No skin in the game? Nothing to lose.

From BusinessWeek:

Time to Give Up the House?

For generations, homebuyers have had one simple rule drilled into their heads: Whatever happens, keep paying the mortgage. If you don’t, you risk losing your house and all the equity you’ve built up in it.

But for many subprime borrowers, that doesn’t seem to be the rule of thumb anymore. They are now more likely to be late on their mortgage than on their credit card, according to a new study from Experian Group, the Ireland-based company that maintains a huge database of consumer credit histories.

The significance? One explanation could be that many recent subprime homebuyers simply aren’t that worried about losing their homes because they don’t have much to lose. Most put down small or zero down payments. If prices have fallen since they bought, they may actually owe more than the house is worth, making it an easy choice to walk away.

At the same time, keeping access to their credit cards has become more important than ever, says Stan Oliai, vice-president of decision sciences for Experian Decision Analytics. “People are using credit cards for everyday items like gasoline and groceries, and to tide themselves over from paycheck to paycheck,” says Oliai.

Experian’s study, released June 20, says that the share of subprime borrowers who were 30 days or more late on their mortgages went up from about 32% at the beginning of 2003 to around 36% at the end of 2006—a sign of increasing financial distress.

Many subprime mortgage borrowers “don’t have much skin in the game,” says Douglas Duncan, chief economist of the Mortgage Bankers Assn. Subprime loans that originated in 2004 and 2005—which account for a big share of those now entering delinquency—involved extremely small down payments, Duncan says. “Some people said, ‘Let’s roll the dice and see if we can get a house. And if it doesn’t stick, we’ve still got to have the credit card to keep going and we’ve got to have the car to get to work.'”

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220 Responses to No skin in the game? Nothing to lose.

  1. pesche22 says:

    maybe they can get sick leave,think about
    it , paid not to work.

  2. James Bednar says:

    From Bloomberg:

    Bear Stearns Fund Collapse Sends Shockwave Through CDO Market

    “More than a Bear Stearns issue, it’s an industry issue,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. Hintz was chief financial officer of Lehman Brothers Holdings Inc., the largest mortgage underwriter, for three years before becoming an analyst in 2001. “How many other hedge funds are holding similar, illiquid, esoteric securities? What are their true prices? What will happen if more blow up?”

    U.S. Securities and Exchange Commission Chairman Christopher Cox said yesterday that the agency’s division of market regulation is tracking the turmoil at the Bear Stearns fund.

    “Our concerns are with any potential systemic fallout,” Cox said in an interview.

    Not since 1994 have mortgages with past due payments been so high, according to first-quarter data compiled by the Federal Deposit Insurance Corp., the agency that insures deposits at 8,650 U.S. banks. Lehman analysts estimated in April that the collateral backing CDOs had fallen by $25 billion.

    “The big question is whether these forced liquidations represent a tipping point in the market,” said Carl Bell, who helps manage $63 billion in fixed-income assets as head of the structured-credit team at Boston-based Putnam Investments. It “may put pressure on other hedge funds pursuing similar strategies” as the Bear Stearns funds, he said.

  3. James Bednar says:

    From the Star Ledger:

    Mayor’s plan sharpens debate on citizenship

    The United States is filled with people whose families have been citizens for generations, more recent immigrants who have followed the rules and the path to become citizens and others, drawn by the opportunities of this nation, but illegally living here.

    Morristown Mayor Donald Cresitello has inserted himself into the national debate about this situation and not in a quiet way. The 5-foot-6 1/2 Cresitello “likes a good fight,” said Senate President Richard Codey . “He’s feisty, which is fine.”

    Cresitello is seeking to deputize some of Morristown’s police as federal immigration officers. By Cresitello’s reckoning, illegal immigrants are to blame for everything from stagnant blue-collar wages and dangerously overcrowded housing to rapes and murders, including several attacks in Morristown, where almost one-third of the population is foreign-born.

    The move is under federal review. If the effort fails, Cresitello risks his political future, but he seems willing to take the risk.

    “America is being raped, is being abused,” he said. “I am fighting for the protection of the residents of Morristown.”

    Even some of his previous supports think he has gone too far.

  4. James Bednar says:

    From Bloomberg:

    &R Block Reports $86 Million Loss on Mortgage Unit

    H&R Block Inc., the largest U.S. tax preparer, posted a fiscal fourth-quarter loss after reducing the value of the unprofitable mortgage unit.

    The mortgage unit posted a net loss of $677 million in the fourth quarter, the company said. That included pretax losses of $389 million for bad loans and $517 million of impairment charges taken before the sale of the unit.

    Option One, based in Irvine, California, was the eighth- biggest purveyor in the U.S. last year of subprime mortgages, offered to people with the worst credit records. Such loans typically default about six times more often than conventional mortgages. H&R Block had already written down about $250 million linked to bad home loans before the sale to Cerberus was announced as U.S. defaults hit four-year highs.

  5. thatbigwindow says:

    I hate disclaimers.

  6. pesche22 says:

    Henry Paulson says we are at the bottom
    or close. The boys will keep us in the
    clear.

  7. James Bednar says:

    So do I, but I always manage to attract some pretty nutty emails whenever anything having to do with race, immigration, or socioeconomic class pops up.

    jb

  8. James Bednar says:

    Henry Paulson says we are at the bottom
    or close. The boys will keep us in the
    clear.

    Didn’t he call “bottom” over two months ago?

    In a question-and-answer session, Paulson delivered an upbeat assessment of the economy, saying growth was healthy and the housing market was nearing a turnaround.

    “All the signs I look at” show “the housing market is at or near the bottom,” Paulson said. The U.S. economy is “very healthy” and “robust,” he said.

  9. thatbigwindow says:

    Got to love the over-sensitives. James, I imagine in your position you are going to always have people complain and act like children. Personally, I wouldn’t even acknowledge them. Funny thing about people is we all have short memories and will get distracted by something else and poof – issue goes away by itself.

  10. Contractor Bill says:

    What disclaimers are you referring to?

  11. HEHEHE says:

    “Henry Paulson says we are at the bottom
    or close. The boys will keep us in the
    clear.”

    It’s amazing how these guys tow the line once they get into government.

  12. BC Bob says:

    Of course they are not worried about losing their home. They were presented with a free option. The only possible risk [falling prices] was not apparent. It boils down to an option with basically no expiration date. Heads I win, tails the lending institution loses. They now realize that the charade is over. However, their cc is their lifeline, day to day survival. They would rather go back to their apartment and spend as opposed to paying for a sinking asset that they can no longer afford. What the hell, it was worth a shot.

  13. thatbigwindow says:

    #10: I am talking about post # …. uhm… nevermind :)

  14. Contractor Bill says:

    Oh sorry, since I’m new to blogging I thought that perhaps there was a “disclaimer” that I was unaware of; I didn’t realize that you were referring to the contents post #3.

    However, FU just the same for being a D-bag.

  15. James Bednar says:

    #12 – Well put.

    jb

  16. BC Bob says:

    JB [2],

    They are all frantic regarding what the REAL price of this crap is. Nobody has a clue. It will get very interesting when this leads to rating declines and hedge fund redemptions, not to mention other hedge funds in the same predicament. Again, too much liquidity chasing too few realistic opportunities. For as long as history has been witnessing this scenario, the end result has always been the same. This end result will not break that chain.

  17. pesche22 says:

    why dont they do something about the
    AMT . Triple tax killer for nj taxpayers.

    of course the deadbeats collecting dont
    worry about it.

  18. thatbigwindow says:

    See, no matter what you do, someone will get upset. lol.

  19. James Bednar says:

    From Bloomberg:

    Bond Risk Rises on Concern Over Bear Stearns Hedge Fund Losses

    The perceived risk of owning corporate bonds soared worldwide on concern over losses at hedge funds run by Bear Stearns Cos.

    Credit-default swaps based on 10 million euros ($13 million) of debt included in the iTraxx Crossover Series 7 Index of 50 European companies jumped 16,000 euros to 216,000 euros, the biggest one-day rise in three months, according to Deutsche Bank AG. The CDX Crossover index in New York surged $10,000 to a nine-month high of $178,000. The contracts are used to bet on a company’s ability to repay debt and an increase in the cost indicates worsening perceptions of credit quality.

    “While markets ignored the subprime-mania time bomb since the market shake out in March, it seems to be a longer lasting phenomenon,” said Jochen Felsenheimer, head of credit derivatives strategy at UniCredit Group in Munich. “In this highly leveraged environment, when the playing field is dominated with hedge funds, the risk is you could get a domino effect. There’s the potential for more negative news.”

    As home-loan defaults rise, bondholders stand to lose as much as $75 billion of subprime-mortgage securities, according to an April estimate from Pacific Investment Management Co., manager of the world’s largest bond fund. Investors in all mortgage bonds will probably take about $100 billion in losses, according to a March report from Citigroup Inc. bond analysts.

  20. BC Bob says:

    JB,

    Great collection of front page news stories.

  21. pricesstillskyhigh says:

    OT, Can someone please tell me what is the best way to wire transfer money in Euros to a bank account? My bank is willing to do it in dollars but I need it to be done only in Euros. Its for some stock/bond and the instruction says it has to be done only in Euros. Thanks any help is appreciated

  22. skep-tic says:

    this is why it is all the more amazing to me that so many politicians are trying to shut down the foreclosure process. when the “homeowner” has zero equity, what exactly are you trying to protect?

  23. James Bednar says:

    From MarketWatch:

    Credit Suisse cuts U.S. real estate to underweight

    Credit Suisse lowered its view on the U.S. real estate sector to underweight from market weight, citing the recent moves in the 10-year Treasury bonds as well as credit spreads, and following seven straight years of outperformance. Also, it’s cutting First Industrial Realty Trust to underperform from neutral, upgrading BRE Properties to neutral from underperform and upgrading Archstone-Smith to outperform from nuetral. “Something’s gotta give — either buyers must be willing to accept even lower returns, or prices will have to be adjusted to reflect the current environment. We believe the latter is already playing out; one private market participant describes the current acquisition climate as ‘re-trade city,'” the broker said.

  24. James Bednar says:

    this is why it is all the more amazing to me that so many politicians are trying to shut down the foreclosure process. when the “homeowner” has zero equity, what exactly are you trying to protect?

    Votes.

    jb

  25. pesche22 says:

    the pols go wherever they can pander to get
    a vote at the taxpayers expense.

    NJ is famous for it. take a look at the crew
    who we have.

    rice,nill,corzine,pascrell,

    they never saw a vote they would not pander
    to.

  26. Clotpoll says:

    Pesche (25)-

    Actually, I don’t think a single one of the people on that list have ever set foot in Hunterdon Co.

    They just spend all their time thinking up new ways to take even more from us.

  27. Clotpoll says:

    Pesche (25)-

    None of them have the guts to show their faces around here.

  28. PeaceNow says:

    Uh, presumably taxpayers are voters…

  29. James Bednar says:

    From Inman:

    Construction job loss may be understated

    Home builders have been hit hard by the downturn in the U.S. real estate market, and an economic report released this week by the Anderson Forecast at the University of California, Los Angeles, asks, “Where are the unemployed construction workers?”

    The report, by economist Jerry Nickelsburg, points to a statistical anomaly — while demand for housing is down in Los Angeles County, and permits and prices are down for new homes, the data suggest that employment in residential construction is not falling. How can this be?

