From HousingWire:
Home prices decline 4.3% in November: CoreLogic
Home prices nationwide fell 4.3% year-over-year in the month of November, according to analytics firm CoreLogic in its November Home Price Index.
Santa Ana, Calif.-based CoreLogic said home prices declined 1.4% from October to November, making it the fourth consecutive monthly decline.
When excluding distressed home sales, prices year-over-year fell only 0.6%, compared to 1.6% in October. Distressed sales include all short sales and REO deals.
“With one month of data left to report, it appears that the healthy, non-distressed market will be very modestly down in 2011,” said Mark Fleming, CoreLogic’s chief economist. “Distressed sales continue to put downward pressure on prices, and is a factor that must be addressed in 2012 for a housing recovery to become a reality.”
Capital Economics expects prices to stop falling this year, although the recent acceleration in the rate of declines “will provide more support to those Fed officials who recently have championed more action to revive the housing market.”
“The current balance between demand and supply, as measured by how long it would take to clear all the homes on the market at recent rates of sale, is consistent with prices stabilizing in six months’ time,” according to the Toronto-based firm.
From CNBC:
Government Set to Sell Foreclosures in Bulk
The Obama administration, in conjunction with federal regulators and led by the overseer of Fannie Mae and Freddie Mac, is very close to announcing a pilot program to sell government-owned foreclosures in bulk to investors as rentals, according to administration officials.
…
A pilot sales program will be starting in the very near future, according to administration officials. They are working on what the market potential is, what pricing would be, how government can partner with private investors, and who has the operational experience to manage so many properties.
“I think there is a fair amount of money in the wings waiting to buy, investors doing cash raises to buy properties on a large scale,” says Laurie Goodman of Amherst Securities. “But that means they have to build out a rental organization; it means they build out a management company, because if you’re accumulating a hundred homes in Dallas that’s very different than running a multifamily building.”
A number of institutional investors have shown appetite and interest in bulk REO deals, according to officials, but the plan has to incorporate ways to help facilitate financing. That has been one of the biggest roadblocks to deals already in the works between hedge funds and the major banks. Sources close to these private bank negotiations say there is plenty of cash to buy properties, but building out a management structure for the rentals is pricey, and some investors are finding the math doesn’t add up to make it worth their while.
Larger investors want to be able to get real scale in any government program, in the range of 50, 100, 500 properties per deal, or $1 billion-plus in assets, say officials close to the plan. That’s why the government is looking to test a combination of different approaches. Fannie Mae did a $50 million sale last June, but that was on the small side. Officials are evaluating at what larger asset sales beyond that would look like.
“We expect several pilots that will involve both local investors and institutional investors. The goal here is to reduce supply by converting foreclosed homes into rental units,” says Jaret Seiberg of Guggenheim Securities. “Less supply — even less fear about a flood of foreclosed homes hitting the market — could stabilize [home] prices.”
Morning Mike
Good Morning Funnel, Nom & New Jersey
Good morning Mike
Grim 1,
Will that help bring rents down?
grim (1)-
The nightmare scenario, come full circle: the crooks who nearly destroyed the world are allowed to bulk-purchase RE in a gubmint-rigged, non-competitive process. Guaranteed the gubmint will do whatever it takes to completely subsidize these crooks’ management companies, too.
It’s all over, but for the crying.
veets (5)-
What it will do is help grind people like you and me into powder.
The new version of the “real estate investor” will now have to purchase in 1 bn increments, immediately set up a management company and be politically connected enough to even be allowed to bid.
Oh, I forgot…Phony and Fraudy are completely altruistic companies, dedicated to promulgating the benefits of homeownership to individual Amerikans.
Politicos will adjust the associated terminology to try to shape opinion.
Watch for a shift from “bulk sale of REO” to “disposition of assets” or “resolution of troubled assets”
Jamie Dimon said yesterday at a conference we are at or near the bottom of RE prices. Guess time to close up shop here.
C. opted R.ealestate A.ssest P.rogram or what it will be for the rest of us CRAP
So what’s next Grim? You called the top in 2005 and recently called bottom (and bought a house).
Does the real estate market continue to bounce along the bottom for the forseeable future?
I keep hearing about the dreaded “shadow inventory”. Do you ever think they’ll be enough demand for housing to absorb “shadow inventory” and for it to appreciate in value ever again?
I wonder how much leverage they going to give private equity to buy these foreclosed homes? 30 to 1 coming back?
http://us1.campaign-archive2.com/?u=822f57272edf2c46e4f77a7be&id=349d3ad69f
All is well as the American Consumer racks up record Debt . No problem I’m getting that new ipad ,55inch ,we’re on the comeback trail .
Hurry, take a look at new place to live,as prices are at the bottom
http://www.thedailybeast.com/cheats/2012/01/10/hostess-filing-for-bankruptcy.html?utm_source=dlvr.it&utm_medium=twitter
Twinkies for the second time. Finished
TARTCO – Troubled Asset Resolution Trust COrp.
Double hope score for using the word trust.
Great now I have a craving for a Twinkie
Jamie Dimon and Lord Blankfein = Slum Lords
So the houses that people rent will just degrade at a faster pace now that no tenant has a vested interest in the property. Lovely……
#14 We cannot talk about a bottom in prices in NJ, without talking about property taxes. 10k to 12k on a 3 bed 1.5 bath 60 year old house?? Prices I believe will still continue to drift down wards.
Brian [12],
What bottom? Where is there a bottom? What activity points to a definitive bottom? If I’m a lender, I want to see assets, steady job history, stellar credit rating, 20% down. How many can boast that they have all 4? And those potential buyers that have the muscle will not fall for the ridiculous f*cking asking prices that still exist in far to great numbers. We’re not close yet; the majority of sellers are still fat, bloated slobs living in fantasy world.
Foreclosed properties sold in bulk will not be counted as distressed properties,not counted as comparables.Values of individual homes sold will go up in value.Happy days indeed are here again.
20 – nobody requires 20%, procto exam yes, but no 20%.
You can get by with less than stellar credit, but if you want that 3 handle, you better be spotless.
Land banking is going to be part of the resolution.
Buyers will tear down to reduce tax liabilities.
Previously subdivided parcels will be combined to build properties with a higher best use value as multi family or retail/light commercial.
