A look back at the 2007 market

From the Home News Tribune:

State homeowners “coped with the bursting of the housing bubble”

In June, Mary Lou Mangarella listed her New Brunswick home with discount real-estate broker Foxtons, in a move that unwittingly placed her smack dab in one of the biggest business stories of the year.

With the housing market in a steep decline, West Long Branch-based Foxtons went out of business in September. Her home sat for three more months until her Foxtons contract expired. And she finally sold it for 16 percent less than she originally asked.

“It was a nightmare,” said the 77-year-old Mangarella, who moved to Milltown in Middlesex County.

She summed up 2007 for many. Thousands of New Jersey homeowners coped with the bursting of the housing bubble. Home builders and real-estate agencies struggled sometimes futilely to stay in business. And the economic impact reverberated to local banks and retailers.

Through it all, the economy managed to stay afloat. New Jersey added jobs, albeit slowly. A regional mall lifted the curtain on a giant expansion. And telephone, cable and Internet companies slugged it out for customers with mixed results.

“The good news is we didn’t slip into a no-go mode,” Rutgers University economist James W. Hughes said. “The bad news is, we didn’t rev up to a go-go mode either.”

The housing market, which lost steam in 2006, fell into an outright slump in 2007. The median price of an existing single-family home in the region that includes Monmouth and Ocean counties was $391,000 during the third quarter, down 5.7 per-cent from the same quarter a year ago, according to the National Association of Realtors.

Analysts said the prior growth in the price of homes outpaced wages, setting the stage for a steep correction that played havoc with homeowners, companies and investors.

The real-estate downturn caught up with other companies in 2007.

Foxtons, which made its name by offering discount com-missions, closed in September after it ran out of money. It laid off more than 300 workers and filed for Chapter 11 bankruptcy with a reported $488,000 in as-sets and $40.9 million in liabilities.

Metro Homes, a Hoboken developer, halted construction in December on its 224-unit Esperanza high-rise in Asbury Park, citing poor real-estate conditions.

“We are convinced that the national mortgage crisis now impacting real-estate markets around the country represents a temporary setback, and we remain fully committed to Asbury Park and its rebirth,” Dean Geibel, president of Metro Homes, told the Asbury Park Press.

A quick real-estate recovery didn’t materialize.

One reason: With home prices climbing beyond their reach earlier this decade, many consumers needed to resort to unconventional financing, including subprime loans. Some of those buyers had poor credit histories. Others didn’t have money for a down payment.

The loans, which carried high interest rates, were affordable in the beginning. But after a year or two, the interest rate ad-justed. The payments rose. And many homeowners had to default.

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81 Responses to A look back at the 2007 market

  1. Essex says:

    Flipping? Dead!

  2. ithink_ithink says:

    I just can’t imagine doing so as first time buyers.

    Lots of Home Work

    The Mrs. & I get tempted often to take on something like this but it’ll have to be a later in life dream.
    I almost bought a 3 story brick elementary school off eBay once. (a penthouse with a coffee shop, duh!)

  3. crossroads says:

    “Analysts said the prior growth in the price of homes outpaced wages, setting the stage for a steep correction that played havoc with homeowners, companies and investors”

    if this is supposed to be a steep correction I would say we have a ways to go. how much of a decline do we need to bring incomes back in line w/ house prices?

    does anybody think this could happen?

  4. Confused In NJ says:

    If you use the old metric (Mortgage = 3x’s Gross Salary), even a Family Gross Income of $200K can only justify’s a Mortgage of $600K. Bear in mind the old Metric did not anticipate exhorbitant Property Taxes, which are on Par with the size of Old Mortgages. A person buying today has to figure out their complete debt load, including taxes, against their Net Disposable Income. The taxes in NJ have become very insidious, under McGreevy & Corzine, in that many more things are taxed. Hardwood Flooring for example is no longer a Capital Improvement, but rather is taxed for materials and labor. Replacing you broken Hot Water Heater is a Boon for Local Tax Coffers. The “Realty Transfer Fee”, which relocating retirees like to call “The Exit Tax”, is particulary “Evil”.

  5. Essex says:

    #4……….$200k yrly….$600k home?

    All I know is that my wife and I wanted a place that we could buy on ‘one’ income…..and we did….put another $100k into it over the last 5 years…and Viola….we are OK, I suppose…..never wanted a $600k mortgage even with earnings over the mark you mentioned. Too much other stuff to buy/do up here…..!

  6. dinra says:

    Roxbury houses on fox lane sold for 360k in 2004 and now seeling( Oct 2007 last sale) for 520….Do you think it is going down?

