From Bloomberg:
Bernanke Says Tighter Lending Will `Restrain’ Housing Demand
Federal Reserve Chairman Ben S. Bernanke said tighter lending standards for mortgages will “restrain” housing demand for longer than policy makers anticipated.
The Fed chairman noted that the housing slump hasn’t spilled over into other parts of the economy and he maintained a forecast for “moderate” growth. Government and industry reports this month showed acceleration in job growth, manufacturing and personal spending and gains in business investment.
“The slowdown in residential construction now appears likely to remain a drag on economic growth for somewhat longer than previously expected,” Bernanke said in the text of remarks via satellite to a conference in Cape Town, South Africa. As subprime mortgage lenders make it tougher to get loans, that will “restrain housing demand, although the magnitude of these effects is difficult to quantify,” he said.
Fed officials have repeatedly cited housing as a threat to their forecast for faster growth this year. At the same time, they continue to view inflation as the biggest risk, keeping interest rates unchanged since last raising them a year ago. Economists and investors abandoned forecasts for a cut as signs of strength emerged in other parts of the economy.
“Although core inflation seems likely to moderate gradually over time, the risks to this forecast remain to the upside,” Bernanke said. Price increases remain “somewhat elevated,” he said to the International Monetary Conference today.
Minutes of the May 9 Fed meeting released last week noted that the housing recession would continue longer than officials had anticipated. By contrast, Fed officials in January they cited “tentative signs of stabilization” in home sales.
…
Home building has fallen for six consecutive quarters, the worst slump since 1991. Residential investment also lopped almost a percentage point off of economic growth in the first quarter. Building permits in April fell to the lowest level in almost a decade, the Commerce Department reported last month.
…
Bernanke said in his speech he’s open to imposing tougher regulation of lenders to prohibit “unfair” practices.The Fed, which has authority to write rules for all lenders, is under pressure from Congress to further restrict predatory lending and toughen up standards. The Fed’s Board of Governors in Washington will hold a public hearing on mortgage rules next week.
…
“Combating bad lending practices, including deliberate fraud or abuse, may require additional measures,” he said today. Still, the Fed must “walk a fine line” on regulation, Bernanke said, repeating remarks made in Chicago last month.The Fed chief noted that he favors better disclosure and consumer education, and said regulators will continue to use supervisory guidance to remind lenders of standards.
“We have an obligation to prevent fraud and abusive lending,” he said. “We must tread carefully so as not to suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.”
From MarketWatch:
Treasurys open lower; Bernanke sees moderate growth
Treasury prices opened lower Tuesday, pushing yields higher, after Federal Reserve Chairman Ben Bernanke said he anticipates moderate growth ahead. “On average, over coming quarters, we expect the economy to advance at a moderate pace, close to or slightly below the economy’s trend rate of expansion,” Bernanke said in remarks prepared for delivery to a bankers’ conference in Cape Town, South Africa. Bernanke said some of the factors that slowed the economy to a crawl in the first quarter “seem likely to be at least partially reversed in the near term.” These remarks, plus a continued stress on inflation, suggested to some that the economy is too strong for the Fed to consider a rate cut. At 10 a.m. Eastern the market will view the Institute for Supply Management’s services sector survey for May. The 10-year benchmark Treasury note last was down 5/32 at 96-16/32 with a yield of 4.950%, up from 4.927% at Monday’s close
From MarketWatch:
Bernanke sees moderate growth
Fed chief Ben Bernanke was fairly upbeat about the outlook for the U.S. economy, saying he expects moderate growth in coming months.”On average, over coming quarters, we expect the economy to advance at a moderate pace, close to or slightly below the economy’s trend rate of expansion
Economists generally agree the economy’s trend rate of growth is around a 3% real gross domestic product annualized rate. Bernanke said some of the factors that slowed the economy to a crawl in the first quarter “seem likely to be at least partially reversed in the near term.”
Also:
Bernanke: Home price drops limited to prev. hot markets
Bernanke: Housing demand has weakened so far this yr
Bernanke: Inflation risks remain on upside
Bernanke: Housing drag will last longer than thought
Bernanke: Factors holding down Q1 GDP to be reversed
Bernanke sees core inflation ebbing, but level elevated
From the NY Post:
HEDGE FUND BEAR-ISH ON SUBPRIME RELIEF
A big hedge fund on one whopper of a winning streak is picking a bitter fight with Bear Stearns over whether renegotiating loans for homeowners struggling with subprime mortgages is fair play.
Paulson & Co., an $11 billion hedge fund, has written regulators over concerns that Bear and other investment banks may be engaged “in market manipulation” when the banks’ mortgage-issuance units modify loans so that homeowners can avoid foreclosure.
The Madison Avenue-based Paulson is ready to do major battle.
It penned letters to the Federal Reserve and Commodity Futures Trading Commission and hired former SEC Chairman Harvey Pitt to provide legal advice, according to The Financial Times.
The letters make no bones about the threat to the value of Paulson’s trades from what it called “uneconomic transactions.” Also signing at least one letter were representatives from hedge funds Hayman Capital Partners and Elliott Associates.
…
subprime securities.
Paulson bought about $1 billion worth of this “insurance” as bonds, backed by subprime mortgages, declined in value, and he locked in a home run, collecting an amount roughly equal to those declines.
But the alleged $1 billion in paper profits that Paulson’s fund has made is being jeopardized as the ABX index has begun to march upward, rallying to 83 from a low of 73 in February.
More ominously, dozens of other hedge funds have shorted billions of dollars worth of ABX index derivatives and bought credit default swaps. Should there be an unexpected upward move in the ABX index, dozens of hedge funds would seek to cover their shorts, likely forcing prices sharply higher.
Soft landing for the economy, a hard landing for housing?
jb
JB Too early to say yet for the economy, definitely hard landing for housing, at least in in the former hot areas, but with the economy its still early.
I would think much of the rampant consumer spending was doen in the former hot markets,and the reality is just setting that the party is over.
Not sure that has spilled into consumer spending yet.
Housing
In addition to a brief overview of the U.S. economic outlook, Bernanke devoted most of his speech to developments in the housing market.
Bernanke said a close reading of the housing market data indicate that demand for housing has weakened over the first four months of the year.
Housing prices remain quite soft this year, but for the most part outright price declines have been concentrated in markets “that showed especially large increases in earlier years.”
Tighter lending standards in the troubled subprime mortgage market will likely restrain housing demand going forward, he said.
There are also likely to be further delinquencies and foreclosures in the next two years as many adjustable-rate subprime loans face interest-rate resets.
“However, fundamental factors – including solid growth in incomes and relatively low mortgage rates – should ultimately support the demand for housing, and at this point, the troubles in the subprime sector seem unlikely to seriously spill over to the broader economy or the financial system,” Bernanke said.
The new FICO modifications are going to add another layer of tighter standards to the mix. I have no doubt that many individuals are going to see their FICO scores fall when the new rules are put in place. The “authorized user” trick is very commonly used to raise the joint score when one spouse has poor credit, but the other good. There is another alternative that would accomplish the same thing, adding the spouse as a joint cardholder. Fair Isaac hasn’t mentioned anything about eliminating this. However, this will require that the spouse be approved to be a joint cardholder. Those carrying balances may see a significant jump in rates when adding their bad-credit spouse. This wasn’t the case with the “authorized user” trick.
From the AP:
Fair Isaac excluding some accounts from FICO scores
Fair Isaac Corporation says the next version of its widely used FICO (FYE’-koh) score will no longer consider certain types of credit card accounts.
