From the Record:
Housing recovery may be anemic
After three years of hard times, analysts say, the housing market is likely to begin recovering this year. But between high unemployment and rising foreclosures, the recovery is expected to be weak and slow.
“The housing market will improve throughout 2010,” said Patrick O’Keefe, an economist with the Roseland accounting firm J.H. Cohn. “But it’s not going to be anything to write home about. I wouldn’t even e-mail about a lot of it.”
…
Prices have fallen about 30 percent nationwide from their peak, and 20 percent in the region. Is 2010 the year that prices start to rebound?Patrick Newport, an economist with IHS Global Insight doesn’t think so. He forecasts a price drop of 5 percent during 2010.
“With foreclosures still rising and the fact that the economy is still losing jobs, we’re going to see prices start falling again,” he said.
…
According to the National Association of Home Builders, the New York-White Plains-Wayne area, which includes Bergen and Passaic counties, was the nation’s least affordable major housing market during the third quarter of 2009. Only about 19 percent of all homes sold during the third quarter were affordable to those earning the area’s median income of $64,800, according to the NAHB.That’s the main reason that Karen Weaver, an analyst with Deutsche Bank Securities, recently predicted that home prices in the area may drop significantly.
Home values “would need to decline another 29 percent just to restore prices to the point in New York’s history when housing was at its most affordable,” she wrote in a recent report. Even if prices just revert to their average affordability levels, she wrote, they would drop by 8 percent.
Lower prices can pose a serious financial hardship for homeowners who owe more on their mortgages than their homes are now worth. Those owners may find it impossible to sell.
But it’s a different story for buyers.
From MarketWatch:
Low rates didn’t cause bubble, Bernanke says
The Federal Reserve had a role in inflating the housing bubble, but it wasn’t low interest rates in the U.S. that fueled speculation in housing around the globe, Fed Chairman Ben Bernanke said Sunday.
Rather, it was lax supervision of toxic mortgages by the Fed and other bank regulators — along with excessive flows of capital around the globe — that inflated the bubble, setting up the world economy for what may have been the worst economic crisis in modern history, Bernanke said.
In twin speeches at the annual meeting of the American Economic Association in Atlanta, Ga., Bernanke and his vice chairman, Donald Kohn, responded to critics who suggest that the Fed’s policy of very low interest rates from 2001 to 2005 was the major cause of the housing bubble.
“The magnitude of house-price gains seems too large to be readily explainable by the stance of monetary policy alone,” Bernanke concluded in his speech. Comparisons with other major economies shows that countries with relatively higher interest rates had larger housing bubbles, he said.
Bernanke conducted a kind of post-mortem on the housing bubble. Using historic relationships, he concluded that low interest rates were responsible for about 5% of the change in housing prices, while greater global capital flows explained about 30% of the change.
The biggest cause of the bubble was exotic mortgages and the decline in underwriting standards, he said. Buyers were able to lower their initial monthly payments, which allowed prices to soar to unsustainable levels.
First
From the Star Ledger:
Grads discover finding jobs is harder work than expected
For eight months now, Ashley DeNyse has awoken at 8 a.m. each day to scour a half-dozen job sites over her morning cereal.
The 23-year-old, who graduated from Rutgers University in May with a double major in communications and public health, was certain she’d land a job by now. She never imagined that after applying for more than 300 jobs, she’d still be living with her parents in Cinnaminson and baby-sitting part-time.
“I knew with the economy that it was going to be difficult; I just didn’t know it would take this long,” she said. “Every single callback I get, they’re saying they took someone with more experience.”
For recent college grads and other young adults like DeNyse, the job situation is going from bad to worse. The latest Labor Department figures show the unemployment rate dropped in November for men and women, black and white, in almost every age group. Nationally, the jobless rate fell to 10 percent from 10.2 percent, spurring hopes that the job market may be emerging from the bottom.
But for 20- to 24-year-olds, the unemployment rate rose to 16 percent — up from 15.6 percent in October — the highest for the age group since 1983.
Just 60 percent of 2009 graduates had full-time jobs within six months of graduation, compared with a placement rate of 75 percent in recent years, according to the National Association of Colleges and Employers, which recently polled 10 colleges across the country. Entry-level salaries were also down, averaging $48,633, off 1.2 percent from the previous year.
It’s a crisis for the roughly 1.5 million undergraduates who earn degrees from U.S. colleges every year, said Phil Gardner, director of the Collegiate Employment Research Institute at Michigan State University. Contrary to recent speculation that older, more experienced adults are facing the toughest job challenges, the report showed fresh graduates are the most vulnerable, followed by those with fewer than two years’ experience.
From yesterday’s thread:
#311 – Thanks Fiddy for your quick response. I’m going to check out that one on Jefferson.
I was trying to figure out how to search using common sites for all homes for sale in a certain neighborhood. If you put in the zip, you get all of Red Bank, if you put in Middletown, you get all of Port Monmouth etc etc etc, and River Plaza doesn’t really exist (some would say shouldn’t exist, but whatever…)
Any suggestions welcome.
Thanks.
From Krugman at the NYT:
That 1937 Feeling
Here’s what’s coming in economic news: The next employment report could show the economy adding jobs for the first time in two years. The next G.D.P. report is likely to show solid growth in late 2009. There will be lots of bullish commentary — and the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.
But if those calls are heeded, we’ll be repeating the great mistake of 1937, when the Fed and the Roosevelt administration decided that the Great Depression was over, that it was time for the economy to throw away its crutches. Spending was cut back, monetary policy was tightened — and the economy promptly plunged back into the depths.
The financial system and government have also decided the commercial real estate ((CRE)) problem requires that we kick the can down the road. BusinessInsider reported some sobering statistics in November:
* The MIT Real Estate Center said that commercial property prices has dropped almost 42% over the past 2 years.
* As a result of that drop, about fifty-five percent the $1.4 trillion commercial mortgages that will mature in the next five years are underwater.
* The delinquency rate for commercial mortgages climbed to 5% in October. A year ago the delinquency rate was just 0.77%.
* About half of all commercial mortgages sit on the balance sheets of smaller banks. So the massive number of bank failures this year is significantly attributable to losses from commercial real estate.
* Late last month, one of the largest commercial real estate finance companies in the world filed for bankruptcy.
link
http://seekingalpha.com/article/180681-2010-housing-outlook-kicking-the-can-down-the-road
Here is a 2010 forecast we can get behind.
http://seekingalpha.com/article/180682-housing-and-stock-markets-2009-analysis-2010-forecast
* I believe the massive supply of available housing is still far in excess of any market based demand, and only a wide variety of government efforts to prop up the market are keeping housing markets afloat. These efforts have included tax incentives, driving mortgage rates down, restructuring mortgages, massive support of government sponsored mortgage agencies like FHA, Freddie Mac, and Fannie Mae, etc. I believe that, literally, with the exception only of the two world wars, never have so massive financial resources been allocated to a single issue as saving American housing.
* It’s interesting to note that in the case of people who have their mortgage payments reduced, almost 40% go back into default within the next year.
* As I write this, housing prices are going down, not up. The most recent Case-Schiller index released on December 29th showed housing prices generally flat, but that release covered October, is seasonally adjusted, and is an average of 3 months of data. I believe that the next release will show house prices declining again.
* The vast majority of the “rejuvenated” housing market has been the result of sales at the lower end, as investors snap up foreclosures, and take advantage of government tax incentives. The higher end of the market has not seen any rebound.
* Despite the downturn of the last few years, housing is not cheap. Almost all markets are much more expensive than in 2000, despite the general lack of income or job growth during that period. Washington housing prices are 80% higher than in 2000, New York’s are 75% higher; even very hard hit areas like Miami are still almost 50% higher in nominal terms, while LA is 68% higher. On average, housing prices are still 50% above 2000 levels, while the stock market, employment, and incomes are flat. This indicates to me that housing still has further to fall. Commercial property – apartment buildings, shopping centers, hotels, etc – have had roughly the same 50% price increase in the last decade.
http://www.federalreserve.gov/boarddocs/speeches/2004/20040223/
#1 – Grim
“The biggest cause of the bubble was exotic mortgages and the decline in underwriting standards, he said. Buyers were able to lower their initial monthly payment, which allowed prices to soar to unsustainable levels.”
