Preliminary March sales and inventory data for Northern New Jersey is in..
The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 1000, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.
(click to enlarge)
The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.
(click to enlarge)
The third graph displays only March sales, 2000 to 2007 YOY.
(click to enlarge)
The fourth graph displays an overlay of Sales and Inventory from 2003 to 2007.
(click to enlarge)
The last graph, new this month, displays the year over year change in inventory on a monthly basis.
(click to enlarge)
The numbers:
January
Average Sales (2003-2006): 1895
2005 Sales: 2013
2006 Sales: 1579
2007 Sales: 1583
(Up 0.3% Year Over Year)
February
Average Sales (2003-2006): 1536
2005 Sales: 1578
2006 Sales: 1395
2007 Sales: 1364
(Down 2.2% Year Over Year)
March
Average Sales (2003-2006): 2193
2005 Sales: 2256
2006 Sales: 2033
2007 Sales: 1841
(Down 9.4% Year Over Year)
Caveat Emptor!
James (aka Grim)
Man, you make a purty graph!
If you were to add NJMLS, do you think it might overlap and skew the numbers?
I’m wondering if boomers are looking to condos and townhouses to avoid mowing, shoveling and other maintenance. I expected to see sales lower than SFH.
Man, those colors are intense. Reminds me of the old Commie-64 days…
Rich,
There is enough overlap that I’d be more confident in creating a second set of graphs. Otherwise we’re going to need to merge/purge.
jb
Good job JB.
Man, I can’t wait till this summer is over.
Then I can start collecting on my shorts ;P
But, I still don’t see it as a crash “yet”.
It ain’t going to be over till the fat lady sings. Last bust done taken 10 yrs if I remember correctly..
SAS
oh no…
Is it me, or is this web site acting funny again?
Grim, you sure nobody is trying to bring you down? You sure you ain’t rigged?
SAS
you would think thi is fraud..
>>
Home buyer’s club
New down-payment funding idea draws regulators’ attention
http://www.marketwatch.com/news/story/new-down-payment-funding-idea-draws/story.aspx?guid=%7BAA2879A8%2D4495%2D4C1D%2DA8CC%2DE679599DD3DB%7D
JB
Great job as always…do you know when Otteau’s next report is due? I’d love to see price data.
JM
JB,
You must have a very very understanding wife. Kiss her and thank her.
You work and you spend all your free time making pretty graphs.
You have an angel.
And thanks for the graph.
Spring bounce?
spring must be broken. NO bonce at all.
What is going on with inventory pace???
CC
CC,
CF explained nicely on some powerpoint presentation over the Weekend discussion.
Hi,
I have just landing to your old blog (blogspot site). Wooow…pretty amazing!!!The way you drive visitor to your site. Congrats!
Report: Subprime woes to drag housing in ’07
‘The problem in the subprime area is just the tip of the iceberg’
http://www.msnbc.msn.com/id/17903104/
Updated: 12:18 p.m. ET April 2, 2007
LOS ANGELES – The subprime mortgage implosion will take even more steam out of the already slowing real estate market this year and beyond, according to a new economic report.
More than two dozen subprime lenders have shut down in recent months and others are scrambling to stay in business as a spike in defaults caused by borrowers unable to make payments has rocked the mortgage industry.
Now, as lenders tighten credit standards, the housing market will likely see further declines in price and output, senior economist David Shulman wrote in the quarterly Anderson Report to be released Monday by the University of California, Los Angeles.
“We suspect the problem in the subprime area is just the tip of the iceberg for the mortgage market as a whole,” Shulman wrote. “For all practical purposes, the subprime market is in the process of shutting down.”
A tougher credit environment will limit the number of first-time home buyers entering the market and make it tougher for others to refinance their subprime loans before they face a default or foreclosure.
Shulman expects housing starts to hit 1.33 million units this year, down from a previous forecast of 1.48 million units.
“For a housing market that has already witnessed housing starts decline by 36 percent, this is not good news,” he wrote.
Still, he does not forecast a recession but only a softening of the economy.
He expects growth in the nation’s gross domestic product to range from 1.7 percent to 2.5 percent through the first nine months of the year, and to average 3.25 percent next year.
The nation’s unemployment rate will tick up from February’s 4.5 percent to 5 percent by the third quarter before beginning a gradual decline, Shulman wrote.
JB, great, great stuff as always.
Thanks.
Curiousd
What is going on with inventory pace???
It’s currently sitting up 16.15% year over year and trending downwards. We’ve got to wait and see if we end up intercepting the “no change” line sometime around August/September with inventory around 24000 or if the trend breaks.
https://njrereport.com/files/SalesInvOverlay.xls
February Pending Home Sales due out at 10am EST.
jb
Hat tip to MaxedOutMama for this link. A little insight into just where those subprime loans are going.
Foreclosures have moved to suburbs in Ohio
Ohio’s home foreclosure crisis, already a near epidemic in some urban neighborhoods, has moved to the suburbs.
A new report released Thursday showed that 73 percent of the subprime loans that have ignited the crisis were made in middle and upper income areas — often suburbs — in 2005, while just 27 percent were made in low and moderate income areas.
The trend applied in all area counties. Warren County had the highest percentage in the area — 87 percent in middle and upper income areas.
“Foreclosures are no longer (just) an urban problem,” said Paul Bellamy, who worked on the report for the Coalition on Homelessness and Housing in Ohio. “They’ve moved to the suburbs.”
“You must have a very very understanding wife. Kiss her and thank her.”
David,
What about the poor dog who is still waiting patiently for his midnight walk?
Town’s future lies in transit village
Part of downtown Woodbridge revival
Tuesday, April 03, 2007
BY SHARON ADARLO
Star-Ledger Staff
Woodbridge Township officials yesterday announced Main Street downtown will be part of a “visioning process” to eventually revitalize the area into a transit village, bring in new businesses and alleviate parking problems.
“There’s a lot of nice, attractive uses downtown, but we can improve it,” Mayor John McCormac said.
The process will be a collaborative project drawing input from residents, business owners and township officials, McCormac said. The first phase of the study will take approximately five months and include three publicwide meetings.
The state Department of Community Affairs granted the town $50,000 for the visioning process last fall when State Sen. Joseph Vitale (D-Middlesex) served as interim mayor, McCormac said.
“The downtown merchants are very excited about this plan and they are letting me know they want this to be on the way,” McCormac said.
Eventually the process will give way to a transit village plan for the downtown area so that Woodbridge may receive funds from NJ Transit.
The state grants may be used to build a parking deck for the train station, which would help alleviate parking problems on nearby roads, McCormac said. Many commuters park their vehicles on adjacent streets causing complaints from residents.
And new parking options would encourage more people to use the trains.
“It’s good for them and it’s good for us,” McCormac said about NJ Transit.
The study will also address how to attract businesses to the empty storefronts downtown.
For the long-term project, the township council is planning to hire the architectural firm Agrest and Gandelsonas of New York City to oversee the visioning plan, McCor mac said. The company has done work on downtown Red Bank, which township officials want to emulate.
“I’d love to see no empty stores on Main Street and Rahway Avenue,” McCormac said. “We need uses appropriate for a train station.”
The visioning process is not the first the township has undertaken. Woodbridge has been gathering input for Oak Tree Road, which extends through Iselin and Edison.
Oak Tree Road has been the center of congestion for years because it was originally designated to be a main street in a small downtown, said officials.
Other areas for study next on the list are New Brunswick Avenue in Fords, the Keasbey waterfront and Inman Avenue in Colonia.
Vito Mazza, co-owner of the Vito Mazza Salon and Day Spa on Main Street, voiced his approval for the visioning plan.
“I am extremely excited,” he said. “It’s a tough economy as it is, but we’ve been doing well. We have seen businesses come and go. A transit village will make people come to downtown.”
How come no bloodhounds have fully tracked the subprime escapees? Is it just not critical path yet?