  7. spam spam bacon spam says:

    from previous open comments thread…


    OK…I found BOTH listings…same building?

    2382849 for 1.6MM
    2382845 for 369K

    what am I missing?

  8. afe says:

    Anyone have an address for mls 2462380 ?

    Also, status on mls 2430256 would be appreciated.

    Much thanks!

  9. lisoosh says:

    Spam – I was intrigued so I looked them up – the square footage is completely different – one is 15,000sqf, the other 2500.
    2 different units in one commercial building?

  10. 3b says:

    #4 confused: It is already happening.

  11. rhymingrealtor says:


    This looks like a total unit vs a single unit lease.


  12. W.C. Varones says:

    You thought the housing bubble was bad? Wait ’til you see the auto bubble!

  13. HEHEHE says:

    Interesting ETF’s in the works courtesy of Calculated Risk:

    6) Commodity ETFs will continue their expansion and gain even more popularity.

    In 2007, the commodity ETF offerings and assets in them grew by leaps and bounds, thanks in large part to the excitement small investors were feeling at having this asset class available to them and the success of certain commodities ETFs. As of December 27, PowerShares DB Commodity Index Tracking Fund (DBC) was up 31.4%; iShares S&P GSCI Commodity-Indexed Trust (GSG) was up 32.9%.

    Next year will be no exception. A number of commodities-based ETFs are already in filing with the SEC, including:

    iShares GS Commodity Energy Trust
    iShares GS Commodity Industrial Metals Indexed Trust Greenhaven Continuous Commodity Index Fund
    ProShares Ultra Dow Jones-AIG Commodity Precious Metals
    ProShares Ultra Gold
    ProShares Ultra Crude Oil
    Market Vectors – Coal
    United States Heating Oil Fund


  14. Ann says:

    2007 was ok to us.

    We sold our townhouse relatively quickly and easily. Bought a relatively new house that we are excited about. Bought and sold at 2004 prices. Of course, we are fortunate and had made money in the runup and have a nice-sized downpayment.

    I just really can’t believe anyone thought buying a house with zero down payment and no cash for closing costs was a good idea. I remember in grad school when I could barely get the rental deposit together to rent an apartment once. I took a cash advance on my credit card once to do it, to hold me over until the next stipend check came in. Lord.

    Anyway, Happy New Year all! May 2008 bring all of your real estate wishes come true, whether an increase or a decrease! : )

    P.S. Foxtons is the lowest of the low keeping all of those contracts until they expired.

  15. Orion says:

    Re: 2007 RE market
    Legal larceny
    Megasupersized sh*tball

  16. spam spam bacon spam says:


    ahhhh. I see it now. I couldn’t see details last night on laptop.

    It looks like the bldg isn’t finished. (I’m assuming) someone ran out of $$$. (?) So I’m wondering when the 369K listing was entered; if it was entered at same time as the 1.6MM, and if the bldg is still not finished, then nothing happened with eiterh listing and these have been rotting on the MLS since… (when?)

    Would you give the address? I haven’t seen this bldg in my travels so I’m assuming it’s in a remote location of HB…

    (I personally need “easy” access, not highway exposure, but I need to avoid a rabbit warren of roads to get to me…)

  17. ithink_ithink says:

    How often does the jumbo line get drawn in the sand? Yearly? I know there was talk this fall of reducing from $417 but didn’t happen.

  18. spam spam bacon spam says:

    Regarding oversized auto loans:

    Being upside down on your car payment is nothing new and is 1 of 2 driving factors fueling overpriced SUV/lux car sales.

    Car dealers have been adding “your current car’s loan balance” onto your new car for quite a few years now. People don’t read the documents they’re signing, what do they know? They see bling, they *need* bling, so they sign on the dotted lines wherever the finger is pointing to…

    Anyway, factor #2 is leasing. Leasing for non-business use is a good way to flush your money down the drain. Fluuuuuuuusssssssshhhhhhhh.

    Many ppl don’t understand leases and the gov’t hasn’t mandated the same disclosure rules as there are for financing. So people don’t understand things like “money factor”, etc.

    And never ever ever give them a “deposit” to lower payments or trade in something you “own”. It’s an outright gift. They go in the back breakroom and laugh until their stomachs hurt.

    It can happen to anyone story: My father (yes, three-offers-dad) used to sell big ticket industrial equipment on leases. With what’s called a “$1.00 buy out”. Many customers (companies) would “just return the piece of equipment” at the end of the lease, when in fact, for a single George Washington dollar, they would have OWNED it OUTRIGHT.

