From the National Association of Homebuilders:
Builder Confidence Slips In March
Builder confidence in the market for new single-family homes receded in March, largely on concerns about deepening problems in the subprime mortgage arena, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. After rising fairly steadily since its recent low last September, the HMI declined three points from a downwardly revised 39 reading in February to 36 in March.
“Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity,” said NAHB Chief Economist David Seiders. “The fundamentals of today’s housing market still are relatively strong, including a favorable interest-rate structure, solid growth in employment and household income, lower energy prices and improving affordability in much of the single-family market – due in part to price cuts and non-price sales incentives offered by builders. NAHB continues to forecast modest improvements in home sales during the balance of 2007, although the problems in the mortgage market increase the degree of uncertainty surrounding our baseline (i.e., most probable) forecast.”
From Marketwatch:
U.S. home builders’ index falls to 36 in March
By Rex Nutting
U.S. home builders were less optimistic about the housing market in March, according to a monthly sentiment index released Monday by the National Association of Home Builders. The NAHB/Wells Fargo housing market index fell to 36 in March from a downwardly revised 39 in February. It was the first decline in the index since September.
From Bloomberg:
U.S. Homebuilder Confidence Index Falls to 36 in March From 39
By Courtney Schlisserman
U.S. homebuilders lost confidence this month amid concern that tighter credit standards would discourage would-be buyers.
The National Association of Home Builders/Wells Fargo index of sentiment fell to 36 this month from February’s revised 39, a seven-month high, the Washington-based association said today. A reading below 50 means most respondents view conditions as poor.
…
Economists had forecast the gauge would fall to 38 from a previously reported February reading of 40, according to the median of 31 estimates in a Bloomberg News survey. Projections ranged from 35 to 42.
Is Fremont getting ready to shutter its mortgage ops? From Bloomberg:
Fremont General Gives Mortgage Staff Two-Month Dismissal Notice
Fremont General Corp., the California thrift trying to sell its home-lending business, told the unit’s staff they may be dismissed in two months.
Employees will receive pay and benefits through May 18 unless they take other jobs, Kyle Walker, chief executive officer of the Fremont Investment & Loan subsidiary, told employees on a March 16 conference call. Fremont posted a recording of the call on a toll-free playback line. Walker cited the “uncertainty of this situation” at Santa Monica, California-based Fremont.
“The company has aggressively been pursuing its options,” Walker said. “Such efforts continue, although the company cannot provide more definitive information today.”
From Reuters:
Housing “nightmare” tarnishes the American dream
By Emily Kaiser
Jillayne Schlicke’s father used to tell her that mortgage banking was the “highest calling of all” because it involved helping people live the American dream of homeownership.
“I learned how to spell ‘mortgage’ when I was about 6 years old. It was on a flash card,” said Schlicke, the daughter of two mortgage bankers and co-executive director of the Ethical Lending Foundation near Seattle.
As a widening crisis over nontraditional and subprime mortgages gone bad threatens to force millions of people out of their homes, Schlicke worries that mortgage brokers are well on their way to overtaking used car salesmen on the list of professions least trusted by consumers.
Sleepless nights…
The New York Times. “Lawyer David Volman has handled enough divorces to know that many marriages collapse under financial strain. So when his practice, in Shelton, began receiving an unusually large number of divorce cases last summer, Mr. Volman took it as an omen. ‘Divorces go hand in hand with foreclosures and bankruptcies,’ he said.”
“Sure enough, in the first two months of this year, Mr. Volman took on some 50 bankruptcy cases, an ‘enormous amount,’ he said, given that in all of 2006 he handled 19.”
“Many of the cases involve working-class couples in the Lower Naugatuck Valley who can no longer afford their mortgages. ‘People are walking into my office and saying: ‘Here are the keys. Do whatever you have to do. I just want to get out of this so I can sleep at night,’ he said.”
====================
No debt no noose around your neck and lots of liquidity = sleeping well at night.
Lots of dummies twisting and turning all night.
noticed road rage picking up lately. hehehehhe
Realtors said get in at any price now look…MISERY!
BLEED”EM DRY!
Take “at least” miniumum 25% off the top of 205 irrational prices.
Tell’em to keep it.
BOOOOOOOOOOOOOOYAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA!
Bob
It’s going to get extremely miserable for you grubbers and realtors.