I’ve done it to the best of my ability on my own holdings, and made some changes in Jan, but only the shadow knows for sure.
http://www.marketwatch.com/news/story/story.aspx?guid=%7B20967453%2DD958%2D4D99%2DB40B%2D59C0E80FC036%7D&dist=rss
From MarketWatch:
S&P: U.K. housing market showing signs of cooling
Standard & Poor’s said the U.K. housing market is showing distinct signs of cooling down in the coming quarters. It noted the affordability index is at levels recorded in the early 1990s, just before the market suffered a sharp downturn. It suspects there is more trouble ahead from the impact of recent interest-rate rises. The housing markets in Ireland and Spain are also cooling down.
Moody’s Plans Credit Rating Cuts to 40-50 Banks After Protests
http://www.bloomberg.com/index.html?Intro=intro3
A bit out of our general area, but interesting nonetheless. I think this fits in well with the discussion about the impact of reduced subprime lending we had yesterday. From the Albany Times Union.
A dream farther out of reach
Rising default rates nationally are making it harder to get a mortgage in the Capital Region.
Area brokers say lenders are tightening restrictions and trying to protect themselves as concerns grow about so-called subprime mortgages given to those with shaky credit.
That means potential home buyers with a recent bankruptcy, a less-than-perfect payment history or little money for a deposit are facing far more scrutiny than they did just months ago.
“A lot of people with a 580 credit score are not going to be able to buy a house with 100 percent financing anymore,” said Gary Fernet, manager of the Streamline Mortgage Corp. office in Albany, referring to a middle-of-the road credit score. “They are going to be able to buy a house, but they are going to have to put 5 or 10 percent down.”
And buyers with even shakier credit might be out of luck.
“It’s going to have a real impact,” said Albany-based bank industry analyst Kevin Timmons, “because you’re not going to get that mortgage.”
…
Several Capital Region mortgage brokers interviewed Monday said they had lined up loans for potential buyers with less-than-perfect credit, only to have the lender cancel the mortgage program before the sale closed, leaving them scrambling to save the deal.
“Over the last two months, the number of banks that are doing that type of business have been cut in half,” said Matthew Huckans, a sales manager with Hometown Mortgage Corp. of Saratoga Springs.
Until recently, borrowers didn’t have to put money down or verify income, he said. Now they do.
Some brokers said they fear the new restrictions could lead to a slowdown in the regional housing market, because there will be a smaller pool of potential buyers.
Charles Wait, CEO of Adirondack Trust Co. in Saratoga Springs, noted there has been a substantial pool of money in the subprime lending market.
“If you take that money out of the market, that’s going to have an impact on (housing) prices,” he said.
“Until recently, borrowers didn’t have to put money down or verify income, he said. Now they do.”
[23],
2006- Uranium
2007- Unobtainium
>>“Until recently, borrowers didn’t have to put money down or verify income, he said. Now they do.”
maybe the bottom scraping can only fog a mirror dregs do, but pretty much everyone else can still go 100% financing.
Apparantly, subprimers aren’t the only ones who can’t keep up with their house payments:
Michael Strahan’s ex-wife says she’s struggling – She wants to sell $3.6 million mansion in Montclair
Boohoo! I can’t afford my $10k house payment, $4700 utilities, and I have to trade my in Cadillac for a FORD!
#26 Ah Richard, No many cannot. I suggest you speak with soem people int he business, deals falling apart left and right now, because so called buyers cannot get their financing.
Longtime lurker; infrequent poster. Need the collective wisdom of njrereport on a scenario I haven’t seen been debated here:
While I realize the macro outlook weighs heavily against buying now, what if a family member were willing to give me a very low interest $300,000 balloon loan (payable upon an assured inheritence some years hence) for downpayment on a $600,000 house. Let’s also make the following assumptions:
— noneconomic psychological factors (children/school) weigh heavily
for buying within the next few months
— job benefits include a mortgage that is well-below market rates
— I must buy in a town where property taxes are high, even for N.J.
— I can get the property for a price that is considered reasonable at this moment in time
I would appreciate a 360-degree
evaluation of the problem from anyone who generous enough to comment.
Many thanks in advance ~ Cass
P.S. I’m not on the nominating committee but if I were I would be putting JB’s name in for a MacArthur. Creating an online community
as vibrant as this is pure genius. Of course, everyone here who contributes would deserve a piece of the award (some bigger pieces than others!).
At what rate Richard, 8.5%, 9%, 10%? Lets see the rate sheets.
jb
“deals falling apart left and right now, because so called buyers cannot get their financing.”
bbb,
Unless I am wrong, Countrywide does not offer 100% at this time. Not a big deal, they are only the largest player in the business.
Cassandra (28)-
On first take, this looks pretty advantageous for you. I’m assuming that the terms of this loan put it well-below prevailing market rates in terms of APR. I’m also assuming that the balloon is not in any way punitive or that it contains some sort of ticking time bomb that would make you want to run for the hills. By having such a significant portion of your purchase price financed in such an advantageous manner, purchase price becomes less of a concern.
One question you should address with your family member making this loan is whether the mortgage will be recorded. IMO, family member or not, it should be.
BC Countrywide now requires a minimum of 5% down, on your typical 500K POS colonial, that is 25K, plus around another 8k or so for closing costs, lots of people will be knocked out, because they simply do not have the money.
But I guess it is different for Westfield, here is a town with over 170 SFH’s for sale, and yet Realtors are knocking on Rich’s door begging him to sell his house, I guess everybody in Westfield pays cash.
The most recent Countrywide rate sheet I’ve got is non-prime:
https://njrereport.com/files/WLDBCNJ.pdf
jb
#28
The one concern I would have with a low interest loan is that the IRS will look upon it as a gift unless the interest rate were equal to the prevailing rate. The person offering you the loan would then have to declare the interest as income.
bbb,
They’re going door to door, armed with qualified buyers ready to buy. Maybe it’s the ws crowd disguised as Jehovah’s. I get it, realtors have not left the businees, they are simply walking the streets of Westfield.
Grim (29)-
Until those rate sheets are verified by you, I’ll consider Reetch’s post #25 to be the latest in a series of trolls.
We have an active mortgage company- chartered in three states- in part of my building. I see wholesale rate sheets every day. 100% financing is- once again- becoming the province of the old-time sharks. And, you’d better be bulletproof and ready to pay up to obtain it. As for the big guys going 100%, here’s the short list:
WaMu: no
America’s Wholesale (Countrywide): no
Nat City: no
Long Beach (WaMu subprime): no
Alterna: no
Fremont: as if
WFC: no
Wachovia Correspondent: yeah, right
BAC: don’t even ask
BBB,
No need to get excited.
Every court needs a jester. :)
Kneecap Bank of Staten Island: yes
Grim (33)-
Love that 11.55% front-line for 680 FICO, 100% financing.
That’s gonna be real popular (LOL!).
BC Bob Well everybody wnats to live in Westfield, so that would explain it.
David Not getting excited (well maybe a little), and people are entitled to their opinions, but I am skeptical to say the least about the knocking on doors realtors.
If you are going to take a position on a debate, you should back it up, not make it up.
Willow #34:
I was just about to say the same thing. I think the rate would have to be at least prime mortgage rate not to be treated as a gift. I’d check with an accountant, Cassandra. Also, since I did something kind of like this once with a family member and an inherited property, the thing I’d worry about the most would be damaging that relationship. I might even write up something that resembled a contract to specify what would happen in the event of a catastrophe (like the person loaning you this money needing it back before your inheritance comes through, or the possibility that your inheritance might not be enough to pay back). And yes, I’d record the mortgage, too.
Willow (34)-
With that note being a recorded mortgage, I’d fight the IRS all day long if they deemed it a gift.
BC (35)-
Like zombies in Night of the Living Dead.
#42
It would only be considered a gift if the interest rate were lower than the current mortgage rates available.
#39 Clot So on the proverbial 500K POS colonial at that 11.55 rate (no money down), one would be looking at around a $5,700 mortgage, plus taxes anywhere from 700 to 1000 a year, plus insurance.