    (wow…talk about a gift to the dealership.)
    The dealership now owns it for FREE. The client had paid for it IN FULL, and then, just returned it. Mint condition, low hours, as, of course, they had been “leasing” it.

  19. Confused In NJ says:

    Their home and debt both need downsizing
    Sunday, December 30, 2007
    Star-Ledger Staff

    Jackie and Marc are living the American dream. They’ve got a mini-mansion, three terrific children — one in college and twins who will start college in another two years — the golf membership and other perks of the good life.

    But looks can be deceiving.

    The couple have run up a mountain of debt, and they’re not sure how to get out of it.

    “It looks to us like we are spending about $2,000 more per month than we are bringing in, producing debt of about $20,000 to 24,000 per year, excluding our college plan,” says Jackie, 52.

    They’re looking ahead to 2011, the year in which their college sav ings will be depleted and Marc, now 58, wants to retire. They’re not sure if they should sell their house, tap into their retirement investments or make some other drastic moves.

    Jackie and Marc, whose names have been changed, have so far saved $198,428 in 401(k) plans, $117,365 in IRAs, $16,000 in Employee Stock Purchase plans, $88,000 in college savings and $10,000 in liquid accounts. Marc and Jackie each expect a pension when they retire. Their debt is huge. They have an interest-only mortgage of $610,000 on their $1.3million home, plus they’ve tapped their home-equity line of credit for $90,000. They owe a family member a $60,000 private mort gage, which they plan to extend by another $25,000 for college bills in January 2008.

    The Star-Ledger asked Michael Gibney, a certified financial planner with Highland Financial Advisors in Riverdale, to help the couple get out of this mess.

    “The primary issue the couple needs to address is getting a handle on their income planning,” Gib ney says. “This is an understate ment — they need to stick with a budget and decrease their spend ing.”

    Marc and Jackie admit they’re spending far more than they’re earning each month, adding tens of thousands of dollars to their debt each year. Further, they’re facing the hurdle of having three children in college in the next few years, and their savings won’t cover the anticipated tuition bills.

    “They will have to take the drastic step of selling their house in order to retire comfortably,” Gib ney says. “They may have to sell sooner simply to end the build-up of debt, which does not yet include the twins’ college costs, less than two years away.”

    Gibney calls their debt burden enormous — and growing. The couple are paying off their credit cards every month, but they are adding to their home-equity line of credit in order to do so. Gibney says the credit line is also used to “pay bills,” which he says is the worst use of a credit line.

    Gibney says what’s interesting is that they do not live excessively. In reviewing their expenses, there is nothing extravagant. Their largest expense is their house. With property taxes of $17,000 a year, he says, once the twins are away at college, Jackie and Marc need to seriously consider selling their home and downsizing. If they do this within the next few years, he says, they can take the gains from the sale of their house to eliminate much of their debt and then seri ously consider being aggressive in preparing for retirement.

    Because they have an interest- only first mortgage, they’re not building any equity, so they are basically renting their home.

    For retirement, the good news is that they both expect to receive a pension, which is a rarity today. Gibney says they will need to do a thorough analysis of their distribution options when the time comes to take their pension. A cash-flow analysis will help them decide between a lump sum and the different payouts available.

    Although they have saved for retirement in their respective retirement plans, Gibney says the balances are not as high as he would expect, given their age and work history. Gibney says the downsizing of their house will play a major role in the success of their retirement.

    “If there is one overwhelming similarity we see among our clients and others who are ‘successfully’ retired is that these individuals have little to no debt,” he says. “There are very few absolutes in financial planning, but having no debt while retired is close.”

    Gibney calculates if they sell their house for $1.3million, after closing costs and paying off all debt, they will be left with about $435,000. They need to consider buying a new home outright, or take a very small, manageable mortgage.

  20. Frank says:

    For all you bears out there hibernate on this, my neighbor lowered the asking price to a ridiculously low $230K and people are coming in droves. Yesterday they had 10 showings, today 2 more already. This shows you that for the right price there’s a lot of buyers out there.

  21. rhymingrealtor says:


    330 Roycefield rd


  22. Essex says:

    Frank…don’t you think your neighbor is screwing the pooch for the whole block? Sheez.

  23. Shore Guy says:

    # 6

    dinra Says:
    December 30th, 2007 at 10:57 am
    Roxbury houses on fox lane sold for 360k in 2004 and now seeling( Oct 2007 last sale) for 520….Do you think it is going down?

    “Selling” or listed?

  24. syncmaster says:

    Frank #20,

    What was the LP before they lowered it?

