(Note: This is the weekend open discussion)
From the National Association of Realtors:
April Existing Home Sales (PDF)
Key data:
April Annual Sales Rate down 2.6% vs. last month
April Annual Sales Rate down 10.7% vs. last year
April Inventory up 10.4% vs. last month
April Inventory up 23% vs. last year
April Months Supply up 13.5% vs. last month
April Months Supply up 37.7% vs last year
Northeast April SAAR down 8.8% vs. last month
Northeast April SAAR down 8.8% vs. last year
April National Median Price down 0.8% vs. last year
April Northeast Median Price down 0.6% vs. last year
From Bloomberg:
U.S. Existing Home Sales Fell 2.6% in April to 5.99 Mln Rate
Sales of previously owned homes in the U.S. fell unexpectedly in April to the lowest level in almost four years, dimming prospects for a quick recovery in housing.
Purchases fell 2.6 percent to an annual rate of 5.99 million last month from 6.15 million in March, the National Association of Realtors said today in Washington. The supply of homes for sale at the current sales pace rose to the highest since August 1992.
The decline suggests that homeowners may have to cut prices further before sales stabilize. A government report yesterday showed that sales of new homes, which account for 15 percent of the market, surged unexpectedly as buyers took advantage of the biggest decline in median prices since 1970. The Federal Reserve has said housing remains a risk to its forecast for “moderate” growth this year.
“I don’t see a real recovery in housing until 2008,” Russell Price, senior economist at H&R Block Financial Advisors Inc. in Detroit, said before the report. “People are not in any rush to jump into the market. They want to get a good price.”
Resales were expected to be at a 6.12 million annual rate, unchanged from the originally reported March figure, according to the median of 70 forecasts in a Bloomberg News survey. Estimates ranged from 5.9 million to 6.4 million.
The number of previously-owned unsold homes on the market at the end of April represented 8.4 months’ worth at the current sales pace. The supply of homes for sale increased 10.4 percent to 4.2 million last month.
From the AP:
Home Prices Fall for 9th Straight Month
Sales of existing homes fell by a larger-than-expected amount in April while the median price of a home sold during the month fell for a ninth straight month as the troubles in the subprime mortgage market acted as a further drag on housing.
…
The median price of a home fell to $220,900, an 0.8 percent fall from the midpoint selling price a year ago. It marked the ninth straight decline in the median price.Sales were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the Midwest and 0.7 percent in the South.
The drop in sales was accompanied by a big jump in the number of unsold homes left on the market. They climbed to a record total of 4.2 million. It would take 8.4 months to exhaust that supply of homes at the April sales pace.
Analysts are concerned that the glut of unsold homes will further depress prices in coming months.
From MarketWatch:
U.S. April existing home sales fall to 4-yr low
Existing home sales fell 2.6% in April to 5.99 million units on a seasonally adjusted annual basis, the slowest sales pace in four years, the National Association of Realtors said. The fall in April sales was larger than expected. Economists had forecast that sales would dip a slight 0.2% to 6.11 million units. On a year-on-year basis, existing home sales were down 10.7%. The median national sales price was down 0.8% year on year to $220,900 in April. Inventories of unsold homes rose 10.4% to 4.20 million, a 8.4 month supply, the highest in 15 years.
I know this is not RE related. But I think Immigration reform will have impact on RE and we have discussed it before.
Immigration Bill Provisions Gain Wide Support in Poll
Taking a pragmatic view on a divisive issue, a large majority of Americans want to change the immigration laws to allow illegal immigrants to gain legal status and to create a new guest worker program to meet future labor demands, the poll found.
http://www.nytimes.com/2007/05/25/us/25poll.html?_r=1&hp&oref=slogin
From Bloomberg:
Is U.S. Ceding `Master of the Universe’ Status?: Caroline Baum
China is trying to slow its breakneck pace of economic growth. The U.S. could use a little of what China has too much of. Are the two countries working at cross purposes?
The notion of a global growth cycle, with countries taking their cues from the U.S., is being challenged as Asia’s developing economies continue to boom amid a slowdown in the U.S.
In this new age of globalization, synchronicity is out, decoupling is in. Yes, China and India are growing in ways that may be independent of the business cycle. (China, for example, just snags a bigger market share of global exports.) Still, it’s much too early to conclude that the U.S. slowdown will be a non- event for the rest of the world.
“The oldest rule of economic forecasting in the modern era still holds, even in the earliest years of the 21st century,” says Carl Weinberg, chief economist at High Frequency Economics in Valhalla, New York. “When America sneezes, the world catches a cold.”
Weinberg reviewed 20 years of year-over-year and annual gross domestic product data for the U.S. and the six developed countries (Japan, Canada, Germany, France, the U.K., and Australia) he tracks. He found that the six economies’ growth rates moved in the same direction as the U.S. two-thirds of the time.
…
Not everyone subscribes to the old U.S. cold-contagion model. Some economists argue the world has become increasingly immune to American viruses.
“The evidence is overwhelming that the global economy has decoupled from the U.S.,” says Alex Patelis, head of international economics at Merrill Lynch & Co. in London. “Domestic demand growth elsewhere has accelerated, overcompensating for the negative U.S. impulse.”
…
Listening to economists argue the impact of the U.S. on the rest of the world, I’m reminded of something that old wordsmith, Alan Greenspan, said in September 1998. With Russia defaulting on its debt and hedge fund Long-Term Capital Management on the verge of collapse, the (at the time) Federal Reserve chairman warned that “it is just not credible that the U.S. can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress.”
He was wrong. The U.S. economy sailed right through the crisis, with some official (interest-rate cuts) and unofficial (a Fed-orchestrated bailout for LTCM) help from Greenspan.
Now the tide has reversed. Is it credible that the rest of the world can remain an oasis of prosperity in the face of distress in the U.S? We await Greenspan’s verdict, not to mention a new desert metaphor.
Big drop in home prices predicted
http://money.cnn.com/2007/05/23/real_estate/prediction_big_home_price_drop/index.htm?postversion=2007052413
Some economists see steeper drop in store for home prices.
By Les Christie, CNNMoney.com staff writer
May 24 2007: 1:37 PM EDT
NEW YORK (CNNMoney.com) — Most industry watchers agree that home prices will continue to slide before they recover, but now some economists say they’ve got a long way to fall before bouncing back.
David Wyss, chief economist at Standard & Poors, has forecast a price drop of about 8 percent for the 24-month period through the fourth quarter of 2008.
His prediction came during a general economic outlook session at the Mortgage Bankers Association’s (MBA) National Secondary Market Conference & Expo in New York this week.
Housing prices will suffer from a “significant increase in defaults and foreclosures,” he said, with affordability still a major issue. Wyss worried how hard the slump will hit already highly inflated housing markets.
He said its impact on areas like South Florida, where much of the buying is speculative investment in second homes, could be big. “You don’t need a second home,” Wyss said.
Overall, he said he expects the U.S. economy to slow this year to a growth rate of about 2.25 percent, down from 3.3 percent last year.
Celia Chen, Moody’s Economy.com’s director of housing economics followed Wyss’ lead. “We also have an 8 percent decline in median house prices [for the 24-month period ending March 31, 2008], which is consistent with what David Wyss had.”
“That is quite a bold forecast,” Lawrence Yun, economist at the National Association of Realtors, speaking from his Washington, D.C. office, said of Wyss’s prediction. NAR is predicting a much less severe total decline of 1.4 percent through the slump – prices have already declined three straight quarters – and that a recovery will start to take place in early 2008.
“The run up,” Yun said, “was an investor-demand driven boom, and it was followed by an investor-driven collapse.”
more…
Housing Bubble Hits Home
.
……..
.
.
http://www.paperdinero.com/BNN.aspx?id=198
Segment chronicles some of the aspects of the housing mania and subsequent decline that we now know all too well. Features a series of anecdotal stories of personal gloom and doom while tracking a series of “homeowners” from 2005 to today.
Sorry about the downtime last night.
Was out of my control, I’m still waiting to hear back from the techs on what caused the problems.
jb
Re: Downtime
Thanks for clarifying, I thought my ISP was on holiday.
