From the AP:
New Home Sales Fall by Record Amount
New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.
The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.
The government reported that the median price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.
And the slump in sales and prices appeared to be worsening at year’s end. December sales fell by 4.7 percent, a bigger-than-expected drop, while the median price of a home fell by 10.4 percent last month, when compared to December 2006, the biggest 12-month decline in 37 years.
“It looks like the floor fell out of the housing market in December,” said Mark Zandi, chief economist at Moody’s Economy.com. He said the current slump is already on par with the deep housing downturn of the 1980s and could end up being the worst in the post World War II period.
The data on new homes followed earlier reports that sales of existing homes dropped 13 percent last year, the biggest decline since 1982, while construction of new homes and apartments fell by 24.8 percent, the largest drop since 1980.
From the WSJ:
AmEx Reports 9.9% Income Drop,
Amid Rising Credit-Card Losses
By KATHY SHWIFF
January 28, 2008 5:19 p.m.
American Express Co.’s fourth-quarter net income dropped 9.9% as the company set aside more money to cover higher delinquencies and loan write-offs amid rising credit-card losses and a slowdown in consumer spending.
From the Center for Responsible Lending:
U.S. Treasury’s Plan Helps Only 3% of At-Risk Homes
An updated analysis by the Center for Responsible Lending shows the Treasury Department’s plan involving streamlined loan modifications of distressed mortgages will prevent only 118,200 foreclosures — about 3% of the outstanding subprime mortgages with adjustable interest rates that are causing the current market turmoil. This analysis shows the Treasury plan, plus existing lender modifications, barely make a dent in the growing foreclosure crisis and will allow subprime damage to continue spreading through the entire economy.
The Center’s analysis is based on recent industry data on delinquent mortgages and on industry analyses of loan modifications made by lenders. The attached chart summarizes the Treasury plan analysis. In addition, recent MBA data shows that lenders’ voluntary loan modifications are dwarfed by the number of impending foreclosures.
grim Says:
January 28th, 2008 at 5:29 pm
From the Center for Responsible Lending
grim: this place still exists? I thought it was closed due to lack of interest….
“House Of Cards: The Mortgage Mess”
http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml?source=mostpop_story
SAS
One of my favorite “waiting for prices to drop properly” pastimes is looking at grand old mansions at bargain basement prices sitting in crumbling towns. Newark, East Orange, West New York, Trenton. Truly stunning properties from the early 1900’s, original beautiful woodwork, panelling, perfect window balance and light, the works. Better than almost anything built these days at quarter of the price.
Reminds me never to give in to hubris.
I think this is from this report above:
From the NY Times Floyd Norris:
“Regionally, the northeast is the least important part of the country for new home sales, but it is also the strongest. There were 65,000 new homes sold in that region last year, up 3 percent from 2006. But the other three regions were all down at least 26 percent, with the west (California, there you go) off the most at 32%”
http://norris.blogs.nytimes.com/2008/01/28/bye-bye-mcmansions/
lisoosh 5
We did a tour of Hiltonia in Trenton pre-kids. Wow. So cool.
OT: why do some towns have a low assesment but a high rate? is it better to be taxed at market value?
any lectures/explanation are appreciated.
interesting statement from Market watch
Now Playing:
Kerch: Home buyers are waiting for even lower prices
Home buyers “do not want to get into a new home today and find next month the builder has cut prices next door by another 10 or 20 percent.” And so, Steve Kerch, the real estate editor at MarketWatch.com says buyers are “holding off.” He tells Steve Potisk they may be right to do so since builders “now seem to be willing to take a loss,” just to get home inventory off the books.
CUTE :)
PIGS FLY ALERT! A realtor with a conscience asks “Should we be telling folks ‘now is a great time to buy’ when in fact values are still declining?”
“When George Soros says that the world is facing its worst financial crisis since the second world war, businessmen, politicians and the public pay attention. This, after all, is the man who famously made $1 billion betting against the pound in 1992”
“The current crisis is not only the bust that follows the housing boom,” he said. “It’s basically the end of a 60-year period of continuing credit expansion.”
http://business.timesonline.co.uk/tol/business/economics/article3257268.ece
8 i think
It’s better for towns to keep up with their assessments, because then no one in the town is getting screwed.
What will happen when towns don’t keep up, is the folks in old houses will be paying much less than they should, but the people who bought new houses will be paying more than their fair share. The new houses will be assessed at their sale price, but the old houses will carry the most recent assessment that could be way old.
When towns like this finally reassess, the old houses could see their prop tax go up and the new homes can see it go down.
So, to answer your question, you don’t want to be the new house in a town that hasn’t reassessed in 10 years. You’ll be getting screwed. However, if you are an older house, then you might be getting a break for a while, but watch out when they reassess, your taxes could go up by a large percentage then.
Really, it’s best for everyone in a town if assessments are kept current. If you are seeing high rates and low assessments, that means a reassessment is probably due. Be wary if you are looking at older houses in towns like that. If the whole town was built around the same time, then not such a big deal most likely.
Hope this helped.
Hoping to come to get together, but not a drinking [yes old time religion childhood] so have a place for coca-colas & sprite.
Lisoosh #5,
Like this one?
http://www.friedbergproperties.com/hybridlistings/detail.cfm?mls_number=2741733
Geezus, they want 429K for this house in that town? I think a lowball is needed, whatta you think?
http://web.archive.org/web/19970204112915/www.murphyrealty.com/hslp08.htm
Pret,
I actually agree with you. Beautiful house.
Gary,
429K in Franklin Lakes?
Gary,
I can’t imagine the rage you would fly into if I gave you an MLS “book” from the mid 90s.
grim,
lol! Gee, I guess you don’t have me pegged now, do ya?