  25. Ann says:

    20 Frank

    When we were selling we lowered our price quickly, against our realtor’s wishes, about 5% below what she said, because were weren’t getting any showings. It wasn’t a lot but it looked out of place in the old MLS pricing hierarchy for our town and she was not happy with us.

    We went from ZERO showings in ten days, to about 10 showings the next week, followed up with an open house the next Sunday where we received three good offers.

    Price is everything!

  26. syncmaster says:

    Essex #22,

    Will the rest of the block pay them for their home? If not, they don’t matter.

  27. Just me says:

    HMM just one sample…

    Public records for 44 Whitlock AveAbout this info About assessor records and prior sale history Assessor records and prior sale history are public records information dating back ten years, as recorded for tax assessment purposes. The prior sale history provides context for the current listing price relative to most recent sales. Property Information
    Street Number: 44
    Apt Number:
    Street: Whitlock Ave
    City: Jackson
    Zip Code: 08527
    Beds: NA
    Baths: NA
    Year built: NA
    Sqft: NA
    Lot Size: NA
    Sales History
    Historical home sale price (1): $482,900
    Prior sale date: Nov 1, 2007
    Change since this sale (1): NA

    Historical home sale price (2): $525,000
    Prior sale date: Aug 12, 2005
    Change since this sale (2): -8%

  28. Frank says:

    They started with $330K, which was below market. I don’t thing they are screwing us, I bought it for much more in 2005 but now I will have a comp to lower my tax base.

  29. Ann says:


    I think the first person who lowers to sell does the neighborhood a favor, injecting a big dose of reality!

  30. dinra says:

    23 Shore Guy.

    It was sold….I am going through the Morris County records. Don’t have access to mls sales data.

    BTW, it is fox chase lane.

  31. grim says:


    What about this house on Fox Chase Lane, currently for sale?

    22 Fox Chase Lane

    Purchased: 5/24/2002
    Purchase Price: $568,575

    MLS# 2432133 – Currently Active
    Asking Price: $578,900
    DOM: 150

  32. BC Bob says:

    “For all you bears out there hibernate on this, my neighbor lowered the asking price to a ridiculously low $230K and people are coming in droves.I bought it for much more in 2005 but now I will have a comp to lower my tax base.”


    Very confusing.

    We have been arguing this point for the past 2 years; the only remedy for this market is lower prices. This is exactly what every bear on this site is waiting for. Hibernate on this? On the contrary, it may be time to tie the boot laces.

    You paid much more in 2005 and you’re happy? A lower comp? What happens when the raise the tax rate? If you paid $100 for a $50 stock, would you be thrilled if the company raised the quarterly dividend 0.25%? Does this erase the fact that you are down 50% on this stock?

  33. Ann says:

    Isn’t the purpose of an assessment just to figure out what percentage of the budget is your bill? As long as the town is reassessed often enough, and all together, and the relative values are in line, what does it matter that your house is assessed higher than what you could get for it now?

    I guess the exception would be if your house for some reason went way down in value for some specific value that didn’t affect anyone else in town or your type of house (condo etc) got hit harder than other types.

  34. sas says:

    07 RE was a lamb market.

    08 will be worse, but still tame. I think we will finally start to see a real bear market.

    I think the real pain will come late 08 and 09.

    Hope you are prepared and are off the banker’s treadmill.


  35. lisoosh says:

    This news hot off the wires is interesting:


    World Outsources Pregnancies to India

    “More than 50 women in this city are now pregnant with the children of couples from the United States, Taiwan, Britain and beyond. The women earn more than many would make in 15 years. But the program raises a host of uncomfortable questions that touch on morals and modern science, exploitation and globalization, and that most natural of desires: to have a family.”

  36. sas says:

    As far as the state of NJ…. will be a push for privatization.

    and Corzine and his crooks will lead the way.


  37. sas says:

    “World Outsources Pregnancies to India”

    damn people are stupid.


  38. Frank says:

    I have been waiting for the bubble to burst since 2000, in 2005 I have realized that if you can’t beat, them you join them, that was my mistake, but I could not wait any longer and watch prices to go up and up. At this point the price paid is water under the bridge and I the only thing I can do is lower my taxes by lowering the assessment.

  39. 3b says:

    #38 frank I don’t think 2000 qualified as bubble condidtions.

  40. 3b says:

    #34 sas I think the real pain will come late 08 and 09.

    I think we start to see the real pain by mid 08, after a non existent Spring selling season.

  41. 3b says:

    #33 Ann: I know several people in my town who are challenging their asessments, based on falling prices.

    One was already successful, and has his taxes reduced by over 3k.

    I am sure towns are doing it quietly now (reassessing), but when it becomes a floodgate, (and it will), then towns will lower the asseseed values across the board, and increase the tax rate.

