From Bloomberg:
U.S. Housing Decline Threatens to Last Into 2009: John F. Wasik
Ivy Zelman’s view of the U.S. housing market is gloomy, but it’s probably the most realistic.
A veteran Wall Street analyst, Zelman, chief executive of the research firm Zelman & Associates, says it’s unlikely the U.S. housing market will recover before 2009, adding there’s a “50 to 60 percent chance of a recession,” as the housing slump curbs consumer spending.
Zelman paints a much darker picture than Federal Reserve Chairman Ben Bernanke, who said last week that housing will be a “significant drag” on the economy into next year.
When you consider the huge home inventories and tight-as-a- drum mortgage restrictions, it’s easy to conclude that the housing slump could extend well past 2008. Unless financing loosens up and buyers return, her prophecy will become a reality.
“I’ve never seen the market as bad as this,” Zelman said. “And it could get worse. The home-price decline could range from 16 percent to 22 percent.”
Monitoring inventory, builder incentives and demand, Zelman is also watching adjustable-rate mortgage resets. Homeowners with these loans will automatically face higher monthly payments that they may not be able to afford, another trigger for foreclosures or sales. Some $500 billion of these loans will re- adjust through 2008, Zelman says.
…
“These are the worst inventories we’ve seen as a nation,” she says. Zelman originally presented her report Oct. 10 to the Home Improvement Research Institute, a Tampa, Florida-based trade group.Zelman’s words carry some weight because she was one of the few major Wall Street analysts to warn of a housing decline months before it began late last year.
She was alarmed that home prices far outpaced personal- income increases during the boom, which is how the economic disconnect began. A bubble created artificially high demand that had to deflate sometime. Now economists and analysts are trying to assess the collateral damage of the bust and subprime mortgage meltdown.
Meanwhile, builders are stuck with thousands of new homes they can’t sell and potential buyers are canceling in droves or are unable to get a mortgage. Housing starts fell to a 14-year low in September.
From the Wall Street Journal:
Europe Feels Pinch
As Housing Boom Slows
By JOELLEN PERRY in Frankfurt and KEITH JOHNSON in Madrid
October 22, 2007; Page A3
The real-estate slowdown that hit the U.S. is spreading to Europe.
Home prices in some of Europe’s hottest markets are falling after a decade of double-digit-percentage increases. The reasons resemble those across the Atlantic: higher interest rates, faltering confidence and tighter lending standards.
“A year ago it was all, ‘no problem,’ but now they’re making us jump through hoops,” said Iciar Caro, a 29-year-old school psychologist in Spain who can’t find a bank to give her a mortgage on a €236,000 ($337,000) house in a northern suburb of Madrid.
Home prices in Spain more than doubled over the past 10 years, but the average price of an existing home has fallen slightly since July, according to real-estate agent facilisimo.com. France experienced its first quarterly home-price decline in almost a decade in the third quarter, according to its federation of real-estate agents, while Irish house prices in August were 1.9% below the year-earlier level.
The weakening home market could hit European economies. An expanding construction industry has fueled growth in Europe. Now, construction in Spain and elsewhere is easing. Also, some people said higher payments on their mortgages are cutting into their ability to spend.
The housing boom was a global phenomenon, affecting virtually every developed country outside of Japan during the past 10 to 15 years. Former Federal Reserve Chairman Alan Greenspan is among those who argue that a period of sustained low interest rates and quiescent inflation world-wide after the Soviet Union’s collapse encouraged a rush into housing.
Low interest rates were a potent stimulant in Spain, which experienced one of the biggest housing booms in Europe. The European Central Bank, mindful of slowly expanding, big economies on the Continent, kept interest rates low for much of the first part of the decade — often lower than the rate of inflation in Spain. That encouraged Spaniards to borrow money.
…
In Ireland — where economic growth, an influx of immigrants and low interest rates helped quadruple house prices over the last decade — the boom also may be ending. Falling house prices will push construction of new units down to 60,000 in 2008 from last year’s record 88,219, according to a recent study commissioned by Ireland’s environment ministry.
Construction accounts for some 13% of Irish jobs, and the slowdown prompted the Economic and Social Research Institute in Dublin to reduce its forecast of Irish gross-domestic-product growth next year to 2.7% from 3.7%. David Duffy, a senior researcher at the institute, said: “It would still be a good growth outturn in a European context.”
Some European countries experienced less of a housing boom and are feeling less of a hangover now. In Germany, the largest economy in Europe, a preference for renting has kept house-price growth limited. In an interview last week, German Finance Minister Peer Steinbrück listed cities, including London and New York, where he believes there might be a property bubble, and then added pointedly: “Not in Berlin.”
In France, government regulation has limited construction, so French houses still are in short supply, unlike in Spain and Ireland. Also, the majority of French mortgages carry a fixed interest rate, meaning homeowners are less sensitive to rate increases. That is why economists expect any slowdown in French home prices to be gradual.
From Bloomberg:
Commerzbank Falls After Chief Warns About Subprime
Commerzbank AG, Germany’s second- largest bank, dropped in Frankfurt trading after Chief Executive Officer Klaus-Peter Mueller warned of larger-than-expected losses related to U.S. subprime investments.
The shares fell as much as 1.54 euros, or 5.1 percent, to 28.60 euros, the biggest drop since Sept. 7. They traded 3.6 percent lower at 29.06 euros at 11:15 a.m., valuing the Frankfurt- based bank at about 19 billion euros ($27 billion).