    “There is either something wrong with the data and it will all get better when revisions come in, or the data are missing something, or general contractors are happy to keep their idle workers on the payroll,” Nickelsburg states in the report.

    The most likely scenario is that the data is missing the unemployed workers, according to the report. And a possible contributor is that undocumented workers do not appear in the data.

    “They are the ‘trabajadores escondidos,’ or hidden workers. They are not on payrolls so they do not appear in the Payroll Employment Survey nor in the Unemployment Insurance Claims.” He also states, “The official unemployment rates are understating the unemployment, as they are unable to count the hidden workers.” And these workers have been an important force in the industry.

  30. Clotpoll says:

    pesche (25)-

    Uh, sorry…Corzine probably has been here.

    To see the improvements he paid for at Carla’s pied-a-terre in Alexandria.

  31. Clotpoll says:

    Peace (28)-

    Pretty much nobody votes. That’s the problem.

  32. skep-tic says:

    since I touched off the lease vs. buy car battle of the past couple of days, I should probably report that I (more accurately, my wife) bought a car yesterday. got a toyota highlander with 0% financing for 60 mos. went a bit over budget at about $27k (wanted to spend no more than $25k), but the sticker price was $32k, so I feel pretty good about it. Borrowing money at 0% for such a long term is pretty sweet as well. kind of surprised toyota is doing such a thing– I wonder to what degree this reflects on car sales more generally

  33. Jamey says:

    This could NEVER happen in Cliffside Park.

    Pesche: For somebody who whines all the time about people taking paid leave, you sure do spend a lot of working hours posting on this message board.

    Just sayin’, that’s all…

  34. pesche22 says:

    jon:

    he learned some lesson but as with mostly
    all pols. shameless

  35. James Bednar says:

    Clot,

    Sorry, but wouldn’t her $1.1 million dollar Hoboken condo (also paid for by Corzine) be considered the pied-a-terre?

    jb

  36. Jamey says:

    ps: This article gives a fresh meaning to the phrase, “betting with the house’s money.”

  37. Clotpoll says:

    Grim (35)-

    Right you are. I stand corrected. Carla’s place here should be referred to as the “compound”.

    Now, let’s get on to meatier issues:

    http://dailynews.att.net/cgi-bin/news?e=pri&dt=070621&cat=news&st=newsd8pt6aqo0&src=ap

  38. James Bednar says:

    #37 – I just wanted to sneak that tidbit in.

    Speaking of juicy tidbits, I hope the Katz/Corzine emails go public.

    Katz takes step to protect Corzine e-mails

    The state worker union leader who once dated Gov. Jon Corzine and received lavish gifts from him when they broke up plans to ask a judge today to keep e-mails between her and the governor private, according to a report in the Courier Post.

    The state Republican Party chairman recently filed a lawsuit against Corzine asking the court to make e-mails between Corzine and Carla Katz, president of the Communications Workers of America Local 1034, the largest state workers union chapter, public.

    But Katz contends the e-mails shouldn’t be released because she is a private citizen and her union local is a private agency.

    “Any communications that I allegedly sent or received from the governor’s personal e-mail account are claimed to have been sent by me as a private citizen with the full understanding and expectation that they were private communications,” Katz wrote in a certification to be filed in Mercer County Superior Court this morning, the newspaper reported.

  39. lurkerA says:

    #32 – were they offering that kind of financing on other models, or just the bigger SUVs? I know someone who recently went to buy a Honda CRV but they were practically giving away the Pilot, it ended up being much cheaper, even after he calculated the difference in how much gas he would be buying, to buy the Pilot. I think this might have been last year though, with the previous model of the CRV.

  40. t c m says:

    a little off topic –

    does anyone have any experience/advice on renting an apt. in nyc?

    my son and his friends are looking now – (they are students) they were told there was a negotiable 15% first year rent fee – is that standard?

    also, regarding rent control – some apts. say they are rent controlled, and some don’t specify – yet the rents are around the same amount. how does it work in nyc? are all apts subject to rent control once the tenants move in, and then free to go up when they move? or can the landlord raise the rent as much as they want even if the tenants renew the lease?

    any other insight would be appreciated.

  41. skep-tic says:

    lurker– not sure, as I was not at the dealership and my wife went specifically to look at highlanders. I have heard that SUV sales has been slow in general, so it wouldn’t surprise me if similar deals are around

  42. skep-tic says:

    #40

    t c m– 15% of yearly rent is a standard broker fee in Manhattan.

    With respect to your other question– I believe there is a difference between rent controlled (rare) and rent-stabilized (more common). I had a rent-stabilized apt for 4 yrs in Manhattan and the landlord could not raise the rent more than 4% annually.

  43. john says:

    Re 32 – You overpaid, you can get a 2007 used in a driveway for around 22K and if you get the owner to fill out gift form there is not sales tax. With tax you paid 30K and I don’t see how you are saving $9,000 dollars by buying it new just to get zero percent . At auction the Highland is worth at most most 19K but you have to pay sales tax and the $250 fee to use the dealer number, so you are out 10K for one day of drving. Plus the Highlander comes with a crappy warranty three years and 36 months and it is not an SUV it is just a camry engine and drive train with an SUV looking body thrown on top, that somehow they get people to pay 10k extra for a faux 4 by 4 camry.

    Now if you are buying new cause you like it that is cool, but financialy it is insane to buy a new car.
    Skep-tic Says:
    June 21st, 2007 at 8:57 am
    since I touched off the lease vs. buy car battle of the past couple of days, I should probably report that I (more accurately, my wife) bought a car yesterday. got a toyota highlander with 0% financing for 60 mos. went a bit over budget at about $27k (wanted to spend no more than $25k),

  44. PeaceNow says:

    Ah, finally something I know a lot about: NYC rent laws. (I used to be a tenant counselor.)

    1) If you go through a broker, the 15% is pretty standard. Most will also require proof of annual income.

    2) Rent control and rent stabilization. Rent control is a very old program, and there are no new-to-market rent control apartments. There are new-to-market rent stablized apartments, but not all apartments are rent stabilized. With rent stablized apartments, the rent is raised by a bureaucratically established percentage each year. With “fair market” apartments, the landlord is free to raise the rent as high as the market will bear each time the lease comes up for renewal.

    Since your son and his friends are students, they might check with the school they’re attending for help with housing. I’d also suggest trying Craigslist to see about subletting.

    I’ll be out and away from a computer after this until quite late this evening, but if you have any more questions, I can answer tomorrow.

    Oh–and Clot #31: I don’t need to repeat the maxim that if nobody votes they only have themselves to blame, do I?

  45. john says:

    skep-tic Says:
    June 21st, 2007 at 9:21 am
    No one can get a rent controled apartment in NYC unless they are a direct relative of a rent controled apartment, lease owner and they have it as there primary residence and actually live there for at least a few years. Rent Control Units stop shortly after WWII and when they become available to a new person they become rent stablized.

    With respect to your other question– I believe there is a difference between rent controlled (rare) and rent-stabilized (more common). I had a rent-stabilized apt for 4 yrs in Manhattan and the landlord could not raise the rent more than 4% annually.

  46. James Bednar says:

    I missed this one yesterday:

    Cuomo Expands Probe as Appraisers Attest to Pressure

    New York Attorney General Andrew Cuomo is asking home appraisers to declare in writing that they were improperly pressured by mortgage brokers and lenders to inflate estimates and that such practices damaged the market’s integrity.

    Miller Samuel Inc. and Mitchell, Maxwell & Jackson Inc., which together valued more than 13,000 Manhattan properties last year, both said they were asked to sign identical statements by Cuomo’s staff. Both companies said they were told “many” appraisers were asked to sign the one-paragraph declarations.

    The effort shows Cuomo may be expanding his probe of the real estate industry to include mortgage brokers, banks and loan officers who profited as Manhattan apartment prices doubled in the last five years. Cuomo has issued subpoenas to at least three appraisers and a mortgage broker. Ohio and Colorado are examining lender-appraiser relationships as well.

    “It is clear to me that the targets of the investigation are mortgage brokers along with anyone else who exerts any form of economic pressure on appraisers,” Y. David Scharf, a lawyer for Mitchell Maxwell, said in an e-mailed statement.

    The document Cuomo distributed says in part: “I have been improperly pressured to reach a predetermined value for a property or to alter an appraisal after I completed it. I have also been threatened with the withholding of future business for refusing.”

    Both appraisers signed the declaration after making revisions to it.

    Miller said he removed the reference to being threatened, instead saying that he thinks he lost business because he wouldn’t bow to pressure. He also changed a statement saying that such pressure has had “a significant negative impact on the integrity of the real estate market” to say that the impact has been on the mortgage industry.

    “I was thrilled to help,” said Miller, who writes about appraisal ethics on his blog, soapbox.millersamuel.com. “It’s a topic that I have been very outspoken against for a number of years.”

  47. skep-tic says:

    #43

    I’m sure you could buy a 1 yr old highlander from someone’s driveway cheaper if you look hard enough, but to be honest we don’t have the time or patience for that, plus in that case I think you have to wonder why someone would be selling a car that is 1 yr old. I don’t have any experience with car auctions but these would be repo’d cars — right? — so I would think that similar questions re: reliability would arise. Bottom line is that there is always something cheaper, not everyone wants to buy a new car, but some people prefer it because there is the least question re: reliability.

  48. James Bednar says:

    FYI, for those that don’t already read it.

    http://matrix.millersamuel.com

    jb

  49. Salty Steve says:

    [RE: #43]

    My wife and I bought a new GMC Envoy back when GM was doing the friends and family promotion. We bought a reasonably loaded Envoy for an ‘out the door’ price of 25.5k. That’s after tax, tags, etc….
    At the time, looking at lightly used envoys with similar options, the cost was about 22k + tax, tags, etc.
    Buying a new car at that time was a good option. I will gladly pay 3k more for a brand new car versus a car with 10k miles on it.

  50. Salty Steve says:

    ohh and a follow up to my previous post. I forgot to mention I have one of those GM credit cards, so I got $3500 off from my credit card points. That’s what helped keep the price soo low. (Obviously GM credit card points only apply to new cars)

  51. JBJB says:

    skep-tic

    Did you test the Highlader Hybrid? Am interested to hear how they compare to the standard V6.

  52. 3b says:

    #43 John I searched for months before I bought my 2006 Highlander (in early 2007), and the prices for used/certified were much higher.

    A fully equipped 3 to 4 year old Highlander certified was asking anywhere from 18 to 22K, with 30 to 40K miles and more;there was liitle to no room for negoiation.

    I ended up getting a brand new 2006 fully equipped for $20,000, with 5 year/60 mile warranty. and I purchased it precisely because of the Camry connection, (it was for my wife) a well built car that mimics an SUV as far as room etc.

    Every peice of research I reviewed spoke hihly of the Highlander, the only negatibe being that it was considered boring from a style stand point (I like boring).

    I did not relish thhe idea of buying a certified with 30K miles on it for 18k or more.

    But for 2k more I got a brand new one, with a full warranty.

    I had the choice between the cash back or cheap financing; I took the cash back and paid cash for it.

    We both love it, and are happy with the purchase decesion we made.

  53. skep-tic says:

    JBJB– didn’t test the hybrid. While I like the idea of hybrids, they don’t seem to make sense economically yet and I am also concerned that the technology isn’t perfected and that owning a hybrid could entail expensive repairs

  54. James Bednar says:

    From CNBC:

    CNBC: Barclays Has About $300 Million Exposure to Bear Stearns Funds

    Barclays Bank has about $300 million of the riskiest assets within two troubled hedge funds at Bear Stearns that have other banks either freezing assets in the funds or unwinding their positions in order to cut potential losses, CNBC’s Charlie Gasparino reported.