My crystal ball says…
This morning’s numbers come in under estimates…concessions and price drops for new homes shifted buyers away from the existing home market, where recalcitrant sellers are digging in their heels and fighting price drops.
The NAR will blame the softness on the weather and lingering subprime problems. They will also see signs of stabilization and predict an up tick in sales just around the corner.
Renting (7)-
I think your prediction is excellent. Let’s see how it plays out.
Blame the… weather?
“The weather across the country was favorable last month. It’s likely that potential buyers were too busy enjoying the good weather to purchase homes.”
Blame the… weather?
Why stop now? They blame the weather every other month. It had to be raining somewhere.
… and now the crystal ball is also saying the markets will rally on the lower sales numbers, as hopes for a rate cut are again ignited after they were dashed by yesterday’s strong new home sales numbers.
I think your prediction is excellent. Let’s see how it plays out.
What the heck, let’s break out the crystal balls.
I’ll take the optimistic side today for volume, and the pessimistic side on prices.
National sales volume of 6.2m (SAAR), national median price down approximately 4% YOY to $213,000.
jb
No basis behind those numbers, only a s.w.a.g.
jb
James Bednar Says:
May 25th, 2007 at 8:37 am
No basis behind those numbers, only a s.w.a.g. jb
grim: What about Wagner?
Wild A55 Guess Not Easily Refutable
Always fun to make predictions, and I hope the bankers who made theirs rely on better data than I get, but here goes:
Small downside surprise: 6.06M SAAR. If it comes in below 6M, Wall St. may actually view it as bad news and it could be a rough day for stocks.
FTR, in his March forecast Lereah had talked a lot about weather making things really bad and predicted an upturn in sales for the April report being released today.
Of course 2 weeks later he was surprised by the strong Feb. number, so who knows.
gsmls.com seems to get a hundred new properties every day. At that rate, we’ll hit 40,000 before August 1
I was too busy streaking through central park to buy a house last month
Yun did not try any short-term call in his first forecast in the big chair, but he put annual at existing annual 6.29M.
One thing that surprised me a bit when I looked at his call this morning is he put NHS at 864K for 07. That is a lower number than my Jan. prediction of 880K, and I’m supposed to be a hardcore bear.
The beleaguered housing industry is sending mixed signals, with sales of new homes surging in April by the biggest amount in 14 years while prices endured a record plunge….Analysts said the price drop could provide evidence of builders’ desperation. They are looking to reduce a glut of unsold homes in the face of the worst slump in sales in more than a decade.
http://www.northjersey.com/page.php?qstr=eXJpcnk3ZjczN2Y3dnFlZUVFeXk3NDImZmdiZWw3Zjd2cWVlRUV5eTcxMzk5MjImeXJpcnk3ZjcxN2Y3dnFlZUVFeXkyMg==
Where’s that revisions graph…didn’t somebody post a chart here showing that? I like revisions forecasting on the down side.
SG, the sad part is that legal immigrants fighting for citizenship have very little support from any group.
Taking a pragmatic view on a divisive issue, a large majority of Americans want to change the immigration laws to allow illegal immigrants to gain legal status and to create a new guest worker program to meet future labor demands, the poll found.
It’s unfortunate when a hardworking, educated legal/documented immigrant is passed over by an uneducated, undocumented worker.
1] As we tread towards peak sales season, flat sales will indicate continued downturn.
2] Credit tightening in March may not be factored in April sales [February contracts?] .
I’m with JB, 6.2 million sales, price… down 2%.
RentL0rd Says:
It’s unfortunate when a hardworking, educated legal/documented immigrant is passed over by an uneducated, undocumented worker.
They already have legal/documented immigrants on the hook paying taxes. Is it possible that they are pushing this through so we can start getting tax revenues from the illegals?
House of Cards #3
“That is quite a bold forecast,” Lawrence Yun, economist for NAR…..NAR is predicting a much less severe total decline of 1.4 percent through the slump – prices have already declined three straight quarters – and that a recovery will start to take place in early 2008…..“The run up,” Yun said, “was an investor-demand driven boom, and it was followed by an investor-driven collapse.”
So despite all of the news out there, this is an “investor” driven boom. For the record, you can’t tell the difference between a spectulator and a second home buyer.
sg, what a crock on support for illegal immigration amnesty. i wouldn’t trust the ny slimes news rag or any of their polls. they always have an agenda.
So Lawrence, that means prices have to rop 30% to revert to the mean. Right Lawrence? I mean you are an economist, right? You do understand how these things work, right? I know you’re not going to shoot up kool aid, right Lawrence.
Re the Bloomberg article I think there’s so much friggin’ liquidity in the world in a macro-sense right now it doesn’t matter what the hell goes on anywhere.
It’s ridiculous. I read two articles last week, one in Businessweek and one in the Economist, about hedge funds and banks chasing assets/stocks in countries like Egypt, Columbia, etc. When all this funny money begins to dry up things could get really nasty.
U.S. April existing home sales down 2.6% to 4 yr low
U.S. April existing home sales drop larger than expected
It appears, regardless of common sense, empirical evidence to the contrary, everyone who works for the NAR can come up with a positive spin about the housing market. I’m starting to suspect that in the office building there is special Kool-Aid readily available to drink. I have to admit, if anything, they are consistent.
Having said that…… imagine if you somehow got a job in the NAR’s NJ office. As part of your orientation, you are presented with data from all of the state’s MLS systems, that shows increasing #’s of homes for sale, increasing # of days on market, etc……
So you take a swig of the Kool-Aid, feel woozy because you now feel like a spin-doctor mode….and come up with your best spiel on why its a great time to buy, and NJ home prices can go no where but up, you!! You have nothing but positive things to say about NJ
” Is it possible that they are pushing this through so we can start getting tax revenues from the illegals?”
Yes. I especially would love the guest Visa program that will boom the rental market immediately and in long term it will increase the demand for housing and get bail this industry out.
We definitively need more Doctors, I spent the night in the Emergency Room and all I needed was 10 minutes worth of Stiching.
It was horrible.
U.S. April existing home sales fall to 4-yr low
http://www.marketwatch.com/news/story/us-april-existing-home-sales/story.aspx?guid=%7BABF31B83%2DFE64%2D40E7%2D94AA%2D73CEA66167B6%7D&dist=hplatest
Existing home sales fell 2.6% in April to 5.99 million units on a seasonally adjusted annual basis, the slowest sales pace in four years, the National Association of Realtors said. The fall in April sales was larger than expected. Economists had forecast that sales would dip a slight 0.2% to 6.11 million units. On a year-on-year basis, existing home sales were down 10.7%. The median national sales price was down 0.8% year on year to $220,900 in April. Inventories of unsold homes rose 10.4% to 4.20 million, a 8.4 month supply, the highest in 15 years
Now they are pushing the recovery put to 08, but in reality there will not eb any kind of recovery until lat 09/10.
And this recovery will mean in the begining no more price drops, flat prices for another 7 years or more after that.
The sellers, or the smart ones anyhow should now realize the party is most defintiely over.
Hey JB – any chance you’ll update the sales/inventory overlay chart for april? That thing is awesome.
#25 Richard: True.
“We definitively need more Doctors, I spent the night in the Emergency Room and all I needed was 10 minutes worth of Stiching.”
Trip over one of your stacks of $100’s?
If this doesn’t count as bad news nothing does. I can’t wait to see the charts and the NSA data. As I said before, I don’t think Wall St. can spin this one into a positive.
One ray of hope from Yun and the NAR as quoted on the business channel covering the release was that “early numbers for May show a slight uptick.” That’s a relief. Adverse Feb/March weather also noted as a reason for the bearish numbers. Looks like the NE took it on the chin in April. Drat the weather!
hehehehe…
I’m not that well off…but I wish I was.
Besides of some CD’s and about 8% return on some minor investments in Financial Instruments I haven’t made any money since early 2006.
I’m just using the rental income and getting buy. That’s all.
#38 I wonder how he defines slight?
from FXstreet.com
Inventories of previously owned homes rose 10.4% at the end of April to 4.20 million available for sale, which represented a 8.4-month supply at the current sales pace. There was a 7.4-month supply at the end of March, revised from a previously estimated 7.3 months.
