The Tale of Two Bubbles

Posted on June 7, 2009 by grim

Hot off the presses from Kettle and Veto!

Two Bubbles – NJ OFHEO Home Price Index Historical Analysis


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(click to enlarge)


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This entry was posted in Economics, New Jersey Real Estate. Bookmark the permalink.

38 Responses to The Tale of Two Bubbles

  1. gary says:
    June 7, 2009 at 5:23 pm

    F*cking Frist!

  2. grim says:
    June 7, 2009 at 5:24 pm

    From the APP:

    Construction to begin Monday on rail tunnel under Hudson River

    New Jersey officials will sink the first shovel into the nation’s largest transportation project Monday.

    The groundbreaking ceremony will kick off construction of a third tunnel under the Hudson River, an $8.7 billion project expected to be completed in 2017.

    The new link will be dedicated to carrying commuter rail traffic between northern Jersey and Manhattan, permitting an exponential expansion in direct rail routes and doubling commuter rail capacity.

  3. gary says:
    June 7, 2009 at 5:27 pm

    Kettle, Veto and Grim… you all rock! Is this the same data that Suzanne has been using for her research? And what’s the name of that North Jersey chick realtor who was getting slammed here about a month ago? I can’t remember her name… perhaps she can use this data to swindle… er… assist her buyers.

  4. gary says:
    June 7, 2009 at 5:36 pm

    Look at this mutant! These sellers will be begging for an offer. This thing has as much curb appeal as a fat girl with development problems hanging at the corner pub around closing time on a Tuesday night.

    http://www.realtor.com/realestateandhomes-detail/West-Caldwell-Twp_NJ_07006_1108473483

  5. Happy Camper says:
    June 7, 2009 at 5:42 pm

    by DAVID MARGOLICK

    “The Night of the Generals
    The six retired generals who stepped forward last spring to publicly attack Defense Secretary Donald Rumsfeld’s handling of the Iraq war had to overcome a culture of reticence based on civilian control of the military. But while each man acted separately, all shared one experience: a growing outrage over the administration’s incompetence, leading some of the nation’s finest soldiers to risk their reputations and cross a time-honored line.

    “Donald Rumsfeld is now gone, and history’s first draft on him has been written. Not long ago, one of the most famous former military men in America, Senator John McCain, said Rumsfeld was, along with Robert S. McNamara, of Vietnam fame, one of the worst secretaries of defense ever, evidently thinking he’d get votes in his run for the presidency by saying so. But in a nation founded on civilian control of the military, in which generals fight wars but rarely take on their politically elected bosses, the spectacle of six retired generals, some intimately associated with an ongoing war, attacking a sitting secretary of defense was extraordinary, and, for some, extraordinarily unsettling. “Seven Days in April,” someone called it. On April 14, 2006, headshots of five of the generals dominated the front page of The New York Times.”

  6. sas says:
    June 7, 2009 at 6:38 pm

    not sure if we can make a comparison.

    a ballpark estimation.

    but, it does send the message. prices will continue to fall.

    SAS

  7. flowerboy says:
    June 7, 2009 at 6:57 pm

    Anybody have any info about how buying a house from a relocation company works. Anything to look out for. If the house was bought out at appraisal will they only sell at appraisal or let it sit. Also, does the relocation company appraise about the same as bank appraisal or is one usually higher? Thanks clot grim or anyone who cares.

  8. Essex says:
    June 7, 2009 at 7:02 pm

    4….I would totally live there — yo.

  9. Clotpoll says:
    June 7, 2009 at 8:44 pm

    frank (457, last thread)-

    I don’t know why I respond to you, but here goes:

    Virtually no one out there has a 2% mortgage, either an original one or one “modified” according to your insane stipulations.

    Most people who had 2% mortgages got that rate as the teaser into a pay option ARM (most likely, a MTA) and lost that rate when they hit the neg am limit.

    Making Home Affordable has done about 100K workouts nationwide so far. That’s a little shy of the 2mm it was supposed to “save”. I would imagine any borrower that would have to have the rate lowered to 2% to stay within the program guidelines would be disqualified for not measuring up to other criteria.

    Again, please provide some sort of evidence- other than ad hominem attacks on me and taunting the board in general- or else you’re no more than a second-rate troll.

  10. cobbler says:
    June 7, 2009 at 9:39 pm

    Shiller (as in Case-Shiller) in todays NYTimes:

    Why Home Prices May Keep Falling

    http://www.nytimes.com/2009/06/07/business/economy/07view.html?ref=business

  11. cobbler says:
    June 7, 2009 at 9:45 pm

    Looking at kettle/veto charts one could argue that the drop in RE values (at least, inflation-adjusted) does not preclude economic growth: as we remember, Clinton years had been rather good for both GDP and incomes/wages – at the same time prices seemed to end sliding only in 1997. We are certainly in a different situation today than in 1989, primarily because deindustrialization of the U.S.A. got much further – but still…

  12. zieba says:
    June 7, 2009 at 9:53 pm

    They need to flip that house around, the back is much more composed.

  13. frank says:
    June 7, 2009 at 9:54 pm

    #8,
    I don’t why I am wasting my time responding to a RE agent, but here it’s. So stop calling names and STFU.

    “They gave me 3 years @ 3.197% and then 6.25% fixed for the rest.”
    http://www.loansafe.org/forum/success-stories-homeowners-who-fought-back-won/5974-indymac-modification-success.html

  14. homeboken says:
    June 7, 2009 at 9:54 pm

    Kettle & Veto – My compliments for your charting ability. More importantly, being able to decipher meaningful data and present it effectively is impressive.