So…..Did he miss Greenspan’s speech 2/23/04?
“American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage.”
If Bernanke doesn’t believe Greenspan leaving the rates too low too long was a problem, he should at least acknowledge that Greenspan promoted alternative mortgage products.
http://www.businessinsider.com/security-breach-at-newark-creates-travel-hell-2010-1
Stu/Gator/Sean – Pics of the Newark Airport last night.
Fascists Gone Wild:
“We cannot identify the source of the new money that pushed stock prices up so far so fast. For the most part, the money did not from the traditional players that provided money in the past.”
Huh? So, this vast infusion of liquidity–which helped the banks to avoid painful deleveraging–did not come from the usual suspects?
That’s right. According to Biderman, the money did not come from (a) companies (“which were a huge net seller”) (b) retail investor funds, (c) retail investors, (d) foreign investors …, (e) pension funds [or (f) hedge funds].
Has it happened? Has the government or it’s primary dealers really purchased stocks?
I don’t know, but Bernanke’s refusal to open up the Fed’s books – and the lack of accountability and transparent accounting standards for the big banks – isn’t helping to dispel suspicions.”
http://www.zerohedge.com/article/us-government-buying-stocks
Watched Greenhut talking about “Plunder” on C-SPAN last night.
Ugly. Just plain ugly. I especially liked the part where the Treasurer of Orange Co. got up and said he thought CA would default by this Summer. Their CDS are currently at the same price as Botswana’s.
Cindy, what’s your bug-out plan?
12 – Clot – Me?
I’m in it for the long haul. Remember, I may have to tear out the lantana and plant a garden. I’m using every cent I have to be totally out of debt. The house taxes run about $1400 a year. They would probably have to grandfather clause in something if prop 13 is changed.
If CA goes under, there will be other states close behind. Lots of folks will need a plan.
Me..I’m the eternal optimist. The structural deficit has to be addressed. Our archaic budget process has proven to be unworkable. I’m hanging in there.
good to be back on the regular work schedule. would i feel different if i didnt work for myself? probably.
putting the new Keurig to work this morning while thanking the big guy upstairs that i wasn’t stuck at newark airport last night. what a debacle.
go jets!
http://abcnews.go.com/Business/wireStory?id=9468512
Foreclosures weigh on home appraisals
Clot,
It’s not even the amount of the money flow into equities as the equities that were bought. Who in the hell would have bought bank stocks and commercial reits last year?
Gerald Levin on CNBC. Big yuks.
Actually, it’s pathetic. Perhaps their new idea is to slowly condition everyone into believing that failure = success.
If so, they’re wasting time. It’s already been done.
HE (17)-
Never underestimate the stupidity of the US investment community.
Interesting Article from Pravda on American Capitalism or lack there of.
American Capitalism Gone With A Whimper
It must be said, that like the breaking of a great dam, the American descent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people.
True, the situation has been well prepared on and off for the past century, especially the past twenty years. The initial testing grounds was conducted upon our Holy Russia and a bloody test it was. But we Russians would not just roll over and give up our freedoms and our souls, no matter how much money Wall Street poured into the fists of the Marxists.
Those lessons were taken and used to properly prepare the American populace for the surrender of their freedoms and souls, to the whims of their elites and betters.
First, the population was dumbed down through a politicized and substandard education system based on pop culture, rather then the classics. Americans know more about their favorite TV dramas than the drama in DC that directly affects their lives. They care more for their “right” to choke down a McDonalds burger or a Burger King burger than for their constitutional rights. Then they turn around and lecture us about our rights and about our “democracy”. Pride blind the foolish.
Then their faith in God was destroyed, until their churches, all tens of thousands of different “branches and denominations” were for the most part little more then Sunday circuses and their televangelists and top protestant mega preachers were more then happy to sell out their souls and flocks to be on the “winning” side of one pseudo Marxist politician or another. Their flocks may complain, bu t when explained that they would be on the “winning” side, their flocks were ever so quick to reject Christ in hopes for earthly power. Even our Holy Orthodox churches are scandalously liberalized in America ..
The final collapse has come with the election of Barack Obama. His speed in the past three months has been truly impressive. His spending and money printing has been a record setting, not just in America ‘s short history but in the world. If this keeps up for more then another year, and there is no sign that it will not, America at best will resemble the Weimar Republic and at worst Zimbabwe.
These past two weeks have been the most breath taking of all. First came the announcement of a planned redesign of the American Byzantine tax system, by the very thieves who used it to bankroll their thefts, losses, and swindles of hundreds of billions of dollars. These make our Russian oligarchs look little more then ordinary street thugs, in comparison. Yes, the Americans have beat our own thieves in the shear volumes. Should we congratulate them?
These men, of course, are not an elected panel but made up of appointees picked from the very financial oligarchs and their henchmen who are now gorging themselves on trillions of American dollars, in one bailout after another. They are also usurping the rights, duties, and powers of the American congress (parliament). Again, congress has put up little more than a whimper to their masters.
Then came Barack Obama’s command that GM’s (General Motors) president step down from leadership of his company. That is correct, dear reader, in the land of “pure” free markets, the American president now has the power, the self-given power, to fire CEOs and we can assume other employees of private companies, at will. Come hither, go dither, the centurion commands his minions.
So it should be no surprise, that the American president has followed this up with a “bold” move of declaring that he and another group of unelected, chosen stooges will now redesign the entire automotive industry and will even be the guarantee of automobile policies. I am sure that if given the chance, they would happily try and redesign it for the whole of the world, too. Prime Minister Putin, less then two months ago, warned Obama and UK ‘s Blair, not to follow the path to Marxism, it only leads to disaster. Apparently, even though we suffered 70 years of this Western sponsored horror show, we know nothing, as foolish, drunken Russians, so let our “wise” Anglo-Saxon fools find out the folly of their own pride.
Again, the American public has taken this with barely a whimper…but a “free man” whimper.
So, should it be any surprise to discover that the Democratically controlled Congress of America is working on passing a new regulation that would give the American Treasury department the power to set “fair” maximum salaries, evaluate performance, and control how private companies give out pay raises and bonuses? Senator Barney Frank, a social pervert basking in his homosexuality (of course, amongst the modern, enlightened American societal norm, as well as that of the general West, homosexuality is not only not a looked down upon life choice, but is often praised as a virtue) and his Marxist enlightenment, has led this effort. He stresses that this only affects companies that receive government monies, but it is retroactive and taken to a logical extreme, this would include any company or industry that has ever received a tax break or incentive.
The Russian owners of American companies and industries should look thoughtfully at this and the option of closing their facilities down and fleeing the land of the Red as fast as possible. In other words, divest while there is still value left.
The proud American will go down into his slavery without a fight, beating his chest, and proclaiming to the world, how free he really is. The world will only snicker.
Stanislav Mishin© 1999-2009.. «PRAVDA.Ru». When reproducing our materials in whole or in part, hyperlink to PRAVDA.Ru should be made. The opinions and views of the authors do not always coincide with the point of view of PRAVDA.Ru’s editors.
Why don’t they fly a plane into this POS?
Jan. 4 (Bloomberg) — Dubai’s Sheikh Mohammed bin Rashid Al Maktoum will open the world’s tallest tower today. It won’t be the world’s fullest.
The occupancy rate at Burj Dubai may reach 75 percent this year, with office leasing proving the biggest challenge for investors, said Roy Cherry, an analyst at investment bank Shuaa Capital PSC. While mainly residential, the 200-story tower will have 37 floors of office and retail space.
“Those who bought with the intention of leasing will face a difficult time because few companies today can justify paying premiums for luxury,” Cherry said.
The tower cost $1.5 billion to build, said Mohammed Alabbar, chairman of developer Emaar Properties PJSC. During the five years of the tower’s construction the sheikhdom’s debt- fueled property market went from the world’s best performing to the worst, forcing officials to renegotiate loans and seek bailouts from neighboring Abu Dhabi.