Sales of existing homes dropped in all regions, down 0.7% in the Midwest, 8.8% in the Northeast, 1.7% in the West, and 1.2% in the South.
An 8.4 month supply puts tremendous pressure on sellers. Sales drops in the south going forward spell BIG trouble.
2008 (29)-
I never fail to marvel at the LOD’s expectations that NAR- unlike any other American industry- has some sort of obligation to “poor mouth” itself. What other business out there does this (other than the occasional HB, saying all 12 months this year will suck)?
NAR is a trade association. It will talk up housing until the eve of Armageddon. That’s what trade associations do. It’s amusing, it’s completely detached from reality…but NO ONE should take anything they say seriously.
And please don’t tell me scores of innocent Americans rely upon their data. Anyone that easily swayed by cheerleading has no business buying a home.
make (30)-
Why didn’t they stitch your mouth shut?
Pat Coombs knows the deal though. From the release:
“Although some buyers have a wait-and-see attitude regarding home prices, they should consider that rising interest rates later this year could offset a lower sales price when you get down to the monthly payments.”
Translation: Prices suck, but interest rates are going to get worse so buy now. And of course, use a realtor, because it’s always a great time to earn a commission.
Clot #41,
Maybe so. But for a trade association they sure get a ton of media coverage. Their “experts” are called on for an opinion in every blip of the RE market in all media, online, print, broadcast. This gives them a powerful propoganda advantage, and not all buyers out there are as informed as we LODs.
By contrast, when was the last expert opinion you’ve heard on the market for milk, beef, plastics, tobacco, etc.?
LOL…
Clot #41
I think only realtors rely on their data and not innocent Americans…I hope
Home sales in the basement.
http://www.marketwatch.com/news/story/us-existing-home-sales-drop/story.aspx?guid=%7B13AACCBD%2DFFAC%2D4588%2D9ACB%2D1DDF5413ECA8%7D
make money Says:
May 25th, 2007 at 10:19 am
I’m not that well off…but I wish I was.
printing-press: what the hell is this?
#41 Clot Most Americans probably do not even know it exists. The realtors (for the most part) will spout the party (NAR) line, and as distasteful as I find that, you are right, that is the way it is.
At the end of the day it is the buyers responsibility, to do their home work,and seperate the BS form the valid.
If they choose not to, then that is their fault.
“not all buyers out there are as informed as we LODs.”
My neighbor just sold his house for list. He would have sold for less. It had been on the market for over a year. Yes, this sucker paid full price. What an idiot.
looks like the North East has joined the club. Best YOY results but worst MOM.
the northeast number doesn’t surprise me. it seems much of the inventory hasn’t been moving until recently. i would expect the inventory to stay high but the # sold to get better in june and july.
>>But Lawrence Yun, senior economist for the Realtors, said that the small year-over-year price decline of less than 1 percent was still modest compared to the 50 percent rise in home prices that occurred during the five boom years that ended last year.
he’s a shill but it’s hard to argue this point.
#43 Lindsey: falling prices will continue, rates will rise modestly until the end of 07.
Prices will continue to fall into 08, the Fed will start to lower rates Feb of 08, prices will continue to fall, rates will continue to decline.
It will be a repeat of the early 90’s except in my opinion with more severe declines in prices.
Clot, (post 41)
I don’t expect the NAR to bad mouth itself.
I totally agree that the organization does what it should, my problem is with the media and the simple fact that they never have anything prepared to balance the press release.
Before the release this morning there were plenty of “experts” who had a lower than average call. Why not make a few calls and get some comments on what they saw that lead them to that conclusion and ask what it means?
>>I haven’t made any money since early 2006.
huh? there have been plenty of opportunities in the market to make sizable returns. let me throw one out at you IGNBX. excellent portfolio manager, i’ve met him a couple of time. he’s now getting into alternative energy plays. ok jim hit me with that disclaimer ;)
The information on this site is provided for discussion purposes only. Under no circumstances does this information constitute a recommendation to buy or sell securities, assets, or otherwise.
huh? there have been plenty of opportunities in the market to make sizable returns.
I agree.
jb
For those interested in the NAR release:
Tighter Lending Standards Affect April Existing-Home Sales
3b (53)-
Agreed, except I think the general wordwide distaste for our longer maturites (10 yrs+) will intensify in the coming months, taking conventional mortgage rates another 100 bps higher by March, 2008. That will put us around 7.25%, which is still very low, by historical standards.
However, Fed rate-cutting will bring down short-term rates sharply, normalize the yield curve and create enough spread to make ARMs a viable financing alternative.
However, Fed rate-cutting will bring down short-term rates sharply, normalize the yield curve and create enough spread to make ARMs a viable financing alternative.
Don’t neglect to include pending legislation, regulation, and guidance in your assessment of future viability…
jb
#52 That decline of less than 1% need to be broken down into states, counties, and towns, and portions of towns, and then various physical locations in those towns.
I know that at least in my area the declines are far greater than that less than 1% number quoted
#59 ARSM may becoem viable again, but with tighter lending standards.
Sorry should have said ARM’s may become viable again but with tighter lending standards
Well,marty,
we’re going to have to lower the asking price. Let’s say 10k to 899K, that should
do it.
he’s now getting into alternative energy plays
Just getting in now? I’d be careful about renewable energy. Most of the money in renewable energy has already been made. Much of the demand for renewables is driven by tax credits, which are not permanent. We have seen renewable energy booms and busts in the past coincident with expirations of tax credits. The Economist and others have called alternative energy the next bubble. That’s not to say there isn’t some upside potential left.
Renewable generation technology prices are high and going up, despite being uneconomic without government support. Much of this support was premised on driving prices down by supporting the market and creating economies of scale. This support could be eroded as the price tag goes up.
We watched Sesame Street, grim watched this……
http://hoboken411.com/archives/6899
Love it
Isnt this what Richard is always saying that real estate bubbles are local?
3b Says:
May 25th, 2007 at 10:57 am
#52 That decline of less than 1% need to be broken down into states, counties, and towns, and portions of towns, and then various physical locations in those towns.
I know that at least in my area the declines are far greater than that less than 1% number quoted
On the other day’s topic of shipping containers…
Time to load up on container ship stocks
http://articles.moneycentral.msn.com/Investing/SuperModels/TimeToLoadUpOnContainershipStocks.aspx
#68 ADA I think what Richard was trying to say, and if I am wrong I apologize to him in advance, is that prices only fell less than 1% period,a dter a 50% increase.
As far as local, the real estate bubble encompassed most of the state of NJ, with some areas bing more bubbly than others
#30 em-n-em,
which hosp? if you don’t mind saying?
sl
Renewable energy resources are going to become more viable as oil/coal peak. When that will be depends on who you believe.
Yo, chico , you got to have the Charity card
at the hospital to get fast service.
Have not yet seen a single viable renewable energy scheme.
They aren’t viable currently because of the cheaper alternatives, ie. oil and coal. Once all the easily accessible oil & coal is depleted and costs rise renewables become more competitive. I am not arguing with you. The way things currently stand you aren’t taking a stake in a current money making proposition, you are just positioning yourself on the potential. Some people like Matthew Simmons see oil peaking in the next couple of years.
I think the most logical “viable renewable energy scheme” is using the renewable aspect as an additive to the current energy scheme.
Like adding US made ethanol to gas, adding solar and wind to the existing energy framework, and a move to nuclear in the long run.
still_looking
Staten Island University..North Shore
Hi: Long time lurker and first wanted to say thanks to JB and all here, the service here has certainly helped me learn a lot and is greatly appreciated. Wife and I have been looking and currently looking and patiently waiting for prices to return to a semblance of reality. I’m sure we’re like a lot of people here who just refuse to pay silly prices for the honor of living in the proverbial POS. Pretty much frustrated but still sticking to our guns.
Quick story on how things are going: My last run in w/ a realtor was one who told me he had an accepted offer for a house, then told me to please bid on it anyway since he didn’t think the financing would work. (Also told me he had multiple bids over asking). When I told him to forget and don’t bother me again as I don’t play those games, he then called me 3 times to ask me to please bid and hopefully I had reconsidered after I cooled down (his words). Best part is the realtor lives NEXT DOOR to the house he is selling. Whoever gets that house has a great reminder.
