Short-term memories

From the Wall Street Journal:

When Nerves Get Short, Credit Gets Tight
February 19, 2008; Page C1

One aspect of this credit crisis has a familiar ring to it. All around, investors and lenders are getting squeezed because they depended on short-term borrowing to finance long-term holdings. When their lenders get nervous, once-cheap short-term borrowing becomes dangerously expensive or disappears altogether.

Think about the Americans with sketchy credit backgrounds who depended on adjustable-rate mortgages to finance home purchases. Many thought they would refinance into fixed-rate mortgages if their adjustable rates reset much higher. Instead, their rates shot up and their banks wouldn’t refinance. For many it suddenly becomes impossible to finance the most essential of long-term investments — a home. Nearly 16% of risky, subprime mortgages with adjustable rates were at least 90 days delinquent as of Sept. 30, compared with 6% for subprime mortgages with fixed rates.

Wall Street is getting trapped by short-term borrowing in different ways. Two prime examples from last year were investments known as asset-backed commercial paper and structured investment vehicles. In both cases, banks and their clients went to the short-term commercial-paper markets to raise money. They used the money to acquire long-term investments, such as mortgage debt, or to make long-term loans. When commercial-paper markets seized up, the short-term borrowing rates soured and the strategy imploded.

An old-fashioned bank run works the same way. Depositors put their money in a bank, understanding they can pull it out at a moment’s notice. Banks use the money to make long-term loans to businesses or homeowners. When depositors get skittish and demand their money back, the bank has a problem: the funds are tied up for decades with customers. That is what happened to a British mortgage lender called Northern Rock last year. Now, the bank has been nationalized.

Something with similar contours is happening in the auction-rate-securities market. Municipalities, museums, student lenders and others issue these securities, which have interest rates that reset every week to 35 days. They use the money to finance projects or make student loans with long repayment periods. Investors have fled the market, and the municipalities that issue the notes have had to digest soaring interest costs.

There is nothing new about any of this. It was an ingredient in the financial crises that plagued emerging markets in the 1990s. Countries that depended on short-term debt got squeezed when investors became skittish about the miracle stories of emerging-market growth. The savings-and-loan crisis of the 1980s had its roots in a mismatch between the maturities of thrifts’ long-term assets and their short-term liabilities.

The trouble is even the most sophisticated bankers have very short-term memories. Because when the strategy doesn’t work, the consequences can be dire.

This entry was posted in Economics, National Real Estate, Risky Lending. Bookmark the permalink.

255 Responses to Short-term memories

  1. grim says:

    From Bloomberg:

    Barclays Second-Half Profit Falls 21% on Writedowns

    Barclays Plc, the U.K.’s third- biggest bank, said second-half profit fell 21 percent on asset writedowns and a slump in revenue from fixed-income trading.

  2. grim says:

    From the WSJ:

    Traders’ Errors Prompt Credit Suisse
    To Slash Value of Some Securities
    February 19, 2008 5:50 a.m.

    ZURICH — Swiss bank Credit Suisse Group, until now relatively unscathed by the credit crisis, Tuesday said first-quarter earnings will be reduced by $1 billion from mismarkings and pricing errors by traders which led to the reduction in the value of some asset-backed securities by $2.85 billion.

    The news came only a week after the company reported robust fourth-quarter profits largely free of any impact from subprime-credit exposure. The Zurich-based bank said it is reviewing whether the change in value of the securities will impact last year’s earnings as well.

    “In the first quarter to date, we estimate we remain profitable after giving effect to these reductions,” the bank said.

    Credit Suisse shares dropped on the news. In early morning trade, the stock was down 10%.

  3. grim says:

    From the WSJ:

    How Green Is My Realtor
    February 19, 2008; Page D1

    In a bid to stand out in a sagging housing market, an increasing number of real-estate agents are marketing themselves as eco-friendly — connecting environmentally conscious buyers to “green” homes and helping sellers make their homes more eco-sensitive.

    These agents are promoting their knowledge of eco-friendly and energy-efficient properties on their Web sites and blogs. Some are taking courses to learn about things like geo-thermal heat pumps and how to help home buyers qualify for grants and tax credits for energy-saving improvements.

    Yet some housing experts question whether some agents are using a cursory knowledge of green building as a marketing ploy in a tough market. “A Realtor may support [a purchase] regardless of how green the home is,” says Jay Hall, acting director of the eco-friendly homebuilding program at the U.S. Green Building Council in Washington.

  4. grim says:

    From Bloomberg:

    New York Bond Costs Rise as Banks Let Auctions Fail

    New York state taxpayers’ weekly borrowing costs increased $2.3 million after banks failed to attract bidders to auction-rate bonds and stopped buying unwanted securities.

    Interest rates on Dormitory Authority bonds sold for the City University of New York rose to as high as 6.26 percent last week from 3.42 percent on Feb. 6, according to data compiled by Bloomberg. Buffalo’s rate on water system revenue bonds soared to 11 percent from 3.30 percent. Bonds issued by the Museum of Modern Art climbed to 4.47 percent on Feb. 13 from 3 percent at the end of January.

    Rates in the $330 billion auction-rate bond market are rising nationwide after banks from Citigroup Inc. to Goldman Sachs Group Inc. stopped bidding for the debt at periodic sales they oversee, according to Bloomberg data. New York, with $4 billion of auction debt, may convert the bonds to a fixed rate or a different type of variable-rate security, state budget director Laura Anglin said in an interview in Albany last week.

    “It hurts,” said Anthony Farina, executive assistant in the Buffalo comptroller’s office. Interest costs on the $63 million of auction-rate bonds rose $93,000 for the week, he said. “Nobody expected this kind of jump.”

  5. kettle1 says:

    this is for clott, enjoy

  6. Clotpoll says:

    vodka (5)-

    Har! Soon to be approved by the FDA…

  7. grim says:

    From the Star Ledger:

    Slowdown at New Jersey port

    Now, in a sign of the downturn on the docks, Maher this month eliminated the overnight shift. The terminal just isn’t that crowded with cargo anymore.

    “The economy isn’t doing real well,” said Sam Crane, spokesman for Maher Terminal in Elizabeth, the largest terminal in the port. “We’re not exempt from the economic cycles.”

    From NJBIZ:

    No, We May Not Be Hiring in 2008, Staffing Firms Say

    After enjoying several boom years, New Jersey’s staffing industry may be pulling back in 2008. Local staffing experts cite an uncertain economy and the departure of businesses from the state as the main reasons for slower growth among staffing firms this year.

    “The overall slowdown with staffing firms is something we’re seeing,” says Patricia Koziol, executive director of NJSA, which has about 220 members statewide. She blames much of the industry’s decline on the state, which she says has failed to promote more growth-friendly policies for businesses and has consequently seen many companies leave, presenting a major problem for the local staffing industry. “Definitely there are fewer businesses, which means that there are fewer job opportunities,” Koziol says. “That certainly takes business away from our companies.”

  8. grim says:

    From the Philly Inquirer:

    Employers of illegal workers targeted

    Employers who knowingly hire illegal immigrants could have their business licenses suspended, or even revoked, under a bill the New Jersey Senate majority leader plans to introduce this week.
    Sen. Stephen M. Sweeney (D., Gloucester) said yesterday that illegal immigrants undermine the state’s economy by not paying taxes and by taking jobs from people who are in the country legally.

    “It exists all around us, and nothing’s being done on a federal level,” said Sweeney, who is also a leader of Ironworkers Union Local 399.

    Sweeney said he would model his bill after similar legislation in Arizona, which was recently upheld by a federal judge.

    Under Sweeney’s bill, businesses that knowingly hire illegal immigrants would have their business licenses suspended for 10 days for a first offense. A second offense would result in a license being revoked.

  9. grim says:

    From NJBIZ:

    New Jersey Retirees Are Getting Back to Work
    The golden years aren’t what they used to be. Rather than leading lives of leisure, older New Jerseyans are coming out of retirement and going back to work in increasing numbers. The return of retirees to the work force is driven partly by the financial and personal needs of these individuals. At the same time, companies that are anticipating a worker shortage in the future are stepping up efforts to retain and recruit older workers.
    Nearly 810,000 New Jersey residents that were 55 or older were working in 2006, up from roughly 630,000 in 2000, according to the U.S. Census Bureau. Those numbers are only expected to increase as more people reach retirement age, employment experts say.

    “As more people retire, they realize that retirement isn’t for them, either for personal or financial reasons,” says Marcia Wilson, communications manager for the Maryland, New Jersey and Pennsylvania regional office of Experience Works, an Arlington, Va.-based nonprofit organization that helps older low-income workers find employment.

    For some retirees, who tend to work in part-time positions or in full-time consulting jobs on a short-term basis, re-entering the work force is a financial necessity. “They need the extra money to survive,” says Joseph Scalice, president and CEO of Inc., a Holmdel-based firm that runs an online job board for retirees and the companies that hire them. “They’re living longer, they’re spending much more time in retirement than past generations have.”

  10. grim says:

    From Bloomberg:

    Pittsburgh Hospital Redeems `Loan Shark’ Auction Debt

    The University of Pittsburgh Medical Center plans to redeem $430 million of its bonds to stem as much as $500,000 a week in losses caused by a crisis roiling the market for so-called auction-rate securities.

    The hospital offered to buy back $91 million of its debt yesterday, and will make similar offers for almost $340 million more, according to Tal Heppenstall, UPMC’s treasurer. Holders have until March 19 to sell the bonds back for $100.01 of par value plus accrued interest, according to a notice posted on Bloomberg.

    Funding costs soared nationwide in the $330 billion market for auction-rate securities as banks from Citigroup Inc. to Goldman Sachs Group Inc. stopped bidding for the debt at the periodic sales they organize. New York state, with $4 billion of auction debt, may convert the bonds to a fixed rate or a different type of variable-rate security, state budget director Laura Anglin said in an interview in Albany last week.

    “It’s outrageous,” Heppenstall said. “We’re a AA-rated credit. We don’t need to get financing from loan sharks.”

  11. grim says:

    From the Star Ledger:

    A ‘safe’ bond market suffers costly collapse

    Rowan University Controller Joe Scully checked his e-mail to see how the college had fared in its routine weekly auction of $20 million in construction bonds.

    What he found late Tuesday shocked him.

    For the first time, no bidders had shown up to purchase Rowan’s bonds. The interest rate on the notes nearly quadrupled to 12 percent overnight. Suddenly, the college was on the hook for an extra $35,000 on its weekly interest rate payment.

    Like Scully, finance officials at colleges, hospitals and government agencies across New Jersey are finding out daily that a long-placid corner of the bond market — auction-rate securities — has stopped working.

    As a result, agencies bankrolled by taxpayers, students and toll payers are shelling out hundreds of thousands of dollars in unexpected interest costs. Government officials across the state insist they are moving to stop the financial bleeding. If they can’t, the damage could slam cash-strapped agencies already pinched by an economy that’s on the brink of a recession and ultimately force cutbacks in services.

    “The auction-rate world is the cheapest way for us to borrow money when it’s working, but it’s not working now,” said Kevin Shanley, CFO of Atlantic Health, manager of Overlook and Morristown hospitals, where failed auctions pushed the interest on $170 million in debt to 12 percent from 3 percent.

  12. grim says:

    From the NYT:

    Credit Suisse Reveals New Write-Downs

    Credit Suisse on Tuesday announced new write-downs of $2.8 billion that cut $1 billion from its profit, in a stunning reminder of the difficulty banks face in valuing complicated financial instruments under current market conditions.