    Citing traders close to the situation, Gasparino described the Barclays assets as “radioactive stuff” that would be “next to impossible to auction.”

    “If Barclays Bank does hold this stuff that it can’t sell, Barclay’s will take one of the biggest hits on its balance sheet when all gets said and done,” Gasparino said.

  55. RentinginNJ says:

    Just bought a Chevy Trailblazer yesterday. We looked at Toyota’s, which are better cars, but GM made an offer I couldn’t refuse.

    The company I work for has a large vehicle fleet, so I get “employee pricing” on GM vehicles, which is 1% below invoice. They were also offering $4,000 cash back on top of that. By financing through my credit union, I got well below market rate financing (they haven’t update their loan rates in a year). The sticker price was $31k, but I paid $24k and change after the discounts.

    Usually I wouldn’t go for the SUV, but with a 2 month old it was time for a family car. Planning ahead, this is probably going to be a 2-child car at some point along with all the stuff that comes with kids (playpens, toys, car seats, etc.). We needed the extra room.

  56. James Bednar says:

    From MarketWatch:

    U.S. May leading economic indicators up 0.3%

    The U.S. index of leading economic indicators rose 0.3% in May, the Conference Board said Thursday. The consensus forecast of Wall Street economists had expected a 0.2% gain. In addition, the leading index in April was not as weak as previously estimated. The index fell 0.3% in April, up from the initial estimate of a 0.5% drop. In May, the coincident index rose 0.2%, while the lagging index rose 0.2%. Five out of the ten indicators that make up the leading index increased in May. “These data may be suggesting that the economy has weathered the negative impact of the housing slump and the spring run-up in gas prices,” said Ken Goldstein, labor economist at the Conference Board.

  57. twice shy says:

    Skep #47,

    Nice reply to #43. A model of tone and decorum.
    I suspect you can afford a new car, and 0% financing is simply unbeatable. I bought my last new car in 2001 w/ 36 mos./0% deal, and plan to drive it until at least 2011.
    It’s been a beauty so far, knock on wood.

  58. make money says:

    After 5 years of driving your Highlander your truck with a camry engine is gonna be worth 13K(dealers price). Assuming after fees and taxes you spent 30K that’s a 17K loss over 5yrs.

    That’s $283 dollars a month depreciation on your SUV.

    http://www.autotrader.com/fyc/vdp.jsp?car_id=219419891&dealer_id=68977&car_year=2002&marketZipError=true&search_type=both&num_records=&keywordsfyc=&make=TOYOTA&transmission=&model=HIGHLANDER&distance=10&make2=&address=10301&default_sort=priceDESC&advanced=&certified=&max_mileage=&max_price=&sort_type=priceDESC&min_price=&body_code=0&end_year=2002&keywordsrep=&color=&start_year=2002&drive=&search_lang=en&page_location=findacar%3A%3Aispsearchform&engine=&fuel=&doors=&style_flag=1&cardist=10

    For that kind of money you could have leased a better car/SUV at leasetrader and changed at least 3 cars in that 5 year span and always stayed under warranty.

    I’m convinced that it’s the pride of ownership with you. You can tell all your neigboors ” I don’t lease, I BUY.”

    Anyway congrats on your new monthly pmnts for the next 5 yrs. Enjoy the power of a camry engine and the engenuity of Japanese enginering.

  59. Read My Lips: NO REBOUND NO HOPE 2008 Misery -Real Estate Depression says:
  60. scribe says:

    tcm

    If by “NYC” you mean Manhattan, by now, most apartments in Manhattan are no longer subject to rent stabilization.

    A while back, they put through “luxury decontrol.” Once a rent-stabilized apartment reaches $2,000, the controls come off and it goes free market. The landlord can charge anything he wants for a lease renewal.

    With apartments that are still subject to rent stabilization, tenants are offered one or two year leases. The percentage increases are set by a board once a year. Currently, it’s 4.25% on a one-year and 7.25% on a two-year.

    “Rent control” is a different system. It’s mostly elderly tenants who are still under that older system. With rent control, city government sets the annual percentage increases – if any – and mails the paperwork directly to the tenant. Very, very few rent -controlled tenants now.

    Apartments are cheaper once you cross the river. So, if your kid is going to school in upper Manhattan, try Astoria. Lots of new construction out here – new construction is free market, but much cheaper than Manhattan. The rule of thumb is that apartments in Astoria are about half of Manhattan rents, and much bigger and nicer, too.

    If he’s going to school in lower Manhattan, try Brooklyn.

  61. James Bednar says:

    No matter how you slice and dice it, owning a car is a liability and is always a losing proposition. There is no way to beat the game, all we’re talking about here is how to minimize the losses that we’re going to incur.

    Even those I know who have dealer licenses, buy at auction, and quickly resell (1-2yr), don’t always come out “winning”. Heck, I even know some folks that only buy luxury “totals” at auction and have them rebuilt in order to be able to drive a “flashy” car for cheap.

    Personally, the only way to win at this game is to drive an older model, high-reliability car until the cost to repair simply doesn’t make sense anymore. Don’t finance, don’t lease, and keep your money in assets that make money, not tied up in a car. But how many folks can really do this without feeling a massive amount of embarassment. After all, if you aren’t driving that new BMW you really are just a worthless piece of waste.

    jb

  62. Read My Lips: NO REBOUND NO HOPE 2008 Misery -Real Estate Depression says:

    “Make an Offer”

    “I ain’t giving it away.”

    “negotiable”

    “fast closing”

    “priced to sell”

    NOT working!

  63. BC Bob says:

    #62,

    You may have missed. FSBO this weekend in the Bergen Record;

    Vultures Welcome.

  64. dreamtheaterr says:

    #32, Skep, congrats on the purchase. People will debate the pros and cons of buying new versus used. I’ve done both, and I feel they were the best decision given what value I was looking to derive from the purchase at that time. No doubt you feel the same way too. I say just go out and enjoy the Highlander; you and wife should have 6 years of a trouble-free ride.

  65. James Bednar says:

    From the Freddie PMMS (via MarketWatch):

    Freddie Mac: 1-yr ARM averages 5.66% vs 5.75%
    Freddie Mac: 15-yr mortgage averages 6.37% vs 6.43%
    Freddie Mac: 30-yr mortgage averages 6.69% vs 6.74%

  66. James Bednar says:

    5-year hybrid ARM averages 6.31% vs 6.37%

  67. scribe says:

    From today’s NY Times.

    June 21, 2007
    Bear Stearns Staves Off Collapse of 2 Hedge Funds
    By VIKAS BAJAJ and JULIE CRESWELL

    The high-stakes game of brinksmanship began early yesterday on Wall Street, and continued throughout the day. Bankers traded telephone calls, frenetically negotiating the fate of two hedge funds.

    All wanted to avoid a fire sale in the troubled mortgage-securities market, but at the same time, not get stuck with an exploding liability that could result in steep losses. The day ended with deals that appeared to have forestalled a meltdown. But questions remained about how successful they were and whether they had merely delayed the inevitable.

    [clip]

    “I think people are nervous and trying to figure out what the best course of action is here,” said Jeffrey Gundlach, chief investment officer at the TCW Group, an investment management company with $85 billion in mortgage- and asset-backed securities. “Do you want to be the first one out and perhaps cause the lows to be hit in the market, or do you want to wait and see how this all plays out?”

    In fact, rather than aggressively selling the assets it has seized, Merrill is quietly showing it to a small group of potential buyers, according to a person briefed on the process.

    Such an approach helps to keep the pricing of the securities under wraps, allowing Wall Street firms to avoid marking down their own stakes. Keeping the sales price quiet also means that the firms may not have to add collateral immediately to shore up their portfolios.

    At the end of the day, Merrill sold only a small portion of the $850 million in assets it had seized from the Bear funds as collateral. Traders said what did sell was the less risky, well-collateralized securities and that those sold near or at par in many cases. It is unclear whether Merrill intends to hold onto the remaining securities or whether it will try to sell them again down the road.

    full text here:

    http://www.nytimes.com/2007/06/21/business/21bonds.html?pagewanted=1&_r=1&ref=business

  68. dreamtheaterr says:

    #58, Make Money can you shut your trap for a while? Everyone’s circumstances are different when they make a vehicle purchase. Don’t stuff buyers remorse down someone’s throat just coz it entered up your a$$.

  69. t c m says:

    #21 pricesstillhigh – Re: wire transfers in euros.

    that should be absolutely no problem. i worked for a major bank, and it was done all the time –
    in fact, we preferred to wire in euro’s – i think it was because we could make money on the exchange – and the fee was cheaper.

    you need to open an account in another bank. the only problem you may face today is that in the bank i worked for, they would not wire money out of an account the same day the account was opened – and they were not supposed to open an account soley for the purposes of wiring money – can’t speak for all banks.

  70. nwbergen says:

    Post 53.

    My car was in for service yesterday and the dealer provided me with a 07 Prius hybrid loaner for the day. When I returned the car, the dealer asked me what I thought of the car and would I consider buying one in the future. All I could say was I felt like Ed Begley Jr and needed to find the closet tree for a hug. No Prius in my future way over rated for the price. If you are into gadgets this car is for you. However if you are into safety this would not be a good choice, my empty Schafer beer can offerers more protection than the passenger doors. But, if you are riddled with guilt over global warming and CO2 emissions, pony up and lay out your hard earned cash for piece of mind.

  71. James Bednar says:

    From Reuters:

    Bear still hoping to restructure funds

    Bear Stearns Cos. Inc. and its adviser Blackstone Group are still hoping to restructure two troubled hedge funds managed by Bear, a source familiar with the situation said on Thursday.

  72. James Bednar says:

    From Reuters:

    Subprime mortgage bond index hits record low

    Bids for the most recent index of subprime mortgage bonds dropped to a record low for a third time this week on Thursday amid concern that losses at a Bear Stearns hedge fund indicate more widespread turmoil.

    The ABX-HE “BBB-” 07-1 was bid as low as 58.25 on Thursday, compared with a closing price of 59.79 yesterday, said fund managers briefed on the index by dealers. Bids climbed to 58.50 after the open, they said.

  73. john says:

    When I am talking auction I am talking dealer only factory auction not a bull crap auction advertised in the post. For instance Ford Motor Credit takes every off lease tri state Jaguar, Volvo, Landrover, Ford, Lincoln, Mercury and auctions them off in Newburgh NY. They also includes trade-ins. Unlike a private sale the dealers have to put up a bond to auction and have to clearly display on windshield known flaws, accident, major mechanical problems etc. If they fraudulently pass a car the dealer can get a refund. The shady used car lots buy the cars with known flaws cheap fix them up and pass them onto cosnumers. In addition, there were trade-ins and demo cars and Hertz cars. Hertz had some good deals it seems they order in bulk and sometimes order too much if lets say a 2007 Jaguar is only being rented 10 days a month and depreciation is $600 a month they will get rid of it right away. I saw Jaguars for sale that were 90 days old from Hertz. I even saw program cars. The cars I was looking at were what dealers pick off to sell as “certified” which is bull crap. All they do is pick a mint trade in and change all the fluids and detail it and then tack on three k. They don’t even post auction prices on the internet it comes out in hardcopy form and it is a dealer only subscription. That trade in price on the KBB I was able to regular buy for up to 3K less. Also a lot of dealers only keep used car up to 30 days and automatically send them back to auction as they are depricating each month. You can even track the used ones on the lot at dealers near 30 days and test drive and wait till they hit the auction and buy it 6K less!!!