Better panic first to panic wins…It’s goig to be dismal at the bottom and it’s coming.
HEHEHEHEHEHE
To many bagholders hanging on by a thread. No Mooooo bailouts. No more refi’s no more sales at aor above purchase price. It’s OVER!
hehehehehehe
can grim or anyone w/ access to gsmls tell me if a certain property has closed and what price it sold for?
unfortunately all i have is the address….618 mountain road, kinnelon. any help would be greatly appreciated. thanks.
what bubble,
MLS# 2334992 – Kinnelon, NJ
Original List Price: $679,000
Sold Price: $630,000
Under Contract: 1/4/2007
Closed: 3/16/2007
Days on Market: 70
jb
That property was originally listed under:
MLS# 2262867 – Kinnelon, NJ
Original List Price: $749,000
Reduced to: $699,000
Days on Market: 191
Listing expired on: 10/09/2006
thanks JB…that was a great house that needed a lot of work.
That is one of the reasons I wish we had a property-centric view of a listing, and not listing-centric view of a property.
Looking at only the last MLS listing, we assume that the property sold in 70 days, at 93% of asking. Not bad.
Now, looking at both listings together, the property was on market for more than 260 days, and sold for only 84% of the original asking price ($119,000 off OLP). A much different story.
jb
yeah i agree…but in all honesty, bubble or not, their original asking price was way off. it was four brothers selling their parents house which was a very cool mid-century modern kind of house that had NEVER been updated. the bones were there but it needed $200K worth of work…it was worth their original asking price if completely fixed up w/ some cosmetic stuff left.
in any case grim, i agree, realtors should be required to provide all previous listing information when reporting figures, though we knew about the original price as she did inform us when we visited the open house.
There was a REO property in Smoke Rise that I absolutely fell in love with. It was a similar flavor of Brady contemporary ™ although much more modernist than that listing. Unfortunately, it was in considerable disrepair. The bank foreclosed, and it didn’t look like the owner kept up on anything. There was considerable mold in the basement, and it needed nothing less than a complete gut. Completed and updated, it would be a fine example of that periods architecture.
I just looked up the sale price, I’m a little disappointed because I would have bought it for that price. Should have lowballed, oh well!
MLS# 2320682 – Kinnelon, NJ
11 Undercliff
Original List: $630,000
Sold: $490,000
DOM: 148
jb
jb: i saw that one too…when i looked the broker told me she would have taken $450K…i brought 2 separate contractors w/ me and they both estimated the work at nearly $300K, and there was a VERY good chance the whole thing would have to be knocked down b/c the mold was pervasive and until you gutted it was unclear how pervasive…
but it was (at one time) a cool house.
the one i asked you about was in smoke rise as well.
the problem w/ smoke rise is the initial fee of $5000 and the annual fee of $2200
$300k seems a bit high there, for that amount it wouldn’t be much more difficult to knock the place down and put up a “Jersey Stucco” McMansion.
the one i asked you about was in smoke rise as well.
I know someone who is leaving Smoke Rise, says it has gone downhill considerably in the last 15 years.
the problem w/ smoke rise is the initial fee of $5000 and the annual fee of $2200
That’s the price you have to pay to live in a gated community in this area. The offset is that Kinnelon taxes aren’t quite so bad.
jb
jb: i think the house was somewhere around 2500 sf and the lower floor (for sure) needed a full gut, including replacing studs and joists (that costs around $100-125/sf or about $150K). then the whole house needed to be gutted (and possibly have wood replaced), new kitchen (a mid=level would cost around $30K), all new bathrooms (figure at least $30K for those too), new floors, fireplace fixed, new deck, new roof, new heating and cooling system, and you already at $300K…the house was a mess (as you know).
Hi, Grim:
Could you please help to look how much these two properties went into contract for?
1) Tullo Farm, bridgewater
2) Knollcroft, basking ridge
I put in offers for these two properties but outbidded. So curious how much more the other buyer pay to get them.
Thanks, CJ
jb #11,
That is one of the reasons I wish we had a property-centric view of a listing, and not listing-centric view of a property.
How did you end up finding the previous listing as well?
Is this obvious for a realtor looking at MLS or do you have to be sherlock holmes?
It appears that Countrywide is still offering funny-money loans to people (100% LTV, things like that). Wall street is going to have to give these mortgage brokers another round of beatings to get them into line.
