From the Associated Press:
Tighter mortgage market shuns bad credit
In the past, lenders didn’t want to give mortgages to people with below-average credit because it was risky, said Kathe Newman, a professor at Rutgers University in New Jersey who has studied the subprime market and foreclosures.
But the explosion of a secondary market for repurchasing mortgages provided more cash to lenders, and investors were willing to take bigger risks. Technology, such as automated credit scoring, also allowed lenders to quickly assess risk, she said.
…
LaVerne Jackson, who sells homes for Century 21 south of Newark, N.J., said the mortgage situation is slowing her business.In early March, one of her clients was set to close one afternoon on a $320,000, four-bedroom home in Linden, near Newark Liberty International Airport. But the deal was canceled abruptly just hours before closing when the buyer’s mortgage company shut its doors, she said.
Jackson said the housing market will suffer as buyers work to establish better credit.
“They will have to do a lot of credit repairs before they can qualify,” Jackson said. “It also means the houses will sit a little longer.”
New Jersey in April barred two companies, Atlanta-based SouthStar and LoanCity of San Jose, Calif., from doing business in the state because they lost financial backing and weren’t able to fulfill existing loan obligations, said Jim Gardner, a spokesman for New Jersey’s Department of Banking and Insurance.
The month before, the state also barred New Century Financial Corp., which pulled funding for 59 home loans and eight with the company’s Home123 Corp. unit that had already closed. The loans have since been placed with other lenders, Gardner said.
Irvine, Calif.-based New Century had taken an additional 451 applications that did not close and Home123 had 293, and they have been directed to other mortgage companies.
…
Osvaldo Rodriguez, a 40-year-old postal worker, purchased a three-family house in Newark last June with about $1,000 down and $300,000 broken into two mortgage loans. His monthly payment was about $2,200 and rising, more than he could afford on an annual income of about $60,000, including veterans disability payments.“It was tight, very tight,” he said, sitting on a couch with a clear plastic slipcover in his living room. “I was paying it, but I was kind of struggling.”
Rodriguez’s home didn’t go into foreclosure because he sought help from ACORN Housing Corp., a housing advocate. He said he had a good credit rating, and he recently refinanced to a lower mortgage rate from a bank, which made his payments more affordable. He also now has tenants to boost his cash flow.
Other borrowers haven’t been as lucky.
Deborah Beatty recognizes that she and her family could lose their home in Jersey City, N.J., across the Hudson River from New York, because they can’t afford the mortgage. The newly constructed three-level home offers a view of the Manhattan skyline and the Statue of Liberty from Beatty’s master bedroom window.
“I’m going to miss that,” said Beatty, 53, who collects disability payments and does not work. “When I come in, I like to see the lady (the statue), especially when it’s a beautiful clear night.”
Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.
With income from tenants, which didn’t come right away, Beatty’s daughter thought she could afford monthly payments of nearly $5,000.
But she hasn’t made a mortgage payment in more than three months, and she’s receiving letters threatening foreclosure.
Beatty’s daughter had to take out a nontraditional loan because she would not have qualified to borrow that much money through a traditional 30-year-fixed mortgage, said Judith Brzuskiewicz, a loan counselor with Citizen Action, a nonprofit advocacy group that is helping the Beattys and other families avoid foreclosure.
Beatty acknowledged the mortgage was probably too good to be true, and now her house is on the market. The family wouldn’t be able to afford buying another house and would likely rent, she said.
“It’s embarrassing,” Beatty said. “It hurts your pride, your respect.”
Maybe it would be better if the tighter mortgage market didn’t qualify people for loans of 30 times their income.
Has anyone seen the show “My First Home”? I’ve seen 3 episodes (I like to torture myself by watching less qualified people find success where I have only found failure) –
1 – Single woman with undocumented loan buys dilapidated St Louis home 50k above her budget (which is an awful lot in the SL market)
2 – Couple buys 100% financed home because “one of their friends bought a home, and it seemed like something they might want to do, too.” ARM/ no dp, and they ask the seller to pay closing costs. As they sign, woman asks man, “Are you ready for this?” His response – “No.”
3 – This is my favorite. Young couple decides to buy in Seattle. Claim that they have no dp, but are very picky about where they want to live. Finally find a nice 3/2 with a backyard and fall in love. Buy with no dp, seller pays closing. First thing they do? Buy a 5-person hottub.
When were these episodes filmed? It couldn’t have been that long ago. So my question is not whether unqualified buyers fueled the bubble, but whether they continue to. What happens when these loans really stop?
Much lower house prices will solve the affordabiity issue.
Misery 2008.
Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.
With income from tenants, which didn’t come right away, Beatty’s daughter thought she could afford monthly payments of nearly $5,000.
I’m guessing she didn’t pass Math 101.
And the mortgage brokers who gave her the loans didn’t pass Common Sense 101.
unbelievable !!
600K mortgage on a 20K income??
This mess we have seen so far is only the tip of the iceberg.
The ARM resets are kicking in and given that 2006 was the peak of the short term adjustable ARMS, the full effect will play out in 2008/09.
From Bloomberg:
Weak Dollar? Currency, at 10-Year Low, May Fall More
I worked as an underwriter for Countrywide Wholesale several years ago and did these deals all day long. Not because I thought they were any good, but because management had “special” programs to put them under where you didn’t have to ask important questions like ‘Can you afford this?’ I have over 15 years in the credit business and the lending industry has just disregarded everything I learned in the first 10. I get such a sense of satisfaction reading this now though. As predicted, the sh*t is all hitting the fan. The people who made the idiotic decision to do these loans are probably sitting on a yacht in the Cayman Islands living it up now though.
“a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000”
What else is left to say??
The same insanity that drove this market to the moon will ultimately lead it to its depths.
[6],
Toast. The only short term hope is a massive short covering rally. After that?
My concern with this whole real estate debacle is that many Buyers will jump the gun and enter the market too soon. I have little/no faith in the public as having spoken to many people I keep hearing the same thing over and over: “It’s a Buyer’s market”. This may be the case, but that phrase does not imply that you SHOULD go out and buy NOW. While I am sure tighter lending regulations will limit the # of Buyers, I still think the image the public does not quite have the grasp that we may have having been so involved and informed.
What are your thoughts?
Allisonline #2, I’ve seen that show, it comes on right after “The Real Deal” on TLC.
Don’t miss the San Fran couple with $100K income and no savings who buy a $700K condo, $0 down, with an interest only loan, and then head immediately to Ethan Allen furniture to drop $3-5K on furniture.
I haven’t seen one “buyer” on that show yet who should be purchasing a house. They all have zero savings, use toxic financing, and can barely afford the payments on Day One (before the adjustable rate mortgages even reset).
It’s one Recipe for Disaster after another.
My concern with this whole real estate debacle is that many Buyers will jump the gun and enter the market too soon.
I’m not sure I’m understanding your concern, or rather, why you should/would be concerned. Is your assumption that buyers “jumping the gun” will reignite the mania and bubble or are you simply just concerned about the financial well-being of these would-be buyers? Either way, I’m not sure your concern is well founded.
jb
sigh. how can anyone with that kind of annual income willing to take that kind of loans? it’s beyond troublesome. and here i am with nearly 200k annually, and i cant even contemplate of buying my 1st home pass the 450k mark.
What else is left to say??
How about a taxpayer funded bailout of her “American Dream”?
jb
“Beatty’s daughter had to take out a nontraditional loan because she would not have qualified to borrow that much money through a traditional 30-year-fixed mortgage
JB,
You must have left out the part where someone held a gun to her head.
What ever happened to not buying things you can’t afford. Enough of this “I’m a victim” play already! What ever happened to personal accountability? Betty’s daughter is a graduate student. That means she has 16+ years of education under her belt. She must have taken basic math at some point of her journey through academia. She can’t figure out that you can’t afford a $600k mortgage on $20k in income?
Oh, and by the way, these people probably had decent credit which means they weren’t part of the sub-prime mess that everyone is hearing about. This is Alt-A which is the next mortgage segment to tank.
