Preliminary October sales and inventory data for Northern New Jersey (GSMLS) is in. Please note that this data is subject to revision.
The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 500, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.
(click to enlarge)
The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.
(click to enlarge)
The third graph displays only June sales, 2000 to 2008 YOY.
(click to enlarge)
The fourth graph displays an overlay of Sales and Inventory from 2003 to 2007.
(click to enlarge)
The fifth graph displays the year over year change in inventory on a month by month basis.
(click to enlarge)
The sixth graph displays the year over year change in sales on a month by month basis.
(click to enlarge)
The last graph displays the absorption rate (not seasonally adjusted), in months:
(click to enlarge)
Bonus Graphs!
(click to enlarge)
(click to enlarge)
Working on getting the rest of the graphs up now.
Second!
Good News:
Inventory levels have seen the first significant year over year decline this cycle. IMHO, reduction in inventory levels are key to market stabilization.
The pace of sales declines also appears to be moderating at this point, however, that is to be expected. We are in our third year of sales declines after all.
Bad News:
Sales continue to decline as the market deteriorates, keeping absorption levels high. While inventory has fallen, sales have fallen further, meaning it will take even longer to sell existing inventory.
October sales do not yet reflect recent market dislocations. Remember that these are closed sales, not contracts, so October sales represent contracts likely signed in the three months prior.
U.S. homes now undervalued, economists say
WASHINGTON (MarketWatch) – The U.S. housing market is now slightly undervalued after rapid price declines have overshot fundamentals, economists for IHS Global Insight said Wednesday.
Compared with their long-term fundamental values, U.S. homes are now 3.8% undervalued, the economists said.
“With no end in sight to the downward spiral of house prices, it is likely that the long-anticipated market correction will now overshoot fundamental valuations on the downside,” said James Diffley, head of regional economics at Global Insight.
Excerpt from (4)-
“According to the Global Insight report, only three metro areas are extremely overvalued: Atlantic City, N.J., Bend, Ore., and St. George, Utah. In 2005, 52 metro areas were deemed to be extremely overvalued.”
A question I’ve been thinking about. Say that some sort of gov’t mortgage bailout happens, and underwater owners get their principal reduced or rate reduced, etc. Or even for that matter there’s no bailout, but the bank and owner work out new terms for the mortgage to make it more affordable. If that owner later goes on to sell the house, would there be any way for the new buyer to find out the terms of the principal/rate adjustment, and would the new buyer be able to use that to negotiate a lower price for the property? It seems to me that if there is any kind of a bailout or adjustment, it’s an ackanowledgement on the part of the owner that the property isn’t worth what they originally paid for it.
Link to the data/reports in #4/5:
http://www.globalinsight.com/Highlight/HighlightDetail2350.htm
Grim,
Charts look great! I found the sales/inventory overly most interesting. The downhill trend in sales (ignoring the spikes) seems to be pretty steady as the inventory levels might finally be leveling off. Nice job.
“reduction in inventory levels are key to market stabilization”
DOM
SAS
Grim: The graphs look great. Thanks for the effort!
Just a taste of October contracts to illustrate the recent market dislocation.
Morris County Contract Sales (GSMLS)
October 2007 – 347
October 2008 – 269
(23% Year over Year Decline)
Compared to a 15% YOY Decline in Closings in the same month
Passaic County Contract Sales (GSMLS)
October 2007 – 231
October 2008 – 178
(23% Year over Year Decline)
Compared to a 21% YOY Decline in Closings in the same month
Essex County Contract Sales (GSMLS)
October 2007 – 322
October 2008 – 245
(24% Year over Year Decline)
Compared to a 22% YOY Decline in Closings in the same month
Somerset County Contract Sales (GSMLS)
October 2007 – 285
October 2008 – 230
(19% Year over Year Decline)
Compared to a 9% YOY Decline in Closings in the same month
JB,
Great work on the graphs. How about a cameo appearance by BIA, for interpretation.
BC (12)-
Interpretation?
How about we just say- in anticipation of Q4/08’s trainwreck- that the graphs represent a solid year of suckitude?
#13 – I concur
And a little peek at November
Morris County Contract Sales (GSMLS)
November 2007 – 218
November 2008 – 159
(27% Year over Year Decline)
Essex County Contract Sales (GSMLS)
November 2007 – 251
November 2008 – 192
(24% Year over Year Decline)
Kabloom
“Interpretation?”
Clot [13],
Not what I was seeking. Nobody, I mean nobody, can interpret like BIA.
Appears that the market didn’t like the October sales data for North Jersey.
how much of the inventory decline is due to withdrawals, expired? anyone? anyone?
BC (16)-
True dat. I think he may be trading the new precious metals ultra ETFs now.
BIA??
Maybe BIA is actually Dennis Kneale?
“Appears that the market didn’t like the
October sales data for North Jersey.”
– Is the market open yet?
the charts are pretty, i like the colors… makes the horror nicer, thanks grim
Harvard Endowment Falls 22%, Poised for Worst Return (Update1)
By Julie Ziegler
Dec. 3 (Bloomberg) — Harvard University’s endowment decreased 22 percent, or $8 billion, in the first four months of fiscal 2009, putting the fund on course to have its worst performance in at least four decades.
“Maybe BIA is actually Dennis Kneale?”
Clot,
Their analysis is about the same. Can Kneale read a chart?
Some good historical evidence. Here is link to Google Trend site search for word “Housing Bubble”
http://www.google.com/trends?q=Housing+Bubble&ctab=0&geo=all&date=all&sort=0
It is very clear that large population (at least online) knew about Housing bubble in 2005. The trend has been on down scale since then, but always has small uptick in summer.
I wonder why FED didn’t do that search?
Wasn’t somebody just talking about those Economist guys?