Apartment prices in the tower, which soared as high as 10,000 dirhams ($2,700) a square foot at the 2008 peak, have dropped to less than half of that.
Happy New Year!!! J-E-T-S JETS JETS JETS>
BTW did we do 2010 predictions yet?
BC Bob did pretty good with Gold (Comex Futures being up 23.9%) however Junk Bonds, (Merrill Lynch High Yield Master) was up 57.5%.
Either way you folks downpayment money is up between 24% and 57% from on year ago if you took our advice and homes are down another few percentage points. Sounds like a great deal.
Regarding the appraisal article, I love to how the NAR deems lower than expected appraisals “botched”.
^know how
From [15];
The contract price is $310,000; appraisal comes in at $280,000. Immediately following that anecdonte, “The National Association of Realtors says nearly one in four of its members has reported clients losing a sale due to botched appraisals.”
So not ‘hitting the number’ is now the same as botching the appraisal. Saving the buyer’s ‘American Nightmare’ requires them overpaying by 10% in a declining market.
NAR delenda est.
If you have a job, and can make the pymts, why is oweing more on your house than it is worth,such a financial hardship? It was the same in many cases in the early 90’s.
#24 3b
Didn’t you get the memo? We are entitled to make money off our houses, no matter how much we paid for them and no matter you could rent the same house for 50 to 60% of what it would cost with a 20% downpayment.
#25
I think people were less likely to actually afford the house they bought this time so if anything goes wrong…boom..you are behind.
Fed hints last week that rates may rise, market down. Fed hints, or should I say recertifies that rates will remain low (Bernanke and Kohn’s speeches this weekend), and futures are up.
It is not a myth. If you eat a whole bulb of garlic it really does come out of your pores. Wonder how long I’ll smell like this.
Safe a couple of days. Do mine on grill with skewers when BBQing till golden brown like a perfectly done marshmallow. Smell bad feel great, really good for you.
Safe 28 – Also not a myth that garlic is completely banned from our corporate cafeteria. Which has not done anything to quell the rumors that Si N. is actually a vampire.
JJ – so tell us about hitting the back wall….
20.John says:
January 4, 2010 at 8:30 am
Happy New Year!!! J-E-T-S JETS JETS JETS>
BTW did we do 2010 predictions yet?
BC Bob did pretty good with Gold (Comex Futures being up 23.9%) however Junk Bonds, (Merrill Lynch High Yield Master) was up 57.5%.
Either way you folks downpayment money is up between 24% and 57% from on year ago if you took our advice and homes are down another few percentage points. Sounds like a great deal.
Can we take the first three minutes of trading and extrapolate it across the rest of the year?
Japanese are now innovators? What has this world come to?
http://www.marketwatch.com/story/hitachi-develops-brain-powered-remote-control-2010-01-04
What exactly is hitting the back wall?
#5 –
So Krugman is basically saying that stimulus doesn’t work, or only provides a phony “recovery”? Because otherwise, when would the government *ever* be able to cut the stimulus? Krugman is enough of a tool to believe that the wise Solons in the government will somehow “know” the difference between stimulus effects and actual, organic recovery. Fat chance.
I used to like to read Krugman. Now I can’t stand him. His politics really have no place in the study of economics.
In other news, Newark Airport blows and TSA stands for Totally sux ass.
Chi-Fi back in October 2008 when massive govt. stimulus was enacted to heal credit markets I did not predict but simply stated the intended plan of Timmy and Ben, heal the markets in this order.
Munis,
Investment Grade,
Junk Bonds,
Stock
I gave up on Munis in Jan, then moved investment grade and gave up in March and then rolled Junk till September and then some stocks.
Trouble is Uncle Sam did not give me a road map this year.
Housing he is propping up right now with artificial credits and low rates. Two of the three legs of that stool will get wobbly come the summer.
Right now one year ING Cds at 2%, mixed in with high coupon callable at par munis, step ups, bank investment grade corp bonds and maybe some special sits prefs and div paying stocks is about all you can do.
Right now my tea leaves are telling me yield is what you get from bonds, not appreciation in 2010. Stocks have room to move up another 10% but there maybe some flare ups in individual names.
For average investor, after we get a bit of a jan effect another few percentage points up I highly recommend you REBALANCE. Fidelity and Schwab were suckering people to do it last year at the March lows. Stupid time, you lost all your money in stocks, re-balance and you lose any chance of getting anywhere near break even. Everyone on this site should actually look at your YE 401K statement and use some on-line tools to rebalance. If we get a double dip that is not the time to be crying.
Back to work today –
Have a good one…
Cindy
I actually like Krugman. He was great in the Old Couple and can’t believe he outlived Tony Randell.
tbiggs says:
January 4, 2010 at 9:39 am
#5 –
So Krugman is basically saying that stimulus doesn’t work, or only provides a phony “recovery”? Because otherwise, when would the government *ever* be able to cut the stimulus? Krugman is enough of a tool to believe that the wise Solons in the government will somehow “know” the difference between stimulus effects and actual, organic recovery. Fat chance.
Can someone please tell me what kind of jobs there are for double majors in “communications” and “public health”?
I recall from college that communications majors wound up as low or no paid interns at radio stations and newspapers, and I have no idea what a public health major studies.
“The 23-year-old, who graduated from Rutgers University in May with a double major in communications and public health”
John says:
January 4, 2010 at 9:47 am
For average investor, after we get a bit of a jan effect another few percentage points up I highly recommend you REBALANCE. Fidelity and Schwab were suckering people to do it last year at the March lows. Stupid time, you lost all your money in stocks, re-balance and you lose any chance of getting anywhere near break even. Everyone on this site should actually look at your YE 401K statement and use some on-line tools to rebalance. If we get a double dip that is not the time to be crying.
john, can you give an example of what you mean by rebalance?
you know, for the unsavvy investor who has his financial advisor pulling the strings.
Poser,
I was a Communication/Pre Med major in college… I’m a doc now… She just chose the wrong co-major ;)
sl
Rebalance? Why bother. Just sell. Everything will be turned to shit by 12/31, anyway…and on 1/1/11, it’s a whole new game, taxwise.
John says:
January 4, 2010 at 9:37 am
What exactly is hitting the back wall?
chicago tan-talizer says:
January 3, 2010 at 1:46 pm
Too bad this is Sunday. I need JJ here. Commentary on short chicks….he would tell you about hitting the back wall.
rebalance = bend over & kiss it goodbye
Poser, #40
“Communications” usually means TV and radio journalism in most colleges. Vague and generally worthless.
The standard in journalism was always a substantive major – usually, history, poli sci, or English.
But communications or journalism BAs were always seen as being basically worthless, gut majors … as far back as the 70’s.
“Communications” might work in applying for PR jobs, maybe.
Happy New Year, John. Ignore CF and don’t go back and read the last thread.
Tell me you haven’t been questioning the timing of the “NO MORE BUYER CREDIT” plastered all over within the last week. Who’s pumping THAT fear, and why the flush rush on inventory?
Who gains if inventory hits and why are they forcing bank to book the loss now?
Without the credit, admin hand will ‘seem’ to be forced into creating alternate mortgage products – maybe at least two.
http://moneycentral.msn.com/content/P108575.asp
Most on-line broker dealer accounts or on line 401K accounts let you rebalance. Depending on your risk tollerance, age etc. After the last 3 quarters of wacky gains vs. the quarters before of loss your portfolio is most likely out of wack. You really have to go on line to your 401k account and do it.
NAR fluff for 2010
Home Prices Increase by 25% This Decade Even with Slump
By National Mortgage News Online
December 31, 2009
After the biggest housing boom and bust in U.S. history, prices of existing homes managed to increase by only 25% over the past 10 years, according to the National Association of Realtors.
The Realtors reported that median home values rose from $137,600 in November 1999 to $172,600 in November 2009 or 25%. At the peak of the market, the median house price hit $230,300 in July 2006.