That being said we are actively looking and does anyone have the background on MLS # 2407757 in good old Boonton?
Thanks!
Clot (42)
You can’t even shine my shoes. You’re a house tour guide. I don’t care to hear that you’re different and that you’re not like the rest of the REA.
In my culture we say a snake is a snake. Period.
The problem with ethanol is that it currently takes more energy to make than it saves. That may change in the future but who knows.
The best thing about peak oil/coal will be the environmental benefit, less greenhouse gases, and no more overly-alarmist movies by Al Gore and Leo Di Caprio.
The worst thing is coming up with something else that’s cheap as oil to run a car or truck.
That being said we are actively looking and does anyone have the background on MLS # 2407757 in good old Boonton?
Was purchased for $139,000 in 1993. Might be completely unrelated, but the seller took out a HELOC for $100,000 in 2005.
jb
HEHEHE (80):
“The problem with ethanol is that it currently takes more energy to make than it saves. That may change in the future but who knows.”
True but it also creates jobs (at least it gives the existing farmers a reason to grow) and it cut’s down the amount of oil needed.
They aren’t viable currently because of the cheaper alternatives, ie. oil and coal. Once all the easily accessible oil & coal is depleted and costs rise renewables become more competitive. I am not arguing with you.
Coal won’t be depleted anytime soon. Ethanol requires just as much energy to produce as you extract from it. Solar energy is so uncompetitive that it would actually be cheaper to generate electricity with $300 oil. Wind is nearly cost competitive, but it has siting issues. People don’t want it in their backyard. These renewable resources are also intermittent. During times of peak electric demand, it tends not to be windy. This means firm capacity is still necessary to back up wind turbines.
There are less expensive options to alternative energy for dealing with global warming and dependence on foreign energy, including efficiency improvement and nuclear energy. These aren’t as sexy so they don’t attract the same attention.
The way things currently stand you aren’t taking a stake in a current money making proposition, you are just positioning yourself on the potential.
Sounds a lot like dot com’s to me. Too many people are thinking the same thing right now.
I’m not making a social commentary here on the merits of renewables, I just think they hold less potential than some people might want to believe and from an investment perspective, may be overvalued.
If you want to get into alternative energy as an investment, go ahead. I think an alternative energy bubble would be great for society. Just like the dot com bubble left us with a fiber optic infrastructure and relatively cheap high speed internet access for all, an alternative energy bubble will leave us with a cleaner environment and less dependence on foreign oil. I just don’t think it will pan out as well for investors who see it as the path to riches.
Thanks!
True but it also creates jobs
True, but it also raises food prices as corn and arable land are put toward ethanol.
RentinginNJ (85) –
Aren’t US grown foods cheap enough already?
Plus, we need jobs for all the (formally illegal) aliens to work :-)
These existing home numbers and yesterday’s new home numbers look like a dead cat being kicked off of a cliff…
JM
Sorry, meant yesterday’s pricing numbers, not sales…
JM
>>If you want to get into alternative energy as an investment, go ahead
the fund manager of IGNBX is very sharp and has proven success in the only way that matters, returns. i don’t need to delve into the specifics to say i will trust this man with my money and if he’s dabbling in alternative energies i’ll trust he knows what he’s doing.
ECONOMISTS REACT
Economists Weigh Homes Data
And When Correction Will End
May 25, 2007 12:21 p.m.
* * *
Existing home sales peaked during the summer of 2005 and fell hard between then and September 2006. Between September 2006 and February 2007 it appeared that sales had stabilized but the last two months have seen another sharp decline that is broadly unaffected by weather. This recent weakness may have been aggravated by the turmoil in the subprime market although the evidence is weak. Sluggish sales have kept inventories of unsold homes at very high levels. This, in turn, has pressured prices, which have been falling for the past nine months. The housing correction is definitely not complete … . – Steven Wood, Insight Economics
* * *
We had expected a modest weather-related bounce in existing home sales in April — since resales are recorded at contract closing, the data tend to lag reality by a month or two — reflecting better weather in March. However, we are not at all surprised that home sales would be weak in April in particular and most likely all spring, as uncertainty surrounding the subprime mortgage situation definitely appears to be encouraging potential buyers to sit on their hands a while longer to see what the market will look like when the dust clears. — Stephen Stanley, RBS Greenwich Capital
* * *
Housing data for April have been mixed as housing starts and new home sales were stronger, while existing home sales and building permits were weaker. … While the conflicting data for April make it difficult to assess the trend in housing activity, it appears that the adjustment in this sector is still ongoing. – Bear Stearns Economics
* * *
Housing demand appears to have bottomed, but two housing headwinds still loom: The impact of tighter lending standards on demand is only beginning to appear, and there is still a mismatch between housing demand and supply. The upshot: The intensity of the housing recession is fading, but it is far from over. – Morgan Stanley Research
* * *
We just got our second report on the state of the housing market in April — existing home sales. The big story is the inventory/supply glut. We have set a new high in homes on the market, and that’s going to keep the pressure on prices. … Until sellers get realistic and start cutting prices aggressively — like the new-home builders clearly are — the market will remain oversupplied. That, in turn, will keep the pressure on sellers and give buyers the upper hand. — Mike Larson, Weiss Research
rentingnj, you missed another area for renewable energy, ocean current technology. it’s in the early stages but has promise. here’s some reading on the subject.
http://ocsenergy.anl.gov/guide/current/index.cfm
I’ve lost all hope that NAR economist Lawrence Yun wouldn’t turn into a Lereah-esque shill.
Larry, do you too have a book deal in the works?
http://news.yahoo.com/s/ap/20070525/ap_on_bi_go_ec_fi/economy
He [Lawrence Yun] said the big rise in unsold homes on the market could be an indication that sellers are testing the market in hopes of selling their homes and moving up to larger units, which he said would be a positive early sign of a rebound in housing.
Well there you have it kids, inventory at the highest levels ever recorded is a positive sign.
jb
Richard (91) –
But what about all the Dolphins (or any other cute swimming animal), that’ll get killed in the turbines.
You know that’ll come up, they have wind turbines in NEPA (my parents live there) and that (killing birds) was the main concern when putting them up.
Make money,
It’s always like that here. If you wanted to be in and out faster you should have gone to the South Shore. The care sucks but you wouldn’t have waited nearly as long.
What’s disturbing is that the data shows that prices bottomed in January and are on the way back up in all regions… defies logic given the crazy increase in inventory.
Interesting story on curbed.com about a Hoboken condo complex putting 40 units up for auction:
http://www.curbed.com/archives/2007/05/24/hoboken_condos_sell_for_whatever_you_feel_like_paying.php
RentinginNJ (85) –
Aren’t US grown foods cheap enough already?
The US can probably absorb the higher costs. The effect of high grain prices, are however, multiplied when it comes to meat prices, because it takes many pounds of grain to produce 1 pound of meat.
The problem is really in the developing world. In Mexico, for example, corn is a big part of the diet and the poor are already struggling to feed themselves. Higher corm prices will take food off of their plates.
Folks:
I have said it before and I’ll say it again. Ignore the hype, watch the inventory and Days on market in the neighborhoods you want to buy/sell in.
According to Economics 101 the price is a factor of supply and demand. When the supply increases drastically, prices must come down or in the case of housing mortgage rates must come down or incomes must go up.
Take a guess what is most likely to happen in the next couple of years?
1. Will interest rates drop further?
2. Will incomes increase significantly to afford the current home prices?
3. Will home prices have to decline to reflect current income and interest rates?
395 Mike What are you refering to?
#90 chgo Morgan says the intenstiy of the housing recession is fading, but still there. Seems to me like this is just geting started.
We have not hit the intensity level yet.
3b,
Something to consider…
WSJ
Did Merrill, Morgan Stanley Overpay?
Both Spent Big Money On Subprime Lenders Just Before Slowdown
By RANDALL SMITH
May 19, 2007; Page B1
In the first quarter of 2007, Merrill has moved up to become the No. 1 underwriter of subprime mortgage-backed securities, in terms of dollar volume, according to Inside Mortgage Finance, a trade publication in Bethesda, Md. For all of 2006, Merrill ranked No. 4. Subprime issuance fell by 23% to $94.8 billion in the first quarter of this year from the same quarter of 2006, the publication said.
