From Bloomberg:
Fed May Cut Interest Rates, Leave Door Open for Further Action
The Federal Reserve will probably cut interest rates today and lay the ground for more to prevent the economy from sliding into recession.
The Federal Open Market Committee will be loath to repeat language from its last meeting that risks between inflation and growth are “roughly” balanced, economists said. Keeping the phrase would open officials to criticism they’re oblivious to the credit squeeze that’s threatening growth.
“They pretty much tried to draw a line in the sand by going to a balanced-risks statement at the last meeting, and now the world’s changed,” said Keith Hembre, who used to work at the Fed and is now chief economist in Minneapolis at FAF Advisors Inc., which manages $105 billion. Officials will “leave themselves the opening” for further cuts, he said.
Chairman Ben S. Bernanke is trying to steer through the housing recession that entered its third year and alleviate a jump in borrowing costs for companies and consumers. The FOMC will lower the benchmark rate by a quarter point to 4.25 percent, according to 113 of 123 economists surveyed by Bloomberg News. Seven anticipate a half-point move and three see no change.
Officials may also enhance their efforts at providing a backstop for bank funding amid a surge in demand for cash, some economists said. Options include reducing the charge for direct loans to banks by half a point, to 4.5 percent.
…
The Fed is scheduled to announce its decision at about 2:15 p.m. in Washington. A quarter point rate cut, after 0.75 percentage point of reductions in September and October, would mark the greatest easing of borrowing costs since the last recession in 2001.
…
“The reality is, markets have gotten worse in a way they couldn’t have expected, and they’ve gotten worse to a point where there are legitimate concerns that it will spill over to the macroeconomy,” said Vincent Reinhart, who was Bernanke’s chief staff adviser on monetary policy before leaving in September to join the American Enterprise Institute in Washington. “Not acting would be too much of a surprise.”
…
Economists including former Treasury Secretary Lawrence Summers and the chief U.S. economists of Morgan Stanley and Merrill Lynch & Co. predicted a recession in the past month as strains in credit markets increased.
From the Stamford Advocate:
Stamford homes dip in price
Forget the Christmas sales.
Potential bargains abound for home buyers in Stamford as the median price of a single-family house dropped in October to $610,750, its lowest October level since 2003.
Four years ago in October, the median price of a single-family house in Stamford was $513,750, according to the Warren Group in Boston, publisher of the Commercial Record real estate report.
The median October price in Stamford reached a peak of $660,000 in 2005, up from $622,500 in 2004, the Warren Group said. The median is the midpoint, with half the sales above it and half below.
June Rosenthal, owner of Juner Properties residential real estate in Stamford, offered a couple of reasons for the median price drop.
“Some of the bigger homes – $2 million and up – that have been pushing the median up, are selling very slowly,” Rosenthal said.
Many sellers in Stamford were seeking prices the market could not support, she said, and the subprime lending fiasco has hampered real estate markets nationwide.
…
In October, 54 single-family homes sold in the city, down from 60 in October 2006, 65 in October 2005, 90 in 2004 and 104 in October 2003, according to Warren Group figures.
The last time October single-family home sales in Stamford were lower than this year was October 1991, when 40 houses sold, Warren reported.
Sales of single-family homes in October were sluggish in Greenwich, too. The Warren Group said 39 single-family homes were sold in the town in October, the same number as October 2006. Fifty-three single-family houses sold in October 2005 in Greenwich, according to Warren.
The previous October low sales figure was 32 in 1992, compared with 80 in 2000 and again in 1996, the Warren Group stated.
…
Thirteen single-family houses sold in Darien two months ago, down from 16 in October of last year and 25 in October 2005. The previous 20-year October low for the town was six in 1990, Warren Group reported.
From Reuters:
Fortis cuts jobs at New York structured credit team
Dutch-Belgian financial services group Fortis said on Tuesday it had cut the number of jobs at its New York-based structured credit team to 10 from a previous 24 due to market circumstances.
“It is a logical consequence of current market volatility,” a Fortis spokeswoman said, confirming a report in Dutch daily Het Financieele Dagblad.
Demand for structured credit products has been hit as defaults on U.S. subprime mortgages — home loans made to borrowers with weak credit records — led to a credit squeeze and shrank the market for collateralised debt obligations (CDOs).
CDOs are complex securities backed by other debt securities such as mortgage-backed bonds.
From the Baltimore Sun:
N.J. urging Congress to halt transfer of base jobs to Md.
One of Maryland’s largest military base expansions is slated to come under congressional scrutiny this week, as civilian employees at Fort Monmouth press their fight to spare the 90-year-old base in New Jersey and keep its high-tech defense jobs from moving to Aberdeen Proving Ground in Harford County.
The House Armed Services Committee has scheduled a hearing tomorrow to review the 2005 congressional decision to close 22 military installations nationwide, including Fort Monmouth, while expanding others, including Aberdeen Proving Ground and Fort Meade in Anne Arundel County.
Maryland officials have welcomed the base “realignments” as an economic bonanza for the state and say they’re confident that Congress will honor an independent base-closure process it set up nearly 20 years ago to avoid parochial infighting over moving military jobs from state to state.
The stakes are high for Maryland: Fort Monmouth’s work force makes up more than half of the 9,400 defense jobs and embedded contractors being transferred to Aberdeen, and nearly a third of the direct military job gains projected statewide.
Note that Singapore, Abu Dhabi, et al are not rushing in to get a piece of WaMu.
One might think their stock gets pounded down some more & then they get bought…but what do they have that any other bank would want? And, lest we forget, their correspondent side (Long Beach) was shuttered months ago.
Two years ago, WaMu was the #2 mortgage lender in the US.
From Bloomberg:
Washington Mutual Will Take $1.6 Billion Writedown
Washington Mutual Inc., the biggest U.S. savings and loan, will write down the value of its home- lending unit by $1.6 billion in the fourth quarter and cut about 6 percent of its workforce as mortgage-market losses increase.
Washington Mutual, led by Chief Executive Officer Kerry Killinger, also slashed its quarterly dividend to 15 cents a share from 56 cents and forecast a loss for the quarter, according to a statement yesterday from the Seattle-based bank. Provisions for bad loans will be $1.5 billion to $1.6 billion, more than the $1.3 billion the company previously predicted. It plans to shutter 190 of 336 home-loan centers.
Fitch Ratings and Moody’s Investors Service Inc. lowered Washington Mutual’s credit rating, citing the firm’s deteriorating mortgage assets. The bank has lost 56 percent of its market value this year, the worst performance in the 24- member KBW Bank index, amid declining U.S. housing prices and record home loan delinquencies. Washington Mutual said it plans to sell $2.5 billion of convertible stock to shore up capital.
…
Fitch downgraded the firm’s rating to A- from A, because of “worsening asset quality,” and “extremely challenging conditions in the U.S. residential mortgage market.” Moody’s cut its rating two levels to Baa2 from A3.
“Credit losses from WaMu’s mortgage operations will be noticeably higher than previously estimated,” and the company’s profitability won’t “begin to recover” until 2010, Moody’s said in a statement.
Just one more snippet on WaMu..
After cutting 1,000 jobs and dismantling much of its subprime mortgage operation in September, Seattle-based WaMu will now get out of the business entirely. The company said it will close about 190 of its 335 home loan centers and sales offices, shut down nine call centers and eliminate 2,600 home loan workers and 550 corporate and support jobs.
From the WSJ:
UBS’s Subprime Hit
Deepens Credit Worries
Bank Gets $11.5 Billion
From Singapore, Others;
‘Unknowable’ Bottom?
By CARRICK MOLLENKAMP , EDWARD TAYLOR and ANITA RAGHAVAN
December 11, 2007; Page A1
UBS AG became one of the biggest casualties of the U.S. subprime-mortgage meltdown yesterday, announcing that it would take a $10 billion write-down and sell a chunk of itself to the government investment arm of Singapore and an unnamed Middle Eastern investor.
The disclosures stoked anxiety about potential losses lurking on the books of other banks. That UBS, long known as a conservative lender, could take such a financial hit suggests that the wave of industry write-downs, which so far total about $50 billion, may be far from over.
[snip]
Merrill, which has $15.2 billion in CDO exposure remaining, could also need to take a further write-down, as could Morgan Stanley, according to analysts. Merrill already disclosed a third-quarter write-down of $7.9 billion, and it has $20.9 billion in remaining exposures to CDO assets and subprime mortgages. Morgan Stanley has already taken a hit of $3.7 billion in the first two months of the fourth quarter, which could grow based on its $6 billion in remaining subprime and CDO exposure.
In a speech to Morgan Stanley employees last Monday, Chief Executive John J. Mack said the firm is still trying to clarify the extent of the subprime losses. The subprime losses, he said, aren’t easy to quantify because the markets keep changing. He said the firm expects to have a better read in the next week and a half.
[snip]
BS has never posted a full-year loss, mainly due to the strength of its wealth-management operations, which in 2006 accounted for about 40% of the company’s profits.
UBS’s holdings tied to subprime mortgages eroded its core “tier 1” capital to about 10.6% at the end of September and came close to falling below a UBS internal target of keeping capital in double-digit figures. Traditionally, the bank has tried to maintain a high level of capital relative to peers because some of its wealth-management clients tend to be sensitive about its financial health, the bank said. The capital-raising measures announced yesterday will raise the bank’s tier 1 capital to 12%, the company said in a statement.
In recent weeks, as the mortgage data deteriorated, the bank made changes to the way it crunched the numbers, including lowering the time it assumed it would take for a loan to default.
Mr. Ospel said UBS decided to “calibrate our models to an extreme distressed scenario.” That ultimately led to the write-down.
“This is a very bleak outlook” for the U.S. housing market, Mr. Rohner said.
Not:
BS has never posted a full-year loss,
But:
UBS has never ….
From Morgan Stanley:
Recession Coming
We’re changing our calls for US growth and monetary policy. Since the shock of tighter financial conditions surfaced in August, we’ve incrementally reduced our outlook for future growth. But the time for incremental changes is over. A mild recession is now likely: We expect domestic demand to contract by an average 1% annualized in each of the next three quarters, no growth in overall GDP for the year ending in the third quarter of 2008 and corporate earnings to contract by 5-10% over that longer period. Three factors have tipped the balance to the downside: Financial conditions continue to tighten, domestic economic weakness is broadening into capital spending, and global growth — for us, long the key bulwark against a downturn — is slowing.
From the WSJ:
Mortgage Pain Hits
Prudent Borrowers
Fannie Adds More Fees on Loans — Even for Home Buyers
With Good Credit; ‘Jumbo’ Rates Resume Upward Trend
By JAMES R. HAGERTY and RUTH SIMON
December 11, 2007; Page B9
Some of the costs of cleaning up the nation’s mortgage crisis are beginning to hit innocent bystanders: people who pay their bills on time and avoid excessive debt.
Fannie Mae, the giant government-sponsored mortgage investor, last week raised costs for many borrowers by quietly adding a 0.25% up-front charge on all new mortgages that it buys or guarantees. On a $400,000 mortgage, that would mean an extra $1,000 in fees, almost certain to be passed on to the consumer. Freddie Mac, the other big government-sponsored mortgage investor, is expected to impose a similar fee soon, according to a person familiar with the situation.
[snip]
Loan applications have been so slow lately, says Lou Barnes, a mortgage banker in Boulder, Colo., that it feels like “our client base today is limited to people who don’t read the newspaper or watch television.”
Still, mortgage loans remain available for many people at rates that are attractive by historical standards. People with good credit scores and enough savings to pay a substantial down payment can still get 30-year fixed-rate mortgages of as much as $417,000 for 6.14% on average, according to HSH Associates, a financial-publishing firm in Pompton Plains, N.J.
But so-called jumbo loans — those above $417,000, the ceiling on mortgages that can be bought or guaranteed by Fannie and Freddie — have become much more expensive in relation to smaller mortgages.
The average rate for a fixed-rate jumbo loan is 7.13%, according to HSH. That is down from a recent high of 7.46% but remains lofty in comparison with “conforming” loans, those that can be sold to Fannie or Freddie. The premium paid for jumbo loans ballooned in August, when many loan investors began shunning mortgages lacking a guarantee from Fannie or Freddie.
http://online.wsj.com/article/SB119733436109620199.html?mod=hps_us_whats_news
#10, Also from the same WSJ article:
Mortgage insurers are also raising their prices and tightening their standards. Mortgage insurance is typically required when a borrower finances more than 80% of a home’s value. During the peak of the housing boom, many borrowers got around this requirement by taking out a so-called piggyback mortgage, which combined a mortgage with a home-equity loan or line of credit. But demand for mortgage insurance has climbed as most lenders have stopped promoting piggyback loans.
Triad Guaranty Insurance Corp., Winston-Salem, N.C., this month stopped providing mortgage insurance on option adjustable-rate mortgages, which carry low introductory rates but can lead to a rising loan balance. Triad also said it would no longer provide mortgage insurance for loans that exceed 97% of a home’s value. It set a 90% threshold for loans in four states where home prices have been dropping fast: Arizona, California, Florida and Nevada. “We want to look for people who have more equity rather than less equity” in their homes, says Triad Vice President Jerry Schwartz.
PMI Group Inc., a Walnut Creek, Calif., mortgage insurer, this fall stopped writing mortgage insurance for borrowers with credit scores below 620 who are financing more than 95% of their home’s value. PMI also has boosted prices for most borrowers who have credit scores of 620 and higher with loan-to-value ratios above 95%. Borrowers with credit scores between 620 and 659 who are financing more than 97% of their home’s value face the biggest increase. The monthly premium for a $200,000 mortgage will increase by $123 to $283.
Starting next month, MGIC Investment Corp. will no longer insure loans when income and assets aren’t fully documented unless borrowers can show they are self-employed and are either buying a home they intend to live in or are refinancing the mortgage on their home without pulling cash out. MGIC also will no longer insure loans in California and Florida where the borrower has less than 5% equity and is raising premiums for certain borrowers. “This is the first significant price change since the mid-1980s,” says Michael Zimmerman, MGIC’s vice president of investor relations.
Now it’s Morgan Stanley with the recession talk, I think last week it was Merrill. They are piling up. I need to read a little Ben Stein, cheer myself up, get my head back in the sand where Hanky Paulson and the plunge protection team want it.