20 – gary
I just respect Grim’s oppinion on the matter. I was reading some of Grim’s older posts and I was impressed at how he was able to apply simple economic priciples to the housing market, see through the media bias and cheerleading and theorize that prices were unsustainable. It’s incredible actually, the data was right there in front of us the whole time. Millions of Americans (and even some real estate experts and Economists) just chose to ignore it and live in denial.
So given that his predictions were correct in the past, I’m interested in seeing him apply those time tested yet simple principles of supply and demand to the current situation. I’m just interested in what the future holds.
#126, yesterday, NjGator, cedar grove pool is run as a separate utility funded via members.
#20 gary: I would not advise putting 20% down, in this environment, once you out it down, it is gone. I would go less and keep the cash.
I will be out in the Spring not necessarily because we have to do, but we just want to get it out of the way. Eventually our rental will be sold by the owner, and in the meantime it is starting to fall apart. We might as well leave before he asks us to leave, as we have told him repeatedly we do not wish to buy it.
Brian [24],
The gamblers are getting itchy thinking they’re ahead of the sting; the pros are still sitting on a beach, sucking drinks, waiting for the pretenders to take their last breath due to an self-inflicted gun shot wound to the head.
It’s incredible actually, the data was right there in front of us the whole time. Millions of Americans (and even some real estate experts and Economists) just chose to ignore it and live in denial.
We’re still not past the denial stage yet.
Deal Breaker?
UK sends new warship to Gulf amid Iran tensions
http://news.yahoo.com/uk-sends-warship-gulf-amid-iran-tensions-114741941.html
Dime a dozen people iwth assets, steady job history, stellar credit rating, 20% down. Bigger issue none want to buy as they think housing is a bad investment and fear if they buy they will lose money.
I say dime a dozen as I live in a starter home neighborhood. First time homeowners buy in they late 20s to mid 30s in my town. Plan is to live there 5-10 years and trade up. Well pretty much every one in my town who bought in 1997 to 2003 is trapped in a mental way. None of us want to trade up as we are scared of future losses. Most of us have no mortgage or little mortgages and we are all not around mid 40’s peak of earning years. I have a few neighbors who live in homes they paid 280k to 300K for back in 1998-2000 back when they were 32 and making like 80K a year. Well couple of promotions and raises later they are making around 300K a year and still fearful of moving. Housing wont or cant recover ever if people with money refuse to buy new homes. Plus now we are all getting to point kids are off to college in a few years. I need one million bucks alone to pay for college, weddings, retirement medical etc. Buying a trade up home is a nightmare. The upkeep and maint is a killer.
gary says:
January 10, 2012 at 8:59 am
Brian [12],
What bottom? Where is there a bottom? What activity points to a definitive bottom? If I’m a lender, I want to see assets, steady job history, stellar credit rating, 20% down. How many can boast that they have all 4? And those potential buyers that have the muscle will not fall for the ridiculous f*cking asking prices that still exist in far to great numbers. We’re not close yet; the majority of sellers are still fat, bloated slobs living in fantasy world.
Kodak up 25% today!!! Take that apple!
Pent up demand until BK?
JJ says
Kodak up 25% today!!! Take that apple!
JJ [30];
I think you overestimate the financial acumen of your neighbors.
http://youtu.be/hn5EP9StlVA
JJ,
Bigger issue none want to buy as they think housing is a bad investment and fear if they buy they will lose money.
Which means that the bottom isn’t in yet.
Jj who buys a home at $80k household income??? In Northern NJ?
re: # 29 – Yo – They sent the wrong man for the job.
U.S. Treasury Secretary Timothy F. Geithner will urge Asia’s two biggest economies to cut Iranian oil imports
http://www.bloomberg.com/news/2012-01-10/geithner-to-seek-china-s-support-on-iran-sanctions-while-pressing-on-yuan.html
I guess the Bilateral Trade agreements between China and Japan are making some people nervous.
Funny the Canadians recently have also been talking up Bilateral Trade with Japan and China as well. Are we going to invade them too?
Obama Ready to Strike to Stop Iran: Ex-Adviser
http://www.bloomberg.com/news/2012-01-10/obama-prepared-to-use-force-to-stop-nuclear-iran-former-adviser-ross-says.html
When I bought my house in 2000 I had household income less than 80K. By 2010 my interest income alone was over 80K and I paid off house. While folks were buying internet stocks, auction rate securities, Subprime Mortgages and flipping houses while racking up massive amounts of debt in the decade of 2000-2009 I was getting promoted and paying down debt and saving. Lots of my nieghbors were doing the same. Remember, I live in a starter home town, anyone who bought pre-bubble and did not trade up and magaged not to lose job has cash. In fact too much cash. Debt on one balance sheet is cash on another balance sheet. The massive build up of debt by munis, mortgages, corporate bonds, treasuries means there is also a massive amount of debt owned paying off massive amounts of interest.
Bocephus says:
January 10, 2012 at 9:50 am
Jj who buys a home at $80k household income??? In Northern NJ?
gary – 20
“What bottom? Where is there a bottom? What activity points to a definitive bottom? ”
I like this guys chart:
http://www.jparsons.net/housingbubble/
It’s not proof of a bottom but shows the trend line of pricing in the US since 1970. The inflation-adjusted and nominal housing prices seem to be back in line with the trend before the bubble. I suppose pricing could overcorrect and dip below the trend line for a while. There are also wild cards of government intervention and property taxes to consider.
39 – thanks Brian, good chart. anyone have one for NJ prices?
http://www.jparsons.net/housingbubble/
re # 37 – yo – consider the source. Ross is one of the last last neocons to be canned from the O admin. Ever hear of Project for the New American Century? Ross is one of the architects you know invading Iraq in response to the 9/11 terrorist attacks?
bearsfan – 40
Yes it would be nice to have more localized data. The author of the chart does warn that he believes that there are still localized bubbles. Northern NJ might certainly be one of them.
Something I’ve been thinking about on the demand side is household creation. It makes sense that a lot of people in their 20’s are out of college living with mom and dad because they are having trouble finding a job. Also, people who’ve been through a foreclosure might be living with parents, relatives or friends. It would be interesing if someone were to analize the 2010 census data and see if there was a jump in multigenerational households. That might point to a potential pickup in demand. Otherwise, it could just be a change in the American mindset and culture.