  74. skep-tic says:

    #58

    make– You do know that depreciation costs are part of leases as well, right?

    And while we’re on the subject, depreciation is not all loss. I will be consumming the car as it depreciates.

    And depreciation schedules are somewhat arbitrary. I read recently (I think on this blog) that a 9 yr old lexus (that is a toyota with an “L” on the front) is more reliable than a brand-new mercedes.

    Obviously, I am not buying a car as an investment. If I am driving this car problem-free 9 yrs from now, I would say that is value, regardless of what a depreciation schedule says.

  75. NJGal says:

    “However if you are into safety this would not be a good choice, my empty Schafer beer can offerers more protection than the passenger doors. But, if you are riddled with guilt over global warming and CO2 emissions, pony up and lay out your hard earned cash for piece of mind.’

    Ha! We thought about it, but came to the conclusion that hybrid cars, at this point in time, are still more of a marketing gimmick than anything. After all, they still make them in factories using oil and emitting pollution, and their upkeep is pricier than necessary. I equate buying a hybrid right now to being one of the first to buy the i-phone. First never wins with these new gadgets – it’s more about bragging rights.

  76. skep-tic says:

    #73

    John– isn’t the key term in your post “dealer only?”

    Again, I am sure there are hundreds of approaches to getting a deal on a car. A Chinese friend of mine only buys salvage cars for less than $3k. He doesn’t expect them to last, but when they do, he is pleasantly surprised.

    For me a car (and shopping for a car and maintaining a car) is mostly an annoyance that I would prefer to minimize. I understand that I am probably leaving some money on the table because of this, but time is money too.

  77. James Bednar says:

    HEHEHE Says:
    June 21st, 2007 at 7:51 am
    “Henry Paulson says we are at the bottom
    or close. The boys will keep us in the
    clear.”

    It’s amazing how these guys tow the line once they get into government.

    He knows who his master is. Don’t, for one minute, think Paulson cares one bit about j6p.

    http://www.washingtonpost.com/wp-dyn/content/article/2007/06/20/AR2007062002199.html

  78. Cassandra says:

    A few Qs:

    Does anyone know how to track down the insurance information for a landlord in New Jersey?

    Is there any state-level mechanism for lodging a complaint against a landlord?

    Is there any precedent for addressing a tenant complaint through consumer fraud (i.e., property vastly altered from premises originally rented) rather than landlord-tenant channels?

    Many thanks in advance.

  79. Pooch123 says:

    Re hybrids and CO2 emissions, there’s a very good movie called “the great global warming swindle” available on google video and youtube. It aired on BBC but no US networks showed it for some reason.

    Kinda made me re-think my attitude towards hybrid cars, etc. I mean, I consider myself an environmentalist and am outdoorsy and all, but bearing massive costs just to reduce CO2 output (and not other pollutants that have a more harmful and direct on us, ie sulfur dioxide or nitrogen dioxide) now seems somewhat silly to me.

  80. pricesstillskyhigh says:

    t c m,

    Thanks for your reply. We are going to have to open an account in some bank and then do the transfer after 3-4 days. Have about 10 days before the deadline. That’s the only option we have now. Was trying to see whether there is another option other than that.

  81. looking in ny says:

    #79

    Maybe the answer is to look at our overall consumption.

    ‘Not Buying It
    Freegans are scavengers of the developed world, living off consumer waste in an effort to minimize their support of corporations and their impact on the planet, and to distance themselves from what they see as out-of-control consumerism.’

    http://www.nytimes.com/2007/06/21/garden/21freegan.html?_r=1&8dpc&oref=slogin

  82. NJGal says:

    I agree Pooch – I have confidence that one day in the not too distant future we will have people come up with alternative sources of fuel and better means of preventing pollution than a hybrid car. I think you’re better off driving a regular car less often than with a hybrid. I try to take public transport or walk as often as possible even though we have a car.

    Besides, I wonder how many hybrid owners try to go green in other areas of their life?

  83. James Bednar says:

    And here we have it, without further ado, the real estate article of the week:

    Realtors attend worship service to pray for better market

    More than 300 people with a keen interest in the Emerald Coast’s real estate market gathered Wednesday at Destiny Worship Center to ask for God’s blessing.

    The Real Estate Prayer Luncheon was organized in hopes of breathing life and positive thinking into the area’s slumping housing market.

    It was the first of what the organizers — co-owner of Crye Leike Coastal Realty Wanda Duke, former Destin City Councilman Mel Ponder and Destiny Worship Center Pastor Steve Vaggalis — hope will become a regular, uplifting event.

    “The heartbeat of today’s economic community is on the backs of the real estate community,” Ponder told the crowd.

    The event was an hour and a half of fellowship over lunch, scripture readings, prayer and testimonials. Those gathered had one goal — “changing the climate in the area.”

    “We need to think positively and get everyone on the same page,” Duke said. “Positive things that come out of your mouth will end with positive results. If we lose hope, we lose everything.”

  84. Pooch123 says:

    I don’t think we’re willing to sacrifice consumption as a population. Anything these “freegans” or other NYU hippies do is a drop in the bucket. Most energy consumption happens at the commercial and industrial [not residential] level. Even at the residential level, who here would give up air conditioning in the summer? Not me…

  85. lisoosh says:

    #58, make

    Believe me, your need to talk about flashy cars, insult peoples car buying habits and rent cars on an revolving basis in order to project a different “personality” to different people says more about you than you can ever know.

  86. Kurt says:

    58 MM said “Enjoy the power of a camry engine and the engenuity of Japanese enginering.”
    If this is the same ‘Camry’ engine that was in the Toyota Sienna mini-van I rented last week, it’s a DOHC 3.3L V6 with variable valve timing putting out around 225hp. Exotic stuff compared to the iron-block pushrod V6 or V8 crap they put in most other SUVs. Of course the inginuity and quality of most American cars today is equal to that of Japanese cars. From 1997.
    BTW I’d rather drive a mini-van than an SUV, and I don’t even have kids….
    Kurt

  87. lurkerA says:

    #75 – I completely agree. While I think it’s great that major car companies are exploring fuel alternatives and i dont think that hybrids should be completely dismissed, I agree with you at this point that hybrids are very much a marketing gimmick.

    when i bought my civic in 01 i also seriously considered the honda insight. it was significantly more expensive than my civic, not to mention i didn’t fit in the front seat (i’m tall, but i’m not THAT tall), plus i do more highway driving than city driving, so i wouldnt be getting much benefit from driving a hybrid. my civic gets well over 30 mpg and that’s fine with me. i’ll be driving it for many more years to come and may consider getting a hybrid in the future, depending on what my situation is and how they develop between now and then.

  88. gary says:

    jb # 83,

    BWAAHAAAAAA!!!!!

  89. looking in ny says:

    #84 Pooch

    What, you don’t believe in the power of the ‘one’? :)

    I do believe that each of us has great power to make an impact through a domino or ripple effect.

    This board is a good example.

  90. skep-tic says:

    amazing how politicians in some states choose to address the tax situation:
    *************

    Florida Governor Signs Into Law
    First Part of Property-Tax Cut
    Associated Press
    June 21, 2007 11:06 a.m.

    TALLAHASSEE, Fla. — The first half of what is billed as the biggest tax cut in Florida’s history became law Thursday with Gov. Charlie Crist’s signature, but many residents may be disappointed because their savings will be relatively small.

    The bipartisan law is expected to slash up to $15.6 billion in local property taxes during the first five years. But those reductions will be spread across-the-board to all classes of property.

    The estimated average cut for a primary homeowner is $174, or 7%, in the first year. Second homes and other residential properties are estimated at $199, also 7%, and commercial-industrial at $941, or 6%.

  91. Kurt says:

    84: “Even at the residential level, who here would give up air conditioning in the summer? Not me…”

    Giving it up is too much to ask, but cutting back isn’t. I live in a ground floor apt and run the AC sparingly (fans/windows most of the time), but the apts above me run theirs 24/7, including while they’re at work. If everyone used programmable thermos, and I guess even more idealistically significantly reduced use of clothes dryers/dishawashers (use mine sparingly/never), we could shut down dozens of dirty coal power plants. Fact.
    Kurt

  92. UnRealtor says:

    This is interesting, a realtor says people who skim commission checks can’t be trusted:

    Wesley Stroop, an agent in Roanoke, said he has seen more foreclosures this year than in the 20 years he has been in the business. In February alone, Stroop had 40 real estate listings for homes that had been previously foreclosed upon. Five years ago he would have dealt with that number in the entire year.

    “A lot of it I blame on the loan officers because loan officers are paid on a commission basis and they are pushing to get that loan through,” said Bonnie Hall, an agent in Roanoke.

    http://thehousingbubbleblog.com/?p=2985

  93. Pooch123 says:

    What, you don’t believe in the power of the ‘one’? :)

    I dont really believe in the power of “one.” Its why I don’t vote, except sometimes in local elections. As for this board, I think it’s great which is why I’ve been a long time visitor, but I kinda fall into Clot’s camp and think the market is so huge and diverse that as great a resource this site is, its effect on “the market” is negligible.

  94. t c m says:

    skep-tic, peacenow, john, scribe –

    thanks for your insight. i definitely was confusing rent controlled with rent stabilized.

    i believe the only way for them to get the apt. is for us parents to co-sign for their portion of the rent.

    i called the realtor (twice) to ask some questions – (that were answered immediately here on the board) and never heard from her…. i guess she feels that i should just send her the commission check while she gets her nails done or something.

    just another example of one of the many lousy realtors who give a bad name to the few good ones.

  95. James Bednar says:

    “A lot of it I blame on the real estate agents because real estate agents are paid on a commission basis and they are pushing to get that sale through,” said Frankie “Easy Money” Lansky , a mortgage broker in Roanoke.

  96. make money says:

    #85 lisosh

    If I drive around in a new Benz and show the look of money, then saying” I need the rent on the first so that I can pay the mortgage” is not going to be believable. If I’m driving around BK, SI, BX, flashing cash that I get from rents than I’ll be asking for it.

    A friend of mine who owns a mortgage company in NJ has a Bentley and he can’t drive it to work. He says that if I show up in a Bentley then everyone is gonna ask me for a raise. You see.

    He drives a Mountanier to work everyday.

    Unless you are in my position than you can’t understand. It’s a different personality we’re trying to project it’s the huge profits we’re trying to hide.

    If I show up to collect rents in a Bentley then my renter is gonna give me a sad story and ask me if I can wait a month and that he’ll double up next month. You know what that means.

  97. BLB says:

    84: “Even at the residential level, who here would give up air conditioning in the summer? Not me…”

    Different people have a wide range of comfort thresholds.

    Some CAN and do cope with summer heat and manage to survive and even thrive. Others have a very narrow comfort range. Some delicate flowers kvetch below 70F and above 74F.

    I once lived below a guy who set his thermostat in such a way that the AC would battle the furnace. A hardy fellow he was not.

  98. BC Bob says:

    “A friend of mine who owns a mortgage company in NJ has a Bentley and he can’t drive it to work. He says that if I show up in a Bentley then everyone is gonna ask me for a raise. You see.”

    Make,

    Tell him not to worry. The street is flooded with resumes from the mortgage industry.