Renting [15],
She never learned the greed/fear syndrome in school. In addition to this, investing sentiment was not a required/nor an elective course.
She must have taken basic math at some point of her journey through academia. She can’t figure out that you can’t afford a $600k mortgage on $20k in income?
It’s not that she didn’t account for certain variables in her calculation, whether she did that calculation in her head or on paper, it’s simply that she overestimated certain key varables like future appreciation and rental income.
jb
“This is Alt-A which is the next mortgage segment to tank.”
X,
Absolutely. It’s all semantics, subprime and alt a. What’s the difference between a killer and a murderer?
#12
To clarify, my concern is more related to the public’s financial well-being and definitely not with reigniting the boom (I don’t think that is possible at the moment). My issue is that I wish the media would portray the market more for what it is. I always seems to be the case that the last people to know (the public) are the ones most affected by it.
the plethora of loan products based upon a variety of factors is new reality. i doubt we’ll ever again see the days of a 20% dp required. with that said i think it makes it even more difficult to predict where this market may head in the future. people can still borrow at or near 100% meaning they have zero financial stake in their purchase. people are still doing interest only loans. the son of a family friend just did a 100% LTV with a 10-year I/O with the seller paying closing costs in Seattle. the property also appraised for 18k above his purchase price so he’s rolling 15k in CC debt into a HELOC and effectively lowering his payments by hundreds a month due to the 30-year amortization and lower interest rate/tax write off. it’s nuts but the public keeps the party going.
100% LTV with a 10-year I/O
But at what rate?
jb
#22 Unqualified buyers most certainly prolonged, and expanded the boom. The amrket was slowing in late 2003, and the correcction should have been complete in late 05 early 06.
The madness of I/O and all the rest added a nother 2 years to the boom, and made the bubble larger.
No we are in the Spring of 07, and the correction is finally getting under way, it will play out into 08 and 09 IMHO.
if only he had bought in Westfield, he could still keep charging his CC too.
Richard Says:
I doubt we’ll ever again see the days of a 20% dp required.
I agree. High LTV’s are here to stay. I don’t even think that I/O’s are all that evil.
For God’s sake though, we should at least be asking people if they even have a job to pay for it when you have that high risk of a loan.
BC (9)-
Yeah, but who’s looking to cover the short? The buyer list is getting smaller, not larger. I get the feeling everybody who’s short is looking to ride it into the toilet (so to speak). One cannot construct and defend a logical bull position on the $. That’s the kind of correlation I like.
Currency used to be= $$$.
De facto currency= AUY, SLW, PCU, ATI
If it doesn’t come out of the ground, don’t buy it, trust it, trade it or bank it.
All disclaimers.
Thanks to all for the blow-by-blow on the TLC real estate shows. I cannot sit and watch an entire episode of any of them; they make me want to puke.
We finally broke down and visited a few open houses this weekend in the N. Monmouth Co. area after a 1.5 year boycot. I was surprised to see that a few realtors were somewhat humbled by the current market situation compared to what we were seeing a year ago. I didn’t get any of the “you better act now” or “I have mulitple offers” nonsense. Two separate realtors, after handing me the spec sheet, gave me the old “the price is negotiable, wink, wink” routine.
One of the places actually seemed somewhat priced to sell – nicely rennovated 5bd, 3ba, heated pool, 1.5 acre, huge fenced, landscaped yard asking was 679,000 neg. It wasn’t what we are looking for but I could see it being appealing to many buyers with kids. Sure enough, there were many people visting with about 10-12 couples actually signing the sheet after 1 hour.
At another place the realtor actually complained openly that the seller would’t even consider further reducing the price even after the POS had sat on the market for 5 months with no serious inquiries. It was 4br/2ba on ~1 acre but needed at least a 100k rennovaiton. The carpeting on the ground floor was still damp from all the rain and you could see water damage on the bottoms of some of the wood doors.The flipper bought it one year ago for 537K (and let it sit empty) and it was listed at 527K “as is”, OLP was ~550k. I could tell that the realtor didn’t want to be there as she seemed convinced that nobody was going to bid anywhere near what the seller was asking.
Anyway, my take home was that there are still plenty of sellers holding on in denial, but with a very thin grip. A decent place that is priced resonably will generate a lot of interest and probably move fairly quikly.
A decent place that is priced resonably will generate a lot of interest and probably move fairly quikly.
Remember, it’s the houses that sell that set the comps.
jb
the plethora of loan products based upon a variety of factors is new reality. i doubt we’ll ever again see the days of a 20% dp required
This is probably true. I don’t think we will swing completely back to the days of a 20% DP required for all loans.
The extent to which plethora of creative loans available today play a large role in the future will depend on 3 factors:
1) Appetite of consumers – People are now seeing that RE really can go down. Without the “guarantee” of big appreciation, I think the appetite for risky loans will be less.
2) Appetite of investors – Investors in CDO’s are getting burned. Will they continue to take on high-risk debt? Probably, but at what price? Investors will demand higher compensation for risk.
3) Regulators – The biggest wildcard. What happens if lenders are given a fiduciary responsibility to the borrower and required to qualify the borrower at the fully amortizing rate based on full docs? These loans no longer stretch affordability. At best they become cash flow management tools targeted at their historic audience; short-term investors concerned about cash flow and borrowers with high, but irregular incomes.
“Pressure at Mortgage Firm Led To Mass Approval of Bad Loans
By David Cho
Washington Post Staff Writer
Monday, May 7, 2007; Page A01
Maggie Hardiman cringed as she heard the salesmen knocking the sides of desks with a baseball bat as they walked through her office. Bang! Bang!
” ‘You cut my [expletive] deal!’ ” she recalls one man yelling at her. ” ‘You can’t do that.’ ” Bang! The bat whacked the top of her desk. As an appraiser for a company called New Century Financial, Hardiman was supposed to weed out bad mortgage applications. Most of the mortgage applications Hardiman reviewed had problems, she said.
But “you didn’t want to turn away a loan because all hell would break loose,” she recounted in interviews. When she did, her bosses often overruled her and found another appraiser to sign off on it”
Clot [26},
I hear you. However, the record short has my attention. Late comers tend to get shaken out before the primary move continues. That said, it is toast, dead as a doornail.
Who said we were going to revert back to 20% down? That example is so extreme that it’s almost meaningless to discuss it.
High LTV loans will not disappear. Thinking they will is a very naive view of the marketplace. There will always be a lender willing to lend and an investor willing to invest. The question is, at what price?
jb
#25 We may never see the days of 20% again, but certainly 10% will become the norm again in many many cases.
For people in the know, what exactly is the average down payment these days? 5%, 10%?
Is the down payment any higher on average for 30 yr fixed?
Whoa, The GSMLS inventory up to 33,300. At this rate I feel we may be upto 35K by end of May.
So, through it all, after all the debates, periodicals, on-line articles, blogs, discussions, analysis, predictions and proclamations have been made, one thing still holds true: the prices are still absurdly in the stratosphere and most semi-desirable towns are still listing at 2005 prices. Yes, there is a sucker born everyday and he/she probably thinks they just got a bargain on the POS bi-level they just “bought” for 25% above the fair market value but 5% below the fat, drunken sellers list price. Yes, it is a new paradigm and yes, it is different here. 20% dp is history and as long as there is a lender willing to dish out the risk and an investor willing to eat the risk, elevated, absurd and laughable prices are here to stay. I really, really can’t see how anyone would buy a house in the Peoples Republic of New Jersey.
RentinginNJ Says:
May 7th, 2007 at 10:32 am
2) Appetite of investors – Investors in CDO’s are getting burned. Will they continue to take on high-risk debt? Probably, but at what price? Investors will demand higher compensation for risk.
rent: #2 is practically the whole thing….it is going to take several years to unwind all this liquidity, but the results are unmistakeable………to say that there is a permanent paradigm shift is ignorant….we are in the same paradigm as ever, it is just market conditions are different….