The Bible:
http://www.ritholtz.com/blog/wp-content/uploads/2011/04/2011-Case-SHiller-updated.png
#20
“And those potential buyers that have the muscle will not fall for the ridiculous f*cking asking prices that still exist in far to great numbers. We’re not close yet; the majority of sellers are still fat, bloated slobs living in fantasy world.”
we agree again…yet sales are still happening out there so someone is buying
People are living with mom and dad after school because they no longer need an apt. 20 years ago a 25 year old college educated person wanted their own apt and car. Today kids mooch for awhile, the status symbols are Iphones, Ipads, amount of Facebook friends, starbucks, amount of video games and downloaded Itunes.
With dual working parents, money for hotels, vacations plenty of chances to hook up. No stigma attached to mooching anymore. The bars near me are packed with 22-26 year olds working full time in good jobs living at home. I did it awhile myself, moved back home from 26-28. Dated plenty of girls, went drinking, vacations, hampton houses, skiing it was great. Wasn’t till you get till almost 30 that you really need a place. Todays kids don’t even need cars or hampton houses to hook up, just a text message to meet me at starbucks for a quickee in unisex bathroom,
Brian says:
January 10, 2012 at 10:31 am
bearsfan – 40
Yes it would be nice to have more localized data. The author of the chart does warn that he believes that there are still localized bubbles. Northern NJ might certainly be one of them.
Something I’ve been thinking about on the demand side is household creation. It makes sense that a lot of people in their 20′s are out of college living with mom and dad because they are having trouble finding a job. Also, people who’ve been through a foreclosure might be living with parents, relatives or friends. It would be interesing if someone were to analize the 2010 census data and see if there was a jump in multigenerational households. That might point to a potential pickup in demand. Otherwise, it could just be a change in the American mindset and culture.
44- “we agree again…yet sales are still happening out there so someone is buying”
Grim’s data last week showed that a larger % are first time buyers than comped with 2003. I don’t think this bodes well for the $450K + ask.
46 – BearsFan
“Grim’s data last week showed that a larger % are first time buyers than comped with 2003. I don’t think this bodes well for the $450K + ask.”
True not right away but if you read one of Grim’s posts later that day, (I’m paraphrasing) he mentions that the reason demand may have slowed is the lack of existing home owners “trading up” for something bigger.
An increase in household creation might eventually enable people living in existing “starter homes” to eventually trade up for that bigger property or property with a better location.
Go out and look at the 649K price tags but make sure you bring a vomit bag with you. They’re still clinging to 2005. Little do the fat b@stards know they have a terminal illness called insolvency.
#48 gary: I showed you that one in Oradell, sold for 665k in 2005, now listed at 425k!!
“An increase in household creation might eventually enable people living in existing “starter homes” to eventually trade up for that bigger property or property with a better location.”
You can bring an army of first time buyers into NJ…none of their activity will spur trade up activity if the existing owners cannot get a sell price that enables them to do this. This is the jam up in the gears. A good portion of the potential “trade up” population are stuck having bought between 04-08. It requires them to take their haircut, hunker down, and save. I sold April 2010 and have been squirreling since, and I’m still struggling to get to a 20% DP for a trade-up (not suggesting 20% is needed). Just saying, it’s hard to save in a stagflation environment. This will take years and patience, and continued price drag on the trade up price imo.
It is only a buyer’s market if the seller is willing to sell.Unless the seller is willing to sell you can wait forever for a transaction to happen.Gubmint is starting to manipulate FK and shadow inventory.Once this are gone for comparables,there is no other way to base comparables than the stubborn price the sellers are holding on.Homes sold at the bubble price are either sold in a Short sale or on FK.As JJ keeps on saying;this homeowners bought this homes in the 60’s and 70’s and are not in a hurry to sell.
Who blinks first?
Even Tards will not giveaway his house
So far, Obama has had nothing but really low-hanging fruit in the foreign policy arena, allowing him to rack up some easy “wins.” But everyone wonders how he will handle the 800 lb gorilla.
This may be posturing, which you cannot take at face value. In fact, far from giving me confidence that Obama has grown a set, the mere fact that there are trial balloons being sent up gives me more pause than confidence.
We won’t know if he grew a set until the bombs drop. And there is no repeat of Desert One.
http://www.bloomberg.com/news/2012-01-10/obama-prepared-to-use-force-to-stop-nuclear-iran-former-adviser-ross-says.html
yo I never said homeowners who bought in the 60/70s are not in a hurry to sell. But fact is people with paid off homes and lower RE taxes can sit it out longer and usually don’t rush as quick.
My annual home expense is irrelevant. I could let home sit empty for years.
Maybe low mortgage rates are not helping much as we have a lot of cash buyers now. Homes are cheap and cash is high. With ten year treasuries at 2% borrowing at 4% is not attractive
Badda bing, badda Norway? Talk about living in Bergen:
http://www.youtube.com/watch?v=bfRgVbp9gSY&feature=share
“Desert One”
No way. This guy is tech savvy and connected to the Web. He is going for Desert 2.0 or Desert 4G.
Let the dominos fall, I aint got control:
http://www.youtube.com/watch?v=utDWPq2cN7c
“…(and even some real estate experts and Economists) just chose to ignore it and live in denial.”
Even?!?! A majority of bubble era house peddlers were soap watching soccer moms turned real estate mavens. The other 25% were GED having clip-on tie wearing opportunists who erected sub-prime lemming cliffs in various immigrant communities in our area. Blind leading the stupid.
My latest sidestep, or perhaps last ditch effort to block out this insanity, was a two year lease on a 2BR/1BA in northern Edgewater. A nice terrace to enjoy supper al fresco while commenting about the relative lack of lights turned on in the neighboring Vela Point community. It’s close to my office, my spouse has good transportation options (i.e. gypsy busses to the city) and my rent is 1.6X of my friends Clifton property taxes alone (!!!) with none of the headaches (and even includes a fair amount of utilities like cable/net, water and gas). I suspect that recent vintage house tax + early year 30yr interest skew would take care of my nut and then some. But to be fair, I was in the right place at the right time.
After this stint however, our next move will be either to take the plunge or move out of state as we cannot bear to live any longer with the stigma of filthy, community destroying renters.