HE (12)-
Funny how when an bank finds they can’t/aren’t making money, they invoke the recession call.
Tell them there’s a recession at (all disclaimers): AAPL, GOOG, CME, CMG, WFR, PCU, CVRD, RIO, FWLT, CBI, RIG, NOV, MOS, POT, MCD, MON, DECK, ICE, ISRG or ESRX.
There’s a big, wide world of companies out there- with no exposure to housing or mortgages- that still seem to provide a product or service that people will line up and pay good money to have.
And, with only a few exceptions, the list of companies above are trading at historically-low PE/G’s. The market may narrow in leadership in coming months, but the best companies cannot be expected to decline.
The whole market just shifted to a growth bias in the last quarter. When growth investing comes into favor, it’s usually a multiyear move.
Again, all disclaimers.
JB[1],
Can’t be, check your source. Doesn’t that writer know that Stamford is the home of the largest securities trading floor in the world?
From Bloomberg:
H&R Block Quarterly Loss Widens on Option One Charges
H&R Block Inc., the biggest U.S. tax preparer, said its second-quarter loss widened on writedowns tied to the shutdown of its money-losing mortgage business.
…
Richard Breeden, the hedge-fund manager and former head of the SEC, replaced Mark Ernst as chairman last month after H&R Block’s Option One Mortgage Corp. lost more than $1 billion over five quarters. The yearlong effort to sell the unit ended Dec. 4 when a proposed sale to Cerberus Capital Management collapsed and 620 jobs were cut.
H&R Block has fallen 13 percent this year in New York trading as the worst U.S. housing recession in 16 years caused higher loan losses and reduced new business for Option One. The company is trying to sell Option One’s billing and collections unit, the only part that won’t be closed by January.
H&R Block’s pretax loss from discontinued operations was $551.2 million, including $367 million of operating losses, mostly from the sale of mortgage assets, a $123 million impairment charge on assets for mortgage origination and servicing, and $61 million in costs for restructuring Option One’s loan-origination business and a writedown of fixed assets.
#14, Bost – Do you mean C?
Why is the press printing more bad news. Did they hear Bi and Reechard say that the sub-prime crisis is over and all the bad news has already been printed???
Reechard had also called a bottom in housing last Feb saying something about wall-street bonuses to save housing.
Reechard had also called a bottom in housing this Feb saying something about wall-street bonuses to save housing.
Vikram Pandit to the top at C?
Let me get this straight:
– Bails on MS, because he couldn’t get along with Zoe Cruz (although that could now be seen as a good thing).
– Start a hedge fund, and have a hot streak.
– Has hedge fund bought by C; get cushy job at C as part of the deal.
– Hedge fund begins to go sour pretty much the day the C deal closes.
– Get promoted to CEO of C, because all other candidates have either been fired, discredited or don’t want the job.
Did this guy step in sh*t, or what?
Anti (18)-
Note the longer and longer time between Reech’s posts here lately.
Although, I do need a good laugh. Perhaps he will chime in soon with his 2008 predictions.
So People who make over 100K are supposed to kick in extra to a retirement plan and not get anything back. So your solution is to take a flawed plan where we may not get all of the money we chipped in back to a welfare plan where the amount you have to pay on income over 100K you are guaranteed to not get any money back. Plus my tax rate slowly gets higher and higher as my income moves beyond 100K so I am already kicking in a higher percentge to the the govt.
Throw the under 65 diability parts of SS out of the program and you will have a surplus. SS was never intended to be disability insurance.
December 10th, 2007 at 5:14 pm
One possible approach: Eliminate the cap on SSI taxable income (currently $100k). Apply a graduated tax to income above that number (e.g., 6% below $100k; 2% to 300k; 1% above that). There, “liquidity crisis” solved. And we didn’t even have to get on the topic of means testing.
Hope for Housing Sparks D.R. Horton Call Action
(WSJ) Traders snapped up bullish contracts in D.R. Horton Inc., continuing a string of activity banking on relief in the battered home-building industry.
As shares of D.R. Horton rose 6.5% to $14.76 in 4 p.m. New York Stock Exchange composite trading, the volume of call options traded was nearly eight times as heavy as put-contracts action.
An unusual level of volume centered around options that give holders the right to buy D.R. Horton stock at $15 by late January.
Nearly 10,500 of these Jan. 15 calls changed hands, compared with open interest of about 3,300 contracts before yesterday. The price of the contracts nearly doubled to $1.20 each.
The spike came after heavy call buying of late in Pulte Homes Inc. and other home builders, which have been the center of the firestorm surrounding mortgage lending.
“It’s telling that people aren’t seeking protection in these stocks, now they’re looking for a bounce,” said Jon Najarian of OptionMonster.com.
Some analysts said the activity was related to a meeting scheduled for today of Federal Reserve policy makers. The Federal Open Market Committee is expected to further reduce a key short-term interest rate, which could be a salve for the housing market.
There also was a pickup in options volume in other sectors tied to interest rates. Traders piled into call options for the right to buy the Financial Select Sector SPDR fund — which tracks financial stocks in the Standard & Poor’s 500-stock index — at $35 by late January. Volume in these January 35 call contracts exceeded the open interest, and the price increased eight cents to 28 cents. The fund traded at $31.86 yesterday on the American Stock Exchange.
#20, And to top it all off, his hedge fund, Old Lane, never even had good (or IMHO adequate) returns!
John (22)-
There will be plenty for all of us when the freedom fighters and I overrun Fort Knox. :)
scribe [17],
UBS. Presently, better known as SUB.
Clot,
I’ve been in CBI and RIG since the summer. Have some holdings similar to the others DE, FLR etc.
CBI’s chart is nuts.
I am not an investment advisor people. Don’t be stupid and listen to me.
HE (27)-
CBI is a sick good company. I keep wanting to sell it, but I can’t find a reason why.
Here’s another fun little company:
http://finance.google.com/finance?q=jec
All disclaimers.
Buzzard (24)-
Is that Old Lane, or Old Fart?
Clot[13],
The exchanges are smoking.
AAPL, GOOG, RIMM, AMZN, the Four Horseman. What about the Seven Mules?
Just an observation.
#14 BC Not to mention it is Conn, and yet oh so commutable to NYC.
Ritholtz has an interesting criticism of Yun’s statements yesterday. Although I’m not so surprised that the NAR has misinterpreted its own index.
Another WTF? Moment: Pending Home Sales Index Did Not Rise
3b [32],
Right along the Metro Line, in tax haven CT. It’s all confusing to me.
Does this tarnish the image of Prestigious Bergen County(tm) ?
Police search for suspect in Paramus Mall stabbing
Lawmen in Bergen County this morning continue to search for the assailant who stabbed a 18-year-old man in the neck outside the Paramus Park mall Monday night.
The victim, whose name was not released, was taken to Hackensack University Medical Center. His condition wasn’t immediately known.
Police said the bleeding man staggered into the mall with the knife in his neck and collapsed before a crowd of horrified holiday shoppers.
He was taken by ambulance to the hospital with the knife still embedded in his neck, Paramus Deputy Police Chief Richard Cary said.
Clotpoll Says:
December 11th, 2007 at 8:18 am
HE (12)- Funny how when an bank finds they can’t/aren’t making money, they invoke the recession call.Tell them there’s a recession at (all disclaimers): AAPL, GOOG, CME, CMG, WFR, PCU, CVRD, RIO, FWLT, CBI, RIG, NOV, MOS, POT, MCD, MON, DECK, ICE, ISRG or ESRX.
Again, all disclaimers.
clot: I won’t say anything $@*&$@_)*@#%*%)*+@$*(@)$*@_%*&_)#%ITU _#I #U(%U% +R}#$R{R$I RITR
You can’t make this stuff up..
From the Record:
Town set to kiss its tax relief goodbye
A half-million dollars intended for tax relief in Rutherford next year might be used instead to pay a retired police chief and captain for unused days off, the borough’s chief financial officer said Monday.
Rutherford needs to scrape the money together before the end of the year because the retired chief, Steven Nienstedt, and captain, Thomas Farrell, each want reimbursement in a lump sum payment.
The officers announced their retirements two weeks ago. Rutherford owes Nienstedt $311,480 in unused time. Farrell is owed $190,821, records show. Each officer is cashing out on hundreds of sick, vacation and other days off they didn’t use during their many years on the force.
Chief Financial Officer Edward Cortright said he was attempting to determine Monday if there was enough money left over in the accounts of various borough departments to pay the officers.
#34 The assisilant is probably from NYC. The general consensus when any thing negative happens in Prestigiuous Bergen County, is that it is somebody from NYC.
“December 10th, 2007 at 5:14 pm
One possible approach: Eliminate the cap on SSI taxable income (currently $100k). Apply a graduated tax to income above that number (e.g., 6% below $100k; 2% to 300k; 1% above that). There, “liquidity crisis” solved. And we didn’t even have to get on the topic of means testing.”
When I was poor — and I mean no heat, not enough food,and holes in the shoes and no money to fix them POOR — I could never imagine feeling resentment over taxes. During the climb up, the more I was taxed the more I was making, so all was good. BUT, between self-employment taxes, AMT, realestate and income taxes in about a dozen states, foreign income taxes, yadda, yadda, yadda, ENOUGH IS ENOUGH. Tax me to defend the nation, to educate children, to care for the ill and the poor, to build bridges, roads, and other infrastructure of commerce, etc. But do it within a ballanced budget so that 30-40% is not going to interest payments.
http://lawrenceyunwatch.blogspot.com/
13#, clot, penny stock promoting is your second job/outlet?
From Bloomberg:
Commerzbank Chief Says Banks May Make More Writedowns After UBS
Commerzbank AG Chief Executive Officer Klaus-Peter Mueller said banks may make further writedowns after UBS AG yesterday said it will reduce the value of U.S. subprime mortgage investments by $10 billion.
“The prices for subprime products drastically declined again in November” and that’s why UBS had to write down the value of investments, Mueller said in an interview at a conference in Frankfurt today. “In such a market phase, further writedowns can be expected for the entire industry.”
23#, the mess in mortage bond market may have some time to come but real estate market seems hit the bottom for now. look at pending home sales number yesterday, interest rate cut and arms re-set freezing, people will start to think maybe it is really buyers market and want to be buyer
#36: Subtract the time they spent on work days lounging around at Dunkin’ Donuts and net that sum to ZERO. Unreal. How is that even possible?
From the Times Record Herald:
Home sales, prices fall in Ulster, Orange, Sullivan
Home sales and prices fell across the region in November, according to data reported by county boards of Realtors.
The decline across Orange, Ulster and Sullivan counties mirrors the slump playing out across large swaths of the country, as flagging demand and tightening credit have thrown a wet blanket on the housing market.
…
“There are a lot of expired listings. People are jumping from Realtor to Realtor looking for answers,” said Meloi. “The answer really is price.”
To combat the Realtor-hopping phenomenon, the Greater Hudson Valley Multiple Listing Service recently stopped publishing the expiration dates of listings. That should help keep Realtors from chasing each other’s business, said Ann Garti, CEO of the multiple listing service. “On occasion, people jumped on it a little too soon, and it did lead to some disquiet,” Garti said.
…
November single-family home sales
Sales Median price
County 2006 2007 % change 2006 2007 % change
Orange 235 222 -5.5% $319,000 $316,250 -0.9%
Sullivan 69 55 -20.3% $195,000 $160,000 -17.9%
Ulster 119 95 -20.2% $255,000 $250,000 -2.0%
“the mess in mortage bond market may have some time to come but real estate market seems hit the bottom for now.”
??
If the mortgage market is in a mess, how is this positive for RE? Cash buyers?
#42 – you are on crack, can I have some please?
things haven’t even started rolling yet…. wait till no wall street bonuses, layoffs, etc. We have an entire generation that doesn’t even know what tough going is. Throw in an equity crash for good order’s sake, and let’s talk.
The question I have for the RE profs here is whether, now that the Esperanza project is on hold in Asbury Park and it looks like the scope of the project will be changed, can the people who put down deposits back out of the contracts without penalty? They paid $X to get property Y but are now going to get property Z (if it gets built at all).
Does the NJ RE law allow them to escape without penalty?
The developer has escrowed their deposit funds.
bi,
Yesterday’s upward MOM move in PHSI was less significant than the YOY decline according to NAR methodology:
“In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.
(Courtesy of Barry Ritholtz)
Pay close attention to the last line:
There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons
While month over month may have moved up 0.6%, we’re down 18.4% on a year over year basis. I’m going to use the same justification that you attempted to use the other day, the upward move can be more easily explained as noise given the tremendous downward move from a year ago.
Looking at the past two years worth of data, there have been plenty of short-term upward moves that were not indicative of any kind of “bottom” or “recovery”. Why should this move be any different? Given the macro picture, which appears to be worsening, this move is largely meaningless.
#42 bi: I cannot believe I am doing this, for you, becasue it is a secret.
There is a direct corelation between the mortgage market and the real estate market.
Shhhh do not tell any body else. I am only sharing this information with you.
social security was created in environment where most people did not live much past 65. Now that life expectancy is close to 80, many seniors are receiving a disproportionately large benefit. It seems obvious to me that the way to make the system solvent (if it must continue to exist at all) is to raise the age at which people are eligible for benefits. Raising the cap on SSI taxes turns SS into a welfare program. I do not mind welfare for the truly destitute, but I have a big problem with welfare for tens of millions of middle class people who spend their days taking Carnival cruises and playing golf.
50 “I do not mind welfare for the truly destitute, but I have a big problem with welfare for tens of millions of middle class people who spend their days taking Carnival cruises and playing golf.”
Indeed.
Re 47? Is the Esperanza a Metro Homes project?
Skeptic # 50
Another problem with SS is that people have depended on it as their source of income once they retire. (perhaps not so much anymore) However, from a historical perspective people have traditionally worked for their entire adult life, even if it is at a reduced level in old age. SS was meant to keep people old people from starving because they could not work or could not find work due to age. SS was never meant to be a retirement fund although it has morphed into that. People have used SS as a crutch and have not adequately planned for old age/retirement. Still medicar is a much bigger skeleton in the closet then SS….