Mueller told the Financial Times Deutschland that the original 80 million euros in provisions set aside for writedowns on 1.2 billion euros of subprime-linked investments “won’t be enough,” spokesman Peter Pietsch confirmed today. Analysts forecast subprime-related losses of 100 million euros to 450 million euros, according to M.M. Warburg’s Andreas Plaesier.
afe Says:
October 21st, 2007 at 10:06 pm
Rhyming:
I thought I’d seen this house before
But then I thought, oh, I don’t know
Price drops make me think before I shop
Hey don’t sign that contract, stop stop stop!!
Thank-you!
I know lame, but I tried!! :)
AFE,
I didn’t answer you last night
I’m changing from late nite to days
At 6 AM my rhymes are’nt right
I’m still in a daze.
KL
From the Boston Globe:
Women and the subprime crunch
THERE WAS a time when purchasing a home was something only married couples did. However, increasingly, single, widowed, and divorced women with and without children are making the choice to purchase a home on their own. Yet, the economic and social consequences of subprime lending practices on them are subjects few are discussing.
Women have become a key component in the real estate market. Last year in Massachusetts, over one-third of first-time home buyers were single women and nearly one-quarter of all home buyers were single women.
Women borrowers are overrepresented in the subprime lending market according to studies done by both the Consumer Federation of America and the National Community Reinvestment Coalition. Across the economic spectrum, women receive less favorable terms than similarly situated men on home purchase, refinance, and home improvement loans. The studies also show that the gap between women and men receiving subprime loans actually increases as women’s income increases.
Elderly women are prime targets of refinance and home improvement subprime lenders. Women on average live longer than men and have a greater chance of living alone. Rising property taxes and medical expenses make older women on fixed incomes particularly susceptible to lenders who promise money for necessary repairs, but instead exact huge fees and charge inflated interest rates.
African-American women, who represent half of African-American home purchase borrowers, are particularly vulnerable. In fact, there is evidence that subprime lenders charge black women and Latinas higher rates and fees than same-race men and white men, again, regardless of income and across all loan types.
For women, the impact of problems in the lending industry crosses age, class, and racial lines as well as neighborhoods.
Because of subprime lending, they are in danger of losing ground in their effort to reach economic self-sufficiency for themselves and in many cases for their children. Older women, who have seen the equity in their homes depleted, are in greater jeopardy of becoming dependent on family or social services. Single women, who are likely to earn less, have more dependents, and to spend a higher percentage of their income on housing, are thus less able to absorb the cost of an escalating, inflated subprime loan payment. Along with foreclosure, loss of savings, impaired credit and even bankruptcy are predictable consequences. Greater Boston service providers are already seeing an increase in family homelessness and it appears that a larger number of the newly homeless families are headed by women.
Anyone else think these people might be jumping the gun?
http://www.nytimes.com/2007/10/22/us/22auction.html?_r=1&hp&oref=slogin
“In a down real estate market, they came to buy. They came early, they came in numbers and they came with bank checks for $5,000.
By 10 a.m. Saturday, more than 700 people filled a hall in the convention center here for what real estate agents say is the largest auction of foreclosed properties ever in Minnesota, with more than 300 houses or apartments for sale in two days. Opening bids ranged from $1,000 — for a three-bedroom house — to $729,000, for a five-bedroom house on 11.9 acres. The crowd was standing-room only, with more waiting to enter. Some were looking for homes, others for investments.”
Living paycheck to paycheck gets harder
http://news.yahoo.com/s/ap/20071019/ap_on_bi_ge/stretching_paychecks
Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.
To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there’s enough food for her children.
He [retail consultant] said the last time he saw this was 2000-2001, when the dot-com bubble burst and the economy went into a recession after massive layoffs.
“A veteran Wall Street analyst, Zelman, chief executive of the research firm Zelman & Associates, says it’s unlikely the U.S. housing market will recover before 2009”
How about 2011.
I wondered why we haven’t seen an article regarding Harrison and corruption. MUST reading for all.
“Just when every new tale of corruption, ethical lapses or curious decisions by public officials in New Jersey was starting to have that tired, been-there, done-that feeling, along comes Harrison.”
“A fading factory town where the former public works director, saddled with six-figure gambling debts, stole at least $100,000 from the local parking meters.”
Where the man who succeeded him was once identified by state prosecutors as an associate of the Genovese crime family.
“Where roughly 50 officials in a square mile, blue-collar town pull down more than $100,000 a year, three dozen collect two public paychecks and another pockets $210,000 in pension and consulting fees from one of the state’s poorest school districts.”
http://www.nj.com/news/ledger/index.ssf?/base/news-12/1193032746190090.xml&coll=1
Isn’t she the same one who asked Mr toll which Kool-Aid he was drinking? :)
By the way, our state taxes built the new high school in Harrison and the football field with the latest, state of the art, carpet field.
On corruption or high pensions in NJ:
It is very simple – state on NJ and local aouthorities need to declare default/bankruptsy
– and say sorry we tapped out we can not pay those pensions anymore – either take 50% pension cut or nothing…
Al,
I agree. It’s the only savior.
Speaking of the great town of Harrison, what is going on with the River Park At Harrison? It looks like a nice development from the pictures. I would never want to live there for fear of getting shot.