The Minneapolis-based company is closing a loophole that allowed strangers to coattail on a cardholder’s good credit.
The new FICO score formula won’t include authorized user accounts, which are users on credit cards who are not responsible for paying the balances but are approved to make purchases with the cards. They’re often college students on their parents’ cards or spouses who have little or no credit of their own.
These types of accounts can improve a credit score when used properly, but there’s a growing practice of people with bad credit piggybacking on the strong payment histories of other credit card holders.
From the Record:
Arrests double in crackdown on illegal immigrants in N.J.
Immigration arrests in New Jersey have more than doubled in the last two years, an upswing that is likely to continue with the imminent addition of more agents devoted to arresting and deporting illegal immigrants.
In the last year, immigration agents arrested 1,772 people in New Jersey living in the country illegally. The year before — May 2005 to May 2006 — they arrested 860.
Of the federal agency’s 24 field offices, only one in Los Angeles and another in Miami surpassed the Newark district in the number of arrests.
The hike in arrests shows “how seriously we take the issue of trying to locate and take into custody these fugitives,” said Scott Weber, field office director in Newark for U.S. Immigration and Customs Enforcement (ICE). The arrests are part of Operation Return to Sender, a two-year-old nationwide program to reduce illegal immigration. Nationally, the number of illegal immigrant arrests also doubled in the same time frame. This summer, ICE plans to add a third enforcement team in the Newark field office. A spokesman wouldn’t say how many agents are on a team.
The crackdown comes as local public officials wrestle with what to do about the growing number of illegal immigrants who have settled in their towns.
Those who favor strict immigration enforcement praise aggressive efforts such as Operation Return to Sender, but want more.
From MarketWatch:
Bernanke upbeat about U.S. economic outlook
…
Housing
In addition to a brief overview of the U.S. economic outlook, Bernanke devoted most of his speech to developments in the housing market.
Bernanke said a close reading of the housing market data indicate that demand for housing has weakened over the first four months of the year.
Housing prices remain quite soft this year, but for the most part outright price declines have been concentrated in markets “that showed especially large increases in earlier years.”
Tighter lending standards in the troubled subprime mortgage market will likely restrain housing demand going forward, he said.
There are also likely to be further delinquencies and foreclosures in the next two years as many adjustable-rate subprime loans face interest-rate resets.
“However, fundamental factors – including solid growth in incomes and relatively low mortgage rates – should ultimately support the demand for housing, and at this point, the troubles in the subprime sector seem unlikely to seriously spill over to the broader economy or the financial system,” Bernanke said.
BC Bob or others – have you heard of GoldMoney.com? Any alternatives in buying gold (other than ETFs or gold mining stock)
Mr. BErnanke th issue is affordability. That is why th emarket is dead in the form er hopt areas. Plain and simple.
Solid growth in incomes? That is in 2 words very debateabale.
From Inman:
Critics come down on commissions
Real estate commissions once again are at the center of debate. A recent “60 Minutes” television segment on commissions and a report issued jointly by the Justice Department and Federal Trade Commission have prompted dialogue around the questions, “Are real estate commissions too high?” and “Does the industry create artificial barriers to lowering them?”
While some forms of discounted real estate services have been around for decades, the Internet has enabled some brokerage firms to instill efficiencies, which they say allows them to cut costs and pass savings onto consumers.
But critics within the industry argue that these efficiencies many times are at their expense. Many discount firms, they say, are able to cut costs by shoving the workload onto the agent working the opposite side of the deal.
Further complicating the debate is a lack of information about commission rates, and recent data indicates the median income of Realtors has decreased.
…
Mark Nadel, a government lawyer not affiliated with the DOJ or FTC, last fall published a draft research paper at the AEI Brookings Center, arguing that the percentage-based commission structure is off-base and doesn’t serve to motivate seller agents to obtain higher prices for homes.
In a typical real estate transaction, the home seller pays a percentage of the home-sale price to his agent (typically 5-7 percent), who then splits the fee with the buyer’s agent. Nadel says it’s counterproductive to reward the buyer’s agent because the listing agent was able to get a higher price.
“I believe that the traditional structure is going to collapse in five years,” Nadel said in an interview with Inman News. He feels that consumers and real estate brokers alike would be better served by a non-percentage-based model such as a flat fee or hourly service charge and that buyers should be able to negotiate fees with their own brokers.
“I’m not the first person to suggest this fee-for-service model,” he said, pointing to Julie Garton-Good, a real estate educator, author and broker, who has said that agents often give away what is most valuable while charging for relatively routine tasks.
From the Fed:
The Housing Market and Subprime Lending
Remarks by Chairman Ben S. Bernanke
To the 2007 International Monetary Conference, Cape Town, South Africa
(via satellite)
June 5, 2007
#11 I need another cup of coffee.
Grim (3)-
Hard to have sympathy for hedgies, but they have a point. I can assure you that all kinds of individual “workouts” are being done to keep people from defaulting on their mortgages.
To the extent that these workouts represent “uneconomic” transactions, I agree with the hedgies. They are a manipulation of the game that yield a forced result.
Builder Bailout – a different type of mortgage fraud
Three Charlotte-area builders will forgive almost $2 million in mortgage loans they made as part of a scheme to sell homes that the buyers couldn’t afford…These were unusual mortgage loans…they were set up without the knowledge of the borrowers. The amounts were small. And there was no attempt to collect monthly payments…But in the strange world of mortgage lending, these loans ranging from $24,000 to $37,000 allowed the recipients to qualify for larger loans from other companies. With that money, they paid for homes.
http://www.charlotte.com/business/v-print/story/147609.html
RentL0rd Says:
June 5th, 2007 at 9:04 am
BC Bob or others – have you heard of GoldMoney.com? Any alternatives in buying gold (other than ETFs or gold mining stock)
R: I bite my tongue – HARD! :(
Grim (12)-
“…But critics within the industry argue that these efficiencies many times are at their expense. Many discount firms, they say, are able to cut costs by shoving the workload onto the agent working the opposite side of the deal.”
Surprise, surprise: an ill-paid, unskilled, overloaded agent from an internet scam RE agency doesn’t (or can’t) actually DO anything…and his client must turn to the agent on the other side of the transaction for assistance? Who woulda thought it (LOL)?
Real-life scenario that’s happening in TX and OH: the agent on the other side of the deal helps a principal represented by a no-skill company. Then, that agent’s principal sees what’s going on and sues the agent for breach of fiduciary obligation for helping the other party.
I’ve allowed two deals to die in the past few years, because I would not help a principal who was represented by an internet scam agency. One was a seller who actually asked me how to negotiate home inspection issues against my own client!
Off to breakfast and then the airport. Can’t wait to get back to civilization.
jb
#8 – With the slow down in building and home improvement, illegals are going to struggle to find work. Desperation could lead to an upsurge in crimes. There could be lots of public lashback if this happens and the roundups could get ugly.
chifi #17, why?!
Here’s more on why I am asking –
I was actively looking for the last month and close to making an offer. But sellers dont want to accept my 15% off offer. So, I am thinking of sending my kids to private school, and doing my math – I will still come out ahead.
Meanwhile, my inflation-hedged funds have returned an average 16% YTD :)
The downpayment is gathering dust at 6% interest (not bad, but pales in comparision to the other douh).
With the way the dollar is winding down, there is one theory that at some time in the near future there may be some private institute/foreign govt that may back their currency with gold… and according to the same theory if you own gold you will be well rewarded.
