This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
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From the WSJ:
Treasury Market Frets
Over Price Pressures
By DEBORAH LYNN BLUMBERG
September 21, 2007; Page C2
The Federal Reserve may be worried about risks to the economy, but in the Treasury market, it is all about inflation these days.
Fears of increased price pressures have been fanned this week by a slew of developments, from the Fed’s aggressive rate cut to surging oil prices and the dollar’s continued decline. That has sent government bonds into a tailspin — and not just the longer-dated maturities, which are typically the most sensitive to rising inflation as it eats away investors’ fixed returns.
Some in the market have been worrying about inflation for some time. They point to strong global growth and tight labor markets as driving price pressures. What’s more, the benign impact of cheap imports to the U.S. is also waning — just as the dollar’s decline is quickening.
“Inflation is more of a problem than the Fed is telling us it’s going to be,” said Jamie Jackson, portfolio manager at RiverSource Investments, adding that the weaker dollar “doesn’t help.”
Core inflation — excluding food and energy — is currently just above the top end of the Fed’s understood 1% to 2% comfort zone. And August inflation data this week showed declines in both producer and consumer prices.
To be sure, the Fed hasn’t abandoned its inflation monitoring. Speaking to Congress yesterday, Chairman Ben Bernanke reiterated that the central bank will continue to pay “very close” attention to the inflation rate. But his words had little impact.
Mr. Jackson expects core inflation to head higher, approaching 2.5% over the next several months, as commodity prices continue to head upward and rental costs climb. The yield on the 10-year note could rise by as much as 0.5 percentage point over the next six months, he said.
Cadmus Hicks, investment strategist at Nuveen Investments in Chicago, worries about the weakening dollar’s impact on inflation.
“A weaker dollar does mean more inflation, and [the Fed] does not want to see the dollar fall in a disorderly manner, as it limits their flexibility,” he said.
From NorthJersey.com:
EnCap may stick us with $51M debt
The looming collapse of the EnCap golf project, once hailed by state officials as way to transform the Meadowlands at no public expense, would stick New Jersey taxpayers with $51 million in debt.
A state official confirmed Thursday that a controversial state loan that fronted the EnCap developers $212 million lacks sufficient collateral to fully protect taxpayers if the project fails.
“We’ll seek any remedies we can to collect what the state is owed,” said Dennis Hart, executive director of the New Jersey Environmental Infrastructure Trust, which joined with the state Department of Environmental Protection to provide the 2005 cut-rate loan.
The loan, part of a total of $300 million in public financing, was made over the protests of top DEP finance officials who argued that EnCap was a bad risk and could not even provide basic security to back the loan. Though the developer did provide a letter of credit backing more than half its financing, $106 million in DEP money was approved with just $13 million in borrowed cash collateral.
The rest was backed by future sales taxes on the proposed golf community, the fate of which is now in serious question.
From the Washington Post:
Fear Drives Baghdad’s Housing Bust
Real estate agents said many people are unrealistic in setting asking prices for their homes.
“Real estate depends on security, and right now the only people in Baghdad are the ones who can’t afford to go somewhere else,” Maliki said. “With the security this bad, the only houses that can sell are very cheap.”
The reduced property values mean that Maliki is barely able to scrape by on his commissions. When he does make a sale, he must make special arrangements to prevent a kidnapping or robbery during the exchange of money.
“These operations are always undercover, in secret,” he said. “I am always afraid. Nobody brings security in because they want it to be low-profile, but usually everybody carries a pistol to the meetings.”
from this article: http://www.msnbc.msn.com/id/20898777/page/2/
Hey Clot: Is this [pistol packing] guy one of your agents? :-)
sl
Can anyone describe when agreeing to “pay closing costs” effectively lowers the amount of net $$ that a seller will see?
afe
Totally OT: My b.f. is moving to NC this weekend. Does anyone know if EZPass will be okay to use in a 16ft truck instead of his car? I can’t find it on their site.
still (3)-
I think I could make a go of it in that market.
I’ve been to a couple of closings where I had the strong suspicion that somebody at the table was packing.
Especially the one where the buyer came with $210,000 in a metal suitcase handcuffed to his wrist.
JB[2],
They should stick it up Sarlo’s *ss. If he was in China, he would have been served the death penalty.
Came across my desk. Disclaimer, if you can’t figure it out, it did not come from Goldman.
Goldman’s Letter to Investors
September 18, 2007
Dear Investor,
As you are aware, August was a difficult month for many quantitative hedge funds. Global Alpha was hit particularly hard. While the fund has experienced both challenging and rewarding periods in the past, the dislocation across capital markets during the latter part of August resulted in unprecedented stress to the fund. This deterioration in performance was particularly dramatic, though Global Alpha’s returns had been under pressure for some time before that. But that doesn’t matter. We are Goldman and we always win. Whether we spin our way out or just bully our way out, we always win. We are winners which is why you invest with us. We win and others lose. That is the way we work. We take no prisoners and hate everyone except ourselves.
The prime concern we have is to ensure our partners are well paid and our graduates are not but still get to have Goldman on their resumes. We know that we have and will continue to achieve this.
Ever yours.
The Special Ones
What’s up with the Mets? I almost felt sorry for them last night.
Let’s go Yankees!
afe Says:
September 21st, 2007 at 6:39 am
Can anyone describe when agreeing to “pay closing costs” effectively lowers the amount of net $$ that a seller will see?
You sell a house for $100,000 and agree to pay buyers closing costs of $5,000. You get a check for $95,000. There is a form at closing called the HUD-1 which details all the details of the closing. It would normally show the buyer having to bring $5,000 to closing to cover his closing costs. Instead, it is subtracted from your net proceeds.
Ron Paul addressing Bernanke at yesterday’s hearing.
http://www.youtube.com/watch?v=AeHWW5gbc0w
Worth a watch.
Another way email make our lives easier.
More Workers Finding Pink Slips In Their In-Box
By Marianne Kolbasuk McGee
InformationWeek
September 20, 2007 01:20 PM
If you thought getting annoying spam in your in-box was bad, that’s nothing compared to the e-mail some other people get. How would you like to click on a message and see a pink slip?
Yes, it’s true. Hitting new levels of tackiness, some employers use e-mail to layoff and fire workers, according to a new survey conducted by Harris Interactive for Marlin Company, a workplace communications firm.
Of the 752 American workers surveyed, 10% said their companies have used E-mail to fire or layoff employees.
E-mail is also a tool favored by some employers to deal with other uncomfortable work situations, as well. Seventeen percent of the survey respondents said their bosses have used e-mail to avoid other difficult face-to-face situations.
So, who’s using e-mail to swing the hatchet? It tends to be larger employers with 1,000 or more workers, rather than smaller companies, although they too are occasionally guilty of using electronic copouts.
In fact, last summer RadioShack sent e-mail messages to 400 workers informing them that their positions had been eliminated as part of a workforce reduction.
People in professional management roles were the most likely survey respondents to say their companies have used e-mail for firing and layoffs, followed by clerical and services workers.
Companies that do use e-mail to notify employees that they’ve been laid off or fired “do it because it’s easy,” said Frank Kenna, president and CEO of Marlin. “It’s not the right way to handle it,” he said, especially for situations where a worker is being fired.
As a boss firing via e-mail, “you don’t get the feedback you should be getting” from the axed worker, Kenna said. With a face-to-face firing, “you might hear things you don’t want to hear, but should” as a boss, he said. Also, employees who see their co-workers being fired by e-mail are also getting a bad message, he said.
Kenna said he expects that more companies will set policies against using e-mail for layoffs and firings.
It’s not only bosses that are prone to e-mail faux pas. Indeed, the survey found that one-in-five respondents admitted to sending an e-mail to the wrong person, while nearly 40% said they’ve forgotten to e-mail intended attachments.
Also, 15% said they’ve been the recipients of e-mail sent in anger, while 23% have received e-mail they consider politically incorrect. Thirteen percent said they’ve gotten flirtatious e-mail and 5% said they’ve received humiliating messages that were copied to others.
Ron Paul for Pres.
Donnie Baseball [9],
Speak softly and carry[not carry trade] a big stick.
The fed heads are hitting the circuit today. It’s hard to believe that they can say this crap with a straight face.
“Federal Reserve Governor Frederic Mishkin said keeping inflation under control depends in part on central banks maintaining their independence in the face of political pressures.” [Edit] Goldman sent Ben Bernanke and Mervyn King to the Titanic with hand pumps. They are independently trying to save a sinking ship.
“Central bank independence, at least along some dimensions, is likely very important to maintaining low inflation,” Mishkin said at a Bundesbank conference on monetary policy in Frankfurt today. “Macroeconomic performance is improved when central banks are more independent. [Edit] Hah. We will not disclose the secret deal that we had with the BOJ in 2003. If the BOJ did not cooperate, we could not have pulled off this scheme.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=af47K1RKxf1A
That was an “explanation” of moral hazard? It was more like free association with the words “moral” and “hazard”. Add a sprinkle of indignation and the herd thinks you’re a genius.
And I used to wonder how Bush got re-elected.
#16 –
really? you think so?
i thought what he said made sense – actually, bernanke’s answer sounded more like mumbo jumbo to me.
JB: I watched most of the congress hearing yesterday. Ron Paul was the only guy asking questions that we normally discuss here. But you had at least 20 other congressman, just worried about how can we make people not loose homes. Not even one mentioned that RE bubble had made it difficult for many to buy homes, or why regulators did not take any action earlier.
In my opinion, we as a group, is very under represented in congress members mind. I think home buyers are being short changed for the sake of home owners/sellers. I think though most on this board are Tech savvy, but lack individual or collective will to make their opinion heard in the political scene.
The first time home buyers have strong case against Fed for not regulating fast enough, even though most of bubble websites and discussion has been going on since 2004 & 2005. We have strong case against NAR for misleading general public by allowing relisting etc… The overall economic impact of first home buyers not being able to afford starter house is much more then someone not able to refinance and now has to pay few hundred dollars more. I feel we as a group (not just on this board but all bubble blogs) have not tried to make this complains heard in Political realm. Just typing our opinion does not do anything (that includes this post as well).
ABC news covering the ever fading dollar. Good watch.
US Dollar and Canadian dollar worth the same for the first time in 31 years
17 – I am being a little hard on him. I just thought that his reasoning was disjointed. I guess it was probably a good thing that he was at least voicing concern for the man on the street. But it looked a little like grandstanding to me, and he wasn’t telling Bernanke anything he doesn’t already know. Also, I think that if Bernanke sounded like mumbo-jumbo it was more because Paul’s “question” was impossible to answer – “What are you going to do about all of the terrible things you and your predecessors have done and are still doing?”
Does anyone know if EZPass will be okay to use in a 16ft truck instead of his car?
Tolls are higher for 2 axle trucks, so your car EZ-Pass might be for the wrong vehicle class. I’m not sure if the vehicle in question would be considered a 2 axle truck.
I personally would not risk it. You may think you are okay, and then get a ticket for each toll you went through. Of course the tickets will go through the truck rental place, so now that’s another headache to deal with.
Again, IMHO, not worth the risk.
Hope your friend enjoys NC. What made them decide to go?
ABC news covering the ever fading dollar.
Even Opie and Anthony discussed it this morning. It’s getting a lot of mainstream attention.
NC road trip,
Watch the troopers in MD..
#15 BC Bob: Mr. Mishkin also said in discussing fed easing,
” Making sure that a house price collapse does not do serious harm to the aggregate economy in no way eliminates sharp price declines in house prices and so does not provide insurance against such declines.”
“The same holds true for stock prices. Indeed we have seen substanial declines in housing and other assets prices in many countries even when monetary policy has been eased substanially.”
vers,
Paul is just being Paul. If you’ve followed him for any length of time, you’ll realize that his address was nothing new. He’s said nothing in this statement that he hasn’t said before.
Keep in mind this is the guy that has called for a return to the gold standard and the Fed to be abolished. Oddities aside, what is disconcerting to me is that the only person that seems to be asking the “tough questions” is the guy who many think is a kook. Most everyone else is salivating over either a bailout, or for regulatory changes that will directly benefit their constituency.
What’s best for me and mine, to hell with the economic implications.
[25],
The kook should be Pres.. Bring back accountability, restraint and by some miracle, our dollar. The fed should be abolished. We don’t need puppets, rubes or clowns. Throw full faith and credit out with subprime.
Does anyone know if EZPass will be okay to use in a 16ft truck instead of his car?
For what it is worth, i have driven a large penske truck to nc using my EZpass, and never got any tickets. Renting NJ may be right, just my experience and not advice. E-mail the EZpass people and ask them.
This is from the EZpass website
Account Types
An individual application may have up to 4 tags per account.
Requirements: For individually owned or leased vehicles with two axles and:
A maximum gross vehicle weight of 7,000 pounds
Single rear tires
For cars, vans, pickup trucks, motorcycles, RV’s
A business application may have unlimited tags per account.
Requirements: For business owned or leased vehicles with two or more axles with:
Single or multiple rear tires
For tractor trailers, auto transporters, pickup and other trucks, buses, vans, cars, and motorcycles
For a business application, please call
1-888-AUTO-TOLL (1-888-288-6865)
So it looks like a rental truck is covered by the EZpass you use in your car as long as yo are under 7000 lbs.