From the WSJ:
Economists: Stabilize Home Prices By Cutting Them Drastically
While builders and Realtors are lobbying for Congress to boost housing demand — and prices — by offering interest rate subsidies and tax credits for home purchases, a new report from the Center for Economic and Policy Research outlines an approach to stabilize home prices by bringing them down further.
The proposal might strike some as severe: it calls for 20-30% price declines in the most overheated markets and for government-held Fannie Mae and Freddie Mac to restrict mortgage lending.
For decades, housing prices have typically tracked rents, but that changed as housing prices posted double-digit annual gains. While a home price correction is underway, it’s not clear how much more home prices need to fall to reach equilibrium. One measure from Moody’s Economy.com that compares home prices to rents shows that home prices still need to fall by around 15% to reach parity with rents.
Dean Baker, co-director of the center and a frequent critic of the government’s approach to promoting homeownership, calls for the mortgage-finance giants to use rent-based appraisals to help drop housing prices.
The center’s proposal suggests that using rent-based appraisals would instill confidence among homebuyers in non-bubble markets, where prices have appear to have stabilized. The report acknowledges that the further decline in home prices would come at the expense of homeowners in bubble markets, but that it would save prospective homeowners from buying homes “at bubble-inflated prices on which they will subsequently lose money.”
“If homeowners will lose most of their home equity over the next year, it is better that they recognize this fact as soon as possible so that they can adjust their behavior accordingly,” the report says.
Sorry Dean, while you speak the truth, it’ll never happen.
vic (24)-
And El Arian has a cushy, new job as Bill Gross’ lickspittle and doesn’t have to answer for a penny of the loss.
Wait ’til these eggheads figure out how much direct exposure to belly-up, non-recourse commercial RE they’ve got. All that crap is just numbers on a page right now, but when those numbers translate into finished, 100% vacant buildings?
Stu Says:
December 3rd, 2008 at 1:31 pm
“I found the sales/inventory overly most interesting. The downhill trend in sales (ignoring the spikes) seems to be pretty steady as the inventory levels might finally be leveling off.”
Yeah, but it looks like Grim will have to increase that 26K upper graph limit on actives by summer ’09.
grim (28)-
That is far too intelligent a proposal to have a chance at succeeding.
I much prefer failed lenders and bad politicians attempting to place an artificial price floor under a rotting asset class. It makes my afternoon TV so much more exciting.
Yeah, but it looks like Grim will have to increase that 26K upper graph limit on actives by summer ‘09.
The lower bound of sales was adjusted downward this year. Actually, I should have adjusted actives upward this year, we had a datapoint that was “off the page” over the summer (26,219 in July).
Beige Book is out , NYC:
Construction and Real Estate
Housing markets in the District have deteriorated further since the last report. A major residential appraisal firm reports substantial deterioration in New York City’s housing market over the past two months: prices of Manhattan co-ops and condos are reported to have fallen by 15 to 20 percent since mid-summer, though it is hard to get a clear handle on prices due to thin volume–much of the recent activity is reportedly from desperate sellers. Transaction activity has dropped off noticeably, and there has been a large increase in the number of listings. Some buyers that had signed contracts for units under construction earlier this year are having trouble getting financing at the contract price now that market values have dropped. Many of those having difficulty selling their apartments are putting them up for rent, boosting the number of rental listings substantially–particularly in doorman buildings. Average asking rents are reported to be down 1 to 4 percent from a year earlier.
New Jersey’s housing market has also deteriorated substantially since the last report. A building industry expert describes buyer traffic at new developments as almost non-existent and notes that larger construction firms are backing out of new developments and cutting jobs, while a number of smaller firms are contemplating either moving into the rehab segment of the market or going out of business. Multi-family development, which had been holding up somewhat through the summer, has ground to a halt more recently. A real estate contact in northern New Jersey indicates that selling prices for existing homes are down 20 to 25 percent from a year ago, but that the number of transactions has held up, as sellers are increasingly negotiable; many potential sellers have taken their homes off the market, keeping the inventory of unsold homes relatively low. The low end of northern New Jersey’s housing market is said to be holding up fairly well, whereas the market for higher-priced homes (over $400K) is described as moribund. In contrast, real estate contacts in western New York State report that prices have continued to increase modestly through October, though sales volume has tapered off moderately.
Commercial real estate markets in the New York City area have weakened noticeably. Manhattan’s office vacancy rate continued to climb in October, rising more than ½ point, led by Midtown. Leasing activity has slowed markedly, and many tenants are requesting short-term renewals, with landlords generally willing to oblige. Actual rents have continued to decline, while asking rents, which had remained slightly above 2007 levels through the third quarter, have now turned down as well. There has been a particularly sharp increase in the amount of available sub-lease space–largely from financial firms. Office markets on the outskirts of New York City are also reported to be softening, but not as dramatically as Manhattan’s.
http://www.federalreserve.gov/FOMC/BeigeBook/2008/20081203/2.htm
Interesting to see Google Trend for word “Foreclosure”.
http://www.google.com/trends?q=Foreclosure&ctab=0&geo=all&date=all&sort=0
Its interesting to see the list of cities from where the search is coming the most.
HEHEHE,
We may need to rename the Beige Book to something more indicative of the contents.
A real estate contact in northern New Jersey indicates that selling prices for existing homes are down 20 to 25 percent from a year ago, but that the number of transactions has held up, as sellers are increasingly negotiable; many potential sellers have taken their homes off the market, keeping the inventory of unsold homes relatively low.
Inventory is not low at all:
https://njrereport.com/images/oct08_salesinv.gif
Vic [20],
BIA, Bob Is Annoying, had the ability to read charts upside down.
“BOB is annoying Says:
November 29th, 2006 at 4:51 pm
why is it so hard for people to just accept that maybe, just maybe, there will NOT be a total collapse? is it only b/c it will prove you wrong and your own ego gets in the way? sheesh.”
