s going on at craigslist.
For UnRealtor #50.
Where are you getting the sale $ from ?
Thanks.
Arriving from Prague,
Of the three towns you listed, I think Harrington Park is your best bet. It’s a very quiet town with excellent schools.
Just be sure not to purchase near the tracks as it’s a freight line. A LOUD freight line.
I continually get Northvale and Norwood confused due to the proximty of each town but they are not “equal”.
Other towns with good schools in that area are Closter, Haworth, Cresskill, Demarest and Tenafly.
Rich
To add, the house next door (113 SH Ave) was listed at $750K and sold in a few weeks at or near asking.
115 SH Ave was also originally listed at $750K, as the recent comp next door (113 SH Ave), would dictate.
It closed for $599K. The bagholder at 113 SH Ave must be enjoying the new comp and the $150K of negative equity in 12 months.
Tom #61, GSMLS. Anyone can look up the MLS # and confirm: 2334280
“Not buying something for 10K off the asking price.”
I guess my point is, which asking price? The one from today, or the one 6-12 months from now?
In your post (#29) you wrote: “It’s priced a little below comps” — which means it’s priced “a little below” 100-year-peak prices?
From CNN/Money:
Subprime woes: How far, how wide
Lending to home owners and buyers without good credit has suddenly become a very bad business, and possibly a very big problem for the U.S. economy as a whole.
The sector is known as subprime mortgages, which pumped $640 billion into the economy through financing home purchases and refinancings in 2006, according to trade publication Inside B&C Lending. That’s nearly twice the level of this kind of lending seen as recently as 2003.
But experts in the field see bankruptcies and a sharp decline in this type of lending in 2007, due to rising delinquencies and defaults by borrowers, and proposals to toughen lending standards and regulation. That’s sending shares of some major financial firms sharply lower Monday.
“Everyone in the subprime sector this year is going to lose money,” said Bose George, analyst with Keefe, Bruyette & Woods, a Wall Street firm specializing in banking and finance. “They’re getting squeezed on all sides. Going into the year, we were looking for a decline of 15 percent, but clearly now that is far too low. It’s now looking like a 25 to 30 decline.”
…
Some economists say that choking off more than $100 billion in home financing will cause problems for real estate and home prices overall by keeping some buyers out of the market, and forcing some current homeowners to sell or face foreclosure.
“People who a year ago could have purchased a house with a subprime mortgage aren’t going to be able to purchase,” said Paul Kasriel, chief economist with Northern Trust in Chicago. “Increased foreclosures will mean more inventory on a market that already has a glut of homes for sale.”
And Kasriel said the additional hit to real estate from the subprime meltdown is likely to mean serious problems for the economy overall.
“Housing has played a very large role in this expansion and one of the reasons it’s played that role is there has been a change in the mortgage market,” he said. “This has been a credit-induced housing boom that lifted other sectors of the economy and it’s all in reverse now.”
“How housing ills killed the bull”
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/HowHousingIllsKilledTheBull.aspx
Prague,
There are communities/schools that are better suited for a commute to downtown NY than Norwood, Northvale, etc. Regardless of whether you are driving or taking mass transit. Perhaps your relo agent has connections to Bergen County (most NorthEastern county in NJ) and it therefore advising you towards that area? Even with your odd hours and available transportation, I think you might prefer the commute from Essex County or Union County and there are numerous ‘top’ towns which are safe with good schools (will your kids go to public school or will they attend private school). Summit or Westfield in Union County or Short Hills/Millburn in Essex. Those towns are best for those in a “money is no object” type situation, however.
From the USA Today link above.
OWNERS AT RISK
Almost 3 million homeowners with shaky credit have adjustable-rate mortgages. Refinancing those loans will be hardest in areas where home prices are falling. Here is a look at the top 24 metro areas with the largest home-price declines at the end of 2006 and the percentages of homeowners with subprime loans who face higher payments by the end of 2008.