The SS Act as it currently exists encaompasses all of the following
* Federal Old-Age, Survivors, and Disability Insurance
* Unemployment Insurance
* Temporary Assistance to Needy Families
* Health Insurance for Aged and Disabled (Medicare)
* Grants to States for Medical Assistance Programs (Medicaid)
* State Children’s Health Insurance Program (SCHIP)
* Supplemental Security Income (SSI)
Sorry Passaic County..
Freeholders to vote on $10M budget fix
Passaic County residents could pay an additional $10 million in taxes next year if the freeholders approve a bond tonight to cover a shortfall in the 2007 budget caused by the appellate court decision that blocked the sale of the county’s public golf course.
The freeholders’ vote will be only one part in a series of events over the last few days stemming from the county’s budget crisis. Department heads were directed Friday to make more extensive budget cuts, the Sheriff’s Department eliminated several positions on Monday, and the county prosecutor was preparing to file a lawsuit against layoffs in his department.If five of the seven freeholders vote in favor of the $10 million emergency bonding, it must be paid back in 2008, County Auditor Steven Wielkotz said.
“It will be paid by taxes in next year’s budget,” Wielkotz said.
The state-imposed cap on county tax increases had limited the 2008 increase to $16 million. However, since payment of debt is exempt from the state’s cap law, Passaic County’s projected 2008 tax levy will be $26 million, if the $10 million bond note is added, Wielkotz said.
Clot,
I missed out on JEC on the pullback in Nov, all those infrastructure stocks were getting killed and I thought the Bear was finally here to stay.
Re 47? Is the Esperanza a Metro Homes project?
Yes
HEHEHE (52)
Re 47? Is the Esperanza a Metro Homes project?
Yes.
How do you know these companies have no exposure to RE? Did you look at their balance sheet and determine that they do not have a large percentage of assets related to real estate, did you check that their customer base in not scewed towards companies related to real estate, did you determine that they locked in rates via cash managment and their portfolio returns won’t suffer in 2008 now that rates are lower, did you take a look at what they are invested in? Plus CME and ICE in 2008 made a boatload off the huge volume related to the mortgage crises as well as the take over prems. That too can all go away.
Tell them there’s a recession at (all disclaimers): AAPL, GOOG, CME, CMG, WFR, PCU, CVRD, RIO, FWLT, CBI, RIG, NOV, MOS, POT, MCD, MON, DECK, ICE, ISRG or ESRX.
There’s a big, wide world of companies out there- with no exposure to housing or mortgages- that still seem to provide a product or service that people will line up and pay good money to have.
I do not mind welfare for the truly destitute, but I have a big problem with welfare for tens of millions of middle class people who spend their days taking Carnival cruises and playing golf.
I’m waiting for the day one of our political leaders has the cojones to say that.
#1
stopped by an open house in Greenwich on Sunday. Very nice (but small) totally renovated all-brick 3/2 cape in one of the better Greenwich elementary school districts. This is the type of place that would sell in an instant if it were priced right. All of the renovatations were high quality and very tasteful. The only problem was the price ($895,000). The place has been for sale for at least 6 months. Realtor at the place was living in a dream world.
Except according to Harvard, middle class is 180K a year.
syncmaster Says:
December 11th, 2007 at 10:11 am
I do not mind welfare for the truly destitute, but I have a big problem with welfare for tens of millions of middle class people who spend their days taking Carnival cruises and playing golf.
I’m waiting for the day one of our political leaders has the cojones to say that.
From Slate:
Worst. Forecasters. Ever
The cockeyed optimists of the National Association of Realtors.
But within the fraternity of financial and fiscal forecasters, the seers at the National Association of Realtors—longtime chief economist David Lereah and his successor Lawrence Yun—may be uniquely ill-equipped to deliver sobering forecasts. They work for a trade group whose mission is to buck up the spirits of real-estate brokers. And real-estate brokers—who live to sell, promote, and market—are constitutionally disinclined to hear anything but good news. Indeed, as I noted last summer, Lereah’s penchant for putting out positive spin on dismal housing numbers inspired a blog and led critics to dub him the Baghdad Bob of real estate. Lereah has moved on. But Yun has picked up where he left off.
In addition to claiming that the sun is shining brilliantly even as rain pours down from the heavens in a mighty stream, Lereah and Yun have also hazarded optimistic, educated guesses about the future. In February 2005, Lereah published a book that is my candidate for Longest Title Ever: Are You Missing the Real Estate Boom?: The Boom Will Not Bust and Why Property Values Will Continue To Climb Through the End of the Decade—And How To Profit From Them. Naturally, the boom busted soon after publication, and property values began to descend.
…
Clearly, the housing market encountered an inflection point in 2006, with housing prices and activity peaking. But you wouldn’t have known it from looking at NAR’s December 2005 forecast for 2006, in which the group said existing-home sales would fall 3.7 percent to 6.84 million and new-home sales would fall 4.8 percent to 1.23 million. Modest declines after an impressive multiyear run. Instead, as the data from December 2006 show, existing-home sales for 2006 fell to 6.47 million, down 8.6 percent (more than twice the rate forecast), while new-home sales fell 17.8 percent to 1.06 million. Last December, the 2007 forecast was once again guardedly optimistic. “Most of the correction in home prices is behind us, but general gains in value next year will be modest by historical standards,” said Lereah. For 2007, existing-home sales were “expected to rise steadily from the current cyclical low and reach an annual total of 6.4 million, which would be 1.0 percent lower than this year’s total.” NAR wasn’t so sanguine about new-home sales, however, projecting they would fall 9.4 percent in 2007 to 957,000. But once again, the forecasts were far too optimistic. As NAR reported today, existing-home sales are projected to come in at 5.6 million for 2007—a fall of 12.3 percent, not the 1 percent fall projected last December. New-home sales for 2007 should amount to 788,000—down about 25 percent from 2006 and far below the projection made a year ago.
S&P DOWNGRADES SHARES OF
WASHINGTON MUTUAL TO
STRONG SELL FROM SELL
WM announces that it will issue $2.5 billion of convertible preferred stock and cut its quarterly dividend by
73% to shore up capital. WM will also write down its home loan business by $1.6 billion. Separately, based
on declining home prices and a rise in credit card delinquencies, we are lifting our Q4 and ’08 loan loss
provision estimates by 23% and 35%, respectively, to $1.6 billion and $6.9 billion.We are reducing our ’07
and ’08 EPS estimates by $1.65 and $1.05, respectively to $0.70 and $0.60.We are also cutting our target
price by $1 to $14, 0.52X book value of $27.0.
[63],
Once again, S&P ahead of the curve.
Fed on target:
http://www.stockmania.com/index.php?showimage=110
Sync
I do not mind welfare for the truly destitute, but I have a big problem with welfare for tens of millions of middle class people who spend their days taking Carnival cruises and playing golf.
defining destitute can be a tricky thing. Consider that the average person living in poverty in the USA is still considered wealthier then 50-60% (a guesstimate, from recent stats i have read) of the global. I would love to hear a politician stop pandering to the masses with bread and circus, but drawing a line in the sand between destitute and nto is easier said then done. But dont take me the wrong way, i am all for helping the needy in society, i.e we send more charity overseas then any other country (its true look it up)yet we still have places like appa;acia that are horribly in need of all sorts of aid. The NYtimes just did an article on how a doctors group does volunteer work for about a week every year, a giant free clinic of sorts. The doctors all tend to note how they see general health conditions on the order of 3rd world countries!
Third World Clinic, First World Country
For anyone still thinking of paying 2005 prices, look at this sales in Bridgewater, NJ.
Closed today,
64 Whitehead Road, sold for $460,000
Other houses on same stret. Most of them are very same houses, with minor differences.
49 Whitehead Rd Sep 06 $497,500
53 Whitehead Rd Jul 06 $526,000
19 Whitehead Rd Jun 06 $525,000
70 Whitehead Rd Jun 06 $525,000
76 Whitehead Rd Jun 06 $505,000
23 Whitehead Rd Nov 05 $580,000
20 Whitehead Rd Feb 05 $410,000
78 Whitehead Rd Jan 05 $426,500
70 Whitehead Rd Aug 04 $435,000
According to this, we are definitely back to Aug 2004 prices.
I gotta say I’m drawn to this place like a gawker at an accident scene…I’d says a moth to flame, but Bi and 50.50 make it so bloody…
Reading Bi and ReInvester101 are like listening to my father (are either of you him?!?!?) when he comes out with his nonsensical economic theories….
I gotta tell you some stories about dad…
Clotpoll(20)
If I were Vikram, I would seriously think do I want that job? Rememeber after SOX you sign on the financial stmts, your ar** will get hauled to jail…
One more example. Since I live in B’water, I know the town better. The town assesses most properties every year. By and large, I have found the assessment has been close to the sale price since 2003 onward. But look at recent transactions.
1173 Sherlin Drive: sold 490 assessed 541
That is 50K less then assessment, almost 10%.
SG, let me know when we get back to 2002/2003 :)
After a year of househunting and reading this blog, can I suggest that real estate crash theories seem to share nothing with the realities of home sales?
We’ve been looking in Morristown, Madison, Cranford and Westfield as well as some of the nice bits of Essex Co. that offer a ‘downtown’.
Occassionally I see something like this (http://www.zillow.com/HomeDetails.htm?zprop=38731311 owner paid $675,000 last year), but mostly I look at the list price vs sale price stats and become very depressed. Housing remains utterly unaffordable to a NYC commuter with a “modest” six-figure salary, a family to feed and kids to educate.
Someone please prove me wrong, employing some facts not silly taunts. Is any quality town within an 80-minute commute ever going to be affordable? How do people manage to live here?
lifelongrenter #72,
It’s the “quality town” part that’s tripping you up. If you can’t afford to live in the towns you pine for on the amount of money you make, adjust those expectations. If you make a middle class income, look in middle class towns, not in freaking Brigadoon.
There are plenty of middle class towns in Jersey. The fact that most posters on this blog sneer at them notwithstanding. You just have to broaden those horizons a little :)
Strong Sell, now that’s one you do not hear often.
Re Esperanza/Metro Homes,
My ex and I owned a Metro Homes condo in Hoboken. Decent quality. Guys who runs the place is a bit of a slimeball. Had a party when they turned over the condo association. The two guys who run the co, Geibel? and some other dude, kept buying everybody kamikazes. One of them started hitting on my neighbors wife. Class act.
LLR,
I don’t get your position, are you saying 520 Centre, South Orange isn’t a reflection of reality?
520 Centre Street, South Orange
(Short Sale)
Purchased: 5/23/2006
Purchase Price: $675,000
OLP on this listing was $900,000 in 2005.
Was listed for sale in September for $589k, has been relisted and current asking is $440k. My math might be wrong, but this is a drop of approximately 35%.
#73 sync, suggest away. I’m well aware of my Brigadoon aspirations. The region’s burbs seem better than a lot of places when it comes to offering something of a walkable downtown. Where else do I need to look?
LLR,
Walkable downtown isn’t all that common yet. If you’re not set on that, check out Bridgewater, it’s maybe borderline on the 80-minute commute and no downtown but prices are falling.. and schools are good too.
skep-tic Says:
The only problem was the price ($895,000). The place has been for sale for at least 6 months. Realtor at the place was living in a dream world.
This brings up an interesting question that I have. People here always ask when sellers are going to realize that they are not going to get their 2005 prices, but when are the selling agents going to understand this. Other than the atypical realtors on this board (i.e. grim, clot, rhyming realtor), it seems that most realtors think that their clients should not lower their prices. That the client should hold on to the high list prices because the market may rebound.
When are the agents themselves going to capitulate to the market? In my opinion, when the agents themselves get a hold of reality, they will hasten the selling public’s grip on reality. Eventually the agents themselves are going to need a commission check, no?
There are plenty of nice towns with good schools at good prices near NYC. The problem is everyone is a snob and wants the same few uber upscale towns to impress their friens and family.
For instance, you can live 40 minutes from Manhattan in Levitown Long Island and buy a nice home for 400K with 6K in property tax. 50 years ago that was the American dream and people thought they arrived when they finally made it to Levitown, today some punk ass 21 year old fresh out of school wants a one bedroom condo on Park Avenue and would laugh his ass off if he was expected to slum it in his grandparents dream house out in Levitown.
Someone please prove me wrong, employing some facts not silly taunts. Is any quality town within an 80-minute commute ever going to be affordable? How do people manage to live here?
Just noticed a couple of houses I am tracking are registering pretty decent price drops, around 10%. Not quite priced where I want them (although entering into the range of “tempting”), but probably enough to generate some activity and perhaps a dead cat bounce or virtual plateau.
Prices not at 2003/2004. If it keeps up like this, I should be able to get what I want in the late summer, as long as I remain flexible.
The fact that the current asking price is down more than 50% on that property should be an indication to you that asking prices need not be founded in reality.
Never, ever, would that property have ever commanded that $900k asking price. It was a dream looking for a sucker to fulfill it.
You can’t gauge the market by looking at asking prices, too many of these listings have prices based on some kind of mythic model. Realize that you can ask whatever you’d like on a home. An asking price is a marketing tool, not an independent assessment of value or price. Well priced homes sell, and don’t sit on the MLS long, overpriced homes tend to sit and stagnate. This often gives the impression that “all the homes are overpriced”. Well, they are. The problem is that you need to know the inventory in a particular market. I’m still seeing well-priced homes going under contract in under a week. Price it right and it’ll move, and FAST. These don’t tend to sit around and wait for buyers to find them.
Likewise when looking at list/sale percentage data. Relisting has become so commonplace that any kind of analysis based on DOM or List/sale ratios are just plain wrong. None of these take into account prior listings. It is just too easy to game the system.
My friend just moved from Bridgewater he spent ten years in that living hell. It is in the middle of nowhere, I was half way to Hersey Penn on my last vacation when I finally came to the bridgewater exit. The place is a horrow show. My poor buddy whenever we were at clients where we worked late or he could time when he left would have a close to 50 mile drive to the path train in the morning so he could catch the path to wall street.
Bridgewater is in the middle of nowhere? Wow, I expect very little traffic and few people and lots of horses in places that are in the middle of nowhere. Maybe to you, anything not within a hop and skip of Manhattan is “middle of nowhere”?
lifelongrenter #72
I would have to agree with syncmaster on the “quality town” thing.