    The announcement came just a week after Credit Suisse earned praise from analysts for the quality of its risk management and it jolted investors. In morning trading on the Swiss Stock Exchange, the bank’s shares slid 5.1 Swiss francs, or 9 percent, to 51.65 francs, or $47.12.

    Credit Suisse said its internal review had “identified mismarkings and pricing errors by a small number of traders in certain positions in our structured credit trading business “. The bank did not detail the problem.

    “It’s a blow to confidence,” said Andreas Venditti, an equity analyst at Zürcher Kantonalbank in Zurich. “It looked like they had done such a good job in risk management. Today, of course, that looks quite different.”

  13. njpatient says:

    “Barclays Second-Half Profit Falls 21% on Writedowns”

    That CAN’T be true! bi said there would be no more writedowns!

  14. grim says:

    Super piece from the March 2008 issue of the Atlantic. The sun is setting on the American Suburb/Exurb.

    The Next Slum (Warning: Huge PDF)

  15. x-underwriter says:

    njpatient Says:
    That CAN’T be true! bi said there would be no more writedowns!

    He also predicted a crash in oil prices and a market rally, none of which have occurred.

    Oil heads back toward $100

  16. John says:

    Thanks Chigago Finance, re-checked some muni closed end funds and was suprised that some of the nuveen closed end state funds my Mom owned many years ago are now sporting 5.2 tax free yields with a 10% discount, they are near ten year lows in their stock price in a time of low yields. Crazy, they have nothing to do with the auction rate problem or even the monoline problem as some of them have been around since the 90’s and a few only invest in triple AAA so the insurance is meaningless anyhow. I think this will be a short lived chance for over 5% tax free interest. The damm bank corporate bonds are back below 5% taxable and you take on default risk and the on-line CDs are at 3.5% taxable which is only like 2.5% after taxes.

  17. grim says:

    From Bloomberg:

    Bond Insurer Split Threatens $580 Billion of Notes

    Credit ratings on more than $580 billion of asset-backed securities may be cut, sparking writedowns by banks, under New York regulator Eric Dinallo’s plan to break up bond insurers.

  18. grim says:

    A convenient excuse..

    Credit Suisse traders suspended

    Credit Suisse has suspended a “small number” of traders suspected of inflating the value of mortgage-backed bond investments by $2.85bn (£1.5bn).

  19. Ann says:


    Interesting death of the American suburb piece. Not sure I buy it though.

    Those “new urbanism” neighborhoods have been harder to set up than expected and still require cars anyway. Really, I just see them as a spin on the mini-mall.

    And I don’t see how certain parts of cities being gentrified by rich folks translates into average families being able to move back to the city, with any reasonable quality of life. Sure, rich people may be “gentrifying” certain neighborhoods, but they have tons of cash for renovations, private schools and shore or country houses. The average family is still going to choose a town with decent public schools and a yard.

  20. John says:

    Here is why closed end yields are high, but I think it is a temp thing.

    02/19 07:31 =DJ Brokers Scurry To Calm Investors In Auction-Rate Market

    By Jed Horowitz, Ian Salisbury and Evelyn Juan Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–The collapse of the auction-rate securities market is reaching beyond issuers to individuals and business executives who have relied on the investments as ultra-safe vehicles they can readily tap to pay taxes, make payrolls or buy houses.

    It’s also likely to open a new trading market for Wall Street firms that have sparked the crisis by backing away from buying auction-rate bonds when other investors can’t be found.

    Brokers have pitched auction-rate securities as liquid, super-safe investments with interest rates slightly superior to conventional money-market funds. With hundreds of auctions now failing, brokers are worrying that some of their most loyal clients will be locked into investments when they need to cash out.

    “I have one client that has a house closing in two weeks, and last week we sold out of the resets. We were lucky,” said David Frisch, a financial planner in Melville, N.Y., who has long kept the client in securities issued by Nuveen Investments’ closed-end funds. “A lot of people are using these things to store up cash ahead of tax time, and if the issue is not cleared up in two months (it) will be serious.”

    Another broker said a client recently put $300,000 into securities from a closed-end fund after her son failed to close on a new home but may need it immediately to help him if his next offer is accepted.

    “These are basic things I’ve used my whole career as belt-and-suspender investments, and now we’re finding there is no recourse to the issuer or the agent banks,” said the broker, whose firm wouldn’t allow him to use his name.

    “The reset rate may be higher, but it doesn’t matter in many cases.”

    More than $300 billion of auction-rate securities are now held by investors ranging from mutual funds and big institutions to wealthy individual investors, according to Moody’s Investors. The securities are long-term bonds sold by issuers such as municipalities, arts organizations, universities and closed-end mutual funds like Nuveen Investments and BlackRock Inc. (BLK) with interest rates reset in auctions held every seven to 35 days.

    The auctions are failing because banks such as UBS AG (UBS), Goldman Sachs Group Group Inc. (GS), Merrill Lynch & Co. (MER), Citigroup Inc. (C) and Wachovia Corp. (WB) that often conduct more than 100 auctions a day have recently balked at buying the securities when there aren’t enough bidders. The banks’ fear putting the assets on their own debt-laden books, and other investors are shying from buying out of fear that credit issues that began in the mortgage market may spread to the turnpike authorities, colleges and funds that issue the securities.

    A spokeswoman at Nuveen said $15 billion of auction-rate securities issued by 100 out of its 120 closed-end funds failed to reset in auctions held Tuesday through Thursday this week. Some investment bank sources said as many as 75% of auctions have failed this week.

    When auctions fail, the bonds are reset at higher interest rates, but that is of little help to investors who need to sell the securities to raise cash.

    Brokerage firms have been scrambling to come up with alternatives for cash- hungry clients.

    “This has been a very traumatic time for most of our brokers and customers as they come into the market and look for liquidity and the liquidity isn’t there,” Craig Miller, chief information officer for wealth management and capital markets at Wachovia Securities, told brokers on a conference call Thursday. Wachovia, after first saying it would support auctions, pulled out of ensuring their success on Thursday. The bank is now working “way into the night trying to figure out solutions that would work for our customers and try to provide liquidity,” Miller said.

  21. haughty gary says:

    Ok, so I basically have a question for anyway willing to throw there $0.02 in here. If you were going to look at a house and wanted to make a bid, what type of checklist would you have before you made the bid? For example, recent comps in the neighborhood would be a first logical step.

    Of course, we’ve discussed here that attempting to force the seller to “see the light” is not going to work and will probably just make them angry.

    But for you personally, would you go as far as to pull in an inspector? Perhaps simply “hire” an agent on your behalf and take their advice? How about the age and conditions of the kitchens and baths, etc.? What would you do?

  22. lisoosh says:

    The death of suburban sprawl can’t come fast enough for me.

  23. thatBIGwindow says:

    I heard about a house in Secaucus which sold in Sept 2005 for $570,000 (elderly owned house, needed renovation) to a flipper who renovated and sold for $740,000 in July 06. Funny thing about this house, is that it was directly next to this:

    Why would anyone pay $740,000 let alone $570,000 for contaminated land? Just goes to show you how crazy things were in the bubble times.

  24. Lincoln78 says:


    Was hoping to get some help on the rental process, as I’ve been living in the same place for a while and have been out of the game.

    – I’m really against paying a broker fee for an apartment I can find all on my own using MLS or Craigslist. Is this realistically negotiable (e.g. paying half the fee)?

    – Can I go through a Realtor of my choosing and have them get the fee (instead of whoever is listing the property)?

    – There are many properties on Craigslist that are offered through rentalstoreusa or easyrent. Are they duplicates of listings on MLS? Are these services trustworthy?

    Thanks for any and all help

  25. thatBIGwindow says:

    NAR must be desperate, anyone hear the radio commercials saying “…the commercial real estate market is still strong, contact a commercial member of the Natl assoc of Realtors today…”

  26. Al says:

    Actually, commercial real estate market is very bad right now – may be around NYC is it still strong, but in Central Jersey – just drive around and EVERY building have space for rent!!!

  27. Al says:

    Another topic – NEw Jersey is in really deep hole as a state – anybody esle see’s introduction/HUGE INCREASE of STATE REAL ESTATE TAX??? LETS SAY YOU PAY DOUBLE RE TAXES – once for schools and municipalities and one part to state???
    It is obvious that NJ will go bankrupt within 10 years.

  28. rhymingrealtor says:


    You can go thru the realtor of your choice to find an apartment.


  29. Sean says:

    Gary Dunton walks the plank on the good ship MBIA.

    MBIA chief steps down
    Gary Dunton announces resignation amid industry-wide crisis and will be replaced by former CEO Joseph Brown.

    See all RSS FEEDS (close)
    February 19 2008: 8:05 AM EST

    NEW YORK ( — MBIA Inc. said Tuesday that Chairman and Chief Executive Gary Dunton will step down, marking the latest development in the unfolding bond insurer crisis.

    The Armonk, N.Y.-based company said that Dunton, 52, would be replaced by former Chairman and CEO Joseph “Jay” Brown, 59, who retired from the firm last May.

    Brown, who became chairman and CEO in January 1999 after serving on the board of directors since 1986, conceded that MBIA faces “meaningful challenges” but said he remained confident in the company’s future.

    “We expect to rebuild confidence in the company and in the industry,” Brown said in a statement.

    Tuesday’s announcement comes at harrowing time for the bond insurance industry.

    Credit rating agencies have threatened to cut the ‘AAA’ rating on MBIA (MBI) and rival Ambac (ABK), fearing that they do not have the ability to pay claims on mortgage-backed securities that turned toxic as a result of the credit crisis. Many fear that such a move could set off a chain reaction across the broader financial landscape, including more losses at the nation’s largest banks.

    Last week was a particularly tough week for the bond insurance industry. Executives from both Ambac and MBIA testified before Congress about the health of their business, while rival Financial Guaranty Insurance Co. got downgraded by Moody’s Investors Services.

    A day later, FGIC said it asked New York state insurance regulators to allow it to split its troubled structured finance arm from its healthy municipal bond insurance business. To top of page

  30. rhymingrealtor says:

    It’s 9:30 Am, did BC have a late night??


  31. kettle1 says:


    ignore the easyrent and rentalusa listings they are spam. i have always found my own rentals and have been very successful with mls and craigslist, also consider driving around an area you like and look for for rent signs, seeing a lot of those lately. There is not much that a broker can do for you that you cannot do for yourself , especially considering that the fee is usually 1 months rent.

  32. Al says:

    Anybody cares to explain to me why are the 30 years fixed rates increasing, if 100% probability of 0.5% point cut is here??

    Is it risk based or inflation expectation based? And is there any chance of it going lower again?

    Or is it “Because there is no market” for mortgage – backed securities right now?
    The ones which are being sold stink too much???

  33. Lincoln78 says:

    rhyming –

    Thanks. Is the fee usually negotiable?

  34. Ann says:

    21 gary

    I wouldn’t pay an inspector first, unless it was a fixer-upper, builder’s special or As Is. I would just make the bid as best you can based on what you can see yourself and see what happens. If you’re “lowballing,” I would definitely wait and see if it gets accepted first before spending any cash. Plus, you always have attorney review to back out.

  35. Dink says:

    Lincoln, I have found it is easier to negotiate down the rental rate rather than the broker fee.

  36. Clotpoll says:

    78 (33)-

    Many landlords are now paying the entire fee for rentals. Even if you go for a place that asks the tenant to either split or pay the entire fee, you and your agent can likely negotiate it away.