Metro area Home-price decline Reset risk
Akron, Ohio -7% 60%
Barnstable/Yarmouth, Mass. -8% 58%
Bloomington/Normal, Ill. -6% 58%
Bridgeport, Conn. -5% 58%
Cape Coral/Fort Myers, Fla. -12% 63%
Columbus, Ohio -6% 50%
Daytona Beach, Fla. -5% 56%
Gary, Ind. -4% 63%
Grand Rapids/Muskegon/Holland, Mich. -4% 56%
Indianapolis -4% 51%
Kennewick/Richland/ Pasco, Wash. -4% 63%
Miami/Fort Lauderdale -6% 60%
New Orleans -9% 49%
Edison, N.J.* -4% 60%
Palm Bay/Melbourne/ Titusville, Fla. -17% 61%
Pensacola -4% 64%
Reno -9% 59%
Sacramento -4% 51%
San Diego -5% 59%
Sarasota/Bradenton, Fla. -18% 63%
Springfield, Ill. -10% 62%
Toledo, Ohio -7% 67%
Worcester, Mass. -5% 59%
Youngstown/Warren, Ohio -8% 66%
* = includes Newark, N.J., Nassau/Suffolk,
NY., and 23 counties in New York, New Jersey and Pennsylvania. Sources First American LoanPerformance, National Association of Realtors
This breaks my heart……..
Pierogi Sales Fall In Chicago
http://www.bloomberg.com/apps/news?pid=20601103&sid=aFvPwQdHG0vQ&refer=us
I have a country home about 75 miles Northwest of exit 5 on the PIP, and I see that this area is right near there.
I rejected an apartment in Battery Park City, (too close to work), and I want my kids to spend their youth outside of NYC.
As for the Relo agent having motives, it won’t concern me. They’re footing thr bills.
In my business, I’ve dined with Gotti and Gravano, Cuomo and Spitzer, and they’re just different sides of the same coin.
Thank you all very much.
Surely a sign of the apocalypse.
Prague,
You don’t have to make your decision from abroad, do you? Online suggestions are very helpful, but they don’t compare to flying over and touring these areas yourself.
jb
jb,
Maybe you gave give Prague a link to the NJ School Report Card.
#69:
Poor New Orleans. People are losing their shirts trying to pay mortgages on houses that aren’t even there anymore. It’s hard to put them in the same category as Daytona Beach, FL et al.
Grim, are you having server issues today? I just did a whole post and it didn’t take. Oh well.
My point was to unrealtor, who is starting to come across as the bitter renter we all have railed against. I am a huge defender of the “bubbleheads” and don’t believe many are bitter as people claim, but come on unrealtor.
The house I am looking at was 300K in 1995. So the price I would pay (700) is actually not a terribly outrageous appreciation, considering the addition they put on, new garage doors, central air, etc. And the price in 6 mos. is irrelevant to me. I’m not leaving for many years, if ever. I also refuse to live my life based on other “what ifs” unrelated to the housing market, such as what if a spouse dies, you lose a job, etc. I wouldn’t buy at a market BOTTOM if I worried about that.
I am concerned about the market, but even in a down market I think it’s appropriate for certain people to buy, particularly me, where the cost is well within conservative estimates (less than 28% of my gross income a year) and I plan to remain there for a long time. This is no starter home to be sold in 5 years.
NJGal,
Yes, problems with the web host. I’m planning on moving the site in the next few weeks.
jb
From MarketWatch:
Frank calls for subprime legislation
House Financial Services Committee Barney Frank, D-Mass., said Monday that there should be a national law regarding subprime lending. Speaking to an international banking conference, Frank said the law should ensure that banks, “don’t lend people more money than they can pay back.” Subprime mortgages are offered to homebuyers who fail to meet the strictest lending standards. Lenders specializing in such loans rely in part on big banks known as warehouse lenders to finance their operations. These backers require that subprime lenders meet certain minimum financial targets; otherwise, they have the right to end the business relationship.