How to survive the fortune you made in Sub-prime;
http://www.bloomberg.com/apps/news?pid=20601039&sid=aDm5lANslluc&refer=home
BC Bob [17],
Yeah, can you imagine that? And if you project the price at roughly 4% annually, that house would be listed for around 650K instead of 800K plus.
Grim, was just going through the other thread and saw that you were actually targeting houses.
Are you looking at buying in the next few months? And at the risk of getting too personal – is this a primary residence or otherwise?
gary,
I keep one handy to keep me grounded. I occasionally second guess my position, when I do, all it takes to bring me right back is to flip through a few pages. Are you coming on the 9th?
Grim, was just going through the other thread and saw that you were actually targeting houses.
If a deal presents itself that makes sense financially, I’m poised to take advantage of it. That said, I’ve been “actively” looking for more than 3 years now, so take it as you may.
I track properties that I think are priced well for the current market. Watching these listings helps me gauge where the market is going.
Ann – Have you seen some of the houses in Cadwalader? Un-f****ing believable. Also some outstanding contemporaries as you go north up the river into Ewing.
Pret – Yup. That is one of the ones that caught my eye. A while back was a beauty in Newark that was built for Tiffany. There is a huge house in East Orange for sale now too that would be worth millions anywhere else.
grim,
Yup, I’ll be there on the 9th.
Good strategy, obviously.
Sorry I wont be able to make the 9th … wife and vaca will be on vacation. Eager to hit the next one, although by that time we will have moved to PA.
Off to look for the PA version of NJ Re Report …
Sell the roads! Sell the lottery! Sell it all! But good god, don’t cut spending!
Codey suggests leasing the Lottery would make money
With Gov. Jon Corzine focusing on toll increases as a way to restructure the state’s finances and raise cash for transportation projects, Senate President Richard Codey today said the state should also consider another option: leasing the New Jersey Lottery to a private operator.
Codey (D-Essex) said he wants to ask voters this November to approve a measure that would allow the state to lease the lottery.
“I think we need to keep all of our financial options open at the moment,” said Codey. “If we can get the ball rolling on this now, and get it on the ballot in November, then at least we will have the legal means to explore this option in the future.”
In the fiscal year that ended in June, the lottery generated $2.3 billion in revenue, of which, the state received roughly $828 million. Codey said it could generate more in the hands of a private operator.
Lisoosh,
Do you actually consider buying any of these places?
What we need here is to explore synergism.
Sell the toll roads and the lottery to the same operator. Make the purchase of a ticket at every toll mandatory.
If you win, you can afford to stay in the state!
Entitlements, where does it end? NJ cannot afford to keep giving away our money, taxes are high enough,where will it end? Please read http://www.dailyrecord.com/apps/pbcs.dll/article?AID=2008801280307
Corzine will be gone and our children will be left holding the bill, I am saying uncle, next move is out of NJ.
Good Luck to all, JIM
31. Not bad. The $118K pension grows to $158K in 10 years with COLA at 3%. Wouldn’t want the judge to have to spend any of his savings in Florida.
lisooh,
Beautiful house.
But did you notice that at least 3 of the photos have Halloween pumpkins?
So the question is: Why is this house sitting?
Grim, Jim
You might as well accept the fact that this nonsense is going to continue in NJ for a long time. This is what the sheeple keep voting for, there is no fear of political consequence. I have come to believe that the average NJ citizen has no idea what they are voting for, they just pull the lever for the D to keep the gravy train coming, real or perceived. NJ will be Detroit before long.
#12 Ann
Thanks for that… but now I have more questions. :-)
Its confusing because when I look at the taxes, even with a different tax rate, it all looks the same from town to town.
If I’m looking long term at existing housing, do I go to a town that has a higher rate or one that’s about even?
Will I be sorry moving somewhere with a lower purchase price with the plan to add a bath, update a kitchen, or install central air?
Is one more likely to be a neighborhood of rentals?
Is this why some places have such neglected classical beautiful houses and other places are mcmansions surrounded by the 500k POS hunters-cape?
32. NJ isn’t the only state with a pension like that for judges….Illinois has it too…and I am sure many others. Become a judge? Or work in a firm that offers a pension? Right?
# 36 etc re. judges.
We have a great need for good judges. When first year associates at even mid-level law firms earn as much or more than most judges, we cannot hope to retain the good ones.
….and the people that sign on for these compensation plans….do so knowing part of what they make will come after retirement…..duh.
ah, well.
off to bed.
grim (2)-
“An updated analysis by the Center for Responsible Lending shows the Treasury Department’s plan involving streamlined loan modifications of distressed mortgages will prevent only 118,200 foreclosures — about 3% of the outstanding subprime mortgages…”
Notice how this little fact gets almost no exposure? Nobody cares. The only beneficiary of all the bailouts/stimulus programs will be banks. Last time I checked, there’s no lobby for poor people or deadbeats.
40
Bingo
Honestly, tax rates and assessments aren’t that meaningful when comparing towns, since they depend on how often the town reassesses. You’ve probably already seen this. But there certainly are towns with higher taxes than others. If you compare the dollar tax amount for a certain type of house, town-to-town, you can see differences.
Personally, I think you’re always better off, in tax terms, in a town where the total tax amount for a particular type of house are lower than another town. A town like that probably has more commercial properties carrying part of the bill, meaning a bit more tax stability going forward.
I think anywhere you do renovations with permits, you’ll see an increase in your property tax bill afterwards.
I didn’t see any correlation between the types of town and tax rate, it really just depends on the last time the town reassessed.
Hope this helps!