Taling About Waste
– Where I live in P-way the quibbleton MIddle school just did major “repair project” on athletic facilities – everything was in quite prestine order before the repairs.
However school’s budget had some money left and if they wold not spend them – it would meand appropriate decrease of the budget for school next year – well what do we do?? We hire “local” contractor to do not-needed remodeling fo outdoor athletic facilities.
There is a lot of these going on in NJ as there si no limit to increase in taxes and local goverment spending.
13#, harrison is likely to be next hoboken. it is actually pretty safe there. the river seperate it from newark. i had lived there for one year long time ago and did not notice any serious crime.
BW Article,
A Troubled ‘Ownership Society’
As lenders cease making small, second loans, the homeownership rate is starting to decline, and the outlook for the housing market could worsen
by Peter Coy
After three decades of stability, the national rate of homeownership suddenly began rising around 1995. The rush to buy homes fueled an enormous surge in housing construction and home prices. Experts differed on the cause of the increase in homeownership, from 64.2% of households in early 1995 to 69.1% in early 2005. Was it the aging of the population? Or was it an expression of what President George W. Bush calls the “ownership society”?
Neither. Surprising new research published by the Federal Reserve Bank of Atlanta concludes that the bulk of the increase was caused by innovations in the mortgage market, in particular the explosion of “piggyback” or “combo” loans that made it possible for people to make small or zero down payments. Young families with little savings flocked to those loans to buy first homes.
One Wall Street economist who has studied the Atlanta Fed working paper, Jan Hatzius of Goldman Sachs (GS), wrote on Oct. 18 that “the implications could be dramatic.” Wrote Hatzius: “Our current forecast calls for a decline in new home sales to a trough level of 650,000 by the first quarter of 2008, which we believe is one of the lowest estimates on Wall Street. However, the simple arithmetic [implied by the Atlanta Fed paper] suggests that this estimate could still prove much too optimistic.”
The Atlanta Fed paper, “Accounting for Changes in the Homeownership Rate,” was published in September. Its authors are Matthew Chambers, an economist at Towson University in Maryland; Carlos Garriga, an economist at the Federal Reserve Bank of St. Louis; and Don Schlagenhauf, an economist at Florida State University and a visiting scholar at the Atlanta Fed.
But could the homeownership rate actually decline? Yes. In fact, it already has begun to. According to the Census Bureau, it was 68.2% in the second quarter of 2007, down from 69.2% in the fourth quarter of 2004 and 69.1% in the first quarter of 2005. Goldman’s Hatzius says that “given the current number of U.S. households of 110 million, the change in the homeownership rate over the past two years has already subtracted almost 500,000 from the underlying demand for new homes.”
The Atlanta Fed paper, “Accounting for Changes in the Homeownership Rate.”
Bi, you continue to amaze….. “Harrison is the next Hoboken’. Many problems with what you just said but with the biggest being – HARRISON IS ONE STOP ON THE PATH TRAIN FROM NEWARK – NOT ONE STOP FROM MANHATTAN LIKE HOBOKEN IS !
What is the difference between Harrison and Newark?
Harrison doesn’t have an airport
Humm fires in Malibu again just like 1991, could it be that there is a a recession brewing……
18#, 19#, you guys never lived there so you don’t know the area. guess what. the apartment is always rented out before you read on the local newspaper. the river park is near the iron bound side of newark. it is a ok place. the school is not great but it is only 22 minutes to wtc. i don’t have any financial interest there but just want to correct some peoples misconception.
bi: I have never lived there, but I have been there…which is why I will never live there! There is a reason why you can get a house in Harrison for under $300,000
Bi, spend some time in Hoboken and report back. Try getting a rental in Hoboken, they are near nyc rents.
You continue to make sweeping statements that make you look like an idiot.
22, 23#, i did not say harrison is hoboken. what i said is it would likely become hoboken. you guys are right: you can get a house under 300K and the rent is cheaper. that is why this is a place you may want to look at for investment.
Just discovered an interesting fact about renting- the insurance companies don’t think that you own much. We have just sold and are now renting in NJ, but the most personal property one can insure is $100K at most insurance companies and $150K at Allstate. We have to get quotes from nonconforming to get more coverage.
I guess insurers still think that most renters live in small apartments with a college refrigerator and Target furniture.
The next house I am buying will be in upstate NY away from the conjestion of North NJ
“I guess insurers still think that most renters live in small apartments with a college refrigerator and Target furniture.”
I think a majority of them do (at least in the NYC Metro area)
Clarification
Yesterday, I wrote about Sam Zell that, “blatantly, I think the guy did a great job.”
What I meant is he did a great job overseeing the EOP sales process. Otherwise, his performance as EOP chairman was only average.
We were up in the Goshen area on Saturday afternoon. Beautiful country, but I’ve got to say, it does have a bit of a “backwoods” feel to it.
Came across a craftsman/bungalow-style home that was featured in American Bungalow selling for $375k.
With Wall Street Slowing, Uncertainty Descends…..
Welcome to reality Manhattan.
http://www.nytimes.com/2007/10/22/nyregion/22economy.html?_r=2&ref=nyregion&oref=slogin&oref=slogin
Here is an example of Prices coming down from 2005 till now. These are 2 separate sale transaction in a Townhouse complex in Bridgewater NJ.