From MarketWatch:
Builder CFO doesn’t see spring turnaround for housing
Home sales haven’t rebounded dramatically so far this spring selling season, which suggests a hoped-for recovery in the housing market won’t play out as soon as some had expected, Toll Brothers Inc.’s chief financial offer said Monday. When asked about the potential fallout from the troubled subprime mortgage market, CFO Joel Rassman said it’s not a big part of Toll’s market, but that subprime jitters have “a big psychological impact” on homebuyers. During a Web cast from an investment conference sponsored by Raymond James, Rassman said headlines on the subprime market “make customers nervous” and added the housing market could feel significant impact in the next month, such as foreclosures and more speculators quitting the market.
doh!
http://www.bloomberg.com/apps/news?pid=20601103&sid=asAknMq5J8kY&refer=us
njgal #76 –
“where the cost is well within conservative estimates (less than 28% of my gross income a year) ”
What is this cost you are refering to??!
This breaks my heart……..
Pierogi Sales Fall In Chicago
http://www.bloomberg.com/apps/news?pid=20601103&sid=aFvPwQdHG0vQ&refer=us
It’s a good thing both my grandmother and my mother-in-law still make Pierogi’s in their homes. Nothing like a fresh batch of fried pierogi!
-Richie
ChiFi (#80),
That’s unreal – when I graduated from U Chicago in ’95, I tuition was around $22-24k, and I thought that was completely ridiculous.
$45k or 50K a YEAR? That’s a very scary thought… 200k+ for an undergrad education. If you didn’t happen to have wealthy parents, those are some serious student loans-
“IN ULTRA-PRICEY NYC, LOTS OF YOUNG FULL-TIME WORKERS NEED A NIGHTTIME GIG TO MAKE ENDS MEET”
I don’t know whether to applaud the “work ethic” of these young adults or gasp in horror at what they deem as necessary “conspicuous consumption”. Even Tony Soprano would be horrified I think.
http://tinyurl.com/3adhdg
So NEW breaches the $4 barrier, trading at $3.97 a share, down almost 73% today.
I wonder what is going through the mind of the major holders..
http://finance.yahoo.com/q/mh?s=NEW
This one stands out to me..
NEW YORK STATE TEACHERS RETIREMENT SYSTEM
Owning 2,011,750 shares, with a reported value of $63,551,182 on December 31st, 2006.
Current value, ~$8.1m.
jb
On my Snapple bottle today. Real Fact #175: In 1634, tulip bulbs were a form of currency in Holland.
NJGal (23)-
See how long they take after you counter them the first time. I think you’re ok as of right now. Sounds like reality may be seeping in on their end. They may have already shopped your offer and come up empty…
Well Clot, reality didn’t seep in – they actually gave us a floor of 750, which made me laugh – sellers, thinking THEY dictate the market? Enjoy riding it down. I made my final of 730. I am pretty sure that because I wanted to move fast their thought was that we REALLY wanted the house. Their plan backfired.
My agent thinks that if we had made the offer in April, we would have gotten it, b/c they are riding on hope now, having just had an open house and having just reduced the price 3 weeks ago. Let them enjoy their hope. If they come back to me in April, my price goes down.
NJGal (76)-
You’ve sussed out Mr. UnRealtor.
WAAAAAHHHHH!
JB: Have you looked into this idea for making the site more popular.
Online advertising arbitrage
Online ad services like Yahoo! Search Marketing and Google Adwords allow you to purchase online advertisements which cost you an agreed upon cost per click. These are known as PPC (Pay Per Click) ads. Some ad clicks will cost advertisers $0.01 while some can cost well over $10 depending on the keywords that were associated with the ad. Yahoo and Google both have programs which allow web publishers (aka owners of websites) to place ads on their own websites to make money. Some webmasters will make a website associated with a high paying keyword(s) and place PPC ads on it. Then, they will purchase low cost ads on Yahoo and Google for their websites. The end effect is traffic arbitrage. Low cost traffic is redirected towards pages which contain high paying links. Enough money is made from clicks to cover the traffic cost and turn a profit.