    The rental market is jammed with “landlords by necessity”: those who cannot sell their homes. Their distress is your advantage.

  37. BklynHawk says:

    AI- Latter. Plus, pricing in more risk. JM

  38. John says:

    Re 32, it is banking 101. Banks borrow short, in other words you give them your money via, savings, checking, money markets and 1-5 year CDs and they lend you long. The spread is where they make the money. Bernakee’s goal is to bring down short rates a lot and slightly raise long rates, banks can make money to cover their losses and ARM people adjusting into new short term rates won’t go under. The 20% down 30 year confirming mortgage crowd was never part of the problem and your rates as long as they are historically cheap is good enough.

    Over the last 100 years mortgage have been around 8%, a 6% 30 year mortgage is still a great deal.

  39. Clotpoll says:

    Gary (21)-

    No seller alive (who has competent representation) will allow you an inspection before an offer is accepted and made binding thru attorney review. Remember, even though you have a binding contract at that point, there are still conditions (like the inspection contingency) that must be met and cleared before a closing can occur.

    It’s also not to your advantage to do a pre-contract inspection. You don’t have equitable title (a sort of anticipatory interest), and if the inspection isn’t to your liking, you’ll probably be out the $$$ for the inspection and just have to walk away. When the inspection is done at the proper time, the report then becomes a lever you can use to obtain repairs or concessions from the seller.

  40. RentininNJ says:


    Look at craigslist & the classified sections of &
    Skip the broker altogether for a rental. They aren’t necessary.

    As with any fee, it is somewhat negotiable, but most agents tend not to be overly flexible since many agents don’t want to waste their time showing lost of places for the fee of one month s rent.

    You may have better luck negotiating who pays the fee (you vs. the landlord), especially if you find the place on your own versus having the agent bring the listing to you.

  41. John says:

    Wall Street Letter

    February 14, 2008

    The International Securities Exchange is planning to list options on exchange-traded fund shares invested in securities, gold and cash.

    Now can I buy options on Gold ETFs on Margin? That would be some great leverage!

  42. njpatient says:

    “Credit Suisse Reveals New Write-Downs”

    That CAN’T be true! bi said there would be no more writedowns!

  43. njpatient says:

    15 x-under

    I know – $40 oil and all that – but I only have the one catch-phrase.

  44. kettle1 says:

    i heard the NAR commercial last night on the radio hyping realestate saying hthat homes double in vale every 10 years and that its a great investment blah blah blah and then they gave a website “with the fact”

  45. jmacdaddio says:

    I saw a townhouse I liked over the weekend. I got a call back from the listing realtor, telling me the parents of the other prospective buyer are coming by for a second look. I feel like I stepped into a time machine that dumped me off in the year 2005.

  46. John says:

    My in-laws and parents were both born in Europe and even though neither could afford to chip in a nickel to help they both would be greatly insulted if a child buying a home did not ask for their advice pre-purchase. Just cause parents are coming they may not be helping out.

    However, the eco-boomers, the name of children of US born baby boomers are selfish self absorbed kids whose parents over-induldge them. In that case they are getting a handout.

  47. x-underwriter says:

    I feel like I stepped into a time machine that dumped me off in the year 2005.

    For every one of us who reads this blog, I can name some late twentysomething I heard of that just got married and went out and bought at today’s ridiculous prices. They’ll be stuck with $3,200/mo payments on some crappy NJ townhouse for the next 30 years. Oh well.

  48. Dink says:

    kettle1 (43)-

    “NAR’s calculation leaves out several important variables, such as closing costs, how much money goes into maintaining a property, brokers’ fees, property taxes and “the risk of using 95% leverage – in the example NAR puts forth, the buyer only puts down 5% of the home’s cost and borrows the rest, he explained.”

  49. kettle1 says:


    From what i have been reading recently it looks like oil may not make any big jumps this year even tough that was my new years prediction.
    From the recent data i have been reading i would expect oil to hover in the 85-105 range for 07 with regular volatility in that range.
    I called a peak of $150 for 08 as my new years prediction, but with the more recent developments i think that may not happen until 09. the underlying drivers are still there but they are currently being moderated

  50. Stu says:

    RE: inviting the parents.

    When I told my parents I paid $480K for a nonupdated 1923 multi-family on less than a 1/4 of an acre lplot with $11,500 in property taxes in 2004… they thought I was smoking crack. They kept saying how things were so much cheaper in the Windsors or Jackson where they live. Keep in mind, my dad is in his mid seventies, so he still thinks you can buy a car for $5,000. I asked him if he was going to drive my wife and I to work every day in NYC from South Jersey? He then didn’t say another word.

    One can not put a price on spending time with their children. I’d much rather use time rather than money to spoil my child.

  51. teddy says:

    Anyone notice apartment complex vacancy rates increasing? I live in Keasbey section of Woodbridge and there are so many vacant apartments in my complex. Its 1K for a 1 bedroom. I think its the bad economy coupled with new apartment construction in nearby areas.

  52. Stu says:

    Yahoo News:

    “He did not elaborate but Walker last year issued an unusually downbeat assessment of his country’s future in a report that drew parallels with the end of the Roman empire.

    He had warned that the US government was on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action was not taken soon.”

  53. gryffindor says:

    I haven’t heard the radio ads, but last night I saw a commercial from the NAR on TV. It must be new since I could only find one from 2007 on youtube. The voice-over told me that “owning a home is a long term plan for building wealth” and “the price of a home doubles every ten years on average.” IMO this is a bogus attempt to save face. Let’s be rational here, if the price of your home doubles in 10 years, the price of everything else is going to go up too.

  54. kettle1 says:

    regarding the end of the suburb PDF.

    I agree with the general idea.
    I think that the McMansion Suburb of today is most likely doomed in the long term as they are ultimately unsustainable. As was pointed out in the article they are flimsily built and probably wont last 30yrs much less 60+. add on top of that the travel required to live in the average suburb, its a constant commute.

    Suburbs will not disappear completely, but they need to shift back towards what they once were. more self container communities, not endless developments named for the natural features that were paved over to build them

  55. kettle1 says:

    so when does the NAR get sued for false/misleading advertising?????

  56. Hard Place says:

    One can not put a price on spending time with their children. I’d much rather use time rather than money to spoil my child.

    Amen! I’m only a father with a young family, but I whole heartedly agree. I could have taken advantage of my parents when I was younger because they were always willing to pay for things, however I was prudent even with their money. You know looking back I remember more the times we spent together. My dad is gone now and those are the things I remember most.

  57. Ready to Buy says:

    “No seller alive (who has competent representation) will allow you an inspection before an offer is accepted and made binding thru attorney review.”

    This is not always the case. Every bid is different.

    We just conducted an inspection before attorney review. The place had major major problems to begin with. We were about to enter a complicated contract that included a contingency on the owners upgrading or changing a septic system.

    We did inspection BEFORE attorney review to explore any additional major problems.

    The seller agreed to this because they didn’t want to be in the middle of upgrading a septic when we pulled out of the contract because of another issue.

    We wanted this done because we decided that the place wouldn’t be worth pursuing if there were any additional major problems. (or we could alter our bid with the inspection report). We also did not want to start running up major lawyer $$$$.

    In the end, the place had major foundation issues. We pulled out, but were happy we didn’t get in too deep.

  58. make money says:

    Anyone notice apartment complex vacancy rates increasing? I live in Keasbey section of Woodbridge and there are so many vacant apartments in my complex. Its 1K for a 1 bedroom. I think its the bad economy coupled with new apartment construction in nearby areas.

    temporary blimp. I’m at my business as usual capacity. This housing and credit crunch is actally benefiting rentals as sales are down and renters stay renters.

    If we don’t have a spring rebound and noone really expects one I will be raising rents another 6-8%. I raised last year and noone left makes me think I left some money on the table.

  59. grim says:

    Blog get together this weekend…

    Southampton, Bermuda.

    Continental running a $36+15k flight for one pass members, leaving Saturday morning out of EWR, coming back on MON or TUE (your choice). Fairmont Southampton presidents club is booking at ~$249 a night + $100 food/drink credit if you pay with Amex.

    Rum Swizzles on me.

  60. njrebear says:

    In somerset rental rates have gone down 7-8% in the last 1 year and there are a bunch of vacancies. My target – 2 bed townhouses.

  61. spam spam bacon spam says:

    The NJREERPORT tee shirt slogans someone suggested recently were all good…I, however, am going with this one:

    “bi said there would be no more writedowns!”

  62. jmacdaddio says:

    Realtor called back. She thinks an offer is imminent. It’s a nice, move-in ready townhouse. Supposedly the other buyers are a married couple with mom and dad coming tonight for a look, which I can only assume means that they’re contributing. I’d seriously consider an offer but when you’re competing against two incomes and parental help, I can’t win.

  63. Stu says:

    Grim announces: “Blog get together this weekend…

    Southampton, Bermuda.”

    If it wasn’t for having Dan Zanes tickets this weekend, I would have certainly taken you up on the offer. My wife and I have close to 400,000 miles in our combined FF accounts, and mostly on Craptinental.

  64. haughty gary says:

    jmacdaddio [62],

    Say buh bye and move on to the next one.

  65. Stan says:

    Mac, I’m sure the realtor is talking you up to Mom and Pop too.

    Any observations on Hoboken Sales / Rents? I have spent a few minutes looking through recent sales in the tax records. So far I haven’t seen any below a prior sale price.

  66. Sybarite says:


    J: Be patient. Let them offer and take it. There will be myriad other opportunities in the future.

  67. kettle1 says:

    got a link for the bermuda deal grim?

  68. Stan says:

    67 Spam – yeah I was thinking about that commercial the other day. It just keeps getting worse.

  69. kettle1 says:


    walk away. there will be another home at a better price that you will find eventually

  70. kettle1 says:

    the germans and the russians are/were amateurs at propaganda compared to the american advertising machine! If Hitler had access to the likes of todays ad agencies he would have ruled the world because 90% would have thought he was saving them.

  71. Stan says:

    This is the real life followup to the Susanne commercial:

  72. njpatient says:

    64 gary
    are you CRAZY? There must be only … what … three townhouses in NNJ? JMac, you gotta win that bidding war NOW!

  73. John says:

    The NAR is similar to the WWF as they can say whatever they want as only a fool thinks it is real.

  74. njpatient says:

    67 spam/73 Stan
    Someone should post those every day.

  75. njpatient says:

    “The NAR is similar to the WWF ”

    LOL – great line
    (it’s funny because it’s true)

  76. John says:

    This is the sign of the times, a credit card that each month your payment is taken directly out of your 401K!!!

  77. prestigous gary says:

    Thanks Ann and Clotpoll.

  78. Clotpoll says:

    ready (57)-

    Always an exception to the rule…always an exception that proves the rule. In this case, you’re it. In your situation, your course of action makes good sense for both parties.

  79. Clotpoll says:

    mac (62)-

    Did you stop to think this agent may be bluffing?

    Too much talk coming from her makes me suspicious. Why her sudden concern that you have a “chance” to make an offer?

  80. Clotpoll says:

    mac (62)-

    If you shoot me this agent’s name thru Grim, I can take a look and see when she got her last commish check.

  81. Al says:

    Last year I was looking for a house..

    Every time I would see a house in my “Price range and tell realtor it is possible I would want to make an offer – he would call listing agent and tell me that there is offer close to asking.

    Out of about 8 houses 7 sold withing a month for 5-15K below listing. But they all sold.

    Right now similar houses LISTED at 30K below last year prices. (same size cape code, within same block)

    I expect quite a few will be sold this spring. It does seems that selling season have started.