So, thinking of diversifying 10 – 15% in Gold and let my returns pay the rent.
What say?
#20,
You’re describing what happens during a recession. This happens with immigrant’s and US citizens as well. Blue collar and white collar. You don’t have any money, you can’t make rent/mortgage you have to feed yourself and your family so you do what you have to do.
Statistically crime will increase with every recession. Whether you deport 2000 people will have no effect on crime.
Everyone seems to forget that this nation is build by legal and illegal immigrants.
My dad was illegal for the first five years when he got here 35yrs ago.
So, thinking of diversifying 10 – 15% in Gold and let my returns pay the rent. What say?
RL: That is a lot of allocation to a hunch….
chicagofinance Says:
June 5th, 2007 at 10:22 am
So, thinking of diversifying 10 – 15% in Gold and let my returns pay the rent. What say?
RL: That is a lot of allocation to a hunch that you have no more particular incremenral insight than the next person……
Bost, clot & SAS are going to take a tire iron to me :(
#24 true. But what do you see at the end of the tunnel for the dollar?
Do I see a little daylight in there? Some term premium? Got to scream at it like a golf ball…..GET UP! GET UP!
3-Month 4.82
2-Year 4.99
10-Year 4.97
RentL0rd Says:
June 5th, 2007 at 10:28 am
#24 true. But what do you see at the end of the tunnel for the dollar?
RL: I don’t know, but I do see USD denominated liabilities for RentL0rd, so I do not see the huge need to tacitly short the USD.
RentL0rd Says:
June 5th, 2007 at 10:28 am
#24 true. But what do you see at the end of the tunnel for the dollar?
RL: I don’t know, but I do see USD denominated liabilities for RentL0rd, so I do not see the huge need to tacitly short the USD.
Nothing Wrong With Buying A Flip As Long As It Is A Good One
Flips. You can almost spot them from the listing sheet. They tend to be among the smaller homes in an area and the listing sheet highlights the fact of new carpet, new appliances, and/or fresh paint. Sometimes a major selling point is that a buyer can “rent to own.” And the houses are almost always vacant. Flips are beginning to crowd the market as home sales slow. Investors who mistimed the market are finding that it is taking much longer than they planned to resell their property. So why should a buyer care if it is a flip? Several reasons. First of all, from the perspective of a bargain hunter, a “motivated” seller is sometimes a fairly desperate seller. The deed will tell you when the house was purchased, by whom, and for how much. The “by whom” can tell you a lot. Is the house owned by an individual or a company? If it is a construction company they will have a quite different expense ratio for any work they did on the property than will a non-builder. If it is one of those companies that advertise they buy houses, they may have deep pockets that will make them poor candidates for a cutthroat negotiation.
http://www.mortgagenewsdaily.com/652007_Flip_That_House.asp
Did Mr. Bednar post a link to the WSJ article from yesterday about credit score piggybacking? (i.e. repairing your credit score by “renting” one or more authorized user credit cards from a person with 800+ FICO score). One guy (retired Army) was pulling down $2500/mo doing this.
I had no idea that such a practice was remotely legal. Personal ethics are a dead, dead letter in this country.
“Soft landing for the economy, a hard landing for housing?”
I’m afraid those two birds are of a feather and will therefore flock together.
#31
Yes – he did.
#s 20 and 22
Furthermore, the crime rate among immigrants is actually LOWER than the crime rate among citizens.
Bank Of Spain Sells 28 Tons Of Gold In May From Reserves
http://www.streetinsider.com/Basic+Content/Bank+Of+Spain+Sells+28+Tons+Of+Gold+In+May+From+Reserves/2417689.html
—
From the wiki, it looks like Spain sold about 200 tons which is 40% of their gold reserves in the past 2 years.
#22 make money.
My dad was illegal for the first five years when he got here 35yrs ago. ” Yes, but your dad assimilated and became a naturalized citizen.
My old man came to the USA and joined the ARMY during the Korean war. This was his ticket to becoming a naturalized citizen and getting a college education. Yes, that makes me a first generation American. NOT a HYPHENATED first generation AMERICAN. Oh and let me add my father did not poses desirable work skills that would have fast tracked the immigration process.
I work with people who are here with H-B1 work visas. They are here legally pay taxes, social security and are afforded most of the same privileges as you and I without having to be in constant fear of being deported. Yet if someone is here illegally, therefore breaking the law, we make excuses for their actions and blame the government for taking action.
Don’t forget to Vote today! If you want change in Trenton vote out the incumbents!
VOTE VOTE VOTE
ChiFi (25)-
Au contraire…I’m spread across minerals, oil, metals and commodities as a conscious, speculative overweight. I realize full well what can happen to me if the trade goes the other way (won’t be pretty). Our friend, Mr. Rent, however, seems to be thinking of loading up with more than just “mad money”.
With all due respect, I feel Rent is putting too fine a point on this. His occupancy horizon seems to be much longer than this downturn will last; trying to hold out and time a bottom (or get tomorrow’s 15% off today) may result in only an incremental savings…or possibly no savings at all, when measured over the time of his stay in the home he eventually buys.
Add to that a quasi-spec gold play (that also carries a risk that may not be to his tolerance), and this whole scenario veers into the realm of dice-roll.
I’m no CFP, but I smell overthinking.
bear,
Spain is a keg of dynamite. The gold sales were not an adjustment to reserves. They are also selling US treasuries. They have a massive current account deficit. Their debt bubble, both corp and individual may be worse than ours. They may be staring at a future banking crisis.
IMO, we could see see a bit of upside for gold if China invests a mere 5% ( 1.2T * 0.05 = $60B = 3000 tonnes) of its reserves in gold.
http://en.wikipedia.org/wiki/Official_gold_reserves
Rent-
I think BC would concure with me on this: there will be a sucker rally in the dollar…and a concurrent gold dump before gold’s next leg up to $1,000. It will take iron onions not to hit the “sell” button when this thing hits.
Rent-
I think BC would concur with me on this: there will be a sucker rally in the dollar…and a concurrent gold dump before gold’s next leg up to $1,000. It will take iron onions not to hit the “sell” button when this thing hits.
looks like after the 8 years of George Bush, you can bet that the dems will win with anyone on their ticket. This will set the wheels in motion for the next generation of over sensitive, entitlement oriented America to come up with more restrictions on what you can’t do and what the government has to regulate. No one will take responsibility for anything. Taxes will go up to pay for it all. And, as I always said, it will eventually become a crime to hurt someones feelings…
In the future, violent criminals will be rehabilitated while people who forgot to wear safety equipment will serve 10+ years in prison. Watch…it is coming…
Rent,
I don’t know anything about that website.
I am pretty active with the metals. That said, I don’t speclulate with my house dp.
I understand your feelings on the dollar. However, I would not go into Gold because you hear that a foreign currency will be backed by it. I have not heard this, at least any credible information. It seems like the foreign currencies are doing fine, with the exception of the yen and swiss, carry trade.. Maybe the US dollar needs to go back to the gold standard.
This can be a whole blog by itself. Get my email from JB and send me a note.
#22 – If white and blue collar citizens get laid off then they get other jobs…maybe not the ones they want but something to pay the bills. Illegals are mostly day laborers in construction so the options are much less. It would only take a hit to the construction businesses to see the illegals in bad shape. This is happening now.