This is not arbitrage as defined above. The owner of the website is simply betting that the income from the affiliate marketing organisation is more than the cost of bringing visitors to the site. The website owner must pay the search engine for each visitor to the website but payment from the affliliate only occurs if the visitor actually clicks onto one of the affiliate advertisements. A classic example might be where each visitor to the site costs the site owner 10 cents but an affiliate marketer will pay the website owner 10 dollars if that visitor clicks through to the target website. In this case if more than 1 in 100 visitors click through then the site makes a profit; and conversely if less than 1 in 100 click through then the site makes a loss. The same theory holds true if the affiliate is the same (or another) search engine.
Source: http://en.wikipedia.org/wiki/Arbitrage
NJGal (88)-
Come back in April. Bet they’re still around.
SG (90)-
Click arbitrage? Now, THAT’S a sign of the apocalypse!
Good call NJGal.
Read your previous posts and from what you shared it sounds as if you have done the research as it pertains to yourself and your own financials.
Either that or our experiences are exactly alike and I like to think I’m doing the right thing too!
Nah! I think WE are doing what’s financially right for ourselves. I’ve set a max myself on certain properties as well.
Good in the future!
Rich
Rachel {86},
Tulip Bulbs;
http://www.stock-market-crash.net/tulip-mania.htm
Thanks all. I actually feel really good about it, because something tells me that they really may be around in April – it’s not like it was a pristine property. It needed a lot of cosmetic work, as well as a new kitchen. There are homes in the town that show much better and need less work.
I should also note it’s one of the first places I saw when we looked, so it’s not like I’m in a tremendous hurry. I like the place, but when the right place comes along, my offer will be accepted – I truly believe that whole world working in mysterious ways thing, because all of our other homebuying “failures” have been blessings in (not so subtle) disguise.
If they come back in April, I saw what, 720? Maybe I’ll head back to my original starting point or lower! And look, if they sell, they sell and we know we were wrong. Nothing wrong with being wrong!
Talk about a hedge fund manager taking risks uncorrelated with the S&P 500!
http://www.bloomberg.com/apps/news?pid=20601103&sid=avUgo7TnjSj0&refer=us
NJGal,
Don’t forget traditionally more inventory starts coming online as well during the next several months. However, I think buyers will not be more than last year given the tightening of lending and speculators leaving the market. You should have plenty to choose from in the next several months.
I myself have reassessed and am waiting until next year, having decided initially to bunker until this year. I’m even looking at jobs overseas and moving my family out with thoughts of coming back when the RE dust settles.
NJGal (95)-
Good luck to you. But…luck and metaphysics have nothing to do with any of this. It’s a business deal, and the seller is either going to come around, or not. Pretty hard-headed of them to walk from you over 20K. I think they’ll regret that.
Do yourself a favor in the meantime: keep your gut tight, watch that house like a hawk and don’t default into “que sera, sera” mode. It’s lame.
jb # 85,
Average cost on NEW was $42
http://www.nystrs.org/main/library/equity.pdf
NJGal:
We have had similar experiences as well. Whenever those properties DO sell, we still don’t think we were wrong, we just think it must have been some crazy uneducated buyer that just stumbled along and the sellers got lucky. They are just “outliers” to data trends.
We haven’t submitted our offer yet, but I suspect ours will be rejected as well, with sellers hoping the spring market will cure their ills.
ChiFi (96)-
This is definitely the kinda guy I’m looking for to lighten my wallet for 2-and-20:
“Hsu has a history of mental-health problems and is on medication, according to bail commissioner Belton. Goldstein said Hsu was previously charged with assault against his wife.”
Yep…he’s definitely bucked the correlation trend. LOL!!! I’d love to see his track record over the past few years.
njgal, are you going to come clean on what town you’re looking in? you were more than willing to share the information in the past, now that you’re serious about buying something you’ve seemed to clam up. interesting.
and folks on the board, don’t think every seller that doesn’t accept your offer is a sniveling, greedy, soon-to-regret it numb skull.