You may find you can afford to buy “something” in one of the quality towns, but it may be the worst house in town and you still will have overpaid.
I remember reading a study somewhere that you never want to be the least-rich person in the town. That is just a recipe for being miserable.
So even if you can afford something in a “quality” town, it doesn’t mean you will be happy there if you are surrounded by people who are mega-wealthy. Psychologically, a family might be better off being in a town where they are somewhere in the middle to upper end of the pack and they can afford a home that is pleasant to you.
#72
Yes, it can be affordable but I see only one way that will work over the next 15-30 years.
1st
Wait 10+ years for the new tunnel & one-stop train rides to nearby towns.
2nd
Cross your fingers that bonds sell & everyone keeps budget & doesn’t over spend their tithe for every town’s saviour: the
monorail, what I say!?transit-village.3rd
You buy a decent home now in one of these towns, but in the next 4-5 years take a 30% drop & then wait another 10 afterwards & hope that your one quality home didn’t get surrounded by dumps (if it does you have to pay taxes + the cost to send your kids to private school). Even if it’s dumpy maybe just maybe the the town will lure flocks to the
genuine, Bona fide, Electrified, Six-carfixer-upper-one-stop-train-transit-village.Monorail!
4th
Hold on for the next 10 years
5th
Sell & move to the next north carolina/idaho/new mexico/new zealand
Ok, someone let me in, where the heck is Brigadoon?
I have noticed a trend where potential buyers will look at the same set overpriced houses on the MLS, day after day, wondering when they’ll capitulate.
These folks tend point to the prices on these 200+ DOM listings as evidence of … strength? These are the homes that *are not* selling. This isn’t strength at all.
These sellers won’t ever capitulate. Ignore them. They are (quite rationally) playing their free option.
It’s the homes that sell that we care about, not the homes that don’t.
Re my comment #85
By the way, this is something my husband and I are learning right now, didn’t mean to sound preachy : )
I think many buyers’ expectations are very high because prices are very high across the board. It is analogous to college admissions– now that virtually every college is very expensive, everyone wants to go to one of a few select schools more than ever. At root, I think it is a search for value more than a desire to impress others. People feel less uncomfortable about possibly overpaying in a top tier location.
#72
You must readjust your expectations. One thing I can guarantee you is that there is a town within 80 minutes on NJT in your price range. You either have to settle on the house or the town. We would not settle on the town so we bought a really small house in what I consider a nice (although somewhat snobby) town (Chatham). If you want/need 4+ bedrooms then I imagine that those towns you mention get expensive really fast. If you can deal with something closer to Newark then you could do a lot worse than Maplewood in my opinion. My one income family buddy is closing in two weeks on a great place in Glenn Ridge for under $500K that only needs a tiny bit of work. The deals are out there, you just have to keep looking until you find one early that is priced to go fast.
Want to talk sillyness? I know a group people who listed their homes for sale with a family friend as a “favor”.
They had no intention of selling, no matter because the prices were anywhere from $100-$200k over what the market would ever pay.
I say “favor” because this family friend was a new agent, new to the business, and was being pressured by his broker to perform.
The tactic turned out to be a great way to get face time with potential clients. He held open houses, folks came. He acknowledged that the homes were wildly overpriced and suggested other nearby homes whose prices were more in-line with reality.
#82 grim:I’m still seeing well-priced homes going under contract in under a week. Price it right and it’ll move, and FAST. These don’t tend to sit around and wait for buyers to find them.
How would you define well priced in today’s market,and how do those prices compare to 2005/06?
Must read below articles
1>. Interest rate ‘freeze’ – the real story
*** Everyone of you must read this….
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/12/09/IN5BTNJ2V.DTL&feed=rss.business
2>. Straight talk on Mortgage Mess from an insider
http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider/
Also please sign the petition – “Tax Payers Against a Wall Street and Mortgage Bailout”
http://www.petitiononline.com/bailout/petition.html
#81 lisoosh: Prices not at 2003/2004. ???
#89
my wife & I are learning this too. It’s very iffy though on some of the towns, future direction is a tough call. Where should 30% declines take place when that 100% leverage isn’t available anymore. We don’t want to jump in too soon if the pieces haven’t all fit (more like fell) into place yet. We’re very unsure what makes a good ‘middle-class’ town these days.
#72 lifelong: It happend before (prices fell), it was and is happening again, there is absolutely no reason why it should not.
#72 lifelong: Have you actually bid on any houses yet?
Lifelongrenter: You’re looking at the wrong WEST. Try looking at Westwood in “PBC”. Trains AND buses to NYC, newly-expanded train service, bike racks at the train station, and a downtown that actually has stores to buy useful things in, as opposed to restaurants-and-Duxiana-Beds Ridgewood. Taxes are decent for Bergen, and there are houses in a wide range from capes to large, older Colonials. If you want more info on Westwood, you can e-mail me. Go to my site link and get the e-mail from the upper-right corner.
And I’m going to go vote for the school renovation budget tonight. :)
can anyone (grim?) explain to me why house values traditionally rose at 2 – 3 % per year? was there some logic to that? inflation?
forget the last 5 years cause that was a period of everyone pulling the wool over everyone else’s eyes and overspeculating the value of a home….these five years are probably going to set the entire cycle back and hurt everyone
How would you define well priced in today’s market
Any price lower than currently listed comps.
There is always some level of “churn” in the market, sales won’t fall to zero. There will always be some number of buyers.
Being the best priced comp significantly increases the chance of selling to this group.
syncmaster Says:
December 11th, 2007 at 11:34 am
Bridgewater is in the middle of nowhere? Wow, I expect very little traffic and few people and lots of horses in places that are in the middle of nowhere. Maybe to you, anything not within a hop and skip of Manhattan is “middle of nowhere”?
sync: I’ve worked in Basking Ridge and Bridewater. If you are within 5 miles of 287 in Middlesex or Northern Somerset, it is a disaster area. The worst of everything really considering the cost (obviously worse places exist). I am not trying to be a prick, I am being honest. I can see how someone can maintain their physical and mental health and live in that area.
I CANNOT……
“Bahrain to ditch dollar peg, report claims”
http://www.arabianbusiness.com/506105-gcc-meets-over-dollar-peg—bahrain-to-drop?ln=en
95 i think
It depends where you’re already looking. You obviously don’t want too dodgy of a town.
For example, sometimes I find I get obsessed with school rankings, but in reality, if a school is “good” does being in the “best” school district really make a huge difference in my life. Like I’m cheating my kids if I’m not in the next district over that is ranked higher. And if we have to live in a shack to live there, are we going to be happy? If everyone has a house in the Hamptons and goes on big vacations every winter and kids get BMWs on their 17th birthdays, is that going to be fun to watch?
I also find that this whole walkable downtown thing is overrated. Ok, some towns have schmancy downtowns with a Starbucks, some don’t. You’re going to pay a premium for one of those towns. Great if you can find a super house that you can really walk to the super downtown. But then people buy in these towns and can’t or don’t walk to the downtown anyway.
Same for train towns. Train towns are good if you use the train. If not, why pay a premium to live there?
98 Jill
Westwood is very cute and so is Washington next store. Again, not as fancy as Hillsdale or whatever, but still nice towns.
chifi #101,
sync: I’ve worked in Basking Ridge and Bridewater. If you are within 5 miles of 287 in Middlesex or Northern Somerset, it is a disaster area.
I live and work within 5 miles of 287 in Middlesex and Northern Somerset, so I do know what you mean. But I’ll say this – if that’s what your affordability gets you, you can do much worse than living/working here. Facts are despite the traffic (there are back roads, I can’t recall the last time I got on 287) the schools are good, transit options exists, shopping exists for all income levels and housing is much more affordable than Brigadoon. And that’s true for the entire region, not just Bwater.
“3b Says:
December 11th, 2007 at 12:07 pm
#81 lisoosh: Prices not at 2003/2004. ???”
Should read NOW at 2003/2004 :-).
Ann – Brigadoon is Westfield. Based on Richards incessant posts about how it was immune to the effects of the bubble, a quality town, people desparate to get “in” blah blah blah. I believe Clot came up with the Brigadoon moniker.
lifelongrenter Says:
December 11th, 2007 at 11:08 am
After a year of househunting and reading this blog, can I suggest that real estate crash theories seem to share nothing with the realities of home sales?
Housing remains utterly unaffordable to a NYC commuter with a “modest” six-figure salary, a family to feed and kids to educate.
LLR: You have platinum tastes, and I assume a platinum plated budget. If you are finding things unaffordable then you have three choices to put you on equal footing with your competition in the areas you are choosing:
(1) double your salary
(2) have an intra-family sale of property
(3) ask both your parents to match the amount of money you are personally putting down with a gift; the purpose to knock down the size of the mortgage
If these choices are not available to you, then face reality and stop acting like something you are not…….
SG 70:
Was looking at the Martinsville section of Bridgewater (North East end) recently.
What I found was that were a number of properties in the past year and a half have turned over for somewhere between 2004 and 2005 valuations. 2004-2005 is a wide price range because there was a re-eval during that time (I think). I compiled some examples. Obviously there are other properties that sold for more than their 2005 assessment, but I just thought that this was interesting.
Sorry in advance if the formatting is messed up
/////////////////////////////////////////////////
Address: 762 Van Nest DR , Martinsville, NJ 08836
Date Sold: October 12, 2007
Sale Price: $ 492,000.00
2007 Assessment 539100
2006 Assessment 538500
2005 Assessment 506000
2004 Assessment 341000
/////////////////////////////////////////////////
Address: 603 Stangle RD , Martinsville, NJ 08836
Date Sold: July 03, 2007
Sale Price: $ 425,000.00
2007 Assessment 525000
2006 Assessment 524400
2005 Assessment 502800
2004 Assessment 340900
/////////////////////////////////////////////////
Address: 969 Spring Run LN , Martinsville, NJ 08836
Date Sold: April 12, 2007
Sale Price: $ 460,000.00
2007 Assessment 486000
2006 Assessment 489000
2005 Assessment 489000
2004 Assessment 312600
/////////////////////////////////////////////////
Address: 1695 Washington Valley RD , Martinsville, NJ 08836
Date Sold: March 29, 2007
Sale Price: $ 430,000.00
2007 Assessment 465000
2006 Assessment 463200
2005 Assessment 409400
2004 Assessment 312200
/////////////////////////////////////////////////
Address: 1664 Washington Valley RD , Martinsville, NJ 08836
Date Sold: January 31, 2007
Sale Price: $ 300,000.00
2007 Assessment 351700
2006 Assessment 350100
2005 Assessment 323200
2004 Assessment 224400
/////////////////////////////////////////////////
Address: 1819 Woodfield RD , Martinsville, NJ 08836
Date Sold: January 15, 2007
Sale Price: $ 600,000.00
2007 Assessment 645000
2006 Assessment 640200
2005 Assessment 606200
2004 Assessment 421400
/////////////////////////////////////////////////
Address: 1680 Washington Valley RD , Martinsville, NJ 08836
Date Sold: January 11, 2007
Sale Price: $ 397,500.00
2007 Assessment 434200
2006 Assessment 437300
2005 Assessment 442700
2004 Assessment 339000
/////////////////////////////////////////////////
Address: 831 Newmans LN , Martinsville, NJ 08836
Date Sold: September 11, 2006
Sale Price: $ 465,000.00
2007 Assessment 506200
2006 Assessment 505300
2005 Assessment 485200
2004 Assessment 315300
/////////////////////////////////////////////////
Address: 780 Newmans LN , Martinsville, NJ 08836
Date Sold: July 03, 2006
Sale Price: $ 345,000.00
2007 Assessment 394400
2006 Assessment 395800
2005 Assessment 387600
2004 Assessment 213700
“CAIBC Says:
December 11th, 2007 at 12:19 pm
can anyone (grim?) explain to me why house values traditionally rose at 2 – 3 % per year? was there some logic to that? inflation?”
I would hazard that the explanation is pretty simple – most people pay for houses with their income and income rises with inflation. Only credit blips (very high interest rates, current easy money) have really affected this, and only for a limited time.
Re: walkable downtown
I think this is a personal preference. I am used to being able to walk to schools, shops, town hall, parks, etc. and this is what I like. I have looked at developments in PA but nothing is close to them and it would drive me nuts to have to get into the car wherever I went. Just like some people want lots of property and will pay a premium for it, there are those who like a walkable downtown and will pay a premium for that.
syncmaster Says:
December 11th, 2007 at 12:41 pm
I live and work within 5 miles of 287 in Middlesex and Northern Somerset, so I do know what you mean. But I’ll say this – if that’s what your affordability gets you, you can do much worse than living/working here. Facts are despite the traffic (there are back roads, I can’t recall the last time I got on 287) the schools are good, transit options exists, shopping exists for all income levels and housing is much more affordable than Brigadoon. And that’s true for the entire region, not just Bwater.
sync: I feel bad to trash the area, because it has a lot going for it, but both NJ Transit line are too slow to be viable options, and I cannot believe what has been allowed to happen in that area. Ultimately, the Woodbridge/Edison/Piscataway area is in the elite hall of shame, but the commute to NYC can be shaved down by about 15-25 minutes per trip which REALLY adds up quickly.
I know some people from other parts of the US who are involved with urban planning who were very interested in seeing Middlesex County as one of the prime examples of how NOT to develop a region. Understand, that 287 corridor is a national disgrace.
Mike, Jill, Ann, etc – thanks for the responses. No, we haven’t bid on a house because we have a very strict budget. We want a house on one income that won’t stretch our finances. We’ve seen a lot of houses we considered bidding on, and a majority sell for more than the asking price.
Many of you will say we’re being unrealistic – that’s probably fair.
Thanks for the suggestions on Westwood and Washington, we’ll have a look.
I think walkable downtowns are very important. I hate to drive, I hate putting my kids in car seats. We live in Summit and we walk to the library and other shops and find it a really preferable way to live and interact with people. Shame that Summit can’t see how a main street filled with interior design shops and banks kills the town’s potential.
#107 lisoosh: Prices now at 2003/04 levels. So much for those who said that will never happen.
on a seperate note ,not to boast, but it was I who coined the term Brigadoon for Westfield.
