Weekend Open Discussion

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

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260 Responses to Weekend Open Discussion

  1. grim says:

    From the Philly Inquirer:

    Mid-Atlantic region: Consumers in Pa., N.J. and N.Y. aren’t as upbeat.

    Consumer confidence declined sharply this month in the region comprising Pennsylvania, New York and New Jersey, according to the Conference Board report released yesterday.
    The Mid-Atlantic region’s outlook is notable because it is considered a reflection of how Wall Street itself views the nation’s economic health.

    Confidence this month in the Mid-Atlantic region dropped to 69.4 – its lowest level since September 2005, when Hurricane Katrina caused a spike in oil prices. The index for the region was as high as 99.1 in July, before problems in the subprime-mortgage industry became fully apparent. Only one other region – the South Atlantic, running from Delaware to Florida – scored a sharper decline in December consumer confidence.

    Mid-Atlantic consumers, however, were the most pessimistic about the near future. They reported the lowest of all regions of the country on the Expectations Index, dropping to 54.0 in December compared with 75.5 nationally when asked how business conditions, employment, inflation, and the stock market would unfold in the next six months.

    The three-state region’s acute pessimism is largely the result of the high concentration of people employed in the financial-services industry in New York, Lynn Franco, director of the Conference Board Consumer Research Center, said in an interview.

    “We’ve seen a lot of volatility in the stock market,” Franco said. As investment banks and securities firms lose money, frontline workers on Wall Street become jittery about the future, affecting the regional numbers, she said.

    “They’re very pessimistic,” Franco said.

    All in all, she said, the latest numbers bear watching. “It’s indicative of an economy that’s losing momentum, not one that’s gaining momentum.”

  2. grim says:

    From the NYT:

    Credit Crisis? Just Wait for a Replay

    As 2007 ends, it seems that the financial world shakes every time a company reveals some new exposure to the disastrous world of subprime mortgage lending.

    But just how different was subprime lending from other lending in the days of easy money that prevailed until this summer? The smug confidence that nothing could go wrong, and that credit quality did not matter, could be seen in the many other markets as well.

    That was particularly true in the corporate loan market. Loans were cheap, and anyone worried about losses could buy insurance for almost nothing. It was not an environment that encouraged careful lending.

    “The severity of the subprime debacle may be only a prologue to the main act, a tragedy on the grand stage in the corporate credit markets,” Ted Seides, the director of investments at Protégé Partners, a hedge fund of funds, wrote in Economics & Portfolio Strategy.

  3. grim says:

    New home sales data due out at 10am eastern.

  4. grim says:

    From the WSJ:

    Buffett to Start
    A Bond Insurer
    For Cities, States
    December 28, 2007; Page A1

    Warren Buffett, seizing a chance to profit from turmoil in the nation’s credit markets, is starting up a bond insurer that aims to make it cheaper for local governments to borrow and promises to be a tough competitor for the industry’s embattled incumbents.

    The billionaire investor’s Berkshire Hathaway Assurance Corp., set to open for business today in New York state, will guarantee the bonds that cities, counties and states use to finance sewer systems, schools, hospitals and other public projects.

    The new venture, backed by an almost-certain triple-A credit rating, is likely to be cheered by municipalities and municipal-bond investors because it will offer them an alternative at a time when other bond insurers’ ratings look wobbly.

  5. Homer says:

    As we near the end of 2007 I still see the greedy grubbers in many areas still trying to ask obscene prices. But there is hope for more declines in 2008. People need to stop asking these prices that people cannot afford without these absurd loans. Prices will fall fall fall. And once houses come to an affordable level. 2.5 annual NJ household income of 65k than the homes will start to sell. Until than minimal homes will sell.

    Oh and PS, from the other day, when I advised everyone not to buy reinvestors house, and he told me he would not sell it to me…I would not want to buy your piece of garbage home. I am not a putz who bought at the top of the market and bought a shack. Have fun watching the price of your home decrease by half its value, and when your home is forclosed on we will all be laughing hahahaha

  6. mikeinwaiting says:

    Grim New home sales should be bleak to say the least going by sfh homes yesterday haven’t they been trending worse lately?
    If so builders stock should take a beating
    also depo & other dependent ind.

  7. mikeinwaiting says:

    Homer From your lips to gods ears.Let us hope that prices come back down to reality.
    Everything says they should & I have seen some 15 to20% declines in my area but these are just afew shorts & reos the over all prices are still to high.

  8. Confused In NJ says:

    I have seen declines in Warren County areas like Greenwich, Pohatcong, Lopatcong, etc., but trainline areas like New Providence, Berkeley Heights, Summit, (Union) and Chatham & Madison (Morris) are still listed at Peak Value. A house for example selling in 2003 in N.P. at $500K is currently listed at $700K.

  9. Dan says:

    Would anybody be kind enough to give me some history info. and address of MLS/Web ID: 2440049


  10. Ann says:

    137 mike, from previous thread

    Yeah, I know, I know, I should wait : )

    It goes both ways. This is a relo, so we lose a boatload of benefits if we wait too long. And of course, I would like to be settled somewhere before school starts in Sept.

    One of the issues brought up on the inspection is a major safety issue and it’s not going to be a cheap repair. So we shall see.

    I think as much as we can say there is a downturn in the market, there is still a trickle of stuff still selling.

    More importantly, in any given neighborhood or town and price range, there is still the “best” house that the lone one or two buyer(s) want.

    That’s kind of what this house is. It happens to have a great lot in a neighborhood with mostly crappy lots. So I want it to work, but if it doesn’t, it doesn’t.

    Our realtor was trying to strongarm us into going easy on the sellers on the inspection issues because they gave us such a “discount.” My husband set her straight on that idea.

  11. chifi - CFAs do it better says:

    “greedy grubbers”……haven’t seen that in a while…..

  12. mikeinwaiting says:

    Ann Yes I remember you mentioning the relo benefits I didn’t know you were under a time restraint.I guess in that case you have to make the move when you crunch the #s for your sit.Your realtor is most likely telling their guy that you are one in million buyer with a dp & aloan in pocket.They play both ways to make money.If you fell strongly enough about house throw them a bone towards repair nothing big just a quarter or something.

  13. Willow says:


    Defaults moving beyond sub-prime

    Delinquencies among holders of risky option ARMs are increasing as their minimum payments climb.

    By E. Scott Reckard, Los Angeles Times Staff Writer
    December 28, 2007

    Thought the mortgage meltdown was just a sub-prime affair? Think again. There’s another time bomb waiting to explode, experts say: risky loans made to people with good credit.

    So-called pay-option adjustable-rate mortgages, or option ARMs, were the easiest and most profitable home loans for lenders and brokers to make for much of this decade. Last year, they accounted for about 9% of the volume of all mortgages made in the U.S. and were especially popular in California, Florida and Nevada — states where home prices rose the most during the housing boom and are now falling most sharply.

    An option ARM loan gives a borrower the option of paying less than the interest due, causing the loan balance to rise. If it rises too much — say, by 10% or 15% — the opportunity to make a low payment vanishes and the required payment skyrockets.

    That scenario is becoming increasingly common. In fact, more than 75% of option ARM borrowers have been making only the minimum payments, analysts at Standard & Poor’s Corp. said last week. As a result, the delinquency rate on option ARMs already is jumping and is likely to keep rising sharply, S&P said. Because option ARMS went only to “prime” borrowers, they aren’t eligible for a much-publicized interest rate freeze that is part of a White House-backed plan to stem sub-prime foreclosures.

    One upshot could be foreclosures growing more common in affluent neighborhoods.

    “Whether it’s a wealthy community or a sub-prime community, it all comes down to how much equity the borrower has and how much home prices fall,” said Joshua Rosner, a managing director at investment research firm Graham Fisher & Co.

    Option ARMs were originally offered in the 1980s by California savings and loans as a way to give some financial flexibility to self-employed people and others with variable incomes. But as homes became more expensive this decade, they became increasingly desirable simply because of the ability to make extraordinarily low payments for a good period of time.

    “The only reason for taking [an option ARM] was to use the minimum payment to get more house or a bigger refi than you otherwise could afford,” said Guy Cecala, editor of Inside Mortgage Finance.

    Attractive payment option

    Joan Olsen is an example of someone who took out a mortgage she couldn’t afford. A retired welfare worker, she said she didn’t fully understand the loan terms when she refinanced her San Diego condominium 15 months ago with an option ARM. Olsen, 73, had a top-tier credit score of 760 but said she could afford to make only the minimum payment on her loan, which initially was $788 a month and now is $847. Her loan balance is $289,000, up from an initial $272,000. If it hits $312,000, which it could do in 20 months, she’ll be required to pay more than $2,000 a month. Meantime, home prices have tumbled: One condo in Olsen’s building sold recently for $251,000, so refinancing isn’t a viable possibility.

    “I have no one but myself to blame,” Olsen said, “for signing off on something I didn’t understand.”

    Although option ARMs went to prime borrowers, they had many characteristics that made them riskier than standard fixed-rate mortgages.

    For example, a borrower could make minimum payments as though the interest rate were 1% or 2%, when in reality interest was accruing at a much higher rate — often 7.5% to 8% at a time — in 2005 and 2006 — when fixed-rate borrowers could get 30-year loans at 6.5%.

    What’s more, standards for making option ARMs were loosened starting in late 2004, when Wall Street firms began buying such loans in bulk to be converted into securities backed by the loan payments, Cecala said. Because lenders didn’t have to keep the loans on their books, he said, they weren’t too worried about the risk of losses.

    As a result, loans of 90% or more of the home’s value became the norm, up from a once-standard 80%. And many of the loans were made without verifying income or assets, even for borrowers who could easily have supplied that information — an invitation for the borrower, loan officer or broker to fudge numbers, analysts say.

    Olsen’s loan required her only to state, not document, her retirement income from pensions and Social Security.

    Her application says that income totaled $5,000 a month. In an interview, Olsen said she actually received well under $3,000 a month but left details of the application up to a saleswoman at the brokerage where she got the loan, and signed the stack of documents without reading them carefully.

    A spokesman for the lender, the Homecomings Financial unit of GMAC Financial Services, said there was nothing in the application to trigger any alarms.

    . . .

  14. Willow says:

    I have to admit that I didn’t know what an option ARM was before reading the above article but why on earth would anyone use this to afford more house? I understand the original intent but if all you do is pay the minimum, it puts you under very fast.

  15. mikeinwaiting says:

    Willow I had one for about 2 years used money to put in central air,new drive way,new front stairs,oil take above ground get ride of in ground.But I still had a ton of room as I bought really low & didn’t take out to much,so in some cases it works as intented.My payment was really low so it worked for me because I was able to sell before the sh*t hit the fan.

  16. Willow says:


    Does anyone have Verizon Fios for TV or internet? It’s now available in my area and we’re looking at it. I notice that it doesn’t offer MSNBC but are there any other stations that Fios doesn’t have compared to cable? How is it for internet and phone? They have some pretty good packages for all three which would save me about $65/month.


  17. syncmaster says:

    Re fios, verizon says I can get that, but I thought they had to lay fiber cable to my house for that?

  18. HEHEHE says:

    What happened to Booya? I need to hear about the Friskies eaters.

  19. syncmaster says:

    Actually, never mind. I read the page wrong. Fios is NOT available where I am.

  20. Just me says:

    anyone wants to gues what new home sales numbers will be???

  21. Homer says:

    FIOS is the best thing since chocolate chip cookies.
    Picture is awesome, I think its better than HD
    Internet is ubber fast makes cable look slow like DSL. As far as phone I got the VOIP from verizon. Voice wing. I didn’t go with the phone in the package as voice wing is cheaper and works fine.