Builder CFO [TOLL] doesn’t see spring turnaround for housing
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b554F8389-2F56-479B-8645-2C85E02E1566%7d
Possiblebuyer (100)-
Last time I checked, the County Clerk doesn’t mark certain sales “data outlier” or “lucky seller”.
The only proof of housing value is a closed sale. Like it or not, a closed sale establishes present value.
Not to say you’re wrong as to the general trend…but a sale is a sale.
Reechard (102)-
Perhaps I should pause, so that you can remove your foot from your mouth.
There (your foot’s been in it so much, it slips in-and-out easily).
Why on earth should someone involved in an active negotiation reveal pertinent details to a bunch of strangers on the internet?
Would you do that?
“Hsu has a history of mental-health problems and is on medication”
Chi [96],
Prerequisite to become a hedge fund manager.
NJGal, just trying to point out that “recent comps,” which you referred to, don’t have much meaning in a market such as this.
I’m not a realtor, and have no vested interest if you buy, sell, or burn the place down.
If financing an extra $100K, for example, doesn’t impact your financial bottom line, you’re very fortunate.
Best of luck to you.
njbear,
A builder that finally is grasping reality and seeing it as we see it here. Doesn’t bode well for the housing.
#104:
Certainly. I meant that a buyer who is well researched about comps and data trends and then observes a home sale substantially higher than existing trends would indicate is not necessarily “wrong” about their original estimation. But, as a scientist, my perspectives of “predicted” vs “actual” values may be somewhat different.
COMMUNITY BANKS AND THE CASE FOR GSE REFORM
JAMES B. LOCKHART III
DIRECTOR, OFHEO
AMERICA’S COMMUNITY BANKERS GOVERNMENT AFFAIRS CONFERENCE
WASHINGTON, DC
MARCH 5, 2007
http://www.ofheo.gov/media/pdf/ACBspeechandslides3507.pdf
I just got a chuckle over the posted article. Anyone who considers Prospect Park, NJ, “getting out of the city” of Paterson hasn’t done ANY research! *doh*
It’s incredible that a seller who makes over 300 grand stalls for 20k. If greed took this market up, greed will bring it down.
Anyone coming from any other state (maybe with the exception of CA) will see that there’s absolutely no rational for asking prices of most houses.
Richard, how about you read the posts before you open your yap? I said above – Katonah/Somers – Northern Westchester, horse country (and I need not specify exact town, since many of them are one “town” but different neighborhoods). What, you want the address now? Can I also send you copies of my paycheck and approval letter? How about my ING account number?
You really are a reechard.
From the Ledger:
Jury finds young roller-blader not responsible for doctor’s bicycle accident
Morris County jury deliberated about 15 minutes this afternoon before finding that an 11-year-old girl did not cause a fertility doctor to crash his bicycle in their Chester Township neighborhood in October 2003.
The doctor, Alexander Dlugi, was not in the Morris County courtroom when the jury of four men and three women announced a verdict that brought a smile to Lauren Ellis’ face.
“I’m relieved it’s over,” said Ellis, who missed five days of her ninth grade classes for the trial.
One of the jurors, Leo Redmond 3d of Rockaway, said they believed that Ellis, now 15, was startled when Dlugi rode up behind her, rang his bicycle bell and yelled “Watch out!” Ellis, who was on rollerblades, turned to her left and into the path of Dlugi.
“We all felt the story Lauren gave was right” and that she acted appropriately, Redmond said.
Dlugi, who suffered a broken collarbone, said in his lawsuit that his fertility treatment practice lost about $323,000 due to the accident, of which he was due half. He also wanted money for pain and suffering.
Ugh, this server thing.
I just wanted to let unrealtor know that i see his point about comps – they are all over the place, but I did my best, because whatever I think, the seller looks at them, and you work with the hand your dealt, no? Reasonableness is key.