“Great if you can find a super house that you can really walk to the super downtown. But then people buy in these towns and can’t or don’t walk to the downtown anyway.”
Ann [104],
I agree, totally overrated. I lived in Red Bank, 5 minute walk to downtown. How many time can you walk to Starbucks and witness the phony scene. Get me out of here.
grim-unmoderate
#111 LLR: We’ve seen a lot of houses we considered bidding on, and a majority sell for more than the asking price.
I would be very surprised to see today that most houses listed are selling over asking. Those days are gone.
#70 SG,
I am currently looking at B’Water, but seems that there is not much houses on the market. I saw one near route 28 was sold within 2 weeks (November) and it was sold over the listing price!! (I think it was about 2006 price)
Seems to me that B’Water is still a seller market, at least for now.
007
BC Bob Says:
December 11th, 2007 at 12:51 pm
I agree, totally overrated. I lived in Red Bank, 5 minute walk to downtown. How many time can you walk to Starbucks and witness the phony scene. Get me out of here.
Bost: hey….you talkin’ to me…
#98 Jill I wonder if it will pass this time, as this is what the 3rd or 4th referendum that they have come up?
Bost:
We were about six or seven rows behind this guy at the garden last night…..
http://www.nypost.com/seven/12112007/photos/spo034a.jpg
…maybe this guy has a history, but security walked up to him and told to shut-up or they would kick him out. Dolan is a freakin’ fascist in there….it is really kind of freaky….
#116 007 It is early to know what it sold at, if it only went under contract in November, unless they closed in less than 30 days.
#100 grim:Any price lower than currently listed comps.
Any idea on how they compare with closed sales for 2005/06, generally?
Freddie Mac sees $12bn credit hit
Freddie Mac, the company that provides financing to US mortgage lenders, has become the latest firm to admit to higher losses in the sub-prime crisis.
It now expects $10bn (£4.89bn) to $12bn in credit losses on its mortgage book, its chief executive told investors.
More at: http://news.bbc.co.uk/2/hi/business/7138992.stm
120#, 3b, give me some statistics on how many “under contracts” did not go to close. in this strict lending environment, many sellers only accept offers with pre-approvals.
Thanks for the Brigadoon reference. Ah, yes, good old Westfield.
Re walkable downtowns. Walking is lovely. I agree. Walking to school, the library is great too. There are lots of geographically small towns in NJ where you can do this.
But I’ve found in my RE search that ‘walkable downtown’ is often code for ‘we have a Starbucks on our Main Street.’ That’s the overrated part.
http://www.cnbc.com/id/22200270
The housing market isn’t likely to recover fully for at least two years, while the mortgage industry faces continued massive losses, the CEOs of Fannie Mae and Freddie Mac said.
Fannie Mae CEO Daniel Mudd told CNBC that he doesn’t expect the real estate market to recover fully until 2010.
[snip]
Broker Commissions at 2003 levels
http://bp2.blogger.com/_pMscxxELHEg/R168LjRwQ2I/AAAAAAAABUs/ld5x7cfb7f0/s1600-h/BrokersCommissions.jpg
“Washington Mutual Inc., the biggest U.S. savings and loan, will write down the value of its home- lending unit by $1.6 billion in the fourth quarter…”
That can’t possibly be true!! bi said there would be no more writedowns! bi, tell’m it’s not true!!!!
“UBS AG became one of the biggest casualties of the U.S. subprime-mortgage meltdown yesterday, announcing that it would take a $10 billion write-down…”
That can’t possibly be true!! bi said there would be no more writedowns! bi, tell’m it’s not true!!!!
123 bi
Aren’t pre-approvals kind of a joke? We had a guy put in a full price offer on our house with a nice pre-approval letter, but then he backed out because “his brother was stealing cash from the bagel store they owned together.”
“Merrill, which has $15.2 billion in CDO exposure remaining, could also need to take a further write-down, as could Morgan Stanley…”
That can’t possibly be true!! bi said there would be no more writedowns! bi, tell’m it’s not true!!!!
3b Says:
“on a seperate note ,not to boast, but it was I who coined the term Brigadoon for Westfield.”
And kudos to you, and excellent term.
#124
Ann,
Actually, my town doesn’t have a Starbucks but we do have lots of nail salons and banks (am in walking distance of three Wachovia branches). We do have a Dunkin Donuts along with deli-type places where you can get coffee.
USA today or daily news yesterday
26 year old buys 310K studio in 40’s ( tudor village? ) makes 57K with OT. Family gives DP of 68K mom and dad co sign
I make around that and take home about 3000 a mo.
Mort 1400 a month
Maint 750 a month
750-900 a month for everything else…
metrocard, laundry, food, having fun ect…
Article makes it sound like everyone else should do this too in their 20’s
#123 bi: How do you know sellers only aaccept offers with pre-approval letter, unless of course you are a realtor, whcih I have long suspected that you are, or a so called investor /flipper.
As far as statistics, what do you want from me? Are you denying that the credit markets have tightened significantly, I believe Clot, grim, and rhymin, have addressed that numerous times with real life examples.And I never said that deals were not closing.
Its not my problem that you purchased at the top of the market,and that you apparently have never lived through a real estate crash in this country. You will learn grasshopper.
Bridgewater is 44 miles to NYC with irregular commuter service to the city!! I live 28 miles from NYC and I think that is too far out. The neighborhoods I am looking at for my trade up house are all 20-25 miles outside NYC and have trains will decent regular sevice to city and good schools. That is where you have the most appreciation and your career does not suffer as you are not the one always running for the damm train/bus.
Trouble is a half way decent house in those towns (meaning kitchen/baths under 15 years old) with 4 bedrooms and a two car garage on a 80 by 100 lot plus start at 1.2 million and you need a minimun of 1.5 million to get a good one. That is why I am stuck where I am, I don’t want to move further out and have no life and I don’t want to move further in and end up in a crap box that I hate just to save ten minutes on the train. Basically, I am stuck where I am until RE decides to take another 20% down and I am hoping it happens soon.
Distance is relative, when I lived in NYC a buddy from my Hamptons house had a party in her Hoboken apartment and no one showed up as it is too far. If you live in NYC, Brooklyn and Queens is the country and Yonkers is upstate NY. Forget about Jersey that is a foreign country and Nassau county is just the traffic jam you endure until you hit the suffolk border and you can start driving 60mph on your way to the Hamptons.
#130 lisoosh: Thank you. Richard has despised me ever since.
#134 John: Patience it is already happening.
“Clotpoll Says:
December 11th, 2007 at 8:30 am
Vikram Pandit to the top at C?
Let me get this straight:
– Bails on MS, because he couldn’t get along with Zoe Cruz (although that could now be seen as a good thing).
– Start a hedge fund, and have a hot streak.
– Has hedge fund bought by C; get cushy job at C as part of the deal.
– Hedge fund begins to go sour pretty much the day the C deal closes.
– Get promoted to CEO of C, because all other candidates have either been fired, discredited or don’t want the job.
Did this guy step in sh*t, or what?”
Kinda like running Arbusto, Spectrum and Harken, Clot. Pretty soon, he’s gonna be President of this great country.
“We were about six or seven rows behind this guy at the garden last night…..”
Chi,
$300 for a seat, $10 for a beer and no booing? What is the purpose of attending a Knick game if you can’t boo?
Re 134
People who live in NYC are lazy and often snobbish. They can’t understand why they should ever have to travel anywhere to see anyone when they live in THE CITY.
“He was really nice, but I can’t see myself dating him … he lives in Hoboken.”
Even the ones who grew up in Bogota and went to Rutgers.
Everyone should do that, go tell your parents to give you 68k. 800 bucks a month is a ton of spending money. Most firms with transist check actually give you the subway pass for free or at least tax free so there is no transportation costs. $1 for breakfast off the cart, $4 dollar pizza special and around $5 at most dinner at home brings your food bill to around $280 a month, the kids don’t have home phones and use free company cell, they expense their cable modem and watch TV from their for free and their is no heat or water bill and a tiny coop is around $25 a month electricity. My friends who are girls even just had their dates pay for any dinner or show they wanted to go to. With the tax break it is only $1,500 a month and after he throws around 5 years of bonus at the mortgage he will be 31 and only paying $750 a month maint and the renter will be paying 3K in rent by then.
R Patrick Says:
December 11th, 2007 at 1:16 pm
USA today or daily news yesterday
26 year old buys 310K studio in 40’s ( tudor village? ) makes 57K with OT. Family gives DP of 68K mom and dad co sign
I make around that and take home about 3000 a mo.
Mort 1400 a month
Maint 750 a month
750-900 a month for everything else…
metrocard, laundry, food, having fun ect…
Article makes it sound like everyone else should do this too in their 20’s
Weren’t the bulls always touting the strength of the American consumer:
“NEW YORK (CNNMoney.com) — After getting off to a fast start last month, holiday sales at some of the nation’s largest retailers have slowed to an excruciatingly slow pace and mall traffic has dropped dramatically.
The results, coming two weeks before Christmas, jeopardize an already weak holiday sales period.
Chain-store sales rose a mere 0.2 percent for the week ended Dec. 8, following a disappointing 2 percent sales decline in the prior week, according to a report released Tuesday by the International Council of Shopping Centers.”
http://money.cnn.com/2007/12/11/news/economy/mall_traffic/index.htm?postversion=2007121110
If you require a preapproval letter does that mean you wont sell to cash buyers?
#134.
I love NY and all it has to offer BUT I never had any interest in schlepping into the city every day. Even from a decent town like Spring Lake, it is an awful trip to make twice a day.
I often wonder why people who are struggling to live in the metro area do not up and leave. I know, I know, the wages are higher than other places. Still, when you take into consideration travel time and costs, taxes, etc., many folks could live with a much higher quality of life someplace else.
It is funny, I know of many people who want to live within 50 miles of Midtown “because of everything there is to do there.” Yet, because of the royal pain in the @$$ it is to get in and do the things, they dont. They would be better off living in the hinterland and traveling into the City for long weekends, etc. when they could just suck the marrow out of the place without the daily grind.
Heck, even if one is living close to the City, buy acerage with a getaway house two or three hours away in PA, Upstate, Western MA, and live in a small place during the week. It has got to beat the ratrace of 287, the Turnpike, NJT, PATH, just to have a bit of lawn.
clotpoll [134],
Maybe the guy was facing an ARM reset and tried to do himself in?
bi (40)-
Yeah. Here’s a hot tip for you: load up on DUG.
#142 Ann:Even the ones who grew up in Bogota and went to Rutgers. ???
I meant post #146
bi (42)-
Oh, yeah. Fannie and Freddie putting an extra 25 bps in all their fees should really start a friggin’ stampede of buyers.
So much for that negative savings rate being the result of massive 401k saving..
Many young workers have little or no 401(k) savings: report
More than one out of every three workers at retirement age in the 2050s will have nothing saved in a 401(k)-style account, according to a government study released Tuesday.
On average, workers born in 1990 will save enough to replace about 22% of pre-retirement income, or $18,784 per year in 2007 dollars, according to the GAO.
“Today’s workers will more likely struggle to make ends meet during retirement than previous generations,” said Rep. George Miller, D-Calif., who had requested the report. “While Social Security faces long-term challenges that must be addressed, this GAO report makes it clear that the real retirement security crisis is the lack of savings in private retirement plans.”
re 22:
This is like the Marshal McLuhan moment from “Annie Hall.”
http://www.ourdocuments.gov/doc.php?flash=true&doc=68
“On August 14, 1935, the Social Security Act established a system of old-age benefits for workers, benefits for victims of industrial accidents, unemployment insurance, aid for dependent mothers and children, the blind, and the physically handicapped.”
John: Is there a cap on income tax?
SSI will still be a regressive tax, but for a change, those paying higher percentages (of lower incomes) might actually get more. How utterly un-American!
Besides, the FICA withholding cap is already rising. http://www.uwsa.edu/hr/benefits/retsav/socsec.htm
It makes sense to eliminate it altogether — at least far more sense than the Cassandras who shriek that SSI is gonna be insolvent. Either that, or shut the **ck up about fixing a program that wouldn’t need fixing if Norquistians and wannabe libertarians didn’t want to kill it in the first place. Sheesh!
ps: I make more than $100k. Not boasting. Not by a longshot. (I suspect I’m at the low end of the earnings range among posters hereabouts.) Point is, I’m not merely prescribing “taxes for thee and none for me.” But SSI is a good thing in my book, and thus worth the expense. I’d even add means testing to any SSI “cure,” which would further “disadvantage” me. Just not as much as indigent oldsters, widders and orphans, who are overwhelmingly the beneficiaries of Soc. Security. Ugh. The needy, how tacky!
/rant
#153
Now I know where the name Grim came from, you are full of good news.
3b, yes, even the ones who are Jersey through and through (Bogota, Rutgers) can magically become snobs once they move to the city. Not all. But some.
Re 156 Bogota and Rutgers just being Jersey examples.
#153
Yup, I work with a bunch of young ladies (living in NYC) that “can’t afford” to contribute to their 401k. Yet, they’re rockin’ a new pair of boots / sweater / jacket, etc etc, every other week.
I yell at them that they cannot afford not to start a 401k, they don’t get it. Oh well, maybe they’ll all marry rich.
John (58)-
In a word, yes. I’m sure if one digs hard enough, the six degrees of separation between these companies and RE can be traced, but I have neither the time nor the inclination to do it.
BTW, MCD is generally acknowledged to have tremendous locked-up value in their RE…so much so, that activist shareholders regularly demand that the company spin off the RE.
CME is a net beneficiary of mortgage market instability (and volatility in general). That’s the kind of RE exposure I like.
chifi #113,
sync: I feel bad to trash the area, because it has a lot going for it, but both NJ Transit line are too slow to be viable options
How is it then that so many people use both line (I assume you mean the NEC and RARV?) to commute to NYC every day. Especially the NEC. If it wasn’t viable, it wouldn’t attract the customer base it has.
I know some people from other parts of the US who are involved with urban planning who were very interested in seeing Middlesex County as one of the prime examples of how NOT to develop a region. Understand, that 287 corridor is a national disgrace.
I’ve heard this before. On this blog, maybe? I can easily believe it, after all I’ve lived in this region for over a decade now (damn). And now they’re going to build Route 18 right through my backyard (well, close) starting spring 2009.