By the way. It now costs our treasury dept over 9 cents to produce a nickel. Don’t try to run out an buy a boatload and melt down. They’ll pin your *ss to the wall.
njrebear Says:
June 5th, 2007 at 11:52 am
IMO, we could see see a bit of upside for gold if China invests a mere 5% ( 1.2T * 0.05 = $60B = 3000 tonnes) of its reserves in gold.
njb: The China USD surplus SHOULD be spent on [their] domestic infrastructure improvements. Just because they have cash sitting around doesn’t mean that it will sit around forever. Sure they can use their cash hoard to buy gold, but they would also trash this country in the process. This course of action is hardly a recipe for Chinese National Prosperity.
Stop listening to snake oil salesman’s pitch…..gold just sits their and does nothing, you are speculating on pure capital gain…….why don’t you just buy a Picasso or something…..
Here’s what I don’t get: a few posters have said that in bergen county, lots of buyers in the last few years used ARMs and put little or no money down.
How do we know this? Is there any way to actually find out something like: in Glen Rock in 2004, 101 houses were bought with ARMs. If this info is out there, how come a newspaper hasn’t uncovered the s*it storm that is about to hit some of these towns?
I’m a numbers guy, and these are numbers i’d like to see. The ones i see now – overpriced houses, nobody budging, etc – are ugly.
Stock market is ugly today
BC #44 – thanks.
Like Clot said, i’m probably over thinking. But, this is not going to come from the house dp.
#46 – that is precisely what Peter Schiff suggests … hoard nickles ;-)
“gold just sits their and does nothing, you are speculating on pure capital gain”
Chi,
Didn’t want to discuss. However, you threw me a hanging curve.
Gold- Not affected by hidden coordination, fudged stats, gigantic/irresponsible creation of money, it is not buried by vast quantities of soverign debt and is not affected by corrupt corporate management or incompetent politicians. It is backed by intrinsic value not by a good faith and a promise, which is currently running at approx $60 trillion.
2000- 42 Oz of gold to buy one share of the Dow.
2007- 20 Oz of gold to buy one share of the Dow.
Record high Dow in US dollars. Priced in gold, it has crashed 50%.
#36 “Yet if someone is here illegally, therefore breaking the law, we make excuses for their actions and blame the government for taking action.”
OK, you said that your Dad didn’t have a special skill so he had to go to war to get legal status which means he was illegal.
Should he have been deported, you’d be a foreigner living in a third world country. Instead, your dad got himself a college degree paid taxes his whole life, you have a degree(assume) you’re a responsible citizen and tax payer etc
Why do you think it was OK for your Dad to become legal and you live the American dream and not for some guy coming out of Latin America or the Far East. They want the same thing for themselves and their family that your Dad wanted for himself and you.
BC, #51
Great Post. I’m impressed that it was you that wrote that. Did you copy and paste from the internet?
BC, #51
Great Post. I’m impressed that it was you that wrote that. Did you copy and paste from the internet?
make,
I’ve been long this market since 2003. Those are just a few reasons why. I copied from my initial risk/reward analysis. Just pull up a chart and compare Dow/Gold from 2000. Nothing creative about that.
#48 I want to know the same thing.
Out of all the ARMS scheduled to reset, how many are in NNJ? Further more, Out of all the sales since 2000, the % of Down payment and type of mortgage broken down town by town.
This info will cause sellers to lower prices if they find out that all the comps in their town were bought with 5% down and exotic mortgages.
Further more, for those so called exceptional prestige towns I want to know the average total debt on their home.ex: Mortgage+home equity loans)
From Bloomberg:
Two-Year Treasury Yield Rises to 5 Percent, a Nine-Month High
The two-year Treasury note’s yield touched 5 percent for the first time since August after an unexpected gain in a gauge of service industries prompted traders to undo bets that the Federal Reserve will cut interest rates.
Traders who a month ago were convinced the Fed would lower its target for the overnight lending rate between banks at least once by year-end now see almost no chance of that happening, interest-rate futures yields show. The increase in the Institute for Supply Management’s index of non-manufacturing businesses follows stronger-than-forecast reports on employment and business activity in the past week.
Out of all the ARMS scheduled to reset, how many are in NNJ? Further more, Out of all the sales since 2000, the % of Down payment and type of mortgage broken down town by town.
This data is rare and difficult to come by. Typically, it would require a subscription to an analytics service or industry-wide database. I believe the last time I looked into getting a copy of the most recent dataset it was close to $2,500.
jb
…as I sit here in PHX waiting on a 2+ hour delay due to “conditions at Newark”…
At least wifi is free here.
jb
#48 Looking in NNJ Says…
There was a graphic, I think on nj.com that shaded northern NJ based on ARMs. As you can imagine, it was much the same as the rest of the country – the closer you got to the not-so-nice areas (Paterson, Passaic, Hackensack), the darker the shading. The Upper Saddle Rivers/Alpines had the least. Anyone have a link to it?
Conditions at Newark?? It is sunny with some clouds and a bit of wind….
JB #58,
Why not media look into it. Every journalist worth something should look into something like that.
Every housing forecaster/economist should needs these numbers to acurately make a prediction. Why not publish the research behing your forecast?
#49 2010: Why did you change from 08 to 10?
>>Stock market is ugly today
i hope it gets uglier so i can buy on the dip. i’ve been employing this strategy for the last 2 years and i’ve made money every time.
BC Bob Says:
June 5th, 2007 at 12:53 pm
“gold just sits their and does nothing, you are speculating on pure capital gain”
Chi, Record high Dow in US dollars. Priced in gold, it has crashed 50%.
Bost: Gold has run up, but it has more to do with its “speculative” value than instrinsic value. I think that you will be shocked by the [unexpected] level of correlation it will have to other markets in a futre selloff – reason – same investors have followed the same strategy for insurance – hence, the ability to hedge has been “arbed” away. Blame Goldman’s private wealth group for starting this problem and ETF’s for exascerbating it.
From MarketWatch:
Goldman had been predicting 3 rate cuts in 2007
1:33 PM ET, Jun 05, 2007 – 3 minutes ago
Goldman Sachs sees no Fed rate cuts this year
1:31 PM ET, Jun 05, 2007 – 5 minutes ago
make,
The link was in the APP:
http://www.app.com/multimedia/maps/20070318_subpr/
The problem is that it was based on 2005 data.
jb
On Wednesday, 1,300 home builders will call on Capitol Hill …”For the first summer in many summers, we’re not helping to keep unemployment numbers down,” says Jerry M. Howard, 51, the NAHB’s chief executive. “For the first time in six years, we are a drag on the economy rather than a plus.”…One area of potential exacerbation: immigration. The NAHB has come out strongly against the proposed immigration overhaul now being considered by the U.S. Senate, particularly its portions cracking down on employers that hire illegal workers, directly or through subcontractors.
http://www.forbes.com/2007/06/04/congress-nahb-immigration-biz-beltway-cx_atg_0605homebuilders.html?partner=daily_newsletter
I’m in the middle of testing some changes to our system for B-C second mortgages at Chase that are coming down the pike. They will no longer be offering 2nd mortgages with less than 640 credit score, which is essentially stopping doing all B-C 2nd mortgages altogether. Credit wrench is tightening for sure
JB,
Since you may have time to kill, why don’t you favor us with a few impressions of Phoenix/Scottsdale? Any For Sale signs?
They still building out the desert like there’s no tomorrow? When I visited friends last spring, my host (a Jersey transplant) told me one day Phoenix and LA will be one vast megalopolis. They’ve been building east as fast as they can put up road signs and relocate the protected saguaro cacti.
Too bad the Colorado river will be reduced to a trickle by the time they’re done.