As for you RentLord, you have nerve calling me greedy. I calculated exactly what needed to be done to that house, including new kitchen, wallpaper removal, paint, new hardwood floor, new front door, etc. I didn’t just throw out a bid. I’m not the greedy one. It’s the ones who bought the place for 300K and are doubling their money now exhibiting the greed. I am merely offering what I think it’s worth. Someone may disagree and offer more, and that’s their choice. I don’t see why even though I could afford more, I should pay more – isn’t that what got us into this mess?
JB,
Thanks for the update.
It’s always good to see a cyclist get put in his place!
Just kidding.
Anyway, I’m glad our system worked and justice was served.
Congrats NJ Gal!
Prague.. I can get to midton in 35 min at 6:00am..I live in Harrington Park.. I like the town and the schools are great and very quiet.. And yes.. DO NOT live near the train line.. I don’t live close to it but I still hear it can’t imagine what it sounds like closer. Good Luck
By the way Clot and PossibleBuyer, thanks. I’m definitely keeping an eye on it and I have no regrets.
And RentLord, I may have misread your post – you said sellers, but then you quoted salaries, so that made me think you meant me. If you did mean me, well, I don’t apologize!
NJGal,
Good luck.
If you do get it. You would have to change your name to NYGal.
CC
“I don’t see why even though I could afford more, I should pay more – isn’t that what got us into this mess?”
NJGal [115],
It was those who could not afford less but paid more that got us into this mess.
Best of luck with your decision. You have analyzed it very thoroughly.
hmmm….
http://www.bloomberg.com/apps/news?pid=20601103&sid=awA7qeRpzikc&refer=us
wow…..NYPD calling Hoboken PD trying to get our city councilman off…at the behest of the councilman…
nj.com/cgi-bin/prxy/xmedia/nph-cache.cgi/cache=300;/njo/njo/campo_edited.mp3
Sure doesn’t take long to get booted out of the S&P #00. From MarketWatch:
Ruth’s Chris to replace New Century in S&P SmallCap 600
Ruth’s Chris Steak House Inc., a New Orleans upscale steak house operator, will replace New Century Financial Corp. in the S&P SmallCap 600 index March 7.
On Monday, the market capitalization of Irvine, Calif., mortgage real estate investment trust New Century fell to about $253 million, below the minimum of $300 million, S&P said.
Question for the finance folks.
How do the ETFs and funds that deal with tracking the S&P indices deal with changes to the underlying stocks in the index? Do they typically sell/buy their entire positions based on these underlying changes?
If so, I don’t understand how this wouldn’t cause massive moves in a particular component being included or excluded.
jb
James Bednar Says:
March 5th, 2007 at 6:05 pm
How do the ETFs and funds that deal with tracking the S&P indices deal with changes to the underlying stocks in the index? Do they typically sell/buy their entire positions based on these underlying changes?
If so, I don’t understand how this wouldn’t cause massive moves in a particular component being included or excluded.
jb
grim: I will defer to dream/index, however, it is one of a bunch of insidious reasons that index tracking instruments tend to underperform…..EVEN WHEN measured tracking error is minimized. As you likely surmised, the index integrity itself is compromised.
James Bednar Says:
March 5th, 2007 at 5:59 pm
Ruth’s Chris Steak House Inc., a New Orleans upscale steak house operator, will replace New Century Financial Corp. in the S&P SmallCap 600 index March 7.
grim: let me know when Luger’s gets added to the S&P600……THAT is news
nj gal…see my post #48 below…thanks.
uhhh..i mean above.
njgal – ofcourse I was talking about the sellers.
let’s blame it on the 500 errors for all the miscommunications ;-)
njgal..i seeit now…thanks.
we were ready to put an offer in on a house in croton, and it got 6 bids w/in 2 days…it was a smart seller who priced the house extremely well…back to looking.
njgal one question…i believe you earlier said you work in the city (as do i)…we were looking in the katonah area as well but were concerned about the distance to the train and parking…have you investigated that?
Clot- you are a realtor I can actually say I *like*!!