  22. gary says:

    Yes, the asking prices by the ignorant, fat b*stards are still at absurd levels for anything liveable and there are those 2 or 3 homes in a given town that still command multiple bids because they’re the most desirable. I see a few people have mentioned this today and I’ve been talking about it for months because above all else, this is the only thing that matters. It’s the price, and the prices have not moved much. Talk about Florida, California, Arizona RE, the credit crunch, inflation and all the other doom and gloom but the bottom line is that this area is still showing much resiliency.

    As long as one person jumps in and buys, the @ssbags will hold out for their price. It’s more than 2 years since the so-called national peak and the NYC metro area is still holding on to the top. And you can’t say it’s my opnion because as I said, there are a couple of people here that have said the same thing.

  23. mikeinwaiting says:

    Gary It has to break sooner or later. I guess its just later here.WE will wait it out.

  24. scribe says:


    You said:

    One of the issues brought up on the inspection is a major safety issue and it’s not going to be a cheap repair.

    What is the “major safety issue”?

    That sounds alarming.

  25. Willow says:

    Home #21

    Thanks for the info. Do you know how much it costs to install extra TVs? Do they use the existing cable jacks? Did they pull your copper?

  26. BC Bob says:


    OUCH. Down 19% in the northeast.

  27. Ann says:

    25 scribe

    The house has a center hall staircase that overlooks the living room. The hallway upstairs also overlooks the living room.

    The entire railing system from top to bottom, every single piece of it, including the overlooking hallway railing, is very loose.

    I’ve been talking to some contractors and we are having one come look at it today, but it seems from what I’ve gathered already, chances are the entire railing system wasn’t built properly (it’s a relatively new house, less than ten years old). So we don’t know yet, but it could involve going through the drywall or the floorboards underneath to basically re-build it right.

    Apparently, stairs are a very specialized area of carpentry. And I’m betting whoever built these stairs wasn’t a master carpenter.

    We have two small children, we need to know that the entire system is as strong as it can be since it would involve a one story fall should the railings fail, god forbid.

    The realtors are trying to snow us over with “it’s not a big deal” and “they already gave you a discount.” On and on…

  28. CAIBC says:

    BC Bob, you sound surprised?

    worst in 12 years….no one should be surprised anymore when data like this comes out…its what happens when a bubble bursts…


  29. John says:

    NEW YORK (CNNMoney.com) — Sales of new homes plunged last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector.

    GRIM TESTAMENT – ARE They quoting our GRIM?

  30. Ann says:

    12 mike

    I agree, they are probably playing the deal both ways, which is why the sellers accepted the offer which was way below their asking price (not that LP means anything these days).

  31. njpatient says:

    That’s the 2nd headline in a week describing RE market as “grim”.

  32. mikeinwaiting says:

    Hey did I miss something new housing #s due at 10 am.

  33. dreamtheaterr says:

    Bleak numbers…..this rolling stone is gathering more loss.

    Has Chameleon Yun has stopped blaming the weather?

  34. Shore Guy says:

    # 13 ““I have no one but myself to blame,” Olsen said, “for signing off on something I didn’t understand.””

    I couldn’t have said it better myself.

  35. Ed Sanders says:

    Re Fios:

    I looked into it, and it seemed like a good deal, but when I called Cablevision to let them know I was thinking of switching they cut my bill by $40 (lower than the Fios price being offered). I have cable/phone/internet from them.

    They also came in and moved my modem to a better spot in the house, gratis.

    A friend has fios, and loves it, but the cable deal will keep me w/ them for another year.

  36. John says:

    It warms my heart to see a share of HOV at about the price of a value meal at McDonalds. I can’t wait till a share is cheaper than the recession buster two dogs and a soda $2.99 lunch at Papaya King.

    BTW DHI has been selling tracts of houses to vulture investors for 60% off peak price. Now that is the sale of the century. Problem is now DHI has to compete with those vulutures who can list those homes at 40% to 50% off peak and still make a profit. Sounds like a few more dominos are going to have to fall before bottom. Either DHI is in dire straits to sell at 60% off or they are betting houses are falling either further, either way it is a shot between the nuts for anyone who bought a brand new tract house in the 2003 to 2007 period. 2008 is DONE for RE! – Lets hope 2009 is better.

  37. Ann says:

    22 gary

    Gary, I mentioned this above too. Buyers have a perception that there is more supply than demand (which may be true on a national or state-wide sense), but this may not be true on the town or development sense. And there is always the one good house that the few buyers want.

    I’m not sure that prices haven’t moved much though. I don’t dig into the data like the folks here, but the house we are in the process of buying is going for at least 10% below the 2005 comp, around 2004. We just sold for around a 2004 comp, 10% less than our neighbor got in 2005 (OUCH!).

    What’s your plan? Are you waiting for the “bottom” to buy and sell low?

  38. Shore Guy says:

    From Yuan:
    “”I would not be surprised if home sales improves in 2008,” he said. “At the same time I can also foresee a circumstance where buyers continue to pull back, the inventory sitting on the market continues to build and it causes prices to go down further.” ”

    This is like tuning into the Weather Channel only to hear: “I would not be surprised if it were sunny tomorrow, nor would I be shocked to find some clouds in the sky.”

  39. BC Bob says:

    “BC Bob, you sound surprised?”

    CAIBC [30],

    Quite the contrary. Since I’ve been on this site, I have been calling this upcoming bust, the largest in our lifetime, maybe history. Much worse than Nasquack, multiplier effect.

  40. dreamtheaterr says:

    #35, strike out the 2nd ‘has’.

  41. Sean says:

    Only the Appetizer

    on Bloomberg.

    This link will open in Windows Media Player.


  42. scribe says:


    That does sound dangerous.

    If it wasn’t done right in the first place, are you sure it can be re-done properly?

    Didn’t you say you had until September to get your benefits?

    What about looking around some more – and what about looking for a ranch or for a house with a more reasonable set of stairs and no open hallway?

  43. syncmaster says:

    Market’s lousy, there’s ‘blood in the streets’ – so, time to buy?

    “If you think there is blood in the streets, you want to be buying,” said Vince Allegra, who in late November swooped in on a house in Chicago’s west suburbs that had languished on the market since spring.

    Dickering with the relocation company that owned the house, he snagged it for $860,000 – less than the original list price of $1.1 million and even below the $950,000 it sold for in 2005, he said. Allegra, a money manager for high-net-worth clients, believed that the market was near enough to a bottom to make a deal worthwhile.

  44. CAIBC says:


    in your case, its a wash since you are selling and buying in the same market…as long as you are happy with your purchase, thats really all that matters….
    on the other hand, folks like me (first time home buyers) are getting slammed with these high prices and would like to see this market correct itself…

    as far as the railing – i would get it fixed…very dangerous situation if there are kids in the house

  45. Willow says:


    We have exhausted the Comcast discounts. They will no longer do it for us because we don’t have digital cable and they don’t want people to have the regular cable anymore. Right now our cable plus internet is $99. Husband’s company pays for the internet so if we got TV plus Freedom Essentials phone it would be $65 plus taxes. Right now we pay $60 including taxes for Freedom Essentials.

  46. mikeinwaiting says:

    Ann Stairs are usually not built but bought by builder & installed.If house is only 10 years old this is most likely the case.Loose rail should not be the end of the world.Is it carpet or wood on stair case
    & over looking hall.I did new construction for years (wood floors)so I have seen alot of these go in & put the flooring in on such
    as most come raw.I could come down & take a look I don’t do that kind of work but would be happy to give you an honest assement on it.The contractors will make it seem like the end of the world as they know you want to buy & the sellers want to sell.They will try & rape you both.

  47. chifi / children are -(NPV) says:

    Ed Sanders Says:
    December 28th, 2007 at 10:18 am
    Re Fios:I looked into it, and it seemed like a good deal, but when I called Cablevision to let them know I was thinking of switching they cut my bill by $40 (lower than the Fios price being offered). I have cable/phone/internet from them.

    Colonel: do you know anyone who pulled the same stunt with Comcast?

  48. Willow says:


    We have done it with Comcast for a few years. As long as you have a higher end package (digital – not one of the older packages), they will give you a discount for 6 months to a year.

  49. chifi / children are -(NPV) says:

    Clarify after seeing Willow’s post…we signed up for the Triple Play thing at $99, although it really is $107 a month. Also they don’t mention that it costs $65 to install and $60 to turn on…whatever, we weren’t going to do anything else at the time. However, I actually believe that Cablevision is a better service (withstanding the Dolans) than Comcast. The Cablevision software is better on their set top boxes and they run less “interference” on the service. Comcast has a lot of stupid subtle items, such as switching onto their channel each time you turn on…….I bet I can fix that if I wanted to bother….

  50. Ed Sanders says:


    Wish I could help more, but I don’t Know any comcast customers who have the Fios option at the moment.

    I have to believe it’s worth the phone call though.

  51. Sean says:

    Subprime still a long way to go according to
    Goldman Sachs.


  52. Ann says:

    47 Thanks mike. Good to know. It’s wood on the stairs, so no rug to worry about.

    I’m not so concerned with how much it turns out to be, as long as it’s not outrageous, since the sellers are going to have to pay for it. I’ll see what the contractor says today about it.

  53. Jill says:

    Ann #29: I’m no expert, but my gut tells me that this railing is just the tip of a shoddy construction iceberg and that other things will come back to bite you if you jump at this house.

    Do with this info what you will. I’m not in the real estate business, but it would make me wonder what else wasn’t done right.

    All: FIOS? No thanks. First of all, Verizon has been employing some really sleazy 3rd party companies to go door to door. Some of these guys have been very threatening and pushy. Second of all, they aren’t telling you what you’ll pay after the “teaser” intro is over. Sure, you’ll get phone/internet/TV for a year, but what then? Have you learned nothing from the mortgage mess about “teasers”?

  54. Ann says:

    43 scribe, We technically have until Sept, but then we’d to pay for our rental once the temp housing benefit runs out (soon). The other alternative it to get a longer-lease rental, move all of our crap out of storage, live there for a year or so, lose the relo benefits, and hope that the prices plummet enough to make it worth it, along with possibly relocating my kid out of whatever school after he starts K. Might be worth it, might not.

    We’ve looked at every ranch, split, colonial in our price range in the towns we like and everything had something wrong with it. Ah, Bergen County!

  55. Ann says:

    54 Jill

    Yeah, it’s kind of scary. Everything else come out fine on the inspection and the house is almost ten years old, so hopefully all of the major construction blunders would be apparent by now. The flip side with older houses we’ve been looking at, is that they are older, and many of them, at least in the towns we are looking at seem to have termite issues, which is equally scary to me. Can’t win.

  56. Ann says:

    CAIBC, good point. We were insistent that we bought for the same relative price that we sold for.

    We originally bought in 2001, so we did benefit from the runup a bit, although not as much as the lucky skunks who bought in 1998 trying to sell for 2X as much now. At least it makes gathering the downpayment easier.

    If it was my first house and I didn’t have any constraints, I would wait this one out for a long while! What the worse that could happen? Prices can’t get higher! : )

  57. Secondary Market says:

    change of careers?

    so i’m looking for a bit of advice here. i’ve posted in the past that my mortgage related company imploded last month and have been hitting the street for a new position since. obviously, the mortgage industry will take some time to reinvent itself and i just don’t have the time or means to wait for it.
    i’ve been thinking about getting into finance but with out any financial licenses i’m basically forced to take an entry level training position which translates to over a 50k a year pay cut; but there could be upside in a year or so. it’s with Blackrock in Princeton (not a financial adviser position).
    so i guess my question is, have any of you taken such a step back to move forward?

  58. scribe says:


    If you go on the assumption that the spring selling season starts with Superbowl Sunday, that’s right around the corner.

    There might be more inventory by then, including all of the people who are looking to bail in advance of resets and more short sales.

  59. pretorius says:

    Secondary market,

    Sign up for the CFA. Pass the test in June. That will help you get a decent finance job.