I wouldn’t buy anything before the funny money is gone. I have said this before but I call the bottom when 30yr fixed is 7.5%
central,
Street numbers make it easier for me.
109# sold for $850,000
Knollcroft is still under contract, it’s got an interesting history..
Started with:
MLS# 2245668
OLP: 1,165,000
Reduced to $1,115,000
DOM: 65
(withdrawn)
Was relisted under:
MLS# 2268283
OLP $1,112,500
Reduced to: $969,900
DOM: 160
(expired)
Was relisted under:
MLS# 2324175
OLP: $969,900
Reduced to $899,900
DOM: 150
(Under Contract)
Another interesting fact is that Prudential Relocation paid $1,112,500 for that property in November ’06.
jb
“However, with the unraveling of the mortgage-finance mechanism, it’s hard to see how house sales can do anything but plummet. Therefore, housing stocks really aren’t cheap, even though the P/Es recently made them appear that way.”
“Now the gaping hole in the side of the mortgage market appears to be impacting the price of housing stocks — just as it will surely impact home sales in the coming months, causing that vast river of denial running through Wall Street to dry up. And, as it does, people will be able to see that there is a gaping hole in the economy, because there’s nothing to fill the gap left by an implosion in the housing market.”
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/WarningThisMessWillOnlyGetWorse.aspx
Hi JB,
I have been a big follower of your blog. It made us take a very good decision to wait and watch since 2005, its been a long wait, but we have a great feeling that we didn’t fall into 2005/3006 buyer category.
Now we started looking to buy in Monroe area, and would like to take your help finding the history of listing: 2361407 (original listing), was also listed with some other ID and now it’s removed. Was told my a realtor that its under contract. I would appreciate if you could give me the details.
Great work to the community, really appreciated.
thanks
Looking
MLS #2361407 5 prestige court does not show under contract in gsmls, but could possibly be updated in middlesex mls which is more than likely the main board and mls for the listing agent.
KL
its been a long wait, but we have a great feeling that we didn’t fall into 2005/3006 buyer category.
If you can afford to wait just a bit longer, I think you will be better off. While prices have backed-off their top-of-the-market highs, they are still extraordinarily expensive. For the most part, houses are still pretty far from a good deal.
I think sellers are in for a disappointing spring. Inventories already high and a number of potential buyers will be forced to the sidelines because of the subprime meltdown.
By fall, I think it will be blatantly obvious that housing is dead, with no quick recover in sight. It’s not just a temporary downturn or a bump in the road.
Just my $0.02, but I would wait until at least the fall. Don’t catch a falling knife.
Gsmls is not as user friendly with property history as NJMLS they have a history button, GSMLS you have to look up the address w/the various categories checked off.
KL
Had a question, since quite a few on this blog rent. My apartment complex is raising my rent a whopping 1% for another 1 year. Anyone had luck getting them to actually reduce rent?! Any reasons I can use for them to consider thinking…. like there are plently of properties lying around vacant :)
From MSN Money:
Top five U.S. subprime lenders asked to testify: Dodd
U.S. Senate Banking Committee Chairman Chris Dodd said on Monday he asked executives at five big subprime mortgage companies to testify at a Thursday hearing and explain their lending practices.
Executives from HSBC Holdings Plc , New Century Mortgage Corp. , Countrywide Financial Corp. , General Electric Co’s WMC Mortgage unit and First Franklin Mortgage were invited to testify, Dodd, a Connecticut Democrat, said in a statement.
Had a question, since quite a few on this blog rent. My apartment complex is raising my rent a whopping 1% for another 1 year. Anyone had luck getting them to actually reduce rent?!
If you adjust for inflation, your rent went down in real terms.
jb
dreamtheaterr,
1% is not much of an increase. Not even cost-of-living. I’d spend my energies elsewhere. I don’t think you’ll find too many landlords willing to lower your rent, despite the apparent “glut” of rentals on the market.
Does the favicon work for everyone?
jb
Aaron # 19,
One other factor is unemployment rate, even w/ low rates if unemployment starts going up. Home prices are correlated to unemployment rates as well. Think about buying, hopefully we’ll still be employed. I’m guessing the national figure would have to be at least above 6% before we get to a more sound RE market, pricing wise.