The latest forecast by NAR economists shows that the median house price will rise 3.6% in 2010 to $178,900, after falling 12.8% in 2009. The economists expect existing home sales will rise 10.8% in 2010 to 5.71 million from 5.15 million in 2009.
Inventory will hit. Banks canceled foreclosures for holidays, that will re-start, tax credits will expire, mortgage rates are going up and the jobless rate is still pretty high. Banks are making tons of money borrowing at zero and investing in higher yielding relatively low risk assets. Banks want to lend but with tougher lending standards harder to find qualified borrowers. Bank inventory hitting the market at a loss is good timing in early 2010 as it will be buried against record earnings. Also people rarely default on a home after 7 plus years, (seasoning of loans). We also have mortgage resets to work though. This sets up a solid RE market for 2011. A market with little govt involvement. However without the Fed pumping it up RE will move back to a historical 3% increase a year rate. Sounds good till you realize munis pay 5% and there is no work involved.
Pat says:
January 4, 2010 at 10:51 am
Happy New Year, John. Ignore CF and don’t go back and read the last thread.
Tell me you haven’t been questioning the timing of the “NO MORE BUYER CREDIT” plastered all over within the last week. Who’s pumping THAT fear, and why the flush rush on inventory?
Who gains if inventory hits and why are they forcing bank to book the loss now?
What a lie, once you inflation adjust we are back to 1999 prices.
Sean says:
January 4, 2010 at 10:59 am
NAR fluff for 2010
Home Prices Increase by 25% This Decade Even with Slump
By National Mortgage News Online
December 31, 2009
The should dig up the old lady from the “Help I have fallen and can’t get up” commercials of Yore and make a new one with her drowning.
Hefty Cleaning Bill for Underwater Borrowers
By Kate Berry/American Banker Pipeline
December 31, 2009
A senior economist at First American CoreLogic has estimated that it would cost $858 billion to extinguish the negative equity of all underwater homeowners and give them a 5% stake in their homes.
Several analysts say one reason the Treasury Department pledged unlimited support to Fannie Mae and Freddie Mac last week is that the Obama Administration is planning to expand the Home Affordable Modification Program or HAMP to allow servicers to reduce borrowers’ principal balances. Mortgage experts say borrowers who get this type of modifications are less likely to redefault. That’s particularly true for borrowers with no equity or even negative equity, who have little incentive to stay in their homes.
But the price is steep.
Nearly 10.7 million borrowers, or 23% of the residential mortgage market, owed more on their mortgages at Sept. 30 than their homes were worth.
Sam Khater, a senior economist with the unit of First American Corp. of Santa Ana, Calif., has estimated that the average value of mortgage debt for homes with negative equity was $280,000 in the third quarter. The average underwater borrower owed $69,700 more on her property than it was worth.
It would take $745 billion — more than the $700 billion the Treasury is spending to bail out the banking system throught the Troubled Asset Relief Program — merely to extinguish borrowers’ negative equity and give them a 100% loan-to-value ratio, Khater said.
Sounds like back in the day when I had a girl who considered me “spongeworthy” Sounded good till I realized why they don’t land 747’s in Teterboro Airport.
chicagofinance says:
January 4, 2010 at 10:36 am
John says:
January 4, 2010 at 9:37 am
What exactly is hitting the back wall?
chicago tan-talizer says:
January 3, 2010 at 1:46 pm
Too bad this is Sunday. I need JJ here. Commentary on short chicks….he would tell you about hitting the back wall.
While on the topics of decades I read this one earlier in the week.
Imagine you were knocked over the head in 1999 with the December issue of the Red Herring magazine. It weighed in at two pounds, such was the demand for advertising in that west coast technology bubble catalogue at the time. The NASDAQ had climbed over 4000, the S&P500 near 1500, and gold averaged $283 that month.
You wake up ten years later in the hospital. The nurse left today’s Wall Street Journal by your bed. You pick it up. It’s dated Dec. 31, 2009.
Holy cow! You’ve been in a coma for ten years. Then you spy the headline “2009: Banner Year For U.S. Stocks” and you smile.
Whew! You may have been out of it for a decade but at least your portfolio, heavy in tech stocks and the S&P500, kept growing as you slept.
Then you start to read the story.
S&P500 1123?
NASDAQ 2285?
After ten years?!
You drop the paper on the floor.
Banner year? Shit, you think. If they call stocks ending the year lower than ten years ago a “banner year” you’d hate to see what they call a “bad year” these days.
Slack jawed you look down at the paper now strewn on the floor. Your eye wanders to a small story on page 32: The price of gold is $1095.
What the hell? Did the world end?
You crawl out of bed to the window, expecting bomb craters in the street. Instead, zombie shoppers plow the sidewalks with white wires spouting from their ears, pods in their pockets.
You stagger across the room, climb onto a chair and, from a black metal bracket on the wall, you rip an object that looks like a TV, only flatter. You grab it firmly in your hands and, in one sweep, clobber yourself over the head with it.
Maybe in another ten years your portfolio will be back to where it was so you’ll have a hope of paying your hospital bill.
NAR Spin —
“The Realtors reported that median home values rose from $137,600 in November 1999 to $172,600 in November 2009 or 25%. At the peak of the market, the median house price hit $230,300 in July 2006.”
What crap !! Stats are for spinners.
Why not say “Home values rose from $137,600 in November 1999 to $230,300 in July 2006 (an unsustainable 75% increase). And then fell to $172,600 in November 2009 (a 25% decrease).
Ouch !!
Dude…I needed you YESTERDAY for this!
John says:
January 4, 2010 at 11:03 am
Sounds like back in the day when I had a girl who considered me “spongeworthy” Sounded good till I realized why they don’t land 747’s in Teterboro Airport.
ALBANI:
You out there?
I’m bringing the Durres clan down to NJ on Sunday. Can you give me the Samvera drill again? Will the guys at the place be happy to see Albanians or do they kind of keep it on the down low because it is an Italian restaurant? Also, I am going to set up a table for 8 + 2 kids. What is the best way to go? Also, if I push the Albanian thing, is that a bad idea because then the bill will be 30% more?
TSA: man who caused Newark airport security breach soon left
http://www.nj.com/news/index.ssf/2010/01/tsa_man_who_caused_newark_airp.html
John (51)-
Speaking of munis, which municipalities out there do you feel are NOT at risk of default?
My list is very short.
Sean (53)-
That idea is a non-starter.
Besides, they’ve already managed to kill the housing market for the next 20-40 years. Why overdo it?
January 4, and we already have the post of the year:
“Sounded good till I realized why they don’t land 747’s in Teterboro Airport.”
GO Bonds or good revenue producing bonds or bonds back by solid physical assets. Things like the new “unbuilt” Nets stadium are scary.
I also think all hospital bonds have been lumped into obamacare concerns and pay a high yield yet some world class hospitals, northshore, mt. sinai etc. are a relative bargain.
NJ other than GO bonds and A rated well to do town with a good commerical tax base and their toll roads have more shakey bonds than all of NY and CT.
Schumpeter says:
January 4, 2010 at 11:30 am
John (51)-
Speaking of munis, which municipalities out there do you feel are NOT at risk of default?
My list is very short.
“Sounded good till I realized why they don’t land 747’s in Teterboro Airport.
You still trying to land your worn out 40year old technology down an overused worn out strip.
I would bet that John is still looking for the “Kalitta Air” terminal.
Seems Bill Gross has left the building…
“New Bank of America CEO Brian Moynihan told CNBC Monday that he expects the economy to stabilize in 2010, but for unemployment to stay high at around 9 percent.”
I do believe that this very sentiment was expressed on this board.
About a year ago.
Braniff, Laker, and National are the only truely-secure airlines.
http://images4.cafepress.com/product/203458694v11_350x350_Front.jpg
RE: “If you have a job, and can make the pymts, why is oweing more on your house than it is worth,such a financial hardship?”
The first two items (“have a job, can make pymts”) aren’t a given these days. Add in illness, unexpected repairs, etc.
It also depends on how far underwater one is — your neighbor bought in 2001, you bought in 2005. Your monthly nut is 2X that of your neighbor, yet you have the same schools, same commute, and same square footage. Your neighbor goes on vacation twice a year, take day trips to the shore.