  42. Confused In NJ says:

    One thing you will always notice in Town assessments, newer properties are taxed higher and will alway’s be so, relative to other housing stock. This is why a newer condo in Berkeley Heights, with no property, will have a higher tax then an older split or colonial with a 1/2 acre. The older split or colonial will have a lower assessed value, but it’s real market value will be $100’s of $1,000’s more. Condition isn’t the factor, because the other houses may be fully updated. Don’t believe that reassessment brings you in line with true market value, their are other factors in play.

  43. Willow says:

    Talk about head in the clouds. How much profit does he need? “Savvy investor” I think not.


    Nicolas Cage’s treasure: a 1940 Bel-Air home
    By Ruth Ryon, Los Angeles Times Staff Writer
    December 30, 2007

    When lean times come to the housing market, even the rich and famous can feel the pinch.

    Consider Nicolas Cage. The Oscar-winning actor paid $7 million for his Bel-Air mansion in 1998. Then, in autumn 2006, he listed it at $35 million. Local Realtors termed the house overpriced, but Cage, a savvy investor, held tight. Finally, earlier this month, he took the property off the market.

  44. 3b says:

    #20 Frank: This shows you that for the right price there’s a lot of buyers out there.

    I am sure they are, but not for the insane 2005+ peak prices that many are still trying to get.

    And of course there may be buyers out there, the question is how many will qualify for loans in the new reality.

  45. lisoosh says:

    Is having women in poor nations give birth to our children the final nail in the coffin for a civilization?

    Has the fat lady sung?

  46. Frank says:

    In 2000 Hoboken was in a bubble already and I was trying to sell my place back then.

  47. Sean says:

    re: 35 lisoosh

    Besides the cost savings of outsourcing there are legal issues here.

    New Jersey state law decrees that surrogates cannot receive payment otherwise you would hear about the poor in New Jersey doing this too. The going rate is around 70k in the USA.

    Back in the Late 80’s the baby M case with Mary Beth Whitehead also made these types of contracts whether they are paid or not unenforceable.

    A NJ Supreme court ruling back in 1988 invalidated surrogacy contracts as against public policy.

    ‘And treating a woman’s reproductive capacity as something that can be bought and sold is something that civilized society cannot allow.”

    Although the majority of these types of surrogate arrangements overseas are for people who truly cannot conceive, some are for women who simply do not want to carry and give birth. I watched an interview with Taylor Dayne the other day, and she said she had a surrogate because she did not think anyone would want to date her when she was pregnant.

  48. Confused In NJ says:

    NJ just passed a law requiring mandatory HIV testing, for all mothers and babies in NJ. Cody signed it, during Corzines vacation absence. Wonder how that is administered, with NJ mothers using Indian surrogate? Maybe Corzine was in India doing the testing himself. Hopefully he was wearing his seat belt.

  49. Sean says:

    Corzine may need to customize his pad and build in extra security, which he can’t do with a rental and since he is a renter he need to become a taxpayer again to avoid the
    “bullets” that will be sent flying by the rest of the taxpayers in NJ.

    From what I have been reading Corzine will be forcing all of the towns in NJ at gunpoint (in the form of his new funding policies) to build new mid-rise low income housing if they want state money for their schools.

    Corzine’s housing agenda includes eliminating local zoning, which means poor old Al Arezzo may be headed for a forced retirement.

    Steve Lonegan the Mayor of Bogota, NJ, has authored this interesting read.


  50. dinra says:


    You are right and is giving me some hopes..but pretty confusing though.
    Actually, living with spouse and 2 kids in an apartment and waiting for the market to
    collapse before I can make the move. What is the MLS for 22 Fox Lane. Can you mail the listing to me including OLP etc..? I am going to wait it out. Thx a lot buddy. Is there any other homes on Fox Lane that are on the market?

    Property Location 22 FOX CHASE LN
    Land Description 95470 SF Acreage 2.1917
    Property Class Code 2 Zone R2.5
    Building Description 2SF 3CG Tax Map Page
    Deed Book Number 05639 Deed Book Page 00218
    Deed Date 05/24/02 Sales Price $568,575.00
    Year Constructed 2002
    Additional Lots 1
    Additional Lots 2
    Prior Block 00033. 1 Prior Lot 00003. 17
    Prior Qualification

    Exempt Property Data
    Exempt Property List Code 0000000
    Exempt Statute Number
    Exempt Facility Name
    Initial Filing Date 11/01/82
    Further Filing Date 11/01/03

    Land Value $87,100
    Improvement Value $339,800
    Net Taxable Value $426,900
    Prior Year Taxes $14,898.81
    Current Year Taxes $0.00

    Sales Information
    Serial Number Sales Price Deed Date Book Page

  51. dinra says:

    you have the mls in there…can you mail me the details like the realtors do with the “Clientfull” page…thx.