    If you already have a decent finance job by the time you receive the test result, then you should be able to use that to get a better finance job.

  60. John says:

    Banks have $161.9 billion of loans and $69.6 billion of bonds left to distribute, according to JPMorgan data.

    “A python that swallowed an elephant is being absorbed through the system,” said Mario Gabelli, chief executive officer of Rye, New York-based Gamco Investors Inc., which has $31.6 billion in assets under management.

  61. mikeinwaiting says:

    Ann Cool if they want to reinvent the wheel
    let me know I can vet it out.It could kill your deal if buyer gets a over the top quote
    from a contractor who knows sit.But then again that might be a good thing.

  62. syncmaster says:

    An interesting blog on nj.com about the census numbers and New Jersey.

    …the demise of New Jersey has been greatly exaggerated. Instead of growing less populated, New Jersey continues to become more crowded than ever… Even with the housing market tightening, I can still watch the “SOLD” signs popping up and construction sites pushing under-utilized space into oblivion.

    … slower growth is not the harbinger of death that it is being made out to be. I’ve lived in a number of “high growth” states, like Florida and Texas, and when I visit them, I’m glad I left them behind almost six years ago to come to New Jersey. High property values and taxes are a reality of life around here, but so are high paying jobs. So are high performing schools…

    Numbers are just numbers. They aren’t the whole story. More people are moving here than leaving. The last time I checked, that’s pretty much the definition of growth.

  63. Secondary Market says:

    CFA, could be a lofty goal no? outside of mbs my finance background is extremely limited.

  64. Ann says:

    62 Mike

    Ha! Yes, killing the deal could be a good thing. If this isn’t the dealbreaker, maybe the radon will come back high.

    A girl can dream.

  65. gary says:

    Ann [38],

    I’m not trying to time it, I’m simply waiting for a price that allows me to put 20% or better down with monthly payments I can sleep with. I may be waiting a long time.

  66. John says:

    Hey Secondary Market I think your real issue is lack of chutzpah and brass balls. I have worked in insurance, banking, brokerage it is all the same stuff, just sell them on what you have to offer and apply it to brokerage/Private Equity. My consulting friends can go to someone who is in an industry for 20 years and even though they have zero experience they can sell that person that they should hire them to fix all their problems. Go for it.

  67. Secondary Market says:

    I appreciate the candor. It’s true, there is some apprehension but I’ve always been able to nail interviews.

  68. bewm says:

    Looks like the Bergen County Sheriff just posted a bunch of new foreclosures:

    2007-12-10 = 206

    2007-12-27 = 206
    2007-12-28 = 240

    Happy New Year!

  69. make money says:


    I love that bloomberg link. Better get used to all this talk about a prolonged recession.

    I still can’t believe that the markets are only pricing in a 6 months slowdown/recession with activity picking up in the second half of 2008.

    19% in the north east?!!!!

  70. chifi / children are -(NPV) says:

    Secondary Market Says:
    December 28th, 2007 at 11:16 am
    change of careers?
    i’ve been thinking about getting into finance it’s with Blackrock in Princeton (not a financial adviser position). so i guess my question is, have any of you taken such a step back to move forward?

    SM: depends on your situation….I forget yours…if you are single and don’t have to answer to anyone, it makes things easier to execute if not digest; if you are DINK, then it is easier to digest, but the hubby will be staring down your sorry a55. If you have kids, well, you better think about that one…..what I will say is get in gear and get off the beach…you never know when the door will close…there will be a whole lot more company
    company on the beach soon, and further many of the people who have been whacked recently likely have rationalized that they can take the rest of 2007 as a well deserved vacation.

    Do you long range planning on someone else’s dime…..

  71. John says:

    Move quick cause Wamu in Lake Success is shutting down on 2-15-08 an letting go another boatload of mortgage people to the job market.

    Secondary Market Says:
    December 28th, 2007 at 11:51 am
    I appreciate the candor. It’s true, there is some apprehension but I’ve always been able to nail interviews.

  72. 3b says:

    #66 gary No you wont.

  73. John says:

    You missed the IPO at Blackrock. Skip it. KKR is still set to do their IPO in 2008. Get in there and nail some stock in your contract.

  74. BC Bob says:

    Secondary [58],

    What was your function within mbs. What type of position are you currently interviewing for? Blackrock is the upper crust.

    If you are sure this is the area that you want to involved with, go b#lls out for it. The best moves I made in the past, were steps back to move forward. If you have any specific questions, get my contact info from JB.

  75. Ann says:

    66 gary


    How low would be low enough for you to buy? (like a 97 price?)

    Just curious because I’ve seen a lot of houses where the sellers were trying to buy up and trying to sell for a very high price as part of their plan and only for that high price. Meaning they probably won’t ever sell, at least not for a while.

    Sounds like your strategy is the opposite, wait until the prices go lower, but then where does that put your sale?

  76. Sean says:

    re: Job Advice for Secondary Market

    Call Warren Buffett and apply for an job. Berkshire Hathaway Assurance is his new startup, a bond insurer which will be one of the few players left with triple A credit.

    He is anticipating any huge boom in civil construction in the US.


  77. msd says:

    Re FIOS:

    I have ordered the $99.00 package for all 3 – TV/20Mbps Internet/Phone and the contract is for 2 yrs. I had the internet for more than a year now and I am very happy with that – consistently get 20 Mbsp (unlike cablevision).

    I am not sure of the price after the 2 yr contract … but I am sure I can change to Cablevision then and save on the other side of the fence too !!

  78. BC Bob says:

    Gasparino says 5-10% jobs cut at Citi, announced around 1/07. He also reported that BOA will no longer be providing free soup, crackers and hand soap. Hand soap? No mention if this included the executive dining room.

  79. chifi / children are -(NPV) says:

    John Says:
    December 28th, 2007 at 12:27 pm
    You missed the IPO at Blackrock. Skip it. KKR is still set to do their IPO in 2008. Get in there and nail some stock in your contract.

    JJ: are you f— stupid?

  80. pretorius says:

    Chifi, can you elaborate on why John’s advice is “f- stupid”?

  81. Bystander says:


    I was in the same boat back in Sept. Got lucky that a friend hoooked me up at a Wall Street IB. Jump on the job. People with experience and qualifications have been looking for months. Much easier to find a job when you have one. You need to keep working until the market returns. The ‘good’ job market is tight despite what forecasters say.

  82. Herring123 says:

    JJ is “f— stupid” because there hasn’t been a Blackrock IPO. I think he’s confusing it with Blackstone’s (BX) IPO a while ago. And while Blackstone is in the upper crust for what they do, Blackrock is simply Merril Lynch’s mutual fund family. Though I do enjoy his stories about Great Neck back in the day.

  83. John says:

    Investors sold MBS funds for the 54th straight month.

  84. John says:

    Blackstone did a recent IPO, Blackrock did have an IPO back in the day. I interviewed in early 2004 to be a VP in accounting at Blackrock and at the time they were doing SOX as they had gone public. In either of the Blacks you are not geting in on the IPO. KKR you still have a chance, plus KKR has noncontribution benefit plans, they pay 100% for your medical, dental and they have a retirement plan where they pay 100% plus free medical for life for retirees, you chip in nothing for any benefits plus they buy you lunch everyday and you get cut in on the KKR IPO. Go pay your own way at Blackstone and spend the rest of your life driving a three series or C class I am only trying to help. At that Blackrock job you will be lucky to afford north of the highway in the hamptons.

  85. John says:

    BLK Blackrock did their IPO in late 1999. When is Fink going to jump ship I don’t know. When I was at their headquarters up in the 50’s off Park I thought the place was kinda junky and depressing looking. Fink has done a heck of a job getting that stock over $200 but if and when he quits who knows.

  86. mr potter says:

    Why would anyone buy or sell for that matter in this market. 2008 looks horrible

  87. gary says:

    Ann [76],

    Whatever the market says my house is worth at that current time is fine by me. I bought my current home in 2001 so a 5% YOY appreciation would be the most I could expect. If the market says I can get a little more, fine. It’s impossible for it to go for less than the YOY 5% in this area unless nuclear armegeddon was upon us.

    On the other side of the coin, I should be buying a house that appreciated at the same rate. That would put a home that was priced at 350K in 2000 a tad over 500K, not 650K that the fat dummies think their beer smelling dumps are worth. My wife and I have become so bitterly entrenched over not making a move that it’s like we’re in a war. It’s a trademark Italian stubborness. LOL!! She doesn’t even think about it. Me, on the other hand, obsess over it. :)

  88. mikeinwaiting says:

    mr potter Some have to sell because of bad loans under water.Others divorce,deaths,job transfers,stupid don’t count that out.
    Buyers job transfer,first timers with no clue,once again don’t count out stupid uninformed and of course people without the patience to wait it out.

  89. Ann says:

    89 Gary


    If the fat dummies think their houses are worth 650, sane sellers are probably selling them for 6 or 575 right now, so you might not be too far off from your goal!

    That’s funny about you and your wife. My husband and I also have different attitudes. I am the doom and gloomer and he thinks the price that we just bought at is great. Of course, I hang out on this blog, that could be my problem. : )

  90. mr potter says:

    #90, agreed but it seems like the number of transactions are drastically declining based on the data today

  91. grim says:

    Seems like I picked a bad day to be tied up in meetings.

    NHS numbers are grim indeed.

  92. grim says:

    From Bloomberg:

    U.S. Economy: New-Home Sales Tumble to 12-Year Low

    Sales of new homes in the U.S. fell to a 12-year low in November, pointing to bigger declines in construction that will hinder economic growth in 2008.

    Purchases dropped 9 percent to an annual pace of 647,000 and October sales were revised lower, the Commerce Department said today in Washington. Last month’s sales were weaker than the lowest forecast in a Bloomberg News survey of economists.

    Treasury notes extended their rally and traders added to bets that the Federal Reserve will cut interest rates again in January to prevent a recession. New-home sales are down 25.4 percent so far this year, heading for the biggest annual decline since at least 1963.

    “This gives a dire picture,” said Dana Saporta, an economist at Dresdner Kleinwort in New York. “The weak data raise the risk of the economy slowing faster than Fed officials would like.”

    The number of homes for sale at the end of November decreased 1.8 percent to 505,000, the fewest in two years. Still, because sales dropped even more, the inventory of unsold homes at the current sales pace jumped to 9.3 months from 8.8 months in October.

    Purchases fell in three of four regions, led by a 28 percent plunge in the Midwest. Sales dropped 19 percent in the Northeast and 6.4 percent in the South. They rose 4 percent in the West.

  93. grim says:

    From the WSJ:

    New-Home Sales Tumbled 9%
    Amid Falling Prices in November
    December 28, 2007 2:39 p.m.

    New-home sales plunged during November to the lowest level in 12 years.

    Sales of single-family homes decreased by 9% last month to a seasonally adjusted annual rate of 647,000, the Commerce Department said Friday. It was the lowest pace of sales since 621,000 in April 1995, and analysts expect further retreat, given the size of unsold supply of new houses.

    “There is absolutely no indication that home sales have reached a bottom,” Insight Economics chief economist Steven Wood said.

    Year over year, new-home sales were 34.4% lower than the level in November 2006 — the largest year-to-year decline since 35.3% in January 1991.

    “Tighter lending standards now in place are probably limiting activity,” said Michael Moran, an analyst at Daiwa Securities America. “In addition, many buyers may have moved to the sidelines for a time in hope of obtaining a more attractive price in the future.”

    The housing slump reduced gross domestic product, the sum of U.S. economic activity, by more than a full percentage point during the third quarter. While GDP still managed to surge at a sizzling 4.9% rate July through September, it is seen much weaker in the current, fourth quarter — hampered by the housing correction and credit crunch.

    Falling home prices can hurt the economy. Consumer spending makes up 70% of U.S. economic activity as measured by GDP. When consumers watch the value of their homes shrink, they tend to feel less wealthy, a mood that can act as a damper on spending plans and, in turn, slow economic growth.