Lastly, I would have to agree with previous postings, in that the natural trade-up cycle has been at least disrupted, if not arrested, by the shit storm of the last five years.
zieba [58],
Great post!! I’m jealous! And proud!! :)
“eventually trade up for that bigger property or property with a better location”
Location may prompt people to move when they dont feel fully secure in doing so but, people can adapt to less-than-ideal living space and are likely to add on if push comes to shove, rather than move, if they really need more or different space and times are unsettled. What would otherwise fo to the cost of moving and real estate agent fees can be reassigned to added/reconfigured space.
Tell you what just buy a house, knock up wife, have her stay home and then the Boss will own your butt, you will work day and night and next thing you know in ten years you will be making 4x what you make today.
Your transient, non-commital, don’t need cash as wife works and you have no kids to support. Goldman don’t want fly by nighters like you. Join the bandwagon and load up on debt to your eyeballs so GS can hire you and make you work till midnight five days a week and you will like it.
zieba says:
January 10, 2012 at 11:31 am
“…(and even some real estate experts and Economists) just chose to ignore it and live in denial.”
Even?!?! A majority of bubble era house peddlers were soap watching soccer moms turned real estate mavens. The other 25% were GED having clip-on tie wearing opportunists who erected sub-prime lemming cliffs in various immigrant communities in our area. Blind leading the stupid.
“Kodak up 25% today!!! ”
What? Trading at $.30 instead of $.24?
Kodak now up 43%!!! May not go BK.
“load up on debt to your eyeballs so GS can hire you and make you work till midnight five days a week and you will like it.”
Shades of Arbeit macht frei.
I thought the meaning is the same
JJ says
yo I never said homeowners who bought in the 60/70s are not in a hurry to sell. But fact is people with paid off homes and lower RE taxes can sit it out longer and usually don’t rush as quick.
[56] shore
Desert 2.o?
You ripped off my Carter Doctrine 2.o post!
But I did like Desert 4G
65
they could have taken out refi’s ten times over
Gary (for president),
Our esteemed landlord was forced to exercise his co-op sublet right to fly south to Florida to attempt to salvage a home he’s underwater on (smacks forehead). I think his intention is to wait the market out or something like that.
Alas, the good times come with an expiration date; 11/1/13. What then? It’s disconcerting to me to realize just how much money one needs to conjure up or part with in order to NOT live in a run down hovel.
What I need to do is to shoehorn wife into a fat-cat state job and develop a taste for rusted baseboard heating elements.
Like Gary, I seriously doubt we are anywhere near a NY metro RE bottom. Say what you want about nominal prices or being back to 2002 prices, etc. What I find the most relevant is that property taxes are ~7.5% of median income and pushing 2% of median home value in blue ribbony areas. Not to mention that home “values” are still up around 4x median income. I have absolutely no idea how taxes in NNJ ever get back in line so, consequently, I don’t see the market stabilizing either. Here’s some good data to chew on, I don’t know if it’s been linked before:
http://www.taxfoundation.org/taxdata/topic/89.html
OTOH, if you check the data, the Boston market up here (RE, not the chicken place) has appeared to stabilize, but all across Massachusetts the values and taxes never skyrocketed like other places so they didn’t require as lengthy a correction as other areas will.
The ones that took refi 10x over and can not afford to make payments are in FK or shrt sale.The ones that can sit it out are with Re 101,having a gray poupon
joyce says:
January 10, 2012 at 11:48 am
65
they could have taken out refi’s ten times over
zieba,
My favorite is when I walk into a listing and it smells like someone boiled a body part and then left it there for a few months – all for a 2005 asking price.
People love the smell home cooking. Have a friend for dinner and sell your house.
AS per Bernk;Housing is the only obstacle to recovery.The Fed will not stop until they get it right
What I can’t shake is the continued feeling of “how the FK do these people do it”?
I got a strong episode of this recently when I drove to Gardenstate Plaza one recent evening and proceeded to circle for parking for what seemed like eternity. It was just that banged out.
While housing affordability may be the main issue, housing stock desirability, albeit subjective, IMO ranks close second.
yo
I was saying that what JJ said and how you expanded on it were not the same.
Houses bought in 60s/70s might not be paid off
Yo [51];
As JJ keeps on saying;this homeowners bought this homes in the 60′s and 70′s and are not in a hurry to sell.
Who blinks first?
Sellers do. When granny (that 1960’s buyer you talk about, now in her 70’s) falls and breaks her hip and needs both rehab and eventual assisted living, her kids who are being squeezed dry by their own mortgages and need the cash to pay for said rehab/long-term assisted living will sell at market. Can’t eat the house, can can’t pay with it either – have to convert it to cash.
Not funny: Chavez and Ahmadinejad share joke about ‘big atomic bomb’
Flipping alive & well in NJ?
18 Glencarl Road, Upper Saddle River
Bought on Jan 6, 2012 at sherriff’s auction for $951k
Now can be yours, 3 days later, for just $1.499mm, see NJMLS #1200832
read the description:
GREAT DEAL FOR USERS/BLDR/INVESTOR TO PROFIT EST.$700K TO 900K. HSE IS ALREADY BUILT, BUT INTERIOR NDS TO BE FINISHED,& SOME WK OUTSIDE. OPPORTUNITY TO CUSTOMIZE HM. 6 OR 7 BRS 6 1/2 BTH NW BRK CTR COL ON ONE OF BEST STREETS IN UPSADRVR. 3 OTHER HMS ON SAME STREET UNDER CONTRACT BET $2.8M (APPROX 7800 SF) TO $3.1M (EST 8,400 SF). 18 GLEN CARL IS LRGR AT 9000 SF + ON DEEP PROP. NOTE: WHEN HOME IS FULLY FINISHED, PROJECTED TO BE VALUED BET $2.9 M TO $3.1 M., AFTER WK IS FINISHED BY USER / BUILDER / INVESTOR. A TREMENDOUS VALUE FOR SOMEONE THAT WANTS TO CUSTOMIZE HM & CAN BE FIN IN 3 TO 4 MOS+ AND READY FOR SPRING MRKT. **SPECIAL NOTE:IF PROP SELLS AT $1,499M AND USER/BUILDER FINISHES WORK FOR AN EST. $500K TO $700K, TOTALING A COST BASIS OF 1,999M TO $2,199M, & LEAVE PROFIT/EQUITY ON TABLE OF APPROX $700K TO $900K FOR BUYER. ONLY CASH BUYERS WITH PROOF OF FUNDS THAT R SERIOUS CAN BUY THIS HOME IN ‘AS IS’ COND. HOWEVER, BUYR CAN GET BANK LOAN TO FINISH THE PROPERTY AFTER PAYING CASH.
joyce,
True. I know someone who purchased a house in 1999 for $240K. In 2010, after ten years of diligently making payments, the loan balance was $440K.