“A real estate contact in northern New Jersey indicates that selling prices for existing homes are down 20 to 25 percent from a year ago”
That’s a start.
BC,
It wasn’t me, I swear.
The low end of northern New Jersey’s housing market is said to be holding up fairly well, whereas the market for higher-priced homes (over $400K) is described as moribund
Excactly what I am seeing ; Low end – fairly strong, middle and uppper segments – are getting killed, as in reality very small percent of population can afford 500K+ home, not even talkijng about 10-20K taxes.
Grim,
They should put a skull and crossbones on the cover.
Kabloom x2. Just got harder to get a loan if you need PMI.
From CR:
Fannie Mae Limits DTI regardless of AUS Decision for Loans with MI
I’ve heard from industry insiders (not confirmed) that Fannie Mae is putting a limit on the debt service-to-income (DTI) ratio of borrowers regardless of the Automated Underwriting System (AUS) decisions for loans requiring mortgage insurance (Loan-to-value (LTV) > 80%). This is apparently due to pressure from the mortgage insurers (MIs).
These are essentially caps on DTI. Previously the max was determined by the AUS.
For conforming loans in stable markets (as defined by MIs), the DTI limit is 45% when PMI is required (LTV > 80%). For expanded approval loans in stable markets, the DTI limit is 41%.
In soft markets, the max DTI is 41%. Previously this could be exceeded if approved by DU/LP (Desktop Underwriter Version 7.0® / Loan Prospector® ).
This raises a great point. The MIs were locked out (luckily for them) of many of the worst loans, because Wall Street securitized 2nds instead of using MI. Now that MI is needed again for loans with LTVs greater than 80%, the MIs once again have a say in the underwriting process.
From Bloomberg:
Port Authority Gets No Bids for Taxable Bond Offering
The Port Authority of New York and New Jersey received no bids from investment banks seeking to underwrite a taxable note offering that what would have been the largest deal of its kind in eight months.
The $300 million of three-year notes, backed by net revenue of the authority that operates airports, river crossings and transit in the New York City area, were up for competitive sale among underwriters at 11 a.m. New York time today. The debt carried the highest short-term ratings from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings.
“The lack of bids will have no impact on any current Port Authority capital projects,” the bi-state agency said in a news release. “We are confident that the markets will recover in the upcoming year when we plan to return with another sale.”
grim (42)-
You bet the MIs have a say in underwriting. Those “declining market” designations came straight from them. Pretty much crimped off investment/2nd home market.
New commercial standards are in place now, too. Most commercial loans now want a minimum of 25% down.
grim (43)-
Be worried. Be very, very worried.
“The lack of bids will have no impact on any current Port Authority capital projects,” the bi-state agency said in a news release. “We are confident that the markets will recover in the upcoming year when we plan to return with another sale.”
hmm, with 41% of DTI assuming no other significant monthly payments a person with 90K salary will qualify for a 300K mortgage with 10K taxes.
About right…. a bit tight, but doable. that is assuming NO other monthly payments such as car or student loans, 6% interest rate.
Update on the Financial Crisis from Bird and Fortune
British comedians John Bird and John Fortune resume their discussion of the credit crisis.
Welcome to Stock Market Roller Coaster :)
The most fun you can have while sitting at your computer at work!!!
I’d be interested in the change in absorption yoy by month.
“The Port Authority of New York and New Jersey received no bids”
Houston, we have a major problem.
Clot, your day has come.
Beige Book is a bloodbath and the market ralies.
Beige Book is a bloodbath and the market ralies.
Is it all just noise until the employment numbers are released on Friday?
“Beige Book is a bloodbath and the market rallies.”
Wait until Friday’s unemployment numbers. This is the grandaddy of economic reports and is published monthly. Everything between now and Friday morning might appear irrational. Friday will most likely be majorly sucky for longs.
Ughh! We are on the same wavelength Grim.
From MarketWatch:
House Republican leader call for More Bank Bailout Oversight
ouse Republican leader John Boehner joined key Democratic lawmakers in calling on Treasury Secretary Henry Paulson to provide more details about how the department is allocating $700 billion in bank bailout funds. “The government has burned through nearly $350 billion of … funds and is pledging trillions of dollars more through other programs, yet little is understood about how these investments are contributing to the nation’s economic recovery,” Boehner and other key Republicans wrote in a letter to Paulson and Federal Reserve Chairman Ben Bernanke. So far, Treasury has committed $330 billion of the capital. Boehner said in the letter that Treasury should not seek approval from Congress for additional funds until questions about the first allocations are answered. His criticism comes one day after the Government Accountability Office released a critical report about the governance surrounding Treasury’s spending of the bailout funds.
Friday is a straddle kinda day. Don’t know if the market is going to plummet or skyrocket, but I’ll be damned if it doesn’t do one of them. Of course, since everyone else is expecting the same, is there really any money to be made here?
Friday’s unemployment numbers – ADP numbers are already out and I would have thought they would have already been factored. While the ADP figure is not exact, it tracks close enough.
re# 43 Wowza, what a bellwether for the Muni Bond markets. Soon the Port Authority will be up for sale, Corzine proboblay already has the paperwork drawn up for a nice PPP deal with say Dubai or China. I would not mind owning a Bridge with some toll booths, the GWB collects over a million per day and that has only tolls in once direction.
Where is our resident bail bondsman John? Did he take a vacation or did his company pull the plug?
From Bloomberg:
Fed Says Economy Slowed Across U.S. Since Mid-October
The U.S. economy weakened across all regions since the middle of October as it became tougher to get loans and demand for credit shrank, the Federal Reserve said in its regional economic survey.
Retail sales, tourism spending and manufacturing declined in most places, housing markets were “weak” and commercial real estate “weakened broadly,” the Fed said today in its Beige Book release, published two weeks before officials meet in Washington to set interest rates.