All I can say is God Bless em!! (thery are going to need it)
Clot,
Judging from your posts, you turned out ok. I will be needing your therapist’s number after I send my kids to boarding schools. hahahaha
Someone I know worked with Southstar – speaking of sob stories. This person from “former” southstar… new baby.. just bought a $800K house.. new Mercedes..
Clot,
Question regarding mortgage lending from the Bank of Mom & Dad (or Brother, Aunt, etc).
My assumption is that the mortgage lender is going to want to be senior position, with that second note sitting junior.
Or are they going to look at that as a downpayment gift?
Cass,
Why not just ask for that inheritance early and skip the loan from what sounds like a third party?
jb
Willow #34 and Cassandra,
Absolutely consult with an accountant, I am no expert but I was considering going down an intra-family loan path at one point. Didn’t pull the trigger but found these sites to be helpful:
Circle Lending (Google it because I don’t want to get moderated for having two links) is a company that formalizes and administers private loans between individuals. It may be worth the $$$ to make things completely official without having to use an attorney for everything.
As for interest rates deemed acceptable by the IRS, it does not have to be the prevailing rate but it must meet standards set by the IRS. You have to be charged the applicable federal rate, which change monthly, to determine if the interest rate is proper. If your family member charges at least the applicable federal rates, s/he simply reports the interest payments as taxable income. You can find those rates on the IRS web site here:
http://www.irs.gov/taxpros/lists/0,,id=98042,00.html
While some companies will simply cull risky mortgages from their portfolios, it’s much more likely that niche firms will continue to offer them, albeit at knee-cap breaking rates (thanks Clot).
The big volume shops are going to cut the products out, simply because they can’t generate the volumes necessary to justify their existence.
Once packaged, Investors will continue to buy these securities, the question is, at what rate. With Countrywide advertising rates nearing 12% on 100% loans, it’s obvious that the investors are demanding significantly higher yields to compensate for the risk.
I wish I had some older rate-sheets to do a comparison. Anyone have any Countrywide non-prime circa 2003/2004?
jb
National pending home sales up 0.7% for the month, down 8.5% YOY.
From Marketwatch:
U.S. pending home sales rise 0.7% in February
A measure of future U.S. home buying rose in February, the National Association of Realtors said Tuesday. The pending home sales index rose 0.7% in February. The index is down 8.5% in the past year. However, said David Lereah, the realtors’ group’s chief economist, unusually bad weather in February held back a better performance in pending sales. “We also may be seeing some fallout from a decline in subprime lending,” Lereah said Tuesday. Problems in that market will “modestly” depress improvement in existing-home sales this year, he said. But he added that the improvement in the month-to-month index is “encouraging” and suggests an “underlying stabilization is taking place in the housing market.”
#51 I wonder how he would define “modestly depress”, here we go again with needing some interpertation on davidspeak.
From the NAR:
Pending Home Sales Index (PHSI)
The Northeast (SAAR) saw a drop of 1.3% from last month, and a drop of 8.2% YOY.
jb
When will David Diarreah stop spewing utterly candy-coated lies?
I nominated him to be next Mephistopheles.
I bet he can even sell jacuzzi, steam bath and sauna in Hell. Wait, he owns that place, doesn’t he?
#51 I wonder how he would define “modestly depress”, here we go again with needing some interpertation on davidspeak.
bergenbubbleburst,
The fact that Lereah has been acknowledging this is important, to me at least. I believe the NAR would have much rather preferred to take the spin-positive stance on this issue, but they can’t. In fact, they issued a press release on March 30th revising their forecast because of it.
NAR Forsees Short-Term Impact on Housing Market From Subprime Reforms
NAR Senior Vice President and Chief Economist David Lereah predicted that tighter underwriting practices may cause total home sales to fall by about 100,000 to 250,000 nationally, or no more than 3 percent a year over the next two years. Many of these households will probably, over time, purchase a home when they have attained the financial capacity to do so by saving for a down payment or growing their income.
BBB,
If I didn’t know better, I would say, you are obsessed with D*ck .. I mean.. Richard. :)
Let it go. Would you take what Rodney Dangerfield says seriously?
#55 David I will let it go….let me just shake my head one more time, OK, done.
#54,
JB,
The problem is that RE hound dogs like us know what he meant. But general US mass being 4th grade educated, they can’t read between the lines.
He is misleading American public to mass suicide by suggesting that it’s getting better.
He is more responsible for the misery of many Americans than some criminal stealing plasma screen TV’s.
He should be brought into justice – tarred and feathered and publicly humiliated for atrocities he committed.
“Would you take what Rodney Dangerfield says seriously?”
David,
Rodney makes more sense.
#54 JB Yes, I can see the difference if you will in tone, but he still appears to be spinning numbers, only 100k to 250k people a year will be forced out of the market because of tougher underwriting guidelines?
Based on everything we have been seeing and reading,and all of the information you have so graciously provided us, I believe those numbers to be much higher.
How many alone will be forced out of the NYC metro market, and Lereah is talking 100 to 250K, I don’t think so.
Bob,
But Rodney still doesn’t get any respect. :)
I totally believe it about the Realtors in Westfield.
Bored agents hanging around the office, boss tells them to get out and drum up business. Got to go to an area where people will actually believe that there is a line to get “in”. What better area than Westfield (Trademark Pending)?
I smell conspiracy…
If I adopt the conspiracy theory…
Sally and Richard are JB’s invention to make this forum more lively..
Every story needs a villain or two.
Those of you who rent single family homes are probably used to getting junk-mail from brokers that is addressed to the landlord (pulled from the local tax records of course). I get at least one postcard a week from the local brokerages letting me know about their services, what the neighbors place sold for, that they finally sold that shack down the block, or that they would be glad to perform a free comparative market analysis for me… err.. the owner.
jb
“I smell conspiracy…”
David,
You should have been on this site a year ago, that was fun.
Some data on Nutley for BG..
March 2006
Active Listings – 164
New Listings – 59
Under Contract – 40
Sold Listings – 19
SP/LP – 97%
Average Sold Price: $405,097
Median Sold Price: $430,000
March 2007
Active Listings – 195
New Listings – 56
Under Contract – 29
Sold Listings – 23
SP/LP – 96%
Average Sold Price: $368,116
Median Sold Price: $396,000
BC,
David has been around since Q3 ’05, pretty bullish on the metals during that time too.
jb
“David has been around since Q3 ‘05, pretty bullish on the metals during that time too.”
Where the hell have I been? I thought he just arrived the last few weeks.
JB [65],
Wow, 8-10% decline. I may have to update my original, conservative forecast [peak-trough]
Bob,
As JB said, I have been around for a while. Been busy during 06 taking care of some businesses – had to work once in a while to make money.. you know.. the kids.. they are quite spoiled.. they want to eat 2 or 3 meals a day, they want to sleep indoors, they want to wear clothes.. .
And I talked to JB a lot about precious metals. and yes, I did quite well with Gold, Silver and Palladium (JB was big on Palladium, if I remember correctly)
So what happened a year ago?
can you please find me the address of MLS ID#: 2389906
6 DECAIRE LANE
Thanks James
Bob,
Then think of me as a new kid on the block. haha.. David come lately..
Was the conspiracy theory about the metal? gold backed currency? gov’t fraud? that ol’ gold bug stuff? :)
Then you must be an anarchist. and I thought you were a heartless Republican. hahaha
“We also may be seeing some fallout from a decline in subprime lending,” Lereah said Tuesday
Tightening of lending standards in March had no effect on Feb pending sales. IMO pending sales can never be equated to tighter lending standards. The deviation from mean of pending sales conversion is the only indicator of tighter lending standards.
#54,#57,#59 –
I saw an NAR rep on CNN this morning, spinning the comments from Lereah about today’s stats, but man, did he look glum.
You could see in his face that even he didn’t believe what he was saying!
You know who I miss? The Greenwich Gus guy.
I had David and Gus lumped in together for some reason, and they both seemed to go on an extended absence leave.
But Bob, seriously, even I have been able to stow away my tinfoil hat(s) and stop imagining J.B. creating the trolls to torture nice folk like KL.