Is that chest pain heartburn, or a heart attack?
Give me your list,
Schumpeter says:
January 4, 2010 at 11:30 am
John (51)-
Speaking of munis, which municipalities out there do you feel are NOT at risk of default?
My list is very short.
John is ahead of his time. Again.
Internet spells death of English
http://www.smh.com.au/technology/technology-news/internet-spells-death-of-english-20100104-lq7s.html
Should be:
“Your neighbor goes on vacation twice a year, you take day trips to the shore.”
I frrgot how too spell da day tey nvented windows 95, bck in typewritter days I cold spill with te bess of dem.
#74 John
U da mann
California to get a bailout? I’m starting to get battle-weary fighting the tide of optimists out there.
http://www.californiahealthline.org/articles/2010/1/4/governor-calling-for-federal-aid-to-help-close-state-budget-gap.aspx
Speaking of munis, this is in the 12/28 Bond Buyer about NJ:
From 2002 to 2008, NJ’s bonded debt went from 15.23 billion to 33.87 billion. Growth of bonded debt was 14.2% per year but rev. growth was only 6.3% and gross state product growth was only 1.8% per year.
Article also states that NJ has one of the lowest pension funded ratios in the nation, and one of th highest post-retirement helath insurance liabilities in the country.
Maybe it is a good thing that I am job-hunting in places like PA, MA, and DC. I’ll take a hit leaving Brigadoon, but it might not be as bad as the hit I take later.
Shore 68, El-Al?
sl
#70 Does not really answer the question. I said assuming one has a job, and can make the pymt. If buyer paid 500k, the monthly pymt was x, if the house is now worth 400k, the monthly pymt is still x (assuming fixed rate mtg, and of course not counting property tax increase). What triggers the finacial hardship?
Obama effigy hanged in Jimmy Carter’s home town ….TV footage showed the doll hanging by a noose in front of a red, white and blue sign that reads “Plains, Georgia. Home of Jimmy Carter, our 39th President”.
Witnesses said the effigy had President Obama’s name on it.
re #61 Shump – As you know there is a hugh hole in private lending since Securitization died about the same time as Charleston Heston. That hole that won’t be filled in this new decade, and there is no way the gang of 535 down in DC is going to let housing free fall especially in an election year.
As you know the loss caps were lifted on Dec 24th by Eraser Head because the government has directed both Fannie and Freddie to pursue the money losing strategies of modifying mortgages. Specifically for 2010 the reduction in the principal will be all the rage. I can see the government overdoing the principal reductions, some may get as much as 50% or more in some cases so they can make some kind of payment to prevent foreclosure, meanwhile they may end up in positive equity territory sooner with these reductions.
Washington controls Fannie and Freddie out and out, they compromise about $5 trillion in mortgages, about half the market. With the Fed now planning to step back as early as March from buying additional mortgage backed securities after sopping up 1.25 trillion already the taxpayer is going to really take it on the chin with this off balance sheet sludge that Fannie and Freddie really are. Team Obama now has to step in use Fannie and Freddie to continue the game in the housing bubble once the Fed stops printing and buying.
Inflation is the unwritten policy down in DC, all you need to do is watch them smirk when they talk about strong dollar on TV.
Obama effigy hanged in Jimmy Carter’s home town http://news.bbc.co.uk/2/hi/americas/8438852.stm
Is this your Gilbert Arenas impression?
John says:
January 4, 2010 at 12:24 pm
I frrgot how too spell da day tey nvented windows 95, bck in typewritter days I cold spill with te bess of dem.
3b[79];
It could just be simple greed, combined with the lack of long-term consequences from the default (presuming the ’05 buyer bought or rented their next residence before defaulting on their current one).
But more likey, the truth is that the ’05 buyer never could really afford the payment. They were counseled by used house sales flacks and mortgage sales hacks that their income would go up by the time the payments reset, or recast, or adjusted upward (despite that income has not grown over inflation in the past decade – no matter).
The better years down the road when the realtwhore-fueled visions of home equity withdrawal paying for lavish vacations abroad never arrived. What was supposed to be a few lean years to get into the house (that was rapidly appreciating, nach), a few years down the road with no change in income, rising payments (or even not) starts to look a great deal like a lifelong debt serfdom.
Again, a lack of consequences, as Washington finds that no limit to how much of my money they are willing to spend to keep those flakes in the house I bought for them.
John (71)-
Dallas. San Antonio.
That’s about it.
“Obama effigy hanged in Jimmy Carter’s home town”
Dumb rednecks. Don’t they know black history month starts in February?
Bernanke: “Low rates did not cause the bubble and I am not trying to reinflate it now.”
moose (84)-
Just think: the gubmint ain’t gonna stop until you’re living in your car.
Thanks, Ben. Glad you cleared that up for us.
Bernanke: “Low rates did not cause the bubble and I am not trying to reinflate it now.”
Good news.
The company is restoring the 12% of my salary that was taken away on February 1st!
Now what can I buy with this extra money? Perhaps a Jets PSL? (ha ha)
“Without saying so directly, Bernanke just looked straight into the mirror, and pointed his finger not at himself, but rather at a reflection of Barney Frank for Congress’ failure to regulate.
To be sure Fannie Mae and Freddie Mac made the problem much worse and we can thank Barney Frank in particular and Congress in general for that. We can also thank Barney Frank for countless other affordable housing schemes that made matters worse. Year in, year out, Barney Frank was one of the biggest congressional contributors to the mess.
Barney Frank surely deserves the finger, but not from hypocrites like Bernanke who fail to see their own bigger role in cresting this mess.
And so, with the help of Bernanke’s magic mirror, this is the biggest case yet of the pot pointing the finger at the kettle, calling the kettle black.”
http://globaleconomicanalysis.blogspot.com/2010/01/reflections-on-market-sentiment.html
Stu (90)-
Vegetable seeds and ammo.
“Now what can I buy with this extra money?”
Congrats to you. First story like that I’ve heard since this mess began.
#81
Totally agree with this post. Feds are determined to prop up house prices, whatever the cost.
sl,
El-Al is still flying.
Stu,
It is genius on the company’s part: you take a two-year hit of several percent, but they get folks feeling like they got a big increase. Yipee!
RE: “What triggers the finacial hardship?”
Hardship is not always financial (see: stress-induced heart attack).
But your numbers of a $500K house now worth $400K are far more pleasant than my numbers — a doubling in RE values between 2000 and 2005 was common in NJ.
People underwater also don’t have access to HELOC money, and since most people have zero savings, that stings.
But why dismiss my 2 neighbor example, which is common, so easily? Needlessly paying double for the the largest purchase one will ever make is not only stress-inducing, it’s stupid.
“effigy hanged”
This is what the USSS is going after? They have peoople blowing past the WH gate and they go after this?
people, even
Yes, exactly:
“What was supposed to be a few lean years to get into the house (that was rapidly appreciating, nach), a few years down the road with no change in income, rising payments (or even not) starts to look a great deal like a lifelong debt serfdom.”
“you take a two-year hit of several percent, but they get folks feeling like they got a big increase. Yipee!”
Yup!
#88 – Just remember: you can sleep in your car, but you can’t drive your living room!
Sean (81)-
You know, I think anything’s possible. I could even see Phony/Fraudy holding giant lotteries where the prize is extinguishing mortgage balances.
I also think this kind of thing would make a great sort of Chuck Barris-type game show.
Fielding calls for help from underwater homeowners all morning here. Looks like recovery is at hand…gagg…urpp…uh…gulp…retch…
In the brave new world, the yutz who has a Phony/Fraudy mortgage is living large, and the guy who did the high-class/Hudson City-type route is screwed.
Yeah, that’ll revive the housing market.
#96
Here we are 5 years later and house prices haven’t really come down that much. It is possible that families like mine were effectively priced out of the housing market for the main years we wanted a house to raise our children in. I don’t see prices lowering.
Everyone here talks about renting houses cheaply. Every house or townhouse I go see in a nice area is either crap or at least $2,500 a month.