Merrill has moved into the top spot “virtually overnight,” said Guy Cecala, publisher of Inside Mortgage Finance, thanks to First Franklin. Morgan Stanley, aided by Saxon, ranked No. 2 in the first quarter, up from No. 3 for all of 2006.
OT…has anyone had their benefit plans enhanced with a tourism feature yet?
http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=45142
Make, someday people like you who need a few stitches will hop onto a boat registered to some other country, float out to sea for an hour, get their stitches done, and have the option of doing couple hands of blackjack, to boot.
All of it covered (well, maybe not the blackjack.) The ticket, the parking, the drinks :P …the doc. How about that!
All that in a few hours.
“He [Lawrence Yun] said the big rise in unsold homes on the market could be an indication that sellers are testing the market in hopes of selling their homes and moving up to larger units, which he said would be a positive early sign of a rebound in housing.”
Testing the market to move to a bigger home or trying to get the albatross off from around their neck?
#92 JB: That is even better than many of Mr. Lereah’s past comments. Sadly many clueless people may lap this crap up, but that is the way it is.
Slash prices, move inventory. Homebuilders trotted out that time-tested strategy last month and saw new-home sales rise by the largest one-month amount in 14 years….but the pricing inducements suggest the country’s housing-market woes aren’t over yet…. What you’re seeing is the blue-light special,” Pat McPherron, an economist with Moody’s Economy.com….”The only way this market is going to move is by price-cutting.”
http://www.businessweek.com/investor/content/may2007/pi20070524_976639.htm?link_position=link5
JB, post 92
Did you really have any hope?
As Clot so correctly points out, the NAR is not a neutral observer in the housing market, they are the primary advocate for the industry’s main concern — earning a commission. As we all know, it’s always a good time to earn a commission.
While NAR officials may seek honest council from their professionals in private, (see Lereah’s Aug. ’06 PPT), publicly all employees of the NAR understand that their job is to promote the industry. They don’t even go for the fig leaf of setting up a think tank; someone who is identified as representing the NAR is part of the sales force.
The fact that media outlets can’t or won’t acknowledge this has always mystified me.
Yun may have an economics degree. He may spend all of his time parsing economic data, but when it comes time to talk to the press, he is a shill, just like the last guy in that job and just like the next one.
make (79)-
Yep, but I’m not laying around the house all day, pi$$ing off my wife and being a generally shiftless bag of blood.
BTW, how’s that apartment building coming? Talk to your Dad lately? Does he still speak to you? Got any more gambling schemes cooking that you’d care to call an investment?
Had a tetanus booster lately? If that emergency room couldn’t stitch your mouth shut, maybe a case of lockjaw will do it for us. F—ng troll.
One can only hope.
Justin (82)-
Yeah, except for the fact that we could import all the cellulose ethanol we need from Brazil…at a delivered price cheaper than we can formulate our own corn ethanol.
This ethanol thing is a boondoggle and suck up to the Midwest voter…no more, no less. If it weren’t a tariff-protected industry, it’d be DOA.
Renting (97)-
Most commercial beef operations in the Midwest long ago switched to Distiller’s Grain (yep, a byproduct of ethanol manufacture) to “grain feed” their cattle.
Funny thing is, that stuff has alcohol in it. All those cows are walking around loaded.
What if the cows get together, and things get rowdy?
Bovine soccer riot?
It’s very simple; you better do (very well!) what you are paid to do. Why would Chameleon Yun do anything different than Honorary Chameleon Lereah?
Also, nice time to notice McMansions with all their windows open. Cheaper that way, since the electric bills are going to be monstrous this year. And $125/tank to fill the HELOC SUV.
Is #109 an illegal troll?
Clot,
I agree, and I’m in the agr. commodity business. Sugar based ethanol is many times more efficient to produce, except the US has little of it, so corn is built up by politicians as the silver bullet.
lindsey (96)-
This is what happens when TV networks decide to cut costs, eliminate research & investigative reporting and go “cut-and-paste” instead of behaving like journalists.
I think NAR’s opinion gets quoted as fact so often simply because we’re organized, constantly talking and on message.
Clotpoll (108) –
Isn’t the idea to move away from foreign dependency? It’s would be a public works type of system.
OK, I’m not sure if this is the right time and place for this, but the cause/effect reporting regarding the situation with the subprime lending market needs to be stated clearly.
At post 90 chifi pulled this from the economist:
This recent weakness may have been aggravated by the turmoil in the subprime market although the evidence is weak.
The reduction in illegitimate subprime loans cannot be a legitimate factor in any discussion of current or future RE sales.
Improperly documented and issued mortgages were part of the bubble inflation in RE in the last five years; the lack of loans that have no realistic prospect of repayment should not be considered as something that is contributing to a slowdown in the market. Even as I write this, I’m not sure my point is clear.
I’ll try again. Sales that would have been made connected to loans that would not have been repaid cannot be considered as a legitimate part of the market.
The lack of fraudulent or misguided lending simply means that market activity reflects economic reality.
The previous subprime shenanigans are part of the cause of the bubble, if bogus loans are no longer being written that just means the market is no longer operating under that undue influence.
3b(99) –
Referring to the PDF April Existing Home Sales link on this thread.
Justin (115)-
The WPA was also a public works/”jobs” program that led us into the formation (via the Great Society in the ’60s) of the biggest welfare state in the history of mankind and cemented the existence of a permanent underclass in the US.
Artificially-supported, tariff-created industries can never be justifed. The result never matches the intent, no matter how noble.
Adding…
Also in the Chifi post at 90:
uncertainty surrounding the subprime mortgage situation definitely appears to be encouraging potential buyers to sit on their hands a while longer to see what the market will look like when the dust clears. — Stephen Stanley, RBS Greenwich Capital
The number of legitimate potential buyers giving a moment’s thought to anything surrounding “the subprime mortgage situation,” is infinitesimally small.
I believe it is limited to about 300 people nationwide who would like to buy a home, but feel prices have been artificially inflated and will come down because they are regular readers of certain RE blogs.
What’s disturbing is that the data shows that prices bottomed in January and are on the way back up in all regions… defies logic given the crazy increase in inventory.
Prices always drop during the winter months, during boom or bust.
i just got off the phone with my brother who lives in Arizona. one house in his block is in forclosure. in another house across the street, the people are splitting up and just walking away – going bankrupt. he could never figure out how these people could afford all the stuff they were buying – now it comes out they refinanced FIVE times! they owe much more than the house is worth, so they’re just walking.
Time for some completely meaningless (but semi interesting) datapoints..
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Clot,
First, as a guy who currently is laying around the house all day, pi$$ing off my wife and being a generally shiftless bag of blood, I want you to know that being called on it really hurts.
Not quite as much as my back, but still.
Anyway, re post 114:
It’s not just cost-cutting, it’s attitude, laziness and a fundamental misunderstanding of their job.
I’m getting treatment btw, but they tell me not to expect to get out much until mid-July. This really blows.
Lindsey (123)-
My sympathies. No dis to you at all.
You’re injured and have every excuse/right to rest and get better.
Our friend, make, on the other hand, should be quarantined given IVs of bleach.
#120 Rich I am not seeing any price pick ups in River Edge or Oradell, I ma seeing a lot of price stagnation (not lowering).
T
…or maybe IVs of that stuff Jack Bauer used to make his brother talk.
James Bednar Says:
May 25th, 2007 at 2:41 pm
Time for some completely meaningless (but semi interesting) datapoints..
JB,
I’ll throw one out also. I have been tracking vacant lots in my neck of the woods here in Port Charlotte,Fl. This is the first time i have seen a buildable lot below 10k. The lot is listed for 9k. This is 99-00 pricing. The best part is there are about 650 lots listed going up to 65-70k.
It is gonna be a long hard fall for a lot of land flippers. This whole RE thing is just starting to unravel imho.
Chris
3B,
RE 125: I shouldn’t have said it’s absolute. It’s just a trend I’ve noticed where median price (sold) dips during the winter months.