I never could, however, erase the image of JB as Booyah. To this day, whenever Booyah perks up, I think to myself, “Why is JB stirring the pot?” Then I have to go back and see what in tarnation was wrong with the topic.
Downloading the most recent LoanPerformance MarketPulse now (December 2006 data). I’ll post it up here when I’ve got it, pretty big at 5 1/4 meg.
Super interesting look at Alt-A. I won’t post the conclusion and spoil anyone’s fun.
jb
Pat,
yes, I miss Greenwich Gus. You probably tied me to him since I hang out at Greenwich a lot. Also Gus and I had a lot of discussion about Greenwich (not only they have expensive houses but they also have 3 housing projects in Greenwich).
And I thought Booyah guy was JB’s alter ego. :)
Looks like we can expect a pickup in sales next month…
What fun would an online community be if I had to make up the cast of characters?
I’ve been involved in online communities for a very long time. Long enough to know what a BBS is, proud enough to acknowledge that I owned a 300 baud modem, but not dorky enough to reveal my “handle”. I was an online chat geek when it wasn’t cool and remember “surfing” the web with Lynx. See Richie’s comment above about the C-64. He was a partner-in-crime way back during those times.
I find the dynamics of online communities an incredibly fascinating topic. Especially as it relates to building a sense of community online. A long long time ago I was an experimental/cognitive psych kind of guy. Spoke with a number of researchers about using it as a PhD research topic. Spent some time out at UCSD thinking about it, talking to post-docs. Ultimately talked myself out of it, was making too much money in IT at the time (beginning of the dot.com boom).
jb
Is it worh considering the condo market?
My husband works in Jersey, and we live in the North Bronx where my son goes to school and I work.
I was just wondering what’s going to happen to the co-op and condo market, because it seems like they’re available in the thousands, and now there seems to be a trend toward trying even to rent them out.
Now I wonder how hard it would be to re-sell…
Any thoughts out there?
Here is the most recent LoanPerformance MarketPulse.
MarketPulse (5mb PDF warning)
jb
From that Star-Ledger story about the football player’s wife:
The house has 30 rooms, including a built-in theater.
There are also, according to court papers, renovations that need to be completed. For instance, she said the house needs a 5,000-square-foot concrete shell, which serves as a support wall in the house.
So the house is at risk of falling down?
JB,
You remember BBS and handle? hey, I thought my generation invented those back in Berkeley days. :) and I thought you were in diapers those days. :) I was teaching BSD Unix at Berkeley for fun (not my main area). Some of my buddies are teaching at UCSD, Cal Tech, Stanford and many at Cal.
Do you know what Blue thick cables are? this is before the thin net and before 10 base T. Actually, my buddy, Eric Allman, wrote a small program. Do you know who he is?
I was kidding about your invention of extra characters. But you already know that.
Now, if I can only figure out this lover’s quarrel between you and CF… hahaha
Looking in NY,
what area of NJ?
If I were you, I would rent it now.
Condo market will go down real fast and real deep and it has been going down. I expect another 25%-40% free fall.
As for co-op, they are quite “cheap” already compare to condos/townhouses so it won’t go down much at all. But again, it won’t go up much at all either.
i’ve had two actual buyers with agents ring my doorbell the last month. i’m not saying this is indicative of every area but in my town people still want in and they’re still paying a hefty price to do it.
Wow! So many intelligent and talented people here! I feel like an idiot, seriously. (Ok, knock off the jokes some of you, I can hear you from here. :)) Anyway, I’m darn impressed. I’m having a crappy day just trying to put together some queries and stuff and you guys are talking about teaching UNIX and whipping up programs. UGH!! I use UNIX and Sybase and other stuff all day long but I’m nowhere near “Guru” levels. sniff… sniff…
>>t what rate Richard, 8.5%, 9%, 10%? Lets see the rate sheets.
i’ve only heard of a couple. three had fixed rates with I/O portion in the mid to high 6’s. two others had 10 year fixed at 7% with adjustable after that max 1% per year up to 9%. that’s all i know. i think people are still getting attractive rates up front and letting tomorrow worry about itself. that’s what the data seems to support.
Clot, Grim –
From yesterday’s discussion about Morgan Stanley’s motivation in pushing its brokers to do mortgages –
The big retail brokerages have been pushing their brokers to do mortgages for a while, but from everything I know, they view it as another means by which they can lock in client relationships for the long term. Management at MS may sense an “opportunity” because financing is drying up elsewhere. But I don’t think the push is coming from a desire to generate mortgages that can be securitized. If they want “product” for their securitizations, they can buy mortgage originators – a la Merrill.
Another reason to offer mortgages – the long-term trend where the big brokerages have been pretty successful at luring the big-ticket clients that were traditionally the clients of the stodgy bank trust departments. The brokerages want to offer banking services of all kinds, to keep those clients.
Gary,
I am an old guy. :) Eric wrote a “small” program called sendmail. :) I was his sister’s, (Cat’s) good friend (though that poor girl suffered inferiority complex due to her genius brother).
Guru just means that you wear pony tail and smoke pot. hahaha.. :)
#63 JB I used to get offers Telling me I was already approved.
Here is something interesting the last few nights, in front of the World Trade Center on my way to the PATH, there have been people handing out brocheures for Hoboken Condos.
They proclaim loudly as people hurry down the stairs,and I quote
“Hoboken Condos avaialable, only 10% down, which they repeat 3 or 4 times as they hand out their sales literature. Interesting,would not have seen this a couple of years ago.
Just wait until the big boys get their claws into realty brokerage.
One stop shop for savings, investment (stocks, bonds, funds), mortgage financing, *and* home purchases.
jb
I have a question. If the big lenders won’t do 100% financing, what about an 80/20 loan to get around not having a downpayment? Wouldn’t that still work?
“And I talked to JB a lot about precious metals. and yes, I did quite well with Gold, Silver and Palladium”
David,
I thought I had the long driveway, for my truck??
Some of the fun, while you were on sabbatical, briefly;
1) RE never goes down.
2) There is no bubble, some are still delusional and currently believe.
3) Bergen County would not be affected, proximity to NY.
4) Wall St bonuses will save this market.
5) 150k, first year out of school will save this market.
6) The pundits.
My personal favorite, by far, BIA analyzing charts, just classic. By the way, I love that career-builder commercial.
One of my relatives lives in the “Estates” section of Colonia.
The lady next door – the same Indian doctor has rung her doorbell three times, asking her if she wants to sell. No shortage of properties for sale in the “Estates” section, either. He just wants her house for some reason.
#86 Richard: how come they are not interested in the other 170+ houses that are for sale in Westfield. I
If people want in, then it looks like there is enough inventory for everybody. Hey I am just asking, but you ahve to admit it does seem strange, all that inventory, all that demand, and yet……..
(Sorry David)
Some good, realistic comments included in this article from Reuters.
Mortgage crisis calls American Dream into question
http://www.reuters.com/article/domesticNews/idUSN0132936820070403?src=040307_1146_DOUBLEFEATURE_top_news
Pages 2 and 3 are definitely worth reading.
David,
Gotcha. I still feel a little like Forrest Gump. Especially today, nothing is working right and I’m hitting roadblocks everywhere.
#93 Glen: From what I have been reading, a good few lenders are getting away from the 80/20 business as well.
Lenders are starting to self-regulate, before the government does it for them.
Bob,
Yep, feel free to park your gold filled tractor trailer in my driveway. :) After all, liberals like me need to save the downtrodden. hahaha
So basically there were full of idiots while I was busy feeding my kids, driving all over due to my kid’s activities.
Yet, no discussion of government conspiracy theory regarding Gold backed currency? That’s disappointing. :)
During 2005 Spring and Summer, I tried real hard to sell my investment condo in Fort Lee. Barely sold it in Spring 2006.
Bought a lot of PM around Fall 2005 and sold them in 2006 Spring. Still waiting for Gold to come down to 500. :)
#94 BC Bob Please its prestigious only minutes from NYC Bergen County, that is how we prefer to be known.
bbb [91],
I saw the same. It took me by suprise, I actually went over to the person and asked; “how much down”? I said I would be interested if there was a deal with 0 down. His response; “that is what everybody is saying, all you people working and nobody has any $”.