  99. Rob says:

    JB #83:

    I’m not sure prayer is the answer here. Maybe a human sacrifice or two might appease the real estate gods. I’m sure they can dig up any number of pretty blonde realtors for the altar.

    News flash:
    “People Working on Commission More Likely to Engage in Slimy Dealings”

  100. Lindsey says:

    Re posts 22,24, etc.

    Any “bailout” is certainly not about votes, it’s about banks/lenders.

    While there may be some small segment of the population that benefits from some type of government engineered bailout of the current mess, it is the banks/lenders who will be the primary beneficiaries. Regardless of any rhetoric otherwise, the banks are the target of the bailout.

    If they wanted to help out the people who screwed themselves, the best plan would be to let them get foreclosed on without any derogatory marks on their credit report while requiring the banks to accept the property as full payment of any debt connected to it.

    That costs taxpayers nothing, helps out the “poor homeowners” and at least one party responsible for this mess shoulders the burden.

    But a bailout is not about votes, so that is not going to happen.

  101. RentinginNJ says:

    Kinda made me re-think my attitude towards hybrid cars, etc. I mean, I consider myself an environmentalist and am outdoorsy and all, but bearing massive costs just to reduce CO2 output (and not other pollutants that have a more harmful and direct on us, ie sulfur dioxide or nitrogen dioxide) now seems somewhat silly to me.

    Hybrid cars are not going to solve climate change. When you buy a hybrid, what you are really doing is voting with your wallet. It’s a public demonstration that you are willing to pay a little extra because you think climate change is important and needs to be addressed. You are sending a message to the politicians. You are also sending a message to the car companies that there is marketplace demand for clean and efficient technologies. The idea is that this will stimulate R&D for better and even more fuel-efficient vehicles.

    more harmful and direct on us, ie sulfur dioxide
    What’s really depressing is that be reducing SO2 emissions, we are actually increasing global warming. Sometimes you just can’t win.

  102. gary says:

    UnRealtor #92,

    LOL!

  103. Pooch123 says:

    NYC rental agents are perhaps the lowest form of life. That said, the vacancy rate in NYC is something like 2% I believe.

    You will most definitely have to co-sign, especially if you are looking at fancy areas where your son, as a potential tenant, will be competing with banker or lawyer potential tenants.

    Finding an apt via craigslist is kinda hit or miss. Perhaps if your son has the time, he could spend a day or two walking around the relevant neighborhood and calling the managing agent of various buildings (they’re often listed on a plaque outside the building) to see if they have any availabilities.

    15% of a year’s rent is a huge chunk of change, though you really should not be paying more than 12% if you have to hire a broker.

  104. James Bednar says:

    The Realtor(tm) brand is being systematically destroyed by this kind of nonsense. If these antics continue, the brand will be worse than worthless, it’ll be a detriment.

    Perhaps it’s time for a new trade association? One that doesn’t wish to extend membership to anyone willing to pony up the dues.

    jb

  105. dreamtheaterr says:

    Make Money, your stories are full of manure. I thought landlords make sure rent checks are mailed to them by the 5th. Otherwise, they send lawyers after the tenants and haul them to small claims court (I presume). So you drive and knock on doors for rent on the 1st? Wonderful tenants you have, eh?

    Do you realize how ridiculous your story sounds?

  106. BC Bob says:

    “Perhaps it’s time for a new trade association? One that doesn’t wish to extend membership to anyone willing to pony up the dues.”

    Qualify? Oh my. If the coffer is bare/low who pays for the pom-poms at the AC convention?

  107. Pooch123 says:

    Renting in NJ –

    How does reducing SO2 increase global warming? Also part of my point was that I believe climate change is inevitable, as the avg temperature of earth has varied throughout history and it’s tough to say how much, if any, of recent (in the past 100 years) global avg temperature change was human caused. Instead of worrying about something we dont understand, perhaps we should focus on reducing pollution we DO “get,” like enforcing existing regulations against gas stations better so we don’t get MTBE in our groundwater, cleaning up polluted areas and/or converting it into parks, etc.

  108. afe says:

    skep-

    Congrats on the Highlander. I have a family member in the market for a toyota, mind if I ask which dealership u got such excellent financing from?

    thanks in advance,
    afe

  109. skep-tic says:

    finding an apartment in manhattan when you are just starting out is nightmare. in my experience, most of the no-fee apts are scams and the few that are legitimately no-fee tend to be in horrible repair and run by slumlords. the 15% broker’s fee, as ridiculous as it is, is very hard to avoid. NYC real estate practices make most markets look sane by comparison

  110. skep-tic says:

    #108 afe– Westport, CT

  111. make money says:

    #105

    Do you realize how ridiculous your story sounds?

    guess what It’s not a story. I don’t like checks. I prefer cash. As a matter of fact if they pay cash they get a small discount.

    I have 2 buildings that are large enough to merit a supper. all others are 4-8 family’s. I have one person in each property(renter) who gets to pay a discounted rent and in turn he takes out the garbage, cleans the stairs etc.

    Anyway enough about me.

  112. afe says:

    thanks skep.

  113. looking in ny says:

    Pooch123 Says:
    I dont really believe in the power of “one.” Its why I don’t vote, except sometimes in local elections. As for this board, I think it’s great which is why I’ve been a long time visitor, but I kinda fall into Clot’s camp and think the market is so huge and diverse that as great a resource this site is, its effect on “the market” is negligible.

    Would you say that people here have had an impact on each other?

  114. Eagle says:

    re: post 21 — wiring from dollars to Euros. If you need to make the transfer today (although it is probably too late due to time zones), I can put you in contact with a Dutch law firm that our company uses for some of our European transactions. (Due to Grim’s non-solicitation provisions, I would not even charge our normal fee for acting as go-between.)

    (However, the earlier poster is correct that if you are in NY, and probably even NY area, you should be able to find a bank that can handle this without the need for additional parties.)

    If you want to pursue this, JB should have my email.

  115. HOUSE OF CARDS says:

    Bear fund collapse raises mortgage questions
    Initially it will hurt only company, but effects could eventually hit Main St.

    MSNBC News Services
    Updated: 5:51 p.m. ET June 20, 2007
    NEW YORK – Two Bear Stearns Cos. hedge funds that invested heavily in securities backed by subprime mortgage loans are close to being shut down as a rescue plan is falling apart, The Wall Street Journal Online reported on Wednesday.

    Late last week, the fund sold off at least $4 billion of mortgage securities, to help pay for client redemptions and expected margin calls.

    That would mean heavy losses for the investment bank and lots of buzz on the New York financial scene. That’s bad for Bear Stearns, but for the average person, what’s the big deal?

    more details: http://www.msnbc.msn.com/id/19337651/

  116. sc says:

    #32

    Toyota is coming out with an all new Highlander for 2008. They are obviously trying to clear their lots of the 2007 models. That’s why you got that deal.

  117. Pooch123 says:

    Looking in ny – touche – I hear what you’re saying. Perhaps I should’ve said “I believe in a limited power of one, and regarding something as huge as the global environment, that limited power of one is pretty negligible.”

  118. hobokenrenter says:

    Just rented the movie “MaxedOut” showing the actual americans up to their eyeballs in debt.

    It had comedy, the RE Agent that said these house are so big now they are building two laundry rooms. She even admited that if it wasn’t for laxed lending she couldn’t afford her house. The best line was if I act rich, I will eventually become rich.

    It had horror and drama – two mothers of two college students that hung themselves becasue they were in too much credit card debt. Even hunters know not to kill the young ones. The mother of one said her dead son was still getting credit card offers. She said that they already took her son, what else did they want.

    Tales of bankruptcy, where now with the changes to the law, the calls from collectors will continue to the day you die. Don’t answer them, no problem, with the databases they have they will call your neighbors or relatives to pass a message to you. One family had their water shut off and the neighbor next door had to run them a hose to flush the toilet.

    It showed a Harvard professor that spoke to a banking group and was stating that if you screened a customers records better they could avoid bad debts. One of the senior bankers said if they did that they would lose their best customers. They actually said that the best customer was someone coming out of bankruptcy because they couldn;t file again and they had “a taste for credit”

    It was very disturbing. Its kind of like I’m in my own little world and its not till I go to DMV and see what the masses that are there and think, these are the people that have licenses

  119. James Bednar says:

    Just rented the movie “MaxedOut” showing the actual americans up to their eyeballs in debt.

    Just came in the mail (NetFlix).

    jb

  120. James Bednar says:

    From MarketWatch:

    Philly Fed index jumps to highest reading in two years

    Factory activity jumped in the Philadelphia region to its highest level in more than two years in June, the Philadelphia Federal Reserve Bank said Thursday.

    The Philly Fed’s business outlook survey rose to 18.0 from 4.2 in May. This is the highest reading since April 2005.

    New orders rose to its highest level since March 2006. The indexes for delivery times and unfilled orders improved to their highest readings of the year. However, shipments and employment declined. The price index dropped slightly.

  121. RentinginNJ says:

    How does reducing SO2 increase global warming?

    SO2 molecules in the atmosphere reflect sunlight back into space and prevent them from warming the earth. You can see an uptick in the warm trend in the early 1990’s as the Acid Rain program started to dramatically reduce SO2 emissions from power plants.

    (Note: I’m not advocating for SO2 emissions, its more of a commentary on how complicate climate science is and the number of moving parts involved)

  122. RentinginNJ says:

    Belle Mead plant to close

    3M Co. plans to close a manufacturing plant in Somerset County that has been blamed by environmentalists for polluting local streams.

    The plant, in Belle Mead, produces tiny granules used in asphalt roof tiles and other products and will be “phased out” over the next 20 months. The company cited a combination of reduced customer demand and high costs that make the Belle Mead facility “uneconomical.”

    St. Paul, Minn.-based 3M said the estimated 90 employees of the Belle Mead plant will have opportunities to apply for other jobs within the company or will be provided severance packages.

    The Belle Mead plant has been under pressure to improve its environmental controls. A byproduct of the plant — dust from pulverized rock — has been cited by environmentalists for fouling streams.

    “Looking ahead, the already high cost of production, combined with the additional investments needed for continued operation, make it economically unviable to continue business at this site,” Martyn Tiplady, a 3M division vice president, said Wednesday.

    The work done at the Belle Mead facility will be moved to other 3M plants, the company said.

  123. lisoosh says:

    make:

    “When we are invited to local community ethic parties I rent a Jeep or something like that so that I can blend in the conversation and complain about gas prices. I have to act like I have a lot less than I actually do.”
    A Sebring for collections. A Jeep to project to “friends” Boasting about fine cars to a bunch of anonymous strangers.

    I actually find it a little sad.

    If you can’t be yourself, who can you be?

  124. john says:

    May housing starts fell 2.1% while permits, a key sign of builder confidence, rose a surprising 3.0%.

  125. James Bednar says:

    john,

    We covered the new home starts and permits numbers when they were released on Monday, two days ago.

    jb

  126. James Bednar says:

    Really wasn’t very much to discuss, however..

    http://njrereport.com/images/maynhs.gif

    jb

  127. UnRealtor says:

    A fascinating documentary:

    “The Great Global Warming Swindle”
    http://video.google.com/videoplay?docid=-3028847519933351566

  128. James Bednar says:

    From the Economist:

    Bearish turns
    A prominent hedge fund’s implosion revives fears about the poisonous influence in America’s subprime-mortgage market

  129. 3b says:

    #124 John And that rise in permits was almost entirely due to a rise in permits for apartment construction (rentals)

  130. James Bednar says:

    We’ve gone from using incandescent bulbs to being completely CFL (well.. everything but oven and fridge). The new breed of CFL bulbs are very nice. The color is actually bearable, and high-frequency flicker has been reduced dramatically. Most importantly, turn on time is shorter than it was in the past, I know this used to be the deal-killer for most.

    jb

  131. pesche22 says:

    all clear markets up.