Apartment living sucks. We lived in those Rennaisance apartments in North Brunswick and had to move because of the drug dealers downstairs playing loud music from speakers the size of a Volkswagon. Eventually the police came and made a big show of it..knocking down the door etc. They were already gone by then and we had decided to leave.
I told you capitalism will be blamed not the Fed for the housing collapse. The Communists seek a revolution.
“Capitalism brings immense suffering to the world and needs to be overthrown that is according to political economist and author Raymond Lotta from New York. He told RT he thinks a revolution is coming.”
http://www.youtube.com/watch?v=tg3hYLzfWYQ
rent (104)-
What would you rather be: priced out of the market, or foreclosed out?
I know we made the right decision not to get in over our heads.
I am just being a tedious bitter renter.
Same here renter…real bitter.
#96 Qwerty: Oh I am not dismissing it at all. I was just alluding to the article, that stated an underwater mtg, in and of itself leads to financial hardship.
…and same here Renter – bitter as all he||
Would love to buy but just can’t justify it at this point.
“What a lie, once you inflation adjust we are back to 1999 prices.”
John, inflation adjusted prices only brings us back to 2003.
Nominal prices are back to 2004.
Well im glad to be back from Texas vacation. Took only 26 hours door to door on the way there right before xmas. and that was suppose to be a direct flight. i love flying.
The only thing more precarious about being a homeowner in NJ is being a renter in NJ sitting on cash.
NJ is still so expensive. At least small colonials and splits that are in good shape are showing up in our price range. But the thought of paying 370k for a renovated 3 bedroom 2 bath split with no basement and 7k a year in taxes for a “good” non train town is still repulsive to me.
Hey Al why is renting and hoarding cash precarious?
2/3 of Americans own houses. Almost all of them want prices to stay high.
Of the 1/3 who rent, significant portion are illegal or unreliable voters (poor, uneducated). Renters are not worth wasting an effort on politically.
Politically organized groups that want high house prices: unions (because higher property tax base funds them), banks, realtors.
Politically organized groups that don’t want high house prices: none.
The only thing more torturous than actually working in this market on a daily basis is listening to the bitching and crying of people who are so fortunate not to be in it…yet can’t wait to seemingly crucify themselves.
This state is done, from a purely housing standpoint. So, probably, are NY and CA. If you’re waiting for things to line up in such a way that a reasonable person would gain from the transaction, pack a lunch. You’ve got about a 20-40 year wait ahead of you.
BTW, when prices finally “bottom”…that will just be the beginning of a series of even worse events.
So then Schump I’m guess you suggest getting the f’outta dodge?
skep (116)-
Just because a fraud is large doesn’t make it less of a fraud.
Nothing like a market in which massive numbers of people will sacrifice everything just to talk it up.
I agree it is a fraud, but what good does it do to see the matrix if everyone else is just living in it and doesn’t care?
115.
The dollar is going to be devalued within a year to 18 months.
The Dow will finish the decade flat, but the dollar has lost 30% of its value rendering stock and bond investments as big losers. The dollar lost 75% of its value versus gold.
just sold my condo,, good luck to the guy
who took it off my hands. glad to be a renter in this state or any right now.
market still in a downtrend.
Okay, so who hacked into realtor.com. Love the photos.
http://www.realtor.com/realestateandhomes-detail/Elizabeth-City_NJ_07202_1110591714
#104 renter: In my BC town prices are back to 03-02 levels. We are getting there;try to be patient. The only reason prices have not fallen further is all the govt manipualtion, and even with the manipulation, they have still fallen. If you bought in the last 5 years you are now underwater even if you put money down.
skep (120)-
If you see it for what it is, you either don’t jump in…or you figure out a way to escape.
I’m working on the escape part.
does anybody think people are just hanging on over in Bergen,? close to the City.
lots of new SUV’s ,BMW’s , etc.
118. Where you going to run to?
Freedy,
I think it’s just baseless optimism combined with recession fatigue.
90 Stu,
Congrats on the pay reinstatement but where is my TARP bonus supposed to come from then :)
The ultimate insider, Robert Rubin, who is a former secretary of the Treasury (1995–99) and now serves as co-chairman of the Council on Foreign Relations and is a fellow of the Harvard Corporation, in a Newseek opinion piece had this to say:
The United States faces projected 10-year federal budget deficits that seriously threaten its bond market, exchange rate, economy, and the economic future of every American worker and family. Those risks are exacerbated by the context of those deficits: a low household-savings rate, even after recent increases; large funding requirements for federal debt maturities every year; heavy overweighting of dollar-denominated assets in foreign portfolios; worsened fiscal prospects in the decades after the current 10-year budget period; and competing claims for capital to fund deficits in other countries.
The conventional concern here is that private investment will be crowded out, which would result in a reduction of productivity, competitiveness, and growth. In addition, the very early 1990s showed that unsound fiscal conditions can have a symbolic effect that broadly undermines business and consumer confidence. But finally, and far more dangerously, our bond and currency markets could react with severe distress to fears about imbalances in the supply and demand for capital in the years ahead or about the possibilities of inflation. Those effects have been averted so far by a number of factors: large inflows of capital from abroad into Treasury securities; concerns about other major currencies; the low level of private demand for capital; and the psychological state of the market. But this cannot continue indefinitely, and change can occur with great force—and unpredictable timing.
http://www.economicpolicyjournal.com/2010/01/robert-rubin-all-hell-could-break-loose.html
By the way. Reading what is written on this board is probably going to save you a lot of future heart ache.
Schump, ive only been gone 2 weeks and your posts have gotten even more dire if thats possible.
Speaking of Dallas/SanAntonio… i did the math in my head while i was there looking and visiting friends houses. Prices are about 40% cheaper there. Also they have way more inventory.
If you are a young first time buyer, there are a wide array of starter neighborhoods filled with 20 yr old 3 bdrm 2 bath homes with small garden yards that sell for 150-180K.
Sounds great but keep in mind that avg household incomes are about 30% less.
The other surprising thing is that prop taxes are not much cheaper over there. Although they dont have state income taxes so i guess you are paying less in the end.
According to the NY Daily News today
Newark Airport will be be getting those new Virtual Strip Search Machines ASAP now in Terminal B.
My prediction for 2010 is there is going to a large amount of Megan’s Law offenders submitting their resumes to work at the TSA.
http://en.wikipedia.org/wiki/Backscatter_X-ray
According to the NY Daily News today
Newark Airport will be be getting those new Virtual Strip Search Machines ASAP now in Terminal B.
My prediction for 2010 is there is going to a large amount of Megan’s Law offenders submitting their resumes to work at the TSA.
http://www.nydailynews.com/ny_local/2010/01/02/2010-01-02_newark_undiecover_airport_first_in_area_to_get_special_fullbody_scanners.html
Well out on LI they did there annual assessment of homes to market value. Guess what most homes went up in value. But then again my home went down a lot in value prior year. Most people in my neighborhood could care less about the economy. It has no effect. Very few people work in city most are teachers and firemen. Funny in re-assessment it gives what price you paid for house. Since turnover is low in my neighborhood most people paid very little. My neighbor for instance told me he paid 40K as a newlywed for his house, has no mortgage for years, last kid in college and since he is a CPA business is up as everyone is looking for info on new tax breaks etc. This site often forgets 50% of people own no stocks. Take my daughters teacher as an example, public school teacher married to fireman bought a little split for 250k back in the 1990s. She had two guranteed pensions, no 401Ks and free medical for life. She is off all summer and goes to beach with husband and kids. They got raises in 2009 while prices fell. They are loving it. They still qualify for all tax breaks as their huge free medical and pensions don’t count as taxable income. Life is good for some people, better than it has been in years. I know cause they all went to Disney, did cash for clunkers etc last year.
“Most people in my neighborhood could care less about the economy. It has no effect. Very few people work in city most are teachers and firemen.”
Too easy, pass.
Speaking of tax assessments, I’m open to advice on how to push my next home’s assessment down. Assuming we close the deal next month, we’ll be buying at 26% below assessed value. I’ve heard some realtors say that these are fairly easy challenges to make – this was a transaction price in a competitive market, so market price should be reset to assessed price. I’ve heard others say it won’t be that simple.