Chris Low of FTN
go to minute 6:45 and listen for the next 3 minutes……opinions of people who are really close to the objective information
http://media.bloomberg.com/bb/avfile/BBRECON/v35qfiAqa6ns.mp3
For people in the know, what exactly is the average down payment these days? 5%, 10%?
Is the down payment any higher on average for 30 yr fixed?>
According to CSFB, 46% of 2006 U.S. Home Purchases had a combined LTV of more than 95%.*
Translation: Roughly half of all home buyers put down less than 5% in 2006.
* Mortgage Liquidity du Jour: Underestimated No More, Credit Suisse First Boston
From the same report:
Non-agency Alt-A loans – 2006 (20% of the market)
Avg. CLTV: 88% (12% down on average)
Non-agency Subprime loans – 2006 (20% of the market)
Avg. CLTV: 94% (6% down on average)
I wrote this in the weekend thread, and here it is:
A student has no business buying a house.
Why would they buy a house when their income should increase atleast 3x as soon as they graduate? Where is the monthly cash flow during graduation? Stupidity at its best………
JB,
The eagle has landed. Check your email.
Rich,
Didn’t see anything yet..
jb
From Hedgefund.net:
Ellington to Buy New Century Loans
Hedge fund firm Ellington Management Group has agreed to buy $170 million in loans from subprime mortgage provider New Century Financial.
According to a report by Bloomberg, Ellington is buying the loans for less than 30 cents on the dollar, agreeing to pay $58 million for them in a court-supervised auction. Many of the loans, however, are likely to be difficult to collect or completely worthless.
Got it, thanks.
jb
Cool.
In Seattle, more dummies:
#37 Gary: No, Thi is the watersehd year, no real Spring market. The people that have to sell or really want to sell will finally get the message,a nd we shouls see significant price declines as we get inot 08 and 09.
After all is said and done, at the end of the day it is price. A significant reduction in price at the starter level is what will get the market moving again.
Clot has discussed this repeatedly,a nd I believe he is absolutely right.
Un,
That’s an incredible story. Just read the full text.
#42 dreamtheaterr
I don’t know about salary increasing at least 3x, even if they’re currently making 20,000. I didn’t think college students are making $60,000 as soon as they graduate, but I could be out of touch with reality. It’s been a few years.
Speaking of Westfield, there was a Coldwell Banker tent featuring homes in Westfield at the Hoboken Arts & Music Festival on Sunday. There didn’t seem to be much interest (at least while I was walking by), but one of the Realtors pounced almost immediately when I slowed down to take a look.
The easy credit allowed marginal first-time buyers to bring forward their house purchases in the past 2-3 years. My hunch is that a large number of these buyers are seriously upside down already (and don’t know it since their house is not marked to market), considering that over half of them put no money down, and prices have softened.
With credit lending standards now tightening, marginal first-time buyers are effectively out of the market. How many credit-worthy first time buyers are there in today’s stricter lending standards?If 50% of buyers could afford because of a financially engineered mortgage, it just shows how strained the finances of most folks were, when lending standards were lax.
I am also guessing that someone who qualified for a 6.5% fixed rate last year would see perhaps 100 bps increase if they wanted to qualify today. So even if house prices have come down, the increase in the mortgage rate and payment for first-time buyers nullifies any decrease in house prices. Net net, affordability is the major issue.
House prices need to decline to 2.5-3x household income for affordability to be restored for entry-level homes. It may be a rocky mountain road to there, but eventually the equilibrium will be achieved via declining prices.
anyone? help?
address for 2390585?
thanks in advance
sl
JB #14
you, like me, are not in love with leverage, like so many others. I own my home, paid for in whole (took about 10 yrs), where every spare dime went to paying down principal. My next upgrade will be paid in full on purchase, I dont buy until I can afford it. Tis a stress free way to go through life.
sl,
Are you talking about the commercial prop. in SO? 109 Valley.
jb
yes, thanks, jb!
sl
From PR Newswire:
New Century Execs’ Multimillion-Dollar Bonuses Tied to Lowballing Risks, Highballing Income From Subprime Mortgages, FinancialWeek Reports
New Century Financial, the highest-profile casualty of the subprime lending meltdown to date, had an old-style bonus formula that may have fueled management’s overstating of income and understating of risks for the subprime loans it was feeding into Wall Street’s securitization machine, FinancialWeek reports in its May 7 issue.
According to proxy filings for 2005 reviewed by the newspaper — the company will not be issuing 2006 financials or a proxy statement since it filed for Chapter 11 protection on April 2 — the Irvine, Calif.-based company’s bonus plan was structured to pay the company’s top four executives a percentage of pretax income if the company exceeded an 18% return on shareholder equity.
Per a plan adopted in 2004, chief executive Robert Cole, chief operating officer Brad Morrice, finance chief Edward Gotschall and executive vice president Patrick Flanagan — all co-founders of the company in 1995 — were paid 1.125% of pretax income above the return on equity threshold of 18% and below a 28% ceiling. On pretax income between 28% and 38% ROE thresholds, they received a 0.75% cut. And if the company returned better than 38% on equity, they got another 0.6% on that amount.
The formula resulted in bonuses of $2.4 million for each of the four executives in 2003, $3.4 million in 2004, and $1.1 million in 2005. The amounts for 2003 and 2004 were roughly six times the executives’ salaries for those years. The plan also enabled the company to comply with IRS regulation 162m, which limits tax-deductible compensation for individuals to $1 million. Any compensation above $1 million has to be linked to meeting performance targets.
“Speaking of Westfield, there was a Coldwell Banker tent featuring homes in Westfield at the Hoboken Arts & Music Festival on Sunday. There didn’t seem to be much interest (at least while I was walking by), but one of the Realtors pounced almost immediately when I slowed down to take a look.”
Ha, my husband and I got attacked to, and we were doing nothing but looking at the booth, the same way we looked at the other booth. It should have had a sign that read “Hi yuppies – when you realize that living in your 2 bedroom condo sucks, come to Westfield where there are people just like you!” Certain Hoboken types would eat that up. We found it a weird place to pitch, and bizarre overall. I prefer the psychic reading and handicrafts booths myself:)
“Speaking of Westfield, there was a Coldwell Banker tent featuring homes in Westfield at the Hoboken Arts & Music Festival on Sunday.”
Seems like a waste of time when they could be knocking on doors with buyers in hand.
20% dp is never coming back. Never underestimate the American consumer’s appetite for debt.
Take your pick of any kind of consumer debt– mortgages, auto loans, credit cards, student debt, “pay day” loans, etc— they have all steadily gone up, up, up over the past 30 yrs without fail, and with increasingly risky terms.
The American lifestyle is ever more precarious financially. Even after the harsh new bankruptcy reform act passed, consumers bankruptcies continued to increase just as they have since the late 70s.
Most people quite simply do not care how much debt they carry overall, as long as they get to have what they want when they want it, and can make their monthly payments most of the time.
It was “open house weekend” down here in Ocean Grove. Four of the local realtors coordinated this, so about twenty houses could be viewed at the same time. Two of the “highlights”: a $400,000+ POS just loaded with such desirable features…such as wood paneling, ceiling tile and peeling linoleum. Also, a $325,000 studio that rivaled other studios (in terms of size) that I’ve seen in Manhattan. At this open house, there was actually a mortgage broker on site to push home equity loans as a way to purchase.
Not many serious buyers though, I thought. Just natives checking out the houses without having to spring for one of the organized house tours. Beach house anyone?
#48 They buy houses the old fashinoned way. They pay off their credit cards before applying.
They put at least 10% down, plus closing, and have at least a couple of months savings if at all possible.
Everything old is new again.
BBB,
It’s tough to stay grounded when I open the Sunday paper RE section and see bi-levels with “potential” seeking an asking price of $620,000. It’s absurd. I do hope the best is yet to come.
speaking of sunday papers, NYTimes had a couple of beauties in their RE section.
1. article on how Newark is the new hot spot. According to the Times, it will be filled with rich people within 5 years. This article officially convinced me that the Times RE section is now parodying itself.