212 Strull Ct sold Jul 05
Sell Price: $380,000
Assessed Value: $335,000
$45,000 over assessed value
208 Strull Ct sold October 2007
Sell Price: $287,500
Assessed Value: $282,500
Only $5,000 over assessed value
So today if the person who bought in 2005, tries to sell his house, he will be at least $40,000 under just on sale price, not including RE commission etc…
If you think about it – how do you get past 100K in you belongings?? have a lot of expensive Jewelery – thats about it – and if you do you’ll probably keep it on the bank.
Antique furniture – thats the other way….
but how many people have it %-wise??
also 100K it a lot fo money since renter’s insurance does not cover cars or structure.
So please tell me how would go have all of your belongings valued at more that even 50K unless you have Jewelery and antique furniture.
And if you have Jewelery that Insurance companies would not want to cover it as it is very easy to steal.
Al #14,
Agreed it is wasteful from a practical standpoint. However, from a PR standpoint it looks great to have “new” athletic facilities. Most people have their priorities misplaced, they care more about sports than academics. Look at all the RU stickers everywhere, where was their school spirit when RU just had a top-notch engineering and philosophy department and not a halfway decent football team?
Grim-
Does this mean your taking flight from NJ or just a weekend home option?
JM
how do you get past 100K in you belongings?? have a lot of expensive Jewelery – thats about it – and if you do you’ll probably keep it on the bank.
Al #32,
Even if you do put it in a safe deposit box at the bank, it is still governed by your HO policy.
Where is Goshen? Google reveals there are many Goshen’s…
Are we talking about art, fine/antique furniture, or other high-value collectibles?
If so, why not try contacting some providers of specialized insurance? There are a number of high-profile insurers that offer specialized services for art, antiques/antiquities, etc.
TO post #35 – I did not know think of this one.
I guess it make sense then.
sync,
Goshen is a bit further north than Warwick, near Middletown.
If you think about it – how do you get past 100K in you belongings??
333 pairs of $300 jeans.
Actually, $100k in belongings is really a lot once you exclude the building and cars, unless you collect valuables (antiques, stamps, etc.). Jewelry can get you there if you have a lot, but many policies require a rider for jewelry over a certain value. I doubt a vanilla renters policy will pay its full $100k limit for jewelry.
easy to get past 100K if you are talking replacement value and not actual value.
No state bailout for Pascack?
#41 –
Actually I suppose it is if you’re into $10k sofa’s and $15k bedroom sets, that Bloomingdales high end stuff.
“Actually I suppose it is if you’re into $10k sofa’s and $15k bedroom sets, that Bloomingdales high end stuff.”
Then why are you renting? :P
#43, not even sure that is the case. We have some good quality furniture, and for dining room, kitchen table, china cabinets etc it is easy $20K. Then add up some decent clothes, my wifes shoes, paintings and pictures, rugs, china, my wifes shoes, decent electronics, music collections, my wifes shoes and it is easy over $100k. And I certainly do not consider us to have ultra highend stuff, it just all adds up
BC Bob Says:
October 22nd, 2007 at 7:44 am
“A veteran Wall Street analyst, Zelman, chief executive of the research firm Zelman & Associates, says it’s unlikely the U.S. housing market will recover before 2009″
How about 2011.
I’m with you.
“my wifes shoes,”
[45],
You married to Imelda Marcos?
We bought a bunch of antique furniture from the 1920s at an estate sale. $20.00 for the dining room set, $5.00 for a music cabinet, etc. I am sure it is worth much more.
grim Says:
October 22nd, 2007 at 9:22 am
We were up in the Goshen area on Saturday afternoon. Beautiful country, but I’ve got to say, it does have a bit of a “backwoods” feel to it.
grim: the town up there that is Chez Chic is Sugarloaf….it is south of Chester.
Nice area. It even has Metro North/NJT to Hoboken….albeit a healthy couple hours of your life. Bring a book. Bring a BIG book.
Those shoes’ll kill ya.
A cursory go over my household I came up with about $40k tops to replace everything new, and that is with some nice upgrades.
But then I’m a poor miserable bitter renter.
NJ Bound
I have renter’s insurance from allstate, who as you said insures personal items up to 150,000, really for the life of me I can’t think of any reason anyone would need that much personal belonging insurance. If you have the need for that expensive/and or that much stuff, look for the void that’s causing that need.
KL
( Sorry if that sounds harsh, but really, life is much easier without all that item/mind clutter)
home builder stocks are all up today despite this lousy market. what would be the impact to housing?
you can get a general umbrella insurance policy to cover things that exceed the renter’s policy limit.
I can see how you could easily exceed the $100k limit if you have some hand-me-down art or antiques
Housing will not recover , nor it should, until asking prices’s drop for at least 25-30%. Reduce prices’s buyers will come!!!
off topic observation, I was at Woodbury this weekend, still lots of people shopping. Although it was like the United Nations, stop for a second and listen and you could hear conversations being spoken in about 10 diff languages. Not sure if that means there were some Euro’s on vacation looking to pick up a deal on the exchange rate or what. I will note there always seems to be a decent mix of nationalities whenever I’m there, so maybe it’s no different than normal.
Buy buy buy, only 2 months until Christmas!!!