Funny, I’ve not had a thing to say here for the past couple of weeks, yet my name is mentioned.
Can’t you revel is your joy at the misfortune of other Americans without involving me?
spam spam bacon spam Says:
December 11th, 2007 at 11:00 am
I gotta say I’m drawn to this place like a gawker at an accident scene…I’d says a moth to flame, but Bi and 50.50 make it so bloody…
Reading Bi and ReInvester101 are like listening to my father (are either of you him?!?!?) when he comes out with his nonsensical economic theories….
I gotta tell you some stories about dad…
http://www.cnbc.com/id/15840232?video=605445206&play=1#
Overstock CEO takes the wind off cnbc talking heads.
Maybe you want to be within walking distance of Jumping Brook Country Club in Neptune. Just another day at the office for Monmouth County public officials;
http://www.app.com/apps/pbcs.dll/article?AID=/20071209/NEWS/71209002
#156 Ann: True I have seen i tiem and time before. In fact over my years on the street (Wall St), aI have often found that the truly wealthy (generations back), were fro the msot part pretty down to earth.
The first or second generation crowd that went to college,and came from the surrounding middle class NYC surburbs, were were/are of the biggest wannabee snobs you have ever met.
Than of course there is the town my town is better than your town. Again I have ssen this more in the wannabee Bergen Co. towns, than the towns that have been excellent down through the years.
I find the whole thing truly funny.
Any prior history on MLS: 2455946 as well as the address?
154
My own rant:
I am tired of paying more each year in state taxes to assorted states than most of the residents of those states earn in a year and having those states so poorly run that a huge portion of the taxes goes to interest on debt. It would not be so objectionable if the money went to actually fix bridges before they collapsed, or roads, before they became disasters. And don’t even get me started on federal taxes and my friend, the AMT.
The thought of removing the cap on SS taxes before the federal government gets its economic house in order sickens me. Maybe we could go to a doughnut hole, where it stops at 100k then kicks in again at $10 million or such, just to feel better about Bill Gates, and Warren Buffet, but, really, removing the cap right now would just bleed people further and will not fix anything until spending is less than revenue.
If we really want to fix things, lets eliminate the DEBT, not the defecit, but the debt, and that will allow us to have all the $ we need to fix social security and bridges while cutting taxes at the same time.
#156
Ann, I know exactly what you’re getting at. Except in my case it is usually some 24 year old girl from the Midwest busting my chops because they live in NYC and think they are a hip-liberal-know it all-too cool for school, New Yorker.
Oh, and they’ve been here two years. The fact that my whole family is from NYC and I grew up within 7 miles of NYC my whole life counts for nothing. They run the city.
It’s comical.
#163, I love the caddies at that club. Much better than most other clubs.
Oh, and I don’t consider myself a New Yorker… I just think it’s funny that the girl who spent 22 years of her life in Wisconsin thinks that I’m the rube because she’s been in NYC for a cup of coffee.
Shore Guy #166,
The thought of removing the cap on SS taxes before the federal government gets its economic house in order sickens me. Maybe we could go to a doughnut hole, where it stops at 100k then kicks in again at $10 million or such
Given this nations supposed commitment to a progressive tax policy, how does it make sense to levy taxes on all income between 0-100k and not on all income between 100k-10mill?
If any income is to be excluded, the lower bound for the exclusion ought to be at the bottom, not at 100k.
169
Doyle,
Number one it was not a coffee, it was a latte. Second, it was a latte and a scone.
“Except in my case it is usually some 24 year old girl from the Midwest busting my chops because they live in NYC and think they are a hip-liberal-know it all-too cool for school, New Yorker.’
Doyle [167],
It is quite comical. It’s as if they were all glued to Friends and now think it’s hip to hang out in NY and drink coffee.
#160 Sync,
I think you said you were from Bridgewater. I live there too and don’t know anything about Route 18 as you mentioned. Can you elaborate?
Mike (91)-
“You either have to settle on the house or the town.”
Mike, you just made the truest statement ever on what lies at the core of NJ real estate.
#172 BC Bob: That is why ( I know it is wrong), but nonetheless why I am not a fan of a lot of midwesterners.
Nothing worse then some kid from Red Wing Minn (population 1200) lecturing you on the area that you were born and raised in.
BC (172)-
Back in the day, my buddies and I used to call girls like these “pleasure units”.
Wonder how many go back to Iowa, put on 60 lbs. and start cranking out kids like they’re human Pez.
If you are a young pretty girl making 60k a year at the risk of being very sexist it is a better investment to get a share in an apartment in the city and spending the majority of your income on clothes etc. while positioning yourself to nab a high income guy from a good family.
You can marry more money in a minute than you can make in a lifetime.
That said, alas the same does not work for guys, the poor smuck who blows all his money and is 35 and broke is not marrying the doctors daughter from Alpine.
My wifes very pretty blonde friend who was living in a basement apt in Queens, grew up literally on a cape right on the tracks and working as a claims adjuster for CON ED squeezed together her $600 life savings in the 1980s’ for a 1/2 share in a crowded small hamptons house. Well it took her a whooping three weeks to land a broker and 20 years later has a dream home in Garden City, a ski house, a new BMW and rich inlaws in Greenwich and two beautiful children. Sometimes you have to roll the dice!.
Take a girl from the Midwest, that twangy voice (like Frances McDormand in Fargo), too much to drink the night before…then marry it to a raging hangover and an angry alarm clock.
Closest I ever came to homicide.
170,
Here is why. People earning over 100k are never going to see a commensurate increase in SS payments when they eventually collect. Therefore it is unconscionable to tax them on that income, since it is not supposed to be a welfare system. I did not urge the collection of taxes on those earning $10MM, but just threw that out there as something that would allow the liberals to feel like they were not allowing the richest of the rich to get away with something, while at the same time protecting the upper middle class and lower upper class from the uncontrolled spending that will continue to occur if Washington has the extra revenue from increased SS taxes. Unless spending is put under control the increased taxes will buy no solvency for SS.
XJ #173,
I think you said you were from Bridgewater. I live there too and don’t know anything about Route 18 as you mentioned. Can you elaborate?
I don’t live in Bridgewater. I do live and work in the general vicinity, though. We do a lot of our shopping in Bridgewater, too.
I live in P-way. The northern end of Route 18 currently ends in P-way at Hoes Lane. They’re going to “rehabilitate” Hoes to turn it into Route 18 and create a new interchange on Route 287 between exits 7 and 8, where the new Route 18 will meet up with 287. It’s a shame, because Hoes Lane today is a quiet local road which I use a lot.
ff / disc reduced 25 bps
Shore-BC,
Yup on both counts… Plus, you HAVE to scream everything liberal at all costs. I don’t lean either way, but if you attempt to disagree with their Liberal topic of the moment than they look at you with pity in their eyes. It’s a look of “oh how cute, he’s the stupidest man in the world and doesn’t realize it… I feel for him.”
Please keep in mind that these are the same girls with no 401ks and they know absolutely NOTHING about politics.
It’s just cool to be Liberal in NYC…
FOMC cuts fed funds rate by quarter-point to 4.25%
By Greg Robb
Last update: 2:17 p.m. EST Dec. 11, 2007
WASHINGTON (MarketWatch) – The Federal Open Market Committee on Tuesday cut its benchmark federal funds rate by a quarter of one percentage point to 4.25%. The Fed statement was more downbeat about the outlook for growth. The statement repeated that “some inflation risks remain.” The Fed stipped out a balance of risk statement. This is the third straight meeting with a rate cut after the financial markets seized up in August. The decision was expected by traders and economists on Wall Street. In a related action, the Fed trimmed the discount rate by a quarter point to 4.75%. There was one dissent. Boston Fed president Eric Rosengren wanted a bigger rate cut.
Sync, thanks.
he Federal Reserve has reduced fed fund rate 1/4 point and the discount rate 1/4 point.-ADS
Shore Guy #179,
People earning over 100k are never going to see a commensurate increase in SS payments when they eventually collect. Therefore it is unconscionable to tax them on that income…
Are you fer real? People earning over 100K pay state and federal taxes, do they get a commensurate benefit on those? No they don’t. That’s why it’s called progressive taxation, you tax the rich more and the poor less. If we’re going to pretend to be committed to progressive taxation (the only major Prez candidate who maybe isn’t is Huck) why not extend the principle to SS?
…while at the same time protecting the upper middle class and lower upper class from the uncontrolled spending…
Protect the upper middle and the lower upper but not the lower middle and below? Ha!
#178 clot:Take a girl from the Midwest, that twangy voice (like Frances McDormand in Fargo)
Could not have said it better, hysterical!!!
The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 4-1/4 percent.
Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time.
Readings on core inflation have improved modestly this year, but elevated energy and commodity prices, among other factors, may put upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.
Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Charles L. Evans; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; William Poole; and Kevin M. Warsh. Voting against was Eric S. Rosengren, who preferred to lower the target for the federal funds rate by 50 basis points at this meeting.
In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 4-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, and St. Louis.
the Fed just cut .25 and the Dow immediately dropped 160.
Looks like Wall Street wanted 1/2 a point reduction.
Maybe the economy is not so bad after all ;)
fed cuts 25 & 25
#163
Sounds like the State Troopers golf outing I play in every summer.
That said, alas the same does not work for guys, the poor smuck who blows all his money and is 35 and broke is not marrying the doctors daughter from Alpine.
I’ve personally have seen it twice in the last year.
When pontificating your trite stereotypes, you should at least try to make sense.
I STOOD UNDER THAT HELICOPTER FOR HOURS AND ALL I GOT WAS A HEADACHE!!
Doyle Says:
December 11th, 2007 at 2:02 pm
Oh, and I don’t consider myself a New Yorker… I just think it’s funny that the girl who spent 22 years of her life in Wisconsin thinks that I’m the rube because she’s been in NYC for a cup of coffee.
D-Man: oldest trick I used in my early-20’s…..when out with a group of people that includes said UWMadison-type…ask a particularly rough group of urban teenagers for directions using your best street talk. You have a 3 in 4 shot of getting your knob shined….
Fed cuts rate .25%. Suddenly, that $600k Cape in Teaneck looks affordable…
(puts cap back on ether bottle)
CF: You let random street toughs polish your helmet?
Kinky.
186
Sync,
The big, and critical, cifference is that general tax revenue is and always has been for the general welfare. SS is not. If we want to make it just another part of the income tax, lets abandon the practice of having income tax and SS taxes, and just make it all income tax. The fact remains, most people who collect SS will get far more out of it than they put in. I know, I know, someone will shout “yes but if they had invested the money, yadda yadda.” But, we have all seen how people do NOT invest. They buy bigger cars, fancier TVs, etc, and have nothing left at the end of the month. Most people would squander the $ they are currently paying in social security taxes. Now when SS was instituted,the SS taxes were collected because only about 2% of the population paid income tax and SS taxes made it seem like we were all in it together.
I guess this means the housing crisis is over and Clot will start selling a lot of homes again and grim will shut this blog down.
SO greenspans super low rates are now considered a bad thing as they inflated the realestate bubble. Many people new that the extremely low rates was a bad idea as its purpose was to inflate a new bubble to prevent recession after the collapse of the dot com bubble. So how long before Helicopter bens rate cuts are openly acknowledged as a bad thing? and what is going to be inflated now? The rate cuts are sinking the Dollar, but any other bubbles out there on the rise???
any other bubbles out there on the rise???
Sure…the one that surfaces when I fart in the hot tub.
One of my posts was answered with a “knob shined”, and in turn, “polish your helmet” reference. Oh, and a near miss homicide by Clot.
My work is done here.
Shore Guy. You make a powerful emotional argument. But it’s just that: Emotional.
You claim to know from poor. Was it all big screen TVs and fancier cars in your destitute days, or are you possibly citing the exceptions as the rule?
General tax revenue oftentimes advantages the advantaged in the ways it get spent. Sucks, but true. Accounting for loopholes, deductions, offshoring, corporate welfare, the Halliburtons of the world, Neil Bush’s educational software, etc., our progressive taxes are downright regressive after all is said and done.
“D-Man: oldest trick I used in my early-20’s…..when out with a group of people that includes said UWMadison-type…ask a particularly rough group of urban teenagers for directions using your best street talk. You have a 3 in 4 shot of getting your knob shined….”
It’s funny because it’s true.
Doyle: Is it REALLY work if you love what you do?
To continue the previous question, When will all of these economic heavy weights ( bernanke and party) acknowledge that a recession is not an entirely bad thing. recessions are needed from time to time so that you economy can clear out the detritus and run more efficiently.
so if your parents give you $68,000 for a downpayment, don’t you have to pay gift tax?
kettle1 #205,
When will all of these economic heavy weights ( bernanke and party) acknowledge that a recession is not an entirely bad thing.
After November 2008?
FURTHER WRITE-DOWNS, OIL BACK OVER $90; FERCHRISSAKES, BI IS LOSING ME MILLIONS!!!
And making ME MILLIONS!!!
Well thousands actually.
I wonder if Bi made it big in the dot com days and is trying to recapture the glory by short term day trading? from his advice on this board i suspect it isnt going well…..
Hey what is all this talk about the purple headed fellow in the turtle neck sweater?
BTW I am not talking sterotypes when I am talking about attracting the best mate. Going to the right college, landing a job at the right company, dressing nice, moving to the right neighborhood and going to and being seen at the right places for men and women is all about finding the right mate.
If there was only men in the world we all would be driving beat up dodge darts and wearing our old Led Zep t-shirts while hanging out in the local dive bar drinking tap beer, eating chicken wings and shooting darts with the game on in the background.
“I wonder if Bi made it big in the dot com days”
kettle,
Don’t waste too much time wondering.
Street seems upset with the decision..
“all would be driving beat up dodge darts and wearing our old Led Zep t-shirts while hanging out in the local dive bar drinking tap beer, eating chicken wings and shooting darts with the game on in the background.”
That’s me, except replace the Led Zep with a Bruce t.
Finding the right mate is all about hanging out in the most elite chatrooms.
#188 Shoreguy: The Street is not happy because of the Fed’s statement, which is quite down beat in relation to future growth.
#213 grim upset with the Fed’s statement.