Grim, great points all around.
My bet as I’ve said before is that Bernanke will hold firm (i.e., won’t drop rates further) from here on in. He’ll evenually get the Fed going in the right, or at least a better, direction.
Actually, the kook should be chief fed head.
#20 –
i’ve watched many hearings – they ALWAYS grandstand – all of them.
grim: If you think about it, may be less then 50 to 100 congressional districts are hard hit by reseting ARM loans. These are mainly cities like NY, SFO, LAX, Miami, Las Vegas, Detroit, Cleaveland etc… But the bailout will be paid by all US citizens from 500+ districts.
Why should citizens of places like Buffalo NY bailout folks in San Diego? There may be some case for folks in Detroit & Cleaveland as they are double hit due to Manufacturing job loss, but not in San Diego, NYC, LAX etc…
I feel the main issue is Finance committees are generally hijacked by folks living in areas which are related to finance industries (for e.g. Barney Frank from NY who chairs the committee). They have vested interests from vote perspective as well as from corporations in their respective areas.
The issue is the group (i.e. folks who will pay mainly for bailout without realizing any benefit) needs to speak up and make this a big issue. Only when that happens, the congress members from those district will realize the truth and will ask tough questions and not readily agree to bailouts.
While Bernanke might have an impeccable academic background, it is clear from the wavering in his voice and during the Q&A that he has yet to master the political and leadership requirements of his new position. While his testimony was spot-on, his delivery will do little to inspire confidence in financial markets.
“He’ll evenually get the Fed going in the right, or at least a better, direction.”
The said the same regarding Arthur Burns. BB made his bed, we know where he lies. The world markets will press him to the brink.
Disclaimers, just an opinion.
SG 18 and BC Bob
The Katrina/New Orleans disaster is an illuminating incident that is relevant to the current housing/economic issue. The GOV saw what was coming and took inadequate initial steps. After the Hurricane hit the level of bureaucracy and the corporate cronyism prevented even the most well-meaning efforts from really being effective.
In the current situation there are undoubtedly some very sincere individuals who want to fix the problem, but there are so many people worried about getting re-elected and loosing the financial support from the street and the banks, and the banks worried about loosing money, that any effective efforts at correcting or mitigating the current mess is unlikely to be effective.
This is what’s scary about the situation. You would imagine that the highly educated and experienced people running things would not allow the value of the dollar to be destroyed and for the markets (housing included) to become so disconnected from underlying fundamentals. But through a combination of greed and ineptitude the only people who are really running the show nowadays in the US are the corporations. So basically the rest of us are screwed
versity: Don’t bet your money on it. I gurantee that you would loose.
I have been too much up, close & personal with Washington then I would like. No job in Washington is independent. Everything is related to politics that goes even for Fed. I have always felt that the farther you go away from Washington, more patriotic you are.
Sorry Kohn, a 50bps cut mere weeks after the Fed assured us that subprime wouldn’t spill over and that the bottom in housing was reached? This was a massive reversal that goes completely against the “transparency” that the Fed has been striving to achieve. The ‘put’ is real. Words like moral hazard are easy to throw around in a hypothetical discussion, or when jawboning the markets. Not so easy in practice. So now we see that the talk was just that, only talk.
From MarketWatch:
Kohn disputes notion of Greenspan or Bernanke ‘put’
Federal Reserve vice chairman Donald Kohn disputed Friday the notion that either Fed chief Ben Bernanke or predecessor Alan Greenspan operated in a manner intended to bail out investors who made bad bets, thereby implicitly encouraging them to make worse bets in the future.
In short form, this perceived tendency is known as the “Greenspan put” or the “Bernanke put,” so coined because a put option protects its holder from a loss on an investment. The existence of such a “put” has been a popular debate in the financial press since global markets erupted in turmoil early last month.
…
Fed officials are known to have bristled about the suggestion of a put in private, but they aren’t believed to have addressed the issue head on — until now.
In a speech at the German Bundesbank on Friday, Kohn said that Fed officials “have always focused sharply on the macroeconomy” and not on investors’ profits or losses. The notion of a “put” arises as the Fed tries to cushion the downward effects on the broader economy of a financial shock, he said.
Sometimes, it looks like the Fed is jumping to save investors because asset prices tend to rise gradually but fall sharply — “rising by escalator and falling by elevator,” Kohn said.
“In point of fact, Federal Reserve policy makers have not been asymmetrical in intent or actions, in that we have always focused sharply on the macroeconomy,” he added.
“I doubt policy would have been eased this week if housing prices had continued their upward march,” Kohn said.
JB [36],
They are sending out the troops. Pretty soon we’ll see them on CNBC with Kudlow. If you look closely, you’ll see they are growing webbed feet.
Just thinking about this bailouts. Is there any private sector solution for this? I am not an expert, but could this be a solution.
Instead of bailout, can’t the government allow Insurance companies to come up with product to insure against payment shock? Insurance companies can take their bet on long term insurance rate going up or down and provide such a product. If long term interest rates remain low, they would benefit as they would get premium and not much of payment shock will occur.
It would be interesting to see Ron Paul elected President. While i am not so sure about trying to go back to a gold standard (don’t know enough about the minutiae to make and educated decision) Pauls primary platform is basically personal responsibility and states rights. The average US citizen is so used to GOV handouts that the majority of the population would not know how to handle it. Personally I think states rights are the way to go. If we shifted back to states rights it would allow for the various regions of the US to function more effectively. Interestingly enough some of the big arguments that the framers of the constitution and the founding fathers had was how close the government should be to the local people. I wont try to give a history lesson here but you might want to read about it. Basically one group wanted the legislators well removed from the common individual in the manner that we have now on the basis that the common man was not educated enough or well read enough to form an intelligent opinion on complex matters. The other group wanted the opposite on the basis that if the legislators are to far removed from the local people then they begin to act like aristocracy and an elite class.
Kettle1,
After reading some of the fed’s comments today, it’s clear to me that they have been drinking too much of it.
Even Opie and Anthony discussed it this morning.
I really wanted Anthony to get in the nitty gritty of it as i know he knows his stuff and lil’ Jimmy was interested. Never went further though.
#39
50% of the U.S. population pays no federal income tax. in other words, 1 out of 2 people in this country are effectively on the dole and have no incentive to vote with their wallets. that is the major reason why we have an entire slate of candidates for president who advocate raising taxes (when was the last time this idea was so mainstream?)
From Bloomberg:
Fed Cuts, BOE U-Turn Show Limits of Independence: Mark Gilbert
“Dear customer, congratulations on your new Hokey-Cokey Bank Plc deposit account! You’ll enjoy substantially higher interest rates than you can get anywhere else, because we’ll be betting your life savings in the local casino. Should the roulette ball land on red rather than black, no worries! The U.K. government guarantees your money!”
Anyone who regards the Federal Reserve, the Bank of England and the European Central Bank as independent, insightful and in control has had their confidence shaken by the recent events.
The U.S. central bank had to cut its key lending rate by half a point, and reduced the penalty it levies on banks that need emergency funds. That prompted some wag to mock up an advertisement of Chairman Ben Bernanke in a toy helicopter poised to shower the economy with dollar bills. The picture carries the tagline “Warning: cannot really prevent a severe recession.”
In Europe, a promised rate increase to curb inflation had to be put on ice. French President Nicolas Sarkozy immediately took credit for restraining the policy makers, to the fury of ECB President Jean-Claude Trichet.
And Bank of England Governor Mervyn King has been bounced into an embarrassing U-turn on his willingness to lend three- month money to commercial banks in exchange for accepting their tarnished mortgage bonds as collateral. He has also had to underwrite deposits at ailing mortgage lender Northern Rock Plc, triggering front-page headlines questioning his job security.
…
Greenspan let one very scary-looking cat out of the bag during the dog-and-pony shows accompanying his book launch. Asked by the Financial Times why he didn’t push up borrowing costs more quickly once it was clear his 1 percent emergency rate had averted the risk of deflation, Greenspan had this to say:
“The presumption that we were fully independent and have full discretion was false,” Greenspan said in an interview published by the newspaper on Sept. 16. Raising rates faster and sooner would not have been acceptable “to the political establishment,” Greenspan said.
#31 –
that’s what i was trying to say yesterday –
do the politicians think that the only people who vote are those who “are in danger of losing their homes”?
what about all the people who made hard decisions that kept them out of that situation? aren’t there more of them? don’t they vote?
i think some part of the moral hazard is that these people will start to see that their efforts to do the right thing is all a joke – and they’ll start to game the system too.
Great story from the consumerist. Too bad Jon did not read this website and maybe he could of at least saved the $60K he put into his depreciating condo…..
Back in 2005, my wife and I bought our first condo. We live in the Central Coast of California, in San Luis Obispo, where the property values were skyrocketing, and were not supported by the wage base, similar to Monterey and Santa Barbara. It was the top of the market and I knew it, but we had a very slick mortgage broker who got us qualified (it wasn’t a no-doc loan, but it was a 100% finance, 80/20 with a first and a second, the first was a 6.5% 2/28 ARM, the second a 9% fixed.) We were assured at the time and up to as recently as this Summer, that we would have no problem re-fi-ing that loan (and even paying off our lower-interest student loans by taking some cash out in the process=wtf???) by the same broker. Of course that didn’t happen…
We came into some money in the time in between and paid off a bunch of student debt, credit cards, and car loans, and took some trips AND significantly, spend 60k improving that condo. We did not pay off the second or any principal on the first or re-fi it.
Then, this April, we bought a new house with more room and a yard. We bought it 100% financing zero-down, but FIXED, but also no-doc. (I also was able to get a no-doc loan for my sister’s condo, bringing my mortgage total to $1.4M. Let’s just say, I do ok, but that’s INSANE.) We knew we were upside down on the first condo, but tried to rent it because everyone tells you that real estate here is such a good investment. Tried to re-fi, got tenants, tried to re-fi…….. then we get the ARM readjustment. $1,000 more, on something we’re already losing about $2k a month on even after the rent.
Long story short, I’m losing the condo, losing the $60k of improvements we put into it. Now I read (I think on your site) that I’m probably getting hosed by the IRS for it too. (Not sure since the deficiency is protected under California law–they have no option but to forgive it.) Plus, I’ve had to spend another $5k or so settling with my tenants who had a one year lease.
I’m a big boy. I can handle the ding on my credit. But I can’t be an expert at everything. My irrationally exuberant broker made me believe I would always be able to get out of the ARM, and that it would let me get more house and rely on an income going up, and probably not need to worry about the adjustment much anyway. In this particular market, that was literally one of the 10 cheapest properties on the market at the time, and I needed voodoo financing to get into it????
If I gave a client that kind of advice, I probably wouldn’t lose my license, but I would probably get sued for malpractice. I guess the Department of Real Estate doesn’t have standards as high as other professions in this state.
Personally, I’d love to see a bailout for people (not like me) who are getting hosed by the ARM adjustment (how about just fixing them at prime at the time they were signed?). But that’s “class war.” It’s only OK to bailout Wall Street hedge funds who borrow even more recklessly to invest in this paper that would be better used in toilets.
I’m not looking for sympathy, since I’m not losing my roof, but it still sheds light on the current crisis. I’m an attorney, and I arguably could have known better. But a law license doesn’t make me omniscient, and real estate isn’t my field. So, if this happened to me, imagine what happens to people who know even less!
-Jon
Kettle1:
Washington works on Favours. All appointments are political, all fallouts are taken in returns of favours. The difference this time is lot more people had to take fallout for taking political favours. My history is not very strong, but I feel during last 7 years more people had to take fallout then any other administration. Take the list, Collin Powell, Scooter Libby, Antony Gonzales, Rumsfeld etc… Granted they may be involved, but more then their involvement, they had to take fallout from top, at times right or wrong.
I think Ben Bernanke is risking lot of things. If things don’t pan out the way top guys like it, he will be the fall guy. No question about it. Its no different then corporate world.
I was wondering if someone could help me out with this listing, it is in Mountainside, Union County – MLS# 2393905. It is listed at 599K on various sites. An older NYT listing is at 699K, and I was wondering if it was reduced or if that was a typo. Thanks.
SG #38
Why should anyone be bailed out, you read the contract and you signed it. As has been stated on this board before; all you hear about tis how great free markets are and then when someone starts to loose money all you hear about is wanting the GOV to step in. It seems the current philosophy is “privatize gains and socialize losses”
# SG Says:
September 21st, 2007 at 9:33 am
Just thinking about this bailouts. Is there any private sector solution for this? I am not an expert, but could this be a solution.
Instead of bailout, can’t the government allow Insurance companies to come up with product to insure against payment shock? Insurance companies can take their bet on long term insurance rate going up or down and provide such a product. If long term interest rates remain low, they would benefit as they would get premium and not much of payment shock will occur.
MLS# 2393905
Original List Price: $769,000
Current Price: $599,000
DOM: 170
#42 skep
“50% of the U.S. population pays no federal income tax. in other words, 1 out of 2 people in this country are effectively on the dole”
Not sure where you get this stat, but in any event it’s deeply misleading. Lower income populations are hardest hit by FICA/FUTA taxes, which are extremely regressive, so the “income tax” portion of the qestion isn’t particularly relevant to them.