2. article on how the Miami condo market is in a state of “flux.” Flux = sales down 30% YoY and inventory up 60% YoY. Still a great time to buy, of course.
i love the ignorant opinions on westfield. it’s clear you know little about the town. live there first then talk from first hand experience. by the way any time you pass a realtor tent at any show or fair they attack you like rats on cheese. more so with the slowing market.
bottom line is the market is slowing. most houses are still priced too high and aren’t moving. no move, no commission. i know a few realtors and while they’re saying things are slowing no one is panicking. these are veteran realtors though who’ve been through slowdowns before.
>>Most people quite simply do not care how much debt they carry overall, as long as they get to have what they want when they want it, and can make their monthly payments most of the time.
really seems that way. never overestimate the intelligence of the masses. don’t knock it, profit from it.
#66 Richard: “Veteran realtors who have been through slow downs before”. Well if they truly were veterans, then they would not call what happened in the past a slow down.
They would call it what it was a crash, or at least a correction. This is far more than a so called slow down.
#64 Gary Agreed, and thats why the only possible out come is substanial price declines.
If for some remote reason we are wrong, then we continue to rent, you continue to own the house you own, and life goes on.
There is no real fundamental reason for me to buy right now, when it is so much cheaper to rent. I either rent form the land lord, or rent the money from the bank.
Where is the upside in owning now? That at some point it will start to appreciate rapidly again, and that appreciation will offset the massive amount of interest and property taxes I will have paid over 15 or 20 years?
MAkes no sense, therefore substanial price decliens have to occur.
Veteran realtors may not be panicking however yield chasing investors, along with Chuck Shumer, seem to be.
For realtors:
When a house displays “Under Contract” does that mean it is pretty much sold?
“Where is the upside in owning now?”
bbb,
There is none.
If we were at the bottom, like we have heard numerous times, there would still be no reason to worry. When the bottom is ultimately reached, the market action will not resemble a V formation/rally off its low, akin to the stock market reaching a low and rallying. A better example would be a turtle in a marathon.
“When a house displays “Under Contract” does that mean it is pretty much sold?”
Orion,
Not in today’s market. The buyer is still subject to financing. I’ve see more under contract signs coming back on the market than I have ever seen, in any specific time period, over the last 20 years.
My husband and I make around $115K annually. We went for a pre-approval as an exploratory thing last week just to see what they told us. We were informed that we would be approved for a 30-year fixed rate mortage of up to $570K, even though we have only $20K to put down and about $15K in credit card debt. We told them we’re going to pay off our debt, save up some more money and look again a year from now. They told us that we should buy now, prices are only going up! I said that I put together an Excel spreadsheet and paying a mortgage for a $400K house with 5% down would leave us with minus $1,200 MONTHLY in cash flow. They said we’ll make up the difference in taxes. I told them we don’t want to live on credit – we’re finally getting our spending habits under control and we want to be completely prepared with no debt, a decent downpayment and money left over for emergencies. They said our debt was nothing, that EVERYONE lives like that. I said, I don’t want to live like that, we’d rather rent!!! They said we’re throwing our money away on rent. I said, how am I throwing it away when we’re paying down debt and saving money?
#66
Richard.
What is a nice street on Westfield? We drove down there on Saturday to look around, but did not find a reason to stick around. What were we missing?
Kim,
What rate is the 30yr fixed loan.
Did they suggest a piggy-back loan for the downpayment??? If yes, what rate??
CC
“we have only $20K to put down and about $15K in credit card debt.”
Please, tomorrow write a check for $15,000 to the credit card company.
#76 chaoticchild – the rate was 6.5%. They gave us both piggyback and PMI options – piggyback was cheaper by about $200 monthly and both loans were at fixed, 30-year rates. The second loan was at a higher rate, 8.25%, I think.
When a house displays “Under Contract” does that mean it is pretty much sold?
For the most part, yes. While a small subset of contracted homes do not close, and do return to the market, that percentage is generally very small.
To give you an example of the volume, and realize that a single datapoint isn’t entirely meaningful, 15 properties that were previously under contract in North Jersey (GSMLS) are back in active status today (as of 2:15pm).
jb
#77 Unrealtor – good idea – but our loan at that card is at a very low fixed rate, 4.99%, and we’re paying it off very quickly. We were at almost $30K a year ago. (Lots of good living in the past that we’re paying for now!)
Kim,
The rates are actually not bad. It has to be a catch somewhere???
You and your hubby have good FISO scores?
Thank you for sharing.
CC
#79 JB I think if you are looking at a small area the amount of homes that come back on the market can be very telling.
For instance in one zip code that I have been following about 12 homes or so went UC between middle of March,and end of April. Five of those 12 are now back on the markert, which to me is quite telling.
Also from people I know in the legal area lots fo deals are not closing, soem even falling apart on closing day (financing pulled)
I think UC int he past may have menat pretty much sold, but now, there are people buying out there who have no idea that they will not qualify for financing. If standards are tightening I expect to see a lot more of this going forwrd.
Its never sold until the monies and property change hands. Even more so in this changing environment.
I wish I did, but I don’t have a continuous dataset of UC -> A BOM properties. Ultimately, we’d need to know the historical rate to determine whether or not the anecdotal changes we’re seeing now are greater, lesser, or on par with what has happened in the past.
I attempted to capture this data starting last year, but it’s simply not easy to do. It involves looking up the listing history on every single BOM property. It’s incredibly time consuming and I gave up after realizing just how volatile this data was.
jb
Her 29-year-old daughter, a graduate student with an annual income of less than $20,000, qualified for a mortgage of $600,000 with no money down, split into two different loans at 8.75 percent and 12.5 percent interest rates.
AMAZING.
I recall a simple formula my teacher in high school told us which I adhere to today. Multiply your income by 2.5. Thats the most you want to ever finance. While this can vary with interest rates I find its a pretty good reference. One might push 3.00 today but I wouldnt go any further than that.
re: 30-yr fixed rates.
I was just pre-approved on a 30-yr-fixed at 6.75% APR. That includes no closing costs, no points, no PMI (which I think they folded into the rate). 10% down, excellent FICO, ample cash reserves, no debt. Just FYI for those in the market. Don’t think I should reveal the lender as every situation is different and I don’t want to violate blog rules against advertising.
Guess it’s a matter of perspective. $15,000 @ 5% interest means you’re throwing away $70 each month, when you have the money to pay in full.
That’s two nights out to dinner each month.
Why not pay that off today, start putting money into an online savings which will earn you 5% interest?
Sounds like you’re on your way to being debt free, but paying interest is bad news, no matter the rate. Always let the banks pay you interest.
[ Climbing down from soapbox :) ]
Kim WOW. I hate realtors who pull that crap. I had one recently try to talk up housing well to finance another 10K is only 63.00 a month. $63 times 12 times 30 is $22,680.00. Sorry No.
My own personal quirk w/ under contract is I don’t put under contract until I get commitment, and I rarely use my sold signs, I have used them twice after a home closed but the new owners, have not moved in yet and they offered to let me keep it up for a while.
KL
Kim –
My fiance and I are in a very similar situation, very similar numbers, but about 30k for dp and no cc debt. Student loans, but no cc. We’re trying to buy in the mid-3’s, which seems doable according to our calculations, but we don’t have much over head (drive old, crappy cars, but no payment, etc).
Right now, though, we’ve been disappointed with the market. Everyone said it was a buyer’s market and we should jump in, so we tried, went under contract on a property, gave up the lease on our apt. But the inspection went bad and the property was pre-foreclosure. No $ to fix the problems. So, we’re stuck moving in with my parents for now, but I think we’ll end up waiting another 6 months for prices to drop, savings accounts to plump…
It’s crazy what they’re willing to give you and how hard they’re willing to push you to take what you don’t want. Everyone tells us that if we just went to 400k we could find a lot more we’d be happy with, and I know they’re right, but right now, it’s not the right choice for us. Just because someone is willing to lend us the money doesn’t mean we should take it. Same thing with cc, as you know, I guess.