The report underscores the picture of a downfall that spurred Goldman Sachs Group Inc. and Morgan Stanley analysts to forecast a contraction in the economy this quarter of about 5 percent. Fed Chairman Ben S. Bernanke and his colleagues may cut interest rates further and consider adopting less conventional policies when they meet Dec. 15-16.
“We are looking at an economy that is not only in a recession, but a recession that is deepening rapidly,” former Fed Governor Lyle Gramley, now senior economic adviser at Stanford Group Co., said in an interview with Bloomberg Television. “It certainly is a gloomy report, but not I guess worse than what you would expect given the data coming in.”
The New York Fed said its regional economy “deteriorated substantially” since the last report in mid-October. The San Francisco Fed, which oversees the largest district, said business “weakened decidedly,” while the Chicago Fed said contacts “expressed concern over the potential length of this downturn.”
“Overall economic activity weakened across all Federal Reserve districts since the last report,” in mid-October, the Beige Book said.
Lost my coffee, another keyboard in the trash. I really hope this was done tongue-in-cheek.
(continued from above)
There were some bright spots: farms had a “relatively good harvest” and skilled labor was in demand in some places, the Fed said. Some businesses were able to profit from the weakness, with the Minneapolis and Dallas districts reporting “growing demand for bankruptcy services.”
The New York Fed said its regional economy “deteriorated substantially” since the last report in mid-October.
So much for NYC holding up.
I know this WSJ link was already posted but this paragraph read like f*rt in church.
http://online.wsj.com/article/SB122764977315457619.html
“In a poll of 2,000 adults, real-estate-data provider Zillow.com found that 61% believed the value of their home would either remain level or rise over the next six months. Another survey of more than 1,000 homeowners, sponsored by real-estate-services firm Realogy Corp., found that 91% thought that owning a home was the best long-term investment they could make. And an online survey of 5,000 people commissioned by Citigroup found that just 32% believed it was a good time to invest in stocks — but 51% said it was a good time to buy a home.”
I feel like a child in the backseat of a car hurtling towards “the bottom”, and every few minutes I just have to ask — are we there yet?
The low end of northern New Jersey’s housing market is said to be holding up fairly well, whereas the market for higher-priced homes (over $400K) is described as moribund.
I found my silver lining. I’ll take “fairly well”, beats “moribund”.
Bally Fitness files Chapter 11… again.
http://www.njar.com/pressroom/releases/2008/111908.html
“New Jersey residents might have heard a lot about waiting for the real estate market to “bottom out” lately from real estate speculators and financial pundits, but before deciding to wait on the sidelines, home buyers need to first consider three timely reasons why waiting can end up costing them.
“No one can time the market perfectly,” said 2008 New Jersey Association of REALTORS® (NJAR®) President, Drew Fishman. “We really won’t know when home prices have officially ‘bottomed out’ until they start to go up. That’s why interested home buyers who are financially capable can’t afford to let these opportunities pass them by.”
1. The Federal Housing Administration (FHA) will require a higher down payment percentage after January 1, 2009. The Housing and Economic Recovery Act passed by Congress in July raised the down payment requirement on FHA loans to 3.5 percent, up from the current requirement of 3 percent.”
Rofl, does the njar really think we are that bad in math? Well, I hope we’re not. Their big scare tactic is the FHA downpayment increasing to 3.5 percent? That’s difference of about $1000 to $3000 for most homes in NJ. That’s not even a down payment on a car.
“No one can time the market perfectly,” said 2008 New Jersey Association of REALTORS® (NJAR®) President, Drew Fishman.
The herd certainly didn’t as they rushed in at/near the top.
… interested home buyers who are financially capable can’t afford to let these opportunities pass them by.”
Yeah, we can ;)
SG Resposne to your post at 141 form prior thread. Houses are not yet undervaleud in our area;but they will be.
My fiancee and I are looking to buy a POS cape in Mercer County for 190-200k. If I took out that FHA loan, that would be $1000 more I have to put down. Meanwhile, I’m waiting on 30-40k decreases in price. I’m pretty sure I can afford to wait. I can’t believe we are still letting people buy houses for 3% down. Did we not learn anything from this crisis?
Bergen County NJMLS Data for October
Year Med$ #Sold #U/C
1998 $264,771 $252,701 $205,000
1999 $309,545 $298,028 $235,000
2000 $342,969 $327,550 $250,000
2001 $381,687 $371,773 $299,900
2002 $429,423 $417,984 $340,000
2003 $459,090 $445,238 $364,500
2004 $506,324 $491,952 $420,000
2005 $612,656 $588,046 $490,000
2006 $606,194 $554,717 $446,000
2007 $632,078 $580,506 $467,500
2008 $588,137 $528,751 $423,000
Preliminary Bergen NJMLS Data for November
Year Med$ #Sold #U/C
1998 $210,000 650 636
1999 $231,800 739 698
2000 $254,900 703 735
2001 $282,000 639 788
2002 $339,900 691 744
2003 $365,000 778 784
2004 $411,750 852 861
2005 $480,000 764 703
2006 $450,000 619 718
2007 $440,000 502 504
2008 $427,250 368 354
#28 grim: You never know.
Trying to scare sideliners into buying? C’mon Drew.
Oops!
Bergen County NJMLS Data for October
Year Med$ #Sold #U/C
1998 $205,000 845 830
1999 $235,000 799 616
2000 $250,000 785 828
2001 $299,900 897 749
2002 $340,000 793 850
2003 $364,500 975 923
2004 $420,000 888 935
2005 $490,000 830 797
2006 $446,000 726 763
2007 $467,500 576 587
2008 $423,000 466 482
What are today’s predictions? Mine – 200 up.