Kettle1: Why should anyone be bailed out?
They are already getting bail out. By Fed cutting the rate 50 bps, there will be small impact on long term rates (may be 30 bps). So, the fed is helping guys with ARM reset by printing more money, to be paid for by either current or future tax payers.
The News organizations touts the benefits of rate cut by saying exports will grow. That will benefit a small percent of population (working in export industries), but by and large, US is consumer society, which imports lot more then what it exports.
As you said it is, “privatize gains and socialize losses”.
RayC,
LISTPRICE 769000 759000 7/23/2007
LISTPRICE 759000 699000 8/22/2007
LISTPRICE 699000 599000 9/19/2007
What the Rate Cut Means for You
by Jane J. Kim and Ruth Simon
Wall Street Journal
Fed’s Half-Point Move Likely to Trim Payments on Credit Cards,
Home-Equity Lines, but Offer Scant Relief on Certain Mortgages
Consumers should soon start feeling the impact of Tuesday’s Fed rate cut in the form of lower borrowing costs and stingier savings rates. But the rate cut doesn’t offer much help for the key problems bedeviling many mortgage borrowers.
The Federal Reserve said it lowered short-term interest rates by half a percentage point, to 4.75%, to combat the effects of a weaker housing market and tighter credit on the broader economy. The steep reduction in the Fed funds rate surprised many on Wall Street who expected a more modest rate cut. Stocks on Sept. 18 rose sharply after the Fed’s announcement, with the Dow Jones Industrial Average gaining 335.97 points, or 2.5%, to 13739.39.
I guess the talks for more reduction will start soon again.
skep-tic Says:
50% of US citizens don’t pay a federal tax?????????
What is your source?
[# 45] Mike NJ Says: “But a law license doesn’t make me omniscient, and real estate isn’t my field. So, if this happened to me, imagine what happens to people who know even less!”
———————————————
Perhaps the lawyer should have had a real estate lawyer look at the contract prior to having signed. You would think a lawyer would know that ignorance is not defendable (is that a word?).
============================================
Kettle 1 Says “It seems the current philosophy is “privatize gains and socialize losses””
This is a brilliant statement! Kudos for noticing.
Grim,
Thanks very much.
RayC
The fed is simply reducing the rate for banks that come to the window. Drop off your tarnished crap and related junk and we’ll reduce your lending rate. It is not a bailout to arm resets. Their rates will be higher as the yield curve steepens, thanks to massive selling in the long end. The fed spoke, the market reacted.
Also from Kohn today, from the Fed;
Success and Failure of Monetary Policy since the 1950s
The world is, no doubt, different than when we gathered here eighteen months ago. However, it is far too soon to pass judgment on what went wrong in the U.S. housing market and why. I suspect that, when studies are done with cooler reflection, the causes of the swing in house prices will be seen as less a consequence of monetary policy and more a result of the emotions of excessive optimism followed by fear experienced every so often in the marketplace through the ages. To some extent, too, the amplitude of the housing cycle was heightened by the newness of the subprime market, the fragmentation of regulatory oversight responsibility for that market, and the complexity and opacity of the newer instruments for transforming and distributing risk. Low policy interest rates early in this decade helped feed the initial rise in house prices. However, the worst excesses in the market probably occurred when short-term rates were already well on their way to more normal levels, but longer-term rates were held down by a variety of forces. And similar, sometimes even sharper, trajectories of house prices have been witnessed in some economies in which the central banks said they were paying more attention to asset prices.
(emphasis added)
““The presumption that we were fully independent and have full discretion was false,” Greenspan said in an interview published by the newspaper on Sept. 16. Raising rates faster and sooner would not have been acceptable “to the political establishment,” Greenspan said.”
Grim, I remember reading (I forget where) speculation on this front in real time. It seemed likely to me.
Translation: The housing bubble was due to extraordinary delusions and the madness of crowds.
(Hat tip to Mackay)
“You would think a lawyer would know that ignorance is not defendable (is that a word?).”
Ignorance of the law is no excuse.
Ignorantia legis neminem excusat.
#45
the fact that people get PO’d about having to pay taxes on forgiven debt is just bizarre to me.
let’s say I have a friend who goes to Foxwoods a lot. I’m not one for gambling, but he is and he assures me he’s good at it, but doesn’t have enough cash to sit at the big tables.
He asks if I’ll give him $20,000 to gamble with. He offers to pay me a fee of 10% for this money. I let him have it in exchange for an IOU for the 10% and three days later he comes back with nothing.
Now it seems fairly obvious to me that if I just forgive my friend it is like I just paid him $20,000 to go to Foxwoods and have a good time.
If he were a professional gambler, he would have to pay taxes on his winnings (and could deduct his losses), so why is this any different?
That fact that we called it a “loan” becomes irrelevant when I decided not to make him pay me back. At that point, it is not a loan anymore, but income to him.
It is the same thing when a back forgives you mortgage. You made a bet and lost. The bank decides to be a nice guy and not ask you to pay the full amount you owe. Well, at that point is like they just paid you a salary to gamble and you owe a tax on your income.
#21 RentinginNJ Says:
“Hope your friend enjoys NC. What made them decide to go?”
Thanks for the EZ Pass suggestion. I saw the fines and don’t think it is worth it either.
He sold his condo, quit his job as a lawyer, and is opening up a Cluck-U Chicken in downtown Chapel Hill. I may be going down as well, just having trouble right now finding a decent job w/a respectable salary.
Rachel
#54
this is from wikipedia:
http://en.wikipedia.org/wiki/Taxation_in_the_United_States#_note-4
In the United States, the Treasury Department reported based on IRS data the share of all federal taxes paid by taxpayers of various income levels.[5]
The data shows the progressive structure of the U.S. federal tax system that reduces the tax incidence of people with smaller incomes, as they shift the incidence disproportionately to those with higher incomes.
The top 0.1% of taxpayers by income pay 17.4% of all federal taxes (earning 9.1% of the income).
The top 1% of taxpayers by income pay 36.9% of all federal taxes (earning 19% of the income).
The top 5% of taxpayers pay 57.1% of all federal taxes (earning 33.4% of the income).
The bottom 50% pay 3.3% of all individual income taxes (earning 13.4% of the income).
“If he were a professional gambler, he would have to pay taxes on his winnings (and could deduct his losses)”
True, but just barely. He can only deduct his gambling losses from his gambling winnings for the same taxable year, and only to the extent that he has receipts!
#64
That doesn’t answer the question. And whoever wrote that wikipedia entry is comparing apples to oranges, because they suddenly shift from “federal taxes” (which includes taxes that are not income taxes) to “individual income taxes” (which does not include taxes that are not income taxes). As I previously explained, the federal tax burden on lower income earners comes disproportionately from FICA/FUTA, which they pay at a much higher percentage than do folks who earn millions, so to subtract that from the analysis is misleading, to say the least.
according to the Census bureau for 2006, top 5% household income was $167,000 and above.
#66
njpatient– I don’t disagree that our tax regime tends to get less progressive with respect to the very well off. But the upper middle class (those making low six figures who live off of salaries, not investments) do get hit very hard by our tax system, relative to both rich and poor.
Rachel 63
He sold his condo, quit his job as a lawyer, and is opening up a Cluck-U Chicken in downtown Chapel Hill. I may be going down as well, just having trouble right now finding a decent job w/a respectable salary.
Did you mention him a while back? I seem to remember a conversation about a lawyer opening up a fried chicken place near a campus.
The fed heads are hitting the circuit today. It’s hard to believe that they can say this crap with a straight face.
I know there is a lot of discussion about the Fed being aloof on inflation, but is it possible that inflation is exactly what they are after?
What other solution is there to the U.S. debt crisis? American citizens & its government (state & federal) are in over their head in debt. Large companies are getting crushed by legacy pension obligations. We have hit the point where even cheap credit and low interest rates isn’t enough to keep the party going.
The “intellectually correct” decision is probably to accept a recession, pay down debt, allow housing prices to drop & basically let the economy self-correct its imbalances. We would be better off in the long run, but this solution is politically unacceptable.
So, that leaves us with the “inflation solution”, which is essentially a massive nationwide bailout. Debts get repaid with devalued currency. Real housing prices drop, but inflation puts a floor under nominal prices (which is all Joe Sixpack cares about). Oil goes up, but that can be blamed on someone else. The Fed “talks down” interest rates as much as it can by jawboning about inflation. If that isn’t enough, it prints money and buys treasuries in the open market to force down rates.
I’m not advocating this solution, just pointing out that it may be the most politically palatable among a buffet of lose-lose choices.
#70 “I know there is a lot of discussion about the Fed being aloof on inflation, but is it possible that inflation is exactly what they are after?”
I have been saying this for weeks now!
Find me a good spot for a Jersey Mike’s Subs and I will be right behind both of you on I-95!!!
#68
I agree completely, skep, with your point about the lower middle (and I might even include middle) class being screwed. Tax policy, particularly in the current decade, is skewed against EARNING money and in favor of HAVING money, which is always bad for the middle class.
That being said, my point was that speaking only of income tax is a favorite trick of folks on the WSJ editorial page and doesn’t give a complete picture.
Someone earning $20,000/year is going to pay 7.65% FICA. Someone earning $250,000/yr (which bi tells me covers the entirety of Bergen County) pays only 3.87% in FICA. I won’t do any more math, but suffice it to say that after you get to a million, your FICA drops below 2%. Not including this in any discussion of federal tax burdens is misleading, and whoever wrote that wikipedia article probably did it on purpose.
#72
If that happens, I might be right behind YOU.
skep – you said “upper middle” and I meant to agree with that (brain fart). Not a good situation these days.
oh – and Renting/Justin at 70/71, I also agree re intent of inflation. I’m feeling very agreeable today.
Find me a good spot for a Jersey Mike’s Subs and I will be right behind both of you on I-95!!!
It’s interesting. The biggest downside about NC (perceived or real) that I hear from most people when asked about relocating to NC has to do with the food. NY metro area folks don’t want to give up their good pizza, bagels, good Italian food and non-chain restaurants.
With the number of people from this area moving to NC, there must be a huge demand for the comforts of home. Sounds like there may be a great business opportunity.
re: EZ Pass
The tags are specific to your make/model car and vehicle registration and to my knowledge are not transferrable. I believe they photo the car at each toll and a mismatch will generate a violation notice.
#72 Mike NJ – the Jersey Mike’s in Chapel Hill shut down due to the owner’s health. I think the spot is still open.
#69 lostinny – yes, same guy as before. It takes a LONG time to get a restaurant going and more expensive than he expected. The build out is going to start in the next few weeks. We are hoping he opens by mid November.
Rache,
All the best. I really admire what your boyfriend is doing. Enjoy Tar Heel country.
HSBC to close non-prime wholesale mortgage lender
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BDD7B2CCF%2DE327%2D4B58%2DB140%2DD690FA45C623%7D&siteid=mktw
700 jobs
$880 million goodwill impairment
$65 mil – restructuring
If it cost 850 a month to rent a 1 bedroom apartment in Bergen County, really not much has changed in terms of rental prices. Houses were almost at the 300k mark then.
the biggest change is the property taxes actually…
Another downside to NC (for me at least) is lack of old houses. I prefer the character and crafted attention to detail old houses have opposed to houses built after 1940
Rachel,
Do they already have a Dunkin Donuts/Baskin Robbins there??
sl
[packing up my belongings and loading the truck right now….]
re: EZ Pass
The tags are specific to your make/model car and vehicle registration and to my knowledge are not transferrable. I believe they photo the car at each toll and a mismatch will generate a violation notice.
Not true. I still use my E-Z pass from the 90’s and lord knows I’ve changed dozens of cars since then.
renting (76)-
Where’s the good Italian food in NJ? I have yet to have anything- anywhere in the state- that even resembles Italian food. The mean of quality is disgusting, and most places fall below that line, and into the category of flat-out inedible.
A pound of pasta, swimming in “red lead”, is not Italian food. Neither are the various “Parmigianas”, which more resemble fried shoes than food. Leathery veal scallopine, anything “alla vodka” and shellfish buried under bread crumbs- then incinerated- should carry warning labels.
From MarketWatch:
Debt ceiling forcing suspension of some Treasury securities
The Treasury Department will suspend issuing some securities on Sept. 27, because Congress has not raised the U.S. debt ceiling, the department said Friday. The suspension applies to state and local government series securities, Treasury said, which are purchased by state and local governments. On Wednesday, Treasury Secretary Henry Paulson told Congress the U.S. will hit its current debt limit of $8.965 trillion on Oct. 1 and urged lawmakers to quickly raise the ceiling.
#51 SG By Fed cutting the rate 50 bps, there will be small impact on long term rates (may be 30 bps). So, the fed is helping guys with ARM reset by printing more money, to be paid for by either current or future tax payers.
? not sure hat your statement means, the ARMS are going to reset, regardless of the Fed cut, yes, the impact will be mitigated, but if a borrower had a teaser rate that was going to reset to lets say 8%, and now lets say it resest to 7%, how much will that help.
Even for more traditional ARMS taken out 2 or # years ago, thses rate will be going up as well.