54#, woodbury new jersey? or connecticut?
rhymingrealtor- I totally agree with your last comment, but it is not a ‘need’. We are not shopaholics, and have no debt. But excuse me if owning a few nice pieces of furniture, jewelery, clothes for business and decent electronics over 10 years of marriage is considered a condition that has deemed me to have a void! 100 K in replacement value is not much these days.
bb,
I don’t remember Woodbury any other way. They run bus trips there out of NYC.
woodbury commons- outlet stores near Harriman NY, at Rt 17 and the NY Thruway.
I was in Buffalo last week. The locals were complaining about the traffic/parking problems due to all the Canadians coming down to shop.
off topic observation, I was at Woodbury this weekend, still lots of people shopping.
I was at Macy’s this weekend. The woman on line in front of me needed to split her purchases between 2 credit cards because they were both too close to the limit. 2 weeks ago I was at Macy’s and the person in front of me had his Macy’s card rejected because his purchase would have put him over the limit. He made a small cash payment on his card, just enough so that his purchase could eek in under his credit limit.
I don’t know if this means anything or if I just had the luck of the draw.
(Disclaimer: I don’t spend a lot of time at Macy’s, I needed something off a wedding registry)
Regarding Woodbury: look out if there is only 1 fancy handbag / wallet / dress left on the rack. That 4’10” Asian woman will not think twice about lowering her shoulder to run through you to secure her purchase.
I have witnessed this happen to the wifie on multiple occasions. It is hysterical every time, never gets old.
Rents fall in NYC? Is it possible?
http://www.tregny.com/pdf/Market_Report_Oct_07.pdf
Rents drop? In NYC? Pre you said that could not happen and yet… it happened.
Ah, fall is amazing this year….sitting out in back of my house on a little brick patio, watching my two old dogs wander around….underneath the big trees — azure sky — wonderful temperate breeze with just the right amount of cool air. *sigh* Kind of makes the whole thing worthwhile.
bergenbuyer Says:
October 22nd, 2007 at 11:02 am
off topic observation, I was at Woodbury this weekend, still lots of people shopping.
berg: can be a leading anecdotal countercyclical indicator….yes?
The first thing done is shop at outlets instead of the front line and/or high-end stores. The next step is cut back.
renting (61)-
OMG! Now the LOD has to disavow discretionary consumer spending:
“Disclaimer: I don’t spend a lot of time at Macy’s…”
My 14 y/o would set up a tent and sleep in Macy’s/Abercrombie/AE/Apple store if she could. It’s fun to buy nice $hit. Much like drugs, people do it to excess because it feels good. And, that’s not good.
I’m not into “stuff”, but there’s nothing inherently wrong with wanting or buying top-end things. The real problem is the misuse of credit in order to obtain it.
Goodbye Sushi lunch…..hello McDonalds.
grim Says:
October 22nd, 2007 at 11:34 am
Rents fall in NYC? Is it possible?
http://www.tregny.com/pdf/Market_Report_Oct_07.pdf
Don’t believe the hype until you try finding a spot yourself. I don’t own any rentals in the city anymore but BK, BX and SI are at 90+ capacity and I increased rents this year.
One would think that assuming the demand for NYC is constant lower sales means higher rents.
Are sales up?
FL land being advertised for sale in India !!! What next ?
http://www.rediff.com/money/2007/oct/22spec.htm
“Rents drop? In NYC? Pre you said that could not happen and yet… it happened.”
Don’t recall ever saying NYC rents couldn’t drop.
Anyway, that is a sequential monthly drop. I don’t believe the trend in rising rents has reversed.
Let’s see what AvalonBay reports in their quarterly earnings release. They will report a honest, same property # for each of their 22 regions. I bet rents in the New York region (excludes NJ, LI) are higher.
Tom [69],
I would target overseas investors. A $1 mil condo, US dollars, costs 500K BP.
Grim,
Do you recall what issue of American Bungalow or maybe the year?
Was at the Dutchess County Fairgrounds in Rhinebeck on Sunday and the traffic heading back in the thruway was horrendous. Got off early and hit even more traffic near Woodbury Commons.
How I love Bergen’s “Blue Laws”!
Rich
Woodbury Common is one of the most successful shopping centers in the world.
The company that developed it is based in New Jersey, and they’ve exported the outlet concept across the country and around the world.
I’m not into “stuff”, but there’s nothing inherently wrong with wanting or buying top-end things. The real problem is the misuse of credit in order to obtain it.
I’m not disavowing discretionary consumer spending. I have some nice toys myself. There is nothing wrong with enjoying the fruits of your labor as long as you live within your means and take care of your responsibilities first.
But to me, two trips to Macy’s in under 10 days is a lot of Macy’s (at least for me). I didn’t want to give the impression that I’m some mindless consumer-bot filling the void in my meaningless life weekend after weekend by filling my shopping cart with overpriced useless crap that will just sit on the shelf collecting dust as the plastic on my maxed-out credit cards wear thin from merciless swiping.
Consumer-bot.
I like that.
Quick poll – how many times have you purchased clothes so far in 2007? Not much you spent or how many items you bought, but how many times did you make a purchase?
I’ll start – 2
Me: 0
My wife: A lot.
I had previously heard that the new construction between Kean University and the Union train station was going to be sold as condos. Earlier this year, there was a sign saying “transit village”.
I drove by it last weekend. Korman is turning it into corporate accommodations.
me-0
daughter- let’s just say she couterbalances my 0.
And to think, I was proud of my ‘2’. On this site, I’m a shopaholic!
From NJ.com:
Tall, dark and… Hoboken? Oh no!