How bad can it be that your sales tactics include harassing path riders, for a condo??
Gary,
I was teaching one adult class at evening once a week (intro to Unix). There was this librarian taking my class. When she was in my class, she let her long blonde hair down, wearing the shortest mini skirt with no (censored), sitting at the front of the class.. changing her librarian glasses to contacts.. many nights.. I forgot what I was talking about.. (who knew a librarian can become a typical california beach bunnie)
and she called me when she was in NYC on business (since left library and got a job in a big corporation) a few years ago, staying at the Plaza Hotel.. she wanted to thank me properly..
BC,
You forgot lumber.
jb
David,
I guess she passed the class. :o
David [103],
I get it. You were just trying to assist the downtrodden.
From what I have been reading, a good few lenders are getting away from the 80/20 business as well.
The 80 isn’t the problem, the problem is nobody wants to be the 20 anymore.
jb
Gary,
She did quite well and I helped her get a job as a Unix admin (this is when no one even heard of internet and before there was WWW project from Univ. of Illinois).
And my buddy was the head sys admin at Sun Micro and all the computers at Sun had one same superuser password.:)
#106.
bob,
I did help the “downtrodden”. hahaha..she really needed my help.. :)
and she really wanted to thank me properly. After all, she moved up high enough that the company was paying for her to stay at the Plaza..
JB [104],
LOL. How could I possibly forget that one? The entertainment value on this site is just priceless.
On a serious note, I do remember somebody who went to contract on a condo, I believe in Edison. He read this blog that night and cancelled his contract the next day. He stated that this saved him 40k, at that time.
What counties would be considered central Jersey – and what counties southern Jersey?
What are the search parameters in trend to get the same data?
Any similar southern jersey websites??
and what’s with lumber? as a liberal, I have much to say about lumber industries, especially the ones who want to cut down the redwood forest in northern california which is several thousand years old.. a national treasure.
I want my kids and my grandkids to enjoy those amazing redwood trees..
rhymingrealtor Says:
April 2nd, 2007 at 10:55 pm
Ok Thats just about enough ChiFi
I have heard you call JB a slacker on more than one occasion, a fruitcake yesterday.. and now this, he smells! even over the internet!!
Now just stop it! KL
KL: I will stop for you, but who will keep him in line? I mean that he is a celeb and all, I want to keep him grounded, or coralled (not to be confused with corralled). Once he begins to glow (literally) after dips in the Passaic, I am afraid he is going to be clubbing around Crapensta. I need those 6:30AM blog entries!
What is Crapensta? Well, we have TriBeCa, SoHo, NoHo, NoLIta, DUMBO, then we have CrAPenSta [the Crap Around Penn Station], which now has all the super NJ B&T club scene.
http://nymag.com/listings/bar/cain/
Interesting point made by economist made over here regarding higher pending home sales. Could be that owners who had been previously holding out for asking price acknowledge that they are not going to get it, and capitulate, hitting bids.
Much like when volume increases when stocks are getting creamed.
I hope this hasn’t already been posted.
http://business.timesonline.co.uk/tol/business/money/mortgages/article1564480.ece
Man, 102, takes out 25-year mortgage
“The property investor from East Sussex has taken out an interest-only £200,000 mortgage and hopes to meet the £958 monthly repayments with income from rent as he joins a growing army of retired people hoping to cash in on buy-to-let schemes.”
David [113],
Lumber:
Around the 4th quarter of 2006, someone on this blog, stated that housing had bottomed. According to them, the bull market in lumber was an indicator. Unfortunately, if they had a position, at that time we were approx 35% off the highs and trending lower. Let’s just say that that I did not concur. I posted a few charts. Subsequently, we have not heard back from the lumber bull.
By the way, you must be a teacher. You ask too many questions.
http://charts3.barchart.com/chart.asp?jav=adv&vol=Y&grid=Y&org=stk&sym=LBK7&data=H&code=BSTK&evnt=adv
Bob,
a former professor/researcher/scientist,
Now, owns a couple of companies and in the process of opening another company, busy being a driver for my older kid.
#102 BC Bob Exactly my thoughts, soliciting for Condos in Hoboken in front of the WTC. Hoboken, the place where everybody wants to, be,blah, blah, blah.
David [118],
A mining company?
Ok, I was BBS’er too. Anyone ever go to the Belfry BBS? I had a 110 modem for my C64 also. Even had a friend who ran a Galacticomm BBS. Innovations BBS, anyone know that one? Hell, I remember spending days a time playing on a MuD or MuSH also.
Bob,
No mining company. :)
a consulting firm, a large retail business and in the process of opening health care clinic (non-profit organization: charging mucho dinero for super rich (not really charging.. “asking” for donation since it’s non-profit, and free clinic for the downtrodden).
“Richard: how come they are not interested in the other 170+ houses that are for sale in Westfield. I
If people want in, then it looks like there is enough inventory for everybody.”
I was wondering the same thing BBB. I looked online today and there are gobs of houses available in Westfield – the inventory is way higher there than in other towns in NJ. Also seem to be an awful lot of spec homes. And where there are spec homes, there is more volatility, I would think.
Noticing an interesting trend. Thought everyone should be aware of it.
Listings coming on the market with incredibly high prices, then being “chopped” dramatically about a month into listing.
I’m beginning to think that this is now a “technique” to get the buyer to think that the home price has been reduced dramatically. Similar to the ol’ retail markup and discount.
Some examples..
MLS# 2384297 – Maplewood
OLP: $439,000
LP: $409,000
DOM: 5
MLS# 2384297 – West Orange
OLP: $639,000
LP: $559,900
DOM: 22
MLS# 2387981 – Piscataway
OLP: $472,500
LP: $339,900
DOM: 13
MLS# 2383528 – Franklin Lakes
OLP: $849,000
LP: $795,000
DOM: 25
MLS# 2380629 – Mendham
OLP: $874,000
LP: $799,000
DOM: 32
NJGal& bbb,
Could it possibly be the previous homeowners coming back to thank them for taking the pos off their hands?
Or is it more of a “Let’s aim high, and reduce quick if we don’t get any bites”?
Clot? KL?
jb
Sometimes if I go to many hours without reading – I try to catch up -I laugh, and laugh and want to comment on a comment , but then the next comment is funnier and the next and I just can’t comment them all or decide which comment to comment… so that’s my comment
KL
#125 BC I like that one. I really am not trying to give Richard a hard time, but there is a real disconnect with him.
#28 Cass, a few general points:
1) assuming you’re borrowing the other $300k from a traditional lender, the lender will not count the family $300k loan as part of your downpayment (and as part of your assets) unless you certify that it is a gift (which has other implications) – if it’s not a gift, the lender will want first lien on your house and they will also count the payments due on the family loan against your DTI – generally it’s a more complicated loan meaning you’ll probably get charged more somewhere – and, if you’re not putting any of your “own” money in, it could be viewed as a zero-equity loan, which has its own problems;
2) with respect to taxes, the IRS will charge your family member taxes on the interest due on the loan as income received, whether it’s received or not – in other words, if you pay AFR or higher, the IRS taxes that amount, if you pay less than AFR, the IRS will impute interest on at least the AFR amount and tax accordingly (again, even if the family member received no interest from you);
3) amounts not collected from you by the family member below AFR also may be counted against that member’s estate/gift tax exclusion amounts;
4) if you’re not sure of how this works, you should, as stated by others, seek professional advice for your sake and the sake of the family lender.
5) “assured inheritances” sometimes aren’t;
I think the biggest missing factor in your question is whether you are comfortable that you can make the payments & taxes, on both mortgages. Also, in buying now, you should be willing to ride out the housing market in the event it continues to head south. YMMV.
-P
#93
Thanks. Maybe that will help drive down prices as well.
#85
investor david-
He works in Jersey City, although we’re not looking in NJ, since there’s rumor that company is relocating to either Bronx or Brooklyn soon.