211
That wasn’t your sexist whining earlier? It’s got your name next to it.
You can marry more money in a minute than you can make in a lifetime.
That said, alas the same does not work for guys
It sounds like Bi giving relationship advice…
Thanks for the props Clot. Settling is easier said then done in this age of entitlement and instant gratification. There is just a general disconnect these days between reality and what we are led to believe to be reality.
John…it ain’t Zep and darts, it’s Styx and shuffleboard.
My best game ever was against two PA State Troopers the night OJ took his Bronco for a drive.
And I am NO dude. So stop trying to hoard the good stuff for the men.
Jamey Says:
“December 11th, 2007 at 2:44 pm
Shore Guy. You make a powerful emotional argument. But it’s just that: Emotional.
You claim to know from poor. Was it all big screen TVs and fancier cars in your destitute days, or are you possibly citing the exceptions as the rule?”
Not quite. It was too poor for a car in an aarea where one needed a car for a job. It was too poor for oil to pay for an oil delivery so we would get a gallon or two of K1 every couple of days to have some heat for part of the night. It was too poor for anything much more than oatmeal and raman noodles and a vegitable was packets of ketchup pilfered from a fast food place. it was holes in the shoes and no $ to get them mended. It was not knowing how to pay the rent and wondering if there would be a house the next week. It was owning no more than could be carried. It was far poorer than most people experience, although there are those who have far worse.
Shore Guy Says:
December 11th, 2007 at 3:09 pm
Jamey Says:
“December 11th, 2007 at 2:44 pm
Shore Guy. You make a powerful emotional argument. But it’s just that: Emotional.
You claim to know from poor. Was it all big screen TVs and fancier cars in your destitute days, or are you possibly citing the exceptions as the rule?”
Not quite. It was too poor for a car in an aarea where one needed a car for a job. It was too poor for oil to pay for an oil delivery so we would get a gallon or two of K1 every couple of days to have some heat for part of the night. It was too poor for anything much more than oatmeal and raman noodles and a vegitable was packets of ketchup pilfered from a fast food place. it was holes in the shoes and no $ to get them mended. It was not knowing how to pay the rent and wondering if there would be a house the next week. It was owning no more than could be carried. It was far poorer than most people experience, although there are those who have far worse.
I am lucky that those days are behind me. But, just because they are, it does not mean that I should embrace poor fiscal policy.
Will this rate cut by the FED in any way, shape or form affect mortgage lending rates?
“3b Says:
December 11th, 2007 at 3:00 pm
#188 Shoreguy: The Street is not happy because of the Fed’s statement, which is quite down beat in relation to future growth.”
Yes. The brokers have been calling since the cut playing chicken little.
Gary [225],
Watch the 10 year for fixed rates. The markets control this, not the fed.
The fed cut will lower prime lending rates.
NEW YORK (CNN) — A former CIA agent who participated in interrogations of terror suspects said Tuesday that the controversial interrogation technique of “waterboarding” has saved lives, but he considers the method torture and now opposes its use.
Ex-CIA agent John Kiriakou says he underwent waterboarding in training and cracked in a few seconds.
Waterboarding begins by placing a suspect on a table with the suspect’s feet slightly elevated, said Kiriakou, who was waterboarded several years ago as part of his CIA training. He said he elected not to learn how to perform the technique, which is designed to emulate the sensation of drowning.
Once a suspect is secured on the table, interrogators wrap his or her face in a cellophane-like material, Kiriakou said.
“There is a bladder, or a water source, above the head with water pouring down on the mouth, so no water is going into your mouth, but it induces a gag reflex and makes you feel like you’re choking,” Kiriakou said. Watch the ex-agent describe the procedure »
Kiriakou said he lasted only a few seconds during his training because his body felt like it was seizing up almost immediately.
“It’s entirely unpleasant,” Kiriakou said. “You are so full of tension that you tense up, your muscles tighten up. It’s very uncomfortable.”
Abu Zubayda lasted a little longer, said Kiriakou, but not much.
Don’t Miss
CIA chief to testify in probe
Lawmakers wants answers on destroyed tapes
Terror suspect: CIA tortured me
Bush says he doesn’t remember tapes
The former agent, who said he participated in the Abu Zubayda interrogation but not his waterboarding, said the CIA decided to waterboard the al Qaeda operative only after he was “wholly uncooperative” for weeks and refused to answer questions.
All that changed — and Zubayda reportedly had a divine revelation — after 30 to 35 seconds of waterboarding, Kiriakou said he learned from the CIA agents who performed the technique.
The terror suspect, who is being held at Guantanamo Bay, Cuba, reportedly gave up information that indirectly led to the the 2003 raid in Pakistan yielding the arrest of Khalid Sheik Mohammed, an alleged planner of the September 11, 2001, attacks, Kiriakou said.
The CIA was unaware of Mohammed’s stature before the Abu Zubayda interrogation, the former agent said.
“Abu Zubayda’s the one who told us that Khalid Sheikh Mohammed was so important in the al Qaeda structure, and we didn’t realize at the time how important he was,” Kiriakou said.
Abu Zubayda also divulged information on “al Qaeda’s leadership structure and mentioned people who we really didn’t have any familiarization with [and] told us who we should be thinking about, who we should be looking at, and who was important in the organization so we were able to focus our investigation this way,” Kiriakou said.
Abu Zubayda reportedly told the agent who waterboarded him that “Allah had visited him in his cell during the night and told him to cooperate because it would make it easier on the other brothers who had been captured,” Kiriakou said.
Though the information wrenched from Abu Zubayda “stopped terrorist attacks and saved lives,” Kiriakou said he opposes waterboarding.
“Now after after all these years, time has passed, and we’re more on our feet in this fight against al Qaeda, and I think it’s unnecessary,” he said.
In a separate CNN interview, Kiriakou said the Justice Department and National Security Council reportedly approved waterboarding and other “alternative” interrogation techniques in June 2002.
“It was a policy decision that came down from the White House,” he said.
Despite the executive blessing, Kiriakou and other agents were conflicted over whether to learn the technique, he said.
“One senior officer said to me that this is something you really have to think deeply about,” the former agent said, adding he “struggled with it morally.”
Kiriakou conceded his position might be hypocritical and said that the technique was useful — even if he wanted to distance himself from it.
“Waterboarding was an important technique, and some of these other techniques were important in collecting the information,” he said. “But I personally didn’t want to do it. I didn’t think it was right in the long run, and I didn’t want to be associated with it.”
As for the tapes of the interrogations, Kiriakou — who claims neither he nor the other CIA agents realized they were being recorded during the Abu Zubayda interrogation — said he disagrees with the decision to destroy the tapes.
“I don’t see the reason to destroy them,” Kiriakou said. “There’s a possibility that they could be used in a criminal investigation, and frankly, for the historical record, I think it’s important to have things like that maintained.”
The Justice Department and CIA have announced a preliminary inquiry into the matter. Hayden, the CIA director, is slated to go before congressional committees Tuesday and Wednesday.
Hayden has said the CIA destroyed the tapes “only after it was determined they were no longer of intelligence value and not relevant to any internal, legislative or judicial inquiries.”
Wow you had heat in your house!!! Rich kid.
BC Bob,
I’m aware of the 10 yr. I was just wondering if there is any additional effect because of current market volatility.
…and the LIBOR.
Hayden has said the CIA destroyed the tapes “only after it was determined they were no longer of intelligence value and not relevant to any internal, legislative or judicial inquiries.”
Well, that and they implicated our ‘friends’ the Saudi royal family in 9/11.
Can’t upset our allies…
Back below 1490 – yikes!
Financials have been the hardest hit, posting a loss of 4.5%. The thrifts & mortgages group is down 8.8% and residential REITs is down 5.8%.
Homebuilding has also been clipped, as it posts a loss of 10%.
Perhaps the homebuilders have not yet hit bottom. IMO, bottom for the homebuilders will be bankruptcy for many of them.
Sure, many have land they could sell, but not enough to pay the carry cost on their unsold stock.
Just wait until those foreclosures hit.
At least 1 in 50 homes will be owned by the bank. Good luck selling yours, my friends.
Gary [230],
See post # 10 regarding the effect.
The high Libor rate and its historic spread over t-bills reflect banks nervousness about lending out their cash. A lower ffr rate does not solve this problem.
First Bush, under advisement from Greenspan, taxed 50% of Social Security Payments. First Clinton, under advisement from Greenspan, taxed 66 2/3% of Social Security Payments. Remember Social Security deductions are after Tax deductions, so you already have double taxation. Still, this did not solve the problem, because the Government spends surplus Social Security Collections. So, the answer is, Tax 100% of Social Security, at a rate indexed to payments out, not to exceed 100%. This should reduce the burden on the workers, whose deductions would only be need to fund Congressional Pork, like bridges to nowhere in Alaska.
The Street is not happy.
This is so remisnicent of when I was a young pup and would have tantrums if I didn’t get what I wanted.
From Barron’s last Friday…
Twisted ARMs and Figures That Lie
FIGURES DON’T LIE BUT LIARS FIGURE, the old saw goes. Then there are numbers that seem to say something but actually are meaningless, or worse, downright misleading.
For instance, rates on 30-year fixed-rate mortgages fell to a two-year low of 5.96% this week, down from last week’s average of 6.10% and 6.11% a year ago, according to Freddie Mac.
Rip Van Winkle awakening from his long nap would think such low-cost mortgage money would mean housing would be booming. Of course, quite the opposite is happening. And the Associated Press attributed the decline in mortgage rates to the house bust and threat posed by a “lingering credit crunch,” which would’ve confused old Rip.
If home loans were readily available, we wouldn’t be having subprime mortgage meltdown that has impelled a supposedly conservative administration to adopt its Twisted ARMs initiative.
No doubt some arms were twisted by the Bush White House to get major mortgage lenders, servicers and investors to accede to a freeze on rates on adjustable-rate mortgages for a select group of homeowners, who borrowed not wisely but, as it turns out, quite well.
ARM borrowers who have kept up with their “starter” rates — the new euphemism for teaser rates — have the opportunity to hang onto to these cheap rates that were supposed to be too good to last under the Twisted ARMs scheme.
And that 5.96% fixed-rate mortgage calculated by Freddie Mac and quoted without question by the popular media? Those now should be called sucker loans because only a sucker would play by the old rules when Washington is handing out free “do-overs.”
The old rules said you had to scrape together a downpayment of 20%; build up a credit history that demonstrated your responsible use of credit; and show that you had sufficient income and assets to pay the mortgage and the property taxes, plus have a cushion for the inevitable things like leaky roofs or water heaters. And, if you opted for an ARM, you had to show you could handle the loan when rates moved up, not just the initial teaser rate.
Time was, that’s what you had to do to get a mortgage, period. Then came subprime, which lenders found could be vastly more lucrative. Some critics say lenders plunged into subprime because they were forced to do so by fair-lending laws designed to reduce discrimination against minority borrowers. Nonsense. Lenders are colorblind to anything but green, the color of money.
It was far more profitable to lend to anybody, regardless of race, nationality or economic status, so long as the collateral backing the loan continued to appreciate. Indeed, making loans that conform to those strictures for sale to Freddie Mac and Fannie Mae is a loss leader to major lenders.
And that 5.96% average 30-year fixed rate is for loans that Fannie and Freddie can buy, which are capped at $417,000 and would finance at $520,000 house with 20% down. For those lucky enough to live in high-priced Blue States, that will buy something barely habitable.
“Jumbo” mortgages above that $417,000 limit typically had cost only about an eighth to a quarter percentage point more than conforming loans. No more. Since the credit crisis exploded last summer, that spread has widened to nearly a full point. On a $1 million 30-year loan, a 1% rise in interest rate translate into a 10% rise in monthly payments, from about $6,000 at 6%, to $6,650 at 7%. And that $1 million loan won’t buy you anything special in Manhattan or the New York area suburbs.
Another number that gets bandied about is that of the10-year Treasury note yield, which the popular media claims calls the tune for the 30-year mortgage rate. (Because interest and principal get paid monthly on a mortgage, as opposed to semiannual interest payments and repayment of principal at maturity, the cash flows of a 30-year mortgage and a 10-year bond are roughly equivalent. Also, few 30-year mortgages run that long because people move, get divorced and die before the loan gets paid off.)
The 10-year note hovers around 4%. These are not typical times, however. Treasury yields have plunged as the result of investors seeking shelter from the credit storm. Borrowing costs in the private sector, either for mortgages or for corporations, have not followed those of the U.S. government. Still, some commentators persist in citing “low interest rates” as a bullish factor. Those low rates apply only to a select few.
Finally, there is the most scrutinized interest rate on earth — the Federal Reserves target for federal funds, which is the cost for overnight interbank loans. Uniquely in a free-market system, the price of overnight money is set by government diktat.
In normal times, all money-market rates closely follow the fed-funds rate, currently pegged at 4.5%. These are anything but normal times. The three-month Treasury bill hovers just above 3% while the three-month London interbank offered rate costs about 5.15%. Libor isn’t some exotic foreign interest rate but the basic cost of money for banks and, perhaps more importantly, the base for ARM rates for many American homeowners.
In other words, Libor is the real-world cost of money. And the fed funds rate? In the words of veteran observers such as James Bianco, head of the eponymously named Bianco Research, the funds rate has become a rate with no meaning. Banks can borrow overnight at that rate, but no longer.
The erstwhile benchmarks no longer have the same meaning, which is an indication that we are set adrift in a sea of uncertainty. What can correct that? Government-led schemes? They may suppress the symptoms but can’t cure the disease.
Time heals all wounds. Time also wounds all heels. It takes time to work out the problems we face. Don’t tell that to traders looking to make this quarter’s numbers or politicians looking ahead to next year’s elections.
In the meantime, focus on the numbers that matter, and not just those that the media reports on a rote basis.
Skep #206
No gift tax on 68K if you’re married with a kid or its done over 2 years.
Many young workers will have little or no 401(k) savings at retirement: GAO
http://www.marketwatch.com/news/story/many-younger-workers-likely-have/story.aspx?guid=%7B27B11106%2D34EE%2D4B1C%2DA7FF%2D342225E2983E%7D&dist=hplatest
“If there was only men in the world we all would be driving beat up dodge darts and wearing our old Led Zep t-shirts while hanging out in the local dive bar drinking tap beer, eating chicken wings and shooting darts with the game on in the background.”