:) hah! and you think reason can compare with that kind of stupid?
“Location may prompt people to move when they dont feel fully secure in doing so but, people can adapt to less-than-ideal living space and are likely to add on if push comes to shove, rather than move, if they really need more or different space and times are unsettled. What would otherwise fo to the cost of moving and real estate agent fees can be reassigned to added/reconfigured space.”
And that’s pretty much what I did. No doubt one of our great qualities as human beings is to adapt. When I found myself underwater, having trouble refinancing, with a second kid on the way, I just had to dip into my savings and pony up the cash. I dormered out the back of my POS cape, resided, and made other improvements on my own. I finished my education and found a better job. I did what I could with what was within my control.
I just find it hard to believe that those in government haven’t targeted stimulus to household creation. They should be doing everything they can to target demand that way. There must be somebody in the current administration who understands this. I mean, If I can figure this out, sitting on my couch scratching my belly drinking a budweiser while surfing grim’s blog in my POS cape in sussex county, can’t some overeducated government official see this?
We need good leadership, someone who inspires us, so that ipads, and how many facebook dorks we know are not the measure of worth. A productive job and a good home are what’s to be proud of.
It’s something for me to think about as the next election approaches. We’ll see if any one of the clowns they’ve presented us with actually knows what they’re doing.
gary: The listing below is asking 399K, at the peak it would have sold at 450K or more. Taxes are $11,000.00, almost a grand a month before the mortgage insurance etc., and this for a small so called starter house
http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1142767&dayssince=&countysearch=false
Con’t [76];
I had to pass on such a situation (as a buyer) because the seller’s agent was her sister in law and reality hasn’t yet done quite the number that the fall did to her. Her logic right now is likely ‘If I get 2008 pricing, great! Otherwise, I’ll just move back in after rehab.’ Only problem is that even assuming she get back into shape to amble up and down the steps, she’s still a divorcee with college-age kids out of the house, in a 3-story, 4 bedroom house.
Its actually too bad, becuase despite some obvious but fixable flaws, I liked the house, but as Grim says, MLS be damned, its just not really for sale.
“purchased a house in 1999 for $240K. In 2010, after ten years of diligently making payments, the loan balance was $440K”
They really “put the house to work” for them.
I just hope they did not put that money renovating the Crap House or spending in stupid things.I really hope They really “put the house to work” for them.
Shore Guy says:
January 10, 2012 at 12:17 pm
“purchased a house in 1999 for $240K. In 2010, after ten years of diligently making payments, the loan balance was $440K”
They really “put the house to work” for them.
We finally have something to talk about Real Estate.Bottom or Not?
I believe they used it to supplement their income between 2003-07 and then levered up to purchase another home in Phoenix… a typical sub-prime love story.
[39] Brian
Have you seen a housing chart for Japan? It’s a 30year slide into oblivion. Trends work until they don’t, just like any other technical analysis.
Until you see real disposable incomes start to move up in a real way, I don’t think housing will be able to stop sliding, let alone appreciate.
PS – The brigadoon community pool is awesome, especially if you get there early on weekends.
Why would you refer to a UK-source for information on the U.S. Presidential race? Not a very objective source, but I guess you aren’t either…..
Fabius Maximus says:
January 9, 2012 at 11:47 pm
In the spirit of this blog, this is this is how you really play with the houses money.
http://www.independent.co.uk/news/world/americas/las-vegas-casino-tycoon-gambles-5m-on-backing-for-newt-gingrich-6287009.html
Chi, do you still think Mitt gets to the finishing line with out any major war wounds?
reposting…..
chicagofinance says:
January 9, 2012 at 4:57 pm
The End Is Nigh (JJ Spouse Edition):
LI mom strips to pay bills
By KIERAN CROWLEY
A Long Island mom who in her co-ed days posed for Playboy is now working as a stripper in Manhattan to pay expensive legal bills in her battle to get custody of her 4-year-old son.
“I’m dancing to pay for justice, to get my baby back,’’ said a tearful Nicole Montiglio, 41, of Great Neck.
Montiglio lost custody of her son, Sal, in November after a judge noted that she repeatedly reported that her estranged husband, John, was abusing the child — claims never substantiated by investigators.
As a result, Sal was placed with her husband’s brother.
Montiglio claims that Sal told her his dad abused him while bathing him, but officials found no evidence. John Montiglio declined to comment.
Nicole Montiglio’s lawyer, Leslie Barbara, said: “This is a case of ‘Alice in Wonderland.’ A mother seriously believes . . . there is . . . abuse . . . and custody is given to the father’s family.’’
“…dancing for justice…to get my baby back”
priceless.
If they paid cash in the Phoenix home and enjoyed supplementing income and can move to Phoenix,walk away from NJ home,they might have made the money work for them.
zieba says:
January 10, 2012 at 12:27 pm
I believe they used it to supplement their income between 2003-07 and then levered up to purchase another home in Phoenix… a typical sub-prime love story.
grim…
my offer was accepted on a house… can you give me the contact info for that really good inspector you used?
thanks.
87 – daddyo
“Have you seen a housing chart for Japan? It’s a 30year slide into oblivion.”
And that’s what I fear. However, aren’t demographics in the US much different than they are in Japan? I believe Japan’s aging population was an important contributor to their “lost decade”.
http://www.news-to-use.com/2010/08/u-s-vs-japan-demographics-differences.html
If my house is paid,bought in the 70’s,took refi at the bubble price and hold on to cash.Walk away.Did I make the house work for me?Remember,refi is 20% less than appraisal to avoid PMI
#83 Shore: I know someone who put over 100k into a kitchen remodel, says it was alot but that when they sell the house in 20 years they will get their money back on that “investment”. What can you say to a comment like that?
#92 danxp: Can you tell us where you bought?
72 – i sold my NYC apartment by myself, held open houses – baked chocolate chip cookies before each one. that is a smell people love.
an issue in may houses i have visited over the years in NNJ is the pervasive stench of kimchi.
“What can you say to a comment like that?”
I hope you do.