Chi [65],
True. However, along with the speculation there are fundamental/technical reasons to own, dollar. As we all know the dollar is not down as the result of speculation. I won’t be shocked with any correlation because now it’s one big play. We saw this on Feb 27. I’m betting that there will be a future disconnect. That said, I own insurance if I’m wrong.
sorry, make that building west from Phoenix.
From Reuters:
Fed’s Warsh-Too soon to say subprime woes over
The troubles of the U.S. high-risk mortgage markets seem to be contained but it is too soon to say they are over, Federal Reserve Governor Kevin Warsh said on Tuesday.
“The tumult that we found in the subprime market of the ’06 vintage, those problems seem to be contained in my view,” he told a seminar at the European Economics and Financial Centre.
“We haven’t seen major slippage, even in the broader housing market or in the broader credit markets.”
However, he was cautious on calling the end of the downturn in the U.S. housing market. “It would be premature for us to call that chapter complete,” Warsh said.
RentL0rd: On you Gold question. Have you looked at GLD. Its an ETF.
“2008 Buyer” is now “2010 Buyer.” HA!
Good luck waiting. Tell me when you become “2012 Buyer”
Hey Clotpoll,
Sorry that you think my house is overpriced, but I live in a more expensive county than you do. Please do not use Hunterdon/Somerset County prices when evaluating Bergen prices.
JB, that was the graphic. Thanks.
“Mr. BErnanke th issue is affordability. That is why th emarket is dead in the form er hopt areas. Plain and simple.”
Are grammar and spelling also issues?
I changed my name because I don’t plan on buying in 2008 and because of the number of 5 yr arms originated in 2005 with the first reset in 2010. The numbers dwarf the proposed $1 trillion in resets to slated to begin later this yr. That’s about all I can say about it.
JB,
The article about real estate commissions means nothing. NAR is one of the biggest financial contributors to Congress. If you don’t like paying 5-6%, then use Foxtons or one of those flat fee agencies that list your house in the MLS for $500.
2010 Buyer,
Not everyone took out 5 year ARMS. Lots of people, such as myself, took out 30 year and 15 year fixed mortgagaes. We were smart and do not have to give our house away for pennies on the dollar.
Donald….
to me ROI is important when determining what asset I want to invest in. And I’m not saying that my house is an investment but I like to get into it “in-the-money” sort of speak. There are some bargains out but nothing that has caught my attention just yet. If in 2010, I still haven’t found a bargain and have other places to make money then I just may change my name to 2012.
I’ve been following this blog for the past few months and I was curious what you all think will happen to rental rates?
With so many impending foreclosures and others homeowners struggling to make ends meet, the demand for rental residential space will increase in demand and supply should drop. A lot of you bubble bloggers are renters and I commend you for continuing to rent until prices bottom. Unfortunately, I expect your rents might increase a bit quicker than you would like in the interim.
The reason I ask this question is due to my unusual situation. In late 2004, my wife and I purchased my first home (a 2-family) in Montclair where we had formerly been renting. We bought it from the brother of the deceased owner at about 20% below true value when you factor in the realtor commission, if there had been one. We put down the requisite 20% and have no problem meeting our current mortgage obligations (it sure helps that we have tenants footing over a 3rd of the bill). The taxes have gone up about 30% in the last 3 years due to a reval where all the multi’s got hammered, but my wife and I are frugal savers.
I used to commute to lower Manhattan via rail and my wife still rails to Midtown, but I was recently promoted and now work out of an office in Union. With this in mind, we would like more space and are considering a departure from the tax hell we know as Essex County. Don’t even get me started on the stupidity of building an ice arena, sans basketball team in downtown Newark. Well, we are left with the choice of selling our 2-family in Montclair or renting both units. Currently, the property should be close to break even with 2 rent roles, but this ties up our downpayment. We do get to keep the tax breaks though. The downside is that as home values decrease, we lose that great 20% discount we earned by getting in with such a good deal.
We do have enough saved to make another downpayment to purchase our Madison/Chatham/Summit home, but plan to wait at least 2 more years for prices to drop.
So the question of rental rates and which direction they are heading is key for us to make the wisest decision.
What do you all think?
And up above, someone posted the decription of a chart of towns with ARMS. The bulk of these loans are in low income areas. If you want to live in an upper middle class area, the ARMS are not going to have an impact on the price you pay.
Donald
LOL…I’ll bite. Let’s rehash this convo about ppl not taking out ARMs to get into a house around December
Ahh,( make money)
I was very careful in choosing my words. I did not make any mention of race and or national origin in my comments. I would also caution you not resort to race baiting as it detracts from any possible rational dialog.
I am thankful and I am sure you are as well, for the hard work and sacrifices our parents made to ensure that we would be better off then they.
What makes this country great is the multicultural assimilation that make us Americans.
The (aka) Donald is back! Thanks for the laughs.
If you want change in Trenton vote out the incumbents!
VOTE VOTE VOTE
#83,
You are missing the big picture. What happens if one of your tenants decides not to pay their rent? What happens if an apartment goes vacant and you lose one of your rent checks. My suggestion, although you might disagree with it, is to either:
a) Keep living in the house with the tenants
b) Sell the house and buy elsewhere
what do you guys think will happen in the Sopranos finale. I heard an interesting comment that Sil is the turncoat. Phil said they were going to take out the NJ family and take the “remaining earners” that are left and move on.
Some interesting points:
– in the beginning of the episode, why didn’t Sil ask for Tony’s go ahead before taking action on someone who was supposedly trying to turn him. was he simply covering his tracks?
– Sil mysteriously left his phone off at a time when a major hit on Phil was taking place
– after the shooting outside the Bing, Sil appeared to be dead but later on Paulie says noone can see him? could he be on the lam until the family’s wiped out
– Sil tells Tony that Phil can’t be found then says something like “the underground they call it”. Tony asks “who??” and Sil responds with an awkward “it’s an expression”
– in the hideout, there’s an eerie cutout of Sil. will this play a part in the final scene?
did he miss the power of being “the boss” while Tony was in a coma? did he start questioning Tony’s leadership when he came out of the hospital?
Also, You are nto going to lose the 20% discount you got because home prices did not depreciate anywhere near that much. You will be able to keep at least half of it, if not more.
Another thing: Good luck in finding those low taxes. NJ has the highest property taxes in the country. If you want discount taxes, try Alpine.
#88,
How about keeping the discussion focused on real estate? Thank you!
Donald,
It’s been 3 years and the rent has always been paid on time. I might need to remind you that this is Montclair, not Staten Island ;)
It is a distinct possibility, but highly unlikely.
I’m from the camp, where I’m willing to let the apartment go vacant for 2 months waiting to find the credit worthy tenant. By the way, my tenant signed on for another 2-year lease this past September. They are representative of so many of the participants here. They want to buy their first home, but can’t save enough for a 20% down payment.
cf (47),
If i had $40 million to spare, i would have bought myself a modern painting. :)
I’m not holding 100% of my assets in gold. IMO, a 3% allocation of your total assets in gold is not a bad bet.
Stu,
What happens if one of the apartments go vacant? People move. I lost a tenant when I was a landlord in lower Manhattan. I never found a new one so I ended up selling the place.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/03/REG3HQ5K8Q1.DTL
I am also in the same situation as you are, by the way. I own a 2 family house in Brooklyn. The house has been in the family since 1981, when it was purchased for about $50,000. I rent the house out, but I am not dependant on the rent since there is no mortgagae and the taxes are only (are you sitting down for this?) $4,500 a year.