Clot, 124
No harm, I was just struck by the accuracy of the description; it was like you were in the room or something…
and the wife has been great about this, I am one lucky man.
JB
I’m as down on RE as they come, but that little Haver Analytics graph really isn’t fair with 5.6M as the base.
interesting numbers though it sure would be nice if they started breaking them down by state. It would be my guess that 7 or 8 states are draging the whole country down in the above analisis.
Just my 2 cents
I’m as down on RE as they come, but that little Haver Analytics graph really isn’t fair with 5.6M as the base.
Good point, in the spirit of fairness I’ll take it down.
jb
Do you have any stats for Morris Township comparing 2005, 2006 and 2007 you would be willing to share?
From the meaningless stats department.
It was impossible not to notice the jump in national inventory during April after a particularly flat March.
Monmouth County listings went up about 5% each month. April was actually 5.5%.
I’ve got stats back to Sept. 2005. All-time peak for Monmouth in that span was hit on Sept. 29 06 at 8,652. We’re about 300 away.
FTR, the listings I pull from include rentals,land and farms. here is the url:
http://tinyurl.com/2r2gsd
Interesting numbers, but they just continue a trend. We need to see some possitive numbers soon.
#135 ?
Ouch
Franklin Lakes
ACT $1,750,000 8/21/2003
ACT* $1,750,000 8/25/2003
U/C $1,750,000 9/23/2003
SLD $1,750,000 11/26/2003
ACT $1,995,000 6/5/2006
PCH $1,849,000 7/27/2006
PCH $1,749,000 8/23/2006
PCH $1,699,000 9/29/2006
ACT* $1,699,000 4/10/2007
U/C $1,699,000 4/11/2007
SLD $1,530,000 5/22/2007
You aren’t kidding Rich. That’s almost a quarter of a million dollar loss.
Can you check the lot sizes on those two listings, I’m wondering if the original lot was subdivided.
jb
Interesting numbers, but they just continue a trend. We need to see some possitive numbers soon.
Why?
Because nobody’s been beating a path to your door for “The Art Of Successfully Flipping Homes”?
Good point JB, I’ll check.
Morristown man,
Pick a “name” and stick with it.
jb
2 new wonderfully ugly listings for your review in prestigious close to NYC River Edge, just came on this afternoon.
njmls listing numbers, 2721225, and 2702293. I cannot decide which one is uglier.
The second one I remember coming home around 11:00 one night a coupl of months ago, and they were working on it at night, with the lights from a pick up truck and a couple of cars. Better run and get one of these now!!
Enjoy the long weekend!!!
Nope, no subdivision.
I’ve been noticing a lot of $1M homes selling this month, but all way below asking.
Ridgewood
ACT $1,349,000 12/2/2006
PCH $1,190,000 2/24/2007
ACT* 78$1,190,000 3/29/2007
U/C $1,190,000 3/30/2007
SLD $1,110,000 4/27/2007
Old Tappan
ACT $1,699,000 4/7/2006
PCH $1,579,000 4/27/2006
PCH $1,499,900 6/4/2006
PCH $1,399,900 6/22/2006
ACT $1,375,000 9/27/2006
PCH $1,299,900 10/4/2006
ACT $1,289,000 2/2/2007
ACT* $1,289,000 2/12/2007
U/C $1,289,000 2/16/2007
SLD $1,250,000 5/4/2007
Englewood Cliffs
ACT $5,500,000 4/2/2006
PCH $4,995,000 5/17/2006
PCH $5,000,000 5/17/2006
PCH $4,900,000 6/1/2006
EXP $4,900,000 7/3/2006
ACT $4,900,000 9/1/2006
PCH $4,450,000 10/5/2006
U/C $4,450,000 3/28/2007
SLD $3,771,000 5/11/2007
Rich
3B: number 2 is.
This is what a ten percent drop in your house price feels like, I think.
http://www.youtube.com/watch?v=lih4BsE1OaM
I don’t really think this will be happening this year, but a little snow after a hot drive home can’t hurt, right?
http://www.bloomberg.com/avp/avp.htm?T=default&clipSRC=mms://media2.bloomberg.com/cache/vIGa2DTrsyPw.asf
That’s for anybody who needs a reason to go have a drink.
rich – thanks for the data and taking the time to give details. I think seeing the “process” of how prices get lowered and the dates involved keep things in perspective.
JB, these homes make me think of that guy who posted on craigslist about moving to princeton (or somewhere south) from bergen county (i think). Do you remember him? Did he end up selling his house?
afe
Whoever I was talking to about environmentally friendly floors the other day, here is another option that looks pretty beautiful, coconut palms:
http://www.durapalm.com/
I’m wondering why nobody brought up reclaimed lumber during the discussion of alternate flooring. Although I admit, anything of decent quality is going to be expensive. But then again, wide plank old growth lumber isn’t cheap.
jb
Anyone know how the Philly RE market is doing these days?
How does it compare with NJ?
SAS
Curious – does anyone have a link to the ranking of the NJ public schools? We’re looking in Bergen County and we know Ridgewood, Cresskill, and Glen Rock are near the top, but for now, the prices remain downright silly.
So we just wanted to check the next tier of schools, but can’t seem to find an old link we used to use.
Thanks,
longtime lurker
http://www.njmonthly.com/topschools/hslist.lasso
http://www.nj.com/news/reportcard/
JB – lumber liquidators carries reclaimed wood. Someone did bring it up I think.
There is some beautiful furniture out there made of it.
This week’s home sales data illustrate the fundamental differences in how home builders and home owners are dealing with a weakening market,” said Peter Schiff, president of Euro Pacific Capita. “The new home sales report shows builders acting like sober-eyed businesspeople, slashing prices to move bloated inventory.”
“The existing home sales report shows homeowners clinging to their dreams of real estate windfalls,” he added. “It is only a matter of time before homeowners realize that the dream is over, and that price cuts are now necessary to sell their homes.”
http://money.cnn.com/2007/05/25/news/economy/home_sales/index.htm
well said.
Hi–can anyone give me the addresses for the following properties?
MLS #2387734
MLS #2395351
I’ve read Grim’s site religiously–almost everyday–for a year and a half and am so thankful for everyone’s contributions (especially Grim’s). My wife and I are house-hunting after waiting as long as we could–we’ll try to make as smart a purchase as is possible at this time, based on all the info we’ve learned here. If nothing seems smart, we’ll consider renting a bigger place. Thanks again to all.
Bernanke Warned by Real Estate Analysts:
Housing Collapse Is Much Worse Than You Say
http://www.larouchepub.com/pr/2007/070522warn_bernanke.html
May 22, 2007 (EIRNS)—A real estate investment and analysis firm, John Burns Real Estate Consulting, said on May 21 that it is “going public with our concerns” that the national sales information for both new and existing homes, is misleading and covering up a deep plunge of the housing sector. “The housing market has softened much more than is being reported” by the Fed, and the National Association of Realtors (NAR), says JBREC.
The firm reports that having purchased and compiled actual home sale closing data for 55% of the country, it finds existing-home sales down, not 9% as NAR reports, but: 22% in May 2006-April 2007, compared to May 2005-April 2006; and much more than that on a simple year-to-year comparison of the past couple of months. It found that existing-home sales have fallen every bit as much as the new-home sales of the biggest homebuilders D.R. Horton and Lennar, which are down 37% and 27%. It found that home brokerage transactions by Realogy Corp., the nation’s biggest realtor company which owns Century 21, Coldwell Banker, and ERA, fell 18% from 2005 to 2006. And that mortgage applications for home purchase have fallen 18%, even though many buyers now have to fill out several applications in order to get a mortgage.
Taking the states with the worst housing sales/foreclosures crises, JBREC found Florida home sales down 34%, not 28% as NAR reported; Arizona sales down 38%, not 28%; and California’s down 37%, not 24% as NAR reports. This strong underreporting of the collapse by NAR, the firm says, only dates from the middle of 2006; it doesn’t claim any intentional misrepresentation by NAR.
As for new-home sales, JBREC reports the Census Bureau is continuing not to subtract cancellations from reported sales, giving sales figures which are much rosier than the grim reality, and are reported publicly by the Federal Reserve.