    Friday’s data showed the median price for a home dropped in November compared to the same month a year prior, down 0.4% to $239,100 in November from $240,100 in November 2006.

    “The growing imbalance between demand and supply puts downward pressure on home prices,” Lehman Brothers analyst Michelle Meyer said. “We expect national home prices will fall another 10% to a bottom at the end of 2009.”

  94. John says:

    Fed funds futures on the Chicago Board of Trade indicate a 92 percent chance the Fed will reduce its target rate for overnight bank loans a quarter-percentage point from 4.25 percent at its Jan. 30 meeting, up from 76 percent odds yesterday.

  95. John says:

    Financial stocks on 52-week lows: Bear Stearns (NYSE: BSC), Citigroup (NYSE:C), Canseco (NYSE: CNO), Discover Financial (NYSE: DFS), Fifth Third Bancorp (NASDAQ:FITB), Fortress Investment (NYSE: FIG), MBIA Inc. (NYSE: MBI), Washington Mutual (NYSE:WM)… urgh! When does it stop?

  96. mikeinwaiting says:

    John 2-6 months, then I will buy rather buy on the way up than catch a falling knife.Good long term buys.IMHO

  97. njrebear says:

    bi (blonde long hair…) and pret on fox!!!


  98. mikeinwaiting says:

    nj bear priceless who do like as pret.

  99. pretorius says:

    “nj bear priceless who do like as pret.”

    Say what?!

  100. pretorius says:


    That was a funny video.

    The position that comes closest to my own is Ben Stein’s.

  101. mikeinwaiting says:

    pret bear put you in there I just was wondering who he thought was you.You must admit the guy as bi was dead on.

  102. mikeinwaiting says:

    pret sounds good.

  103. Mitchell says:

    Only three areas — Charlotte, N.C., Portland, Ore. and Seattle — posted year-over-year home price appreciation in October. Charlotte posted the largest gains at 4.3 percent.

    Among the three, only Charlotte is likely to be saved from declining house prices within the coming few months, Newport said, because the area has not seen periods of rapid appreciation like the other markets.


    I would guess that we still have a lot of people from NY/NJ/PA moving to Charlotte area. Plus the city is stealing a lot of business from Atlanta. Realtors recently priced up houses in the area $1-$3 per sq ft although you can see the area is starting to slow down.

    Oregon I heard is amazing from a ole Brooklyn friend but I have no idea about work there. Might be good if one is considering retiring or running a business out of the home.

    Seattle – I just don’t understand why its going up.

    I still believe the majority of the country got out of control and those areas are the ones that will pay the price the most like the article states. Some areas are still undervalued comparatively but that doesn’t make it invincible.

  104. mikeinwaiting says:

    Mitchell I here inventory way up in your area to ?

  105. njrebear says:

    Ben Stein you are. Say everything is possible and when something happens proclaim victory for predicting ‘correctly’.

  106. Clotpoll says:

    pret (104)-

    Even if I agreed with Ben Stein, I would never align myself with him publicly. How could anyone take the same side as Ferris Bueller’s principal? Better just to wear a sign around your neck that says “dork”. What an absolute whore.

  107. chifi / children are -(NPV) says:

    John Says:
    December 28th, 2007 at 3:30 pm
    Financial stocks on 52-week lows: Bear Stearns (NYSE: BSC), Citigroup (NYSE:C), Canseco (NYSE: CNO), Discover Financial (NYSE: DFS), Fifth Third Bancorp (NASDAQ:FITB), Fortress Investment (NYSE: FIG), MBIA Inc. (NYSE: MBI), Washington Mutual (NYSE:WM)… urgh! When does it stop?

    JJ: IB’s just need one more major round of write-offs…the consumer banks are about to get throttled with credit card defaults….stay away from everything here for now….don’t short them either…if they sell assets or get more deep pockets to dump cash in theor laps, you will be squeezed…..just stay clear…

  108. chifi / children are -(NPV) says:

    Seattle – I just don’t understand why its going up.

    MSFT and Boeing on fire among others….

  109. pretorius says:


    I’m not saying thatI agree with every position Ben Stein takes. I don’t even know his position on most issues.

    The position that comes close to mine is the one Ben took in the youtube video:

    “It would be a very unusual housing correction if it didn’t take a few years to run its course.”

    I expect several years of stagnant home prices in New Jersey.

  110. Clotpoll says:

    ChiFi (111)-

    Right-o. Buying some HB stocks seems like a sedentary investment next to the scorched earth of financials. And, all the sovreign fund/foreign money still on the sidelines could be hugely disruptive in the coming months. One can’t even like GS here; they’ve basically been treading water for over a year, and they’re the best of the Ibanks (all disclaimers).

    Gambling on bowl games- or Pats/Jints- would be less risky.

  111. mikeinwaiting says:

    Bear at least Stein was stoned, guys on a life time lude.No need for him to ever chill out.Got to love his delivery always
    classic Stein.

  112. Mitchell says:

    I couldn’t agree with you more on the 2.5x-3x the 65K income and NJ will return to normal. In fact one should never mortgage more than 2.5 times their yearly income.

    The only problem is the increased taxes the govt placed on the homes during the last couple of years would also need to come down. 350K house with taxes that resemble a 550K home is still not desireable. Fat Chance of decreased property taxes happening. Its really an embarrassment that some people will pay more in property taxes than their mortgage when all is said and done.

    The NJ State Govt in the end will have done more damage than the sub prime lending problems to home values in NJ and when home values decrease and can be bought for less with existing incomes the NJ Govt is stupid enough to believe thats a sign to ask for more taxes since you have more right?

    If it weren’t for NY City I would bet there would be some ghost towns in NJ.

  113. Clotpoll says:

    …especially BC -5.5 this afternoon.

    Go, BC!

  114. chifi / children are -(NPV) says:

    pretorius Says:
    December 28th, 2007 at 1:27 pm
    Chifi, can you elaborate on why John’s advice is “f- stupid”?

    pret: you have a job in hand in the finance sector in this environment….the guy is on the beach….bear in mind, nothing really bad has happened yet (e.g., 9/11 or financial equivalent)…..everything right now is calm and it is December….hiring freezes can happen instantaneously among other things…I would be most concerned about being crowded out.

    As an example, I interviewed for a job in October 2001 and was one of six people chosen out of 206 applicants for a valuation job, I ended up as the runner-up….guess what….I may as well have been #206.

    Also, PE firms, make POS IPOs. Why? Because they aren’t going to leave money on the table. The have no incentive to IPO unless they are going to be grossly overpaid for doing so. They have much more effective ways of raising capital.

  115. Clotpoll says:

    Mitch (107)-

    Nice shill for Charlotte. However, that’s not what I hear from people on the ground there. HBs are dealing right and left (a former agent of mine picked up a 380K new construction for 280K and closed on Wednesday), there’s a gigunda inventory overhang, and all the financial people are getting ready to lose their jobs.

    However, I hear that the figure-8 demolition derby business has never been better.


  116. Mitchell says:

    #108 Inventory is up and we are seeing more rentals. However the majority of them I would say are NY/NJ people who purchased their homes thinking it was 2005 buy now and your house will sell instantly. They expected to sell their NY/NJ homes and roll that money into the home and some in the bank when they purchased here. The problem is its not 2005 any more.

    Of the 10 or so homes I know the status of 7 are people from NY/NJ/PA who cant sell their home up north. This comes from the people renting those homes down here. The other 3 are in the business of renting and selling at a later date or its their second home they rent out.

  117. njrebear says:

    I agree :)

    Do you define ‘stagnant’ as in +/- 2%? In which case you are wrong for the year.

  118. mikeinwaiting says:

    Mitchill Taxes are always a consideration when buying a home.I & others surely balance price & taxes.2 homes same price 1 lower taxes guess which one sells.I would say that a house with higher taxes for what
    ever reason maybe a bigger lot or extra bath will have to lower its price in this market.

  119. chicagofinance says:


  120. grim says:

    New Otteau E-Newsletter:


    The slowing pace of home sales continued in November as Contract-Sales fell to the lowest level since the housing recession began in 2005 and ran 18% below the prior month’s pace. Also noteworthy is that Unsold Inventory fell for the 3rd straight month and now stands at 64,000 homes, as compared to 72,000 in August. While this inventory reduction would otherwise be a positive sign for the housing market, the current reduction is driven by weak market performance leading would-be sellers to defer their selling plans until Spring and also causing home builders to further slow the pace of new construction. Thus, the continuing decline in Unsold Inventory provides further evidence that the bottom of the current housing recession has not yet arrived.

    As a result the ongoing decline in home prices will extend into 2008, suggesting that ‘waiting until Spring’ is an unwise decision for home sellers hoping to maximize selling price. Given that home prices continue to decline and that the pace of future price increases will be slow and gradual once the housing recovery begins, home prices are unlikely to recover to 2005 levels until Spring of 2014. As a result, Right Pricing! to current market levels is the smart strategy for sellers.

  121. Mitchell says:

    #119 BULL! You can tell anyone and everyone that the truth is Charlotte area never did a 5-20% increase in a year to have a bubble like the north did. It had a steady 1-4% increase year over year and its still significantly cheaper house to income ratio than most other areas making it much more desirable to many. Not to mention the college breaks one gets here in NC when your a resident. How much will it cost your kids to go to Rutgers vs My kids going to UNC? I wont need a second mortgage to complete that.

    My point is NJ is not just out of whack from a house price issue but also from income, taxes, insurance, congestion, and environment issues that plague the state.

    If you dont like Charlotte then go to Texas.

    NJ is on the brink of a lot more than a housing market bubble decline.

  122. mikeinwaiting says:

    Clot Spent about an hour last night looking at Charlott area Re last night.Alot of vacant vandelized stuff going dirt cheap all were fairly new 2000 up 50 60 k 3 beds.
    Things aren’t so good down south either.

  123. chicagofinance says:


    “….home prices are unlikely to recover to 2005 levels until Spring of 2014.”

  124. WickedOrange says:

    Great Site, just punch in a zip code


  125. Essex says:

    Quit shilling for Charlotte…..no one is buying there either….believe me I know. If you want a nice 1/2 Mill Golf course home down there let me know….

  126. Mojo Jojo says:

    Need an address in Chester Township – 2441193.

    Happy Holidays to all and hold on tight. 2008 is going to make 2007 look like lazy Sunday afternoon.

    Grim, thanks for all your hard work on this site. I know I speak for many here who thank our luckly stars every day that we found this site.

  127. 1987 Condo Buyer says:

    #128..that is consistent with the 1987-1999 crash/recovery

  128. crossroads says:

    did house prices peak in 2005 in NJ? I know the peak is considered 2005 for the nation but NJ seemed to lag and peaked in 2006

  129. Mitchell says:

    #130. Keep telling yourself that as I see more and more NJ license plates pull into the development as more people are leaving NJ coming here.

    According to Census Bureau estimates released NJ state gained 19,845 residents, from July 2006 to July 2007.

    North Carolina grew by 2.2 percent in the year ending July 1, adding more than 190,000 new people to reach 9,061,032. That made North Carolina the sixth-fastest growing in the nation.

    More than 14,000 jobs were created in the Charlotte area in 2007, he said, compared with more than 12,000 jobs in 2006.

    NC 190,000 vs. NJ 19,845

    Yup people are just flocking to live in NJ. How many of them were NY moving to NJ looking for something cheaper of those 19,845?

  130. syncmaster says:

    2014? OMG I’ll be almost 40.

  131. John says:

    Best part of raising kids in Charlotte is you don’t have to worry about which side of the church to sit on when your kids get married.