    Againn competition this spring is for reduced price homes. which are sold withing week on a market. TO me it seems that better strategy is to wait untill late summer/fall and then look at remaining/less desirable properties.

    Once again Starter homes in NJ are minority and seems to be going strong – once they are reduced to remotelly affordable price.

    I said it two years ago and I stand by it – biggest drop we will see in the middle-priced housing. with bigger % in higher end of middle priced housing.

    Starter homes – tough.

    P.S. Condo’s are glorified apartments and Town-houses are crap – HOA owns the land anyways.

  82. jmacdaddio says:

    Thanks for the tips everyone! I legitimately like this place and I may end up making an offer. Mark my words though, I will not overpay for it. I am willing to walk away from it.

  83. Stu says:

    Good luck jmacdaddio.

    Just don’t let the seller know how much you like it!

  84. Hard Place says:

    Architecturally, where do people think the nicest looking homes are in Morris/Essex/Union counties? I’ve been looking at homes in Chatham and I have to say that for such a prestigious town, the homes are not aesthetically pleasing.

  85. Mike NJ says:

    86, Hard Place

    Post a description (or a link) to the types of homes you are interested in (architecturally) and I can try to steer you in the right direction area wise. Remember this, the last 5-10 years have seen an unbelievable amount of “fix-ups” and thus many of the charming homes in charming towns have been updated and in a lot of cases the old siding that was beautiful was replaced with cheap vinyl, beautiful architectural details were also removed and replaced with home depot crap, all in the name of the almighty dollar. We looked at a lot of towns and we spotted horrible cheap looking homes in some of the nicest parts of NJ. In the end you have to settle on the town and block. We live in Chatham and found an area of town that we consider to be aesthetically pleasing to say the least. There are other areas of town that are dominated by large 1980’s type McMansions. It all depends on your taste though.

  86. RentininNJ says:

    temporary blimp. I’m at my business as usual capacity. This housing and credit crunch is actally benefiting rentals as sales are down and renters stay renters.

    Also a temporary blip; a short term state of disequilibrium as market participants swing in favor of renting over buying (either due to tight credit or a desire to wait out further price declines).

    Vacancy rates are at all time highs for both renter & owner occupied units. Overall, housing is in a general state of oversupply. As prices fall, buying will again look more attractive. At the same time, many condo conversions will return to the rental market. Many underwater sellers will also become involuntary landlords as they can’t sell, but need a tenant to slow the blood loss as they wait for the market to recover.

    I’ve seen more SFH’s for rent than ever before. I’m also seeing more for rent or sale signs.

  87. Imus says:

    #21: Savy buyers often ask to inspect a house pre-purchase. Good way to deal with issues prior to contract, but you have to be willing to spend the $ for an inspection on a house you may not purchase. If the seller recently purchased the house, you can also ask to see his old inspection report (but of course, you ultimately need to do your own inspection).

    Also, if you have a designer or a general contractor, have them tour the house with you — they may see things.

    Otherwise, make sure your contract provides for all possible contingencies (inspection, radon, septic, underground tank, etc).

    There are still not many deals out there, good luck.

  88. Willow says:


    Essex Fells has a lot of different types of architecture and some of it is really beautiful. Like any town, it has the older homes and some from the 1970s but the majority are really beautiful on big lots.

  89. jmacdaddio says:


    Well, she is a Klingon, and Klingons never bluff…

    I think I located you offline through your link and you should soon receive an email from me. Thanks a million!

  90. grim says:

    From Bloomberg:

    U.S. Homebuilder Confidence Index in Rose in February

    Confidence among U.S. homebuilders rose for a second straight month, the first back-to-back increase in almost a year, as signs emerged that lower house prices attracted more buyers.

    The National Association of Home Builders/Wells Fargo index of builder sentiment increased to 20, from 19 in January, the Washington-based group said today. The index in December reached 18, the lowest since it was first published in January 1985. Levels under 50 mean most respondents view conditions as poor.

    “We’re still at a very low level but we’re moving in the right direction,” said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, who correctly forecast the index. “The increase in buyer traffic suggests that some people are somewhat intrigued by lower prices and lower interest rates. However, it’s not showing through to higher sales.”

  91. Lincoln78 says:

    Thanks all for the rental search advice. If have any other useful suggestions, please let me know.

  92. HEHEHE says:

    Not sure if somebody posted the PBGC’s new strategy:

    “In response its potential financial troubles, the fund is drastically changing its investment philosophy. It plans to roughly double its investment in equities to 45% of total assets, but claims the strategy will be less risky because the investments will be spread among different asset classes.”

  93. New in NJ says:

    I know that this is a little OT for the weekday, but this is certainly another take on the ‘education quality’ comments that have been so frequent lately…

  94. RentininNJ says:

    From what i have been reading recently it looks like oil may not make any big jumps this year

    Oil up $4.00 to $99.50. May even break $100 today.

  95. Mitchell says:

    A few years back I mentioned voting democrat would ruin the state. Convinced yet?

    While they are at it there is plenty of room for tolls on 295, 130, Rt1, 9, 18, main streets, 1st aves, etc etc etc.

    Trying to keep homestead rebates are an all time low for the democrats. And I caught hell for a vehicle donation that the states changed the maximum you could get a rebate on when I could have sold it and donated the cash for much more.

    Now was Christine Whitman/republicans that bad? Didn’t anyone learn from Florio?

    Even if the rates dropped to near zero nothing is going to save NJ from rising taxes, insurance, gas prices which effect everything because the democrats will find a way of pushing the state into economic collapse. Kiss your two nickels goodbye they are after them.

    Expect another 10-15% drop in NJ real estate prices before things start to remotely look better. Prices might appear to be attractive now being some 10-25% off peak in NJ but the first time home buyer hasn’t returned to the state making it a bad market.

    Keep in mind those overpriced houses owners are over financed and the homes aren’t getting the attention they need so when prices do finally return to being attractive expect to pay to have them repaired in some way shape or form.

    My guess is that the democrats are going to make the state unattractive even to renters.

    If a democrat gets into office next term just make the state a landfill.

  96. Ann says:


    A townhouse can make for a very nice starter home IMO. Unless it’s a condo, many townhouses are “fee simple” just like single families. If you get a 3br one, even if you have kids, you’ll have enough bedrooms, even if life happens or the market crashes and you can’t buy up for a while.

  97. njrebear says:

    Is DUG digging a deeper hole?

  98. Ann says:

    45 jmac

    We just sold a townhouse in November and had multiple offers. It happens. Even though the market stinks, it’s not homogenous, and there will still be the one house in the neighborhood that the one or two buyers out there want or that is the best value. Good luck.

  99. kettle1 says:

    renting 96,

    i was refering to my 150 prediction. it really depends. there are moves in the oil markets similar to how the fed has been playing with gold. along the same line; oil is ripe for a big jump upwards i just dont know if the elements are in place for a big jump to the heights of 150 and beyond.

    I think oil is going nowhere but up, the uncertainty is in how fast or slow. i think next fall/winter could see some significant jumps. from what i have been reading it seems that the industry has been trying and may be successful at preventing any big price jumps in the summer

  100. Ann says:


    Just read the rest of the thread. Make an offer, what have you got to lose, other than killing a tree for the wasted contract. I wouldn’t be surprised if she is playing you off this other couple. Sure, maybe someone is coming to look at it again or something, who knows, who cares. Make your best offer that you are willing to pay, tell them you’re totally ready to walk, no big deal. Also, don’t assume parental help, could just be parental nosiness. Also, don’t make an offer for just a tiny bit off of list just because you think you should get something off. The place could be priced right.

  101. Hard Place says:

    MikeNJ, Willow – architecture.

    I’ve always been partial to victorians or balanced center hall colonial. Chatham is as far out as I want to move. I know Morristown and Westfield has some nice victorians, but they are a little far. Summit seemed to have homes w/ nice architecture, but pricey. Millburn for an expensive town, has little sub $1mm homes with nice architecture. I almost bought in Weehawken about 5 years ago and they had some nice victorian’s.

  102. kettle1 says:

    if anyone is familiar with the home heating issues that have been occurring in maine this year, keep them in mind. There is a good chance we may see this more wide spread across the northeast next winter depending on how natural gas supply/demand works out

  103. RentininNJ says:

    Oil hit $100

  104. Doyle says:

    A friend of mine bid 10% over list on a house in the Montclair / Glen Ridge area last week and still lost it to a higher bid. It was the nicest house he saw in his price range and was “priced well”.

    I believe someone stated a while back that some realtors price aggressively in this area in an attempt to secure multiple bids.

    Seems like it worked this time.

  105. RentininNJ says:


    I agree

  106. pretorius says:

    Hard Place,

    Is Weehawken still on your list?

  107. Hard Place says:


    Not really. My situation has changed. I now have two kids (2 and newborn) and the school district is not the best. I need a school district that in 5-10 years out will remain near the top.

  108. grim says:

    I believe someone stated a while back that some realtors price aggressively in this area in an attempt to secure multiple bids.

    Seems like it worked this time.

    *Every* Burgdorf listing in Montclair/Glen Ridge is listed with an unrealistically low asking price. They will also not accept offers during the ‘showing period’.

    The tactic always draws multiple offers and will always draw a selling price higher than asking. “Works every time”

  109. Doyle says:


    Not sure who the listing was with, but they could not put in an offer when they saw the house. They had to call the following week with their bid. So I’m sure it was Burgdorf…

  110. BC Bob says:

    “Drivers on the Massachusetts Turnpike face higher tolls because the state is unable to sell bonds insured by a unit of troubled Ambac Financial Group Inc.”

    “The Massachusetts Turnpike Authority, which oversees Boston’s `Big Dig’ highway tunnels, is spending an additional $300,000 a month on its bonds because investors won’t buy $126.7 million in auction-rate securities backed by Ambac, state officials revealed today. Rising debt costs threaten to derail agency efforts to avoid raising tolls this year, officials said.”

    “That is a very significant financial obligation, probably our biggest short-term problem,” Alan LeBovidge, the turnpike authority’s executive director, said at the state agency’s monthly board meeting today.

  111. Ann says:

    Totally off topic…

    What features of a home are totally overrated to you?

    Here’s my list
    1. Pedestal sinks (no storage underneath)
    2. Stainless appliances
    3. Those jets in a soaking tub (tub is nice, jets are silly)
    4. Fireplaces

    Things I like that I think are underrated
    1. Two zone heating
    2. Central AC
    3. Ceiling fans

  112. njrebear says:

    Oil hit $100

    Yet another rogue trader?

  113. jam says:

    Does anyone have an opinion regarding bi monthly mtg payment vs monthly? I know its two extra payments a year and 24 years vs. 30 on the payoff which should save a good deal of interest.

  114. jam says:

    I really like a fireplace Ann.

  115. John says:

    Pedastel sinks are like $50 bucks in home depot. Stainless steel is a nightmare with 2-4 year old kids, lots of finger prints. Tubs with jets are a germ nightmare. Fireplace near christmas tree can be nice but multiple ones are insane and poorly maintained ones are a nightmare. Ceiling Fans are like $49 bucks each big deal. Central AC is a nightmare, most towns it is considered an improvement and jacks your taxes and requires maint.

    Two Zone heating is good. Three zone even better.
    Ann Says:
    February 19th, 2008 at 2:45 pm
    Totally off topic…

    What features of a home are totally overrated to you?