“In summary, we believe that the Fed should know that the housing market correction has been quite steep, and is also not showing signs of bottoming out,” concludes JBREC.
Separately, a Wall Street firm reported May 18 that the foreclosure “shock cone” is widening: While total foreclosures, at all stages, are up 60-70% over last year so far, foreclosure notices—the front end of the process, when a mortgage is typically 90 days delinquent—are 127% higher so far than in 2006. It said that foreclosed homes being resold by banks or lenders, are hitting the housing market with an average price drop of 30% nationally.
AlexY,
2387734 – 8 Scrivani
2395351 – 48 Garbarino
Since I never opened the Weekend Open discussion yesterday, we might as well use this thread.
jb
This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.
For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.
This post will remain at the top of the page during the weekend, any new posts will be displayed below.
From the SF Gate:
How to deal with tighter credit rules
Mortgage broker Bruce Honaker has seen up close how much tougher it is for people with tarnished credit to get a loan these days.
“If somebody comes into the office now with less than perfect credit and no down payment, they’re eight or nine months away from (getting a mortgage),” said Honaker, owner of American Acceptance Capital in Antioch. “I sit down and analyze their situation and try to help them get their credit into (a better) range. We set up a plan to get (bad debts) cleared up, and once their score is up several months down the road, then they can go for the house.”
Across the country, people who took out subprime loans — higher-interest mortgages for those with poor credit — have begun to default on those loans in record numbers. The result: Lenders have gotten a lot pickier and prospective borrowers have to meet stricter criteria to qualify for a mortgage.
…
Lenders’ “tighter” standards represent a return to the classic lending criteria that governed mortgages until about two years ago, when lenders plunged full force into issuing subprime loans, allowing people with poor credit, little money and no proof of income to take out mortgages in exchange for paying higher interest rates.
Time for some completely meaningless (but semi interesting) datapoints..
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Page Views: 1,075,913
Visits: 352,776
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Average Page Views: 3.05
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Jim,
I think I might have mentioned before, how this creeps me out, big bro.
KL
Possibly the most confusing listing photos ever..
http://newjersey.craigslist.org/rfs/336769782.html
I wonder if the family is included with the sale…
Wow, charades on the lawn! Rock on!!
There is a story in the NYT’s Real Estate section today entitled “Fighting Off Foreclosure” about foreclosure rates in NYC.
One of the quotes:
“Ryan Slack, the chief executive of PropertyShark, said that foreclosure rates have always been higher in Queens because it has the highest concentration of detached single-family houses, which account for nearly 90 percent of foreclosures, he said. That, he explained, is because banks allow the buyers to take out large mortgages.
Queens has more than 270,000 single-family houses, while Brooklyn has about 200,000 and Staten Island has about 100,000, according to PropertyShark.com. He added that owners of Manhattan condominiums, which often don’t require large down payments, could also run into trouble if there was a slowdown on Wall Street.
If there were a major problem in the job sector — particularly in the financial industry — I think you would see massive foreclosures in Manhattan condos,” Mr. Slack said.
I can’t seem to find this on the paper’s website…..
I couldn’t care less about minuscule deltas in the current charts. I’m not interested in phony sales…Period! I’m convinced; prices will never go down to where they should (relative to INCOME and SAVINGS) simply because the masses can’t help themselves. Blame the buyers: They want what they want NOW. They’re too use to buying with plastic and borrowing easy money with no real backing. Yes indeed just maybe it would be quite different if they had to earn the money by hard work and dedication over time. There wouldn’t be as much “wise Guys” out there trying to be MR/MS real estate geniuses searching for a bigger sucker then them. Yeah I saw that “flip this house” episode too.
Here is a great idea for those Hip and Happening pseudo intellectuals.
GO BACK TO WORK or more accurately GO TO WORK and produce something.
A HOUSE is a place to raise a family. (what a new concept)
James Bednar Says:
May 26th, 2007 at 5:53 am
Since I never opened the Weekend Open discussion yesterday, we might as well use this thread. jb
lazy
Thanks James!
I work in Midland Park, so Wanaque seems like a cheaper alternative to M.P. and surrounding towns like Ridgewood, Wyckoff, Glen Rock, etc.. Cheaper when comparing actual prices, of course, not necessarily in terms of value. Obviously there’s less demand up there, less convenience, schools are not as good–the usual tradeoffs. Anyway, we’re “just looking” at this point and going to drive up there today and see the area. Thanks again.
Here’s the NY Times piece on foreclosure:
http://www.nytimes.com/2007/05/27/realestate/27cov.html?ref=realestate
Another look at housing data from John Mauldin’s website. It’s a long report, so this is only a partial clip. Dated 5/25/07.
Housing Is Weaker than the Data Suggests
But if the subprime debacle poses no systemic risk (i.e., it will not bring about a collapse or serious contraction of the economic system and credit markets), it does pose a serious economic risk to the growth of the US economy.
Housing accounts for about 23% of the US economy, when taking into account all housing-related purchases of furniture, appliances, and items for new homes, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. So if the housing market is in recession, which it is, it is no small potatoes. Let’s look at a few recent points of data.
The NAR (National Association of Realtors) says that home sales are off 9%. Real estate analyst John Burns (http://www.realestateconsulting.com/) says that “the housing market has softened much more than is being reported” by the Fed and the NAR. Let’s look at some of his research. He gets it from purchasing the actual closing data for 55% of the country. Using this data, home sales are down 22% for the year through April 2007. The largest nationwide real estate brokerage firm reports sales down 18%.
Mortgage applications for home purchase have fallen 18%, even though many buyers now have to fill out several applications in order to get a mortgage. Taking the states with the worst housing sales/foreclosures crises, Burns found Florida home sales down 34%, not 28% as NAR reported; Arizona sales down 38%, not 28%; and California’s down 37%, not 24% as NAR reports. This strong underreporting of the collapse by NAR, the firm says, only dates from the middle of 2006; it doesn’t claim any intentional misrepresentation by NAR.
As for new-home sales, JBREC reports the Census Bureau is continuing not to subtract cancellations from reported sales, giving sales figures which are much rosier than the grim reality, and these are reported publicly by the Federal Reserve. And cancellations are a big factor, running 40-50% in some markets.
The market was happy when new home sales rose by 16% yesterday. But looking at the data, one should not be quite so impressed. First, prices fell by 11%, the largest monthly drop on record. Homebuilders, taking a page from auto dealers, are “marking them down in order to move them out.” Gabriel Stein at Lombard Street Research in London (www.lombardstreetresearch.com – an increasingly useful source of information to me) comes up with some very useful points on home prices:
“Yesterday, Commerce Department data showed that sales of new homes jumped in the US, although prices fell. Today’s data from the National Association of Realtors shows that sales of existing homes fell, although prices rose. Is there a relationship? Almost certainly, yes. The significant development there was that the median price of a new home fell below that of an existing home. Monthly price data for both new and existing homes goes back to 1975. In that period, there is only one brief period – from September 1981 to February 1982 (and only in three of those six months) – when prices of new homes were lower than those of existing homes.” As she notes, that period also had a very high stock of unsold homes.
I know this SS/medicare discussion was so the other day, and this is anecdotal but……..
I’m in dunkin donuts this a:m and this older gentlemen orders a egg sandwich, and says make sure you charge me the senior rate! when it was rung up -he argued that it supposed to be less than she was charging, back and forth a little and in fact she was giving him the “Senior rate”
I get my order, get in my car and pull out at the same time as this “poor senior” in his red S500 mercedes.
KL
http://bp2.blogger.com/_pMscxxELHEg/RlcHoEEpiGI/AAAAAAAAAis/5CbtU26DGRQ/s1600-h/Existing+Inventory+Mearures+April07.jpg
the housing market is stepping back one inch for the next strong upward. It is the best time to buy. Don’t miss the chance to jump into the market.
Long term, housing is a great investement while providing a place for you and your family to rest. Nothing beats that.
Don’t forget this: we are close to NY….
interest rate is still low… and we are in a congested state. You are sure that we have a lot of demands for that special house….
Don’t get fooled by the news. Trust professionals like us. we are ready to serve.
Man – someone’s a little ill-informed………..