For people with a home equity line of credit at 8.25 that dropped to 7.75, that will be a savings of $21 a month on a 100K loan. No big deal to me.
RentinginNJ Says:
NY metro area folks don’t want to give up their good pizza, bagels, good Italian food and non-chain restaurants.
The only difference between here and somewhere else now is the bread/bagels. It simply can’t be duplicated. I think it’s the hard water here. I’ve eaten at top places in FL, GA, and SC and NY/NJ doesn’t hold anything over them anymore.
Looks like the ‘mer-kan consumer and government aren’t very different after all.
Fiscal responsibility be damned!
#87 Clot
Try Scalini Fedele or Il Mondo Vecchio – not half bad.
(Although I suspect that what was being discussed was “italian food”, rather than Italian food, if you know what I mean.)
#87 Clot
Osteria Giotto in Montclair….Great Northern Italian
#87 Clot: Agreed. Everybody talks about the pizza in NJ, and at the many many places I have tried in BErgen Co over, the years, they all stink.
What is with the cheese not meeting the crust any more? And the attempt to makse a Sicillian Pie? Hideous.
NYC has the best pizza in the area, period, I still miss it.
I’ll second Scalini Fedeli, although I don’t think it falls into the category of traditional italian at all. Although, I haven’t been there in about a year, so who knows.
Clot,
You’ve been eating too many ribs. Try Angelo’s, Lyndhurst.
Clotpoll Says:
Where’s the good Italian food in NJ?
I swear by Zagat.com. Anything with a food rating of 22 or higher will be very good.
#87 Clotpoll…not in NJ, but you can zip over the bridge if you ever happen to be in Trenton.
It’s in an old Pizza Hut. The Italian owner grows herbs around the outside of the building, right in the parking lot. Doesn’t care. Tomatoes, too. No alcohol, but he’ll bring you a complimentary glass of wine.
Soccer from around the world on their big screen.
http://local.yahoo.com/details;_ylt=AhLSiBBx7rhwIyDVv3yx7seHNcIF?id=12205769&lsrc=results&p=Italian+Restaurants&csz=Morrisville%2C+PA+19067&fr=&lcscb=
NC is in desperate need of more Dunkin Donuts. Chapel Hill has a Starbucks, Caribou, and a bunch of little shops. There are maybe only 5 Dunkins in the whole area of NC.
As for the rest of the food, Olive Garden and Macaroni Grill were rated the highest in the Best of The Triangle magainze for Italian food. ugh!
When you go out in the back yard and pick figs off the tree and your grandmother then slices them open, stuffs them with crushed walnuts and grated orange peels and bakes them in the oven… then you’re eating real Italian food. Or how about the stuffed artichokes or the meat pies during Easter week, or the bows drizzled with honey during Christmas or the pizzelles and on and on…
Rachel,
Oh God! lol!
Pat,
I could not believe that $850 rental. Why don’t they just turn the McMansion into multiple condos?
I loved good Italian food at OTTO in City.
http://www.mariobatali.com/restaurants_otto.cfm
Babbo is one of my favorites
…Or the scallion pie stuffed with black olives and anchovies.
gary,
You take reservations?
Bob, you’re the one who put the kabosh on my “do-it-yourself” subdivision scheme for McMansions.
Oh, wait, I don’t think I signed that post.
Leo’s Grandevous in Hoboken. No, really, I DO mean it.
#5 Rachel.
I rented a u-haul a while back and the chap at the counter told me, that I couldn’t use my ezpass since the truck had 4 axles or something like that. I used it anyway, and never heard from EZpass.
Again, I am not suggesting u do this.
Babbo is my favorite in NYC too, but have fun getting a reservation.
Boy, we ARE afraid of the Chinese Govt.
http://biz.yahoo.com/ap/070921/china_tainted_products.html?.v=5
Hey, this this restaurant/food talk is making me hungry, time for lunch.
BTW, have we decided where the next meet up is and when?
JM
Trump – I had the same reaction to that story. Mattel is going to bend over and give up significant goodwill in the eyes of its American consumer base for why? There must have been some very significant behind-the-scenes pressure brought to bear.
#47 RayC:
From pictures, house looks empty. Looks like the double mortgage is beginning to hurt. I would start negotiating in the upper 400s low 500s depending on how badly you want to buy.
Like clot says it is hard to buy today at tomorrow’s price.
#113 NJpatient:
From the article
“Li reminded Debrowski that “a large part of your annual profit … comes from your factories in China.”
Before long, we will see the Govt smack Paulson and say
“Remember we hold a big chuck of your debt and we can start selling them
gary (100)-
That’s what I’m talking about!
Pat [107],
I don’t believe that was me. I’ve been promoting the same idea, a McCondo.
“Like clot says it is hard to buy today at tomorrow’s price.”
Clot has taken too many soccer balls to the head.
Clot,
You should email me. My mom is from Italy and has a restaurant in Northern NJ. No menus – just a 3 hour eating fest. You would not be disappointed.
Spill the cannellinis.
“No menus – just a 3 hour eating fest.”
A blog dinner?
Where’s the good Italian food in NJ? I have yet to have anything- anywhere in the state- that even resembles Italian food.
If you don’t like NJ Italian food, then you’re going to hate NC Italian food (i.e. Olive Garden).
We were checking out houses in NC with a realtor. She was originally from Linden, but had spend many years in NC. I asked her “So, can you get good pizza around here?” She responded, “oh yes, there is one pizza place in the area…it’s almost as good as Pizza Hut!”. YUM! YUM! Barf
Mattel can take my daughter’s Little Janie Lead-dress play set … when they pry it from my cold, dead hands.
These colors don’t run. They’re infused with lead oxide.
You should email me. My mom is from Italy and has a restaurant in Northern NJ. No menus – just a 3 hour eating fest. You would not be disappointed.
In Little Falls by chance?
re: EZ Pass
The tags are specific to your make/model car and vehicle registration and to my knowledge are not transferrable. I believe they photo the car at each toll and a mismatch will generate a violation notice.
Make money says,
Not true. I still use my E-Z pass from the 90’s and lord knows I’ve changed dozens of cars since then.
Just to clarify, you can use your tag in different cars as long as you provide EZ Pass with registration make/model info to update their records. If you take a tag from your car and use it in one you borrowed or rented, that tag will not match their records and you will get fined.
When you go out in the back yard and pick figs off the tree and your grandmother then slices them open, stuffs them with crushed walnuts and grated orange peels and bakes them in the oven… then you’re eating real Italian food. Or how about the stuffed artichokes or the meat pies during Easter week, or the bows drizzled with honey during Christmas or the pizzelles and on and on…
No restaurant i’ve ever been to has ever been anything like the real italian food that my grandparents used to put in front of me. Like two different worlds.
Yes, Little Falls. Good guess. My dad has a nice size garden in the backyard of their house. Nothing better than fresh tomatoes, eggplant, squash, etc. Getting hungry and I just ate lunch.
So RentinginNJ, have you been?
Grim, Clotpoll,
No reservations required. Just don’t forget the canolli… and leave the gun.
have you been?
Yes. A few years ago. Excellent food.
Now that you reminded me about it, I want to go back soon
buzzard (119)-
I’m as good as there. Sending my e-mail now to Grim.
I know of the Little Falls place, my sister used to go often. I’ve never been, but will certainly be going now.
Little Falls:
Let’s take over the place one night.
One warning about the restaurant. You should go in a group. Atmosphere is VERY casual and can get loud. For instance, one of the waitresses tells jokes and encourages others to speak up. It is also a BYOB. Not much to look at, but the food is very good – of course, I have somewhat of a bias. Only open on weekends and reservations are required. If you have a big group, she will open it up for you during the week. Oh, and no making fun of my HS graduation picture on the back wall!
RentinginNJ – glad you liked it!
One warning about the restaurant. You should go in a group. Atmosphere is VERY casual and can get loud. For instance, one of the waitresses tells jokes and encourages others to speak up. It is also a BYOB. Not much to look at, but the food is very good – of course, I have somewhat of a bias. Only open on weekends and reservations are required. If you have a big group, she will open it up for you during the week. Oh, and no making fun of my HS graduation picture on the back wall!
RentinginNJ – glad you liked it!
#45,
The story from the consumerist is a perfect example. These people treated the house as a high risk investment and when it blew up in their face they scream for mommy to kiss their booboo. You either buy a house to live in or as an investment. If you buy to klive in then you had best make sure the financials match up and you can handle the long term financial comitment. If you are buying an investment which anyone who gets and IO or funny money ARM is doing whether or not they realize it, then you gad best be prepared to accept the risk that goes with the investment. Since when does “well jimmy did it too” excuse anyone from consequence of their action (well it does now appaerntly)
I don’t know if anyone posted this.
But this thread is too down today. We need something a little more upbeat. So harr eet eez.
http://www.imf.org/external/np/tr/2007/tr070913.htm
Is it that place with all of the statues on Stevens?
Pat (136)-
A regular yuk tsunami there.
#125
Makemoney is partially correct. After I sold my third car, I have a spare ez-pass not registered to any car which I keep to lend when I have family/friends visiting from outside the northeast. No-one has got tickets.
The issue in using it in a rental truck is that the rates are different for trucks and you are under-paying the toll if you use an easy pass for a car.
“Coming at a time when rate increases were needed to combat the sinking dollar and surging gold, oil and other commodity prices, Ben Bernanke’s 50 basis point cuts in the Fed funds and discount rates this week may go down as the most irresponsible move in Fed history.”
“Furthermore, a fifty basis point cut was not an act of bravery but one of cowardice. The brave thing to do would have been to raise rates and allow market forces to purge the economy of the imbalances built up during the Greenspan bubbles. It would have taken some real courage to level with the American public and let them know that our profligacy has consequences, rather than pretending it can ride to the rescue with a wave of its magic wand and a crank of the printing press.”
“The irony of the situation is that on September 11th, while in Germany, Bernanke delivered a speech in which he admitted that we need to increase our savings and declared that the inevitable adjustment to our current account deficit would have both real and financial consequences. Bernanke’s actions, which reward borrowers and punish savers, merely exacerbate those imbalances, ensuring even greater consequences when the inevitable adjustment finally occurs.”
http://www.financialsense.com/fsu/editorials/schiff/2007/0921.html
Talking about tolls, I drive south once a year to visit family in Tennessee/Georgia. I pay about 30 bucks in tolls for the first 200 miles and then the rest of the 650 miles is free.
Turnpike, Delaware memorial bridge, Ft McHenry tunnel, etc, etc..
One of the other disadvantages of living in the New Jersey. The tax man benefits every time you start up your car !
#70 RentinginNJ
Regarding the FED’s 2 choices to get out of this mess. There is really only 1 choice and that is the “intellectual one” of cutting spending and increasing rates. The so called 2nd option of inflation is not an option all it is, is a bandaid on a sucking chest wound. Our current consumer culture is unsustainable and when you include or war expenses on top of the consumer spending then we are in way over our heads. Inflation will buy us more time but will not save us.
What the fed is doing is the same thing as saying i make 5K/month but spend 6K and after using all of my saving to cover the difference moving to credit cards. This is not sustainable for very long.
I am not sure to what extent inflation will actually help home prices. If the value of my 100K in the bank drops faster then the going price for that “POS” then am i really much better off very. They only way an inflation model is really effective is if wage inflation keeps up with M3. The last 5-10 years have shown that wage inflation has not kept up and i do not see companies pumping up wages anytime soon.
This short term inflation fix also carries huge risks such as the pertdollar/euro issue as well as other FX effects that we have discussed.
The current mess will not be fixed until the US gets over the consumer culture either due to bankruptcy or by choice.
# RentinginNJ Says:
September 21st, 2007 at 10:51 am
The fed heads are hitting the circuit today. It’s hard to believe that they can say this crap with a straight face.
I know there is a lot of discussion about the Fed being aloof on inflation, but is it possible that inflation is exactly what they are after?
What other solution is there to the U.S. debt crisis? American citizens & its government (state & federal) are in over their head in debt. Large companies are getting crushed by legacy pension obligations. We have hit the point where even cheap credit and low interest rates isn’t enough to keep the party going.
The “intellectually correct” decision is probably to accept a recession, pay down debt, allow housing prices to drop & basically let the economy self-correct its imbalances. We would be better off in the long run, but this solution is politically unacceptable.
So, that leaves us with the “inflation solution”, which is essentially a massive nationwide bailout. Debts get repaid with devalued currency. Real housing prices drop, but inflation puts a floor under nominal prices (which is all Joe Sixpack cares about). Oil goes up, but that can be blamed on someone else. The Fed “talks down” interest rates as much as it can by jawboning about inflation. If that isn’t enough, it prints money and buys treasuries in the open market to force down rates.
I’m not advocating this solution, just pointing out that it may be the most politically palatable among a buffet of lose-lose choices.
10 year t yield continues to creep up. Looks like Bond Investors are try to do the feds job for them.
Question for the board…
What is your opinion on either a true flat tax or something like the
Fair Tax
James
Could you find the address on MLS# 2393905. Thanks again.
RayC
P.S. This is the second property in this town this month that has a price that got my attention. The first one was a much smaller house on a nice street that needed a ton of work, but they listed at $429K and it went in a week or so. $429K was the lowest price in town.