#88
Totally bad grammar, sorry
KL
Financing no more than 2.5x your income is a fantastic rule of thumb in my book. If you want to buy a home in excess of what the rule states you should finance, make up the difference with a larger down payment.
jb
Allisonon line
Just read your post, I often wonder why tennants get so hung up on giving notice? Rent is paid forward – mortgage backward, you pay your interest at the table, why stress?
Close 5/15 first mortgage payment 7/1 give notice 6/1 take your time moving?
Appt dwellers do not need to stress so badly over giving notice. I see this with buyers everday. Why not close then give notice so you know for sure? All the things to stress over on a new home purchase that’s the least.
KL
we had a similar experience getting preapproved. our numbers are similar, though we have no cc debt, but we have some student loans, and we had more $$ for a dp, and have a somewhat higher income. when he gave me the # we could be preapproved for, i asked him what planet he was on. he told me we could go up to 60% of our income for mortgage/taxes before we had to get “creative” – i explained that we wanted to do a 30 year fixed, nothing else. nothing “creative.” he tried to push an I/O loan and an ARM on me. I told him no.. we knew exactly what we could afford and preapproved ourselves. it was one of the most disgusting conversations i had ever had.
BBB #69,
Yup, you’re absolutely correct. In fact, we just had the cousin-in-law over to the house this past weekend to measure out to put a deck on the back of the house. For the last 3 years I thought we were moving; I finally gave up. I’m not crazy about the size of the house or where it’s located (3 houses in from busy street)but it’s going to have to do.
The deck goes on and whatever else happens will happen. This housing “thing” of the last 7 years should’ve died on the vine at least 3 years ago but all the slobs had their snouts in the trough so now they can enjoy whatever outcome they deserve.
We broke our lease and had to find a new tenant to avoid a penalty. We found someone and promised them the place 6/1. We were supposed to close 5/17. Then, the big bust. I guess we could have reneged on the deal, but it didn’t seem like a decent thing to do.
At least we can bank 4k/month from mom and dad’s. 6 months x 4k = 24 k extra. Probably worth it.
By the way all, we’re on our third house offer – very nice place, good location, still in Northern Westchester, but further south than before. This one is a house they are asking 760 for, that they bought 3 years ago for 745. So they’re losing money either way, and they are still negotiating with us on our low offer. Although it’s only a half an acre of land and not the acre hubby wanted, it makes up for it in condition of house, school and location (to shopping, train, etc).
There is a chance there could be another offer later today, according to the listing agent (isn’t there always?) but hubby and I have already said that there’s no way we’re going above asking, so if the third time is not a charm, we’ll keep shopping!
It’s crazy what they’re willing to give you and how hard they’re willing to push you to take what you don’t want.
My wife and I were preapproved for a mortgage amount that was so obscene I’m too embarrassed to post it here. I wonder how many folks walk out with a pre-approval letter ready to spend up to that max?
jb
Allisonline,
You write about lenders enticing you to climb up to 400K. Considering the way things are looking right now, I think in one more year 400K will come down to where you are. It looks almost inevitable that what’s now listed at 400K will be 360 or less this time next year.
I should start going to open houses to get a better idea of where prices are now. Last time I went to an open house was last summer and we saw a ton of 500k capes with 1970’s deco.
Consumers moving back to plastic now that the housing ATM is tapped out?
From MarketWatch:
U.S. March consumer credit rises by $13.5 billion, or 6.7%
Outstanding U.S. consumer credit climbed by $13.5 billion in March, or at a 6.7% annual rate, the Federal Reserve reported Monday. It was the largest increase since November. Nonrevolving credit, which includes automobile loans, rose by 5.2% annualized, or $6.7 billion. Revolving credit like credit cards climbed by $6.8 billion, a 9.2% annualized increase. The overall increase was much larger than expected. Economists surveyed by MarketWatch predicted that consumer credit would climb by $4.8 billion.
abamitphd, #75:
The northern side of Westfield is much, much nicer than the southern side of town. Many of the houses on the southern side seem a bit run down from what I saw driving around.
The consumer credit release (AKA G.19) can be found here:
http://132.200.33.130/releases/g19/Current/
jb – i cant imagine who these people are that are willing to spend the max, if there are any. while we would have been able to make the monthly payment, we wouldnt have had any money left for little things like food and gas (to be able to get to work to get the money to pay the mortgage) – not to mention luxuries like cable and phones. i would be curious to meet such a person though.
From Bloomberg:
U.S. Consumer Credit Increased $13.5 Billion in March
Consumer borrowing increased in March by the most in four months as Americans charged more purchases to their credit cards and took out more car loans, Federal Reserve figures showed.
Consumer credit, or non-mortgage loans to individuals, increased $13.5 billion, or 6.7 percent at an annual rate, to $2.425 trillion, the Fed said today in Washington. In February, consumer debt rose $5.6 billion.
Consumers faced with tapped out home equity loans and falling real estate values may be turning to higher-interest- rate credit cards to keep spending. Gary Thayer, chief economist at A.G. Edwards & Co. in St. Louis, said low unemployment is also providing support for consumer spending, which accounts for two-thirds of economic growth.
I have to know what keeps you in NJ? We had friends and family but in the end some have already moved south with us to NC. Those that didnt say they are kicking themselves for not doing it and one other is still just trying to sell thier home to come south.
You get more than double what you get up north and to maintain it is a fraction of the cost. In short I didnt know how bad NJ was until I didnt live there any more. The only negative is you have to pump your own gas but its not like it ever gets cold enough that you care about it.
North Carolina seems so far ahead of the north in just about everything that the jokes of the south really mean south carolina as North Carolina is nothing but NY, NJ, PA, and OH people.
When you see what you get for your money in other areas I think it makes you wonder why any home in NJ is worth so much money. Its not sandy beaches in california but its priced like it is.
#81 – chaoticchild – Yes, our credit scores are pretty good, high in the 700s.
#86 – unrealtor – very good suggestion, thanks for sharing. We’ve considered it but decided to hang on to the cash since we’re banging our way through the debt so quickly.
I have to know what keeps you in NJ?
Friends and family mostly. My wife’s family lays on the guilt trip pretty thick too. Of course, I always find that interesting because they are immigrants who left behind friends and family to find a better life in America. Now that we talk about leaving NJ for a better life, we are depriving them of watching their grandchildren grow up.
We are going to make a serious effort to stay here, because of friends and family, but we have our limits. If we don’t see prices drop over the next year and some progress on at least slowing the growth in taxes, we are out of here.
Mitchell Says:
May 7th, 2007 at 3:32 pm
Great. See y’all.
READ MY LIPS YOU DUMMIES: IT IS NOT A BUYERS MARKET.
TAKE AT LEAST 25-30% OFF OF PEAK 2005 PRICES AND YOU WILL BE REASONABLE TO FAIRLY PRICED.
COMPRENDE?
To many dummies around gotta keep it simple.
BOOOOOOOOOOOOOOYAAAAAAAAAA
Bob
allisonline –
We’re looking for a house in the mid-$300s too. There’s one cape for sale in the town we want to live in for $449K. It’s a cute house, 4 bedrooms, 2.5 baths. They realtor told me they’ll take $400K. I said we can’t afford it. They said to offer $350K. I said no, they’ll never accept it, since a similar house just sold across the street for $470K. They said, well offer them $350K, they’ll talk you up to $400K and they’ll think they got a bargain. I said I told you that we could not afford $400K! Guess she didn’t hear me the first time.
**Test**
Message is not getting out…….BOOOOOOOYYAAAAAAAAAAAAA misery
http://www.bloomberg.com/apps/news?pid=20601103&sid=avBx6ZRcr_r8&refer=us
I have to know what keeps you in NJ?
to your point, I posed this last night…
I just caught the HGTV episode on North Jersey. Thanks for the heads up.