#2 and #4 here,
I acknowledge that many Jersey City and Hoboken renters did not have the means to buy in the early 2000s because they didn’t have the $ or were still in school.
However, many renters did have the means to buy but chose to remain renters. Today, these renters (chicagofinance, James Bednar) are 30+ years old and can observe the amount of $ they left on the table by choosing not to buy.
http://www.hobokenx.com/html/modules/newbb/viewtopic.php?topic_id=13347&forum=8&post_id=99858#forumpost99858
Can anyone give me status on GSMLS 2377477?
Thanks.
honest-realtor,
Your arguements have been proved false on many occassions on this blog. stick around and you shall learn… that gold coast as lost its glitter.
Also, you may be an “honest-realtor”, but that doesn’t mean your are an “informed-realtor”.
Now, back to my burgers & dogs.
:)
SAS
sas #178,
I think I recall reading from Toll Brothers recently that one of their stronger markets is in the JC-Hoboken area of NJ.
My apologies is that has already been discussed, I haven’t been keeping up.
sync,
yes, I would agree with Toll that JC-Hoboken is there stronger markets.
But, what are they comparing it to…
Next to an orphan from India…I look like Donald Trump, but obviously..I am not.
Get the drift.
Have you driven around these areas lately? Its a ballon galore with for-sale signs.
Maybe someone can post some raw data..
:)
SAS
In previous calls w/analysts, Toll has repeatedly reported that they were “killing them” in Hoboken. I believe on their last call they didn’t mention Hoboken, but graded the NYC area market as B+.
btw, I think that article from the NY Times should be on the front page.
http://www.nytimes.com/2007/05/27/realestate/27njzo.html
I’m surprised they had such a negative article in the RE section of the Sunday times.
Presumably it was timed for this weekend, since they figured most people would be away for the weekend.
#175 honest: Most realtors are not professionals. Did you live through the last real estate down turn?
Are you telling us you know more than we do because you have some silly license?
With all due respect, did you even live in this country during the last down turn? Please stop with the silly cheer leading rhetoric.
Almost vomited after reading “honest-realtor” in #175.
But I hope more dummies listen to such realtor rhetoric, and buy at the 100-year bubble peak:
http://graphics.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
I’ll enjoy the increased inventory to choose from — on the courthouse steps.
re #176: ChiFi hit it out of the park, as usual.
My big quarrel with the Times’ article, though, is how they don’t discuss perhaps the main reason why Velocity isn’t selling. That is, the fact that Velocity is right across the street from Hoboken’s housing projects. No-one in their right minds who knows that area would buy a “luxury” condo a block away from the ghetto (and all of the problems that come along with living next door to the ghetto). I guess the NYT reporter either didn’t feel like taking a trip over to NJ to actually SEE the neighborhood where Velocity sits (usual Manhattanite condescension towards anything related to New Jersey, a misguided belief in realtor propaganda about the general desireability of Hoboken, sheer laziness, or some combination thereof?) or rattling the developer’s cage too much with some inconvenient-but-necessary questions (as in, what kind of crack were you smoking to make you think that you could get up to $800K+ for condos across the street from crackhouses?)
#186 They would have sold 2 years ago, crack house or not.
An odd story to start your day.
Homeowner in foreclosure turns home into a pig farm.
http://www.oregonlive.com/oregonian/stories/index.ssf?/base/news/1180155303269110.xml&coll=7
Sync:
MLS# 2377477
Still UC.
jb
Wishing everyone a safe Memorial Day.
Let’s all proudly fly the American flag.
I think honest realtor just has a very unique sense of humor…….thanks for the laugh honest realtor!!
AlexY (170): The biggest problem with Wanaque is that God forsaken Skyline Drive. Think long and hard before making a purchase there as there are no real arteries in or out, only single-lane roads.
This shows you how stupid people are, in times when it’s cheaper to rent than own, most people buy using subprime mortgages. Scary times ahead of us.
http://www.nytimes.com/2007/05/27/nyregion/27owners.html?ref=nyregion
Buying with a sub-prime mortgage in New York City isn’t quite as bad as buying with a subprime out in the Lehigh Valley (for example), IMO. In NYC you have the best shot of continued employment and the best shot of said employment paying well. If you don’t intend to leave NYC any time soon (ie your time horizon is long-term) the sub-prime probably won’t hurt as much.
Now, if I were to relo to Bumblefukc Nebraska for that awesome job in the only company in town… and I were to use a sub-prime mortgage to buy a house in that town, you can see how much more risky that is. NYC isn’t quite as risky. JMHO.
Happy Memorial Day to all! And, save a thought for our armed forces all over the world. Agree with the war or not, they deserve our support.
Isn’t the term “honest realtor” an oxymoron?
“Report: NYC Homeownership Rates On the Rise”
http://tinyurl.com/3c2cra
Interesting…in NYC..70% of people rent.
SAS
oh..that “honest realtor” post was a joke??
ok..ya fooled me.
SAS
gary (195)-
Aren’t you a certified moron?
#193 sync: That is very debateable.
From the AP:
Neighborhood Swayed by ‘Liar’s Loans’
Upstairs at Victory Chapel Church — a cinderblock bunker converted from a long-ago Ford dealership — the pews are reserved for praising heaven. But downstairs, in a basement rental hall, a pair of women preached of worldly wonders.
At 11 a.m. on alternating Saturdays, they set out rows of folding chairs and spread tables with urns of coffee and boxes of Dunkin’ Donuts. And they offered testimony to the bounty of real estate, encouraging their growing flock to buy the wood-frame walk-ups and rowhouses surrounding this workaday stretch of Columbia Road, just down from the OJ Car Wash.
The key was trust, they told the faithful, as the voices of the practicing choir rang through the building.
Still, Valerie Hayes was a little skeptical.
“I really was thinking it would be at least a year before I’d get a mortgage,” says Hayes, an executive secretary and mother of two. She was wary of borrowing because she was saddled with her own student loans.
But “on Saturday I went to the seminar,” she says. By Sunday, she was preapproved to buy.
Soon after, Hayes did buy. The problem, prosecutors say, is that the women put Hayes and others into homes they couldn’t possible afford. They did so by filling their loan applications with details of jobs, paychecks and bank accounts that were all so much fiction.
What happened in this church basement was no fluke; it happened elsewhere, too.
I think I have a listing that should give everyone a giggle, but I’m not sure. OLP is listed at 619k. Currently at 319k. Listing says “no lockbox – just walk the property – value in the land.”
I’d love more info on this one: MLS 2372985
200;
These quotes from that article just go to show the pitfalls of commissioned salespeople masquerading as “experts” and “advisors”.
“Often it’s not considered fraud. It’s pushing the envelope. It’s a dollop of distortion topped with a measure of creative exaggeration. It’s doing whatever it takes.
…
Of course, most real estate agents and mortgage brokers are honest.
But there have been too many in the last few years “who stretch the truth … that make deals happen that really shouldn’t happen,” says Jim Croft, founder of the Mortgage Asset Research Institute.”
the new snapper-head
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vjSp2KkNU388.asf
On Memorial Day the flag should be placed at half-staff until noon only [first hoist the flag to the peak for an instant, then lower to half mast.] From noon to sunset, fly at the top position.
http://www.senate.gov/reference/resources/pdf/ourflag.pdf
Inventory in NJ are up 2% in the last week to another record. When will this nightmare end?
When will people start dropping prices enough for others to start buying. I am definitely waiting.
Frank,
They are dropping prices… from sublime to simply laughable, so “bring your checkbook” because this “charmer” is priced to sell and “will not last”.
I’d love more info on this one: MLS 2372985
10 cedar street riverdale – 109 dom
5/18 changed from:619,000
NEW CONSTRUCTION! BRAND NEW BI-LEVEL FEATURES MEIK, FORMAL DIN RM, LR W/FPLC, HUGE FAM RM W/FPLC, MULTI-ZONE HEAT & C/A, OVERSIZED 2 CAR GARAGE, POSSIBLE MOTHER/DAUGHTER SET UP – PLUS MORE TO ENJOY!
To:319,000
VALUE IN THE LAND! HOME BEING SOLD AS IS. NO LOCK BOX-JUST WALK THE PROPERTY..
KL