The New York Post’s Dating column yesterday was about a blind date between Tiffany, a 25-year-old pharmaceutical rep, and Kevin, a 25-year-old insurance wholesaler. Tiffany lives in Manhattan; Kevin lives in Hoboken.
You would think a little ol’ river wouldn’t make that much of a difference… but maybe you don’t know Tiffany.
Kevin was interesting and intelligent; I was really starting to like this guy. But then he mentioned that he lives in Hoboken. Immediately, a red flag shot up. The first and only time I went to Hoboken I got a parking ticket and a boot put on my car. Hoboken’s not a deal breaker, but let’s just say it’s not geographically desirable.
Me – 0
My wife – 2 or 3
My 5 month baby – may be 5 – thouse little dudes grow mighty fast :)
grim,
In college (RU-NB), a close friend of mine dumped his girlfriend of 2 years because she changed apartments from P’way to Dunellen. Too much of a commute for ****y, he said. I told tell him where Dunellen was, but he didn’t care. He didn’t know where it was, it “felt” far, and that was enough.
Me – 2
Wife – 3-4 (but she has an excuse in 07, she had a baby)
6 month old – 5 or 6. At least her stuff is still pretty cheap.
sync (83)-
Your pal was right. College girls ain’t worth the drive.
Does anyone have statistics regarding Bank appraisals coming in significantly lower than contract prices on homes? We have submitted an offer on a FSBO in Bergen County, very close to the most recent comps in the town. The owners are 50k apart from our offer and we cannot convince them that even if we offered the higher price (we would never) a bank would not approve.
#86,
You’re the statistic, when you have to ask you are overpaying.
The owners are 50k apart from our offer and we cannot convince them that even if we offered the higher price (we would never) a bank would not approve.
It’s probably not worth the effort trying to convince them. Especially, if they are FSBO, it probably means that either they think they know if all or they are trying to squeeze every last nickel out of the place.
Smile. Walk away. Tell them to please keep you in mind if they reconsider their price. Let them find out for themselves.
NJ Buyer
I don’t understand the situation. Why was an appraisal done if you haven’t come to an agreement regarding price?
Or are you just trying to use that argument as a bargaining position?
Second time that I have seen this. Last Spring, it was a home in Haworth. Divorce. Wife said $645, even as a FSBO. We said no thanks too rich for our blood. 3 months later, it was listed with a Realtor and sold for $565.
Grim
We are trying to use it as an arguement. Along with the fact that we can close in 3 weeks, conventional mortgage, nothing to sell (we are living with my folks) no BS etc. We showed them the comps and they just dont get it. Figured if we told them that a bank would not appraise it may help our case. We have not actually had the appraisal done.
NJ Buyer
Why are you in such a rush to buy. You are trying to convince someone to sell you an asset that will only depreciate in nominal and real terms in the next 36 months.
Relax and enjoy your moms home cooked meals and keep stacking your chips. You will be glad you did.
my two cents
nj (87)-
Leave your best offer on the table and walk away. Once they’ve turned themselves inside-out to get someone to beat it, they may well come back to you. Every sale I’ve made since July has been done this way.
Showing comps, etc to the other side is a waste of your time and can actually turn the seller against you. Nobody wants to be told what an overpriced POS their home is (even if it’s true). Reeks of horse-trading.
#5–That was a really interesting article in the NY Times today. My favorite quotes:
“Some, including Bryan Kihle and Jim Casha, who bought a four-bedroom house for $145,000, bid without seeing the properties. “I just looked at the picture and thought if we got it cheap enough, we could rent it for a year, then sell it when the market goes back up,” said Mr. Kihle…”
and
“Others just saw a chance to enter the housing market. “It won’t always be low,” said Pearl Dobbins, who said she was willing to spend up to $50,000. “This is our chance to buy a home and start our financial future.” “
Can anyone tell me the closing price on:
11 Coventry Road, Wayne?
Thanks in advance.
Did anyone see this article on declining markets?
gary,
OLP: $659,900
LP: $629,000
SP: $605,000
#95 Here is my favorite quote, and not just because her name is “Crook”, but because her occupation is “food server”.
“The market’s really low right now, so you can get a good price,” said Lori Crook, a food server at Keys Cafe who said she was looking for a place she could fix up and sell. “Even if you can’t sell it right away, if you just sit on it and sit on it, it will go up.”
Re #93 Trust me, I would love to stay at moms but we have been there over a year with our 2 year old, seen 4 homes fall through due to inspection issues, contaminated oil tanks you name it. We need to buy something soon.
Clot
Thanks for the advice.
Thank you, Grim!
NJBuyer – Why don’t you rent an apartment instead if staying with moms is difficult. Do you ‘need’ to buy a house now?
Zack
Just didnt want to get tied up for a year with 4 white walls. We have waited this long it would be nice to find a home and finally get our stuff out of storage.
NJ Buyer Says:
October 22nd, 2007 at 3:03 pm
Re #93 Trust me, I would love to stay at moms but we have been there over a year with our 2 year old, seen 4 homes fall through due to inspection issues, contaminated oil tanks you name it. We need to buy something soon.
NJ: you are knocking the cover off the ball; you’ve been prudent; and you saved yourself from massive heartache and fiscal damage….and NOW you doubt yourself? Make the market come to you……or maybe you just need a little time away……take a mini-vacation somewhere…clear your head….
#105. Agreed. Just antsy….