I also caught the beginning of “My First Home”
What I found incredible was the house that was featured in Pequannock. It was an abandoned 550 square foot crack house in the flood zone where nothing had been done in 50 years. It was literally falling apart. It was basically a tear down, but the couple planned to live in it. The couple offered $199k and was turned down. It was absolute garbage.
“My First Home” comes on and a single guy with a Fed govt. job is looking in the suburbs of Atlanta. They guy says he doesn’t want to spend over $200k. The realtor shows him house after house in his range. All new or near new construction; marble countertops, Jacuzzis, hardwood floors, 2 car garages etc. The worst problem with the house he bought was a leaky bathtub. Can you imaging buying a $200k house in NJ and the biggest problem is a leaky drain?
It really makes you wonder why you would want to stay around here. Unless you are well off or are already well established, you could do much better somewhere else.
Notice a few posts talking about realtor harassment. Things are really slow out there and the starving bunch are desperate to eat, but they made their bed now they must lay in it.
Around 1993 in the middle to latter part of the last housing bust, desperate starving realtors would be hounding you once a week pushing their listings.
babababababa
Can someone with Middlesex MLS access please give me the address for MLS ID# 719313 in South Brunswick?
Thanks!
“They said, well offer them $350K, they’ll talk you up to $400K and they’ll think they got a bargain. I said I told you that we could not afford $400K! Guess she didn’t hear me the first time.”
That is so annoying! It must be so frustrating – I would want to yell “WHAT ABOUT CAN’T AFFORD 400 DIDN’T YOU UNDERSTAND????” Ugh.
98 -Marito Says:
May 7th, 2007 at 3:25 pm
Allisonline,
You write about lenders enticing you to climb up to 400K. Considering the way things are looking right now, I think in one more year 400K will come down to where you are. It looks almost inevitable that what’s now listed at 400K will be 360 or less this time next year.
Well, not really. The lenders would have us spend much more than that. This is realtors, friends, family – people who are supposed to be looking out for our best interests who are telling us “you can’t get anything for under 400k – just go to 400k and you’ll find something nice.”
We just won’t do it. We’re hoping you’re right. Between depreciation in the market and a little extra rainy day money, hopefully in 6 months – a year we’ll be able to buy that 400k house for 360k.
“I have to know what keeps you in NJ?”
Taylor Ham and Cheese?
#112 Chicagofin: IT makes no sense to me,w hent the talking ehads go on about how job growth is fueling cosnumer spending.
Let me understand this, you are tapped out on your housing ATM (which you do have to pay back every month), so now you turn back to your high rate credit cards.
Were those balances clear to begin with? To continue spending, and now have to pay those credit card bills, along with the ATM house bills, but it is OK because job growth is strong? But what if you already ahev a job? Is is a case of you did nto have a job, but now got one, and because you did it is OK to use credit cards?
I know I am rambling on here, but these Bozos make these statemetns with out thinking.
Is job growth strong so I can get 2 jobs and so now I can use my credit cards etc. etc. Does any body else see the clulessness in this type of reasoning.
#117 Whwn your so called friends and family are paying your bills, then they can give you advice. Otherwise do not listen to them, as they only know believ what they have been told to believe.
#118 BC Bob: Also known as a “Zebra”, cholestrol heaven, but oh so good.
I have seen pork roll here in NC. (Taylor Ham)
You can always move your family they will appreciate saving as much as they will by moving south.
It’s my understanding that the vast majority of subprime loans have been made through private or non-federal lending. Is there any likelyhood that if this situation doesn’t right itself that tax payers will ultimately wind-up footing the bill for the clean-up?
>>What is a nice street on Westfield?
on the north side of town wychwood, woodland, kimball ave, kimball circle, tremont, fairmont, tuttle parkway. on south side shadownlawn, midwood, parts of hyslip, hazel and dorian.
>>That is so annoying! It must be so frustrating – I would want to yell “WHAT ABOUT CAN’T AFFORD 400 DIDN’T YOU UNDERSTAND????” Ugh.
someone i know told a lender i can’t afford more than X a month for this property and i want a fixed rate. so the lender got him into a 30-year fixed rate at 6.25% with a 10-year I/O. he felt he stuck to his guns. i didn’t have the heart to tell him he got hoodwinked.
“how job growth is fueling cosnumer spending.”
bbb [119],
In 2006 we averaged 187k jobs a month. At this point, in 2007, we are averaging 129k a month. A 30% decline in jobs may result in some type of adjustment in consumer spending going forward.
At least Westfield has a Trader Joes that sells good cheap beer and wine. I don’t know of any others in NY/NJ/PA/DE/MD that do. There’s a couple stores in NYC that carry wine or beer but not both.
>>Many of the houses on the southern side seem a bit run down from what I saw driving around.
the western most area bordering scotch plains just below south ave and eastern most area bordering garwood also below south ave isn’t that nice. westfield is a big town (population ~30k) so you’ll have different sections.
To Give comparison.
NJ:
House 500K just over 2000 sq ft.
Needed Roof soon, needs Kitchen Remodel, needs Pool Liner, needs New Fence on 1/2 acre.
Taxes 6500 and increased to 7200.
Car insurance: 2400 yr (State Farm)
Job Offers: Average 83K-108K Perm
NC:
House 257K just over 3000 sq ft brand new with stainless steel appliances on 1/3rd acre. Community pool, walk to largest YMCA brand new, with Lake Access,
Taxes: 2200.00 recently increased to 2400.00
Car Insurance: 1200 yr (State Farm)
Job Offers: Average 72K-103K Perm
The rest of the general items are the same like food, gas, water, electric. The difference. I can drink the water here.
Housing here is about half of the north costs and 50% more for brand new built the way you want it. Incomes are very competitive in most areas. Some its lacking but the income to housing ratio is not rediculous. You can certainly find brand new townhomes for $119K which are very nice in good places to live.
As for Internet connection I get 9Meg download 512K upload. Way faster than anything I had up north.
If you knew NJ 30+ years ago then NC is what NJ was at that time.
>>At least Westfield has a Trader Joes that sells good cheap beer and wine
people come from all over for this reason. the wine is actually pretty good at $3 a bottle. the beer is cheap too. actually everything is cheap there. great store.
You can buy Wine and Beer at the grocery store in NC. To buy hard liquor you need to go to an ABC store. Not a big deal but its nice to pick up beer at the local Target/Walmart.
Taylor Ham can’t hold a candle to a southern Waffle House. :)
most people have an idea in their heads as to what their lifestyle should be like. For the most part, I think people just aspire to be middle class.
They want a decent house, to be able to send their kids to decent schools (including college), to drive a Ford Explorer or something similar, and maybe eat out at Applebees once or twice a week.
The problem is that each of the things on that list (healthcare, food, housing, education and energy) has been rising well above inflation for a long time, but wages haven’t.
So people maintain their middle class lifestyle by continuously increasing debt.
It is a tough thing for people to accept that their position in the middle class is precarious and not guaranteed. This in part I think explains people’s highly irrational use of debt in this country in recent years
>>If you knew NJ 30+ years ago then NC is what NJ was at that time.
NC is much cheaper for 3 reasons. location location location.
Credit cards = cancer
Once a credit card balance starts increasing, painful chemo is involved. This simple chemo is called ‘live within your means’.
NC is in a better location that NJ. There really is nothing in NJ that isnt here plus its closer to a lot of places.
5 hours to Florida state line. 9 hours to Disney.
Local White Water Rafting.
Skiing in NC on par with PA skiing.
Excellent Scuba Diving.
Mountains great camping.
Incredible Parks.
Mining. Take the kids Gem Mining.
Airport takes minutes to check in and out. (Ug Newark) Similar to Atlantic City Airport very easy.
NC Hooters are hot unlike the Hooters in Cherry Hill or Elizabeth. ICK.
Its like living where people from the north come to vacation. Its not Florida.