    Here’s my list
    1. Pedestal sinks (no storage underneath)
    2. Stainless appliances
    3. Those jets in a soaking tub (tub is nice, jets are silly)
    4. Fireplaces

    Things I like that I think are underrated
    1. Two zone heating
    2. Central AC
    3. Ceiling fans

  116. kettle1 says:

    bidding o homes, My uneducated option…..

    why participate in any sort of bidding war. there is more then enough housing for all of us. No house is the “Perfect” home and there will always be another that is to your liking.
    Know your break point for a house and it someone bids higher then walk. as has been said 100 times on this board treat it like business, cold blooded. The instant gratification is not worth the long term pain of being house poor.

  117. John says:

    Stick with the bad school district that way you won’t have to pay for college.

    Hard Place Says:
    February 19th, 2008 at 2:37 pm

    Not really. My situation has changed. I now have two kids (2 and newborn) and the school district is not the best. I need a school district that in 5-10 years out will remain near the top.

  118. lurkerA says:

    I’m a big fan of central vac, maybe it’s not that common but now that I have it I can’t imagine not having it. You never really hear that as a big selling point.

    I totally agree with you on the stainless steel and will add granite countertops to your list of overrated features.

  119. kettle1 says:

    by the way sales people hate me.I get the info and make my decisions before showing up. even with a home. i know i will spend X. i will try to maximize the features i want for X but will not go over it. why is that so hard for people to do?

  120. Jill says:

    Ann #113: Ah, a fun topic!

    My list of overrated features:

    1. Soaking tubs (who has time for soaking baths? If I’m going to waste water I’d rather have a nice multiple-jet shower)

    2. Ceramic tile floors (especially in kitchens. If you drop a spoon, you break a tile)

    3. Oversized master suites

    4. “Bridal staircase” (what, you’re going to buy a house with this huge, impossible-to-heat space so that your daughter can walk down it ONCE in a white gown? Ridiculous)

    5. Dishwashers. So sue me. I’ve never had one and I don’t miss it. My kitchen has no room for one and I don’t care.

    6. Fancy laundry rooms. It’s a frickin’ LAUNDRY ROOM!

    Things that are underrated:

    1. Nice landscaping. It’s EXPENSIVE to do this right; far better to buy a house where this is already done.

    2. Insulation. If you have a basement family room like mine, where the previous owners just slapped on paneling on furring strips dug into concrete, you know why.

    3. Corner cabinets with no blind corners.

    4. Baseboard heat. If you have forced air like I do, you know why.

  121. kettle1 says:


    apparently that rouge trader dropped his cigarette someplace he shouldnt have…

    SAN FRANCISCO (MarketWatch) — Alon USA Energy Inc. said Tuesday that an explosion and fire temporarily shut production at its Texas refinery, 290 miles west of Dallas.

    The accident drove gasoline prices to an historic high Tuesday. Crude futures also rallied.

    …Crude oil for March delivery surged more than $3 to surpass $99 a barrel Tuesday, and March motor-gasoline futures rallied 10.59 cents, or 4.3%, to $2.5993 a gallon. It earlier rose to $2.6084, the highest level a gasoline front-month contract has ever seen.

  122. Shore Guy says:

    # 115 I am not a fan. I prefer going the route of looking at the am schedule and making the next month’s principal payment as an extra principal payment with each month’s payment. It saves more, and gives one the flexibility of not having to pay every two weeks.

  123. Jill says:

    #115 Calling it bi-monthly, even though it’s come into common use, makes me nuts, because as far as I’m concerned it’s still wrong. Twice a month should be “semi-monthly.” Bi-monthly is every two months.

    It’s sort of like “irregardless” that way. :)

  124. thatBIGwindow says:

    Over Rated:

    “Excellent” school districts – What do people even mean by that???

  125. thatBIGwindow says:

    come to think of it, what is the defines a “good” school district? Aren’t most Northern NJ schools “good” ?

  126. SG says:

    Good Topic – Ann. Agree with your list, to add few of my own.

    Here is my list,

    Pergo Floors
    Hardwood under the Carpet
    Bed Room in either Basement or Attic

  127. Stu says:


    Leaving partisanship out of the equation, it was Whitman who got us into this mess by choosing to underfund the pension accounts based on the booming tech bubble stock market gains. When the bubble burst, she never restored the funding. True, the governors who followed her didn’t restore funding either, but she ultimately chose not to allow a surplus which would have helped the state weather the troughs.

    Property tax relief is a joke. They raised our sales tax by 1% to simply be able to give it back to us a year later.

    The real issue at work here is that pensions need to be ended. Just grandfather everyone in who is currently working and all new hires don’t get one. The argument that government won’t attract the skilled workers necessary is a complete myth. Their is no incentive for government workers to work. And for this, they are rewarded with benefits that are unmatched in the private sector. The problem is not party related, its systemic.

    Unfortunately, the sheeple have been promised cuts in services which won’t realistically occur. Plus, it would barely put a dent in our state’s pension obligations.

    NJ government is woefully corrupt as is much of our Federal government. This will not change based on which party the sheeple choose to elect. The only way to right the ship would involve great amounts of protest from the sheeple and quite frankly the bread and circuses continue to work their magic to keep it from ever occurring.

    I mean, look at the stimulus checks. Our government is actually taking on another 400 billion in debt to reward our bad behavior. This country is literally screwed. My point is that if you want to blame it on the dems, go for it. Remember though, you just might be sharing the refrigerator box with one of ’em sooner than you thought possible.

  128. Mike NJ says:

    Hard Place,

    Victorians and balanced Center Hall colonials are very popular. They also tend to be larger than the average house in my area. Summit, Chatham, Short Hills, etc will not have anything under $1M for these house types I would imagine. I love Center Halls colonials but at my budget I could not find anything ever remotely inhabitable in my areas of interest. What I did was I relented on the house to get the town. You may have to do the same or you may just have to move towns to get the house you want. Maplewood has some large homes and it is a good commute. As you move closer to Newark the price for your dream home will get cheaper and cheaper.

  129. Shore Guy says:

    #125 Agreed. Why we just do not call them fortnightly payments eludes me.

  130. kettle1 says:

    technically irregardless means that you have to regard the subject

  131. grim says:

    From Reuters:

    Reuters Summit-Millions of Americans could ditch homes

    NEW YORK, Feb 19 (Reuters) – Millions of U.S. homeowners who bought homes with sinking value are set to abandon the properties and cut their losses on bad investments, a leading housing market economist said on Tuesday.

    “We may face something unprecedented … that is a situation where millions of homeowners are going to walk out of their homes in the next couple of years,” said Nouriel Roubini, professor of economics and international business at New York University’s Stern School of Business and head of Roubini Global Economics.

    Somewhere between 10 million and 15 million homeowners might soon find that their homes are worth less than the amount of their loans, Roubini said at the Reuters Housing Summit in New York.

    Such borrowers would be caught in a trap of “negative equity,” in which they are paying off loans that no longer represent
    the true value of their properties.

    “When the value of your home is below the value of your mortgage, you have a huge incentive essentially to walk away,” he said.

    Home prices across the nation are set to sink in value by 10 percent this year on top of the losses already recorded, he predicted.

    If prices indeed continued to drop, Roubini said, mortgage servicers and lenders would face pressure to write down a home loan to the lower value and take big losses on many loans.

    The other option would be for servicers and lenders to push delinquent borrowers into foreclosure — but that would be costly for the mortgage industry, which would then be stuck with homes — very illiquid assets in today’s market.

    Losses could reach $1 trillion to $2 trillion when all the credit costs are totaled up, Roubini said. What began with defaults on subprime mortgages has already spread to home loans that were considered less risky, and Roubini sees more problems arising in auto loans, credit cards, student loans, commercial real estate, leveraged buyouts and corporate loans.

  132. RentininNJ says:

    bidding o homes, My uneducated option…..
    why participate in any sort of bidding war.

    I think the term “bidding war” has a negative connotation that may not always be warranted. I don’t see anything wrong with participating in a bidding process where the price starts below market and gets bid up to a fair price.

    I’ve won a few auctions on eBay with multiple bidders (a bidding war) where I was very happy with what I paid.

    The problem comes in when people get emotionally attached to the idea of “winning”; they are willing to overpay in order to be the “winner”.

  133. jam says:

    I thought of taking a monthly mtg and then making an extra payment, but I know I won’t – this kind of forces me to do it, it saves me 6 years of payments and I get an interest break.

  134. kettle1 says:


    you are correct, as long as the government can continue to provide bread and circus, the people will do nothing. One the people start to get hungry and board (not mindlessly entertained) is when you see change.

    But dont worry, the US still has plenty of assets to sells to keep the bread and circus flowing for many years yet

  135. grim says:

    The problem comes in when people get emotionally attached to the idea of “winning”; they are willing to overpay in order to be the “winner”.

    Winner’s Curse.

  136. Mitchell says:

    Over Rated/Under Rated

    Over Rated
    1. Pedestal sinks (no storage underneath)
    2. Stainless appliances (Your right it Doesn’t make food taste or last longer nor dishes cleaner. Doesn’t do well with finger prints. premium price. Stainless colors vary by company so you can be stuck with a particular company.
    3. Fireplaces (Most are never used) Waste of a wall in a lot of cases.
    4. Tray ceilings. Easy enough to do on your own.
    5. Landscaping.

    1. Storage – in order to make some homes look bigger they give up on storage spaces. While its bigger you have no place to put anything.
    2. Ceiling fans
    3. Laundry room located on same floor as rooms.
    4. Good Windows.
    5. Water heaters? and their location – most are in very poor places making moving them required to get back usable space. Most idiot plumbers would put them in the middle of your living room instead of off to a side or far enough that you could frame out a basement properly without having to call a plumber had they put it in a good place to begin with. – Besides water on demand systems should be used instead of water heaters today.
    6. Insulation.

    Two zone heating/cooling (Most are not installed or designed properly to work effectively) Sounds good but could be twice the cost repair/charging and not worth it if it isn’t done/designed right.

    Most Unverified
    Garage Door Width and garage width. For some reason the doors are getting smaller and the vehicles larger. I have seen many a garage you could get the car in but forget getting the door open. The garage is barely bigger than the door.

  137. Ven says:

    In NJ is it legal to disclose if there are any pending offers on an a property? If so, can they disclose the offer amount?

    Recently I just contacted a agent about a lot she advertized on CL. She claims that there is an offer on the lot already and I better hurry upbidding.

    I asked her to f’off. I think she lost a potential customer and hope she learns better ways of doing business.

  138. Stu says:
    Home builder outlook remains dim

    “The index that measures current buyer traffic showed the most significant improvement in February, rising to 19 from 14 in January. The survey of present housing market conditions increased one point to 20.

    But the index that measures builders’ view of the marketplace 6 months from now slipped to 27 from 28 in January.”

  139. Ann says:


    Totally overrated — Hardwood under carpet. Oh, how many times I saw that one.

    Pergo doesn’t bother me as long as they are not trying to pass it off as real wood.

    Agree on the bedroom in the basement. It’s not quite a bedroom if it’s in the basement.

    Also on my overrated list are finished basements in general.

  140. grim says:

    Isn’t there always another offer?