  132. John says:

    mitchell you are right and wrong at the same time, the blue collar neighbors who left my neighborhood last year to head to NC were quickly replaced by white collar neighbors who could better afford the cost of living. The lawyers, bankers and brokers all making between 200k and two million a year are not flocking to NC. For anyone who bought pre 2002 and has a good Financial Services job housing is just a small portion of their income. 12K in RE taxes seems like a lot compared to NC. But when a 30 yo old couple makes 300K a year it is hardly relevant. My RE taxes are less than two weeks pay. Now if you are talking retirees and blue collar people, yes they are flooding out the door and good riddance to all of them. Those people cost more than they are worth. Problem is if you keep taking all that dead wood soon your NC problems will mirror NJ. Think about it if state taxes are around 6% up here and I lose two blue collar neighbors who combined make at most 200K a year and they are replaced by white collar neighbors who make 500K a year combined the state just got an eztra 18K a year in taxes forever. Plus they will spend a heck of a lot more to support our economy.

  133. mr potter says:

    Mitchell (AKA Cliff Claven of NC)

    Please leave. Charlotte is like the mall to many people from NY/NJ. Mediocre on a good day, stupid people and awful restaurants. Be Gone.

  134. Mitchell says:

    John your information is so made up it isnt even close to believable. I used to live in NJ.

    But please provide some factual links to support your made up BS otherwise what your saying is anyone making less than 200-300k should leave NJ. With the state median on NJ being around 65K I hardly believe what you have to say has any truth.

  135. Rich In NNJ says:

    My once daily post as I’m in sunny SoCal.

    …home prices are unlikely to recover to 2005 levels until Spring of 2014.

    And once again, considering the source, holy crap!

  136. Mitchell says:

    #138 and I guess NJ is the cesspool of NY. I guess I would much rather be at the mall then.

  137. mr potter says:

    Mitchell, you are at the Mall !!!!!

  138. Confused In NJ says:

    Now if you are talking retirees and blue collar people, yes they are flooding out the door and good riddance to all of them. Those people cost more than they are worth. Problem is if you keep taking all that dead wood soon your NC problems will mirror NJ.

    Interesting, Adolph Hitler had a similar Philosophy.

  139. Confused In NJ says:

    According to Census Bureau estimates released NJ state gained 19,845 residents, from July 2006 to July 2007.

    Star Ledger indicated this increase is immigrants, legal & illegal, rarely white collar.

  140. Clotpoll says:

    mike (127)-

    Things suck all over in NC, too.

    Just more Up With People Tony Robbins sheeple who will blow sunshine up your a$$ down there.

    Kool-Aid is still Kool-Aid, whether it’s served in a paper cup or crystal glass.

    When half of B of A’s workforce is working checkout at liquor stores and living on pork rinds, come talk to me about how affordable UNC is, Mitchell. I went to UNC in the late ’70s, and most of my friends pretty much paid their own way, because Ma and Pa were one illness away from a tar paper shack.

  141. Clotpoll says:

    Hey, Mitchell (aka Cliffy)-

    Wanna know what the most fun is?

    Dealing with somebody who’s back in NJ after six months in NC. The best is when they’ve rented out their old house for a year (at a negative net cash flow, natch), skipped on their lease in NC, the job in NC either didn’t work out or never materialized and now they want to jam a family of 5 into a 2BR townhouse for no more than $1,200/month.

    I don’t even bother running credit on this kind of person, because I can guess their score within 20 points (usually 600-620 FICO: the first stop on the fast track to complete insolvency). I also know better than to ask if they have enough reserves to put down the first month’s rent in advance or escrow 1.5 months’ security deposit.

    The good thing is, most local landlords don’t bother to run credit anymore. Just plu somebody in, and stop the bleeding.

    Sort of a 21st century Grapes of Wrath.

  142. mikeinwaiting says:

    You know clot dare I say things aren’t so good in most of the US these days.But when
    when things get bad down south it makes bad times up here look good.

  143. Outofstater says:

    #146 “grapes of wrath” Agreed. To my knowledge, the white collar job losses haven’t started in metro Atlanta yet but they’re coming. The landscapers and plant nurseries have been devastated by the drought. There are several nice new subdivisions within a couple of miles of my house where work has stopped dead. One has about 6 houses, all vacant, then just empty lots. Another has the streets and streetlights in but nothing else and yellow tape stuck to orange barrels blocking the entrance. There are indications all over of what is to come. Of course, the fact that I’m reading a book about the Great Depression isn’t helping any either.

  144. mikeinwaiting says:

    Clot You bring up an interesting point with all foreclosure,credit cards auto loans showing next on the horizon.What do all these people due in our credit driven society.I guess we get back to have & have nots end to middle class.Which is not people making 200 to 500 k a year guys.As some would like to believe.What do we do with the majority of people in NJ avg income what 65k.Who will fix your car, get coffe at dinner, cut your hair, work at the A&P.Things do not work in a state where most people are priced out that make it work.John just doesn ‘t see this all big money finace people can’t be a functioning society.

  145. Outofstater says:

    #119 “figure 8” I once considered taking the exchange student from Paris we were hosting to the Dixie Speedway for a real southern experience. I decided against it when I was advised to make sure she didn’t wear sandals “on account of the spit.”

  146. dreamtheaterr says:

    Re Charlotte:

    If you’re bumped off the musical chairs between BoA, Wachovia, and CREF, you’ll be in deep kaka, and once again taking a one-way Penske back to NJ.

    Or so I’ve been told…..

  147. chifi - CFAs do it better says:

    dreamtheaterr Says:
    December 28th, 2007 at 7:57 pm
    Re Charlotte: If you’re bumped off the musical chairs between BoA, Wachovia, and CREF, you’ll be in deep kaka, and once again taking a one-way Penske back to NJ.
    Or so I’ve been told…..

    yan: be careful….avoid double entendre….

  148. grim says:

    Highly recommend this piece from the NY Fed..



  149. Frank says:

    grim, too bad subprime securitization is gone for good. What are you going to do with all this info? Wait for the next bubble?

  150. Pat says:

    153 I’ve been looking for the mirror piece to this from 2001-2002 timeframe.

    It was a presentation to either IMF or Freddie and described the theory of risk reduction through dispersement. It included a couple of diagrams, and was a .pdf.

    Anybody seen that?

  151. Pat says:


  152. gary says:

    I’d rather be dead lying in the gutter at East 4th Street and Avenue D than alive in North Carolina.

  153. gary says:

    And another thing… see this is a big f*cking problem. I know you can’t see the picture but the realtor sent it to me. It’s a run-of-the-mill bilevel; absolutely nothing special. Another stupid b*stard who thinks their POS is the bomb. Hey seller, f*ck you, go get a job d*uche bag. This house will decay like a f*cking corpse in a John Carpenter flick before anyone with an ounce of grey matter even looks at it.

    I’ll offer a price of 365K which is 5% over fair market value and the most these clueless idiots can hope to see. My best and final offer is on the table for 48 hours.


  154. Secondary Market says:

    “What was your function within mbs. What type of position are you currently interviewing for? Blackrock is the upper crust.”

    i worked for a firm that purchased distressed mortgage assets on the secondary market. before that i was the director of mortgage services for a small group financial firm. so i’ve been married to the mortgage industry for the past 6 years or so and ready for a divorce! i was laid off in November.
    the position at blackrock is the entry level training program to become a wholesaler on their mutual fund desk. i’m 30yrs old and married (no kids yet but the wife is ready to start). thankfully my wife is a controller/accountant so i suppose she could “support” me while i learn the ropes for the 18 months or so before i move out of the whopping 40k salary…man it hurts to say that.
    that in a nut shell is my situation.

  155. ricky_nu says:

    gary #158 – good luck trying to get the seller/stealer to come to grip with that kind of bid…

  156. RentinginNJ says:

    Another stupid b*stard who thinks their POS is the bomb.

    In my parents neighbored, one neighbor lists their tiny 3 bd 1 ba split-level (very small, but well kept w/some upgrades) for $479 in the summer of 2006. 18 months later it is listed at $399 and still unsold. It’s still $30k-$40k overpriced IMHO.

    If that isn’t bad enough, the neighbor 1 block away with the same exact tiny house, but all original 1960’s (no work done since), puts their POS on the market last month for $420k.

    WTF are they thinking? Your neighbor can’t get $399 with a much nicer house and you think someone is going to hand your dumb ass $420?

  157. grim says:

    The “2008 Predictions” thread will be posted Monday morning. I advise you all to spend the weekend cleaning your crystal ball and preparing to prognosticate.

  158. Pat says:

    secondary, can your wife commute from PA for a year or two? You’d EASILY be able to handle it financially for two years at 40k (plus learning new career) as long as she’s making 55k or more. After that, you’ll be able to look at $60k jobs around here.

    Remember, you can buy a decent split in a nice neighborhood for under $290 here.

    Geez, I always sound like I work for the PA Relocation Commission.

    You don’t need to worry about the absolute amount of money, as long as it’s temporary, and you have a way to value the fact that they are educating you and giving you a new career. What’s that worth? $20k? $30k? My husband took a big hit when he left NY and moved down here to Bucks County when we met. It took him at least four years to get back to his former pay level, but he’s no longer working three shifts with dangerous chemicals and he has a new career in pharm. development. Recruiters call him all the time.

    Good luck with your new career.

  159. ithink_ithink says:

    if anyone’s awake, today show about to do a bit for why seller’s should underprice their homes.

  160. lostinny says:

    Barbara Corcoran on the Today Show giving “advice”.

  161. ithink_ithink says:

    i took notes.

    lester interviewed barbara cokeheaddamn

    on market:
    – most markets up just a few are down
    – down cycles are short, everyone makes $ in longterm

    on sellers (*cough*in a down market*cough*):
    – intentionally underprice. if neighbor sells for 400k you should underprice (no, no value given).
    – 1st offer is best offer, just take it don’t wait for what is around the corner.

    on buyers:
    – sell your current house now, take it on the chin so that you can get into a new house.
    – market isn’t science you can’t figure it out
    – if your credit is good you have no prob like those subprime people, but still don’t buy more than you can afford.
    – you as individual know what you can afford, not those online calculators so don’t over do it.

  162. Pat says:

    I want to know the headcount at Corcoran’s place right now, versus 1/1/2006. Can somebody shoot her an e-mail?

    Then I’ll assess her advice.

    Payroll speaks.

  163. lostinny says:

    Ben Stein was Ferris Bueller’s chem teacher, not principal. I can’t remember his name.

  164. lostinny says:

    I think
    I completely zoned out on what she was saying. I thought I heard her give a percentage to price under your competitor (fellow seller) but I can’t remember what it was.

  165. Clotpoll says:

    lost (169)-

    Taking advice from Barbara Corcoran is like playing Russian roulette with five loaded chambers.

    Remember, this is a lady who thinks Reading, PA is within commutable distance of NYC.

    NIce to see NBC regularly featuring a person who will give millions more Americans a reason to hate Realtors.

    Time to warm up the cheese grater for my morning shave.

  166. Clotpoll says:

    lost (168)-

    Thanks for that important correction. I need to revisit the classics.

    Bueller? Bueller?

  167. lostinny says:

    Barbara Corcoran can s@ck it for all I care. I certainly wouldn’t take advice from her. But it is fun to watch her change her stories.
    Sorry about the correction on Bueller. Just something I remembered. I don’t have a filter between my brain and my mouth (or hands as it were) this morning.

  168. Clotpoll says:

    Pat (163)-

    “…but he’s no longer working three shifts with dangerous chemicals…”

    Is your husband Homer Simpson?

  169. ithink_ithink says:

    i was still brewing coffee so i probably missed it outright then.

  170. Ann says:

    166 Re Babs

    I think she’s right on the sellers part. Intentionally underprice, in other words, look out of place on the hierarchy of listings. We did that and it worked like a charm. Got the first buyer, rest are still on there and had to lower their ridiculous 05+ prices anyway.