  132. chicagotroll says:

    James Bednar Says:
    June 21st, 2007 at 12:31 pm
    Just rented the movie “MaxedOut” showing the actual americans up to their eyeballs in debt.
    Just came in the mail (NetFlix).
    jb

    I have this in my queue. Let me know you review. I am considering using it for presentations [edited] for high school kids.

  133. john says:

    300K condos from 2004/2005 on auction block that sold for 145k. Great vido watch the people who paid 300K screaming at the auction how they got ripped off. Levit and sons said they sold them at market in 2004 and they sold them at market in 2007 and it is not their fault condos prices are down 50% in three years

    http://www.winknews.com/news/local/7896352.html?video=YHI&t=a

  134. RentinginNJ says:

    Just rented the movie “MaxedOut” showing the actual americans up to their eyeballs in debt.
    Just came in the mail (NetFlix).

    I went to put it in my queue and I got an option to “watch it now”. Wow, instant gratification…at least once I get home and put the baby to bed.

  135. Richard says:

    #109 your synposis on the manhattan rental market is spot on. yes folks it is different in manhattan. if it wasn’t before it definitely is now.

  136. make money says:

    Ladies and gentelman,

    Gear up for stagflation. That is, sluggish economic growth coupled with a high rate of inflation and unemployment. Meaning, less money to buy homes and tighter credit. What we are seeing with this hit to Bear Sterns is Wall Street is fearing a market becoming more cautious about credit. The entire game is dependent on credit so stifling off easy money will surely bring the game to a close.

    Cash will be KING again. Your patience will be well rewarded.(I hope)

  137. pesche22 says:

    i want my family leave.

  138. BC Bob says:

    Make [138],

    Thanks for the heads up.

  139. BC Bob says:

    Whole Loan Transaction Management and Sales

    Inside Sales Department was decided to be moved to FL with a pay cut. I took a package to leave the firm.

    Most Recent Employer Goldman Sachs

  140. JBJB says:

    We recently swapped out to CFL’s as well. I really didn’t notice any change to the quality of lighting in the house, although you can’t use the dimmer switches, but this doesn’t really bother me. This is one thing that anyone can easily do to decrese CO2 emissions (GW skeptic or not). However, the US was just this week swallowed by China in total CO2 emissions, until the Chinese and Indians get on board, we’re really just pissing in the ocean.

    Anyway, cool website on CFL’s for those interested:

    http://www.onebillionbulbs.com/

  141. Read My Lips: NO REBOUND NO HOPE 2008 Misery -Real Estate Depression says:

    Just go to the county record and look up the dirt.

    It’s all there. Then you can see the shaky finances of each of these homedebtors.
    You have the ammo to take it to’em.

    It’s payback time baby.

    hehehehehehehe

  142. nwbergen says:

    Opps, I did it again. I left my gas grill on all night. Three burners on high for 8 hours 700 degrees. Oh well, I guess I contributed to global warming again. So much for the hybrid offset.

  143. RentinginNJ says:

    Inside Sales Department was decided to be moved to FL with a pay cut. I took a package to leave the firm.

    What kind of cut in percentage terms were they asking you to take, if I may ask?

    Would the lower cost of living have offset the cut or was it really a deep cut?

  144. Read My Lips: NO REBOUND NO HOPE 2008 Misery -Real Estate Depression says:

    READ MY LIPS: IT’S A MESS! A PILE OF LEVERAGE.

    BABABABABA

    HUNKER DOWN. BE PREPARED.

  145. 3b says:

    #137 Richard: it is a little too early to be saying that at this point.

    Much of the same Wall St etc NYC capital of the world, foreign money etc, etc., reminiscient of the 1980’s and yet,…. well there are those of us who do remember.

    If the pricey NYC suburbs such as Westport and Chappaqua are starting to take a hit, (house price wise) NYC will too. It may take longer, but it will happen.

  146. dreamtheaterr says:

    James Bednar Says:
    June 21st, 2007 at 10:18 am
    No matter how you slice and dice it, owning a car is a liability and is always a losing proposition. There is no way to beat the game, all we’re talking about here is how to minimize the losses that we’re going to incur.

    Even those I know who have dealer licenses, buy at auction, and quickly resell (1-2yr), don’t always come out “winning”. Heck, I even know some folks that only buy luxury “totals” at auction and have them rebuilt in order to be able to drive a “flashy” car for cheap.

    Personally, the only way to win at this game is to drive an older model, high-reliability car until the cost to repair simply doesn’t make sense anymore. Don’t finance, don’t lease, and keep your money in assets that make money, not tied up in a car. But how many folks can really do this without feeling a massive amount of embarassment. After all, if you aren’t driving that new BMW you really are just a worthless piece of waste.

    jb

    There might be another way to ease the pain of car costs for some folks; let the IRS share the pain. I am no tax guy so pl treat this with skepticism.

    I believe you cannot claim your daily commute to work as part of unreimbursed business expenses. But for folks who do consulting/part time jobs, driving to-fro client sites is not considered a daily commute. So you can claim 48.5 cents a mile as a business deduction for 2006 for your personal car. Depending on your tax bracket (say you are in the 33% bracket), 16 cents/mile (33% of 48 cents) is what IRS effectively allows you to shield from taxes for using your car. If you do about 1,500 miles a month, IRS is helping you out to the tune of $240 a month. Effectively, that’s the depreciation amount on most cars.

    Maybe I am all wrong….can any tax folks in here shed some light?

  147. BC Bob says:

    Renting [146],

    OOPS. That wasn’t me. It came across my desk. I just copied and pasted part of the email.

  148. 3b says:

    #142 BC Are you a Goldman Alumn?

  149. BC Bob says:

    3b [151],

    See my post, #150

  150. 3b says:

    BC OK Got it. would have been a small world if you were.

  151. James Bednar says:

    I’ve added some buttons to add posts to digg, del.icio.us, reddit, etc.. If you are a member of any of those services, please make liberal use of the buttons.

    jb

  152. Richie says:

    I believe you cannot claim your daily commute to work as part of unreimbursed business expenses. But for folks who do consulting/part time jobs, driving to-fro client sites is not considered a daily commute. So you can claim 48.5 cents a mile as a business deduction for 2006 for your personal car. Depending on your tax bracket (say you are in the 33% bracket), 16 cents/mile (33% of 48 cents) is what IRS effectively allows you to shield from taxes for using your car. If you do about 1,500 miles a month, IRS is helping you out to the tune of $240 a month. Effectively, that’s the depreciation amount on most cars.

    For the most part, yes correct.. Most self-employed people don’t write off the personal mileage, but rather lease the cars or finance them through their business. The lease is 100% deductible, whereas the purchase must be depreciated over 5 years.

    $240 in mileage is nice to deduct, but if you can write off a $500+ lease payment, that’s more of a tax advantage, along with your gas expenses, repair, maintenance, etc, it’s more lucrative.

    There’s tons of other information on the irs website, lots of babble, but the rules are all there..

    -Richie

  153. 2010 Buyer FKA 2008 says:

    If you didn’t know it already, its a great time to buy. (sacracism added)

    Weichert, Realtors Sees Ideal Opportunity for Buyers
    Potential home buyers waiting for the perfect time to jump into the housing market should wait no longer, according to Weichert, Realtors….“Much of the attention real estate is getting today continues to be based on comparisons to the past thanks to the record-breaking years we had earlier this decade. But if you take a more forward-thinking approach, you see real estate is set for an upswing based on indicators such as home supply, interest rates and employment,” …. Weichert Financial Services, for example, offers more than 360 different mortgage products.

    http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070621005747&newsLang=en

  154. RentinginNJ says:

    Hedge fund woes could hit Main Street
    Upheaval in credit markets could hit consumer, business borrowing – and slow the economy; risk premiums already rising.

    NEW YORK (CNNMoney.com) — When Bear Stearns’s hedge funds melted down this week because of too big a bet on subprime mortgages, it may have seemed like a Wall Street problem.

    But numerous economists said the latest turmoil in the nation’s credit markets could spill over to Main Street as well, raising borrowing costs for consumers and businesses alike – and possibly putting the brakes on the surprisingly resilient U.S. economy.

    Subprime mortgages, made to home buyers with less than top credit ratings, have been skidding since early this year as delinquencies and foreclosure rates soared. Now problems with those mortgage loans have sparked a big headache forBear Stearns and the Wall Street firms that lent it money to invest in subprime mortgages, such as Merrill Lynch JPMorgan Chase and Citigroup

    But the problems threatening the credit markets could mean far more than just billions in possible losses for those firms. It could push rates higher for corporate debt, which has been relatively cheap even for companies with poor credit ratings.

    Even if those companies don’t fall behind in their debt payments the way many subprime borrowers have on their mortgages, the investors making money available for those riskier loans are now demanding a much higher premium than they had until just recently.

    That could choke off the supply of relatively cheap money that has kept the U.S. economy humming in recent years, putting a dent in everything from business investment to consumer spending.

    “That’s clearly high on my list of things to worry about,” said David Wyss, chief economist at credit-rating agency Standard & Poor’s. “I think it’s healthy that pricing for risk changes. I think it’s too loose now. But the transition could be painful. It depends on how fast it happens.”

    Wyss doesn’t believe that the rise in borrowing costs for most companies will plunge the U.S. economy into recession – and many economists agree with him. They said there’s enough underlying strength in the economy to keep it growing. But it will mean slow growth in the second half of this year rather than more normal “trend” growth of 3 percent a year or greater, said John Silvia, chief economist at Wachovia.

  155. Willow says:

    FYI Compact fluorescent bulbs

    “Lastly, due to the very small amount of mercury in CFL bulbs (about 4.0 milligrams), though they pose no health threat if broken, they should still be disposed of at household hazardous waste sites to avoid mercury buildup in landfills. Better still, encourage retailers who sell CFLs to recycle them, as Ikea does, and encourage takeback programs similar to those being instituted for other electronics (see “Responsible Electronics Recycling”). Also, seek out lower-mercury bulbs. Philips just recently introduced its ALTO line of CFLs and fluorescent tubes, have 70 percent less mercury than fluorescent bulbs manufactured in 2001.”

    This is from a subscription site http://www.thegreenguide.com/doc/ask/cfl

  156. john says:

    You can only write off your commute to a client 100% if your declare your primary residence as your work place. In theory you can only deduct the amount in excess of your normal commute. So if your consulting office is 20 miles from home and you drive from home to client under 20 miles and back and never go to office that day you can’t deduct milage that day. Also if you buy a truck over a certain weight class such as a GMC surban you can fast track depreciate it and take much better write off than leasing. This might be better if you don’t rack up a lot of miles as the gas milaage will kill you.

    Also if you have a $500 dollar lease you don’t get $500 a month back. If you business is in let s say 40% tax bracket you get back $200 a month so the guy taking the $240 deduction is actually ahead. Plus in the lease you can only write off the days you actually use if for work not every day as you have to back out personal driving so that makes it less of a deduction. I know people say I write the whole thing off even my trips to soccer games and milk but that is illegal. Also in the lease I once got a job offer from Hertz years ago and they offered me a free leased car. There are only 200 work days a year after vacation, weekends and sickdays so I had to take 165/365 of lease as income on my check as it is a benefit.