  141. kettle1 says:


    If you want to see the next surprise mess, watch demand for food imports and food aid to various countries around the world. the oil supply issues that are currently masked are definitely impacting food supply.
    Food prices are fairly sensitive to the cost of their primary inputs and oil is actually one if not the biggest input into modern food (fuel for tractors, trucks for delivery, fertilizer, pesticides etc.). if you look at the commodities markets the price of staple food items such as wheat rice and corn are jumping upwards. Many countries populations are relatively sensitive to food cost increases as they have little to no discretionary income or discretionary expenses. Place like pakistan are starting to hand out food assistance cards so that significant numbers of the population can afford to buy wheat. this is happening around the world, consider mexico and people being hurt by tortilla prices.
    Oil supply demand inflections are going to have major effects in food markets before they have more than an inconvenience efect in transportation. you can choose not to travel. you cannot choose not to eat.

    tangentially related but amusing

  142. Ann says:

    116 jam

    Yeah, most people like fireplaces. I find that we rarely use them with kids, it sucks the heat out of the house, is dirty to clean up and wrecks a wall where I could put furniture. They do look pretty though.

  143. Ann says:


    Oooh, central vac. That I would like.

  144. BC Bob says:

    Wasn’t Clot talking about a bus tour?

    “The foreclosure crisis has come to this in Massachusetts: guided bus tours of bank-owned properties for sale, led by real estate agents drumming up business in a slow market.”

    “In yesterday’s downpour, a dozen bargain hunters boarded a shuttle to inspect deals to be had as financial companies are repossessing a record number of homes from owners who can no longer afford their mortgages. On a three-hour tour of five houses in Stoughton and Easton, they tromped across hardwood floors, inspected kitchens devoid of appliances, and marveled at clutter left behind by homeowners who fled in haste – or disgust.”

    “But all saw what they came for: opportunities to snare a house in a quiet suburban neighborhood for about $300,000, or less.”

  145. grim says:

    Given the choice, I’d go woodburning stove over fireplace any day.

    Newest woodburners (catalytic) burn clean and throw off a considerable amount of heat. However, if you don’t have access to cheap lumber, using one is a very costly affair.

    Vermont Castings makes some very pretty enameled cast iron stoves.

  146. Ann says:


    Totally agree on oversized master suites. Our house we just bought has one and it’s so ridiculous. We’re going to reconfigure it so we can have another room instead.

    Nice landscaping is a huge plus. Also, nice neutral window treatments that people leave are nice. Window treatments are expensive.

  147. Mitchell says:

    #129 I hear you Stu but people are not forced to buy stocks but people do need a place to live. All you other points I agree with.

    As for Democrats It varies from state to state so I cant lump them together. NJ democrats are the worst in the country.

    Announcing your a NJ Democrat is the same as saying I work for the mafia with a golden ticket and were going to extort every penny we can out of you. Like it or not.

    I totally agree the sheep need to come out in numbers but we all know the sheep are too busy working to pay the premium and cant afford to take a day off to fight the real fight.

    As Al stated above the state will probably bankrupt within 10 years.

    It cant continue at this rate because companies aren’t coming to NJ they are going elsewhere and the companies that are there are decreasing their stay in NJ if not moving out of the state.

  148. BC Bob says:

    March Crude, settles at $100.01

  149. Ann says:

    lurker, I like granite but I can’t bring myself to pay for it.

    Excellent school district, means nothing.

    Mitchell, laundry room that is not in basement is always a nice thing to have. I agree on insulation. I would also add to the underrated list now that we are talking about heating, a high efficiency furnace. And an on demand water heater.

    1. Storage – in order to make some homes look bigger they give up on storage spaces. While its bigger you have no place to put anything.
    2. Ceiling fans
    3. Laundry room located on same floor as rooms.
    4. Good Windows.
    5. Water heaters? and their location – most are in very poor places making moving them required to get back usable space. Most idiot plumbers would put them in the middle of your living room instead of off to a side or far enough that you could frame out a basement properly without having to call a plumber had they put it in a good place to begin with. – Besides water on demand systems should be used instead of water heaters today.
    6. Insulation.

    Two zone heating/cooling (Most are not installed or designed properly to work effectively) Sounds good but could be twice the cost repair/charging and not worth it if it isn’t done/designed right.

    Most Unverified
    Garage Door Width and garage width. For some reason the doors are getting smaller and the vehicles larger. I have seen many a garage you could get the car in but forget getting the door open. The garage is barely bigger than the door.

  150. Dan says:

    1. Pedestal sinks – same as previous posts.
    2. Stainless appliances – yes, I agree with previous posts, you pay a premium for nothing
    3. Sitting room on Master Bedroom (what a waste!)
    4. Pools, you use them a few times but a year yet you have to maintain them, have a fence around, etc. and do not get me started with above ground pools – eyesore.
    5. Wet bars . Believe it or not, they still build them!
    6. 3 car garage
    7. crown molding, etc. (you can do that yourself)
    8. Formal Living Room – who uses it anymore, maybe once a year?
    9. Second set of stairs. why?

  151. Stu says:

    Vermont Castings – awesome company with bullet-proof products. Their ‘real’ barbecues, not Home Depot specials, are phenomenal as well.

    Nice call Grim.

  152. lurkerA says:


    I totally agree with you on pedastal sinks. they are great, in theory, in that they look nice, but unless you have a ton of storage elsewhere in the bathroom, they are pretty much useless.

    i just dont love granite or understand the hype, beyond the $$. i prefer silestone, but really, if i were to redo my kitchen (we currently have laminate) i would likely get butcher block. i just really like the way it looks.

  153. Ann says:


    People seem to go either way on pools. Like if it’s there, you might think, ok cool, but if it’s not, no big deal. They are a pain to upkeep, lots of places need heaters for them to really get a lot of use out of them depending on the sunlight in your yard, then there is the whole fencing issue. They are nice if you have kids I guess.

  154. make money says:

    I know the phrase of Being in bed with a developer but never actually thought of it literary until now.,23599,23235348-2,00.html

  155. Mitchell says:

    Central vacs seem like a great idea until someone drops a golf ball into the hole and renders its useless unless you want to break open walls to find it. Central vacs are over rated.

    Roomba, and a vacuum on every floor of your home is easy enough.

    Finished basements are over rated because most people don’t stay with the flow of the house and make a basement to their personal taste. Its like landscaping with the stupid twisty trees and lion statues. Keep it simple and don’t make it personal unless you plan to live there forever.

    Carpet is a waste to me especially if you have kids or pets. Get hardwoods.

    Fake flooring – Pergo is not a problem but make sure its the stuff that can be resurfaced at least 2-3 times.

  156. kettle1 says:


    if you use a pellet wood stove it can be one of the cheapest sources of heat. you just have to buy in bulk. 1 60lb bag of pellets goes for about $15 @ $0.25/lb. if you order in bulk, say 2 tons you can get it for about $175 per ton (delivered in pallets of 60lb bags). @ $175/ton you are paying $.10 per pound. if a stove is used as a primary heat source you can burn 2-6 tons in 1 winter. 2 tons of wood pellets will fit in your garage.

  157. lurkerA says:

    157 – i LOVE our central vac, and can’t imagine how or why anyone would drop a golf ball in one of the holes ??? I suppose it is not for everyone, but I think it’s fantastic.

    Roombas are completely useless if you have pets – My dog would freak out and destroy it the very second it left it’s little docking station.

  158. Mitchell says:

    #152 Nice catch Dan.

    I agree OverRated are sitting rooms, pools in northern areas, Formal Living Room (X-mas tree showcase room), and I will add there is a big trend toward getting rid of formal dining rooms too (X-mas and Turkey Day only room).

    People want extended kitchens instead of a formal dining area.

  159. mikeinwaiting says:

    Wood burning stoves are great had one last house.Of course I’m in the country & can get wood cheap.

  160. Al says:

    Well markets are down, oil is above 100$ again.

    Looks Like Fed is successful in staving off a recession..

    Instead it will be a severe inflammatory depression as there is no pressure on wages right now…

    but wait it can not happen in USA, it can not happen in global market, things are different now…

  161. Al says:


    and severe – because food, medical, transportation will go up while wages will be stagnant.

  162. Al says:

    Cr@p I can not type – Inflanatory

  163. Mitchell says:

    #159 we had a central vac but the wife always felt it never did or had the suction of a real vacuum. It had good suction but never the power of a real vacuum. To prove it she vacuumed the house with a Dyson after doing it with the house system and she never used the house system again. Now she feels dirty when she goes into a house with a house system and carpet.

    Roomba is not a true vacuum but a maintenance cleaning. If you have carpet pass but good for homes with hardwoods.

    Our upstairs rooms were carpeted but downstairs and hallways all hardwoods.

  164. pretorius says:

    I think parking is overrated, although it seems that other people need homes that can accommodate at least 3 cars.

    The front of many houses is dedicated to storing vehicles. These houses have massive garages which dominate their facades or front lawns that have been paved over to hold more cars.

    I prefer front porches and landscaped front lawns, not front entry garages and concrete yards. Why not place the garage in the back corner of the lot at the end of narrow driveway?

    This house has parking that I like.

    And this is what I don’t like.

    By the way I can’t afford these houses.

  165. pretorius says:

    grim I’m in moderation

  166. Mitchell says:

    Would love to have heated floors than central heat. Heats up the air instead of drying it out.

    I did love our screened in porch off the back of the house. Ours was pretty large and nice. You could hang outside without mosquito problems.

  167. lurkerA says:

    165 – fair enough. I think our central vac is better than any vacuum ive ever used – especially with the dog hair. but we dont actually have any carpet, so that could be the difference.

  168. Dan says:

    #160 –

    Yes, I forgot!, the formal dining room another waste, a room for a table and a fine china cabinet.

    My inlaws have a formal dining and living room.
    The dining room gets used 3 times a year:
    Tx giving

    The living room, only once a year to open the Xmas gifts! I just can’t believe it.

    Also grandkids are not allowed neither in the living room or the dining room; they may break something.

    What is the sense of having rooms in your house that you cannot enjoy?

    I have told them that they should charge a cover each time somebody walks into the living/dining room, since they are just an expense; they are paying for something they hardly use.

    But yet, builders do not understand that these formal rooms are a thing of the past (along with sitting rooms, etc).

  169. Mitchell says:

    #164 Carpet could be the key.

    Central Vac = Good for no carpet in the house.

  170. Mitchell says:

    #169 I have told them that they should charge a cover each time somebody walks into the living/dining room, since they are just an expense; they are paying for something they hardly use.

    Great you found another tax and toll for the democrats of NJ.

  171. Al says:

    Actually cheaper source wood be coal… but US do not have transportation network to distribute it, and I think it is illegal due to pollution it would produce.

    I think once natural gas will start running out a,d oil will be 200$/barrel – we will see coal coming back – as people will say $crew the Enviroment, I would like to be warm.

    P.S. In many countries in Europe Coal is the heating source:

    1. You buy it in bulk once or twice a year. you can store it in the ground or in a box – no special handling or hermetically sealed container are needed.
    3. It never goes bad.
    2.It produces a lot of heat and it is not wasted by converting it to electricity (conversion to electricity is only 35% efficient and about 5% transprtation losses).
    3. Transportation is cheap as it is usually delivered to towns by a railroad, and distributed to final destinations via tracks(short traved by car, long – by train, very efficient)
    4. Coal fuel is about 5 times cheaper than oil/gas.
    5. Modern coal burning ovens are alot more advanced and produce less particles compare to 20-30 years ago.

    1. Sometimes difficult/costly to automate – in single family residence requires everyday loading of the heater.
    2. Cleaning of burner/afterburner/particulate filter – more maintanence needed. Might need to get you hands and clothes dirty.
    3. Oil companies can not sell you heating oil… Bad for the economy.
    4. Produced ashes with somewhat high concentration of heavy metals..(probably biggest problem of all – need a suitable landfill.)
    5. Mercury in the air – see my enviromental comment earlier.