  52. Confused In NJ says:

    If the Depression hit’s, and NJ real estate market collapses, Corzine can find affordable housing in all NJ towns, without building anything new.

  53. dreamtheaterr says:

    “World Outsources Pregnancies to India”

    Will the kids look like zebras? OK, flame away… that was meant with humor (after a coupla drinks).

  54. Clotpoll says:

    dinra (50)-

    “Actually, living with spouse and 2 kids in an apartment and waiting for the market to collapse before I can make the move…”

    What makes you comfortable with the idea of buying into a collapsed asset class?

  55. Clotpoll says:

    dinra (50)-

    Like nobody else out there has the same idea as you…

  56. reinvestor101 says:

    Please people. Let’s try to go into next year with a more positive outlook. That should be everyone’s new year’s resolution here. Moreove, those who don’t own houses should resolve to buy one during the next year. Resolve to not continue to undermine the real estate markets and our great nation.

    Do the right thing!

  57. reinvestor101 says:

    You need to move boldly and buy. Ignore all the doom and gloomers here. You really don’t want to be couped up in a cramped apartment with two kids. Those kids need a yard to play in.

    The market will not collapse, even though there are those who hope for that to occur. Go ahead and buy.

    dinra Says:
    December 30th, 2007 at 5:24 pm

    You are right and is giving me some hopes..but pretty confusing though.
    Actually, living with spouse and 2 kids in an apartment and waiting for the market to
    collapse before I can make the move.

  58. Confused In NJ says:

    56. Please people. Let’s try to go into next year with a more positive outlook. That should be everyone’s new year’s resolution here. Moreove, those who don’t own houses should resolve to buy one during the next year. Resolve to not continue to undermine the real estate markets and our great nation.

    Do the right thing!

    19. Jackie and Marc are living the American dream. They’ve got a mini-mansion, three terrific children — one in college and twins who will start college in another two years — the golf membership and other perks of the good life.

    But looks can be deceiving.

    The couple have run up a mountain of debt, and they’re not sure how to get out of it.

    “It looks to us like we are spending about $2,000 more per month than we are bringing in, producing debt of about $20,000 to 24,000 per year, excluding our college plan,” says Jackie, 52.

    Looks like Jackie & Marc support Reinvestor 101, but at what cost?!

  59. Fiddy Cents on the Dollar says:

    Re: #19

    That Star Ledger article on the McMansion family…it amazes me how people can make such fundamental mistakes in their finances.

    Jackie and Mark are in their late 50’s and have an interest-only mortgage on their castle. They are using an Equity Line to meet monthly expenses, currently running about $2K more than they bring home (and that doesn’t include any college savings for “the twins”). There’s a piddling amount in their $401K plan, some other small accounts, a $60K mortgage with a “family member” (Gambino family??). They seem to think there’s a pension in their future….but unless he’s a public servant, that pension can evaporate in a hurry.

    Their biggest nut is the $17K property tax on their soon to be empty nest. Next year they will have all three kids in college. This is clearly a family that does not need a $1.3M house.

    I’d wager that there is an Escalade and a Audi A8 in their driveway.

    It’s like they woke up one morning and said “What Happened!?!?!”

    I wish HGTV would do a reality show with stories like these.

  60. dinra says:


    Wish I could do as you suggest, but the way prices are in NJ, the “yard” you are talking about would make me buy in PA with a min 60 mile commute (and I am not talking NY city). The ones in NJ will take me into bankruptcy within the next two recessions. Even coupon cutting will not help. I don’t see my salary increasing exponentially as well. I don’t want to downgrade your optimitsm, but hey that is the reality of my situation. You can call me negative or not worthwhile of living in NJ, but right now I cannot risk the “roof” over my kid’s head for the “yard” that could risk the “roof” in the next 2/3 years.

    Please take no offence.

  61. Orion says:

    (57) reinvestor101

    I will move boldly and buy in 2008 when the FUNDAMENTALS make sense.

  62. Confused In NJ says:

    our great nation

    Be thankfull the current Ponzi Government wasn’t in power in 1941, or you’d be speaking German in NJ and Japanese in CA.

  63. dinra says:


    This is the one I am talking about. 22 fox lane is selling close to 2002 price as you reported. What did 1 fox lane sell for when it was constructed in 2001?