The nice part is if you cut someone off in NC they dont follow you to your home.
otis wildflower Says:
May 7th, 2007 at 4:32 pm
At least Westfield has a Trader Joes that sells good cheap beer and wine. I don’t know of any others in NY/NJ/PA/DE/MD that do. There’s a couple stores in NYC that carry wine or beer but not both.
my man: The Whole Foods in Middletown/Red Bank is one of the best in the entire chain. New, clean, not crowded, full beer and wine selection.
The rest of the general items are the same like food, gas, water, electric. The difference. I can drink the water here.
Electric is significantly cheaper in NC; 8.76 cents per kWh versus 12.76 cents per kWh in NJ. On average, this works out to over a $330 per year difference. Gas is the same, but you use less in the winter for heating.
Mitch: it all depends on what matters – obviously for your laundry list, it is a good move
#133 skeptic: I think that used to be the way, but not any more. 3 beds 2 bath not enough any more, has to be bigger, kitchens have to be bigger, and of course granite and stainelss steel.
Ford Explorer, no Landrover or Expedition, and BMW 325i or soem form of ML or Jaguar as second car Applebees? no Cheesecake Factory for those who equate that with upscale living.
“I have to know what keeps you in NJ?”
That warm fuzzy feeling that my property taxes go to help pay for a 1st grade teacher’s $100,000.00 a year salary and retirement benefits.
NC FIREWORKS ARE LEGAL!!!
4th of July here is incredible. Dogs hate it but you dont see the police coming to take away your rights because of a sparkler.
Took me nearly 2 years to shed my Joisy attitude but its about gone now. Gone with my EZ Pass which that stupid company still thinks I have.
Escape from NJ Says:
You bring up a good point there are a lot of retired NJ Police and Teachers here. Lots and they usually go back to work as Security and Teachers for the extra coin.
“Taylor Ham can’t hold a candle to a southern Waffle House. :)”
UnRealtor,
If that’s the case, why stay in Jersey?
The sad part is I have no pension plan at my firm. But I get to pay for others with no benefit to me.
Re # 55
I agree 100 %. My last mortgage was 1976
Dtbinj
Mitchell, NJ only has a better location if you believe NYC is the be all and end all of the world, which is why so many people in the tri-state area are stupid enough to pay 500K for a rundown house in a crap neighborhood. And family – family is what keeps me here. NYC is fantastic and I love it, but if I made even half of what I make here in NC, I could come up here every weekend and stay in the nicest hotels, since my house in NC would be about a quarter of what it would cost here.
But, we’re here for now. New baby, sick family members…
“people come from all over for this reason. the wine is actually pretty good at $3 a bottle. the beer is cheap too. actually everything is cheap there. great store.”
What annoys me about that particular store is that the lines at the registers can get really long sometimes and it seems that half the reason this happens is that some people just refuse to help pack their own stuff. They just stand there slackjawed and uninterested while watching the cashier pack an entire shopping cart of their food for 10 minutes.
While I realize the customers are not obliged necessarily to help pack, it makes you wonder just how lazy and entitled these people act outside of Trader Joe’s.
#124
Thanks Richard
I have family in the NC Triangle area and I would move there in a heartbeat if it weren’t for a very nice job I have here. And at age 52 and not enough money to retire yet, you don’t give up a great job to move; not when you’re going to be perceived as “too old” wherever you apply. Now if something happens to my job, all bets are off. Then it’s just convince the hubby that it’s the most logical choice. Then the difference in COL comes into play so you can punch a register at Target or clean houses or cook for yuppies if you have to.
“If that’s the case, why stay in Jersey?”
Been asking myself that for awhile. We’ll see what the next 12-18 months bring for NJ housing.
NJ probably has more White Castles, so that’s a plus.
UnRealtor,
I hear you. I may be with you.
Good point regarding White Castle.
Escape from NJ:
You should Monster your field of work state by state.
2 things that changed my life.
1-Was the commercials Universal Studios was running which was take back your vacation time and how americans spend less time on vacation than any other people and people in NJ need it but arent getting it. I know I went about 5 years without and barely got to see my wife and kids. Those commercials inspired me to get that back.
2-Was a show I was watching on crime rates in Miami where the guy said you can be a car thief in Chicago or a car thief in Miami. The difference is one has a better climate thats why Miami is full of crooks. I then realized I could do my job anywhere as well its the same job.
NC, TN, OH, NM are hot places to live.
TN is a bit unusual its hot but limited.
NC-Look at Raleigh Durham but I feel Charlotte has a lot more going for it. We think Charlotte will possibly get the 2020 or 2024 olympics because of the highway and train infrastructure that is going in.
TN – Knoxville is still hot but might depend on your area of expertise.
OH – Varies in areas but I get calls about it a lot.
NM – Its way west but everyone who goes there doesnt come back because they like it do much.
TX – Is on its way out for some reason. I think its High Taxes and lots of allergies kill it.
When I had enough In NJ, Commute, Poor Working company (Pfizer), Tolls, Angry Drivers with Road Rage, Insurance, Bills, Taxes, etc. I did a search of my field state by state and while GA was highest having been there enought times with Lucent I knew it was a traffic nightmare. No way. NC was just booming. Lots here. Made the trip and the day we returned we put the house on the market and never looked back. After what we saw and their being no catch we split NJ. Everyone else has been heading this way since.
If not because of the housing market but because of the lifestyle.
PepBoys doesnt exist here probably because they cant scam everyone like they do in NJ. I got my car fixed here by a graduate from a guy who is trying to be a Nascar tech and my last repair cost me $120.00 and they did more than I expected and could have ripped me off but didnt. NJ would have had me replacing my transmission.
I also heard words I havent heard in a very long time. Our boss in a meeting said if you have any family issue and need time off take it. If you have a death of a family member or a friend. He considers a friend as close to a family member one can be you can certainly take the time off. Family and friends come first.
At Pfizer In Parsippany I had to argue with my Manager to get 3 days off to visit a sick relative on time that was approved and scheduled months ahead of time. FRUCK PFIZER!
NC rules take back your life. I work to live now instead of living to work.
Mitchell,
Very well said. Do you have family back in Jersey?
138. RentinginNJ.
Your right electric and I think Gas is cheaper here in NC. I didnt originally notice it because the bill is about the same as I paid up north in jersey but I do have 50% more house to heat and cool which probably balanced it out.
I own a snow shovel too that I should just throw away now.
BC Bob:
Yes I have a brother who works for the state and should be vested soon. Except he plans on moving to Vero, FL to be close to the dodgers training camp. He played on the rookie leagues before he hurt his knee.
I have another brother in Florida and a sister in West Virginia as well.
All other family members live around here now in NC. Wife’s parents made out great they have a house on a private lake, 3br, 2.5 bath, on 3/4 acre. Thier property taxes are 1200 a year but the amazing part if thier water bill is $12.00 a month. They fall outside city limits but are around the corner from where we live. He walks out the back door and drops his pole in the water and before he can real it in he has a fish or a turtle. Lots of turtles. You mention NJ to them and they laugh and apply a few selectively chosen words. While we all miss a few people back up north we certainly dont miss the state and lifestyle. I was a Jersey Shore, Club Hoping guy most know from Birch Hill Night club and other various places.
It really is one of those things that you dont realize how bad NJ is until you dont live or work there any more.
I will add we had friends also move to TX and FL and they say the same thing. They didnt realize how bad it all way. One was hunting in TX because he was able to buy more than 20 acres north of dallas and he had a 300K house in NJ he sold. The other in FL was attempting to learn to surf. Everyone I think feels 10-15 years younger.
Myself I have lost 45lbs, no longer have insomnia, no longer have road rage, in much better shape (No longer a heart attack possilbity) and have time for the wife and kids.
Housing is merely the tip of the iceburg of the problems in NJ. Life is not worth losing to pay a Mortgage.
Can you believe this?
Mitchell,
Kudos to you. Congrats.
Can you believe this?
Sure can..