Grim,
what gets me is that most of the side liners I’ve talked to had the courage and patience to wait this crap out since 2002. If they weren’t willing to pay the 2002 price, what the hell makes these NJAR clowns think that they’ll pay the 2003-2004 prices that we are seeing today?
#50 BC Bob: In all of my years in the muni business (in a former life), there was never a time that the PANYNJ, had to pull a deal due to lack of interest.
Oh yeah, we have a problem.
Bally Fitness files Chapter 11… again.
New York Sports Clubs is waiting on deck.
Ben (66)-
“Rofl, does the njar really think we are that bad in math? Well, I hope we’re not. Their big scare tactic is the FHA downpayment increasing to 3.5 percent? That’s difference of about $1000 to $3000 for most homes in NJ. That’s not even a down payment on a car.”
It’s a lot of money…if you don’t have any money at all.
Which describes most FHA buyers these days.
Ben (70)-
“I can’t believe we are still letting people buy houses for 3% down. Did we not learn anything from this crisis?”
No.
BTW, FHA loans are brought to you by the same people who think an artificial price floor can be placed under a collapsing asset class.
And, they are willing to wreck the entire economy to make it happen.
Opening bell in 5 minutes.
Every trading day @ 3.45 is like the Super Bowl kick-off.
[24] The last time that happened, they fired Walter Cabot.
Nice guy, Walter. Offered to be one of my references when I interviewed for clerkships.
[78] NYSC in death pool?
Hopefully, whoever takes it over will clean up that pit of a club in Newark Gateway. Easily the shabbiest of their centers that I have visited.
[75] Vic,
I am gonna lowball you, and say 169 up.
[50] BC
Apparently, I am not the only one staying away from revenue bonds.
SRS is on sale fellas.
Bergen County NJMLS Data for October
Year Med$ #Sold #U/C
2005 $490,000 830 797
2006 $446,000 726 763
2007 $467,500 576 587
2008 $423,000 466 482
Median price off 14% from peak, sales off 44% from peak, nothing but ugly here.
I thought Bergen County was “bubblewrapped”?
comrade nom deplume (84)
NYSC just keeps building more and more clubs like there is no recession.
vic (87)-
SRS, relative to today’s Beige Book?
Sale of the century. It’s now down to near where it was when the short-selling ban was in place.
Just saw Ken Lewis on TV. His eyes look like they’re about to pop out.
SRS; which price is right:
$116?
$299?
[89] hype
Wish they would do something with that sh1thole of a club in Newark. Grungy, small locker room, lots of things not working, threabare towels, and cable offering with something like 9 channels, and most of those in spanish.
Okay, where’s gator??? If she has any irish in her, this must have gotten it up.
“During ABC’s broadcast of the Florida-Florida State game, the announcing team revealed that the University of Florida doctors didn’t invent Gatorade. That the sports drink was invented by rival Florida State, three years prior in 1962, and it was called ‘Seminole Firewater.'”
“I am gonna lowball you, and say 169 up.”
OK, It is confirmed. Nom works for the PPT.
(27)-Grim
The proposal might strike some as severe: it calls for 20-30% price declines in the most overheated markets and for government-held Fannie Mae and Freddie Mac to restrict mortgage lending.
What?? This doesn’t help me one iota. I don’t know why the hell anyone would propose that. My ass is in a sling and all that does is make things worst.
You want a severe presciption? Let’s do something that’s going to help me. Let’s just bulldoze the houses in foreclosure. This will reduce the damn supply and put in some price support. Bulldoze enough of them and real estate prices will return to where the hell they were. I know someone is going to question what losing the collateral is going to do to mortgage lenders. Guess what? They’ll be just fine because they’ll be able to refinance the houses that have increased value due to limited supply which will allow me to take out cash so I can invest and buy stuff. In turn, that will stimulate the damn economy.
Something has to be done to help the American investor. I’ve believed in this country and it’s time it believed in people like me.
“Just saw Ken Lewis on TV. His eyes look like they’re about to pop out.”
Clot,
Did he just review Contrywide’s portfolio?
“You want a severe presciption? Let’s do something that’s going to help me. Let’s just bulldoze the houses in foreclosure. This will reduce the damn supply and put in some price support. Bulldoze enough of them and real estate prices will return to where the hell they were.”
Because that’s a great idea. A strong economy is based on how much stuff you can destroy. Why stop there? Lets trash all those unsold 2008 Chevy models. Hell, lets trash every factory and dealership owned by GM to increase Ford’s value. Brilliant!
“Let’s just bulldoze the houses in foreclosure.”
50.5,
I stated, about 6 months ago, that this would be the only scenario which would support this market. Glad to see you’re on the same page.
“I thought Bergen County was “bubblewrapped”?”
Grim, it is bubble wrapped. Unfortunately, the plane that was carrying it just announced it had no fuel left and we’ll be bracing for upcoming impact.
Grim-
Thanks for the charts. I was looking forward to this update.
The one that makes me laugh is the Sales/Inventory chart. Three years of divergence and sellers still don’t seem to have gotten it. I could see the first two years of denial, but it’s time to throw in the towel already!
ECB/BOE tomorrow.
78/Anecdotal. Had a neighbor move out about a year ago and before she left she canceled her membership at a local gym. Not a chain. She mentioned that the manager said they had just had their highest volume of cancellations due to moving ever.
100/Ben – LOL. Fantastic!
FDIC Survey Confirms Widespread Use of Unauthorized Overdrafts by Banks
A new survey by the Federal Deposit Insurance Corp. underscores the need for regulatory and congressional action to stop banks from artificially increasing overdrafts without a customer’s express consent, a practice that unfairly strips billions of dollars annually from checking accounts.
Rock Chalk [101],
How many; Find a qualified, delusional buyer to get me out of this trap or it’s jingle mail?
Buy now, before it’s too late.