    Property Location 1 FOX CHASE LN
    Land Description 19650 SF Acreage 0.4511
    Property Class Code 2 Zone R2.5
    Building Description 2SF 2CG Tax Map Page
    Deed Book Number 20952 Deed Book Page 01064
    Deed Date 10/26/07 Sales Price $540,000.00
    Year Constructed 2001
    Additional Lots 1
    Additional Lots 2
    Prior Block 00033. 3 Prior Lot 00001.
    Prior Qualification

  64. grim says:


  65. mikeinwaiting says:

    My town doesn’t change assement just raises the rate.How do you fight that when it is half the price you would pay.

  66. Just me says:

    BRAVO 62!!!!

    Now fresh from LONDON :just a bit more CREDIT issues!!!

    2:53 AM today Merrill Lynch seeking more capital: UK Observer – MarketWatch
    2:53 AM today Merrill CEO in taks with China, Mideast funds: UK Observer – MarketWatch
    2:53 AM today Merrill may write down up to $15B assets: UK Observer – MarketWatch

  67. Frank says:

    Without Jackie and Marc living the American dream 20% of Wall St. jobs would not exists. We need idiots like them paying 24% on the credit cards and 12% on their mortgage. China needs them to buy crap at Walmart. Jackie and Marc, please keep living beyond your means.

  68. Essex says:

    Let’s put it this way….we stretched to buy our first place….we did everything we could to secure a conventional mortgage and fixed rate…..carefully dodged the temptation to fall for creative financing. Glad we did. Owning your first place….is excellent….here’s to anyone who takes the plunge in 08….just buy smart. Not everyone lives like a millionaire.

  69. Stu says:


    Your cause would be better served on another blog.

    Want a reminder of what you are up against?

    Pretty much anyone who bought a house in NJ worth over $400,000 who put 10% or less down (we’re talking the majority of recent home buyers) will be better off mailing the keys in to the lender than continuing to pay the loan. As a matter of fact, since your credit will get equally destroyed whether you fight to hold on to your precious home or not, if you are smart, you just stop paying the mortgage lender ASAP and squat until you get the boot. Save the money you would have paid the lender and use it towards rent and your 40% down that you will need to buy your next home at 30% off in two or so years.

    Kramer was right when he said “just walk away!”

    The only foolish ones are the ones who will try to hang on. In NJ, this is virtually impossible with the skyrocketing public sector retirement bill and no real solution available to pay for it.

    So your advice for people to go out and buy a home that will most likely be worth 20 to 30% less is mean and hurtful. To say you are starting off the new year on a kind note is like claiming that global warming is good for HVAC repairmen.

    People who read this blog are not stupid. This is evidenced by their desire to learn. You are so in denial that it pains me to read your posts. I sympathize for you and your poor investments. Especially your wack concept that changing the minds of people on this board will somehow turnaround the residential real estate sector. You are as silly as those people who feel fabricated posts on stock message boards influence stock prices.

    Making your most recent statement after witnessing the worst month to month drop in real estate since 1992 is proof positive of your terrible advice.

    Please look at this chart and tell me how the thousand or so readers of this blog could impact the RE sector. If we all ran out and bought a home, it would amount to more than a drop in the bucket.


    Let’s all just run out and catch a falling knife!

    Happy New Year to everyone. Even to those less fortunate and clearly in denial.

  70. pretorius says:

    “bought a house in NJ worth over $400,000 who put 10% or less down”

    I did it this year. I flipped the place a few weeks later and collected a triple digit IRR.

  71. pretorius says:

    I called up the lender and told him to pay me back the interest, principal, and taxes that I had paid in advance a few weeks earlier.

  72. Hobokenite says:

    Why don’t you do it again?

  73. Sean says:

    If you haven’t watched this one you
    should and then forward it to your friends.

    Courtesy of the Aussies


  74. Confused In NJ says:

    Bah Humbug: Is it time for a Buy Nothing Christmas?
    Posted by Kelly Heyboer/ The Star-Ledger December 27, 2007 5:26AM
    Categories: Jersey Blogs Column

    By now, most of us are in post-holiday recovery.

    We’re sorting through our gifts, cleaning up wrapping paper, exchanging ill-fitting presents, pondering what to do with our gift cards and worrying about next month’s credit card bills.

    More than a few of us are wondering: What was the point of all this . . . stuff?

    In an era when Christmas and Chanukah are synonymous with shopping, there is a growing anti-consumer movement brewing. There are whole corners of the Internet devoted to “Buy Nothing Christmas,” “Hundred Dollar Holiday,” “The Christmas Resistance Movement” and other efforts to rethink the holiday gift-giving season without turning into a Scrooge.