Anyone care to share experiences?
Gator has been winning on non-transacted properties, I think.
D-Train (129): “Congrats on the pay reinstatement but where is my TARP bonus supposed to come from then :)”
Don’t get too excited. If I am not mistaken, my last salary increase occurred in October of 2007. Since then:
My 401k match was ended.
The annual 3% of my salary 401K contribution (in lieu of pension which was ended in late 90s) was terminated.
My health care costs have increased about 20%.
My home has dropped in value between 30 and 35%.
Of course, the value of the dollars that I have saved have also decreased a bit thanks to Ben and his money press.
On the bright side, I was one of the few who moved my 401k into bonds when the DJIA was around 1400 that same October I received the salary increase. By far, this is my largest asset. Although, I did not time my reentry nearly as well. Went back long 50% of my 401K at 9000 on the DJIA. Still at 50% invested as I really don’t think the financial crisis is over. I subscribe more to the ChiFi melting up theory and would not be at all surprised to see the DJIA hit 11000 again in the near future.
Have had discussions with Gator about renting over buying recently and am definitely considering it if the right rental inventory comes on line in GR.
Either way, most likely staying put in my multi until the impact of the ending of the tax credit can be seen.
In other news, Montclair owes us a check for our property tax appeal refund and WF owes us a refund on our mortgage escrow since we refinanced. Funny how if I’m this late with a payment, my credit is dinged and I pay super-sized penalties, interest and fees. When the township or the bank is late, there is nothing I can do except steal a couple extra pens and lollipops. I’m gonna stop at every Wells Fargo ATM I can find and throw out all of the deposit slips and envelopes I can find!
#104
“Everyone here talks about renting houses cheaply. Every house or townhouse I go see in a nice area is either crap or at least $2,500 a month.
Apartment living sucks. We lived in those Rennaisance apartments in North Brunswick and had to move because of the drug dealers downstairs playing loud music from speakers the size of a Volkswagon. Eventually the police came and made a big show of it..knocking down the door etc. They were already gone by then and we had decided to leave.”
Try the townhomes in Woodbridge Center Plaza. 2 years back these townhomes were renting for @2000/month. Now after taking into account monthly subsidies and free month and half rent, the rent comes down to $1500/month.
Rents are coming down in my neck of the woods.
Before they install those body scanners in Newark at $170,000 a pop, how about they invest in a set of sliding doors that only open from the inside at the security exits. Sh1t, these things have been in use in supermarkets since the sixties.
Sorry I’m so bitter, but I’d really like to get some of the sleep back that those retards from the TSA robbed from me last night.
Renter,
Do the math and calculate what owning costs. You might just find that $250 to $350 (NET) per week saved is worth living among the drug dealers. Plus, you don’t have to go to far for your fix and your place will definitely never be robbed.
A. West 137 – We had friends in Montclair that filed and settled on their sale price. We have another friend that will be doing this this tax year. I would suggest you file and then call the town and see if they are open to settling. You can file dumb and not include any additional comps/appraisals.
If the town won’t settle with you then you can get comps from your realtor or hire an attonrney or appraisal. You do not need to provide that additional info until a week before your hearing date.
When I lived on lex and 26th in the 90’s I had all four corners of 26the and Park covered with ho’s 12 hours a day, plus I had a few SROs and crackhouse nearby. There was this really sleezy bar on 26 and Lex where the pimps hung out and settle up with their girls. guys was open 24 hours pretty much. I loved that around 4am he would let you buy beers ahead of time and line them up in the ice till the 8am open. There also was a place that locked the doors at around 4:15 am, no new customers except regulars. One Monday night I was at the bar with Joe Montana and the stupid druggie kids from stand by me at seven am after monday night football. Place had a full casino, waiting limos out front and hos on the corners, I pinched myself every day that I actually got cheap rent becuase of this.
Woo-hoo. Just got word from our lawyer that FIL’s house closed. Listed September in Roselle- closed December 31 at full ask. It was a low priced house in a low income area.
The buyers didn’t have 2 nickels to buy so they asked if they could pay $10,000 more but have us cover all the closing costs. What happened to higher lending standards and downpayments? And what about those “botched” appraisals not hitting the ask? Their loan was FHA.
I wonder if they’ll make the first mortgage payment.
Congrats NJC! Nothing better than money in the bank!
Great new entry from Matt Taibbi, on his blog about the whole Housing mess.
http://trueslant.com/matttaibbi/2010/01/04/fannie-freddie-and-the-new-red-and-blue/
Safe
from yesterday: things will get so bad kettle1 will become bullish and chicagofinance bearish
You may be right. I am about 1 step away from becoming a permabear, albeit a selective one. Although that doesnt mean i dont agree with clot at the same time.
happy new year!
NJC,
I hear the Langosta calling your name for a little celebration. Congrats on losing the millstone of a second property across the bridge.
Taibbi makes some interesting points, but his conclusion that the bubble was ultimately a wealth transfer from the middle class to rich does not really add up.
1. the rich pay the vast majority of taxes, so any gov’t funds spent in reaction to the collapse largely come from them, and the debt going forward will fall on their backs even more as the higher tax brackets go even higher
2. inflation, which is the gov’t other method for dealing with the bubble, harms those with wealth and helps those with debt. guess which group the middle class falls into?
3. job losses are real, but the “losses” many middle class homedebtors suffered are total fictions because they never had any equity in their houses anyway or completely sucked it dry through HELOCs. The tendency to treat these borrowers as victims is bizarre.
his aside that the retirement investing/saving scheme has amounted to a total scam against the middle class makes sense to me though.
[142]
“One Monday night I was at the bar with Joe Montana and the stupid druggie kids from stand by me at seven am after monday night football. Place had a full casino, waiting limos out front and hos on the corners, I pinched myself every day that I actually got cheap rent becuase of this.”
And we have our first Johnscapade of the new decade!!!!
“Those risks are exacerbated by the context of those deficits: a low household-savings rate, ”
Hummmmm. Interest rates on insured savings is 0 or close to, the Market recently crashed, and seems poised to do so again or seems rigged against the little invester. I can’t for the life of me figure out why people are not saving more.
veto (132)-
Always remember: agree with me or disagree…but, every morning, I take a front-row seat at this slow-motion train wreck.
Shore,
So true. If I thought I could earn even 5% in a savings account denominated in an appreciating or stable currency, I would jump on it, and I would think much more carefully about dumping $300k into a down payment on a home (foregoing $15k of potential annual interest income). At current interest rates, savings and CDs are for chumps. We would put money in Chinese bank accounts, where we could get higher interest and potential currency appreciation, but it’s a lot of trouble and I worry about the account just disappearing or becoming inaccessable someday.
That was like a crazy long night. I went to China Club on a Monday night till 4:30 am and then to Wuh Hops in Chinatown for breakfast from 4:30am to 5:30am then to my friends after hour club that was pretty empty at 5:45 pm but was packed at 6:45am. At china club met Evander Hollyfield and that boxer with the crazy eye whats his name. Detached retna or something. Had breakfast with some hosemonsters we picked up in club. Even crazier my friend wayne went to china club in his pajamas. Claims it works like a charm. So talking to the heavy weight champ of world, then breakfast with two hot secretaries from brooklyn, at 5am. Then talking to Joe Montana who actually came in by himself. No he did not gamble, just had a few drinks. Said he was on Calli time and Tuesday there was an off day except for a flight. Corey Feldman was to left of me drunk as a skunk and wanted free drinks cause he was a “star” bartender was saying you are a washed up has been pay up or get out. Joe paid for his drinks. I guess he did not want to get judged. I did not pay for my drinks as friend owned club, Corey was yelling at me over that. That guy needs the snot kicked out of him. Left club at 7:45 am showered and got to work at 8:30 am. Bought a cup of coffee so big I need a bathing suit to drink it and ate an egg sandwich with enough ketchup to supply a mcdonalds for a year.