Thanks for your feedback. I think I’ll forget about condos if prices are so unstable (and thanks, bergenbubbleburst), but we really need to move. (Bronx? Queens? Westchester?)
We’ve been living in a studio with our toddler son for seven – yes, you read it right – seven years now, and can’t wait much longer.
Hoping the fall will be an OK time to make a decision…
Corzine signs..
http://blog.nj.com/ledgerupdates/2007/04/corzine_signs_tax_relief_bill.html
Gov. Jon Corzine wrapped up the Legislature’s attack on property taxes today, signing a bill that includes $2.2 billion in property tax subsidies for homeowners and a 4 percent cap on local government tax increases.
Richard is perpetually in the ‘Lucy in the Sky with Diamonds’ frame of mind when talking about RE.
Realtors knocking on his door? Dude’s hallucinating…..
Homeowners earning up to $100,000 are scheduled to collect credits worth 20 percent of their property tax bills; those earning between $100,001 and $150,000 receive credits worth 15 percent and those earning between $150,001 and $250,000 qualify for credits worth up to 10 percent of their 2006 property tax payments.
Given the 4% local tax cap..
Those making between $150k and $200k can expect to see their tax credit of 10% completely eroded by local tax increases in 2 1/2 years.
Those making between $100k and $150k can expect to see their tax credit of 15% completely eroded by local tax increases in 3 1/2 years.
Those making up to $100k can expect to see their tax credit of 20% completely eroded by local tax increases in 5 years.
jb
Anyone know when the cap takes effect? I realize there are loop-holes to the cap… just wondering if it’s this year or next.
APP had a piece on the caps a few days back:
http://www.app.com/apps/pbcs.dll/article?AID=/20070326/OPINION/703260311/1029
They are saying that the new caps are actually higher than the old caps, and just as loophole-ridden.
jb
David,
Tell your son to be aware of more than a body check on the ice;
Judge: DWI doesn’t count on a Zamboni
Sure he was legally drunk, but he was only driving a Zamboni.
So a judge in New Jersey has restored John Peragallo’s driving privileges.
Peragallo was charged with drunken driving in 2005 after a co-worker at the Mennen Sports Arena in Morristown told police Peragallo was speeding, and that he nearly crashed the ice-sweeping machine into the boards.
Tests revealed Peragallo’s blood alcohol level was above the legal limit in New Jersey.
He appealed his license suspension, and Judge Joseph Falcone agreed. Falcone ruled that the four-ton Zamboni isn’t a motor vehicle because it can’t be driven on a highway or carry passengers.
Rich,
Here is Senate bill S-20:
http://www.njleg.state.nj.us/2006/Bills/S0500/20_I1.PDF
jb
bergenbubbleburst Says:
April 3rd, 2007 at 1:43 pm
#125 BC I like that one. I really am not trying to give Richard a hard time, but there is a real disconnect with him.
BBB: The disconnect is in the nuerons firing between the the autonomic nervous system and the high lobes.
“I really am not trying to give Richard a hard time, but there is a real disconnect with him.”
Yeah, on this one I agree. For example, in everyone’s favorite “hot” town in Essex, Maplewood, there are 89 houses on the market, whereas there were 140 last year. But Westfield, a supposedly nicer town, and according to Richard the hottest town in NJ, has over 160 listings. That’s awfully high. What’s more interesting is that many are high end, and many are empty, if you look at the pics on the net. Seems to me to be an example of a good town that got too big for its britches too quickly – not knocking Westfield, because it’s certainly not alone in that, but not every town can support $2 million plus homes.
Chicago
I see you’ve read my post about the bullying, but given the reasoning you used in the last post, I realize I was mistaken, it is in fact jealousy/rivalry rearing its ugly head, hmm he gets a sucessfull blog, you have to go on TV, he gets a dog, & bam! you have a baby, he’s in the Star-ledger, what? will I open up a Playgirl and find you in there???
Green is so unbecoming.
KL
#124
JB,
Can i get an address on the listing in Piscataway?
The listing says “Corporate owned sold AS IS-NO CONTINGENCIES ACCEPTED verified pre-commitment and proof of funds with faxed offer thru LA in contract form only,vacant,flashlite,debris to be removed soon.
Does that mean I would have to submit proof that I have the entire amount in cash or would a pre-approval for a mortgage with 10% down suffice?
AK
C.F. = Taylor Hicks
JB
Thanks. The article is MUCH better reading than the bill.
I didn’t even know there were caps set previously.
Rich
Question for the board. I’m currently a renter in NYC and am considering purchasing (haven’t decided between a condo in the city or moving to the burbs yet). I just finished my taxes for 2006 and was absolutely killed this year by AMT. I asked my accountant whether or not owning would be a big tax advantage for me and his response was that it wasn’t because there would be offsets to my taxable income. It was my understanding that mortgage interest was always deductible even under AMT. Am I wrong? Appreciate everyone’s thoughts.
Thanks.
HC
Regarding today’s news that the subprime mess is contained, I think there’s a delayed reaction effect. The subprime mess won’t impact sales until April or May, when all those would-be buyers get told to get lost. Sure, real estate sales numbers might be good this month however I can’t wait to see the April, May, and June numbers.
#134 JB That is assuming of course that the credits alst that long. From what I understand for now it is a one year giveback, with no provisons for any permanance.
It is an election year gimmick by Commrade Corzine.
James Bednar Says:
April 3rd, 2007 at 2:20 pm
C.F. = Taylor Hicks
grrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
HC Says:
April 3rd, 2007 at 2:38 pm
Question for the board. I’m currently a renter in NYC and am considering purchasing (haven’t decided between a condo in the city or moving to the burbs yet). I just finished my taxes for 2006 and was absolutely killed this year by AMT. I asked my accountant whether or not owning would be a big tax advantage for me and his response was that it wasn’t because there would be offsets to my taxable income. It was my understanding that mortgage interest was always deductible even under AMT. Am I wrong? Appreciate everyone’s thoughts. Thanks. HC
HC: You cannot really plan for the AMT, especially because we have not been given guidance as to what the 2007 exemption for AMT will be [usually done in 4Q]. You got burned because (I assume) as a NYC resident and worker, you pay NYS & NYC taxes – which is a “preference item” under the AMT. If you bought a house, the state and local tax issue would not go away, and also real estate taxes would not either. If you choose to live in NY/NJ/CT you are going to have this problem. Assume you will be nailed again, and withhold accordingly. If you end up with a refund – eh?
Sorry HC: so buying a home is not a solution or a shield from the AMT.
CF,
I’ve been working on something for the 11th.
I purchased a bottle of Mr. Bubble bubble bath. I removed the label very carefully and then spray painted the bottle and cap a gold metallic color. I’m in the process of reattaching the label. When that is done I’m going to mount it to a trophy base.
I’m hoping that I might be able to get it onto the lectern or head table without anyone noticing.
jb
#145 pending home sales mean just that, pending. They have not closed yet.
This sub-prime mess just started in the last few weeks, so to think that there is no real impact at this point is mistaken.
Houses can go under contract, very easily. I bet you there are still lots of Johnny & Mary we have no cash but want to buy a house that are still stumbling around out there blissfully unaware that the lending environemnt is rapidly changing.
It could be a month or more before these so called under contract houses fall through, and come back on the maket.
I also think that after the Easter/Passover holidays, we will see a spike in invenntory.
GSMLS data for Westfield..
March 2006
Active Listings – 206
New Listings – 62
Under Contract – 45
Sold Listings – 28
SP/LP – 97%
Avg DOM – 70
March 2007
Active Listings – 244
New Listings – 59
Under Contract – 28
Sold Listings – 25
SP/LP – 96%
Avg DOM – 83
Inventory up about 18% YOY
Contracts down about 35% YOY
Sales down about 10% YOY
[153],
Are we sure it’s not the sheriff knocking on those doors?
[153]
Am I reading that right? People are paying on average, 96% of the list price? Please tell me that’s incorrect.
JB,
You’re “craft project” has me curious.