JB, if you like modern, this is a fab house:
http://www.realtor.com/Prop/1076264991
$900K though. :(
JB: Did you post Feb Sales transaction data?
The last sales data I have from your posting was on Jan 7th. Just wondering, if I missed any posts.
BTW, Thanks for giving actual sales data.
SG,
Yes, I did:
https://njrereport.com/index.php/2007/03/12/north-jersey-february-2007-residential-sales/
jb
I saw an mortgage broker ad in Homes and Land mag which read: Why buy a $350k home with 5% down when your PITI will be $3,114 when you could buy a $550k house with $0 down and $0 out of pocket, no PMI and your payments will only be $2,250.
Wow.
UnReal,
We went to see this place yesterday, I think it is one of the most unique properties in Northern NJ. Unfortunately, it needs a alot of work. Stuck in the 80s in a bad way.
MLS ID#: 2386369
Photos aren’t on Realtor.com yet, if you’ve got access to GSMLS, take a peek.
jb
jb:
why does it say the lot size is 3%? is this a townhouse or something?
where is it located in clifton? montclair border?
also, the broker on that clifton one doesn’t make going to look at houses that painful…does she?
Ara Hovnanian on CNBC Fast Money saying HB recovery won’t be a “V” or “U”-shaped one…it’ll be more of a “boat hull” shape (no joke; he really said this). Also several references to “skipping along the bottom”.
Jeez, do all these guys have the same media consultant? Are they all reading from the same playbook? Do they take a hit of mescaline 30 minutes before talking to the press?
Dreamtheaterr,
1% really sounds pretty good, depending on your location. I’m in a good bldg w/ pool , indoor parking, et al in Jersey City close to 1 stop from WTC, they raised 5% and I negotiated down to around 2% or so.
Friends in another bldg down the block had their rent raised over 11% (!) in a similar complex…. at least in my area, there isn’t a lot of vacancy as job mkt is still quite strong in NYC and people are either priced out or waiting out the current housing mkt.
In the city itself, rents have really gone up…I looked earlier this year and 1 bdrms in the $3500-3800/mo range aren’t at all uncommon.
Clot[40],
He also used the R word regarding housing.
JB
It seems as soon as I mentioned to you that GSMLS updates their total once a day ( usually just after midnight) It seems to be changing by the moment.
KL
Boat hull? Shaped just like the Titanic perhaps?
jb
Broader Investigation of Lenders by SEC
SEC Investigating Subprime Mortgage Companies, Enforcement Chief Says
http://biz.yahoo.com/ap/070319/subprime_lending.html?.v=3
WASHINGTON (AP) — The Securities and Exchange Commission is investigating a number of companies that operate in the troubled market for subprime mortgage loans, the agency’s top enforcement official said Monday.
It has been known that the SEC was examining accounting practices at New Century Financial Corp., the nation’s second-largest maker of subprime mortgages — higher-priced home loans for people with tarnished credit or low incomes.
Thanks everyone for the insight into rent increases. As JB mentioned, 1% increase is a decline in real terms. I’ll continue renting for another year….
JB, I mentioned this almost a year back but you should seriously consider starting a $AVE-O-METER….. a fun tool to have folks who has visited this blog and postponed their buying mention the dollars they have saved in the past year.
‘Liar loans’: Mortgage woes beyond subprime
Loans where borrowers gave little proof of income could be the next threat to the troubled real estate market – and the economy.
By Chris Isidore, CNNMoney.com senior writer
http://tinyurl.com/38yege
Like I said last week, this one’s next
Sorry if it’s a repost
wsj
Housing News
Had Better
Be Better Today
March 20, 2007; Page C1
There should be good news on the housing front today. Or at least there had better be.
Economists polled by Dow Jones Newswires estimate this morning’s Commerce Department report on housing activity will show the pace of new-home construction starts hit an annualized rate of 1.45 million last month, up modestly from January’s 1.41 million. The biggest reason the economists are looking for a rise? January housing starts — hurt by the arrival of winter weather — were 14.3% below December’s, and there’s just gotta be a rebound.
That may not sound like the sort of fancy analysis economists are supposed to be getting paid for, but when it comes to something like housing starts, which can swing from month to month, it’s probably the best analysis available. About three-quarters of the 49 times housing starts have fallen more than 10% in the past 48 years, the next month they’ve been up.