See you’ve met my husband.
Well actually it was hanging round the living room, smoking a joint, sipping on a beer and fake drumming to “Kashmir” but pretty close. He also has a big Rush collection.
I obviously DIDN’T do all the right things while looking for a mate. Do have a couple of gorgeous kids though, so maybe one of them will marry well…….
“See you’ve met my husband.”
You say that like it’s a bad thing
Hi,
A listing I was following has disappeared and I wanted to find out if it is UC. The property is on Michael Road in Mendham Township but I don’t have the exact address. It may be #5. There are not more than 15 houses on this street. Would someone be kind enough to look this up for me?
Thanks!
Kettle 1,
“The rate cuts are sinking the Dollar, but any other bubbles out there on the rise???”
yeah…and you expect to get this info for free on a New Jersey Blog. Ask BI he knows.
Boomers Turning 60 Surpassed The $100,000 Average 401k Balance Mark
Fidelity Investments reports that Baby Boomers turning 60 years old this year, at a rate of nearly 8,000 per day, surpassed the $100,000 mark with an average balance of $112,000 in their 401k accounts at the end of 2005.
WOW that is the highest average balance of any group and that is peanuts. My wife left the workforce at 35 and only contributed 5% to all equities with an average salary in the high 40’s and she has twice that. What do these people do, just not contribute for years on end and take withdrawls. They should have a million by 60 in their plan, I wonder how much the aveage person over 40 on this board has in their 401K, I bet the number is a lot higher than this crowed of 60 year olds.
John Says:
December 11th, 2007 at 2:55 pm
If there was only men in the world we all would be driving beat up dodge darts and wearing our old Led Zep t-shirts while hanging out in the local dive bar drinking tap beer, eating chicken wings and shooting darts with the game on in the background.
JJ: There are only men in Chelsea, and it doesn’t seem anything like that……
mojo,
Temporarily withdrawn.
It should read Boomers Turning 60 Surpassed The $100,000 Average 401k Balance Mark, and reconciling themselves to another 30 years of cat food.
skep-tic Says:
December 11th, 2007 at 2:47 pm
so if your parents give you $68,000 for a downpayment, don’t you have to pay gift tax?
skep: each parent couple can gift split $24,000 a year to each child, so $48,000 from parents to kids now and $48,000 more in 3 weeks.
($48,000 per year) x (2 years) x (2 sets of parents) = $192,000.
Remember to file gift tax return in order to gift split.
Kettle,
Alternative Energy = two reasons= peak oil and global warming
Kettle,
http://www.fool.com/investing/high-growth/2007/12/11/the-biggest-economic-opportunity-of-this-century.aspx
I’ve seen similar pieces on Bloomberg/CNBC.
“John Says:
December 11th, 2007 at 3:25 pm
Wow you had heat in your house!!! Rich kid.”
Well, for at least part of most nights anyway.
RE #243
Not everybody is in that position,we have one friend who was a school councilor, In NJ. he retired with a pension of 72,000 per year. he has already tapped that for five years.
Another teacher friend retiring @55 this year, her pension $52,000 per year, both of her parents are in their 90 ‘s and she will easily pass that up.
Public workers have no such worries in NJ
, so keep paying your NJ taxes!
Can NJ go bankrupt?
Also in a previous post about a Rutherford policeman getting $390,000 in sick days is almost as absurd as his salary…$186,000 per year.
Chi and ADA– thanks for the gift tax response.
I guess you can tell I’m not expecting any contributions from the Bank O’Dad
Thanks Grim. Do you remember the address? 5 Michael?
“Running a bakery is never easy, but lately it’s been especially tough. In less than a year, Michael Kalupa of Kalupa’s Bakery in Tampa, Fla., has seen the cost of bread flour increase 40 percent, while the milk solid he uses in nearly every product he makes has doubled in price, from $50 a bag six months ago to around $100 a bag today.”
“Bakers all over the country are struggling. You can’t absorb those kinds of cost increases,” said Kalupa, who is also president of Retail Bakers of America, a bakers’ trade group. “For a small wholesale baker who uses 150 bags of flour a week, the bill has gone up by $660 a week.”
http://money.cnn.com/2007/12/11/smbusiness/grainprices.fsb/index.htm?postversion=2007121111
Simple solution to the problem of paying for Public Sector Pensions & Benefits in the State of NJ is to tweak the 13th Amendment from:
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
to:
Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction, except for the State of New Jersey. In the State of New jersey, all Private Sector Citizens will be subject to involuntary servitude, on behalf of their Public Sector Masters, for their natural lifespan.
njpatient Says:
December 11th, 2007 at 4:38 pm
“See you’ve met my husband.”
“You say that like it’s a bad thing”
Not at all, I like ’em like that, he just doesn’t fit into the NY Times wedding announcement stereotype (thank G-d).
Actually, on the radio last week they were reading a list of things a “real man” should be able to do – wiring, mechanical stuff, cleaning a shotgun, the works, and I have to say I was rather proud because hubby could ace the whole list.
Will never see him in a suit though.
This just showed up in my email…
Take advantage of the most recent Fed interest rate cut
You may have heard that the Fed recently cut interest rates by .25%, but do you know why this is such good news for you?
As interest rates drop with the Fed cut, E-LOAN® can immediately pass the savings along to you since we’re a direct lender. This can result in lower monthly payments and a lower interest rate for you.
Act now and see how much you can save.
Apply Now
Disclaimer: I did get my current mortgage through E-Loan, who had the best rates among the 13 companies I questioned ;)
I don’t know what this Fed is thinking…?
sas
how about those granite countertops?
lol
; )
SAS
RE 254
Whew…good thing none of that counts in core inflation, could you imagine???
Bring your checkbook, this one won’t last:
http://homes.realtor.com/realestate/roseland+boro-nj-07068-1085295281/
Gary Roseland 800 Is this town like solid gold location never heard of it.Know most of high end towns in nothern & central.Where is it?
Gary Ok checked it out on map they are out of their minds.But White Castle is not to far now thats a selling point!The only thing I miss being away from hudson cty.
mikeinwaiting,
Roseland is in Essex county between West Orange and Livingston. It’s off of exit 5 on route 280. There are a lot of corporations in Roseland including Prudential, ADP and host of other Fortune 500s so the tax base is low. It’s a nice town but this house is way, way over-priced.
Gary Had some family trying to sell house west orange this year finally moved it but had to come down like 100k.Nice house to very well care for.They don’t have a chance
6 to 650 I’d say.
Kudlow is very disappointed with the Fed, very disappointed.
Next Fed meeting is January,2008.
January 31st,2008. Should be an interesting few weeks.
#265 Mike 6 to 650 I’d say. 350-400, tops.
A lot of young people probably don’t contribute to 401ks because companies have practically figured out how to get around matching. They usually make you wait between 3-12 months to enroll, and then you have to vest the matching amount over a period of 5 years.
With people switching jobs so frequently, for many just getting a tax deferment isn’t a strong enough enticement.
From the WSJ:
Why Borrowers
May Not Benefit
From Rate Cut
Many Loans Are Now Tied
To Benchmark That Remains
High Despite Fed’s Moves
By JANE J. KIM
December 12, 2007
Not all borrowers are benefiting from the Fed’s moves to cut interest rates. The problem: Loans that are tied to a variety of interest-rate benchmarks — some of which aren’t necessarily moving in lockstep with Fed action.
Yesterday, the Federal Reserve cut short-term interest rates by a quarter of a percentage point to 4.25% — the central bank’s third rate cut since mid-September — to help ease the credit crunch and reduce the economy’s chances of falling into a recession. The moves have helped some borrowers who have seen interest rates on their credit cards and home-equity lines of credit fall. Interest rates on many fixed-rate mortgages also have dropped amid a decline in Treasury yields as investors sought out safe investments.
But rates remain stubbornly high on other loans, including student debt and many adjustable-rate loans made to the same type of subprime borrowers whose troubles are now reverberating throughout the global financial system. These rates remain high because many of these loans are tied to the London interbank offered rate, or Libor, and not to more conventional interest-rate benchmarks such as Treasurys or banks’ prime rate.
Libor, which is an interest rate banks charge on loans to each other, normally tracks the federal-funds rate closely. But continuing worries over the credit crisis have kept Libor unusually high — partly because banks are reluctant to lend to one another — even as other short-term interest rates have fallen in recent months. The U.S. dollar three-month Libor yesterday was 5.11%, down from 5.36% in late June. Over the same period, three-month Treasury bill yields have fallen much more steeply, to 2.95% from 4.8%. “The Libor spread is screaming that there is a big, big stress point in the banking system,” says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago.
Borrowers may need to read the fine print of their loan agreement or contact their lender to know what benchmark their loan is tied to. The biggest impact is likely to be felt among borrowers with ARMs that are about to reset. “If you have a Libor-indexed ARM and you’re facing a reset, that’s going to be very disadvantageous because of the divergence between the Libor and Treasury yields,” says Greg McBride, a senior financial analyst at Bankrate.com.
For example, consumers with an ARM whose annual reset rate is linked to one-year Libor are likely to see their interest rate jump to 6.75% or more. By contrast, a similar loan that’s linked to one-year Treasurys is likely to reset to a rate that’s about 5.75%, he says.
Libor is frequently used to set rates for ARMs made to subprime borrowers — mainly people with scuffed credit — as well as many ARMs that fall into the “jumbo loan” category, which currently refers to most mortgages for $417,000 or more, says Keith Gumbinger, vice president of mortgage-tracker HSH Associates. Also, roughly half of non-subprime ARMs that were originated in recent years are tied to Libor, he estimates.
…
A recent report from the Federal Reserve Bank of New York shows that the six-month Libor rate will determine the reset rates for an estimated 99% of subprime ARMs and 38% of Alt-A ARMs in the U.S. that have been securitized. A further 1% of subprime ARMs and 22% of Alt-A ARMs will reset based on the one-year Libor rate. Alt-A is a category between prime and subprime that often involves borrowers who don’t fully document their income or assets.
In recent years, lenders began pegging a greater percentage of loans to Libor as more of this debt was securitized and sold to investors around the world, analysts say. Since Libor is a global interest-rate benchmark, investors have an easier time hedging their interest-rate risk because their investments are pegged to a common index, says Bankrate.com’s Mr. McBride.
I had my team “holiday lunch” today. A big topic of conversation was real estate. A co-worker, who is renting an apartment in Brooklyn (we work in midtown) is looking to buy a house on mid- to eastern Long Island. I chimed in that we considered buying a house but decided to rent since house prices seem to be heading down. I cited a few examples of how houses have proven to be overvalued and that many people who need to get out owe more than they’re worth, how credit is tightening, how inventory is at an all-time high, how more ARMs are resetting, etc. She responded that those are the reasons that NOW the best time to get a deal and that interest rates are going down so that’s even better. I didn’t take it any further than that, just said good luck! I considered sending her the link to this site but I doubt it’ll do any good – I did that with another co-worker who bought a year ago with her fiance… sent her the link to this site and suggested she hold out but she didn’t…. so now they own a house in the boonies, have a terrible commute and their house is going down in value (she admitted that to me herself). I don’t think the general public gets it yet – when I said we were still renting everyone just looked at me like I had two heads. At least no one said I was “throwing my money away on rent.”
Yankee272 Most don’t have a clue & the ones who should RE agents are either in denial or
are intent on keeping their own market area
up for gain.I have tried to enlighten people when subject comes up but to no avail.That except my waitress at local dinner who has lost her home to forclosure
& my hair dresser who is in the process of loseing hers.Its all around them but sheeple
refuse to see.
Yanks Suk (272)-
“To offer a man unsolicited advice is to presume that he doesn’t know what to do or that he can’t do it on his own.”
John Gray
273 No offense to our resident agents as they get it more than most & I’m sure are an asset to their clients.Can you guys give classes to the rest, lord knows they need it.
Clot 274 Most I talk to don’t know what to do (had to get # for my hair girl for help)& no some can’t do it for themself (think that is)so you help who you can & don’t preach.
From Marketwatch:
10 most overpaid jobs in the US
10) Wedding photographers
9) Major airline pilots
8) West Coast longshoremen
7) Skycaps at major airports
6) Real estate agents selling high-end homes
5) Motivational speakers and ex-politicians on the lecture circuit
4) Orthodontists
3) CEOs of poorly performing companies
2) Washed-up pro athletes in long-term contracts
1) Mutual-fund managers
Any surprises?
She responded that those are the reasons that NOW the best time to get a deal and that interest rates are going down so that’s even better.
I hear a lot of this too. I had a similar conversation with someone at my job. I explained my reasons for waiting. I also said that I really wanted to buy next fall if I found the right opportunity.
The person said that I was smart to wait, but now is the time to act. If I waited until the fall, I would miss out on the deal of a lifetime (i.e. houses 10% off their 100% run-ups).
Funny thing is, he didn’t remember, but was had the exact same conversation this time last year.
#270 MCN, great point on folks switching jobs often. Also, plenty cash out their 401ks while switching, and practically shooting themselves in the foot.
For the younger crowd, they should forego the 401k (if they know they won’t be around 3-5 years in the same company) and shovel money first into their Roth IRA while they are still eligible. Only after that should they put some into their 401k to get the tax deduction, assuming they do not get the match.
If they are getting a match, they should do the 401k contribution up to the match, then max their Roth, and then put any extra into the 401k.
Sadly, the figures show how low a priority a 401k is for folks in their 20s when they come out with crushing college loans, wedding expenses, leased cars, and saving for a house.
I just got this banned ad on yahoo. 50 year fixed rate mortgages!
http://img114.imageshack.us/img114/2695/newpaymentds2.gif
Sorry, I mean banner ad not banned ad.
280
50 years, such a deal.
Geez you all figured out my “move to NYC to find future husband” strategy. Except I didn’t move from the midwest, just from a crappy part of upstate. Then again, maybe he is the smarter one by finding me since my job is on the 10 most overpaid list.
I interact with many peers in our 20s who don’t even know what a Roth IRA is and don’t blink an eye at accumulating debt – excess student loans, overpriced housing, etc. But they do own ipods and cool tvs and love Starbucks! Yay!