Re: post 67 (Grim-provided chart with NJ subprime loans in 2005)
JB -if that is what you provided, I suspect that is the best information available, but similar to others, I am curious about the non-subprime “alternative” loans in the various “premium” towns (such as alt-A loans and other ARMs that were not “subprime”). For example, I know many people with high credit scores (whose loans would not be subprime) but with low enough incomes that an interest re-set may prove disastrous.
while #88 is a bit troll-y –
it is quite interesting. that does make sense. that’s probably why David Chase has been distracting us with Paulie. he wants to maintain the suspense with Sil. although we want to believe that the characters we’ve gotten attached to and believe to be honorable, loyal, etc. they are in fact criminals. Sil is no exception. brilliant!
by the way, check out Donald #90 trying to reprimand a troll! priceless!!! LMFAO!!
If I had $40 million, I would spend the bulk of it on this:
http://njmls.com/cf/details.cfm?mls_number=2709885&id=999999
The remainer of the money I would use to buy luxury cars and a private jet.
So everyone,
How much of a lowball should I offer Mr. Simmons for his $23,888,000 mansion? :-)
99
Donald is that the Perillo estate. (Perillo tours)
Nope, that house belongs to Russell Simmons. It was on MTV Cribs a few months ago.
Check out the link below:
http://www.gossipish.com/kimoraleesimmons_house.html
http://bp0.blogger.com/_VMSUn2TMfXo/Rl2iwIhVIaI/AAAAAAAAAVQ/JBQ3V6Vr_J4/s1600-h/crybaby.jpg
friskie eating bunch after begging for a bid.
#83
I think at lot of rental inventory is coming on the market. For example, a lot of new condos that were built to be sold are coming on as rentals now. There are lots of “accidental landlords” too who can’t sell their houses/apts and are now trying to rent them.
I don’t know if my situation was exceptional, but when my former landlord tried to raise my rent this spring, I had no trouble finding many alternatives (I ultimately moved).
yum yum yum
http://bp2.blogger.com/_wFWqWIH-WFU/RmN-4d7UEfI/AAAAAAAABIc/0U9pf5ETVYo/s1600-h/ramen1.jpg
Skeptic,
Where are these condos that are coming on as rentals? All of the condos along the Hudson are being sold as condos. Toll and K Hov are not interested in being landlords.
If anyhting, skeptic, the exct opposite of what you siad is happening. Lots of rentals on the Gold Coast have been turned into condos.. Hudosn Tea, Mandalay (formerly Avalon Tower), etc.
Donald,
NJ isn’t just “along the Hudson”.
#107
Along the Hudson is just one small part of the state. It doesn’t all revolve around the “Gold Coast.”
BC (51)-
Swing that pickaxe, baby!
I know that in recent years there were a lot of condo conversions, but I don’t think that is happening too much now.
Here’s a question: if the local population (in the Gold Coast or wherever) is basically the same as it was pre-boom, and if the number of condo units rose dramatically during the boom, and if sales are off roughly 20-30% from the peak, what do you think will happen to all of those superfluous units?
I still disagree about condos becoming rentals. I have never seen that happen before. Sorry, but the supply of rentals is not going to increase enough to cause prices to level off or come down. Prices will increase. And as more people sell their homes in the future, they will most likely choose to rent.
are people still talking to this Donald character? lol!
ChiFi (65)-
But what about the scenario in which inflation continues to annoy, the dollar index continues to plunge and major market indices continue to rise?
I know it’s threading the needle, but it’s a likely scenario that makes gold a winner.
“if the local population (in the Gold Coast or wherever) is basically the same as it was pre-boom”
But the population is NOT the same now as it was pre-boom. There are people out there to buy condos. This analogy is flawed. You have tonos of people coming to the GC from Manahattan looking for cheaper housing.
Donald,
I cant forecast how much you will sell for, but at this rate, but I forcast that you will post around 30000 times before you sell..
Who knows, you may even keep posting even beyond that..
SG, not interested in ETFs.
GoldMoney promises to buy real gold and put it in a vault near London. I would prefer to just feel the metal though :)
I will probably just buy the metal later this year when I’m in the Gulf where there are no taxes.
BC (71)-
Why own dollars…unless they were purchased with some other country’s stronger currency?
I post lots of times because I see so many flaws in your analogies, it is not funny.
its your time that your investing too, if thats worth anything..
Now I know your views about opportunity cost..
yes, there are obviously tons of people coming from manhattan to buy NJ condos:
“Velocity Hoboken, the 128-unit development that’s auctioning off 40 of those units later on this month for a minimum bid of $295,000 each.”
http://tinyurl.com/37e4z4
Donald (76)-
I don’t think your house is overpriced. The market does.
Your housing dollar does go further in Hunterdon/Somerset. Taxes are lower, too.
That’s why everyone in your county is moving here.
I see so many flaws in your analogies
Like the one you used to say that the market isn’t like the Titanic, it’s like the Hindenberg?
You’re right! Falling from the sky in a ball of flames!!!
I come back to read the site this afternoon and I just KNEW Donald was back with his psychologically disturbing compulsive postings when the number had gone from 60 posting to over 120. Scary. Forget the house – call a shrink.
Clotpoll Says:
Your housing dollar does go further in Hunterdon/Somerset. Taxes are lower, too.
My brother lives in Branchburg. That may have been the case 10 years ago but I think those days are long gone.
#123,
Yeah, everyone is running to buy at Velocity and live across the street from the housing projects.
“That’s why everyone in your county is moving here.”
Really? I do not know anyone moving out there. I would NEVER move out of Bergen County. My plan is to sell and move further up north.
Clot [119],
The way I typed it may have been misleading. It should have read that there are fundamental and technical reasons to own gold as a result of our dollar[its decline], the inverse relationship.
Hell, I’m trying to get paid in CD’s or Euros. My colleagues, same base salary, are making approx 10% more when calculated in their currency. Who knows, they’re probably blogging on some London or Toronto RE bubble site.
I recently talked to a relative who manages a factory in Africa and gets paid in USD. He’s been at it for about 10years and is very handsomely paid for being physically there, etc. Recently he has seen a big drop in his salary because of the USD going down.
He’s really concerned that USD is devaluating so much so fast.
This is just anecdotal evidence.. Just imagine what everyone around the world who has USD is thinking right now!
#78 Sorry Young Doanld, that was just lack of coffee.
#79 Were you at one time planning to buy in 08? Don’t mean to be a pain, just curious as to why your plan might have changed.
Donald,
I still disagree about condos becoming rentals. I have never seen that happen before. Sorry, but the supply of rentals is not going to increase enough to cause prices to level off or come down. Prices will increase.
FYI: Data from NJMLS
Rental units available in Cliffside Park, Edgewater and Fort Lee for the month of May
2005: 155
2006: 156
2007: 221 (of which 119 are Condo/Twnhs)
I do not know anyone moving out there
Why would you?
Are you in the moving business? Postal emploee who deals with change of address cards? A realtor working in Hunterdon/Somerset?
And you talk about correcting other’s flaws… correct your own.
2010 already answer that question. He thinks that there will eb aglut of new inventory when everyone who took 5 year ARMs in 2005 put their homes on the market. Unfortuantely, he does not realize that many of those who took ARMS re-financied to fixed rate loans so he will not get his wish in 2010.
I still stand by my statement. I meant ENTIRE condo buildings being turned into rentals. That has never happened before. Rental buildings get converted to condos all the time, but not vice-versa.
Food for thought: ET was an illegal immigrant.