I would say that the BEST Italian food is in NJ. I live in NYC and NJ, and typically prefer NJ’s establishments (less BS, less expensive, great quality).
NC is NOT a place I would ever want to live. Been down there many times. Nice place to visit for about 2 days. And just a heads up…southerners do not like people from NJ…they will never really accept you there.
Clot: Has there been any kind of response from your sellers/buyers this week after the Fed cut?
Antitrump: “One of the other disadvantages of living in the New Jersey. The tax man benefits every time you start up your car!”
Unless it’s been changed since I moved out of NJ a few years ago, at least you don’t have to pay ~$75 for your yearly car inspection like PA residents do.
And I guess you haven’t been on the PA turnpike lately – at least in NJ the PW/TP are in decent shape!
RE Italian food; growing up in Trenton, Delorenzo’s pizza (the one on Hudson) could stand toe to toe with the best I had in Rome 2 weeks ago. Tattoni’s restaurant used to be top notch (no menu, waitress told you the 4-5 choices with simply prepared Turbot my fav), but I heard it was recently sold due to owner’s age. Sad that the generation that grew up before lame chain restaurants and fast food are fast vanishing….
RayC,
2 Mary Allen Path
EZ Pass does NOT fine you for using your tag in a car that you have not registered for that tag.
However, they ask for that information for your benefit. Sometimes, the EZ Pass unit does not register the toll and when your license plate picture is taken, they’ll send you a ticket unless they can find your EZ Pass account…which is why you have to register. If you register your car, they’ll just debit your account using your license plate.
Chamersburg is all over. most of the Italians are gone
Is this news or am I behind the curve?
uk.reuters.com/article/businessNews/idUKN2127668020070921
“NEW YORK (Reuters) – HSBC Holdings (HSBA.L: Quote, Profile, Research), Europe’s biggest bank, said on Friday that it would close its U.S. subprime mortgage unit, cutting 750 jobs and taking $945 million (468 million pounds) in charges and write-downs, because the business is no longer sustainable.
….HSBC Finance, the U.S. consumer finance arm of HSBC, said the closure of Decision One Mortgage would result in about 750 people losing their jobs. Decision One has operations in Fort Mill, South Carolina, Phoenix, Arizona and Charlotte, North Carolina.”
Strong greenback in U.S. interest, Paulson says
http://www.reuters.com/article/marketsNews/idUKN2137127720070921?rpc=44
He’ SO funny!
http://wcbstv.com/business/local_story_264101121.html
“5 From New Jersey Make Forbes Billionaire List”
Interestingly NONE of them live in Alpine.:-)
#149
Thanks again James, I really appreciate it.
Kettle #142,
I agree with you 100%. However, from a politician’s perspective, inflation is an option. The life of a politician is short. As long as everything works under their watch, they are happy. Any imbalances they perpetuate can simply be passed onto the next guy to take office.
Think of it this way, (setting aside your heirs) if you knew you only had 4 years to live, would you buy a regular house using a 30 year fixed rate mortgage? Or, would you go for the mansion using the minimum payment on an option-ARM? After all, you will be gone before the Option-ARM resets and then it’s the bank problem. Unfortunately, this is how politicians often view the economy. It’s all about Nov. 2008, not the long term.
I am not sure to what extent inflation will actually help home prices.
Assuming incomes keep pace, it will put a floor under nominal home prices. The correction in housing will come from a combination of falling prices and inflation catching up to prices. To the extent inflation is greater, prices will need to fall less to restore balance.
If the value of my 100K in the bank drops faster then the going price for that “POS” then am i really much better off very.
You are not better off. However, most people don’t have $100k in the bank, so its not a big concern to politicians.
However, think of the inverse though. If you are $100k in debt, the burden of that debt gets magically shrunk by inflation (assuming incomes keep up).
“RentinginNJ Says:
September 21st, 2007 at 3:09 pm
However, think of the inverse though. If you are $100k in debt, the burden of that debt gets magically shrunk by inflation (assuming incomes keep up).”
That’s a big assumption. If inflation really starts to take off, I don’t think salaries will easily keep pace.
#146
different strokes for different folks.
NC is fabulous and would never ever think about coming back to NJ.
Renting in NJ #156 and 157.
That is exactly my point. In my opinion wages will not keep up with inflation. And yes inflation can decrease the inpact of debt but if we are still pushing a consumer culture and people are still deficit spending then the inflationary effects on the debt are insignificant because you are increasing your debt at the same rate at which ti is infalting. The 1st and most important corection our society needs is to change to a saving society, not a consuming society.
With regard to the politicians view of inflation you are 100% correct. Once again the only real solution for that problem is for the general population to demand that politicians make sound long term judgments. This is a fundamental change that is required and i think that in many ways it is similar to the situation that the founding fathers were in. The general population of the 16/1700’s were not going to initiate change with england. It took a core group of people to initiate the changes and open the peoples eyes. Today such people would be considered terrorist just like the founding fathers were by england.
(Yes i know that the chances of that happening are remote at best, i am not naieve enough to expect to see this in my lifetime:( )
The general population has forgotten/never learned how to consider long term consequences of their/our actions. Until this happens not much is going to change. If we continue being hyper consumer the US will follow in romes footsteps sooner rather then later.
Understood.
However, even if incomes don’t go up, that may be okay (at least in the short term) if a new bubble is created; just like the housing bubble pulled up the economy after the dot com bubble burst. After all, inflation will need to manifest itself somewhere. If everyone is making a killing on, say, renewable energy and carbon reducing technology stocks, then who cares if incomes go up?
Again, I am not advocating an inflationary policy. I’m just point out that it may hold some appeal to politicians, who are by their very nature, very short sighted. Right now the pols only care about keeping this ship afloat until Nov. 2008. Then its someone else’s problem.
another thought,
I forget where i read it, but i recently read an article that suggested an interesting source of our current consumerism problems. These are not my ideas, i read them else where and i have probably butcher them here but i find the concept very interesting and somewhat plausible.
Over the last 50 years as america has become more diverse people has more or less lost their cultural heritage. At some level everyone is driven by their culture and if you lose your culture you will replace it with a new one that is available to you. When you replace your culture you are most likely to choose one that allows you tyo assimilate with the larger population. The only general culture themes in the US that have been successful and universal over the last 50 years has been one of financial success. The outward signs of financial success are physical possessions and consumerism. SO what has happened to the US is that the general population has unknowingly adopted a large scale culture of spending as they have lost their traditional/native cultures.
The 1st and most important corection our society needs is to change to a saving society, not a consuming society.
We need a Paul Volker. While he was unpopular at the time, he broke the back of inflation and left us with a stronger economy as a result.
I just don’t see this kind of leadership today. So, my expectation is that we will inflate away and continue to chase bubble after bubble until the imbalances grow so sever that the fed can’t inflate its way out. Are we here today? I honestly don’t know.
#144 kettle
“What is your opinion on either a true flat tax or something like the
Fair Tax”
True flat tax would be a complete disaster (just ask Maggie Thatcher), but the Fair Tax, which is in essence a massive sales tax that would have to have a ton of exemptions so as not to be extremely regressive, has strong selling points, I think.
On the other hand, in order to raise anything like the sort of revenue the federal government currently takes in, my understanding is that the sales tax would have to be somewhere in the neighborhood of 60%. I think people simply can’t swallow that.
What effect does everyone think this downturn will have on illegal immigration?
constriction jobs have disappeared, the job market is contracting and funny money is much harder to get. Will the current conditions slow illegal immigration at all?
I would guess that in some areas there will be a noticeable effect, areas where construction was a majority employer, i do not think border areas will be effected.
On another note, One issue i am concered about when i am ready to buy is illegal immigration. I will not buy in an area that is heavily effected or appears to be a likely target. This has nothing to do with skin color, but places like raliegh NC are having issues because their schools are exploding with growth due to immigrant children but the tax base is not matching up. There are numerous other social issues also tied into it. but for me it is a key issue.
Believe it or not, the ‘optimal’ mortgage is an option ARM
If you had to name the most toxic, dangerous, foolhardy kind of mortgage loan that exists, you’d very likely pick a pay-option ARM, which lets borrowers get deeper into debt by paying less than the minimum interest they owe each month and adding the unpaid interest to the loan principal. Worse yet, you might say, would be a pay-option ARM with a very high penalty for prepayment so borrowers can’t get out of it easily once they’re in it. There’s a move afoot to ban these worst-of-the-worst loans.
Guess what? The worst is actually the best.
Yes, according to a new study by professors from Columbia and New York universities, the “optimal” mortgage in a perfect world is precisely that kind of loan—an adjustable-rate mortgage with an option for negative amortization and a ban (or at least severe restriction) on prepayment.
Crazy? Not as crazy as you might think. The key, according to professors Tomasz Piskorski of Columbia Business School and Alexei Tchistyi of New York University’s Stern School of Business, is that this kind of mortgage is optimal only in a perfect world—namely, one in which borrowers are fully rational and always do what’s in their own best interest.
In the real world that we are condemned to inhabit, many people who took out option ARMs foolishly believed that they would never have to pay more than the bare minimum monthly payment. They have stuck with that minimum payment month after month, causing their loan principal to go up and up. At some point they have hit (or soon will hit) a ceiling on total permissible mortgage debt, at which point the terms change and their monthly payments soar to unaffordable levels. Next step: default and foreclosure.
The immediate reaction of most non-academics is that these economists have their heads in the clouds, or somewhere else. Former Federal Reserve Chairman Alan Greenspan has come in for the same kind of criticism for having said during the housing boom that millions of homeowners could save money by switching from fixed-rate to adjustable-rate loans.
But there’s a more positive way to look at the research. If the optimal loan really is better for homeowners who behave rationally, maybe it makes sense to get people to behave rationally through extensive, even expensive, consumer education. In an interview, Piskorski told me that by his rough calculation, the benefits of the optimal mortgage vs. a conventional mortgage amount to a least half a percentage point of interest—namely, $50 billion or more a year for the U.S. as a whole. In other words, you could devote many billions of dollars a year to consumer education about these misused-but-potentially-valuable loans and still come out ahead.
For those with patience for details and a head for numbers, I can refer you to the 65-page, equation-filled academic paper, downloadable here.
Jim,
Awaiting moderation: September 21st, 2007 at 3:55 pm
“Believe it or not, the ‘optimal’ mortgage is an option ARM”
#164 did you read the fair tax page? how would that be regressive if “necessities” are not taxed? The majority of low income family money goes to necessities, not discretionary spending so most of it would nit be taxed…
Ultimatly a tax structure that in some way limits the amount of money to the GOV is only in our best interest.
“I am not sure to what extent inflation will actually help home prices.
Assuming incomes keep pace, it will put a floor under nominal home prices. The correction in housing will come from a combination of falling prices and inflation catching up to prices. To the extent inflation is greater, prices will need to fall less to restore balance.”
That’s true, but whether it constitutes “helping home prices” is another matter.
Here is the Abstract from the paper I posted a few posts above:
This paper studies the optimal mortgage design in a continuous time setting with volatile and privately observable income and a stochastic market interest rate. We show that the optimal mortgage takes form
of either an option ARM or a combination of an interest only mortgage with a HELOC. The default rates and interest rates on the optimal mortgage correlate positively with the market interest rate. The gains from using the optimal contract relative to simpler mortgages are substantial and the biggest for those who buy pricey houses given their income level or make little or no downpayment.
RentinginNJ
I have a plan!!!!
We replace the entire current Gov, all three branches with the people on this board. Heck, we can even find a spot for Bi and Biluva. Even with our various opinions we could build one heck of a financialempire in about 30- 50 years. Oh, we will be elected for life, kind of like what bush wants.
So who fills what posts?
“#164 did you read the fair tax page? how would that be regressive if “necessities” are not taxed?”
Yes – I’ve read a lot about the fair tax initiative. As I said at 164, if it has sufficient exemptions it will not be regressive – the closer it becomes to a flat sales tax, however, the more regressive it will be. The proposal on the fair tax page is a good one, but the tax would have to be a great deal higher than most proponents seem to admit.
bi for President.
And Boo Yah for SecDef, damn he’d go nuts.
“Heck, we can even find a spot for Bi and Biluva. …
So who fills what posts?”
Bi can take Ken Mehlman’s old spot and Biluva can take Jeff Gannon’s old spot.
It will always be easier to levy taxes if the taxes are split up into various smaller taxes and fees and surcharges, so no one item appears too large. Consolidate all taxes into one tax (like a sales tax) and when people see how we spend 50% or more of what we make on taxes, you’ll have a freaking rebellion.
# 169 Syncmaster:
That is called RENTING. On what planet does PURCHASING a home mean only paying interest on the principle. That paper is completely unsound based on the abstract unless you change the definition of OWNERSHIP to FINANCIALLY INDENTURED SERVANT
We show that the optimal mortgage takes form
of either an option ARM or a combination of an interest only mortgage with a HELOC. The default rates and interest rates on the optimal mortgage correlate positively with the market interest rate
#174 sync
That was what I was trying to say, but you said it a whole lot better.
“That is called RENTING. ”
LOL
It’s funny because it’s true.
# syncmaster Says:
September 21st, 2007 at 4:03 pm
bi for President.