    I also enjoy the part that sellers should take the first offer. Maybe those people who didn’t take our very fair offer for their POS wallpaper nightmare will never sell. Oh well, they did us a HUGE favor.

  171. lostinny says:

    “their POS wallpaper nightmare”
    I love it! I mean seriously, are people so in love with themselves and their own taste that they really don’t think their homes need to be prepared for selling? I guess I answered my own question.

  172. Ann says:


    This house was covered in wallpaper from head to toe, had “vintage” windows from the 50s, a deck that was rotten and a decimated kitchen (broken formica, linoleum with holes, old appliances), every stitch of carpet needed to be replaced, scraggly tired Land-of-Misfit-shrubs landscaping.

    And it had been empty for six months because these stubborn sellers are in assisted living, we were the first offer, and it is still sitting there, literally rotting.

  173. Willow says:

    Re: Wallpaper

    If you watch the HGTV show “Designed to Sell,” you’ll see the first thing they do is take down the wallpaper although I did see a show that wasn’t in Los Angeles and the designer painted over wallpaper in a bathroom. Now that would be a nightmare taking it down.

  174. Ann says:

    Re North Carolina

    I thought only people who are not doing so well financially move to North Carolina. Or talk about it incessantly, as if that is the reason why they are a mess.

    In some last ditch attempt to get their lives together.

  175. Ann says:

    178 Willow

    That’s true, taking down the wallpaper is the first thing they usually do. It was hilarious, this realtor and her assistant would sit and open house this place every weekend trying to sell this place, as if one more open house would do the trick.

    Painting over it, that is so wrong in so many ways!!!!

  176. gary says:

    Ann [179],

    That one is a real charmer, I better huury and bring my checkbook ’cause this one won’t last. ;)

  177. d2b says:

    I am thinking about opening a high-yield savings account with Emigrant Direct. One of the reasons is because they have a rewards card that gives back 1.40% in cash to the account. I charge almost 200k per year through work. It will be an account to park some cash until I need it for school.

    Does anyone use Emigrant Direct? Also does anyone else used rewards cards frequently?

  178. spam spam bacon spam says:

    Ann [179]

    That’s a cherry! I especially love the “gnome” on the kitchen counter amongst all the other, dare I say, “junk”… :)

    Hey I got a question: when you say “Vintage Windows” …. we just took out a 50 year old window to put in a ~90-100 yr old window… I guess that makes us crazy? ;)

    Disclosure: Our house is circa 1790-1810, 6 over 6 windows on upper storey and single panes on 1st storey: all wavy glass, original.

    Back porch was enclosed circa 1936 and bathroom brought indoors :), windows in porch were from about 1950’s. We replaced one wall with row of 6 antique french doors that step onto new wraparound Mahogany porch, 1 window yet to be done and bathroom window just replaced as described.

    In every room we completed, we pulled every window and installed insulating strips where you cannot really see them.

    We’ve worked very hard to bring the house “back in time”, I cannot see putting replacement windows in… so windows are still “vintage”…

    Does this make the house worse?

  179. Ann says:


    Isn’t that listing awesome! I like where they try to showcase that this is the ‘entrance.’

    That was a joke with the “Vintage.” We asked the age and they told us “Vintage.” They were trying to pass them off as some sort of asset, but really they were just plain ugly boxy windows from the 50s (actually 60s probably) that were painted shut.

  180. 3b says:

    #113 I expect several years of stagnant home prices in New Jersey.

    From the kid who never lived through a real estate down turn or recession.

  181. Willow says:


    Cash-Strapped Consumers

    Published: December 29, 2007
    During the holiday shopping season, Americans bought fewer gifts while paying more for necessities. From Thanksgiving to Christmas, spending rose only 3.6 percent over the same period last year, the weakest performance in at least four years, according to early tallies from MasterCard Advisors, a unit of the credit card company. One-third of that increase was for gas purchases.

    That’s bad news for an economy that is dependent on free-spending shoppers for growth. When consumers pull back, the economy slows. Employers respond by delaying hiring plans, reducing work hours and, if problems persist, laying off workers. Once a downturn starts, it is always hard to reverse, and especially now, with the White House unwilling to acknowledge that six years of debt-fueled growth is proving unsustainable and with most candidates for president only beginning to talk about how they would fix the economy.

    Of course, one season does not a trend make. And after-Christmas bargain hunters have yet to spend their last penny. But the preliminary results are not likely to change much. Earlier this month, the government reported that personal spending surged in November, but the boost was mostly due to higher outlays for food and gasoline. More troubling, the rise in spending far outstripped the rise in Americans’ income, with the mismatch covered, in part, by a significant drain on savings.

    All of that portends economic pain for families, even if growth, over all, does not contract — the general definition of a recession. That’s because even optimistic growth forecasts — about 1.5 percent for this quarter and next — are too tepid to counter recessionlike conditions in which job growth slows, unemployment rises and paychecks shrink or disappear. If inflation continues, rising prices will only feed the pain.

    To make matters worse, many Americans are ill-prepared for tougher times.

    Since the end of 2001, the economy has posted positive growth every month. That is a performance much trumpeted by President Bush and his aides. There is another aspect of that performance that they don’t talk about. With the Bush-era expansion apparently bottoming out, it may well become the first in which median family income, after inflation, never makes it back up to its level at the peak of the previous business cycle.

    A new study by the Economic Policy Institute uses Census data to trace the dismal trajectory. Economic growth during the Clinton administration peaked in 2000, followed by a brief recession. Growth resumed at the end of 2001, the beginning of the Bush-era expansion, but real family income continued to fall through 2004. It has turned up since then, but as of the end of 2006, it was still about $1,000 below its peak in 2000.

    Even if that difference is made up this year (and it’s still too early to tell if that will happen) Americans would be merely breaking even. That would be a pathetic outcome after six years of strong labor productivity.

    Dismal income growth is no accident. It is the result of misguided tax, labor and social policies — including government disregard of the downsides of globalization for many Americans — that have concentrated income in the hands of the few.

    The ease of borrowing has made it possible for many people to live beyond their means. But, the end of easy money is now exposing Americans’ vulnerability. Today’s stingy shopper may be tomorrow’s angry voter. To deserve those votes, a candidate must articulate a plan not only for restoring growth, but for ensuring that in the next upswing, the benefits are shared.

  182. njrebear says:

    3b, (186)
    If you want a real kick, ask pret to define ‘stagnant’.

  183. scribe says:


    cash back cards are pretty common.

    check out capitol one

    citi, too – 2% on groceries and drugstores, 1% on everything else

  184. pretorius says:

    Njrebear and 3b,

    I’ve gone on record with my forecast for NJ home prices. What are your forecasts?

  185. 3b says:

    #190 pret: 25% possibly more off of 05 peak prices. You cannot have what has happened over the last few years, coupled with the massive fall out that we are seeing now, and simply state prices will be stagnant.

    No bubble has ended with just a whimper, and then stagnant prices.

    With all that has happened, and with the continuing fall out, I am simply stunned that you continue to adhere to your belief that prices will simply be stagnant.

    It is one thing to be optimistic, quite another thing to be delusional.

  186. BC Bob says:

    If this market stagnates for several years or consolidates before moving higher, it will mark the first time in the history of ALL markets that a bubble did not result in a bust. Wishful thinking. My bet is with history. Buckle up.

    By the way, do we just dismiss all the examples that JB and Rich are posting, major declines off 2005. In addition to this, Clot constantly states that deals, in his area, are closing at 10-15% off 2005.

    Peak/trough, 30-40% off, easier call than the nasdaq.

  187. njrebear says:

    Your forecast as in ‘stagnant’ with a price range of -10% to +5% for 2007????

    How does -10 to 5% become stagnant?

    My forecast : i don’t know. But the trend will be negative for at least 3-4 years. It is better than being on the ‘record’ with absurd forecasts.

  188. syncmaster says:

    If this market stagnates for several years or consolidates before moving higher, it will mark the first time in the history of ALL markets that a bubble did not result in a bust.

    Nominal selling prices are already down 10-15% off 2005 where I live. If prices stagnate for a few years, with inflation that’s a further real decrease. Why doesn’t that count as a bust?

  189. Stu says:


    Cash back/reward cards are my area of expertise.

    For the latest and greatest news on what current cards are offering the best rates go to fatwallet dot com and search the finance forum for CB (cash back).

    With good credit, you should have no problem finding cards that offer 5% on everyday purchases (gas, grocery, drugstore) and 2% back on everything else. If you like to cruise or buy American cars, those programs often offer 3% back on everything and 4% back on cruise and car purchases.

    Currently, I’m sporting the Citi Platinum Amex which gives 5% Thank You points on everyday purchases for two years, 3 free entries into airline clubs each year for two years and free credit reports and credit monitoring. The Thank You Points can be used for giftcards for just about any retail outlet. Yoou can always swap gift cards as well, on many internet swap sites or sell them on Ebay for a slight discount. Personally, I just pay for all of my home improvement supplies with Home Depot cards.

    Our other primary card is a Norwegian Cruise Line card. This one gives us the 3% towards a cruise on all of our non-every day purchases. It pays for a nice family vacation annually.

    If you come close to the maximum annual awards that you can earn, make sure your S.O. opens up the same card and just make each other authorized users on each others account.

    Finally. Discover offers 5% cash back on new categories every three months. Currently it is restaurants and movies, but in January it changes to travel related expenses, which is nice, since I’m headed to India on Wednesday.

    Good luck and do your research

  190. spam spam bacon spam says:

    my prediction is a “not-prediction”…

    I’m a lay person, completely outside of finance, RE, hell, I haven’t even been to NYC in probably 10 years, forget wall Street…so here goes.

    There’s always been, and always will be “the next big thing”. Real Estate, Dot Com, Junk Bonds, whatever… so maybe RE won’t continue to be the cash cow it has been, but I fear that the market(s) will never truly correct down enough to reflect a “2.5x annual income” median cost.

    We, as consumers, are short-sighted, have memories that last about 8 seconds, are optimistic about our own personal money handling, and generally idiots when it comes to money.

    So, we’ll take income from the next big thing, whatever it is and lay stupid amounts of money down on bi-levels next to a freight railway, keeping RE costs higher than a true correction would bring it down to.

    You see, there’s always going to be more of us idiots than there are houses. So once we get past the mortgage issuing problems of late, the money will flow from somewhere into RE. Maybe it’ll be people cashing out IRA’s, 401k’s, etc… signing contracts with employers for loan guarantees, whatever. We’re never going back to a “savings society”. Them days are gone. ;)

    We’re never going to see 150K houses in Prestigious(tm) Bergen County. (habitable, anyway)

    I think we’ll see a slight downturn in costs, 10-15% (which is peanuts in the big scheme…) but not much more; we’ll see listing/selling stagnation in the RE market, (more people staying put) and a few years of “it’s mostly idiots” making buys, keeping things costly. …Until people forget about the pain of foreclosure, memories fade, and the old becomes new again…

    (OK, let’s hope I’m wrong, because people need to feel optimistic that they can reach a “higher rung”…and with RE prices so high, we’ve squashed a lot of hopes…)

  191. d2b says:

    Thanks Stu:

    Maybe it’s time that I look at AMEX again. I haven’t had one for about ten years because they had a $55 fee. Right now I use Marriott rewards. I also want to keep a BOA card because I bank there and it’s very easy to transfer payments through a teller.

  192. Stu says:

    Marriott is not bad d2b. Starwood is awesome.

  193. dreamtheaterr says:

    d2b Says:
    December 29th, 2007 at 10:42 am

    Does anyone use Emigrant Direct? Also does anyone else used rewards cards frequently?

    d2b, if you are comfortable with a money market account, Fidelity Investments might be an option worth considering. Keep your money in their money market mutual fund (they offer a decent yield), and they offer a 1.5% cashback on ALL purchases with their MBNA Mastercard that gets credited directly to your Fidelity mutual fund account each quarter.