  157. BklynHawk says:

    JB-

    No Blinklist, Furl it, Magnolia, Newsvine, Tailrank, etc.?

    Just kidding, this is a great add. I’ll start Digging immediately.

    JB, this site is amazing. You put a lot of bigger sites to shame.

    JM

  158. 3b says:

    #157 Real State set fro an upswing, absolutely amazing!! These people are just shy of being criminals

  159. ADA says:

    3b #148,

    but it appears inventory is decreasing which makes me think that prices wont:

    http://www.observer.com/2007/summer-no-cooling-manhattan-residential-market

    The inventory of unsold Manhattan condos and co-ops on the sales market has dropped during the last three months of spring. Inventory slid more than 11 percent from April through May and 25.7 percent from May 2006 to May 2007

  160. ithink_ithink says:

    sorry if a repost:
    Avoiding a Falling Knife in the U.S. Mortgage Market
    http://www.cnbc.com/id/19342644

  161. BC Bob says:

    “He says one of the most important takeaways here could be the culpability of the ratings agencies in all this.”

    From #164,

    It appears that Moody’s, Fitch and S & P are no different than the fraudulent home/condo appraisers. Collusion? The law firms must be smelling another bloodbath.

  162. Rich In NNJ says:

    I (now) Digg

  163. Bloodbath in Winter 2007 says:

    Curious about two places in Ridgewood, can anyone help?

    MLS
    2713215
    2712210

    Just curious about price drops and how long on the market …

  164. RentinginNJ says:

    you see real estate is set for an upswing based on indicators such as home supply, interest rates and employment

    So let me get this straight

    – Home supply is at record highs
    – The ultra low interest rates that fueled this boom are already fully priced-in to housing prices. Rates can only really go up from here.
    – The economy has been doing well and low unemployment is already fully priced in to housing. Sure, it can continue to do well, but unemployment is not getting any lower, and is more likely to rise if we face a recession.

    So which of these indicators is poised to generate an upswing?

  165. 3b says:

    #163 They did before, they will again. some I am sure are selling, some are being taken off the market, only to come back on etc.

    But ultimately the prices will fall. So many will say no, it is different here, its different this time etc, Yet in the end it never is.

    If we had a soft landings in the past,then perhaps I would feel differently, but we have not.

    Even NYC will eventually fall to the same market forces.

    History may not always repeat itself, but it certainly is a guide.

  166. 3b says:

    3158 And thats why I do have no respect for realtors, except for Clot.

  167. dreamtheaterr says:

    #160, John thanks for the clarification.

    So say a person’s drives to his office 5 miles from home. And the current client is 45 miles from office each way. That allows one to write off 90 miles per day * 48.5 cents/mile * 21 days a month = approx $900 a month. Assuming 33% tax bracket, $300 is the after-tax benefit per month. That’s pretty substantial.

    The key is to buy (I am not considering leases in this equation) and drive a used and economical car. Driving an SUV/gas guzzler doesn’t bring you out ahead even after tax write offs.

    Back to that lease, I swear I never understand how folks lease and leave themselves at the mercy of using up their miles before the lease ends. I found a BMW 5 series on leasetrader with 7 months still left on the lease and all miles used up, asking $250 a month for a lease trade. Huh?

  168. Rich In NNJ says:

    2713215 – Glen Rock – Active
    SLD GOODVIET PL $242,000 10/15/1999

    ACT GOODVIET PL $689,000 7/4/2006
    PCH GOODVIET PL $649,900 7/31/2006

    ACT GOODVIET PL $599,900 10/26/2006 (Relisted with same agent)
    W-C GOODVIET PL $599,900 11/24/2006 (Withdrawn)

    ACT GOODVIET PL $559,900 3/29/2007 (New agent)
    PCH GOODVIET PL $539,900 5/9/2007
    PCH GOODVIET PL $529,900 6/13/2007

    Taxes: $10,173

    2712210 – Ridgewood – Under Contract
    SLD S PLEASANT AVE $200,000 7/8/1997

    SLD S PLEASANT AVE $425,000 8/15/2002

    ACT S PLEASANT AVE $539,000 4/4/2007
    PCH S PLEASANT AVE $529,000 5/3/2007
    PCH S PLEASANT AVE $509,000 5/30/2007
    ACT* S PLEASANT AVE $509,000 6/11/2007 (Attorney review)
    ARR S PLEASANT AVE $509,000 6/13/2007 (Attn. review removed)
    ACT* S PLEASANT AVE $509,000 6/18/2007 (Attn. review)
    U/C S PLEASANT AVE $509,000 6/19/2007 (Under contract)

    Taxes: $7,449

  169. chicagotroll says:

    RentinginNJ Says:
    June 21st, 2007 at 4:54 pm
    you see real estate is set for an upswing based on indicators such as home supply, interest rates and employment

    So let me get this straight

    – Home supply is at record highs
    – The ultra low interest rates that fueled this boom are already fully priced-in to housing prices. Rates can only really go up from here.
    – The economy has been doing well and low unemployment is already fully priced in to housing. Sure, it can continue to do well, but unemployment is not getting any lower, and is more likely to rise if we face a recession.
    So which of these indicators is poised to generate an upswing?

    RENT: I know we’ve [collectively] discussed this issue many times over the months here. However, it is the “priced in” nuance that effectively refutes all bulls claims. You’ve spoken it like a capital markets analyst.

  170. ADA says:

    3b

    So when inventory goes up that means prices will fall and when inventory goes down (as it is in manhattan) that means prices will fall too?

    wait a second…

    3b Says:
    June 21st, 2007 at 4:56 pm
    #163 They did before, they will again. some I am sure are selling, some are being taken off the market, only to come back on etc.

    But ultimately the prices will fall. So many will say no, it is different here, its different this time etc, Yet in the end it never is.

    If we had a soft landings in the past,then perhaps I would feel differently, but we have not.

    Even NYC will eventually fall to the same market forces.

    History may not always repeat itself, but it certainly is a guide.

  171. john says:

    dreamtheaterr Says:
    June 21st, 2007 at 5:00 pm
    Yep, unless the client pays you for the milage, My neighbor who is a CPA bought a 2007 surburban cause he needs one large truck anyhow for his wife and his kids and if it snows or he moving stuff and takes the write off. But he has a small car too that is his wife’s personal car. Everytime he has a long trip to client he takes the small car as there is no way to know which car was used that day that way he gets the depriciation and the good mpg. 95% of time big truck is used to haul kids around, low miles per year but with a bunch of kids in it he still comes out way ahead then getting 4 mpg more in a minivan. He is not supposed to do it that way but I see it down a lot. Why does every contractor wife have a large SUV at school while the husband drives a camry to the worksite in brooklyn, My thinkee they are doing switchee

    #160, John thanks for the clarification.

    So say a person’s drives to his office 5 miles from home. And the current client is 45 miles from office each way. That allows one to write off 90 miles per day * 48.5 cents/mile * 21 days a month = approx $900 a month. Assuming 33% tax bracket, $300 is the after-tax benefit per month. That’s pretty substantial

  172. Pat says:

    the RibMeister says..”Somebody’s waiting for somebody else to get a house sold in order to waive that contingency and move forward. In the meantime, a non-contingent buyer can swoop in and take the house, as it’s still active and available for sale.

    Lot of that going on the past few months.

    Clot, I thought that after a period of time, the status had to revert to active? Didn’t know they could retain, “Active, But Contingent” forever.

  173. Donald says:

    Please people, prices are not coming down in Manhattan. The outer boroughs? Maybe. But not Manhattan.

  174. James Bednar says:

    Sorry about the downtime, needed to upgrade the blog software.

    jb

  175. RentL0rd says:

    Has anyone else noticed that NJ.com’s recent home sales page is broken?

    I’m talking about this one –

    http://www.nj.com/realestate/homesales/

    Try putting in a zip code, etc. and submit.

    Any alternative websites to find recent sales?

  176. Pat says:

    Take Money says…”guess what It’s not a story. I don’t like checks. I prefer cash..”

    Ok, now we’re getting to the part where somebody tells you to be real careful of IRS agents casting for phrases like, “I prefer cash.”

  177. Clotpoll says:

    Pat (176)-

    In all properly-drawn agreements, contingencies must end. However, MLS listings are entirely agent-controlled; if that agent doesn’t change the status, it’ll stay that way for the length of the listing.

  178. scribe says:

    Rent,

    Yep, NJ.com is not working at all.

    Try this one:

    http://www.housefront.com/Default.aspx?m=tab

    Also, propertyshark.com

  179. #177 Please Donald they will,just give it time, it happened before it will happen again. Watch it all play out over the next 18 months

  180. startingover inNJ says:

    OK, everybody, I made my first offer today and got turned down immediately. Didn’t even get to price. They wanted to close no sooner than 90 days after the end of attorney review. Nothing in the listing about that one.

    I thought the price seemed more reasonable than most. I guess now I know why.

  181. #174 ADA: did the inventory sell, did they take it off, for a while, will ir be coming back who knows. Will the remaining inventory still sit there, and not sell?

    All to be determined, but at some point the prices will fall as they fell before.

  182. James Bednar says:

    Only a little fallout, move along, nothing to see here..

    From Reuters:

    Brookstreet Securities says may liquidate

    Brookstreet Securities Corp. on Thursday said it “may be forced to close” after heavy markdowns in collateralized mortgage obligations, according to a letter the firm sent to investors this week.

    “Disaster, the firm may be forced to close,” Brookstreet told its investors in an e-mail dated June 20 that was obtained by Reuters.

    Julie Mains, chief compliance officer, confirmed the contents of the e-mail.

    “We were in capital violation as of yesterday,” said Mains in an interview. She said the NASD told the firm it could only sell securities and not make buy orders on behalf of clients.”

    Brookstreet Securities hurt by CMOs, may shut down

    “It would take a capital infusion of at least $5,000,000 to keep the company in compliance with no guarantee that additional markdowns may not be forthcoming,” the firm wrote in the seven paragraph-long email that details the disaster that the firms says occurred in one day.

    Fidelity Investments’ National Financial unit, which acts as Brookstreet’s clearing firm, marked down the values of all of Brookstreet’s collateralized mortgage obligations, Brookstreet said. CMOs are securities of repackaged loans that are divided and sold to investors.

    “Many of those accounts were on margin and have suffered horrendous markdowns and unrealized as well as realized losses,” the e-mail said.

  183. #184 starting: Any idea why they were so insistent on that time frame for a cloisng? Perhaps you could use it to your advantage.

  184. Bullish on housing says:

    A look ahead

    The report also points out the persistence of a wealth effect in 2006, which kept Americans borrowing more against their equity to support their spending. The amount of home equity cashed out set a record last year, as the volume of refinances dropped. The effect of the housing slowdown on consumer and remodeling spending hasn’t been seen yet, according to the study.

    Look farther ahead, however, and the outlook for housing is bullish.

    For one, the baby boomers will continue to move into the age where second-home ownership is at a high. Evidence of this demographic trend has already been seen, with the sale of vacation homes hitting a record in 2006, according to the National Association of Realtors.

    At the same time, children of the baby boomers will continue to move into the ranks of homeownership, boosting housing demand.