And Boo Yah for SecDef, damn he’d go nuts.
I Second this! i want to see what Boo Ya has to say to North Korea :)
# 171 when i re read my post it sounds like an attack, didnt mean to word it that way, meant it as a legit Question
So who fills what posts?
HonestRealtor for Minister of Propaganda.
Reinvestor101 for Chair of the House Committee on Un-American Activities
Speaking of taxation trickery, Quebec does an interesting sleight of hand in calculating Quebec sales tax. You have to pay a federal sales tax of 6%. On top of that you pay 7.95% sales tax to Quebec. Quebec’s tax isn’t calculated on the original sale price but on the original sale price + the 6%.
Sneaky!
#177 and #174
When i do my 1099 every year and have to right a check for over 20K after digging up every arcane deduction i can find the same thought goes through my head.
The average individual has no idea how much they are actually paying and how little they get for it.
You are right that when the general population has to write a single check for 10/20/30K there will be A LOT of unhappy people
do you guys have a sense of price per sq ft in the areas you’re looking?
I’m looking at some towns in Fairfield county and the realtors there recently started to post price per sq ft with the listings. The prices are all over the map– ranging from just about $300 to above $700 in the same town/overall price range.
I understand how price per sq ft is a very useful metric in places like manhattan, but I wonder how useful it is in the suburbs. on one hand, the wide disparity suggests there’s no pricing equilibrium but on the other maybe it just shows that it’s a less useful metric (e.g., doesn’t account for lot size, busy/quiet street, etc)
bi can not be president as he is not US citizen. he is from Kazhakstan (like me ;p)
but he would make a awesome fed chief. that way he can rescue american people’s property.
thanks!
but he would make a awesome fed chief. that way he can rescue american people’s property.
The property isn’t what needs rescuing.
RentinginNJ Says:
September 21st, 2007 at 4:13 pm
So who fills what posts?
HonestRealtor for Minister of Propaganda.
Honest Realtor could have us dropping Nukes IRan inside of a week from accepting the post
RentinginNJ Says:
September 21st, 2007 at 4:13 pm
So who fills what posts?
HonestRealtor for Minister of Propaganda.
Honest Realtor could have us dropping Nukes in IRan inside of a week from accepting the post
but he would make a awesome fed chief. that way he can rescue american people’s property.
So who exactly is trying to steal the north American continent ( given that the US is really quite firmly attached to the rest of it) Current property laws do indeed leave something to be desired, but the fed is not the issue
So who exactly is trying to steal the north American continent
Sovereign funds run by Ay-rabs.
I don’t know. bi said fed’s main job is to rescue american people’s property. right, bi?
thanks!
I would have to vote for myself for the state department, A little vodka and a nice meal can do wonders for foreign relations…. ok maybe a lot of vodka
Kettle1
thanks for the info on NC. (where do you find this stuff?!) additional info/links would be great. thanks!
Yes, Vodka will come in real handy when meeting with Hamas and the Iranian Revolutionary Guard….
“We need a Paul Volker.”
Renting [163],
That is our answer. It is our only hope. We can’t allow the floodgates to be wide open for monetary stimulus. We are now laying the foundation [crumbling] for major problems in the future. If we nominate a PV mini-me, I will sell all my **** and short it. I will also buy *******.
All disclaimers apply.
Sync master, 192,
no problem just bring along
this:
This:href=http://www.pbs.org/wgbh/victorygarden/images/recipes/lamb/lamb1_lg.jpg>
and 99 of these:http://www.airwaysmag.com/channel/images/magazine/january_2007/virgin_america.jpg
Something for everyone
191 biluva
there are some good local forums for raleigh, gives you a good feel for the local politics and social matters, dont have the link right now, but search for “raleigh forums” should give you something
Raleigh is getting crowded. Capital Boulevard south of Wake Forest is a freaking nightmare.
thanks kettle! what are the “desirable” towns there?
Why don’t we send a caravan to kiss the commies #ss.
“About 1 million Simplicity and Graco cribs are being recalled after three children became entrapped in their cribs and died of suffocation, the Consumer Product Safety Commission said Friday.”
“Simplicity Inc., of Reading, Pa., is listed as manufacturer of all the cribs, which were made in China.”
http://www.msnbc.msn.com/id/20907633/
Monday the CEO of Simplicity will hold a press conference saying China had nothing to do with it. He’ll have one of those bomb collars on and say that it’s just a fashion statement.
#198 versity
diet coke just came out my nose – thanks for the laugh
“syncmaster Says:
September 21st, 2007 at 4:36 pm
Yes, Vodka will come in real handy when meeting with Hamas and the Iranian Revolutionary Guard….”
I think milk and cookies should suffice.
Talking of vodka, where can I sign up?
x-underwriter,
Thanks! Well, I mentioned yesterday that I have a family member who is currently selling and the buyer pretty much has them over the barrel. At this point, the buyer has negotiated a price
x-underwriter,
not sure what happened there (oh, I think I used a less than symbol) …as I was saying,
the buyer has negotiated a price less than asking, asked for a 5k closing costs to be paid by buyer, asked for pre-possession, and now is asking for another 5k closing cost concession. Let us say the negotiated price is 100k, with the additional 10k in closing costs, is the “net” from the sale now 90k?
afe
I’ve got to get out of here. I can hear a bottle of Rosenblum calling me.
NEW YORK, Sept 21 (Reuters) – A record 26 percent of U.S. homeowners say the value of their homes has fallen during the past year, above the previous peak of 24 percent seen in 1992, a survey released on Friday showed.
Reflecting the extent of the prolonged housing slump, 21 percent of homeowners polled in September expect the value of their home to decline in the year ahead, up from 18 percent in August, according to the data from Reuters/University of Michigan Surveys of Consumers.
***
looks like sentiment among sellers is gradually changing. news flash: a lot more than 26% have seen their house value drop
NJ Patient: That’s just the liquor talking…
If you’re in Trenton, surely you can still get some decent Italian in Chambersburg somewhere. It’s been more than ten years for me and I couldn’t remember a name if you pulled my fingernails out but I had some amazing meals there.
I’m always interested in NNJ Italian. These days, if I need a fix, I confess a weakness for ducking under the Hudson to Il Mulino in the Village. Something closer would be nice.
chambersburg is finished. all mexicans and
well , you got it.
“On another note, One issue i am concered about when i am ready to buy is illegal immigration. I will not buy in an area that is heavily effected or appears to be a likely target. This has nothing to do with skin color, but places like raliegh NC are having issues because their schools are exploding with growth due to immigrant children but the tax base is not matching up. There are numerous other social issues also tied into it. but for me it is a key issue.”
I say let common sense be your guide and don’t believe people who say one thing when your own eyes tell you something different.
But be careful with whom you discuss such matters. The mere mention of well-documented but negative traits of certain groups is strictly forbidden.
Let’s put it this way….in any classroom of 20 kids — 2 non english speakers is not an issue…..just like 2 morons is not really a problem….get that number to 4 or 5 and the whole class is screwed. Seriously.
BC Bob or Grim,
Do either of you remember the name of the italian restaurant on bloomfield ave in Clifton, on the other side of the underpass after styertown? It was in the same lot as the enchanted florist. I can’t think of the name and I don’t know if it is still open, but that was a great Italian restaurant. But I used to go 20 years ago, and can’t remember much except waiting in line.
KL
NJ RE agents are working hard this week adding another 1000 units to the inventory. So who’s trying to dump all these houses on the market? Anyone want to buy a house in NJ? It does not seem like, at least not this week.
Grim or KL,
Do you have an address for the following GSMLS # 2410162
TIA
re: Italian restaurants- Is Palazzo in Montclair still any good? I haven’t been there in years. And I just had some terrible Italian food from where else? Staten Island.
Essex- Non-English speakers should be in ESL classes and not in all English speaking classes. Any school thats putting a non-English speaker in a regular class needs an adjustment to say the least.
# 212
GSMLS # 2410162
614 FOOTHILL RD
Bridgewater, NJ
OLP: $718888
LP: $669000
DOM: 120
Taxes: $7949
KL [210],
Bella Napoli.
I used to go there often. Great place. They have subsequently moved to a larger location. I have not been there. I heard they lost their touch, when they expanded.
http://www.bellanapolirestaurant.com/
thanks new investor!
BC,
I knew you’d know. That name was on the tip of my tongue! Where is it now? Obviously I don’t get out much anymore, well we do eat out but not alone, so Red Robin,Fuddruckers, & Bensi for Italian is it.
KL
PS: the last time I was in Angelos was 1986. For no other reason then the above stated reason.
“Red Robin,Fuddruckers, & Bensi for Italian is it”
KL,
No Thistle?
#216
No problem.
From here on out I’m transitioning to a new name.
I will now switch to “sybarite”
3b (147)-
There’s been a response, but all wrong on both sides. Sellers now believe there will be scores of buyers, cheap mortgages in hand, to pay ’05 prices again for their languishing homes.
Buyers, however, expect to see mortgage rates pushing down on 5%.
Of course, mortgage rates rose- in lockstep with a fierce Treasury selloff- and, all but the few properly-priced listings still languish.
What else could you expect in a nation of almost total financial illiteracy?
“What else could you expect in a nation of almost total financial illiteracy?”
Wailing, gnashing of teeth and rending of garments?
Found this on the internet thought I would share:
We are thrilled to be moving to the triangle area, HOWEVER, we have a beautiful home in NJ to sell. It’s been on the market for 2.5 months and we’ve reduced it twice. I’ve reached my limit on patience with the absurd offers buyers are making. We had one couple who honestly thought they had a shot when they offered us less than what we paid on the house.
So, while we’ve had a lot of traffic and a number of offers, none of them were anywhere near reasonable (and some with contingencies). We just got a call back from a counter offer we made and the couple came up 5K (big deal). If we accept their offer we are just barely breaking even on what we spent and put into the house since we purchased it 3 years ago.
My husband wants to take it…I want to hold out for the additional 5K. Our offer was half-way b/w our last listing price and what they offered….seems fair, no?
I’ve asked our agent if there is a way in which we can split the commission with the buyers (even if it’s 1% that they pay) or if the agent would be willing to renegotiate their commission (from 5% to 4%) to close the deal. Anyone else have a similar situation where they renegotiated the commission?
Anywho, I was just wanting to vent and thought there may be others who wish to share as well.
These sellers are too in love with their home to sell it. Emotional attachment is a terrible thing in this situation.
Letting the deal fall apart over $5,000? Amazing.
But hey, that sure is a “beautiful home”.
My Neighbors house was listed lasted year at 789,000. Not a bad price, we were even thinking of purchasing it. The town is an upper class community. Now they have it listed for 599,000 and still no offers. I am seeing major price drops in NJ, MA , NH , ME. These are States that I have been looking at daily. It starting , the Bubble is Bursting. Remember all the experts saying there was no Bubble. Now they are saying there will be 10% – 15% price drops.
From being in the trenches of the house market, I have already seen those price decreases.
What the experts are not telling us , is that house prices are going to go back to 2000. And this is going to happen very fast will see bottom in the winter 2010. About the same time that were going to emerge from a recession.(obvious reasons, Iran, Iraq, terrorists, economy, gas prices, inflation,ect)
Are we headed for an epic bear market?
The credit bubble is just starting to unwind, a credit-derivative insider says. And while U.S. borrowers are being blamed for the mess, they were really just pawns in a global game.
http://tinyurl.com/2gylh5
question:
i saw a house with my realtor the other day that i was interested in. i asked the realtor for the disclosures. she called the next day and said the listing realtor said there are no disclosures because it’s an estate sale and the nephew who is selling it lives far away and doesn’t know anything about the house or family.
several days later i went back to the house with my husband to look at the yard. the neighbor came over and we were talking. he told me that the house was owned by a man who died and his wife. the wife now lives in nj. as we were talking a woman came down the driveway, who turned out to be the wife. she was very mad at the neighbor for talking to us about the house and told him not to tell us anything.
this, and the fact that i was told that there were no disclosures because the owner was dead (when clearly i saw she was very much alive) made me suspicious.
2 questions:
is the disclosure paper work mandatory?
am i being overly paranoid?
“So, while we’ve had a lot of traffic and a number of offers, none of them were anywhere near reasonable (and some with contingencies). We just got a call back from a counter offer we made and the couple came up 5K (big deal). If we accept their offer we are just barely breaking even on what we spent and put into the house since we purchased it 3 years ago.”
What you feel entitled to is meaningless.
What is “reasonable” if the market points in a different direction? If the market put your house value at twice what you paid and a buyer said “you don’t deserve a 50% YoY return” you’d laugh, right?
The property condition disclosure is voluntary in NJ.
You are not being overly paranoid in this situation.
If you do go through with the deal, do not skimp on the inspector/inspection.
“My husband wants to take it…I want to hold out for the additional 5K”
D*ck for a tic.
tcm,
You said:
am i being overly paranoid?
No, the seller is hiding something.
If nothing is wrong with the house, maybe the man committed suicide, or maybe he just simply died at home, and the seller thinks that would cause a certain number of buyers to take a pass. Or maybe a violent crime occurred.
Did the wife move out after the husband died, or were they separated before he died?
If you’re really interested in this house, go back and talk to the neighbor some more.