    It’s simple, yet rewarding enough, but only if you don’t care to juggle credit cards just to garner as many rewards as possible.

  194. chifi - CFAs do it better says:


  195. Fiddy Cents on the Dollar says:

    While we’re doing predictions, let me throw my hat into the ring.

    NJ Housing prices in 2008 will decline, slowly into the spring and picking up downward momentum as the Selling Season does not produce the buyers that everyone is anticipating. Into the summer, the homeowners who are COMPELLED to sell….those with untenable mortgages, those in pre-foreclosure, those who are retiring and moving out of state, will reduce their prices just to close a deal and be done with it.

    Six months out is where my crystal ball gets a little cloudy. If the Compelled Sellers trigger an avalanche, then prices could drop into a vacuum. But my feeling is that we won’t see a true capitulation phase this year.

    Those who are looking at 2.5x annual earnings as a barometer of where home prices should be are missing the boat. First of all, I don’t think 2.5x was ever the limit of what housing debt should be. I always heard it given as a range of 2.8 – 3.2x depending on some other factors. Secondly, don’t use the state’s median income to price all housing. I think some of these zealots are using $65K times 2.5 and thinking they’re going to buy a Center Hall Colonial for $162.5K….that ain’t gonna happen!!

    Each individual’s case is different. A buyer in this market better have a family income of $120K and assets enough for 20% down with plenty leftover in the account. No more “Liar’s Loans” and no Gift Letters from the parents. All this with FICO’s in the mid-700 range. Those are the new rules in this lending environment. So $120K times 3.2x gets you an entry level home….priced around $380K -$400K. A ranch or a Cape in a decent neighborhood. More family income will get you more house. A better family balance sheet will get you more house.

    Get busy and use the next six months to get your “ship” together. Save up a healthy down payment, you will get better financing which over the long run will save you thousands. A 20% DP will likely avoid PMI charges, a few thousand bucks each year til your equity can cancel PMI. Get your FICO’s in order, quick access to mortgage money is excellent leverage in the coming market. And a good score can get you a better mortgage rate. You might want to find a realtor who knows their way around the pre-foreclosure market. There will be some fire-sale prices next year.

  196. lisoosh says:

    Guess I’m more optimistic/pessimistic than others.

    30% off peak, more or less.

    Median to drop to around $300k.
    Entry level around $220 (smaller houses and out of commute areas, don’t forget the whole world does not work in Manhattan).
    “Nice” houses $400/$450 and up.

  197. gary says:

    spam spam [196],

    Yup, you said it all. The days of 2.5 times income for a modest home are gone forever in overrated North Jersey. Taxes will escalate higher, housing will stay stagnant at worst for a few years before appreciating 4% to 5% again and for all the reasons that you’ve stated. The masses are too fat, lazy and stupid to change course. It’s like that captain trying to reverse the engines on the Titanic. Impossible.

    Electronic gadgets, leased cars, fast food chains, reality shows and a 4th grade mentality are the prerequisites to be an American.

    There will always be just enough crafty swindlers that will continuously dupe the morons to keep the field tilted in their favor and that alone is the crux of my frustration as well as many others.

    Why and how some can say we’ll see prices anywhere from 25% to 40% off peak is a mystery to me. The con artists wouldn’t allow it. As long as there are suckers to be had, houses will sell. And as long as houses sell, the idiots will be fleeced.

  198. Ann says:

    Here’s my prediction. Completely made up, because, heck, that’s where forecasts really come from in the end.

    Prices stagnate out around 2004/2003 prices for a long, long, time.

    Resulting in an actual drop in value due to inflation, but not noticeable to the average person.

    201 Fiddy

    I agree with your third paragraph regarding the 2.5X 65K median income.

    Here’s why. NJ is extremely segregated, both racially segregated and IMO, economically segregated. 600+ municipalities will do that for a state of this size.

    2.5X median income in each town is what will happen in the end, but the median incomes in each town will vary widely due to aforementioned economic segregation.

  199. Essex says:

    Economic segregation….thankfully. It is spotty communities where you have a dump on one corner and mcmansions on the other that I cannot stand. Who wants to make a significant investment in property only to have scumbags living next door??? Not me.

  200. Fiddy Cents on the Dollar says:


    That is precisely what I was trying to say…..about each case being different from the median number. You, my dear, have cut right to the crux of the matter.

    I do believe that the lending landscape has changed forever. You will have to present yourself to a lender as a rock-solid borrower, with all the attribures that I mentioned above.

  201. Essex says:

    Furthermore….I think consistent neighborhoods….quiet pockets of like minded individuals are fabulous. If the fallout from this debacle of 07 means anything, maybe it is that certain economic mobility based upon deceit and pure optimism is now dead. Perhaps we will see good banks, the ones that value their customers and where relationships matter–thrive…..and bad banks…fail. I would like to see us return to proper values and valuations……

  202. Ann says:

    205 Essex, absolutely right.

    Rich people want to live with other rich people. That’s why a cape in Ridgewood or Brigadoon is 800K.

    206 Fiddy

    Right. Each town is so different in NJ, and each median income is widely different too. And hey, everyone simply can’t live in Brigadoon etc.

  203. Ann says:

    207 Essex

    “consistent neighborhoods….quiet pockets of like minded individuals are fabulous”

    Exactly. That’s what we all secretly want. That’s why none of NJs 600+ towns will ever merge, that’s why we will keep all of these school districts, that’s why our property taxes will remain ridiculous. As much as we all complain, this is the way we want it, deep down.

  204. Essex says:

    My guess is that corruption and waste have pushed our taxes to higher levels.

  205. Secondary Market says:

    Thanks for the advice. Yes, my wife is actually looking at a couple of positions in Philly and in Princeton. If she lands the gig in Princeton, I think it’s a no brainer. As we can rent near work and once I break through the “training” program and salary I think we’ll be ok and ready to buy.

  206. Ann says:

    210 Essex

    There’s corruption for sure, but I think much of the high cost has to do with the number and the size of the school districts.

    I believe you will never see towns agree to merge to save money, unless it is mandated by the state. Which will never happen.

    Town A will simply not choose to merge with Town B. Because one of the towns, or both, will think they are “better” than the other town.

  207. mikeinwaiting says:

    Now for up in the woods of Vernon.I guess I have it easier than most.30% off peak, most have to travel & even if you are willing to give up the time,gas goes into the mix.That is after spring selling is flat.That would put us at 3 to 3.2 of 70 as avg.income.That will buy you a 3 to4 bd 2 bath bi.Nice center hall 350 400.For 600 you can have a palace.When its all said & done,next year this time.

  208. Fiddy Cents on the Dollar says:

    Forget about towns merging….they did a half-hearted study in Rumson, Fair Haven and Sea Bright. If you know Monmouth County, no three towns are more alike than these peas in a pod. The study quickly decided that they couldn’t get any real benefits from merging (which means combining similar jobs would put some of our old boys out of work). If those 3 towns couldn’t merge, then none will even try.

    Forget about towns merging. They should merge the state of New Jersey with Pennsylvania, they don’t seem to have these problems in the Keystone state. The only caveat is that no New Jersey politician be allowed to keep his job or run for new office.

  209. Essex says:

    210…merger to most…and rightfully so means layoffs…and who is the government sector would write themselves out of a job. That and the fact that paying public servants…including teachers and firemen a ‘living wage’ means that money will go out on such things….Not sure about the big bucks though….which might include things like graft and corruption…..I’m sure some waste in the form of admin for public functions exist…but someone is lining their pockets. I just know it!

  210. mikeinwaiting says:

    For all of the above reasons we can forget about mergers.They would have to be done at the point of a gun.

  211. ithink_ithink says:

    ’07 wash.

    ’08 rinse, repeat.

    “recent problems in mortgage markets are not confined to the subprime sector”

    MSM gets new buzzword to replace subprime.

  212. pretorius says:

    A merger was successfully completed in the late 1990s. Several municipalities in northern Hudson County merged their fire & rescue operations.

  213. pretorius says:

    A merger was successfully completed in the late 1990s. Several municipalities in northern Hudson County merged their fire & rescue operations.

  214. mikeinwaiting says:

    Pret I can assure you without the lose of a job.Hudson wrote the book on corruption in NJ.They have few rivals in that dept.

  215. Just me says:

    Anyone cares to guess SPRING HOME PRICESS in NJ???? UP/DOWN procentage!!

  216. njrebear says:

    120k gets you an entry level home….priced around $380K -$400K.

    Even today you can find entry level houses for around 400k. So what’s tighter lending standards going to do? As of yet, I don’t think you can start using 120K as the starter salary. 90K maybe but 120K is way off reality.

  217. Fiddy Cents on the Dollar says:

    Yeah, those $400K homes are located in where….Asbury Park? Neptune? all the way down in Barnegat??

    I was using $120K not as a starting salary, but as the minimum requirement for lender’s going forward. Less than that and you probably will not qualify for the products they will be offering.

  218. njrebear says:

    What locations did you have in mind? and what according to you constitutes a starter house?


  219. chifi - CFAs do it better says:

    December 28, 2007, 10:40 am
    Economists React: ‘Eminently Rational’ Housing Slump

    New-home sales retreated during November, sinking to the lowest annual rate in 12 years. Home prices also receded, a further negative sign for consumer spending and the economy. Will prices continue to fall? Below, economists react.

    Home prices were mixed. Over the year, median prices slipped by just 0.4% while average prices rose by 0.5%. Much of this “strength” reflects the changing regional mix of sales. In addition, home builders’ sales incentives are not included so actual transaction prices are even weaker. Bottom Line: New home sales plunged in November and the trend is definitely lower. In addition, there is absolutely no indication that home sales have reached a bottom. … Prices are falling, more sharply in some regions that in others. – Steven Wood, Insight Economics

    It appears quite clear at this juncture that the consumer has reached a psychological point where expectations of future price declines have become entrenched. We consider this to be eminently rational behavior on the part of potential homeowners and until the new homes market observes a decline in the median price of homes and falling rates, there will be little incentive to step up purchasing activity. – Joseph Brusuelas, IDEAglobal

    This was obviously a stunningly weak report, particularly given the aggressive price-cutting that homebuilders have been implementing …. However, with demand falling, unsold inventories remain high and the months’ supply at the current sales rate is quite lofty … . None of this bodes well for near-term conditions, and prices will need to fall further to help clear the market. … Interestingly, the relation between mortgage applications for purchases and reported sales of new homes seems to have broken down in the past year or so, with applications well above where they have historically been at current sales rates. This could be due to multiple applications being filed by potential homebuyers in order to try to ensure a mortgage approval. – Joshua Shapiro, MFR Inc.

    The declines were spread across the country except in the west where they inched ahead. Winter storms may have played a small part in the decline but in December the storms were more severe and therefore another large decline is likely. The counter intuitive rise in median home sales prices is possibly explained by the fact that sales were up in the west where home prices are much higher on average than across the rest of the country. – Brian Fabbri, BNP Paribas

  220. 3b says:

    #196 spam A nice recession, and your so called scenario goes right out the window.

    This one is ugly folks, again with all that has transpired, and that is continuing to unfold, we still have those who say little to no price declines. “People will cash out theri IRA’s and that will keep prices high”? Amazing!

  221. 3b says:

    #192 BC Bob: Its no use Bob, the children will not listen. Guess they are going to have to put their hand on the hot stove.

  222. syncmaster says:

    400K will get a nice place in Sayreville, Pway and parts of North Brunswick.

  223. lisoosh says:

    I can’t imagine anyone NOT being able to see prices dropping at least 30%. I think this pity party is feeding on itself.

    For starters – outlying areas are ALREADY at 2004 asking prices and they aren’t moving.