NJ,
I know how you feel. I looked to buy for about a year and a half, decided to rent in New Jersey (My wife and I and new baby didn’t fit in the 5th floor NYC walkup anymore) and have been happy renting for about 9 months. Every time I get antsy (three times a day) to buy I have to really examine the prices. Sometimes buying looks good now if I am comparing it to last year’s prices. But when I compare it to my salary, I decide to wait until buying looks like at least a break even with renting. Good luck, someday we will all own our own multicolored 4 walls.
You just need a good spanking whenever you feel like buying, thats all.
Kinky!
Buy vs Rent. I read an article on the rent vs buy situation and it had an interesting ‘rule’. A rule of thumb is that a house should sell for somewhere between 150 and 200 times the monthly rent. When I applied this to a few properties that I looked at purchasing, I quickly passed.
Just didnt want to get tied up for a year with 4 white walls. We have waited this long it would be nice to find a home and finally get our stuff out of storage.
Exactly. You waited this long, why throw in the towel now? A year from now, you will probably be in really good shape. If things are really tough at home, go ahead and rent for a while. In the long run, is it really worth spending tens of thousands of dollars extra to own a home today versus a year from now?
RayC
Mind if I ask, did you rent an apt or a home? I would like to find a 6 month rental and they seem tough to come by.
Mind if I ask, did you rent an apt or a home? I would like to find a 6 month rental and they seem tough to come by.
Would you consider a rental in a SFH or 2 family home? I find that private landlords (as opposed to apartment buildings) are much more willing to do month-to-month leases. Many have a fear of getting locked-into bad tenants. Use that to your advantage.
Would prefer a SFH or 2 family. Besides Craigslist, any place else I can look?
Many landlords still list the old fashion way in the newspaper. You can find those listings here:
We found ours on njo.com
Northjersey.com also works
What’s troubling the markets?
Housing and credit worries have beset the markets for most of the year and the outlook for 2008 is increasingly uncertain.
The main fear is that weakness in the US housing market is now spreading to other areas of the economy.
Engineering firm Caterpillar, seen as a barometer of how the manufacturing and construction industries are faring, said it was seeing signs of a sharp slowdown in activity.
The firm believes the chance of a recession in the US next year is now as high as 50%.
Its gloomy prognosis came on top of fresh evidence of housing woes, with figures showing a 10% fall in new homes being built in September.
Applications for new building permits, a key sign of future demand for housing, were down 7% in the same month.
The housing market now faces an oversupply of properties and acute problems in the sub-prime lending sector, where many low-income borrowers have defaulted on their payments because of high interest rates.
Mortgage financiers have warned it may not fully recover until 2010.
NJ Buyer
I’ve been using realtor.com click on the rentals tab. It seems to be listing all the rentals in a town.
Also, weichertrents.com, it too has all the listings not just weicherts.
#82- And then those girls wonder why they are still single in their thirties and start whining about how “all the good guys are taken”.
Actually my SIL is like this. Picky, picky picky. Now 37, single and visiting sperm banks………
# 82 – And then these girls wonder why they end up single in their 30’s.
I found my rental by answering an ad in the local paper for another house. That house wasn’t suitable for my family, but the agent who was listing it was not afraid that fnding me a rental would keep her from selling me something else. She showed me a few other places, one of which was right in location and monthly rent. In the Basking Ridge/Bedminster (Hills) area, where I was looking, alot of rentals are on MLS.
Interestingly, the agent also made a list of houses I’d seen for sale and liked, and inquired whether the sellers would consider renting. It didn’t work out for me, but she said she’d found rentals for a few of her clients that way, especially when the house was vacant and sitting on the market.
Does anyone know the area of Wayne Hills? I found a nice rental online – but it seems too good to be true. 2 bed / 2 bath, Granite, stainless kitchen, fire place, garage, etc for $1600/month.
#118 Hoboken
Were you referring to the ‘geographic’ comment or the fact that she can’t follow directions or read(ticket/boot) ?!
I remember reading an article a couple of years ago, it was a study of real estate prices in a certain neighborhood in Holland. It was/is a desirable area and during certain boom times (such as the tulip mania [see http://www.stock-market-crash.net/tulip-mania.htm%5D there are parallels to the housing boom). Anyway, someone tracked the real estate values from about 1600 to 2000 or so, and found that despite many periods of wildly fluctuating real estate prices in this desirable town, over the centuries the increase in RE prices roughly followed wage growth. I think it would be interesting to apply, say, the cost of a house in 1979 to its relative worth today, based on one of these parameters:
In 2006, $1.00 from 1979 is worth:
$2.78 using the Consumer Price ndex
$2.35 using the GDP deflator
$2.64 using the unskilled wage
$3.86 using the nominal GDP per capita
$5.15 using the relative share of GDP
This is funny if you are in a position like myself and listen to BC BOB.LOL
The euro shot higher after top world finance chiefs refrained from voicing increased concern about currencies at their meeting on Friday, which dealers took as a reason to drive the dollar down to fresh lows.
“The G7 in effect gave a green light to further weakness in the US dollar by not referring to the currency in their communique,” said Geoffrey Yu, currency analyst at UBS.
By the way Paulson said that a strong dollar is in our nations best interest. It’s like that gatorade commercial ” I LOVE THIS GAME”.