Treasury Considers Plan to Stem Home-Prices Decline
http://online.wsj.com/article/SB122833771718976731.html?mod=testMod
Actually just read the rationale for todays pop on Yahoo finance is the uptick in refi’s has lead to an increase in consumer discretionary and financial shares. I really wish I had more money to short this market with!
Because that’s a great idea. A strong economy is based on how much stuff you can destroy. Why stop there? Lets trash all those unsold 2008 Chevy models. Hell, lets trash every factory and dealership owned by GM to increase Ford’s value. Brilliant
Guess what? Tearing up shlt has been a proven economic theory. Look what the hell we did over in Iraq. We went in there and kicked terrorist ass and now have to help them rebuild. That’s stimulative. Check your damn economics and history books on that and stop trying to be a damn jokester here.
“Buy now, before it’s too late.”
Frank,
How’s every other liquidity scheme, bailout, backstop, etc., that the fed/treasury initiated been working lately?
50.5 – Bulldozing the overpriced homes would do more for normalizing the housing markets than knocking down a bunch of POS foreclosures that nobody wants.
#106 frank: Yep now I am going to get lower prices and a lower rate.
You know frank during the last houisng bust,w e had declining house prices and declining rates.
The best of both worlds.
“Guess what? Tearing up shlt has been a proven economic theory. Look what the hell we did over in Iraq. We went in there and kicked terrorist ass and now have to help them rebuild. That’s stimulative. Check your damn economics and history books on that and stop trying to be a damn jokester here.”
So why don’t you go pay some kid to go around breaking windows all over your neighborhood to stimulate your local economy?
Merrill Said to Cut Bonuses by 50% as Revenue Slumps
Merrill Lynch & Co. plans to cut year- end bonuses in half after more than $20 billion of losses that forced the U.S. securities firm to sell itself to Bank of America Corp., two people with knowledge of the situation said. The average bonus reduction will be about 50 percent at the New York-based company, and some traders and investment bankers will face steeper cuts, said the people, who declined to be identified because the plans aren’t public. While employees won’t find out their bonuses until later this month, division managers are being told now how much they’ll get to distribute.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqSGYyeo7e4g&refer=home
‘Revolution, food riots in America by 2012’
The man who predicted the 1987 stock market crash and the fall of the Soviet Union is now forecasting revolution in America, food riots and tax rebellions – all within four years, while cautioning that putting food on the table will be a more pressing concern than buying Christmas gifts by 2012. Gerald Celente, the CEO of Trends Research Institute, is renowned for his accuracy in predicting future world and economic events, which will send a chill down your spine considering what he told Fox News this week.
http://www.commodityonline.com/news/Revolution-food-riots-in-America-by-2012-13062-3-1.html
kettle [113],
Maybe Merrill should hire some Pooper Scoopers, to be in Hopewell, on the day the bonuses are announced.
These knochlehead auto exs… idiots.
maken threats of depression if they don’t get their bailouts.
total joke
SAS
BC
but what happened to the banks needing to pay huge bonuses or their talent leaves, the same talent that has lost them 100’s of billions of dollars??????
time to end the push for consolidation.
SAS
“the same talent that has lost them 100’s of billions of dollars??????’
Kettle,
Trillions.
Hey, it’s not easy losing trillions, you really have to be a rocket scientist to accomplish that. However, 3 cheers to them, they created enormous opportunities.
“maken threats of depression if they don’t get their bailouts.’
SAS,
No different than Hammerin Hank and Bergabe blowing armageddon up Pelosi’s, Frank’s Dodd’s, Bush, etc., ass.
?
SAS
Auto Execs threaten depression?.?.?.?. HAHAHA ROFLMAO.
They cant stop what is coming anymore then they can order the tide to halt.
There are only 2 real options for a mitigation program. The first is a new Manhattan project. A grand public work that is focused on high tech and knowledge industries. The reason being that America is now an economy of high tech and service sectors 9 data management and manipulation in large part).
The other option is to downgrade everyone back to what we were in the 30’s, manual laborers. Infrastructure projects would only really help a nation based on manual labor, and that we are not.
If we want any chance of maintaining an approximation of our current lifestyle any such public projects must support our current employment market or something similar to it.
BC,
Losing trillion is hard????? Give me 6 months and a nation and lets see if i cant one up them.
[121],
Wrong logon.
BC Bob Says:
December 3rd, 2008 at 10:19 am
Yikes [103], Only have one boot on, at this time. Can’t seem to locate the other boot.
Bost: I thought you left it in Reech’s a55?
Clotpoll Says:
December 3rd, 2008 at 11:58 am
ChiFi (129)- It’s not me they need to talk to. Have them call Cindy @ 908-231-7390.
clot: who is this? is this a phone $ex line? or are you trying to frame me as a stalker?
114….Holy mackeral…sounds like a cross between Clockwork Orange and East Orange.
I just bought a small piece of furniture on CraigsList to restore as a Christmas gift for Mrs PGC.
I was given an address in Ridgewood to pick it up. I drove up to what seemed to be a high end antique store. A bit wary and confused I went into the store to ask. After a discussion with the owner, he went to get the contractor who leased the basement as a workshop and storage. The owner came back up to the store and seemed a little bit off. As I waited for the contractor to bring the piece out, he said a few things that stuck with me. The first was that the contractor should have offered the piece to him first. I think the piece came from a house clearance and with a little bit of restoration and I’m sure he could get 10X what I was paying for it. Thats actually why I don’t buy things from stores like that. The second was that “retail is dead”. I don’t know if he meant the economy for him in general was hurting him or just that internet shopping has now made it into his domain.
Anyway, I bit my tongue and took my piece home. I will have to keep watching the store to see if it stays in business.