Real Estate Marketing Expo, Sheraton Mahwah Hotel… no, April 26
Off Shoring: How Big is this Issue, and are Real Estate Professionals Prepared?, Bedminster, NJ, April 11… no, commercial real estate
I’m sorry if this was already posted & I got this from patrick.net ( can I do that)
This is incredible
http://www.time.com/time/printout/0,8816,915445,00.html
KL
#145, 149, 150
HC, I feel your pain. I live in NYC, own an apt with no mortgage. Working on taxes now – have been subject to AMT for a few years now and it doesn’t get any better. I’d almost not care about having to pay it if I didn’t have to go through the (*#$()(*#$ painful and useless exercise of itemizing – just to see it all get ignored. It’s just pouring salt on the wound. Seriously, that’s the most aggravating part.
Agree with CF, though. Buying a house solely for AMT purposes is like biting off your nose to spite your face, especially in this environment.
This year, I’ve committed to giving money to a tax reform organization (as soon as I find a good one). The AMT has converted me into a proponent of either a flat tax or a national sales tax. I’d never have thought either was possible.
-P
Grim (47)-
Yes, but if the 2nd from ma & pa is recorded and legit, IMO…it ain’t a gift.
#112 Wow, this is the second mention of South Jersey in two days. Maybe people are finally realizing that there is a South Jersey bubble as well. As a lurker here since 2005, nothing would make me happier than to see some discussions on South Jersey here.
Mike, unfortunately there is no such website specifically for South Jersey. JB renamed this site to include the whole state, but the “statewide” aspect didn’t seem to catch on. Hopefully that is changing now, as prices start to fall down here.
Mark
Ricky (115)-
Very perceptive. Capitulations like this are all over the place now. Look for % of asking price to take a dive over the next few quarters.
Clotpoll Says:
April 3rd, 2007 at 4:39 pm
Ricky (115)-
clot: I saw Ricky and got excited, then I realized that it was “Rickey”.
Grim (126)-
Yep. But it’s a dumb and dangerous strategy.
was NOT
politely Says:
April 3rd, 2007 at 4:24 pm
#145, 149, 150
This year, I’ve committed to giving money to a tax reform organization (as soon as I find a good one). The AMT has converted me into a proponent of either a flat tax or a national sales tax. I’d never have thought either was possible.-P
politely: actually, if you want to blame anyone, blame W. and the Republicans for their “head fake” tax cuts. What they did is offer tax cuts on the standard calculation, knowing full well than most of the blue states have state taxes, and so the rates went down the standard calculation went down, but the AMT didn’t really change. People were duped into thinking they were going to get a tax cut, but it was a ruse.
For once – blame the messenger [not me, the legislative and executive branches]….the republicans rooked you and sold you out to the red states.
“Look for % of asking price to take a dive over the next few quarters.”
Clot,
Niagra Falls as opposed to Chinese water tortue?
Am I reading that right? People are paying on average, 96% of the list price? Please tell me that’s incorrect.
96% of the last list price, not the original list price. Nor does that take into account relistings.
Because you are a nice guy, I went back and redid the calculation using original list prices (not relistings), it brings the percentage down to 92.1% of OLP.
jb
SNJ,
Take a look at the link to the newest LoanPerformance Marketpulse I posted above.
The Vineland-Millville-Bridgeton area is in the Top 30 for investor purchase loans at 13.03%. Any insight as to why the percentage is so high in this part of NJ?
jb
BC Bob,
My son plays games at Mennen Area twice a year against the NJ Colonials. I will tell him to watch out for the drunken driver. :)
Now, I am off to CT for his Spring hockey – it’s much cheaper to send him to a boarding school than me driving him all over the places for his hockey, golf and water polo.
Today’s housing “good news” made me chuckle. The subprime meltdown effect won’t even start for another few weeks as would-be first time buyers get frozen out. Just wait 6-8 weeks if you’re on the fence about buying … I think this will turn out to be the spring selling season that doesn’t happen.
CF and JB,
this lover’s quarrel is getting out of hand. Get a room and settle it out of this forum. hahaha. :)
#165, CF
I just need to find someone with enough balls to fix it and to stop wasting so much money. Of course, with the budget baked with AMT, it’ll be like Social Security. Seriously, I get taxed enough to support every man, woman & child in several third-world villages. I’ve never contributed to a political campaign before, but heck, that’s on my agenda now. Democracy through anger… sigh…
-P
I would call CF and JB Blues Brothers.. just trying to figure out which one is Jim Belushi (JB).. hahaha
Intereting that CF didn’t mention anything about my post regarding Clarance Darrow, Loeb & Leopold and Uberman ref. Richard.
Don’t bet the house on the mortgage interest deduction staying status quo forever. I’d suggest that you not take that into account when making your affordability calculations. If you are banking on that deduction to push affordability, buy lower instead.
Many look at MID as sacred, and it is, but remember, it’s only sacred to the extent that it will impact voters.
It would be pretty easy to cut MID down significantly and not impact the bulk of American households nationwide.
MID is on the table, and with the current limit at $1,000,000, it’s pretty easy to sway the masses into thinking that we’re giving the rich a big break here. Let’s just cut that thing right down to about $300,000 to make sure the rich pay their fair share.
jb
#165 CF,
I have no problem blaming Republicans for everything – including BBB and BC Bob. hahaha..
politely Says:
April 3rd, 2007 at 5:00 pm
#165, CF
I just need to find someone with enough balls to fix it and to stop wasting so much money. Of course, with the budget baked with AMT, it’ll be like Social Security. Seriously, I get taxed enough to support every man, woman & child in several third-world villages.
P: I am pitching Roth IRAs like mad…..I don’t trust any of these clowns….if you have a Roth 401(k) option at work, and you are mid-career and maxing it out – USE IT!!!
David,
What leads you to believe that I’m a Republican??
Bob,
something against me looting your gold filled tractor trailer to help the downtrodden? :)
So are you an anarchist? or a heartless Republican? or a rebel without a clue like myself?
It seems like there is more action watching the grass growing than watching the housing market crumbling… I kept telling myself.. patient .. grasshopper..
Re: 96% of list price and 92% of OLP. What I have seen in the last 3 to 4 months (in Fair Lawn for starter capes 350 to 400K) is a lot of houses that are listed with realistic prices for today, which are still outreageous, but whatever… some of those houses sell quickly for maybe 2% or 3% below. Then there are the houses that have been on and off since 2005 or 2006 and finally capitulate. Those sell for same 2 or 3% off their last list price but are sometimes more than 25% below OLP from 1.5 yrs. ago. For me, the 8% average off OLP is really a mix of houses only recently listed that sell for 2 to 4% down and others that sell for 10 to 15% down OLPs from 2006 and 2005.
investorDavid Says:
April 3rd, 2007 at 5:07 pm
Intereting that CF didn’t mention anything about my post regarding Clarance Darrow, Loeb & Leopold and Uberman ref. Richard.
iD: Would you be willing to defend me? It may come to that with Reech….
#168, JB
I have no idea. I have been to Vineland and it is literally the middle of nowhere. It isn’t close to anything and I don’t think there are many companies or jobs. The only thing I can figure is that perhaps investors were looking at it purely from a price standpoint. As in, “I can’t believe that a house in Jersey is this cheap”. As these are outer exurbs, I don’t think they will fare well when the downturn accelerates.
Mark
“something against me looting your gold filled tractor trailer to help the downtrodden? :)”
David,
At that time, there was no mention of that downtrodded student at the Plaza.
downtrodden.
CF,
precisely my point. I would use the Uberman defence just the way Clarance Darrow did.
Ironic that it happened in Chicago. :)
Bob,
Now you are a bleeding liberal after I mentioned the “downtrodden” student?
Did I mention that she had the lightest blonde hair and the longest legs ever? Nothing but legs and the bluest steel blue eyes.. Her name was Sandy.. she was a..