NJ
I rented a house (saw the ad on GSMLS). A builder owns it and said he only wanted to rent for a year as he was going to tear it down. I figured he would change his mind, and if he didn’t I would assess the market in a year, and if need be, rent somewhere else.
There weren’t a lot to choose from, but seeing as how it is temporary, I wasn’t worried about a dream house, although it is a great house. Just needs to be knocked down because it doesn’t have 5 bathrooms…
Knowing what I know now, it might be worth it to contact the big builders in the town(s) you are looking in to see if they have something to rent short term. (2 people left notes on the house after we moved in asking if they could rent it) and
“The total number of foreclosures in 36 Massachusetts communities north of Boston nearly tripled from January through September compared with the same period last year, showing the national mortgage turmoil is hitting home with a vengeance.”
“You can see that it’s a crisis,” said John L. O’Brien, registrar of deeds for southern Essex County, based in Salem. “It’s starting to take on a life of its own.”
http://www.boston.com/news/local/articles/2007/10/21/area_home_auctions_hit_the_roof/
make [123],
I am not involved.
“Hedge fund legend Julian Robertson said Friday he expects the U.S. economy is heading for a “doozy of a recession.”
“I think the Federal Reserve will trash the dollar until such times that there is some turn around in the economy, or until such time that they see that as self defeating,” he said.
According to Robertson, Bernanke is doing what he can to help the economy. “I think in a sense, he is trapped in the sins of his forefathers,” Robertson said. “I think he is doing exactly what he can do: ease ease, ease; cut, cut, cut; print, print, print.”
http://www.cnbc.com/id/21382026
To our valued customers:
During these exceptionally turbulent times BrooksAmerica has elected to temporarily suspend new loan originations effective October 31, 2007. As you all are aware the Jumbo A and Alt A loan products that BrooksAmerica has successfully offered for years have become overly restrictive to the point where they have become unviable from which to operate our present business model. Despite the fact the Company remains financially healthy and in good standing with each of its warehouse banks and investors we have chosen to take a brief respite from the present market. We believe this action to be both prudent and strategically responsible in order to preserve the integrity of our business until the financial markets return to a more rational pattern. After a brief period of rest, reinvention, and reengineering BrooksAmerica anticipates entering the market in the spring of 2008, appropriately positioned with core and leading edge products and services to meet and exceed your mortgage lending needs.
Michael Brooks
CEO
Alt A and Jumbo A are “dead” products. That’s scary.
It’s bad when have to close a company for the winter and come back in the Spring when the selling season is in full affect.
This my dear bloggers is disturbing to me.
NJ Buyer
I find the town local paper the best for apt hunting, they usually come out once a week and are filled with local rentals. What towns are you looking in? Often ( though they are not supposed to) Owners list both on the MLS and on their own in the local rag. You avoid realtor fee by gowing that route.
KL
gowing= going.
Another note on the town paper, lots of town info if you are not familar with the area its a great way to get familar.
KL
mr potter Says:
October 22nd, 2007 at 4:36 pm
#118 Hoboken
“Were you referring to the ‘geographic’ comment or the fact that she can’t follow directions or read(ticket/boot) ?!”
The geographic comment. I don’t mind basic genetic stupidity (they can’t help it), but snide geographic snobbery as a basis for important relationship decisions, especially from someone who probably grew up in Kentucky, is just plain dumb.
As a woman, I can say with assurity, that there is a subgroup of my s*x that overrates itself, usually on the basis of expensive clothing or good hair.
132
At least she did not require the Ivy degree
Ray C #125
I am also renting from a builder–a wonderful house on a to-die-for lot, which is why he eventually wants to knock it down and build a McMansion. About half the rentals I saw were houses being held for later knock-down or subdivision.
rhymingrealtor Says:
October 22nd, 2007 at 5:58 pm
NJ Buyer
I find the town local paper the best for apt hunting, they usually come out once a week and are filled with local rentals. What towns are you looking in? Often ( though they are not supposed to) Owners list both on the MLS and on their own in the local rag. You avoid realtor fee by going that route. KL
KL: many areas of NJ the owner pays the fee….in a sense, my landlord is motivated to keep me happy, because otherwise she has to blow another month for a fee to find someone else…..Hudson County works like NYC, but I think most of the rest of NJ is renter-friendly
grim: can you manage to unmoderate me before 6AM?
So I head out for my afternoon coffee on this glorious day…..and BLAM! they are gutting the crap out of the Starbucks on Broad Street in Red Bank…….fine, so I skip across the street to the No Ordinary Joe’s Cafe…..and they have the whole BoHo vibe-thing on display except two things out of place that were pure 80’s. They have Colin Hay blasting out the speakers belting out an acoustic version of Down Under, and I look at the menu to figure out how to order my mocha-frappa-cino-latte-double-no-whip-halfskim-half-organic-half&half-shoto’vanilla-iced-quad-venti, and I note they have a drink called the VAN HALEN….espresso, vanilla, hazelnut, and steamed milk….had to step up and take the plunge…..afterward, I have to admit that I felt as if I was running with the devil…
Red bank has a nice vibe, reminds me of parts of chicago
From Corruption article above
“Higgins worked for the Harrison schools, an impoverished district with 1,800 students and four schools, for a quarter-century. In 2003, on the same day Higgins retired, the district appointed him to a new, $170,000-a-year position to coordinate four construction projects.”
I am sure there are countless other stories like this in NJ. Maybe it’s time to leave NJ?