Speaking of rentals and condos, this guy on Kannekt makes a good point in regards to the condo conversion o Hudson Tea:
“For newcomers here is a little history background: First, yes, the building has some problems such as ineffective heating and poor insulation between units, but overall, it is a great building (and once again my name is not Robert T.) Saying this, all the negative publicity that frequently appear on these pages comes from renters who did not take Toll’s offer to purchase their units at a once-in-a-lifetime deal because they either thought that a better deal would come or that they are entering into rent control haven. Both considerations proved to be totally wrong which left some people extremely bitter. They will write everything to first, get back at Toll and second, justify their poor judgment. Until they are driven out by expensive leases you will keep reading their venom on this board.”
True, I don’t believe builders will turn new buildings into rentals.
I believe the point was that many UNITS are turning into rentals as the market becomes flooded due to speculators.
As the number above show, a lot of condo units ARE rentals.
So, if inventory has increased, demand is down, what does that due to rental prices?
food for thought –
if someone were to come in and make fun of ppl on this blog, would Donald be insulted since he’s now a “regular”?
Donald, that Kannekt guy is just another idiot making assumptions – from my understanding, the Tea Building has issues. Why does it mean that the people are “bitter renters?” That sounds like a pissed off owner crutch to me – I’ve heard enough owners complain of issues there, and complain about Toll generally (heck, people who buy Toll homes complain about them all the time). Just because someone complains doesn’t mean they’re bitter – maybe if you lived in Hoboken you would understand. but you don’t.
Rich, I have seen a lot of units in Hoboken offered for rent AND sale. Particularly the numerous flip units. I saw a ton of the same on single family homes when I was looking to buy – many homes were unable to sell or rent and remain sitting. Mkes me think of one flip I saw- asking 969, rent ask of 4K. Rent ask has since dropped to 3700 a month, and the house has been pulled from the sale market. It will NEVER sell at that price where it’s located – 750 at best. They can wait for the market to pick up all they want but it’s not going to happen.
Thatbigwindow sez (42): “This will set the wheels in motion for the next generation of over sensitive, entitlement oriented America to come up with more restrictions on what you can’t do and what the government has to regulate.”
LOL. Winnie, you have GOT to be a spoof. You’ve just described the far right Christian militia/”war-on-Christmas”/homeschooling/voucher crowd to a tee.
Donald said:
“I lost a tenant when I was a landlord in lower Manhattan. I never found a new one so I ended up selling the place.”
You couldn’t find a tenant in Manhattan?
88 & 97: Sil said, “Gone to ground,” not “underground.”
Maybe Sil is working for the Brothers Kray or some other English MAFIA outfit…
Donald,
My plan is to sell and move further up north!
I’ve got some news for you.
You’re NOT going anywhere!!!You’re a bag holder!!!!
x (127)-
My office is in Branchburg. Relative to Bergen, you get more for the $$$ and taxes are not as awful.
(145)-
Here’s a historic moment: make is reaming Donald. Like two debutantes in a bi**ch-slap contest.
Stop the madness.
Clot,
You’re a tour guide. Did you show any bathrooms or kitchens today? How smart do you have to be to figure out where the dinning room is?
You can’t shine my shoes. Period.
Donald,
From yesterday:
SLD $840,000 4/4/2005
ACT $998,000 8/22/2006
PCH $975,000 10/4/2006
PCH $939,000 10/15/2006
PCH $919,000 10/29/2006
W-C $919,000 1/10/2007
ACT $905,000 1/10/2007 (relist)
PCH $899,900 1/16/2007
PCH $899,800 3/20/2007
PCH $889,000 4/2/2007
PCH $884,000 4/11/2007
PCH $879,000 4/16/2007
PCH $874,000 4/23/2007
PCH $869,000 5/3/2007
W-T $869,000 5/17/2007
ACT $86,900 5/16/2007 (relist w/typo by agent)
PCH $869,000 5/17/2007
The newest listing price isn’t even keeping pace with inflation.
If you were to get this “target” price two years from now, you won’t consider it a lost?
…
Looking at the example above of one of your neighbors; they have not kept pace with inflation even if they get their asking price NOW.
…
To me, leaving out all the fees, closing costs and commission, if I don’t keep up with inflation, I’m losing.
Do you not agree?
Donald,
I’ll go against my better judgement and respond to your moronic posts.
You state that you can rent your place for 4-4.5k a month. Based on that, your house is worth between 480-648K. What idiot, based on that rental flow, would pay 840K? Sorry, rhetorical question. You did.
make (148)-
I’m a financial professional, dipweed. The tour guides are all wearing orange smocks now. If you don’t think so, I’ve got about 100-120 families every year who will tell you differently.
Also- unlike you- when I leave my house, it isn’t just for the purpose of staring at the sun or taking interior design classes.
How many more months of indolence will it take for your wife to leave…or contract someone to whack you? From what I’ve read of your postings here, you’re worth far more dead than alive.
Thanks to whoever posted that link for the 2005 subprime map!
Even beyond the subprime info, the average subprime income for each town/region is interesting to me, just because it gives me a ballpark for income levels of people who are buying into these towns.
Two interesting bits of info for the two Northern areas of Summit.
Average Subprime Loan $262900
Average Subprime Borrower Income $191333
–
Average Subprime Loan $293300
Average Subprime Borrower Income $191555
It’s curious to me why, if you’re going to go subprime, why’d you’d do it for such a low loan amount (relative to your income)? Anyone have any insight on this?
U.S. stocks fell on Tuesday after Federal Reserve Chairman Ben Bernanke warned inflation is still a major concern, all but dashing remaining hopes for an interest-rate cut this year.
Those wanna be Landlord read this article. I believe Make is already renting out places.
So You Want to Be a Landlord?
Tuesday June 5, 2:27 pm ET
By Motley Fool Staff
So you want to be a landlord? You’re not alone.
You could be attracted by the idea of having money just roll in from tenants every month. We spoke with a bunch of people who have owned rental property for many years, and those conversations opened our eyes quite a bit. Perhaps we’ll instead fund our retirement through investing in solid blue-chip stocks
http://biz.yahoo.com/fool/070605/118106805535.html?.v=1&.pf=personal-finance
#152
“It’s curious to me why, if you’re going to go subprime, why’d you’d do it for such a low loan amount (relative to your income)? Anyone have any insight on this?”
They may be stated income with no actual verification.
#133 3b
In 2005, my thoughts were that I would purchasing a home in 2008 because I had just moved into a new position making more money. Have to admit that I was half-heartily interested in buying. The RE market is not appreciating as fast as it was and IMHO in a state of flux right now. There are a number of ARMs (not limited to subprime either) that are forecasted to reset beginning late 2007 and steadily increasing until 2010. Mortgage companies are tighten up guidelines, specifically requiring down payments coupled with pending legislation will potentially delay the number of first time buyers getting into the market. And Donald Duck, yes there are some who will be able to refi into fixed rate mortgages but there will be a significant number who will not be able to. So all of that, and there isn’t a reason (outgrowing current place, etc.), today I don’t see any compelling reason to purchase a home. I’m not willing to take a $600k+ position on the market right now. And if I’m wrong, I don’t think I will miss out that much because my gut says that homes will not appreciate that much in the coming years. I can sit back and increase my down payment.
Another fine Realtor earning their 3% fee (less the brokers cut, etc. etc.):
http://tinyurl.com/29m7gq
Its really wrong of me to mock though. After all, not only has this agent saved herself some time by not getting out of the car to take a photo of this split waiting to be brought back to its “splendor”. She has saved me some time since I can clearly see the property is on a busy street. So, thanks?!?!?.