  172. John says:

    KPMG pricing of illiquid securities for YE consolidation document.

  173. Mitchell says:

    #173 They could use geothermal exchange units and do away with 75% of the cost of oil/gas.

    I hate that most homes are still essentially stupid by design and extremely wasteful. But

    I assume the problem is not the homes but the lack of educated builders using better technologies.

  174. Ann says:

    SCREENED IN PORCHES! A great feature for mosquito-infested New Jersey! I always wonder why more people don’t have one of those.

  175. Realist says:

    Ann et all,

    A friend of mine coined the phrase “house mullet” when refering to an above-ground pool.

    I absolutely agree with the opinions re: pedestal sinks. Not only is there no storage for the homeowner – there is no place to put your purse for the purse-carrying bathroom visitor. Not only are they over-rated they’re inconvenient.

    I recently went into a home that housed the laundry area within a walk-in closet in the master bedroom. Now that was really cool.

    As an aside, I can’t believe I’ve reached the point in my life that I find laundry rooms cool…next thing you know I’ll be telling everyone about which vegetables are on sale at which supermarket and defining my weeks by whether or not I’ve got a dentist appointment.

  176. red says:

    Ann –

    Excellent school district, means nothing

  177. Mitchell says:

    #178 I wondered the same but I guess if your one not interested in having kids or are an empty nester then you can move to areas where the schools are not important.

  178. Ann says:


    Because excellent is subjective.

  179. Doyle says:

    “house mullet”

    I can’t stop laughing, it’s brilliant. I hate above ground pools as well, now I can call them something mean.

    I went to school out West and was at work one day talking with a girl from the West Coast. She said something about her mother’s pool, and I said, “that’s cool, is it above ground or in ground?” (trying to look cool). She looked at me and started laughing. She was a hot blond from Cali too, oh well… I guess they don’t do above ground in LA LA Land.

  180. Ann says:


    I have kids but “Excellent school district” as written on a listing means nothing these days. First of all, it’s subjective, and it’s written so much it’s become meaningless.

  181. grim says:

    See: Puffery

  182. lisoosh says:

    Jill – I don’t like dishwashers either. Have one (rent) have never used it. They take too long, are too noisy and use too much energy. And generally do a meh job. I can do it faster and better by hand.
    Ditto on insulation. Ditt on baseboard heat. HATE forced hot air, I run humidifiers all winter to balance it out.

    Al – when I was growing up (Scotland) coal heat was quite common. The smell reminds me of childhood. We had a coal fire that ran the central heating and hot water. Bummer for my mother getting the fire started in the morning though.

  183. Ann says:


    Pedestal sinks are the worse. We have one now. I had to buy baskets just to hold all the stuff I normally would just chuck under the cabinet like extra toilet paper. And the lack of space to put a purse or a brush or anything…

  184. Realist says:


    Aside fromn being mean, its really apropo because when you get rid of the house mullet there’s a big bald spot on the lawn.

  185. lisoosh says:

    John Says:
    February 19th, 2008 at 2:55 pm

    “Stick with the bad school district that way you won’t have to pay for college.”

    This is just such a classic my pills have just kicked in John comment.

  186. Mitchell says:

    Seeing an above ground pool might be a perk.

    Most people cant see beyond just taking it down so it might cause some buyers to walk away giving you an option to low ball. This is of course providing that the neighbors didn’t do the same. Kind of like homes with poor interior paint colors. Quick and easy to change.

  187. grim says:

    From CNBC:

    ‘New’ Conforming Loan Limits Look — Limited

    Before you all go running to your mortgage brokers, screaming to refi your adjustable rate mortgages into good ol’ 30-year fixed rate loans under the “new temporary” conforming loan limits agreed to in the recently-signed stimulus package, take a breath.

    It might not be all Congress cracked it up to be.

    The new limits for the GSEs (government-sponsored enterprises), under the new law, are 125% of the local market’s median home price — which will apparently be determined by HUD sometime soon.

    That said, last Friday (and forgive me for taking the day off), the Securities Industry and Financial Markets Association sent out a press release indicating that the “new” loans would not be allowed to be included in existing “conforming” loan pools. They are apparently going to be securitized “under unique pool codes for trading on a “specified pool” basis or inclusion in Real Estate Mortgage Investment Conduit (REMIC) transactions.”

    So what does that mean to you and me and our home loans?

    An excellent source, Craig Strent of Apex Home Loans, says, “That seems to indicate they will not get the best conforming rates, but more likely some kind of middle ground rate between conforming loans at $417k and below and jumbo loans that are still above the temporary increase.”

    So much for my new refi. Strent adds, “This certainly would detract from the benefits the temporary increase was supposed to have in the housing market.”

  188. grim says:

    From Inman:

    Fannie, Freddie can’t mix and match conforming, jumbo MBS
    Restrictions could limit rate benefits for jumbo borrowers

    Jumbo loan borrowers may not see much relief on interest rates when Fannie Mae, Freddie Mac, and the Federal Housing Authority start buying and guaranteeing loans above the current $417,000 conforming loan limit, because the loans will be barred from the most important secondary market where mortgages are bought and sold.

    The Securities Industry and Financial Markets Association announced that “jumbo light” loans of up to $729,750 that Fannie, Freddie and FHA were temporarily authorized to buy or back as part of the economic stimulus bill signed into law by President Bush Feb. 13 won’t be traded in the “to be announced” market where most conforming loans are sold.

    SIFMA said allowing the new, larger loans to be included in pools of mortgage-backed securities (MBS) traded on the TBA market could raise rates on conforming loans because uncertainties about how they will perform could raise the costs or impair trades of all MBS.

    By prohibiting the mixing and matching of loans that meet the current $417,000 conforming loan limit with the larger loans allowed under the temporary loan limit increases in MBS pools, SIFMA is allowing investors to weigh the risks posed by both types of loans separately, and price them accordingly.

    SIFMA’s decision protects borrowers taking out conforming loans from having to pay higher interest rates to compensate investors for the greater prepayment risk involved with jumbo light loans, but could prevent rates on the bigger loans from falling much in the short term.

  189. John says:

    Hey I love my aboveground pool, it does not raise my taxes and I will rip it out when I sell. It came with my house so I did not buy it anyhow.

  190. lisoosh says:

    Ann, good list.


    Pedestal sinks, yes.
    Stainless yes, I would add in granite counter tops as overrated too.
    The tubs – agree with John, I don’t want to soak in a tub with who knows whose grime and gunk stuck in the jets.
    Also claw foot tubs – useless. Just good for collecting dust underneath.
    Like fireplaces but agree with the others that wood burning stoves are more practical, especially in rural/wooded areas.
    Agree with the above ground pool complaints.
    Two story great rooms – never used, uncomfortable to sit in and expensive to heat.


    Pretty much as mentioned, insulation, good windows, good heating, condenser water heater is the best, storage etc. The solid basics that make a house cost effective to heat/cool and maintain.

  191. scribe says:

    Ann, #185

    What about a “space-saver” with shelves – the kind that goes over the toilet? Or an attached cabinet that would go in the same spot.

    What makes for a good storage unit in a bathroom for small odds and ends – the CD-rom cabinets that have square drawers with some shelves. They’re slim, and meant to go in small spots.

  192. Essex says:

    187…actually you may be right….if your kid manages to thrive in a mediocre district they have a much better chance of landing in a really prestigious college…if that is appropriate for them. Only so many kids can get into Yale from Millburn High School.

  193. spam spam bacon spam says:


    One day, a friend was doggie sitting her daughter’s small doggie. “Grandma”, not having animals in the house normally, locked the doggie in the lower family room of her splitlevel.

    She then proceeded to work upstairs for several hours.

    Forgotten, the Roomba came out and started it’s daily round of vacuuming the family room.

    Never having seen a Roomba, the little doggie was scared schitless, literally.

    The Roomba, undeterred by a simple dog schitt, proceeded to “doodle” all over the the room with it’s “schitt crayon”.

    “Grandma” will not be “babysitting” again anytime soon….

  194. stu says:

    “What about a “space-saver” with shelves – the kind that goes over the toilet?”

    We call ours the toilet hutch.

  195. NJGator says:

    Hi all. I just wanted to give a quick update on our property tax appeal. We settled with Montclair today instead of going to trial next week. We managed to reduce our original assessment by almost $60,000 for a total reduction of almost $1,300/year.

    So, yes, you can appeal your assessment successfully without having to hire an attorney, appraiser, etc.

  196. Ann says:

    197 NJGator

    Wow! Congrats! That’s awesome, a ton of money.

  197. njpatient says:

    147 grim
    “Given the choice, I’d go woodburning stove over fireplace any day.”

    Agreed (and that comes from someone who really enjoys the fireplace ambience). My bro heats his place in Maine entirely with a woodburning stove (two, actually, one in each wing of the house). He lives in the woods, so this is fairly cheap for him (his heating cost last year was $0 plus labor). One of the stoves has a glass front, so you can still sit and watch the fire if you want.

  198. njpatient says:

    166 pretorius

    agreed – I’m really not a fan of the garage that dominates the facade.

  199. njpatient says:

    “This is just such a classic my pills have just kicked in John comment.”

    Post of the day, ‘soosh.

  200. njpatient says:

    195 spam

    I’m such a juvenile – can’t stop laughing…

  201. grim says:

    Another smash and grab in Short Hills?

    Millburn going down the tubes.

  202. stu says:

    “Another smash and grab in Short Hills?”

    One of my coworkers from the area was talking about it at lunch. They are all really nervous. She also mentioned that she was surprised at how much retail space was boarded up there in her most recent visit.

  203. D says:

    Will say we have a really nice pedestal sink in our main bath, but also have two floor to ceiling corner cabinets that bathroom.

    We put soapstone on our counters; we did them ourselves & they are beautiful! We happen to like stainless, but then, we’ve always like stainless!

    I agree underrated- landscaping, windows, insulation, storage & basics like solid construction. For the life of me, I do not know why anyone would even want a “new” house. So many of them won’t outlive the mortgage term!

    Any links for the Short Hills smash & grab story? I didn’t see the last one or this one.

  204. Clotpoll says:

    jam (115)-

    Bimonthly payments are a ripoff. You don’t get enough of a break for doing it.

    Just double up every time you can on principal/interest payments on a regular mortgage. People often forget that doing it reduces your effective interest rate.

    One extra payment per year on a 30-fixed amortizes it in 18.

  205. D says:

    205- nevermind- found the link on!

  206. Clotpoll says:

    vodka (118)-

    Disagree. Many bidding wars these days involve deliberately underpriced homes. Often, the “war” is just two parties bidding it up to market value.

    Every house is different, and great buys present themselves in unusual wrappers these days. Talking someone off a potentially good purchase over a principle rooted in nothing other than obstinance is bad advice. Overpriced homes are simply not drawing multiple offers these days, so when there are clearly multiple offers afoot, it’s up to the offering parties to determine market value.

    If more sellers had a clue, we’d be seeing a lot more of this practice.

  207. Clotpoll says:

    Shore (131)-

    “Why we just do not call them fortnightly payments eludes me.”

    Possibly because 75% of adult Americans would think “Fortnight” is a brand of malt liquor.

  208. Clotpoll says:

    Ven (139)-

    What if the agent was telling you the truth? Do you have some sort of voice analysis device hooked up to your phone?

    You’re never going to buy a house. Go get a hobby.

  209. Clotpoll says:

    BC (146)-

    “Wasn’t Clot talking about a bus tour?”

    Not just a bus tour…a bus tour, complete with liquor, cigars and Jagermeister girls.