But persistent cold weather may have taken away any bounce, UBS economist Jim O’Sullivan says. Housing starts are adjusted to smooth out seasonal swings — there are far more construction crews on the job in the summer than in the winter. But variations in the weather can make a hash of such adjustments. Warm weather in much of the U.S. had far more construction crews on the job in December than usual; when it got colder in January, construction activity fell sharply. But February was when the real cold weather, and the bigger winter storms, came, Mr. O’Sullivan notes.
But amid all the recent worries about mortgages for risky “subprime” borrowers, investors will have little patience for a weather story. If starts didn’t rebound last month, they may conclude that housing — already in sorry enough shape — has taken a turn for the worse.
hoyo!
http://www.bloomberg.com/apps/news?pid=20601103&sid=aJCCmK6hcJDA&refer=us
ChiFi (49)-
Three questions:
1) Did Hicks borrow from Ameriquest to pay A-Clod all that stupid money?
2) Will Greg Biffle’s “Ameriquest #16” now be renamed the “Foreclosure Ford”?
3) What would New Yorkers think if a place called “Glorypark” opened here? What would it be mistaken for?
Chi
Maybe they could rename it “Subprime Park”. They can recruit ball players based on their “stated” batting average.
Another stellar event at “The World’s Most Famous Arena”:
http://sports.espn.go.com/sports/highschool/news/story?id=2804101
Why can’t somebody slip in a gun when the Knicks are blowing a 20-point lead? They should just let Whoopi Goldberg coach them…just like in that stupid movie a few years back.
Renting (51)-
Hey, this is the same team that allowed Dubya to cut Sosa loose before he went on his 50-60 homer-a-year tear.
Rickey wants to play baseball!
Very Funny. You would think a realtor® listing a home for someone where their cut of the commission will be over $12,000 could at least make half an effort to spell check their listing.
FABULOUS SPECIOUS COLONIAL WITH NEWER KITCHEN …
I think they meant to say “SPACIOUS”
“SPECIUOUS” means: “obsolete”, “having deceptive attraction or allure” or “having a false look of truth or genuineness”
Freudian slip or just a lazy realtor®?
http://new.gsmls.com/public/detailLst.do?mlsNum=2333590
Renting (54)-
Someone, anyone…please kill me now. Maybe we should chuck the term “Realtor” and just go with “Retard” instead.
Gonna be back to shaving with the cheese grater pretty soon.
RE: 50
1)
I had the pleasure of staying at Hick’s 24 million dollar slope side Aspen “compound” the Week of the 2003 final four… sick week! He’s only there like two weeks a year… talk about FU money.
Main and Guest House:
http://img141.imageshack.us/img141/5473/p4040033jc1.jpg
Pool:
http://img141.imageshack.us/img141/8885/p4040034de9.jpg
Inside Guest House:
http://img402.imageshack.us/img402/6526/p4040030is8.jpg
http://img338.imageshack.us/img338/7113/p4040022vv9.jpg
RE: 50
1)
I had the pleasure of staying at Hick’s 24 million dollar slope side Aspen “compound” the Week of the 2003 final four… sick week! He’s only there like two weeks a year… talk about FU money.
Main and Guest House:
http://img141.imageshack.us/img141/5473/p4040033jc1.jpg
Pool:
http://img141.imageshack.us/img141/8885/p4040034de9.jpg
Inside Guest House:
http://img402.imageshack.us/img402/6526/p4040030is8.jpg
http://img338.imageshack.us/img338/7113/p4040022vv9.jpg
Inside Guest House:
http://img402.imageshack.us/img402/6526/p4040030is8.jpg
Inside Guest House #2:
http://img338.imageshack.us/img338/7113/p4040022vv9.jpg
RE: 49
how very appropriate — i KNEW that one of these subprime ish-shops would end up becoming the Enron of the housing bubble. i guess that Ameriquest is a choice as any of ’em.
JB #37 writes:
“We went to see this place yesterday, I think it is one of the most unique properties in Northern NJ.”
It definitely has great views. But architecturally, it has some major issues.
http://new.gsmls.com/public/getMediaReport.do?mlsNum=2386369
Yeah, those views are killer.
Clot,
Don’t insult someone who is mentally challenged by associating them with a realtor.
appears the GLASS is half full after all ….. see some value http://biz.yahoo.com/rb/070321/usa_subprime.html?.v=1