Federal Reserve transferred $76.9 billion in earnings to the U.S. Treasury during 2011, the central bank announced Tuesday, a side benefit of its unprecedented efforts to stimulate the economy through asset purchases.
The annual transfer amount is slightly less than the record $79.3 billion transferred in 2010.
The Fed said it earned $83.6 billion in interest income from its massive portfolio of securities, which includes Treasury debt and mortgage securities.
It’s been buying assets as part of a program of so-called quantitative easing — an unconventional monetary policy designed to lower long-term interest rates and boost economic growth.
Over the past two years, the Fed’s transfers to the Treasury are about twice pre-quantitative-easing levels
http://www.marketwatch.com/story/fed-hands-769-billion-to-treasury-2012-01-10
3b stupid is as stupid does
77 yo having the bomb for 3rd world sh!tholes is like having a mercedes in the ghetto. Yeah you have the appearance of being big and powerful but in the end you still live in a craphole and somebody else is eventually going to take it from you.
Plus those idiots are smart, they are using Reagan’s playbook against us, proxy wars, economic warfare, why fire a shot when the other guy will bankrupt himself thinking you might. This has and will always be about detroying the US. Why use bombs when they we will gladly do it on our own from the inside. Worked with Rome, Greek city states, English and Ottoman empires. To tell you the truth they are doing a damn good job of it too. History is all around you, sometimes you just have to open your eyes to see it.
The really dumb thing is the morons currently occupying and running for the WH buying this load and falling right into their trap. you get the government you deserve.
European Union regulators have preliminarily rejected a proposed merger between the NYSE Euronext (NYX) and Deutsche Boerse (DBOEF, DB1.XE), Fox Business Network’s Charles Gasparino reported Tuesday, citing people close to the NYSE.
The regulators have indicated to NYSE that they will not approve the deal, Gasparino said. The EU commisssioners have yet to rule on the proposed merger in what is a two-step approval process, he said.
re: # 78 – needs just a bit of work eh?
http://www.zillow.com/homedetails/18-Glen-Carl-Rd-Upper-Saddle-River-NJ-07458/38046224_zpid/
Kodak now up 57.26% today
97 – Seif
“i sold my NYC apartment by myself, held open houses – baked chocolate chip cookies before each one. that is a smell people love.”
I should have known. They had twinkies and wonderbread waiting for me when i looked at my place in 2006.
Finally got an iPhone. Can anyone recommend good real estate apps?
Kodak now up 62% today
Amazing, five days ago Kodak after WSJ announced BK chatter at EK Kodak was bumped up to the stock with the most sell ratings of any stock.
It is up 75% in last five days. Excuse me sir, is that egg on your face. This is a Kodak Moment.
realtors bake cookies at open houses to cover the smell of realtors in the house.
105 – prtraders – I like Zillow.
i went with no realtor and ended up eating most of the cookies myself..but i sold the place.
Brian 104 Almost forgot about the craving this morning I had for Twinkies and you had to mention them. Thanks
Didn’t I call a bulldozer bailout? These bulk REOs will turn into zero risk tear downs in many markets. I’m sorry but that next 25% down has been kicked down the road for another six years. Inflation will take care of most that. And so it goes…
Been running the numbers for Bowie, MD again this month to see if we have stopped the massive YoY slide that started in 2005 and has continued through 2011. Apparently not…
Looking at the zip code 20715 which is right outside of Washington DC and an easy commute to Baltimore or Washington we see the slide continues with a 40k loss from December 2010 to December 2011, a 16% drop from last year.
Month/Year/Average Sold Price
Dec 2011 $211,479
Dec 2010 $251,430
Dec 2009 $272,699
Dec 2008 $313,862
Dec 2007 $353,621
Dec 2006 $373,656
Dec 2005 $402,553
Thats a 47.5% drop from 2005 prices. I’m sitting around scratching my head and wondering when the carnage is going to stop.
Not all areas around Washington DC are seeing this kind of carnage as North Laurel and Columbia MD seem to have stopped their slide and are making small gains but there is definitely something wrong.
waiting for Godot.
Unlike Kodak, Twinkies went BK this week. Eat up Quick.
Mike says:
January 10, 2012 at 1:43 pm
Brian 104 Almost forgot about the craving this morning I had for Twinkies and you had to mention them. Thanks
(112) nick,
PG County?
#11 Well there is still property taxes.
116.
People tend to not bite the hand that feeds them. Eventually we will all be defacto welfare queens.
Yes,
Bowie is in PG County. S. Laurel is in PG County too.
Montgomery is where N. Laurel and Columbia are located.
das uberinspektor…
http://afullhouseinspectionco.com/
danxp says:
January 10, 2012 at 12:37 pm
grim…
my offer was accepted on a house… can you give me the contact info for that really good inspector you used?
thanks.
Actually Peter is someone several people used on the board, but I don’t know if grim used him…….
96 3b…
i’ll give you more details in a couple of days… i’m just a bit superstitious…
Just an FYI – I’ve never used him, so I can’t vouch.
(118) nick,
I know. I was suggesting the cause.
#21 OK. Good luck.
Holy crap!
From the AP:
AC casino revenue up in Dec.; 1st time in 3½ years
Atlantic City’s casinos posted a monthly revenue increase of 4.2 percent in December, marking the first time in 3 ½ years they had done so.
The city’s 11 casinos took in $246.5 million in December. Slot machine revenue was up 8.3 percent, to $174.1 million, while table game revenue decreased by 4.3 percent, to $72.5 million.
The last monthly increase in casino revenue came in August 2008.
For the year, though, Atlantic City’s casinos won $3.3 billion, which is down 6.9 percent from 2010.
Juice – #102
well it seems reasonable that they tried to sell it unfinished for last 2 years and went belly up trying, but now it should sell……………….
119
that company looks pretty good… i’m def gonna give them a call…
thanks!
Nicholas [118];
Isn’t Columbia Howard County? Nice enough but way too planned community nanny-state for my taste. Imagine town government being nothing more than a busybody homeowners association writ large. You don’t really own your house, you use it at their pleasure (and don’t you dare paint your shutters an offensive mauve color without approval from the architechtural committee). I liked Anne Arundel county, but PG? No way. Much adult supervision needed, and they are so close that the feds seemingly buy them off with whatever ‘candy’ they ask for.