    The credit crunch only really started to make itself felt late in the season last year, there are hordes of people planning on putting their homes on the market this year who assume buyers are just “scared by the medias doom and gloom”, they have no idea how out of whack fundementals are. They will tell you that “they couldn’t afford to buy their own house today at these prices” but don’t wonder how anyone else can.

    Alt-A hasn’t even begun to make itself felt yet.

    Foreclosures and short sales are only just beginning.

    Recession is only in its early stages.

    PEOPLE – the money just isn’t there. $120k? There aren’t enough people making $120k to sustain the market – there are tens of thousands of houses sitting on the market – lots of them need to be sold and there aren’t enough people making enough money to pay asking prices.

    The bubble wasn’t set by hordes of sales – prices were set by a fairly small segment of the housing stock being sold at inflated prices to people using funny money loans, whether they were poor, or rich and looking to buy what they felt was appropriate to their status. That and a lot of starter stock was sold to developers who tore them down to build McMansions and flippers who assumed they would make a profit in a self fulfilling scenario. Take that away and you are left with people who literally CAN”T buy at todays prices. Period.

  224. syncmaster says:

    Well, damn, we’re just gonna have to give everyone big fat raises aren’t we?

  225. lisoosh says:

    And I’ll add, the few who can aren’t rushing to buy a dilapidated shack that they know will depreciate in a few months.

    Better to wait a year and pick up something habitable, especially if the assumption is drop then long term stagnation – you want to stagnate in something you can live with for a long, long time.

  226. spam spam bacon spam says:

    [226] 3b:

    I agree, it sounds silly when you say it, but so did mortgages that actually INCREASED the principal every month.

    I mean, when I started seeing the “quicken loans” on teevee, I couldn’t imagine what kind of chromosomally-challenged person would even entertain the idea of buying a house with one of those things…

    Fast-forward 3 years and here we find out all sorts of people do/did stupid things with their house loans…

    Now get someone in office like our “upward-failure prone” idiot in chief and you’ll find when the sheeple decide they need a “quick fix” (like the current foreclosure plan just introduced), someone with plans to hold power at any cost will concoct some scheme to allow 401k withdrawals tax free when used for housing or something similar…I’m not saying that’s exactly it, but something…SOMETHING will be offered as a salvo for the clamoring masses…

    And this is just an idea of how I think the sheeple will never cease to amaze those of us with 1 foot planted firmly in sanity.

    I make up “rules” for a living…it’s my job to outwit my employees/clients by designing foolproof programs that cannot be gamed. And I gotta tell ya’…it’s the stupid people that I have found “outstupid” me. I had one guy was so off base with his thinking, I had to chew on issues extra long just to “Bert proof” them. I find you gotta start thinking in ways that make no sense in order to make sure you cover all your bases…

    As an example: Here’s what this “Bert” did: took a private loan for a late model BMW, overpaid by about double, took more loan out than the cost of car, so (and I quote) “He’d have extra money to make payments in case he couldn’t afford the car…”

    Note: his payments are $10 more a month than his take-home pay. He lives at home, but forgot about all other expenses.

    And so when I think sane people will prevail in this RE market because money won’t be available to everyone, (and therefore prices will drop), I remember the Berts.

    There’s always going to be Berts.

  227. Confused In NJ says:

    Certain towns like New Providence & Berkeley Heights will argue that, the quality of their schools, justify the prices of houses. Their answer to keeping the house prices up, is to continually increase school tax. Their mentality is that people will buy excessively priced houses, if you justify their price, with excessively high property taxes. They may be right for now, people are still buying at inflated prices. Why anyone would want to pay $700K for a starter split, with one car garage, and taxes north of $10K is beyond me, but they do. I use to think they were buying cash, and had really good jobs, but see they were actually buying with heavy mortgages and taxes. They must get “Free Xanax” with every purchase, to moderate the stress. Keeping up with the Jones, has become a way of life.

  228. lisoosh says:

    spam spam bacon spam Says:
    December 29th, 2007 at 8:18 pm
    [226] 3b:

    “As an example: Here’s what this “Bert” did: took a private loan for a late model BMW, overpaid by about double, took more loan out than the cost of car, so (and I quote) “He’d have extra money to make payments in case he couldn’t afford the car…”

    There’s always going to be Berts.”

    Tee Hee.

    Reminds me of a readers question I saw in some newspaper financial section –
    Guy asked about taking out a HELOC (take some of my equity out) to use to pay off his mortgage…….:-).

    The advisor had to very gently remind him that if he took out a second mortgage to pay off his first, he would still owe the same money on the house (plus assorted fees of course).

  229. Confused In NJ says:

    “We’re approaching coin-toss status on whether we go into a recession or not,” said Michael Mullaney, who helps oversee $10 billion at Fiduciary Trust Co. in Boston. “We have some reservations about the strength of the market.”

  230. PGC says:

    Just finished a “best and final offer ” for a nice BC property. While its a strong offer, I suspect I’ll lose it on price.

    Will post details if we get into contract, but I’ll have to wait until the new year to find out the result of the bid. I think someone is going to walk away with a nice property for a good price.

    The wife is done with rentals and wants something permanent. While the market may drop and we may lose money in the short term, we are looking at it from the point that we are rolling in the gain from the sale of our last house, so its a wash.

  231. mikeinwaiting says:

    Confused the coin has already landed & heads its a recession, tails is a depression.
    The perfect storm can’t be stopped.
    Gas,food,no equity,neg savings,houseing dead,banks on the ropes,credit crunch,dollar all time low,no need to go on.
    You don’t have to be a rocket scientist.These guys skirting the fence are full of it.

  232. mikeinwaiting says:

    PGC Good luck! Sure you can’t get the wife to hold off 8 to 12 monthes for the score.
    Just think of that small monthly or a even nicer place that worked with my better half.
    Once again good luck whatever way it goes.

  233. lisoosh says:

    Secondary – sounds like a decent move (of course I’m no expert on the financial world). With many of the mortgage companies and finance companies still with lay-offs in the pipeline having any job might start to look really good.
    If you end up in the area (I live near Princeton) there are lots of affordable rentals you could be very comfortable in for a while, especially if you don’t have school age kids – places like Ewing on the side away from Trenton have some lovely quiet and affordable neighbourhoods and rentals. It gets a LOT more reasonable when you are out of Manhattans’ radius. Frankly you don’t necessarily need to look at PA, at least in the short term, if you both have jobs in the area.

    Good Luck

  234. spam spam bacon spam says:

    can someone get me info on MLS# 2382845…

    I swear I saw this listed out of Weichert for 1.5MM

    I called on it about a year ago and was talked out of it. Now it’s at 369,000K Is that correct? Are my eyes seeing that correctly?

    That would be a (doing math here) 76% DECREASE?????!!!????

    Is that active/available?

  235. rhymingrealtor says:


    I see this mls # 2382845 as a commercial property, it shows an olp of 42,000 and can’t find a history, perhaps you have the wrong number


  236. rhymingrealtor says:

    I finally saw my episode of Bought and Sold, a Tale of 2 condos.

    My offer was the one they turned down because the buyer already lived in the development and they knew he was an investor and they wanted someone who would live there. Isn’t that sweet. The sale took place in Nov of 2006, the show is a little behind the times. It will be aired next on March 6th.


  237. BC Bob says:

    “Why and how some can say we’ll see prices anywhere from 25% to 40% off peak is a mystery to me.”


    Slam dunk. If a market can appreciate 100%, where the underlying fundamentals do not support it, why is a 30-40% decline such a mystery. It’s actually humorous, at least to me, that you are bewildered by this scenario.

    The corresponding reaction will be equal to the delusion that preceded it. Markets have followed this pattern forever. This charade will be no different. The greatest credit bubble in our history resulted in irrational, unsustainable prices. Hard to believe that you don’t have an inkling what the outcome of the upcoming credit crunch will be? You had me fooled, I thought you were schooled on the streets of JC?

  238. gary says:

    BC Bob,

    The son of a JC tavern owner for thirty years, so you know I saw every bookie, junkie and hoodlum pull every con in the book. That’s exactly why I don’t think it can drop that much because as I said, there’s always another sucker to be had. Yeah, what you say sounds logical, I agree but never under estimate the actions of an idiot.

  239. gary says:

    And another thing… the Giants s*ck.

  240. RentinginNJ says:

    That’s exactly why I don’t think it can drop that much because as I said, there’s always another sucker to be had.


    There aren’t always more suckers out there. That’s how bubbles burst; when there are no more “greater fools “left. Most of the suckers have already been drawn in. After all, if there were always more suckers, PETS.COM would still be going up & tulip bulbs would be trading for millions.

    Sure, there are always a few out there who are jumping up and down at the prospect of starter capes; “10% off”, but for the most part the suckers already bought and are now trying to get out. There simply aren’t enough suckers relative to the amount of inventory. The non-owners out there now are either structurally priced out (can’t buy), have no desire to own (renters for life) or understand market dynamics and refuse to pay these bloated prices.

  241. ithink_ithink says:

    Prime borrowers may soon feel pain
    Payments could rise and refinancing those ARMs might be harder


  242. Clotpoll says:

    spam (196)-

    I think you’ve got the psychology nailed. However, the price drops before we catch another updraft are going to be epic.

    I do agree with you on money pouring out of the “next big thing” (and every decade brings a new “next big thing”) into RE and the mass core dump of memory that seems to occur in the US every 10-12 years.

  243. Clotpoll says:

    fiddy (202)-

    “You might want to find a realtor who knows their way around the pre-foreclosure market.”

    I liked your post, but be aware that there pretty much aren’t any Realtors who know their way around pre-foreclosure. I’ve been doing this a long time, and I know maybe three people- tops- who can play that game, and two of them are in my office.

    Also, any agent who does pre-foreclosure will not be doing it to help buyers. The agent will buy any good deal that arises. I get inquiries from potential buyers all the time, asking me to help them with pre-foreclosure; I just tell them no, and then tell them I’m in that game to trade my own account.

  244. Clotpoll says:

    sync (229)-

    “400K will get a nice place in Sayreville, Pway and parts of North Brunswick.”

    Sync, that’s the kind of choice that will put somebody on the Penske Express (whoever coined this term should get an award!) to NC.

    Bring that 400K down to 350-360K, and we might start to see the market move a little…

  245. Clotpoll says:

    spam (233)-

    And people wonder why The Simpsons has been on TV for 20 years.

  246. Tim says:

    I know, I have a most wonderful Idea, to help these poor uninformed people when they bought there cars. “A Bail Out”….Yes this will help our economy and prevent a recession. With this thinking I could be a member of Congress. Yea vote for me!

    On-star help!

    New cars that are fully loaded — with debt


  247. Willow says:


    Now I’ve heard everything. How stupid are people to roll over their car loans into a new car loan. They’ll never get out of debt. How about buying what you can afford and if that’s a small used car, so be it. A car is ultimately transportation but people see it as a status symbol especially in this area. If you go out of this area, you see so many fewer SUVs and more sedans and smaller cars. Even in areas with lots of snow, there are more Suburus than big SUVs.

  248. spam spam bacon spam says:

    [253] Clot

    OMG. My father *loves* the Simpsons.

    (Yes, this is the same father who simultaneously put in 3 offers directly with the *listing* agent, on a vancant house, being sold by a relo company.)

  249. Lincoln78 says:

    I have two friends that live in Hoboken with me. We were walking to dinner and talking about the Sky Club. Friend #1 is a lawyer and talking about how ridiculous the Sky Club is priced ($600k for a 2BR, with the Sky Club being in the back edge of Hoboken).

    Friend #2: “Well, there has to be SOMEBODY out there buying them.”

    Please Friend #2, don’t let it be you…

  250. 3b says:

    #244 BC Bob:Why and how some can say we’ll see prices anywhere from 25% to 40% off peak is a mystery to me.”


    And You and I have seen these price corrections last time around, and yet still some refuse to believe, that it can, it will, and it is happening again.

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