Clotpoll Says:
December 3rd, 2008 at 11:54 am
hype (130)- ChiFi can confirm for you that besides not having the ability to understand the difference between gambling and investment, I also suffer from borderline personality disorder.
clot: OK – I am trying to channel my best Lloyd Bensten – you’re no Jack Kennedy……
I know people with borderline personality disorder, and you’re no person with borderline personality disorder.
I consider you more the personality equivalent of a colonoscopy of infinite duration administered without an anaesthetic.
chi (126)-
That’s the mortgage originator in my office. 20 year vet of the business. Has seen it all & knows where a lot of bodies are buried.
She did Neal Cavuto’s mortgage when he was sick.
Clotpoll Says:
December 3rd, 2008 at 5:47 pm
She did Neal Cavuto’s mortgage when he was sick.
clot: I guess that is a huge step up from merely doing Neal Cavuto……
Chi (129)-
I know you mean that in the nicest way.
quick muni-bond question … here’s the assessment of the one we bought, i just yanked the name of it …
average credit quality of the xxxx Municipal Bond Fund is AA rating. It has about 98% of its investments in investment grade bonds (BBB
rated or higher) and 75% with a rating of AA or higher.
it is a considerable amount of loot, but once again, we dont necessarily need the money for five years. still, we definitely dont want to LOSE money. any thoughts?
Chi (131)-
No other lender would touch that loan.
I guess imminent death was a disqualifier even during the boom.
Note this caption:
“The third graph displays only June sales, 2000 to 2008 YOY.”
It helps us to identify just how many months grim blew off this core responsibility to the board.
SLACKER!
I do think the best economical investment right now is food.
Why put money in the stock market when its going down, but yet foods prices keep going up, and will continue to rise.
As for me, I got myself a nice Made in America cabinet, and I canned & pickled fruits, vegtables, applesauce, dried beans, etc etc…
The food I bought at local farm markets, or grew some myself. Juanita did most of the canning, but I helped some.
SAS
I do like silver too :)
SAS
yikes Says:
December 3rd, 2008 at 5:50 pm
it is a considerable amount of loot, but once again, we dont necessarily need the money for five years. still, we definitely dont want to LOSE money. any thoughts?
Did anyone else aged 28-31 buy the fund?
A friend of mine raises chickens too.
I get great free range eggs and everynow and then a whole chicken. We barder, in return I help him balance his books.
SAS
yikes: what is the fund? I will render a verdict…..
Treasury Considers Plan to Stem Home-Price Decline!
Interesting, maybe Paulson will put a special tax on renters or savers to force them to buy houses.
Why buy now and pay 5.5%? Sit on the sidelines until you can score a 4.5% loan.
After all, if Uncle Hank is offering to subsidize your house purchase, why not take him up on the deal?
When we drive FHA down to 4.5%, we’ll have once again begun to hand out cheap money to deadbeats.
Sideliner Says:
December 3rd, 2008 at 8:55 am
A really good article that I think many on this blog will enjoy reading…
*warning – it’s quite long*
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom/#
Side: I do think that someone else posted this article a couple of weeks ago. However, thank you for reporting, because I meant to read it and forgot.
ALL: IF YOU FREQUENT THIS SITE, THIS LONG ARTICLE IS REQUIRED READING….PERIOD…
reporting = reposting
Reading the comments on CR about the 4.5% mortgage, this is the takeaway (according to me) –
If you do not plan on staying in that house forever, don’t take this offer. The government cannot keep rates this low perpetually, once rates go up, prices will go down. If you plan on selling in the next 5 – 10 years, you will get burned.
That Michael Lewis article is the bomb! One of the best pieces of journalism I have read. I had to read it twice to understand the complex game being played by Wall St – Pure Greed.
how would i know?
yikes: what is the fund? I will render a verdict…..
would rather not say, but does it really matter? was advised by our financial adviser (friend, good gig, etc)
is that not enough info?
“average credit quality of the xxxx Municipal Bond Fund is AA rating. It has about 98% of its investments in investment grade bonds (BBB
rated or higher) and 75% with a rating of AA or higher.”
28-31: Then why do you feel the need to ask a question here?
Look, I can pull a database that will reflect all the holdings…..can you lose money? yes? is this a shrewd move? probably…but you can’t know…..did you buy it in a cost effective way? I can let you know….
28-31: I’m bailing, so I can answer any Q’s on this until tomorrow….
can = cannot
“I’m bailing”
Chi,
If King Kong bailed on an inside pitch, it landed in the upper deck.
Might be fake, but still funny:
http://www.burbia.com/node/2137
#142 grim:Why buy now and pay 5.5%? Sit on the sidelines until you can score a 4.5% loan
And even lower prices!!!
Speaking of sidelines:
http://www.philly.com/philly/hp/news_update/20081203_Builder_giving_away_house_at_Eagles_game.html
#147 victorian: If you do not plan on staying in that house forever, don’t take this offer. The government cannot keep rates this low perpetually, once rates go up, prices will go down.
Prices are going down anyhow, so if you get a low rate to boot, might as well take it.
In other words the low rate will not stop the price declines;it is as simple as that.
Hank and Bergabe-san just need to appear to be doing something.
#151 chgo: Do not understand why someone would be reluctant to dislcose the name of a fund they bought? What is the big deal?
chifi, can i email you or vice versa?
Apparently, once word of the 30k layoffs at ML hit the wires, all h*ll broke lose around campus. Haven’t gotten a clear read… insiders seem to think it was leaked “on purpose.”
Hmmm, not sure how to interpret – someone lookng to scuttle the deal, perhaps?
LOL, if I was BofA, I’d sure as h*ll be trying to dump it!
so I got the word, Cigna Health insurance is given out some pink slips for the month of December. Not sure the % workforce, but I do know that the severece package is 6 months salary & Cobra health insurance for that duration.
SAS
hey, anyone know why Trader Joe’s food is cheap?
Its gotta be grounded up cardboard fillers from China is that?? yes?