I’d be very curious about the “investors” in the Vineland-Millville-Bridgeton area myself. All of these towns are in the middle of nowhere, but all are within commutable distance of Philadelphia and Camden County. Not to mention that Millville has gotten kinda “trendy” since the 1990s. Still, if these investors are after Philly commuters their calculations are a little cockeyed since there are plenty of nice, affordable suburbs that much closer to the city than Vineland, Millville and Bridgeton. (Or at least there were when I left South Jersey five years ago.)
…..transsexual?
So, these condos for sale in Hoboken that they were advertising for by the WTC…..which condos? Did they say?
Just wondering how all these people that can’t get out of their co-ops / condos affect the market in general.
Where do they go, and where are their stories in the media?
Seems like more media denial about the housing market reality.
I don’t know much about the US tax history, but taxes have to go higher to meet all the unfunded obligations going forward.
For folks in the
Thanks for all the AMT responses. It doesn’t seem to make a whole lot of sense to own if you don’t get the deduction. Even with the huge spike in rents (mine are going up by ~30%), w/o any tax advantage, there’s no point in owning. That is unless rents keep going up by 30% per year, in which case I will be kicking myself if I don’t buy.
In #190
Hmm, whatever I wrote got cut off……strange.
Does anyone have under contract data for Wayne? 3 capes that I was going to see went under contract. I only had a chance to see one and I had to bid on it by the next day since there were 2 other buyers.
where’s the bubble in Manhattan?
http://money.cnn.com/2007/04/03/real_estate/Manhattan_housing_market_prices/index.htm?postversion=2007040309
Manhattan home prices on the rise – again
The price of an average apartment in Manhattan has hit more than $1.2 million.
By Les Christie, CNNMoney.com staff writer
April 3 2007: 9:34 AM EDT
NEW YORK (CNNMoney.com) — The price of a slice of the Big Apple was on the rise in the first quarter, reversing a slight decline in the fourth quarter of 2006, according to several reports released Tuesday.
Estimates of the average price of a New York City apartment ranged from $1.28 million to $1.36 million. Reports were issued by Brown Harris Stevens, the Corcoran Group, Halstead Property and Prudential Douglas Elliman.
Those prices represented increases of between 4 percent and 13 percent compared with the third quarter of 2006.
“The first thing we should do is thank Wall Street,” said Tresa Hall, executive vice president of the Corcoran Group.
Tremendous year-end investment bank bonuses – a total of $23.9 billion – poured an infusion of cash into the housing market.
Transactions were way up. Prudential Douglas Elliman reported that sales increased 42 percent compared with the prior quarter. The time homes sat on the market declined 12 percent.
Yes, but it looks like prices for everything but 4+ bedrooms declined.
Rising volumes + declining prices => ?
chifi-
Roth 401K?
I thought they were different things not the same thing? 401K get match from employer, pay no tax now. Roth IRA, not with employer pay tax now no tax later when retired.
Most of the money books for 20’s single say add to the match maximum of the 401K and then try to put in the 4K max of the Roth.
They are suggesting that we are going to have to go back to pre-Regan tax rates to pay for all of this recent spending.
Plus they say get it in now because once I get a wife who wants a NNJ house and kids all the money will go to those two line items :)
JB,
Thanks for the great report (including that bizarre inventory pace graph, who would suggest something nutty like that?).
Looks like the region is slowing a little, but as SAS is noting, whatever trouble may or may not be coming doesn’t seem to have started yet.
Mike in SJ and SNJMark, I’m in the same type of dead zone…live in Bucks, work Middlesex Cty north of PRN.
With all the geeks around here, you’d think there’d be a PA/NJ border blog. When I try on my tin foil, I think Toll pays them off to shut down.
So I glom around here and hope JB doesn’t start blocking glommer IPs.
I’m thinking that trends in the 95/GSP zone will follow through from S to N, with lags based on financing during the ’02-’06 period.
R Patrick, effective 1/1/06 employer- sponsored 401(k) plans could be amended to include the Roth feature (post-tax savings/earnings for non-taxable withdrawal).
There’ve been a good number of articles to help determine a mix:
http://www.smartmoney.com/retirement/401k/index.cfm?story=roth-ira-calculator
Problem with this is that psychological analysis and savings theorists have shown that there is a higher premium placed on money received NOW, versus more later, even with demonstrated value.
People get more money now with the (k), so place a premium on it. Maybe they overprice their “death charge.” Meaning that for many folks, a bird now is worth way, way more than two in the bush.
The Roth IRA and Roth 401k are different animals.
Generally, one should contribute to the 401k to get the full match. Then max the Roth $4k. Then go back and add to the 401k. This combination also hedges to an extent the tax implication; partial tax-deferred, partial tax-free withdrawals.
Given that we are in a low tax rate environment, folks in their 20s and 30s should be maxing out their 401k now, and licking their chops to rollover/convert tax-deferred to Roth IRA in 2010.
Another reason to contribute to Roth IRA is that with increases in salary over time, folks will be ineligible to contribute once they get into the six figure salary ranges, so contribute while you’re eligible.
I’ve heard that companies aren’t in a hurry to allow Roth 401k’s so far…… wonder why?
Could David the chief salesman cook the numbers? I have no trust in anything from NAR…
Most of the major corporations I am aware of offer the Roth 401(k) alternative as of 1/1/07.
Personally, I can’t wait to see the adjustment on the current sales numbers over the next 60 days.
Goldman’s Flagship Hedge Fund Fell 5.7% in February
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayxwv_9rMjN0&refer=home
The co-op discussions always seem to unearth me from the rock I’m hiding under in here and fire me up because of the generalizations made. We’ve already been through the rules and regulations and we don’t need to rehash the co-op/condo debate and co-op board Nazis, however NJ and Scarsdale co-ops can’t be put in the same category as those in Manhattan or an outer NYC boro that has a 20 Minute express subway ride into midtown. Somehow I don’t feel all that panic stricken when the apartment 1 floor above me on the same line, priced correctly and FSBO just got 2% below asking price. And yes, there are also the apartments in here that will continue to rot on the market just like any house that’s got an owner still thinking we’re in a housing boom. I’m not expecting any additional growth, but how many more ways can we spin the fact that a properly priced piece of property (say that 4 times fast), or in this case, “shares” of a slice of property in a desirable location will get attention and will move?
http://www.reuters.com/article/reutersEdge/idUSN0242036420070403?src=040307_1257_INVESTING_comment_n_analysis&pageNumber=1
R Patrick, you seem like a planner. Check this out if you really want to go all gung-ho.
http://www.fpanet.org/journal/articles/2007_Issues/jfp0407-art6.cfm
#207
I’m relatively new to this board, so I hadn’t read previous posts about co-ops/condos and appreciate any feedback I get.
Plus, aren’t conditions continuing to shift and change, and therefore worth the analysis and discussion?
And finally, there are some universal themes to this crazy tri-state housing market.
This to me is the best site out there, nothing comparable with the amount of new info that’s relevant and always available.
I went condo hunting about a week and a half ago – I saw a place that believe it or not, might not be a bad move. Anyway, the realtor with a wink and a nod assured me that 100% financing was still available and that if my FICO was below 640, she knew a guy who could help me secure a mortgage.
The March, April, and May numbers will be very telling indeed. Anecdotally I don’t know of anyone who’s bought a house or is even looking.
to post 198
They are suggesting that we are going to have to go back to pre-Regan tax rates to pay for all of this recent spending.
It is either higher taxes or higher inflation.
Plus they say get it in now because once I get a wife who wants a NNJ house and kids all the money will go to those two line items :)
Get a Wife who do not want a NNJ house – get one who wants a “get the h3ll out of NJ”.
Save some by renting below your means for a few years, and if NJ stays as it is now or getting worse – get a job somewhere else. For younger people like me it is worth to save diligently for 3-5 years, max our 401k/roth contributions, and after that, with good financial base I can take a pay-cut , move to cheaper area and still get ahead.
#199 Oh its started. It might not yet be showing up in the numbers,but it has indeed started.
#196 ADA it is there, whta you are seeing now is simply noise.
#190 Hobokenite: No, but netx time i see them, I will tkae one of theri brocheures, and let you know.