    My background in econometrics forces me into raw numbers…being able to present it as easy to understand charts with well defined axis is a real treasure to us. Thank you much.

  15. frank says:
    June 7, 2009 at 9:55 pm

    #8,
    check the rest at:
    http://www.loansafe.org/forum/success-stories-homeowners-who-fought-back-won

    just look for Indymac, it’s FDIC in case you live under a rock.

  16. Sal says:
    June 7, 2009 at 9:57 pm

    We made an offer on a house on April. Since we lost on multiple bit war, and cannot contact with our agent anymore(he is just ignoring us) so we decided to call the listing agent what is going on with the current buyer. He told us that the house was closed on a week and half ago. Is there any regulation that the house shows up as sold property? I asked my friend to check on the house and it is still under contract stage….

  17. chicagofinance says:
    June 7, 2009 at 10:20 pm

    13.homeboken says:
    June 7, 2009 at 9:54 pm
    Kettle & Veto – My compliments for your charting ability. More importantly, being able to decipher meaningful data and present it effectively is impressive.

    My background in econometrics forces me into raw numbers…being able to present it as easy to understand charts with well defined axis is a real treasure to us. Thank you much.

    home: I really can’t disagree more….cool pictures and some nice platitudes, but what point does this drive home? I think the biggest divergence here is that 1980’s Jersey has more in common with current Phoenix, Miami et al. Current Jersey is in serious trouble, but at best this analysis appears specious, unless the conclusion merely directional and is intended to be “the next step is DOWN”.

    I think it tries to posit a magnitude or duration of a drop, and if so, it is a faulty tool that will lead its users to poor decisions.

    I draw from this one conclusion – and no more. In NJ, do not buy in Summer 2009 if your personal circumstances allow you to avoid it.

    Otherwise I see this as analytical masturbation.

  18. chicagofinance says:
    June 7, 2009 at 10:25 pm

    418.BC Bob says:
    June 7, 2009 at 12:11 am
    “Rarely does anyone discuss the biggest problem with gold — no one actually knows what this metal is really worth. After all, it generates no income. All the gains come from capital appreciation. And that, of course, is a gamble.”

    Chi’s post.

    Hey Brett Arends you a-hole. Maybe Chi too? We all know what’s it’s worth. Take a few minutes and pick up a chart. In 2001 Dow/Gold was 44-1, today it’s approx 9-1. That’s what it’s fcking worth. Nothing scientific about that.

    Bost: Just because I posted something doesn’t mean I wholly agree with it. I appreciate your position, but not being called an a-hole…..did I attach any of my own commentary?

  19. imkeithhernandez says:
    June 7, 2009 at 10:31 pm

    kinda like some others do w/zero hedge or william black articles, no? it hasn’t stopped you from some all caps rants and lectures on issuing disclaimers

  21. Tom says:
    June 7, 2009 at 11:42 pm

    #6 flowerboy

    Relocation co deals can be tricky. I backed out of one myself recently. You will never know what the deal is between relo co, the seller and the seller’s employer.

  22. Flowerboy says:
    June 8, 2009 at 12:06 am

    Thanks for answering. Why did you back out?

  23. Dissident HEHEHE says:
    June 8, 2009 at 7:43 am

    “Are economists paid to say what people want to hear? If not, can someone please tell me why economists are perennially such an optimistic lot, seldom collectively in the ballpark and constantly revising forecasts lower?”

    http://globaleconomicanalysis.blogspot.com/2009/06/optimistic-unemployment-and-housing.html

  24. Dissident HEHEHE says:
    June 8, 2009 at 7:59 am

    More on What the Consumer Is Up To
    Whether or not the current unraveling turns out to be a modern day version of the Great Depression — which I’ve argued against because, among other reasons, the policy responses we’ve seen so far and those I expect to see in future point to another sort of unhappy ending — spending won’t fall to zero. People will still need to eat, put a roof over their heads, find clothes to wear, etc.

    Given that, I try to help visitors to Financial Armageddon — especially those who are investors or who make key business decisions — keep tabs on what Americans are or are not doing with their money. Recent examples of posts on this subject include “Where the Axe Is Falling,” “Green Shoots in Escapism,” and “Proving Me Wrong” — as well as the one you are reading now, which highlights an interesting New York Times article entitled “The Recession, Wal-Mart Style”:

    http://www.financialarmageddon.com/2009/06/zeroing-in-on-the-consumer.html

  25. rt says:
    June 8, 2009 at 8:50 am

    The charts are great. Thanks Kettle and Veto for the hard work. However, the real price is not as important as the nominal price for a buyer. Is it possible for you guys to produce another version of the charts in non-adjusted price?

  26. nwnj says:
    June 8, 2009 at 8:50 am

    Not to be picky, but it would be nice to see what household incomes were doing during this time.

  27. grim says:
    June 8, 2009 at 8:55 am

    #26 – Click the link.

  28. still_looking says:
    June 8, 2009 at 9:01 am

    more anectdata,

    my MIL was just laid off. No recession here. Just business as usual.

    sl

  29. Qwerty says:
    June 8, 2009 at 2:22 pm

    Quite harsh Chi. Have you viewed the full PDF report?

    Two Bubbles – NJ OFHEO Home Price Index Historical Analysis
    http://tinyurl.com/lzxf6x

    If this report is “analytical masturbation” does that make Case/Shiller reports the same?

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    June 12, 2009 at 1:56 pm

    The best information i have found exactly here. Keep going Thank you

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