SAS
For xmas, you buy lead filled Made in China sh*t toys from Toy R Us for your kids… your a nut. and don’t come crying to me neither when they turn autistic.
“LIST: Survey Finds 1 in 3 Toys Have Toxic Chemicals”
http://tinyurl.com/5mfzrw
chi, 145
agreed. went there, read it, wrote the name of the author down (Michael Lewis) and his book from the 80’s (Liar’s Poker) and about to go find it.
WOW what a fright!
It’s hard to wrap your brain around the insanity of it all.
It does help the reader understand the MAGNITUDE of what just happened and unfortunately helps you realize just how deep of a shit we really are flailing about in.
Not good.
sl
Any sane explanation?
1636 Parker Ave Fort Lee NJ 07024
Sale History
10/08/2008: $1,250,000
11/15/2005: $659,000
sl (166)-
And Klink’s crew is going to rescue us all by:
1. Buying up crap mortgages with good money. Our good money.
2. Forcing mortgage rates down another 100 bps.
3. Triggering another blizzard of lending to deadbeats. The same deadbeats who touched off this whole hamster-on-a-wheel affair.
The scary thing isn’t that a bubble got pumped and busted. These things are cyclical and seem to be almost entrenched in human nature. The scary thing is that the guys entrusted with cleaning up a radioactive mess’ best response is to set off another nuke.
sl (166)-
You won’t believe Liar’s Poker. I bet you knock it off in one sitting.
All the stuff about Lew Ranieri (the inventor of securitization) is mind-blowing.
(145) Chicago – I originally posted that article on a weekend thread – Sunday 11-16 @ 1:42. I recognized the author’s name because Clot recommended “Liar’s Poker” when I once asked “Who started this mess?”
Hey Clot,
Would bulk RE deals be advertised on Loopnet? Or is there another source for such listings?
Clot – You must have posted right when I did!
YOU are the one who told me to read that book – then I found the article a few weeks ago…
Syb (171)-
Loopnet is pretty vanilla stuff. The nasty, toxic, eat-a-hole-in-the-loan department stuff is going to have to be teased out of the banks very slowly and very precisely.
Mike Morgan has written some on this subject. The problem is, the banks are refusing to recognize the value (or lack of value) of these failed assets. You simply can’t get to the point of bulk sales until the banks get real. They’re not there yet.
RichNNJ,
…wow..ugly ugly ugly numbers!!
sl
Clot, 169 — can’t wait to
get bowled over byread it!and all this time I was sure you were predicting in hyperbole….well, F me for being wrong…
sl
yikes Says:
December 3rd, 2008 at 8:33 pm
chifi, can i email you or vice versa?
Y: send to grim and tell him what to do….if you want to maintain your privacy from me, feel free to ask grim to strip your identification and he can forward back my response to you…..cheers…
C:
#1 Thanks for a critical find
#2 Thanks for being a role model for others. There are people who outwardly are supposed to be happier, more successful, and wealthier than you. Every day I see an example of such a person who in reality is vacuous, lost, and unhappy, and has no clue that they are miserable or how to stop feeling that way.
Clotpoll Says:
December 3rd, 2008 at 10:36 pm
sl (166)- You won’t believe Liar’s Poker. I bet you knock it off in one sitting.
All the stuff about Lew Ranieri (the inventor of securitization) is mind-blowing.
clot: ever throw a phone at someone….and I don’t mean in a Russell Crowe kind of way…..Moneyball is also an important read, although it becomes more dated through the passage of time…..Nick Swisher is a Yankee now though…
clot: May I call you “colonpoll” from now on?
Clotpoll Says:
December 3rd, 2008 at 10:32 pm
sl (166)- And Klink’s crew is going to rescue us all by:
3. Triggering another blizzard of lending to deadbeats. The same deadbeats who touched off this whole hamster-on-a-wheel affair.
clot: do you really think so? I think it is just a pricing proposal, not a standards issue. Those locked out will continue to be so.
(177) Chicago – I am one happy person – no doubt… Foolish as that may seem. I know I’m lucky to have what I do have – that helps…
Urban tribal bloggers ftw!
http://www.toothpastefordinner.com/111708/tribes-of-the-21st-century.gif
#6 in the list of “most expensive small towns in America”, from Business Week:
Far Hills, N.J.
New York-Northern New Jersey-Long Island, NY-NJ-PA MSA
Median home sales price: $1,071,438
Population: 928
Median household income: $112,817
One of the wealthiest suburbs of Manhattan, Far Hills is notable for its horse farms, rolling hills, elegant mansions, and Old Money. It is also home to several fun attractions, including the Leonard J. Buck Garden, a 33-acre public botanical garden; the Natirar, a 491-acre estate once owned by Mohammed VI, King of Morocco; and the headquarters of the United States Golf Assn.
a portion of the latest Mr. Mortgage post, in which he describes loan modifications that are being offered to borrowers. pretty horrible; basically a way to make them permanent serfs to their houses.
Mr Mortgage: Actual IndyMac (Exotic) Loan Modification
Posted on December 3rd, 2008 in Daily Mortgage/Housing News
The IndyMac loan modification shown here has redefined ‘exotic’ and ‘leverage’ with respect to mortgages. I am going to name it the 5-year hybrid, 30-year term, 8-year graduated payment, 176% combined loan-to-value, mega-balloon, super bendover ARM (document below). And you thought Pay Option ARMs were exotic!
Even IndyMac has a extraordinarily long acronym for this modification. The image below is cut straight from the document. Breaking out the acronym using mortgage lingo you get: Bulk Modification Principal & Interest and Interest Only Fixed and Adjustable Rate Mortgage with Step-Term Balloon. It is this very ‘innovation’ that got us here in the first place.
If they would have had these loans out during the bubble years the housing bubble could have grown twice as large.