Clot,
I’m financially secure. If I don’t work for the rest of my life I can get by on 5% return on cash alone. That my friend is at 500K (5x what you gross). 35K a month positive cash flow in rents alone is not included.
“I’m a financial professional, dipweed.”
Since when is a REA a financial professional. Ok so you close 100x a year, that makes you a successful REA and a good sales person. I’m not saying that you’re not good at what you do, I’m saying that you are an REA and that is the same as a house tour guide. PERIOD.
Because I can afford to sit on the sideline I don’t have to invest in anything unless I develop a passion for it. I love RE.
I can wait and will wait until everyone is running for the hills and come in with cash.
In the mean time, Interior Design, working out(getting diesel),enjoying my family, trips, vacations, I even tried acting. Yankees, Knicks and a local adult basketbal league is how I spend my day’s. I enjoy Blogging around here because Grim runs a well informative site, and most regulars have a decent head on their shoulder.
Don’t be ashamed of what you do for a living. Someone has to list and show the property. That someone is YOU.
Numbers seem a little strange but I would guess they have equity in their properties or the loan amount consists of 1st lien loans and excluded the 2nds. You are a subprime borrower because of your credit history. There are doctors, lawyers, and the like with subprime loans, its not always the blue collar types. With his history of bankruptcies, I would bet Donald (Trump) is a subprime borrower.
JB–moderation at 159
“Yankees”
Make [158],
Being a die hard and very disgruntled, it’s unfortunate that you have to spend your day focusing on their s*it play.
I even tried acting
I wonder why you didn’t succeed…
With regard to the discussion on real estate commissions:
The first thing you should know is that commissions are often split four ways, like this:
1/4 to listing agent
1/4 to listing agent’s broker
1/4 to selling agent
1/4 to selling agent’s broker
The brokers use their part of the commissions to maintain office space and to maintain the Multiple Listing Service.
Where consumers have a point is here. Market factors aside, it takes about as much effort to sell a $2 million dollar home as it does a $0.5 million dollar home. Why should the buyer of the $2 million home pay four times as much in commissions?
Here’s the bottom line. While it’s not perfect, I don’t see the listing-agent based model changing much and I sure don’t see it going away in five years. Personally, I think the best opportunity for more efficiency is in the MLS systems.
One last thing. You might think I’m a real estate agent. I’m not, but I might have sold a house or two.
Rich # 149~ that gave me a chuckle yesterday & again today. It was made all the more amusing when Donald said he’d listed his house for $160k over what he paid in the hopes to make a killing, but that didn’t work out. Two offices…. *lol*!!!
A few months back I posted excerpts from a NY times article about many New York condo projects being converted to rentals. Maybe a search on this forum can pull up that link.
fanshawe Says:
June 5th, 2007 at 4:26 pm
Thanks to whoever posted that link for the 2005 subprime map!
Even beyond the subprime info, the average subprime income for each town/region is interesting to me, just because it gives me a ballpark for income levels of people who are buying into these towns.
Two interesting bits of info for the two Northern areas of Summit.
Average Subprime Loan $262900
Average Subprime Borrower Income $191333
–
Average Subprime Loan $293300
Average Subprime Borrower Income $191555
It’s curious to me why, if you’re going to go subprime, why’d you’d do it for such a low loan amount (relative to your income)? Anyone have any insight on this?
Dare I suggest: Subprime goes along with stated income ???
jb
bad for business, to many assholes in
the room now.
jb
bad for business, to many aholes in the room
Seneca #157,
Where do you get this stuff? Is that photo a parody? It is way funny.
A couple posters appear to be getting off on the pi*sing matches. I guess that’s what happens when Grim takes a well-deserved hiatus.
JB, re Goldman’s poor predictions re rate cuts, someone’s gonna get fired tomorrow…
No wonder Clotpoll thinks my home is over priced. I just pulled up some lisitngs in Branchburg and boy are those homes cheap. My favorite is the one for $549,000 on 2.2 acres. In a good part of Bergen County, that home would be close to $2 million. If I lived in out in the middle of nowhere where Clotpoll lives, I would also think my house is overpriced.
However, my home is NOT overpriced. I just had some major action on my house today and something good might be arund the corner. Nothing is definite at this point so I am not going to give out details.
While the homes in Somerset are obvivously a lot chepaper, in Bergen County I can get to the city in 30 minutes by bus, 20 minutes by car, or 15 minutes by NY Waterway ferry. Can you do that in Brachburg? I think not.
“if someone were to come in and make fun of ppl on this blog, would Donald be insulted since he’s now a “regular”?”
No I would not because I am a “troll,” remember?
In case anyone is interested, here are some re-sale numbers for Maxwell in Hoboken I got from Kannekt:
Apt. 209 original buy at 509K, resells at 704K @ 618 sq/ft
Apt. 210 original buy at 665K, resells at 850K @ 664 sq/ft
Apt. 211 original buy at 488K, resells at 605K @ 570 sq/ft
Apt. 214 original buy at 674K, resells at 870K @ 639 sq/ft
Apt. 300 original buy at 543K, resells at 718K @ 743 sq/ft
Apt. 305 original buy at 536K, resells at 732K @ 611 sq/ft
Apt. 312 original buy at 909K, resells at 1385K @ 727 sq/ft
Apt. 315 original buy at 588K, resells at 813K @ 611 sq/ft
Apt. 504 original buy at 991K, resells at 1406K @ 721 sq/ft
Apt. 505 original buy at 576K, resells at 753K @ 628 sq/ft
Apt. 609 original buy at 589K, resells at 669K @ 748 sq/ft
My new favorite term is ‘jingle mail’. They call it jingle mail because the homeowners are mailing their keys back to their lenders.
Seneca 157..I kind of like the house I can see in the side mirror of the car. Some kind of Canadian flag thing going. Did you have an MLS on that one?
#152,
Your numbers do not make sense, I think you’re comparing all subprime loans and income for all residents.
#175,
ML# 2413406
ack! missed that.
Finally home, what a trip. What “weather” in Newark?
jb
#169 twice shy,
I wish it was a parody and I wish I was actively seeking this stuff out but this is the slop that I get in my inbox on a regular basis. What I don’t understand is how sellers put up with this garbage.
#175 Pat,
I can’t help you with the Canadian house, don’t know that its for sale. However, take a second look at 2413406 and zoom in. How can you pass up the free green basket of recycling that comes with the house?
http://tinyurl.com/29m7gq
Park Ridge:
SLD $430,000 5/15/2000
SLD $799,000 11/3/2005
ACT $875,000 2/14/2007
PCH $828,000 3/21/2007
PCH $815,000 4/11/2007
PCH $750,000 6/5/2007
#180 And the double yellow line, which always tells you the house is on a busy street.
#171 Young Donald if your hosue is not selling, it is over priced. Why do you have such a proble with that concept?
What major action, some people who came to look at it? And now you believe there is a sale in the making?
Your house is over priced, and sorry to say you are not in desireable Bergen Coutny town.
Maybe some people like if for condo shacks, but not single family homes. Its that simple.
Nobody says OHHHHHH Cliffside Park.
#166 Makes sense (sub-prime)
#156 Makes perfect sense
2010 Buyer:
“You are a subprime borrower because of your credit history. There are doctors, lawyers, and the like with subprime loans, its not always the blue collar types.”
Good point. I was making a bad assumption that all these people were choosing subprime instead of being forced into it.