Talk to some of the other neighbors, too.
Get the man’s name from propertyshark.com and google it – see if there are any newspaper stories. Call the local police department. I don’t know how you look up death certificates, but I’m sure there’s a way to do it, to look for the cause of death.
One of my relatives got a great deal on a house that was on the market for two years because the previous owner committed suicide. He wasn’t bothered by it, but a lot of people would be.
#228 and #230
thanks for the input.
#230 –
the wife moved after the man died. i don’t believe there was a crime or suicide in the house.
i looked up the sale history on the house in town and it was sold in around 1993 for $1 and again in 2006 for $1. not sure what was going on there, but the neighbor mentioned different family members moving in and out over the years. and why they sold to someone for $1 after the man died is another question.
i believe that the owner (the man who died) probably did a lot of work, especially electrical, on the house himself. i guess it’s possible he never got permits or something, and maybe that’s part of the reason they are being secretive.
tcm,
The wife moved out and sold to someone else for $1 after the husband died?
They’re definitely hiding something, but what?
Something is fishy.
From today’s WSJ:
Uncle Sam: Subprime Lender
September 22, 2007
This week the House of Representatives overwhelmingly approved a plan to erase billions of dollars of subprime loan defaults in the private mortgage industry. How? By making taxpayers responsible for future losses.
The Bush Administration recently announced support for a similar plan, and the housing industry is in full lobbying mode. One of the lone skeptics is Alabama Senator Richard Shelby, who warns that this could be one of the most expensive federal bailouts since the savings and loan crisis of the late 1980s. He’s onto something.
The goal of these bailout plans is at least admirable — to ensure that subprime borrowers don’t lose their homes to foreclosure, which is a clear and present danger given that some two million adjustable rate mortgages will roll over at higher interest rates in the months ahead. The Bush plan would give the Federal Housing Administration (FHA), Uncle Sam’s Depression-era housing agency, the authority to help as many as 80,000 subprime borrowers refinance mortgages at lower interest rates by insuring those loans against default.
No one wants to see borrowers lose their homes, and the good news is that private lenders are already working with late-payment borrowers to refinance the terms of these subprime loans. What’s troubling about the FHA expansion plan is that the insurance guarantee places taxpayers atop the housing bubble. Uncle Sam would insure tens of billions of dollars in new mortgage liabilities, and just when default levels are cascading.
Worse, both the White House and Congress want to suspend the FHA’s downpayment requirements to insure even zero-equity loans. They should read a new study by the Office of Federal Housing Enterprise Oversight (OFHEO), which reviewed 5,000 FHA loans and found that borrowers “who make no downpayment at all have the highest default rates.” Sometimes these default rates were three times higher than high downpayment loans. In the latest “FHA modernization” bill, some borrowers would have no equity in their home.
In some cases, those getting this federal guarantee would have a mortgage larger even than the value of the home. That’s because the FHA traditionally allows home borrowers to finance closing costs and the insurance premiums. If housing prices keep falling, home owners would have a financial incentive to walk away from the loan and leave it to taxpayers to pay off the balance.
FHA’s supporters claim this insurance can be expanded at no cost to taxpayers because FHA premiums more than cover annual losses from defaults. But this is like arguing that Social Security is solvent because it is running a “surplus” this year. According to the Bush Administration’s own actuarial projections, FHA already lacks the revenue stream to pay the expected claims on loans that go sour, though it claims expanding its loan portfolio will put it in the black.
In recent years, the U.S. Government Accountability Office and the federal Housing Department’s Inspector General have issued reports scoring the FHA for fraud, lax financial standards, and mission failure. The Inspector General reported in 2006 that “because of adverse loan performance,” the FHA’s “total costs exceed receipts on a present value basis.” It also noted that FHA has consistently underestimated default rates on its new loans.
Also in 2006, the Congressional Budget Office confirmed that “FHA’s insurance program imposes costs on the government and taxpayers” and “the subsidy cost of the FHA insurance is between 2 and 5 percent of the amount of the insured loans.” These subsidies are “free” to taxpayers only in the sense that Beltway accounting rules record future liabilities in invisible ink.
It’s a testament to the FHA’s underwriting ineptitude that, even during the biggest housing boom in a generation, the agency’s delinquency rate has somehow doubled over the last 10 years. In 2004, 2005 and 2006, the FHA’s delinquency rate was five times higher than the rate on conventional prime mortgage loans, double the rate on loans with private mortgage insurance, and even slightly higher than the rate on subprime loans. (See the nearby chart).
One recent FHA innovation was the “downpayment assistance program” in which a third party (sometimes the bank or the home seller) is permitted to fund the downpayment for the borrower. That program has suffered default rates as high as 20% — five times higher than on the typical mortgage.
FHA’s market share fell to an all-time low of 4% of all loans in 2006, down from 19% a decade ago. The Bush Administration should have worked to get that percentage to zero and mothballed an obsolete New Deal agency. Instead, HUD bureaucrats and the housing industry keep inventing new missions for the agency, such as the “zero downpayment” program. FHA now wants to elbow its way into the upscale market by expanding the size of a loan it can insure to as much as $417,000 — which would make subsidized mortgage insurance a kind of universal entitlement.
* * *
We wonder if either end of Pennsylvania Avenue grasps the irony of what they are proposing. At the very moment when private mortgage lenders are under pressure from regulators, rating agencies and shareholders to tighten underwriting to avoid another mortgage meltdown, the FHA is relaxing its standards so it can insure more questionable mortgages. If that is permitted to happen, America’s newest and largest subprime lender will be Uncle Sam. Don’t expect this story to have a happy taxpayer ending.
http://online.wsj.com/article_print/SB119041963651535889.html
From today’s NY Times:
Frustrated New Yorkers Grapple With Loan Rates
_________________________________________________
A MONTH after the mortgage markets started to crumble, mortgage brokers and lawyers say that New Yorkers are finding it harder than ever to get mortgages and are increasingly backing out of deals. This lending slowdown has seemed to affect a broader segment of New York City apartment hunters, many of whom are now waiting to see if prices drop because of the mortgage crisis before they commit to buying.
Buyers affected by these changes include younger New Yorkers with short credit histories and, interestingly, professionals who buy apartments with small down payments and nearly 100 percent financing and count on end-of-year bonuses to pay down the loans.
The market has reached the point that mortgage brokers like Lori Famighetti, chief executive of Oxford Wellington Mortgage Company, are telling their clients in New York not even to try to get a mortgage for more than $1 million at a competitive interest rate if they have a credit score of less than 680 and want a loan of 90 percent or more of the purchase price.
“This is the market now,” Ms. Famighetti said. “The buyer has to have a 700 or 720 credit score” to be considered for a mortgage that would cover more than 90 percent of the sales price.
http://www.nytimes.com/2007/09/23/realestate/23loan.html?_r=1&ref=realestate&oref=slogin
Tim (222)-
Amazing, yet so familiar. Evidently, the only way this collective stupidity will be purged from the market will be via mass foreclosure and bankruptcy.
Seems so unnecessary…but, maybe it is necesasry when too damn many people own houses.
When the American Dream becomes too available, it turns into a nightmare.
tcm (226)-
No, disclosures are not mandatory. Second, they should never be relied upon as an accurate statement of condition. Only a professional home inspection will do.
As for paranoia, you’ll have to answer that for yourself.
#220 Clot:There’s been a response, but all wrong on both sides. Sellers now believe there will be scores of buyers, cheap mortgages in hand, to pay ‘05 prices again for their languishing homes.
Buyers, however, expect to see mortgage rates pushing down on 5%.
That is unfortunately what I though tyou would say. ANy ides how long it it will take both sides to realize they are wrong?
tcm-
Sales for $1 are indicative of transactions among family members or legal procedures (completely legit) to change the ownership entity on the deed.
The property may have been held by- or transferred into- a revocable living trust. It could also have been passed from a revocable trust into a subsequent family trust.
I’m sure you can talk to enough neighbors- and paranoiacs on this board- to scare you out of anything. Why not just focus on the house and its condition, and leave the hand-wringing to those with an all-too-obvious agenda?
3b (237)-
About a week, for the conscious.
About a month, for those in denial.
No big whoop. The race to the bottom will continue.
“About a week, for the conscious.”
“About a month, for those in denial.”
Clot,
OK, approx 5% are conscious, approx 45% are in denial. What about the other 50%, dead man walking?
BC (240)-
I’d say 70% in denial, 25% walking dead.
We’re also now at a point at which it’s easier to do a short sale or REO transaction than deal with an irrational seller. I only have one listing client left who isn’t in a forced sale position…and if I hear one more word out of her mouth about how her stench-filled pit of a home is “better” than her neighbors’, the sign’s coming out of the ground.
As the necrophiliac said: “dead people are easy”.
Check this listing:
MLS: 2337141
DOM: 325
OLP: 1.3 Mil
LP : 1 Mill
That’s approximately 10000 dollars off for every day on the market. Guess this seller couldn’t find a bigger fool than him to take this property of his hands.
Grim,
I thought about it for a couple of days. You asked me if I was more concerned about timing, price or the fact that sales are happening at all. My answer is price. I could care less if there are 2 transactions or 5000 transactions happening per day, my only target is price. I want to see reversion to the mean. That means that 4/2 CHC on .5 acre currently listed @ 700K needs to be reduced to 595K. I’m in no rush and could care less if my equity drops by the same percentage. I’m aware of it and will price accordingly.
From Today’s WSJ:
Canada Is Giddy About the Loonie
And Twitting U.S.
Currency Parity Is a Point Of Pride, but Americans Won’t Like the Prices
_________________________________________
he owner of five strip clubs in Detroit and Windsor, Ontario, says American dancers are heading to Canada to earn the strengthened Canadian currency, and Canadian customers are heading to Detroit because their dollars go further there. He’s fighting back by advertising more in the U.S. and offering free limo service to get Detroit men to visit his Windsor clubs.
But like most Canadians, Mr. Katzman is brimming with national pride. “We’re feeling for the first time like we’ve caught up to our big brother,” says Mr. Katzman.
After 31 years of playing second fiddle, the Canadian loonie, so-called because of the bird on the dollar coin, overtook the U.S. greenback this week. A nation that has long been the butt of jokes from its neighbor to the south puffed out its chest and grinned.
At the start of the year, one U.S. dollar bought 1.166 Canadian dollars. Late Friday in New York, it bought just 1.0008 — a slide of 14%. On Thursday, the two currencies hit parity for the first time since 1976. In January of 2002, the U.S. currency touched its recent high against the loonie, with one dollar buying 1.6143 Canadian dollars.
Even Canada’s finance minister, Jim Flaherty, couldn’t resist the opportunity to stand up and speak Thursday, soberly telling reporters he has been worried about the fragile U.S. housing market; Canada’s housing market, on the other hand, is “remarkably different.”
Thanks partly to the initiatives begun over a decade ago, those deficits are a thing of the past and the Canadian economy is surging on the back of record oil prices. Mr. Campbell suggests the U.S. could learn a thing or two from its neighbor.
“I should not presume to tell the U.S. how to manage its fiscal house,” he says with characteristic Canadian reserve. “But you can’t cut taxes and fight a war and balance the books.”
Mr. Katzman, the Windsor strip-club owner, is philosophical. He says that, last year, 90% of his dancers were Canadians. About 200 of them drove down from Toronto and Montreal to take advantage of the U.S. dollars American men typically paid with.
This year, he has more American women dancing in his Canadian clubs — about 160 — than he has Canadians.
It’s a nine-hour trip from Montreal to Windsor, Mr. Katzman explains, and with the loonie as strong as the dollar, the dancers can earn just as much money up there. “As a business decision, it just doesn’t make sense,” says Mr. Katzman.
Even the stripper would rather get paid in Candian dollars !!
What next? The North Koreans ??
Here’s a scenario for anyone willing to provide opinion..
Townhouse condo Tamarac FL
Nice development, well kept private location.
1 story, about 25 years old.
2 bed 2 bath. Not gated, but very well positioned. Was over 55 but was changed to any age.
Bought in at 125 in 2001
Peak last year for similar units at 240ish, 200 as recent as 1/07. Looking to sell – now askings are at 190 area. We priced at 189 and there are at least 6 similar (dev has about 100) on the market similar price. Brough two lookers who were in and out – no offers. I figure it has 155 in its future. Where best to price right now to bring a real buyer?
Are we headed for an epic bear market?
http://articles.moneycentral.msn.com/Investing/SuperModels/AreWeHeadedForAnEpicBearMarket.aspx?page=1
80’s junk-bond king Michael Milken is referenced in this MSN Article on the Global Credit Crunch.
“says American dancers are heading to Canada to earn the strengthened Canadian currency,”
Who’s loonie now? At least the strippers are on the ball [no pun]. Parity by design? The North American Union?
I contacted Hudson City Savings about a pre-approval. For a pre-approval they want full documentation, even 12 mos. of cancelled rent checks. Who pays rent by check anymore anyway?
While their rates are favorable, you need to send them a check for $100 with the pre-approval application. That fee is only refundable if they fund the loan.
I don’t know about you, but I’m used to getting my pre-approvals at no charge. When the seller doesn’t take my bid, I find another property and get the same lender to shoot back another pre-approval to support whatever price my new bid is at. Seems to me, at $100 a pop, this could get expensive rather quickly with Hudson City.