Too bad there aren’t more like you. If there were, there would be less angst about buying and selling.
sl
Whatbubble, that is the only concern, but in talking to people who do it (and not agents) we think that if you do the Goldens Bridge stop, you can get parking if you are taking an earlier peak train. Katonah is a little tougher, since the lots have a wait, and you could get shuffled to Bedford or something. I figure that no matter what, parking is ALWAYS going to be a pain – it was in every town I looked in, be in Westchester, NJ or LI. The commute is long, but I feel the payoff is worth it. That’s a very individual decision though.
And BC Bob, you’re right – I should have clarified “afford” to say “people who were able to get ridiculous I/O and ARM loans even though they had no business buying a house”:)
http://davidlereahwatch.blogspot.com/
nar getting mighty defensive lately.
Toll: No Spring Turnaround for Housing
clotfool, revealing what town you’re looking in isn’t like posting your bio online, but thanks for the condescending pep talk, not that i garnered for your opinion.
has anyone stopped to think that the troubles in the stock market could be good for real estate as a safer haven for investment $$$? it happened before, it can happen again. i guess we’ll wait and see what happens. so far the inventory isn’t moving appreciably in either direction. i know i know wait another couple of months for the surefire bloodbath that’s to come.
It’s only a matter of time before the Realtors give Lereah the boot.
jb
A reply on another blog regarding David Lereah:
Let’s start a rumor that he’s hiding WMD’s in there (David’s house).
Bush will take care of the rest.
LOL!!
#137 – you mean like jumping from the frying pan into the fire?!
has anyone stopped to think that the troubles in the stock market could be good for real estate as a safer haven for investment $$$? it happened before, it can happen again.
Precedent?
Japan real estate prices peaked in 1989. The Nikkei crashed in 1990. Real estate prices fell for years afterwards.
The U.S. stock market crashed near the end of 1987, while median and average home prices peaked in ’88, signs were clear that the market was beginning to break in ’87. House prices fell for years afterwards.
I won’t even bother talking about 1929.
jb
JB[125],
You are right. When a stock is added to the S&P 500 index, the index funds come in and buy the stock, sometimes causing massive moves.
Regarding the ETF’s, stock values also do not mean a thing. They just buy the basket of underlying stocks that are required. With the onslaught of ETF’s last year, I would imagine some market up moves were distorted.
Grim (125)-
I’m not a financial pro, but I do play stocks sometimes with an eye for companies that may be added to a major index.
The simple explanation is that companies offering indexed product will have to buy shares of companies added to a specific index in order for the security to accurately mirror the action of the group. Note today that Ruth’s Chris got a nice burst, based upon nothing other than the Small Cap 600 addition.
The last big move I remember seeing was when Google was added to the S&P 500. The swell of buying under that was quite an event.
ChiFi, BC (136)-
Reechard off his meds! Alert!
BTW, Reech, thanks for the compliment.
Am still searching the OED for syntax on “garnered your opinion”. Will let you know the results.
chicagofinance Says:
March 5th, 2007 at 6:08 pm
grim: I will defer to dream/index
Chifi, why do you feel so threatened by a small investor on a RE blog who mentions the word index? Geez, I can imagine you hitting the roof God forbid if some guy said it on a finance forum.
I tried to be benevolent enough when I comment, but you seem to think you can mouth off whatever you want. Since you refer to me as dream/index, I’ll refer to you as chifi /the 5.75% load, 2% expense, 1% 12 b-1 funds only financial planner.
The market is getting to you, isn’t it?
video – Lonski of Moody’s Sees Risk of Home-Price Deflation in U.S.
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/v9rSMkujqz4A.asf
Note today that Ruth’s Chris got a nice burst, based upon nothing other than the Small Cap 600 addition.
In AH.
jb
Ruth Chris does a nice steak, but is a bit overpriced IMHO.
Black Monday or the day it all Changed
“As I sit here felling like I just watched a train wreck, I am trying to comprehend everything we just witnessed. This is my 12th year in real estate so I can tell you it will be fine in the end, but wow what a day.