Isn’t it weird having all those owners/realtors talking about stabilization amidst the news of lowering prices (including grim’s main post)? NY area was long due for another leg down. After a further 20%-30% they might be able to take care the rest with inflation. However, if Manhattan falls everything is up for grabs.
But Grim ain’t eating his own cooking
Of course not, the main article is the “obectivity” claim
125 – Grim
Sweet the recovery is underway!
Either that or everyone is gambling away their mortgage payments.
To paraphrase: the market can stay rational much longer than you can be in denial or kicking the can.
Sex, gambling and booze sells in any type of economy. As bad as things were or still are people will find money for them.
correction: Holy craps!
grim says:
January 10, 2012 at 2:51 pm
Holy crap!
From the AP:
AC casino revenue up in Dec.; 1st time in 3½ years
Atlantic City’s casinos posted a monthly revenue increase of 4.2 percent in December, marking the first time in 3 ½ years they had done so.
The city’s 11 casinos took in $246.5 million in December. Slot machine revenue was up 8.3 percent, to $174.1 million, while table game revenue decreased by 4.3 percent, to $72.5 million.
The last monthly increase in casino revenue came in August 2008.
For the year, though, Atlantic City’s casinos won $3.3 billion, which is down 6.9 percent from 2010.
We have our own set of issues that could cause the same 30 year decline in housing as Japan, including the Baby Boomer demographics.
If we are able to follow Japan, even with the same 30 year decline in housing, we are golden.
Extinction before recovery.
Japan after 30 years decline has 15% poverty. We are this level after a 4 years decline.
Shoeless Joe Jackson:
“Getting thrown out of baseball was like having part of me amputated. I’ve heard that old men wake up and scratch itchy legs that have been dust for over fifty years.”
That is how I feel about homeowners that are still trying to get their bubble prices…they are scratching legs that haven’t been there for years.
Twinkie fans despairing over the possible loss of their favorite spongy treat, however, were reassured by Hostess Snacks on Twitter Tuesday
daddyo – Japan has different extremes. Perhaps the biggest difference is they really is they are literally multi-generational serfs to the banks.
Imagine being able to saddle your kids with the mortgage?
Here is a story written about Japan housing in 1994
In spite of the booming economy, my uncle, like many Americans today, was shut out of the housing market. Prices always seemed too high, but a pullback never materialized, so he waited until the right time to buy. While he waited, prices spiraled up and away until at last they were hopelessly out of reach. By the time I arrived in 1990, his family was living in a government-owned, rent controlled flat that was, by any standards, small: Two rooms that were each about 12 feet square, a small kitchen and a tiny bath to serve three adults (including his mother) and his two kids…
My uncle thought that he would never ever be able to afford a house in Japan, and that he would live out his dying days in that little rented flat. In his experience, housing prices went only in one direction: up. But by 1992, two years after the Nikkei peaked, something strange began to happen – housing prices started drifting down…
By 1994, housing prices continued to drift lower until some units started to become, with considerable stretching and creative financing, affordable. So that year, by taking out a two generation, 60-year mortgage — with his 16-year old son on the hook for the remaining years that he might not be able to pay — my uncle bought his first home. The family had to scrimp, and both he and my aunt had to work more hours, but they were finally, proud homeowners. And it was a nice house – larger than their old house (but not much), in a nicer neighborhood, and on a higher floor with a view of the treetops. I even helped them move in. It was a happy day. I don’t recall the exact price he paid, but I remember thinking that it sure was a lot! Somewhere north of half a million dollars. Those were the kinds of details were lost on me at that age.
I left Japan in 1994, and didn’t return again for a visit until late 1998. In the intervening 4 years, housing prices had continued to fall, and fall, and fall to the point where my uncle’s house was worth only half of what he had paid for it four years earlier: A couple hundred thousand, up in smoke, just as Japan’s economy was mired in a 13-year slump. But he stuck with his loan, hoping the value will come back. And one day, it just might. So he makes his payments each month faithfully, and when he can no longer make them, his son will take over and pay off the remaining balance. And sometime, in the remaining 48 years on the mortgage, the house may once again be worth more than what is owed on it.
Was just listening to the democratic attack poodle, wasserman-schultz, trying to raise expectations for Mitt. She suggested NH was home court for Mitt, and he had to win 50% OT its a loss. What an idiot. Being gov of Mass doesn’t help much in NH, especially with GOP voters who moved there to get away from Mass. She knows nothing.
143 – she is paid to spin…and that is what she is doing. you may not like her but you have to admit she is beautiful!
just kidding. i can barely stomach her.
Chifi [135];
correction: Holy craps!
Afuera! Siete. Tomar el lin.
Guess what I was betting? I stalk “hot” craps tables like the angel of death. I’m like the short seller everyone loves to hate. I wear the black hat all the way to the cage.
She’d look better with a gunshot wound to the head.
moose (146)-
How often does your owner change the newspaper in your cage?
“I wear the black hat all the way to the cage.”
Good times.
“Nearly 10-years ago to the day, the government of Argentina collapsed. Beset by weighty deficit spending and a completely unrealistic currency peg to the US dollar, Argentina became the poster child for the golden rule of economics: ‘that which is unsustainable will not be sustained.’ It’s reversion to the mean. Within a matter of days, the country had burned through several presidents, the currency collapsed, inflation soared, unemployment shot up, crime rates spiked, and the government defaulted on its debt. After limping along for most of the last decade with a soci@list agenda, the government of Argentina is at it again. The economy is rapidly deteriorating, and street-inflation has surpassed 25%”
http://www.zerohedge.com/news/another-consequence-economic-decline
I live in PG county already so all you PGC haters can walk on as you will find no sympathy here. I have a guy I work with who lives in Howard County literally a ten minute walk from my house in PGC and he acts like PGC is some roach infested suckhole.
I think that the problem with PGC doing so poorly after the housing bust is that there was a huge amount of predatory lending that was going on. They were preying upon the black and hispanic populations with loans that were toxic. Yes, the borrowers bear some responsibility and that is why their homes are in forclosure but the causes are much more complex than “its PG county”.
These are working class neighborhoods that are hit the hardest by the housing bust as many are in the construction trades. No trust funds to fall back on or large amounts of savings as buffers against five year layoffs in construction.
In addition to predatory lending and loss of construction jobs the lending industry also bears more blame. They have labeled “PG County” as a “declining market” and require an additional 5% down payment to get the same interest rate as another market. I think that this type of rule disproportionately affects minorities in the same way “you need to read and write” kept many from voting in southern states.