  210. Clotpoll says:

    lisoosh (187)-

    “Stick with the bad school district that way you won’t have to pay for college.”

    Sneakily racist, yet humorous in a guilty-pleasure sort of way.

  211. Clotpoll says:

    grim (190)-

    Looks like the sausage machine has a little snag in the grinder.

  212. 3b says:

    #83 Al:I said it two years ago and I stand by it – biggest drop we will see in the middle-priced housing. with bigger % in higher end of middle priced housing.

    If one segment of the real estate market suffers it all suffers. Declines in the midle/upper end, means declines in the bottom end.

  213. Clotpoll says:

    spammy (195)-

    That will be a visual that may keep me up for a while tonight.

  214. 3b says:

    #98 Ann: Condos/townhouses get slammed much harder in a down real estate market. In this environment better to wait for aSFH, if that is ultimnately the goal.

  215. 3b says:

    #110 grim:The tactic always draws multiple offers and will always draw a selling price higher than asking. “Works every time”

    What do the clsoed prices look like vs. other closed sales?

  216. Clotpoll says:

    3b (214)-

    Righto. The hallmark of declining markets is that when the decline hits full stride, the percentage drops are the same across all price ranges.

  217. lostinny says:

    OMG I’m laughing so hard I’m crying. DH didn’t think it was as funny as I do.

  218. 3b says:

    #133 grim: thi happened to lots of us late 80’s ealry 90’s and we did not walk away. We stayed and we paid.

    Can some one show me in the mtg. docs where is says you can walk away if the price does not go up?

  219. vince says:

    The oil rich countries flush with cash are buying crude futures and feeding the speculation of higher and higher oil futures. Come to think of it, nobody should be surprised crude futures go to $150 by 2010

  220. Clotpoll says:

    3b (220)-

    Yeah, but all the 80s and 90s underwater buyers stuck around because they had down payments at stake.

    It just makes too much sick sense to walk away when the borrower has no skin in the game and used max leverage.

  221. Ann says:

    216 3b

    I think the only thing people should buy right now is something they can stay in for long time if necessary, for youngish people, that could be a possible marriage, kids etc.

    For some people, let’s say, a 3br townhouse could fit that bill though, as long it can accommodate any life changes that come along and you’ll be happy staying there for a long time if you have to.

  222. Artemis says:

    Mitchell/Ann – I agree with much of your lists except for the fireplace. I love having one, and use it 4 or 5 out of 7 nights a week if the temp is under 50 outside. I’m a fireplace junkie. Staring at a roaring fire is better than xanax. But it has to be woodburning – gas fireplaces creep me out.

  223. Roy G Biv says:

    I’ll take a student who really does thier homework over an Excellent District

  224. Ann says:


    I know new houses can be shabbily built, but just because it’s old, doesn’t mean it’s well-built either. Leaking basements, possible termite damage, old windows, possible asbestos.

  225. Ann says:

    222 Clotpoll

    Even taking inflation into account, weren’t their payments lower too? We bought our townhouse in 2001 from a couple who bought it in the 87 new, couldn’t sell it in 92, rented it for nine years, then finally sold it to us when the price came back up exactly to what they paid for it in 87.

    Too bad, they sold a little too early though. They could have made a bundle renting it for a few more years and selling it in the bubble.

  226. gryffindor says:

    Jill, lisoosh – I live by myself and love my dishwasher. I missed it so much when I didn’t have one in those dinky Manhattan kitchens. It’s a place to collect my dirty dishes – I just rinse them off after meals and store them in there. I can run it while I’m at work so that when it’s done, it stores my clean dishes until I come home and put them away. I definitely wouldn’t consider a house without one.

    re “excellent” school districts – Try telling the parents clamoring to buy in West Windsor-Plainsboro that excellent school districts are over-rated.

  227. Ann says:

    227 gryff

    WWP is SO overrated. Nothing wrong with the district, but overrated? Definitely.

  228. Rachel says:

    what does a corporate rider mean exactly in a real estate listing? The owners are still listed, not a relo company.

  229. spazz says:

    Re: smash and grab in Short Hills

    I live 5 minutes away and I haven’t heard anything about either incident other than on this blog. But I also don’t keep up with local events much either.

  230. Clotpoll says:

    Rachel (229)-

    It just means that when the closing comes, the seller will be the relo company, not the homeowner.

  231. Clotpoll says:

    gryff (227)-

    “…re “excellent” school districts – Try telling the parents clamoring to buy in West Windsor-Plainsboro that excellent school districts are over-rated.”

    The school district need not actually be excellent. It is the illusion of excellence- married to a perception of selectivity- that drives the crowd to “top” districts.

    Many famous “top” school districts actively manage their statistical profiles to ensure high ratings from the gatekeepers of such nonsense (honest to God, how did a rag like NJ Monthly become the arbiter of good schools in this state?). There are plenty of schools that routinely discourage borderline students from taking SAT/ACH and withhold permission to students who want to move up into college prep/honors/AP courses.

  232. Clotpoll says:

    Ann (228)-

    “WWP is SO overrated.”

    Same with Montgomery HS. I’ve always thought that the large amount of Princeton U/Rt. 1 corridor parents who live in these districts act as a magnet to outsiders. It’s like they think their kids will be better students because they go to school with the kids of brainiacs. Sort of a transference of intelligence by proximity.

    Of course, both WWP and Montgomery have plenty of brainiacs’ kids who are the same garden-variety bong-kissers and low level delinquents you can find pretty much anywhere.

  233. Ann says:


    Ha! I remember one father down there going off about some drug bust in an apartment in Plainsboro…Hmm, I wonder why those folks set up camp in Plainsboro? Who would they be selling to? I can’t imagine..

  234. JBJB says:

    The city of Vallejo, California is on the verge of bankruptcy.

    Next up, New Jersey.

  235. Confused In NJ says:

    Conjecture is already starting on McCain picking Conde Rice for V.P. Like a Chess Game.

  236. grim says:

    Too obvious

  237. JBJB says:

    I don’t think Condi has the chin for politics. Not to mention she is way too smart to run.

  238. spazz says:

    “There are plenty of schools that routinely discourage borderline students from taking SAT/ACH and withhold permission to students who want to move up into college prep/honors/AP courses.”

    Is this documented anywhere? I’d love to read about what towns might be gaming their numbers.

  239. kettle1 says:

    way OT

    clott something else for your “home security” kit

    make a shirt out of this and it should prevent a taser gun from effecting you. Some cops have this woven into their jackets so that the tazer cant be used against then

  240. Clotpoll says:

    spazz (240)-

    If it were documented, it might be actionable. I only know this from things clients have told me over the years (and I don’t believe anything until I hear the same story several times from different people). The massaging and steering that gets done by teachers and administrators is very subtle.

    However, if you can get the right 30-50 kids in a class of 350 to avoid the SAT, the result can be significant in terms of upping the mean/median score.

    The other part of the game occurs when a school is left off someone’s “top 50” list. Often, the slighted school(s) will mount a campaign of complaint that results in publications’ jiggering of qualification standards in subsequent years.

    Can’t win the game the old-fashioned way? Change the metric.

  241. Clotpoll says:

    vodka (241)-

    Much obliged. Perhaps a taser-proof shirt, overlaid by a top-quality piece of Ceradyne body armor, will be all the rage for the Spring season of ’09.

    Grounded, lightweight and bulletproof…always in style!

  242. Clotpoll says:

    Wouldn’t you like to see the guy who wears the taser-proof shirts when they get tested?

  243. Bloodbath in Winter 2007 says:

    a bit surprised by two of the over/underrated mentions.

    – can’t stand loud window AC units, and i can’t imagine ever buying a house that didn’t have central AC

    – school district. Not sure if ‘excellent’ is some kind of rating, but basically what we’re doing is comparing the testing scores, # of students per class, teacher: student ratio, and, if possible, AP classes available

    – tend to agree with a garage that doesn’t take up a huge portion of the front of the house

  244. Clotpoll says:

    Then again…perhaps the essential accessory in a taser-proof wardrobe would be a sturdy and reliable codpiece.

  245. Clotpoll says:

    bath (245)-

    “…basically what we’re doing is comparing the testing scores, # of students per class, teacher: student ratio, and, if possible, AP classes available.”

    Is your kid the 50th percentile in everything?

  246. Rachel says:

    Clot (#231) – thanks for the answer on corporate rider. I guess that is what you get when you quit or get pushed out of a sr level job at my company.

  247. RentinginNJ says:

    Totally off topic…

    What features of a home are totally overrated to you?

    Top-Tier Schools.

    There are bad schools that I obviously wouldn’t want to send my kids to; schools that have trouble attracting teachers, rampant violence, drug problems etc.

    However, I think too much is made of difference between middle tier and top tier suburban NJ schools. Much of what makes a “top tier” school a top tier school can be attributed to factors such as self-selection bias (parents that care about education and will push their kids will “self-select” towns with top schools, thus reinforcing the school’s “top-tier” status) and fewer recent immigrants (due to being priced-out of top tier town) who may bring down average standardized test scores due to their less advanced English language abilities, rather than quality of education in a top tier versus middle tier school.

    From my experience in College (I went to a middle tier high school), the students who went to top tier schools didn’t have any real academic advantage over middle tier students.

    Where they did have a clear advantage was after graduation. They were more likely to know the “right people” and have connections to land a job in the right company

  248. chicagofinance says:

    Maybe I’m a guy, but pedestal sinks rock the house. Storage? It’s a bathroom. You have a medicine cabinet and possibly a linen closet. What the heck?

    Vanities are crap-magnets and get messy in a split second.

  249. Lincoln78 says:

    Clot (211) – are you sure you weren’t talking about the Hoboken SWAT tour down in Louisiana?

  250. njpatient says:

    “Conjecture is already starting on McCain picking Conde Rice for V.P. Like a Chess Game.”

    Gotta lock up the incompetence vote?

  251. Confused In NJ says:

    T H E 1 0 C O M M A N D M E N T S

    The real reason that we can’t have the Ten Commandments posted in a courthouse is this:

    You cannot post ‘Thou Shalt Not Steal,’ ‘Thou Shalt Not Commit Adultery,’and ‘Thou Shall Not Lie’ in a building full of lawyers, judges and politicians…It creates a hostile work environment

  252. Jill says:

    kettle1 #158: I had looked into a pellet stove. But I hear the pellets are scarce and hard to come by, and with a tendency towards rodent problems and in a termite area, the last thing I need is a bigass pile of wood pellets sitting in my garage. So I’m off to find an insulation contractor this spring, and when my oil burner needs to be replaced, maybe I’ll look into geothermal.

    Amen on formal dining rooms being overrated. I can’t tell you how many people I know who lust after older Colonials with tiny living rooms because they want that freaking dining room that maybe gets used once a year on Thanksgiving. Unless it’s in a Craftsman house where there’s a fabulous built-in, I can’t see it. And even then, I’d probably make it a home office.

    Regarding countertops: Sue me, I like granite. Hate stainless, though. I’m a bisque appliances kinda gal.

    My POS Cape has no dining room and that’s just fine. What’s laughable is when people turn a bedroom down the hall in a cape into a dining room and call it a formal dining room — like you’re going to carry a 25-lb. turkey down the hall to a dining room. As it is, we didn’t use our living room for 11 years until we got the bigass TV. Now it’s like our family room, which is as it should be.

    Re: Condi Rice as VP — doesn’t this seem a little like “I’ll take your black guy and raise you a black WOMAN”? A very cynical move.

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