No hook-ups as no time in my busy schedule that night.
“Bones” Deplume says:
January 4, 2010 at 4:06 pm
[142]
“One Monday night I was at the bar with Joe Montana and the stupid druggie kids from stand by me at seven am after monday night football. Place had a full casino, waiting limos out front and hos on the corners, I pinched myself every day that I actually got cheap rent becuase of this.”
And we have our first Johnscapade of the new decade!!!!
skep (148)-
No. Deflation hurts rich, middle and poor equally.
Inflation benefits the rich and others who have “first access” to capital, while destroying middle & poor.
Apologies if this has already been posted:
NY Fed Propaganda for Principal Reductions [headline mine]
Paper
WSJ Developments Post
Hey NY Fed! Where’s my $50,000 for being smart enough not to buy a 60-year old hyper-priced Levittown crap box? Actually, if you adjust the $200,000 example for Nassau County’s 2006 peak median price of nearly $500,000, the principal adjustment should be $125,000.
I tell you what, I’ll take $100,000, and you can brag about the 20% you saved the taxpayers.
Or you can just pull your head out of that very dark, cramped hole, and stop trying to provide result-oriented political cover to Timmy. (Isn’t he underwater too on his Bedford manse? How much for him? And please be sure to note the forgiven debt on his tax return.)
someone made the point that housing has not collapsed in value relative to stocks but could this just be the result of the fact that real estate is a hard asset that in an inflationary environment should hold up better?
“It is not entirely clear how, in the event we start pumping more meth into the national bloodstream, we ever manage to get the body off of the habit. When exactly can we stop stimulating housing prices and not see an “increase of one percent in mortgage rates” that will “inhibit recovery”? When will the country finally be disabused of the fantasy that a 5.5% mortgage and 8.5% equity returns are some kind of god-given right? Who is finally going to have the courage to tell America that the average family of four is either going to get pimp-slapped out of some more net worth in the next few months, or that they can wait another half-year to a year and go six rounds with Evander Holyfield c. 1990 instead? Anyone? Bueller?”
http://www.zerohedge.com/article/what-would-we-do-without-experts
Chad (Ochocinco) Johnson manned up and tweeted to Fireman Ed today. Player play on.
Does anybody in NY know how to get in touch with FIREMAN ED” I owe him a trip to this saturdays game- VIP treatment. Smh about 5 hours ago from MOTOBLUR
Thanks to @jasonromano-I’ve gotten in touch with FIREMEN ED-I owe him this after the trash talking and losing! Enjoy the jungle ED about 4 hours ago from MOTOBLUR
re: #149 Cumon Skep
re:#1 – err what new tax was passed on the rich to pay for these bailout trillions? The Fed printing press is paying for this bailout.
re:#2 inflation is a hidden tax we all pay,even a pack of Newports and a 40 oz is way up.
re#3 – I agree taking a vacation on the house was a bad idea.
#4 – The retirement scam you speak of started in the 1970s, this isn’t the first go around on the Ferris.
#153
I look at it like this: deflation hurts debtors and helps creditors and inflation vice versa. The overwhelming majority of Americans are net debtors; very few are net creditors. I agree that the wealthy have privileged access to info and because of this can in theory react to events more quickly. But it seems to me that inflation is the clearly preferable outcome for the majority of indebted americans and their leaders are responding to this fact.
To be clear, I am not saying the rich are getting screwed. I am just saying that the argument that the middle class got disproportionately hosed in this housing bubble doesn’t make sense to me, unless we are talking in terms of job losses.
re: #160 Skep – re: inflation
We may need to eventually cut the value of the sawbuck in half to pay for all that debt and keep it low for a long time, and with no wage inflation just like Japan. We aren’t net savers either here so all we have to offer up to the rest of the world these days are our kids via the Armed Forces so our friends like China can go mine copper in Pakistan safely.
Doesn’t seem like a fare trade to me.
[157] john
A colleague has season tix pretty close to Fireman Ed. I went to a few games with him over the years, and know that the folks in that section are regular holders. I get to talking to them, usually because they want to know why I am there (just like football, that’s all).
A number of them have an opinion about Fireman Ed. What struck me was that none of them had anything good to say. My friend considers him a bit of an @sshole, and the feeling seemed to be universal.
I have no way to know why they felt this way, but I was struck by the fact that nearly everyone in the section felt the same about him.
Who cuts the checks at a closing? Buyer’s attorney or sellers?
Fireman Ed is in LL EZ next year and I know several people who wanted his exact seat location to avoid it. Imagine paying 10K for the two PSLs right behind this guy standing on his brother shoulders and you can’t see a thing. Next year I am in UD EZ right above Fireman Ed so I can pelt him with paper airplanes.
Guy makes some good coin as Fireman Ed, he paid for his own tickets and PSL but companies like Pepsi have used him in ads and he gets paid for this as well as personal apprearance. All that and a NYC pension and free medical for life as he is a retired NYC firman. Only ten home Jets games a year, now that is a job I want.
Here’s another indicator of just how tough things are out there:
Atty positions in the federal gov are usually posted for a certain open period. I recall some of these periods being several months, or simply “open”.
Now, virtually all of them close within a month of opening.
I learned too late that the best time to get a govvie job is when the economy is doing great and everyone is chasing the private sector salaries.
[164] john
yeah, and what’s with the paper airplanes? Seems to be the thing to do at the meadowlands. All I remember is those things raining down all game long.
Could be worse, I suppose. Could be in Philly.
JJ: For you….
Fellayshe-O ® — Anxious? Depressed?
http://www.youtube.com/watch?v=fwRUyCICLvo
[Nom #165]: “I learned too late that the best time to get a govvie job is when the economy is doing great and everyone is chasing the private sector salaries.”
Haa. It looks like the equivalent of timing the market. When the economy is great, everyone expects the good times to keep on going.
S
“Bones” Deplume says:
January 4, 2010 at 4:46 pm
[157] john
A number of them have an opinion about Fireman Ed. What struck me was that none of them had anything good to say. My friend considers him a bit of an @sshole, and the feeling seemed to be universal.
Nom: What JJ said, plus I know a lot of Jets fans think he sold out when they were negotiating with the NYC West side stadium deal and he was paid to be part of the misinformation campaign by the Dolans.
Nom,
Did you leave your firm?
RE: “2/3 of Americans own houses.”
Not true.
27% of Americans own houses.
33% of Americans rent their dwelling from a bank.
32% of Americans rent their dwelling from a landlord.
http://angryrenter.com
Qwerty,
Try this:
27% of Americans rent their dwelling from their town
33% from a bank and their town
32% from a landlord
Actually that’s a bit harsh – in some states property tax is low enough that it’s not like renting from the town. But you can rent a house in Florida for less than the property tax in a typical NJ town.
Up!
172.Qwerty says:
January 4, 2010 at 5:13 pm
RE: “2/3 of Americans own houses.”
Not true.
27% of Americans own houses.
33% of Americans rent their dwelling from a bank.
32% of Americans rent their dwelling from a landlord
100% rent their homes from the Property Tax Collector.
[170] shore (and sastry)
No, I am still here, but I am groping about in the dark for the exit.
When I took this job, more than one person looked at me with raised eyebrow and said “you’re going back to a firm?” They knew me and knew I had said I did not want that life again.
But I got the royal treatment and what seemed to be a decent offer in a place where I could do more to develop a practice, and the first couple of years were quite nice. But as of late, I am beginning to feel like Tom Cruise’s character, Mitch McDeere, in “The Firm.” Suffice it to say that I don’t expect to be here long.
One could say that I went for the money and did not consider long term where I wanted to be. Actually, I did, but I also did not count on a full blown economic collapse to scuttle my plans. I needed some cred, and, at the time, feds would match private sector salary up to a certain $$ amount, so I was also trying to set a high bar, figuring I could do this for a few years and move over.
But this group did not get the high quality work I was hoping for, and I am told that the federal match is also gone. So it would seem that I stayed off the market a bit too long. And now, instead of having a govvie sinecure, I am still here.
Do you know if this is something that works over night or does it take some time for it to work?
с
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