I questioned some of the lenders asking if they realized that asking for a higher down payment in “declining markets” is actually self-reinforcing behavior? That is that because they were requiring a higher downpayment that house prices would continue to fall farther and faster.
(150) nick,
I did walk on. From renting in Silver Spring to owning in McLean. PGC is all yours.
And didn’t Bowie try to secede from PGC and join Anne Arundel years ago?
seif – I googled up some images, and was wondering about your ideals for beauty…..
I have rented in Silver Spring too. I have lived in AA County as well.
From being in the military you get exposed to a lot of different types of people in a lot of different locations and what you come to realize is that aholes are aholes regardless of color or religion. I don’t think that there is a derth of aholes in Howard County they just dress differently.
Nom, I respect your comments about PGC and I didn’t mean anything negative by my comments if that was the way it was interpreted. Just remember that places and people can change in as little as 5 years. Arundel Mills Mall didn’t exist 10 years ago, 5 years ago it as a hopping place and they were building hospitals and schools, now they are building a casino and you can get robbed by people hiding out in the woods after your finished your purchases.
Hey don’t be dissing a congresscritter from South Florida. She may not be pretty but she’s Ours. ;)
Here are two of our biggest and most profitable companies in inaction, as hundreds of the people who make their products threaten suicide:
“As American consumers ogle over shiny new gadgets at this week’s Consumer Electronic’s Show, the workers that make those products are threatening mass suicide for the horrid working conditions at Foxconn. 300 employees who worked making the Xbox 360 stood at the edge of the factory building, about to jump, after their boss reneged on promised compensation, reports English news site Want China Times. It’s not like this is the first time working conditions at Foxconn have made news outside China. But iPhone and Xbox sales surely haven’t lagged in the wake of those revelations and neither Apple nor Microsoft has done much of anything to fix things.
Instead of the raise they requested, these workers were given the following ultimatum: quit with compensation, or keep their jobs with no pay increase. Most quit and never got the money. That’s when the mass suicide threat came in. The incident actually caused a factory wide shutdown, reports Record China.
After the incident, Microsoft gave Kotaku’s Brian Ashcraft the following statement.
“Foxconn has been an important partner of ours and remains an important partner. I trust them as a responsible company to continue to evolve their process and work relationships. That is something we remain committed to—the safe and ethical treatment of people who build our products. That’s a core value of our company.”
Sympathetic corporate statements aside, the conditions haven’t much improved. Beyond this threat — the mayor eventually talked the angry workers down — suicides persist. Apple has given similar responses, saying it ensures safe working conditions and fair employee treatment.
That translates to making employees sign “no suicide” pacts and letting 13 year-olds work half-day long shifts, as Mike Daisey, a self-proclaimed Apple fanboy, details in this week’s This American Life. Daisey goes to Shenzhen, China, where Foxconn employs over 400,000 workers. He talks to both factory workers and businessmen, gathering chilling information about the situation at the factory, discovering suicide nets, 36-hour shifts, 27-year-old burn outs with dismembered limbs and underage workers. Wouldn’t Apple, a company obsessed with details — so obsessed it even programmed Siri to avert uncomfortable questions about its origins, as host Ira Glass discovered — pay attention to these very problematic details, wonders Daisey.”
http://www.theatlanticwire.com/technology/2012/01/foxconn-still-hard-place-work/47193/
AC was very good to me in December. I took 5K from them, not counting the comps and perks.
Mmmmm. Momofuku Milk Bar treats from a vendor who wants our business. Happy early birthday to me. And can I just say that I am a d*mn good mother and wife for saving most of it to bring home and share?
Nicholas [150];
I questioned some of the lenders asking if they realized that asking for a higher down payment in “declining markets” is actually self-reinforcing behavior? That is that because they were requiring a higher downpayment that house prices would continue to fall farther and faster.
Falling prices == bad? Rising prices == good? Why do you assume that house price escalation in an unalloyed good? Wouldn’t the downtrodden be better off if they could own as reasoable and historic multiples of income, rather than jumping from rent servitute to a landlord into debt servitude to bank?
Juice [142];
Imagine being able to saddle your kids with the mortgage?
Imagine? How about this: http://youtu.be/Li0no7O9zmE
FNM CEO is stepping down. Hmmmmmmm.
http://kotaku.com/5874706/report-mass-suicide-threats-at-xbox-360-plant
Report: Mass Suicide Threats at Xbox 360 Plant [UPDATE]
On Jan. 2, over 300 employees at a Foxconn plan in Wuhan, China threatened to throw themselves off a building in a mass suicide. Foxconn makes Microsoft, Nintendo and Sony products. These workers manufacture Xbox 360s.
*****
http://www.theatlanticwire.com/technology/2012/01/foxconn-still-hard-place-work/47193/
Over at The Atlantic, there’s more:
… as Mike Daisey, a self-proclaimed Apple fanboy, details in this week’s This American Life. Daisey goes to Shenzhen, China, where Foxconn employs over 400,000 workers. He talks to both factory workers and businessmen, gathering chilling information about the situation at the factory, discovering suicide nets, 36-hour shifts, 27-year-old burn outs with dismembered limbs and underage workers. Wouldn’t Apple, a company obsessed with details — so obsessed it even programmed Siri to avert uncomfortable questions about its origins, as host Ira Glass discovered — pay attention to these very problematic details, wonders Daisey.
Tard – he got paid and is heading out of town. Williams was around Fannie for the last 20 years and during the run up at point was worth something like $500 million in stock options. He was paid 5 million a year over the last few years as well as other top execs at Fannie and Freddie.
The US House held hearings last year and was moving to suspend large executive compensation packages at Fannie and Freddie and align their salaries with that of regular government employees.
Since the SEC indited the last few CEOs perhaps they were rolling over on him too? Or perhaps he did not want to work for 110k a year and have the Jet taken away.
Anon E. Moose says:
January 10, 2012 at 4:06 pm
Chifi [135]; Guess what I was betting? I stalk “hot” craps tables like the angel of death. I’m like the short seller everyone loves to hate. I wear the black hat all the way to the cage.
Moose: you are The Cooler…..
http://www.youtube.com/watch?v=p3YGswgGA9s
Up, new thread.
Awesome post. Incredibly refreshing given all the duplicate content out there. Thanks for doing something original.