    In addition, immigration is expected to hit a record 12 million between 2005 and 2015. The upcoming growth in new households puts estimates for new-home demand at about 19.5 million units from 2005 to 2014, surpassing the 18.1 million units added between 1995 and 2004, according to the report.

  185. schabadoo says:

    “82 NJGal Says

    Besides, I wonder how many hybrid owners try to go green in other areas of their life?”

    What in the world does that have to do with anything?

    When someone picks up trash on the sidewalk and throw it away, it seems like a good thing; questioning their unknown environmental habits seems amazingly childish.

  186. startingover inNJ says:

    To #187 bbb: Owners are a retired couple, moving to house they already own in Florida. They want to be down the shore in the summer. They told the agents the timing was not negotiable. This doesn’t really explain the ninety days though. My broker thinks one of them doesn’t really want to sell.

  187. syncmaster says:

    If prices have fallen since they bought, they may actually owe more than the house is worth, making it an easy choice to walk away.

    I don’t get it. If I owed more than my house is worth, I would not be able to sell unless I brought cash to the closing. If I have 0 equity, chances are I’m not the kind of person who has cash. How is it an easy choice to walk away? What am I missing here?

  188. Pat says:

    Sync..what are you missing? Walk away doesn’t mean sell. It means foreclosure. If you don’t want to bring a check to the closing, don’t pay your mortgage…let the bank buy the house at the sheriff’s sale.

    You live rent free for a year and that softens the pain of trashing credit.

  189. James Bednar says:

    Bullish on housing,

    Cite your sources, a link will do.

    Pulse on Housing

    Also from that same piece:

    It’s still too early to tell exactly when this housing slump is going to end, with house prices just beginning to soften, mortgages at risk of defaulting beginning to hit reset dates and lending standards that are starting to tighten, according to researchers at the Harvard University’s Joint Center for Housing Studies.

    One thing’s for sure: Before the sun shines again on the housing industry, a good amount of excess inventory will have to be sold, according to the center’s “State of the Nation’s Housing” report, released Monday. Employment growth will play a role as well in the recovery, as will interest rates, the report said.

    In a telephone interview, Nicolas P. Retsinas, director of the center, said the housing industry was going through a “bumpy landing.” Yet despite the severe contractions in home sales and starts seen during this correction, home prices have flattened but haven’t crashed, and as a result, “we’re not seeing a return to affordability,” he said.

    Home prices should slide further, however, according to the report. As for home sales figures, Retsinas said sales of existing homes could bottom out and begin to recover by the end of this year, with the new-home market following in 2008. The Mortgage Bankers Association also expects the market to hit its bottom at the end of the year, gradually improving from there as homes become more affordable.

    jb

  190. Pat says:

    O.K. Today was officially the first day of Summer.

    Did my prediction of Spring inventory going through the roof come true?

    I’m not sure. It seems like a relative. What’s your opinion? Did inventory go through the roof where you live? Where I live, it did.

  191. Rich In NNJ says:

    Inventory for Bergen County is leveling off, it went through the roof last year.

    But the level is still WAY higher than previous years.

    Rich

  192. BC Bob says:

    “The report also points out the persistence of a wealth effect in 2006, which kept Americans borrowing more against their equity to support their spending”

    Bullish [188],

    I was finished after the first sentence of your post. I can’t imagine anyone who is bullish, posting that to support your position. Yikes.

    JB,

    Thanks for the link, the full article.

  193. ADA says:

    3b #185

    You’re right we cannot know the reason inventory is declining in Manhattan but we cannot also know the reason behind inventory increases either i.e. do people really have to sell or do they just want to test the waters to see what their home is worth.

    In the absence of perfect information, we must assume the laws of supply and demand are in place and that increasing inventory will lead to a decrease in prices and decreasing inventory will have to opposite effect, as it is in Manhattan.

  194. RentinginNJ says:

    I don’t get it. If I owed more than my house is worth, I would not be able to sell unless I brought cash to the closing.

    If you have a non-recourse loan and don’t mind a blemished credit report, you basically hand your keys to the bank and flip them the bird.

    If you do care and really can’t pay, you get permission for a short sale. You sell, the bank takes the loss, your credit isn’t hit with a foreclosure, but you are sen d tax bill for the “forgiven amount”

  195. #197 Well time will tell, but form people I know that are familiar with Manhattan real estate , prices in the under 1 million catergory are flat at best.

    Also ther is alot of new invntory under construction that has not hit the market yet,

    During the last down turn in Bergen County (or at least in my prestigious minutes from NYC town) inventory in the early 90’s was low, and yet prices still declined.

    Simply put there were too few buyers, and many would be sellers who wanted to sell could not sell having bought at the top, and so they kept their houses off the market.

  196. #188 Bullish The NAR have been cycling and recycling this fluff peice for the last 2 years.

    You can have all the immigrants you want, but if prices are too high, they canno buy.

    As far as the secon home thing, thats so 2005/06, witness all the alarm bells now about the 55 and over crowd with dismal savings for retirement.

    So basically they advocat people over pay now as it all may work out in the end. Yeah great advice.

  197. Clotpoll says:

    Pat (194)-

    Inventory levels don’t matter. There aren’t any buyers.

  198. James Bednar says:

    I’d call this big news..

    Bear Stearns to cancel Everquest IPO

    Bear Stearns has called off a planned public offering for a fund holding complex debt securities backed by subprime mortgages, amid a crisis at two other related funds managed by Bear that created turmoil in the market for such risky assets.

    The two stricken hedge funds, both run by Ralph Cioffi, Bear Stearns managing director, had close ties with the proposed listing vehicle Everquest Financial, also managed by Mr Cioffi.

    The funds had transferred to Everquest the riskier parts of complex collateralised debt obligations, which package portfolios of debt into high-yielding securities, when the company was established last year, according to the IPO filing. Everquest secured a $200m line of credit from Citigroup.

  199. James Bednar says:

    Hot potato!

    From MarketWatch:

    Lehman selling $400 mln of Bear hedge fund assets: source

    The assets were put up as collateral by the funds that received financing from Lehman, as well as a bevy of other Wall Street banks.

    The bid list, which was in circulation Thursday afternoon, totals about $400 million of securities, said the source.

  200. Donald says:

    “You’re right we cannot know the reason inventory is declining in Manhattan”

    The reasons are very simple:

    1. New construction does not get counted as inventory as it is not put into any sort of MLS (Manhattan does not have an MLS)

    2. FSBO apartments are not counted as inventory

    3. The default rates in Mahattan are much lower since co-op baords screen potential buyers and their credit before they buy.

  201. Donald says:

    “#177 Please Donald they will,just give it time, it happened before it will happen again. Watch it all play out over the next 18 months”

    No, prices are not coming down in Manhattan. You do not realize that Manhattan has safeguards to prevent massive foreclosures. Co-op boards screen the credit of buyers very thoroughly and they require at least 25% down so you do not have that many owners who took out risky mortgagaes.

  202. James Bednar says:

    Sources said the bank may have lent far more money to the high-risk funds than originally thought, much of it linked to the lower tier “sludge” category of sub-prime mortgages most vulnerable to rising US default rates.

    Perhaps it’s that ol’ pesky decimal point problem again..

    jb

  203. BC Bob says:

    JB,

    Perhaps it was “low” risk arb plays between similar tranches. Possibly, the trader also was also employed to oversee the back office. Bring back Nick Leeson. There is no need for checks and balances. Nobody has a clue what the crap is worth.

  204. Orion says:

    Re: #206

    Hot Potato! Yikes!
    Gotta love the “sludge” reference.

    But, if WS is so worried, why did it close higher?

  205. New-to-NJ says:

    Interesting article…no wonder so many sellers are out of touch with reality. It seems homeowners in general are.

    NEW YORK (CNNMoney.com) — Despite turmoil in the housing markets that includes record foreclosure numbers, mortgage rate increases and home price depreciation, homeowners don’t believe there’s a real estate slump, according to a new poll.

    Most – 55 percent – are confident that their homes continued to increase in value compared with a year ago, according to a nationwide telephone survey conducted this month by The Boston Consulting Group (BCG), a business and management strategy firm.

    http://money.cnn.com/2007/06/21/real_estate/housing_perception_gap/index.htm?postversion=2007062114

  206. Justin says:

    The mindset hasn’t changed enough for the 30% drop that people are expecting.

    Americans still confident in home values: survey
    WASHINGTON (Reuters) – Although existing homes are selling at their slowest pace in four years, most Americans are confident their homes are worth more now than they were a year ago, according to a survey released on Thursday.
    http://www.reuters.com/article/businessNews/idUSN2137660020070621?feedType=RSS&rpc=23&sp=true

  207. RentinginNJ says:

    Inventory levels don’t matter. There aren’t any buyers.

    It wouldn’t suprise me to see inventory levels drop at some point as sellers simply give up. If there aren’t any buyers, at some point you just throw in the towel (assuning you can afford to stay put)

  208. UnRealtor says:

    Pat #194, saw bunch of new listings come on the market today. It had been one or two every few days for months, but today a small flood of new properties are for sale.

    Most were “priced to sell” at about 10-15% below recent comps.

    One house in particular, was listed at the same price for almost a year, and today dropped almost $100K.

    Reality is starting to set in for Greedy Grubbers.

  209. Home Seller says:

    for those who think CFL bulbs are a good idea, I just have one question.

    Where are you going to recycle all the toxic mercury in these bulbs?

    Seems like the government missed that minor detail..LOL

  210. Home Seller says:

    #61

    JB, I hope you’re just kidding and not really that vain about driving older model cars.

  211. Pat says:

    Booyah, you don’t get questioned often. But here I go. No goofing.

    Why do many have the 30% drop on the brain? It’s all over, mentally.

    Osmosis? Group think? Wisdom of crowds?
    Did you ever go to a flea market, see something that caught your eye, but you knew nothing about…but you just knew what to dicker to on it?

    30% pops up like a some Billy Joel or Elton John song from 1973.

  212. BC Bob says:

    UN [213],

    I saw a house last year, asking 490K. I offered 350K. They laughed at me, said get serious or move to the midwest. Fast forward to today, now asking 399K. The realtor called and asked if I’m still interested. I said I was last year. However, I think I’m overpaying at 350k, given the state of the market today. The realtor said he understands, obviously I’m no longer crazy, and will get back to me with updates. The worm has/is turning.

  213. Willow says:

    CFl bulbs – the counties have recycle days for things like this.

  214. RentinginNJ says:

    Why do many have the 30% drop on the brain?

    I’m in the 30% camp.

    I think it will come as a result of slow grinding process, with real declines (i.e. inflation) making up a big piece of the 30%. When all is said and done, most people won’t even know real prices dropped by 30%.

    30% also has precedent. On an inflation-adjusted basis, real prices in the NY metro area dropped by 30% between 1988 & 1997.

    Most importantly, however, is that if you believe markets are rational and self-correcting, it will take a 30% drop to realign home prices with fundamentals (mainly income levels).

    This “fundamentals” argument almost puts one is a position of having the burden of proof to make a case against a 30% (or in that ballpark 20% – 40%) drop. Hundreds of year of economic history dealing with economic bubbles support the hypothesis that prices will revert to the mean. If this isn’t the case this time, why not? Was there a paradigm shift? Are things really different now?

  215. 3b says:

    #219 Agreed, just do not think it will be a slow grinding process, and believe me I think people will know, really know.

    If people were paying 500k for POS Cape that is now 400K, well belive me, people will know that, its not soemthing you can hide.

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