Why let a borrower pay a fee up front when you can roll it into the loan and get them to pay interest on it for 30 years?
jb
Chris Low of FTN
go to minute 6:45 and listen for the next 3 minutes……opinions of people who are really close to the objective information
http://media.bloomberg.com/bb/avfile/BBRECON/v35qfiAqa6ns.mp3
Worth a listen.
jb
In today’s episode of Amazing Realtor Stunts, this top-ranked realtor has decided to PhotoShop out the utility wires from in front of the house:
MLS # 2402447
http://newmls.gsmls.com/media/getImage.do?mlnum=2402447&num=0&res=highres&imgcnt=8
You can see the trees are duplicated just above the top of the roof, spanning across the whole photo.
It stood out even in the small photo on realtor.com:
http://homes.realtor.com/prop/1080437249
Is that legal?
test
Ugh, two links = moderation.
In today’s episode of Amazing Realtor Stunts, this top-ranked realtor has decided to PhotoShop out the utility wires from in front of the house:
MLS # 2402447
http://newmls.gsmls.com/media/getImage.do?mlnum=2402447&num=0&res=highres&imgcnt=8
You can see the trees are duplicated just above the top of the roof, spanning across the whole photo.
It stood out even in the small photo on realtor.com:
http://homes.realtor.com/prop/1080437249
Is that legal?
I have the old photo, with wires, saved to disk.
Email it to me and I’ll post it up.
jb
Same realtor, PhotoShopped in a blue sky and puffy clouds:
MLS # 2353709
http://homes.realtor.com/prop/1073042669
Another listing with PhotoShopped blue sky and clouds:
MLS # 2383391
http://homes.realtor.com/prop/1077350939
Sending it to gmail: nnjbubble now.
yeah, post that pic.
SAS
“NC is much cheaper for 3 reasons. location location location”
I have to admit, I am very fond of NC. Had a go down there sometime back in the fall of 87.
As for NJ, I think alot of people just grew up around here and don’t want to move, they have made that emotional attachment.
But, I would like to move soon.
If I get caught in 1 more traffic jam, I am going to jump off the GW….he he…
SAS
If anyone follows:
Daniel F. Akerson and his birds have been moving the market lately. I wonder in what?
SAS
Re: Under Contract
Thanks for your inputs/answers.
https://njrereport.com/files/wires.jpg
that was ambitious
Orion (71)-
These days, nothing’s sold until the checks clear. My small office is running about 1 fall-through a week…at the closing table.
Chaos (81)-
A second at the prime rate (8.25%) can be had these days by any buyer with good FICOs. Funny how all the lenders are bending over backwards for the low-risk borrowers now!
Mitchell (87)-
C’mon. Who stays in a house for 30 years and fully-amortizes on schedule? $10,000 financed is about $63/month.
I’m no advocate of spending what you don’t have, but sometimes one has to understand the difference between prudent purchasing and splitting hairs. Unless you’re purchasing in a range under about 240K, 10K financed isn’t a make-or-break issue. Your example is erroneous, because in real life, that $22,680 is not at stake.
In North Jersey, I mean?
My guess is everyone really tries to unload this summer … and when they cant (after lowering by 50k), they are willing to cut another 50k (or more) to get the property off their hands.
Also, we’re considering doing a 15-year loan instead of a 30, with MAYBE 30% down or at least 25. Is it worth it, or just smarter to do the 30% and pay more toward the principal each month?
I would do the latter, 180, assuming there’s no PPP. The reason is that you can fall back on the lower payment if times get tough.
And since you’re contemplating such a thing suggests that you have the discipline to carry it out.
Having just looked at a few more posts on this thread, we’re in the same boat as a few of you – target house is 325-375k max.
We have zero CC debt, no student loans, and about 140k in the bank collecting interest in ING. Granted, I live in the city and don’t have a car and will need something (already set the limit – 9k, absolute max).
All the houses we like are in the 400-475k range. My beginning point is 100k OFF the current price. I figure maybe someone will give me what i want for my price today, or they will sit on the market and give it to me in 6 months or a year. Really, it’s their call.
I’m actually excited about the boat we’re in and this whole buying process. I’ll prob feel diff when i move away from the keyboard and to speaking with actual people, but I’m 1-for-1 in real estate ventures, and feeling kind of lucky.
April Foreclosure Filings More Than Double Over 2006
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9FHNW7kPEus&refer=home
Those receiving their first notice of foreclosure from a bank climbed 127 percent, those with homes going up for sale by auction jumped 164 percent and those whose homes were repossessed by banks went up 40 percent.
According to Zurich-based Credit Suisse, 82 percent of subprime mortgages have an adjustable rate provision, meaning that payments start with low or “teaser” rates and adjust to a higher rate after a set number of years.
#175
Looks like the photo (minus utility line) might have been taken from a different angle or using a slightly wider lens, allowing the photographer to move closer to the house and thus eliminating the wires. You can still the shadow from the wires on the ground in front of the house. It is also taken a different time of year. However, roof line does appear somewhat suspicious.
The LEHIGH VALLEY is getting crushed with foreclosures, prices around here are dropping like it’s hot (snoop). The majority of people being foreclosed on are commuters from NJ. You would think people from NJ could have spotted the housing bubble over here. Houses sold in 2001 for 85k, people were paying 180k in 2005. That’s insane, now these people are trying to sell as the have negative equitity.
Who in their right mind would travel 3-5 hours a day to live in the Lehigh Valley?
Prices here are going to fall back too pre 2001 and these fools are going to learn a lesson in humility.
Now Playing: Comedian Jokes about Subprime!
http://www.paperdinero.com/BNN.aspx?id=123
Comedian Kathleen Madigan argues that lenders should not be bailed out by the government. The subprime slime may not have fully spilled over into the economy as of yet but it certainly has infected popular media.
Originally aired on: 3/27/2007 on CNN
Running Time: 1 minutes 33 seconds
Allentown Says:
May 7th, 2007 at 11:08 pm
The LEHIGH VALLEY is getting crushed with foreclosures, prices around here are dropping like it’s hot (snoop). The majority of people being foreclosed on are commuters from NJ. You would think people from NJ could have spotted the housing bubble over here. Houses sold in 2001 for 85k, people were paying 180k in 2005. That’s insane, now these people are trying to sell as the have negative equitity.
Who in their right mind would travel 3-5 hours a day to live in the Lehigh Valley?
Prices here are going to fall back too pre 2001 and these fools are going to learn a lesson in humility.
Hey Home prices there can not drop as it is too close to Manhattan!!!
“#175 Looks like the photo (minus utility line) might have been taken from a different angle or using a slightly wider lens, allowing the photographer to move closer to the house and thus eliminating the wires.”
Yes, the angle is definitely different, but that wouldn’t remove the power lines altogether, just move them higher up in the photo (near the roof).
You can see the trees are duplicated (for some reason it’s even more obvious in the smaller realtor.com photo). And if you look at the upper right side of the photo, you can see small pieces of power line still visible, and where a PhotoShop “smudge” tool was used. That’s in addition to the half-dozen trees brazenly duplicated via the “clone” tool.
187/
THink again brother, NYC is 2 hours away minimum, prices are falling. Our inventory was 70% higher in March. Maybe you should look at the MLS and watch our foreclosures, our bubble has broke.
sas (175) If traffic is your big objection to NJ and you think NC is the answer to your traffic prayers, you have obviously not been on 15-501 in Durham at rush hour recently. It takes me 9 hours to drive from exit 168 on the GSP to the 15-501 exit off of I-85 and another 1-1/2 hours to get to Chapel Hill out by Pittsboro.
The LEHIGH VALLEY is getting crushed with foreclosures, prices around here are dropping like it’s hot (snoop). The majority of people being foreclosed on are commuters from NJ. You would think people from NJ could have spotted the housing bubble over here. Houses sold in 2001 for 85k, people were paying 180k in 2005. That’s insane, now these people are trying to sell as the have negative equitity.
Who in their right mind would travel 3-5 hours a day to live in the Lehigh Valley?
Prices here are going to fall back too pre 2001 and these fools are going to learn a lesson in humility.
Where are you getting your information? Because you are wrong…and no one in the LV asked the NJ and NY people to move here!!!