Email after Email from lenders telling us of their guild line changes, and the layoffs, this is a lot to take in. So wont you join me and raise your glass to the end of a great ride, and the beginning of a better one”
http://forum.brokeroutpost.com/loans/forum/2/99884.htm
“I’m not a financial pro”
Clot,
I’m not buying that. I think you know more about stocks than RE.
Hello all,
This is OT, but can someone please give me the address of this property – NJMLS #2707474? Thank you so much everyone, especially JB for running this blog.
Dave
“has anyone stopped to think that the troubles in the stock market could be good for real estate as a safer haven for investment $$$? it happened before”
Richard,
I’m not sure if you are serious or just being sarcastic. After the dot.com bust, bucket shops all across the US took down their equities logo and replaced it with their lending insignia. Instead of pitching some shell company, with zero chance of earnings, they stuffed $ into individuals pockets, with zero chance to begin with. On a scale of 1-10, how would you rate the possibility of this happening again, at the present time??
Interesting rumour about Wachovia..
http://forum.brokeroutpost.com/loans/forum/2/99935.htm
Wachovia Correspondent shut down as of today. THis is the first news I have heard about A/Alt-A banks besides maybe Impac shutting down.
BC, ChiFi (136)-
Alert! Reechard off his meds!
BTW, thanks for the compliment, Reech. Nice syntax, too.
Richard, what crawled up your butt today? Someone is sounding rather nervous and on edge…
Bauer in a whole heap of trouble now.
Cigar, anyone?
Can anyone in NJ verify if CompUSA is closing its NJ stores?
I wont be in NJ until the 18th.
I called them, but they wont answer the phones.
-Sapiens
#158
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXkyOSZmZ2JlbDdmN3ZxZWVFRXl5NzA4NTAyMCZ5cmlyeTdmNzE3Zjd2cWVlRUV5eTI=
From the David Liareah interview on cnn. If this poker faced liar can say this about california, I’d sell property in california really quick… if I can.
“If you look at local areas, that statement is true. California has a long way to go. I expect them to continue to experience pain all throughout this year. Southern Florida, same thing. Las Vegas is probably going to take a little longer to correct as well.” David Liareah.
dreamtheaterr Says:
March 5th, 2007 at 8:11 pm
I tried to be benevolent enough when I comment, but you seem to think you can mouth off whatever you want. Since you refer to me as dream/index, I’ll refer to you as chifi /the 5.75% load, 2% expense, 1% 12 b-1 funds only financial planner.
The market is getting to you, isn’t it?
dream/index: your diatribe is interesting for two reasons – #1 I knew you had that in reserve, and I was just waiting for you to express it; #2 more importantly, your name for me probably better reflects the source funds for your IT consulting paychecks than my financial planning practice.
What’s with the hostility? I needle Reechard, but he just kindly ignores me as I suggest you should. Thanks Reech.
Indexing:
Like making show bets on a wheelchair race.
Give ’em hell, ChiFi.
Someone posted a link to BrokerOutpost.com and all I can say is wow. I cant believe an entire profession that is in many ways vital to our economy is so full of crooks and swindlers. This subprime fallout may actually create the collapse in the market we have been predicting over the last few years. The real question is, is how many people will be shut out of the market after new lending standards are implemented. I better make sure to offer much less on the house I saw last week.
Oh, it’s getting good all – the sellers just caved and want to split the difference….trying to decide whether to tell them to f- themselves or REALLY split the difference for an oddball sale amount (like 733,500).
I knew they would cave. How hard do I want to hold their feet to the fire?
Saw a cute house for sale in a ‘top town.’ Priced at $750K currently, which seems “reasonable” given the market run-up.
Then I looked up what the seller paid. $400K in 2000.
Still has the same kitchen, bathrooms, roof, etc. It’s the exact same house.
So we decided to let someone else transfer $350,000 in “equity” from their bank account, to this seller’s bank account.
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Toprolt.