From WSJ:
Rate Cut Perked Up Builders’ Stocks,But Price Cuts Will Sell the Homes
Health Warning: This article contains disappointing news to Bi-Moron and Reechard.
___________________________________________
In reality, the Fed’s move may do little to restore the availability of higher-risk mortgages that boosted the builders’ sales during the housing boom. “I don’t think the Fed’s move is going to bring back subprime or is going to bring back Alt-A,” Toll Brothers Inc. Chief Executive Robert Toll told investors at the Credit Suisse home builder conference this past week.
Aggressive discounting was on display last weekend, when Hovnanian Enterprises Inc. held a 72-hour fire sale, offering discounts of as much as 30% on certain homes. For example, a Hovnanian home in Southern Californian, originally listed for $1.9 million, was discounted to $1.49 million, a 22% haircut.
“It proves there is pent-up demand,” Hovnanian’s Chief Financial Officer Larry Sorsby said. “There are home buyers out there who are willing to buy a home if they think they are getting an attractive price.”
In its second fiscal quarter, ended May 31, Lennar said average incentives were $43,700 on houses valued at an average of $342,000. That is up from a year ago, when incentives averaged $24,700. In July, KB said its average home price had dropped 12% in the previous 12 months. Deeper discounts may be ahead if Hovnanian’s success touches off a race to the bottom. Next Saturday, there is an auction of 53 units built by D.R. Horton in San Diego. One condo that was previously valued at $309,990 has a starting bid of $149,000, according to the auction Web site.
“In markets where home prices almost doubled in four years, you could easily see price cuts of 20% to 30%,” said Thomas Lawler, a housing economist based in Vienna, Va.
But discounting to move inventory may be the builders’ most effective cure, even if it means sacrificing profit. Indeed, investors were facing reality by week’s end. Home-builder shares gave back most of their gains. “There is no easy way for this to be solved,” says Robert Stevenson, a real-estate analyst at Morgan Stanley. “Everyone knows that pricing needs to fall dramatically to return the equilibrium of supply and demand.”
_____________________________________
Builders see the writing on the wall while most individual sellers keep holding out for the extra 5000 bucks which they won’t see.
#250
Hudson city has good rates, but if you see the fine print they need a 20% down for loans over 500K.
gary (244)-
Not to butt in, but from parsing that post, I’ve gotta say that if you’re concerned about price, it’s all about timing.
Deny it all you want, but if the only price for you is the lowest, mean-reverted one…you are trying to time the market.
(245)-
“I should not presume to tell the U.S. how to manage its fiscal house,” he says with characteristic Canadian reserve. “But you can’t cut taxes and fight a war and balance the books.”
Duh.
2x (250)-
Why don’t you just get a pre-approval for the amount for which you truly qualify?
Even dumb Realtors see through the trick of getting pre-approved at the price of your offer. Besides, being approved for more than your offer- and offering less- is quite an effective message to the seller in this market.
Clotpoll,
I don’t know when that lowest price or price that appeals to me will occur. I guess I have this comfort target in my head. A price that will allow me to sleep at night. I could buy at a certain price and comparable comps can rise or fall from that point forward. If that happens, so be it. I’m taking late 90’s prices and projecting 5% increases per year. Even if the reversion comes close within the next 6, 12 or 18 months, I’d make an offer if I found something.
Gotta run some chores, I’ll check in later.
Clot [255],
Interesting. Thanks. May reconsider my approach to the pre-approval game when my current one expires. I was going on the advice of my sister, who’s been a realtor for about 25 years, on having the pre-approval match your bid so you don’t tip your hand.
AntiTrump [252],
Thanks for he head’s up. Hadn’t got that far into the fine print yet, but I’m not surprised. Basically they’re known as the lender of choice for people who don’t need to borrow money!
Sean [248],
Slumpflation.
I can only speak from my own experience but when I was pre-approved, I was pre-approved for what they felt I could pay rather then what I really could pay. They didn’t take into account how much I was putting into my retirement account or my car payments (the latter was probably an oversight). If common practice is figuring x times one’s salary without considering retirement funding or any other savings, then I’ll never pay what I’ll be pre-qualified for because I need to pay me first. Was this just my experience or has anyone else noticed something similar?
We got approval (wife and i) on one income…on purpose…we could have bought 2x the house….but why. We wanted to be able to weather any storm so to speak.
whereas most people’s attitude was simple: Buy as much house as you possibly can. Forgo drapery and furniture but get the biggest/best place you can find….I wonder if they are happy with those decisions now.
#233 scribe
In many respects an interesting article, but this statement is patently absurd: “But this is like arguing that Social Security is solvent because it is running a “surplus” this year.”
important read:
“Fears of dollar collapse as Saudis take fright”
http://tinyurl.com/3cp9jq
sas
lost (261)-
You always want to pay yourself first. And, there’s no doubt lenders will pre-approve- even today- at exorbitant levels.
However, the pre-approval document is a negotiating lever during the offer phase. The way it’s expressed and presented can deliver a very effective message to the seller. Many buyers and buyer agents overlook this opportunity to “work” the seller, and it’s a shame.
You’d be amazed how many sellers see pre-approvals that only come up to the offer price and mistakenly think the buyer is stretching. Sellers often see this as a sign of intense interest…and then try to push the buyer higher in price, believing that the lender will always loan a little more, if necessary. The buyer thinks he’s not tipping his hand, but he’s inadvertently given the seller the entirely wrong idea.
“Report: Greenspan says euro could replace U.S. dollar as reserve currency of choice”
http://tinyurl.com/yse22f
sas
Anyone have any opinions on Pascack Valley hospital closing?
http://www.thejournalnews.com/apps/pbcs.dll/article?AID=/20070921/NEWS03/709210372/1019
The article says 700 employees will be out of a job (though the likely move is to File Chap 11 and hang around for awhile).
Wonder how this will impact the housing situation in Bergen County and nearby Rockland County …
The dollar is the sick man in the house.
WE lower, while everyone raises…
Big Mistake Bernake…!
The Wall St rally this weekend is hoax and a mirage.
$100 oil & $800 oz/gold right around the corner.
Hope you are prepared…
sas
“Anyone have any opinions on Pascack Valley hospital closing?”
Pascack Valley hospital is an awful place!
Thank goodness it is closing.
I’ve had 2 bad experiences there.
Had to get an appendix removal from there. Caught a nosocomial infection there.
I was stuck on IV antibiotics there for almost 2 weeks.
Nurse care sucked.
THe Drs there are idiots (I have names if you want them).
The layout sucked.
Let it close for good.
SAS
new Web site will debut on Sept. 25 that will allow home sellers and buyers to haggle, cement a deal and see it through completion — all online, and all without the help of a real estate agent.
RealUmbrella, the brainchild of Laguna Hills, Calif., chief executive officer Bryant Katzen and chief technology officer Michael Updegraff, is a patented system that will guide sellers and buyers through the home-sale process, from the initial listing to the final closing. Using a secure server, sellers who list their home through RealUmbrella will be able to view comparable listings on the site to set an asking price for their property, post their home listing on popular Web sites like Zillow and Trulia, and upload a schedule online of open house dates for buyers to see. Using contract forms that are legal in each state, buyers will be able to make offers on homes, secure financing, and arrange for inspections and title searches. Because the site will allow for electronic signatures, the entire process will take place online. Theoretically, a transaction could take place without the buyer ever seeing the house, or the seller and buyer ever meeting in person.
Costing between $349 and $949, the service is a bit more expensive than marketing packages sold by most other for-sale-by-owner sites like Owners.com and ForSaleByOwner.com, which also offer numerous self-help tools like contract forms and links to lenders. RealUmbrella’s higher fees are justified because it brings all of the elements of the sale into a single integrated platform that all parties in the transaction can access in real time, Mr. Katzen says. “We tie everything together,” he says.
Good news: i still don’t feel forced to buy, we’ve got 20% for a down payment on a house our my range, and no CC debt.
bad news: those 600k houses (asking prices in 2006) haven’t yet fallen to 400k.
But it’s not even october, so why worry? Patience, people
#236 and #238
clotpoll –
thanks for the info
Blood #272,
How long are you willing to wait for a 600K house to become 400K?
Warning — Off topic—
** Rant & Rave **
Yeah I know this ain’t Craig’s list but…
*Rant* How do they figure inflation?? I shop, inflation is out there, its out there in full force. They don’t count food right? I mean after all we need a cheaper computer that we need to buy every 3-4 years way more than food! so why count food. I just came from staples, couldn’t get a pack of staples brand paper for less than 5.00 that was the cheap stuff that used to be 3.49 had to pay 6.99 for the just above the very cheap stuff. Come on I buy this stuff all the time, so I know the prices.
*Rave* Along the lines of good eats, ( for those of you from around here) went to Tops diner tonight. Great meal. Had’nt been there since they closed ,remodeled and the kids took over. Great food and took more than half of it home with us. My husband has never been able to not finish his meal & usally everyone else’s but boy we came home with a ton of good food tonight. If diner’s are your thing ( and they have their purpose) Tops diner in East Newark, gets a five start from us.
KL
CPI is a total joke especially in this area. You can really see the inflation in fast food. A breakfast meal at McDonalds with OJ & coffee is approaching $7.00. And, no I dont eat that stuff very often. BTW check out http://www.newjerseylegalforums.com
#275
As far as diners go, Tops is pretty good. Great portions, as you’ve discovered. Great place to go after the bar.
(271)-
“RealUmbrella’s higher fees are justified because it brings all of the elements of the sale into a single integrated platform that all parties in the transaction can access in real time, Mr. Katzen says. “We tie everything together,” he says.”
Yeah, right.
What section of RealUmbrella do buyers and sellers go to to get a clue?
Fully-electronic escrow and closing platforms have been in existence for about five years now.
“The moral imperative that inspired Mr. Bernanke to take down interest rates half a point instead of a quarter was to ease the pressure off the reeling housing market. In the event, though, he managed to steepen the Treasury yield curve, which means that the longer-term obligations, which effectively determine the level of mortgage rates, went up. Not, we suspect, the ideal medicine for what ails homebuilding.”
http://online.barrons.com/article/SB119041472248335791.html
“Deny it all you want, but if the only price for you is the lowest, mean-reverted one…you are trying to time the market.”
Clot, the “mean-reverted” price and the “lowest” price are mutually exclusive by definition.
Patient (281)-
You are right. What I should have said was that the lowest price is the one that comes when the downdraft overshoots a reversion to the mean.
And, that is certain to happen.
Everyone is talking about price drop. But when I looked through GSMLS and did’t see any meaningful price drop on those houses I like. I did see the price drop for those houses I would care less, though.
Frank,
First, realize you are looking at the prices of homes that are not selling. You can’t look at the price of a home that isn’t selling, to understand the pricing of those that do. This is the problem of trying to gauge the market by only looking at the ask side of the equation.
In fact, I’d argue that asking prices should probably be ignored, instead the focus should be only on the prices of deals that close.
jb
ADA – After the foreclosures hit in Oct/Nov/Dec, I think asking prices will shrink.
Factor the increasing difficulty in getting mortgage, the potential of a recession (loss of income, jobs, etc), and i believe that will equal the lowering of selling prices.
All those people who have had their house on the market for 3-4 months NOW … that will be 6-7 months in January, when the market is really saturated.
I really don’t see a rush (but we really want to buy).
mike I have seen some drops in my area Vernon,butI am waiting .I think [and hope!] that they have a way to go.New poster have been reading awhile.Hear some big numbers being rolled around you can get more house here than bergen or morris.To far for NYC but wayne ,morristown area in stirking distance for work.Also low taxes by NJ standards.I am not a re guy , just thought I could help out.
Check this story out:
http://www.nydailynews.com/money/2007/09/23/2007-09-23_queens_woman_victimized_in_brokers_mortg.html
First, check out the sidebar. Apparently, there were some foreclosures in the Midtown area and down around Chelsea. Mortgage turmoil seems to like bridges and tunnels. :) Also, in the main story, I’m amazed at how what happened was legal. The woman features makes $1k a month and got a $538k mortgage.
First, let’s begin at the location of the house. For one, I personally know the area. It is the ghetto!!! Think drug dealers on the corner, broken glass and trash in the streets and more than it’s fair share of abandoned houses. I wouldn’t have paid more than $100k for a house there. The only way they got it through the mortgage brokers was because of comps in the nearby Addsleigh Park area…one-time home to Black glitterati such as James Brown and Jackie Robinson, and currently home to a large upper-middle class Black population. A good local bank would have picked up the foolishness right away, but it obviously wasn’t a local bank behind this.
Secondly, let’s look at the woman’s income. Now, I have good credit, while my fianceé’s sucks. Let’s just say we’re in the Alt-A based on our combined scores. We also make over 6 times what this woman makes. Based on our combined income, the most mortgage we should qualify for is $250k. This woman somehow got a mortgage that was 44 times her income based on lies. WTF?!!! No wonder I had to move to Jersey to afford a place to live!
Lastly, how does someone who hasn’t had a job since 1991 manage to magically make $9k a month? Didn’t this set off someone’s bulls*** meter?