    This season, bloggers on environmental, parenting, consumer and religious blogs were filled with soul-searching posts about de-commercializing the holiday season so it has less impact on the environment and more meaning.

    From El Burro, blogging at Team Effort:

    I have a confession to make. It might be shocking to some of you, but here goes.

    I boycott Christmas.

    The gift purchasing part.

    I still bake cookies, and sing along to carols, and eat candy canes and go to parties. I do give gifts, but they’re either homemade (think hot pepper jelly) or gifts of my time (‘Who needs baby-sitting help?’). I have no desire to offend anyone or hurt any feelings, so I have bent my own rules on occasion, buying something for someone whom I knew just would not understand my point of view. But mostly, I try to stand firm.

    I don’t even buy gifts for my own children . . .

    I made this boycotting decision three years ago, but I’d been on the verge for much longer. My own personal values just didn’t match my actions during the holiday buying frenzy, and I felt more and more uncomfortable trawling through the malls in desperation every year, searching for presents that I was sure were redundant. I actually started feeling queasy with the disconnect I was experiencing.

    From Dr. Steven Parker, a pediatrician, blogging at Healthy Children:

    In this 2007 holiday season the average American consumer plans to spend $816 on gifts (that’s about $200 billion nationally). And your kids are, of course, excited to be the beneficiaries of this windfall and get a boatload of presents, which is– let’s face it– pretty much the meaning of Christmas and Chanukah for most of them (and us).
    I’m no Grinch, but what if each of us were to donate to charity a mere 1 percent of our intended expenditures? That would amount to $2 billion. And what might that teach our kids?

    From Manda, blogging at Whoa, Camel!:

    The stores and advertisements are chocked full of crap that are supposed to make for good gifting. There are the unnecessary gadgets (novelty booze dispensers, shaving cream warmers, a creepy robotic horse from Target) and gifts sets (everything from picture frames to skin care to scarves) that will inevitably be gathering dust in a few months time and are destined for a trip to the trash or the yard sale table by summer.

    Then there are the perishable gifts like mixer sets that make cough-syrupy cocktails or the fancy bottles full of pickled, brightly colored vegetables (Who eats those?) that are soon banished to some far away corner of the pantry . . .

    Don’t misconstrue; I love Christmas, especially Christmas music, and love my son’s growing excitement for the season. Which is why for the past few years I’ve been trying to slowly move myself and my family into celebrating Christmas in a more simplified, less consumption-based manner. It’s not something I can do overnight, and I certainly don’t want to give up on gift-giving all together. I just want to celebrate in a more mindful manner.

    From Hermipowell, commenting at Make Wealth History:

    Have you considered what may happen to economy if Buy Nothing Christmas catches on? What about all the underprivileged people who get a nice job to pay some bills this season as they sign on with some business as holiday help.

    From Jeremy Williams, responding at Make Wealth History:

    Yes, and what a crazy economy we’ve built for ourselves that requires us to consume things that we don’t need, at a level that the earth can’t sustain. It’s a whole system that needs to change, and Christmas only highlights it. The same goes for the underprivileged reliant on seasonal jobs (which I’ve done myself in the past). Can we not create opportunities that won’t be rescinded come January?
    Plus, I don’t think there’s any risk of everyone suddenly adopting it. It’s not as if it’ll catch on and there’ll be no Christmas in 2008. I’m hoping for a slow return to sanity, for changes over generations. The economy and the job market will find substitutes and adapt, the way they always do.

  75. pretorius says:


    Because home prices in my area, Hudson County, have peaked and will be stagnant for several years. Plus, borrowing terms are not attractive right now.

    Hasn’t stopped me from looking for opportunities though. I’m currently sizing up some suburban NJ townhouse neighborhoods – that is where I expect prices to drop sharply before rebounding.

  76. Hobokenite says:

    I think stagnant prices in Hudson County are a best case scenario.

  77. mikeinwaiting says:

    Sean great one, good find.
    Pret you better have a pretty long time line to get a return.

  78. pretorius says:

    Mike, I do. Don’t expect to buy again for 5 years, maybe more.

  79. mikeinwaiting says:

    Pret that should get you over the crash there abouts.You know I was born & raised in hudson I don’t know why anyone who isn’t fresh of the boat would want to live there
    any more.But whatever floats your boat.Its certianly no place to raise kids.

  80. Shore Guy says:

    # 56 “Do the right thing!”

    In the movie, Do the Right Thing, didn’t Mookie — the one who was said to have done “the right thing” — throw a garbage can through a shop window, thus sparking a riot and the destruction of a family’s business and the loss of its income?

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