From the APP:
Some NJ homeowners left under water as market prices fall
Cynthia Spratt, a single mother of two, recently considered putting her Toms River home on the market and moving inland so that she could avoid the expense of flood insurance and save thousands of dollars.
It was a good idea — except that she bought her home in 2007 near the peak of the housing market. The value of the house and the equity she put in it have dwindled.
“There’s no way I could turn around and sell my house,” said Spratt, 37. “I would walk away from this house with almost nothing to put down on the next house.”
Spratt is one of thousands of New Jersey homeowners who have watched as what was supposed to be their most valuable assets — their homes — lose so much ground that it is virtually worthless to them.
Purchasing a home once was thought to be a cornerstone to building wealth. But now buyers who did just that at the peak of the real estate bubble have little flexibility. They would have a hard time moving if they found a new job out of state. They couldn’t tap into their homes’ equity in case they need a new roof.
…
Before the housing bubble, a house was “forced savings,” said Jordan Celkupa, a financial planner with Robert J. Oberst Sr. & Associates in Red Bank.“You borrowed a chunk of money. You paid the mortgage off. And then, magically, you owned this big asset,” Celkupa said.
Now? If you bought a house near the peak, “you’re going to have to make some tough decisions,” he said.
…
The problem could last for as long as a decade, experts said. Median home prices in New Jersey more than doubled from 2000 to 2007, fueled not by rising income — that grew just 25 percent during that time — but by increasingly exotic mortgages, according to Patrick J. O’Keefe, director of economic research for the Roseland-based accounting firm J.H. Cohn.Some homeowners began to default. Foreclosures rose. Workers lost their jobs. Lending standards tightened. And the supply of homes for sale far outpaced demand from qualified buyers. Home values have declined 34 percent nationwide and 20 percent in New Jersey from their peak in 2006, O’Keefe said.
One result: Some 310,000 homeowners in New Jersey, or 16 percent of the state’s homeowners, are “underwater,” owing the bank more than their homes are worth, said Jeffrey Otteau, president of Otteau Valuation Group, a real estate appraisal and consulting firm in East Brunswick.
Friskies
Ben is the true hero of 2008
The left hates him. The right hates him even more. But Ben Bernanke saved the economy—and has navigated masterfully through the most trying of times.
http://www.theatlantic.com/magazine/archive/2012/04/the-villain/8901/?single_page=true
Chifi is famous again!
The problem could last for as long as a decade, experts said. Median home prices in New Jersey more than doubled from 2000 to 2007, fueled not by rising income — that grew just 25 percent during that time — but by increasingly exotic mortgages, according to Patrick J. O’Keefe, director of economic research for the Roseland-based accounting firm J.H. Cohn.
Let’s not forget about the kill shot: property taxes
I wanna talk about Indiana. Some jerk here tried to say Lehigh is a damn Cinderella. That’s bullspit, Indiana is and the beat down we gave VCU last night sets up a rematch with Kentucky and the Hoosier Nation is looking very much forward to that one. Of course, they came to Assembly Hall back at the start of the season thinking they were going to waltz out with a win but got their asses spanked, so they’re pissed. The Hoosier Nation is pissed because they’re in our damn way and the hate for them almost rivals that for that damn place that’s called a college in West Lafayette Indiana. (I can’t call that place’s name because of the automatic gag response the name induces).
I’m putting you stinking Wildcat fans on notice. You’re about to get the beat down of your lives again for the second time this season.
re #2- Hooray for Benny, he papered over the problems. However time is ticking for real growth, and 2008 is already far in the rear view mirror. The US has never avoided a recession for longer than ten years, over the next 5-6 years it is a statistical given we will be in recession again.
Without including the output gap and the extremely slow growth of our economy, shocks to our economy like rising oil and commodities prices will send us back into recession sooner than later. Anyone leveraged up will not survive the next one, there will be no bailouts like what occurred in 2008-2009, and no more 99 weeks of leisurely unemployment either.
Also the article is a bit disingenuous during the mention of airport and encouragement from stangers. Benny does not fly commercial, he is rubbing elbows with the uber rich as they board their private jets. It is not like he is getting a standing ovation at Yankee Stadium.
Good Morning New Jersey
Ben still gets an annual salary of $180,000.00 no matter who hates him or rips him apart on this blog.
Jeffrey Otteau, president of Otteau Evaluation Group in East Brunswick, confirmed that home prices have receded to 2003 levels, so people who bought their home after 2003 probably now are facing negative equity in their homes. This is especially true for people who bought homes with little or no down payment. “And what’s also worrisome is that (an additional) 4.3 percent will be underwater if market prices fall another 5 percent,” Otteau said.
So, by Q3 of 2012, 1 of 5 house dwellers in NJ will be underwater.
When will APP interview me?
I love this. Purdue is broken and in tears with their loss to Kansas. Lehigh’s Cinderella dreams have been dashed. Funny how these schools focused on engineering got their asses kicked. I’m indifferent on Lehigh, but hate Purdue and it does my heart good to see them and their fans in tears with their damn tail tucked. The only way I can possibly feel better is to see Kentucky broken at the hands of the Hoosier Nation. No, I’m not looking for no damn one or two point win either. We have to bury them.
“So, by Q3 of 2012, 1 of 5 house dwellers in NJ will be underwater.”
Don’t forget all of the muppets who refinanced back out to a 30 in 2008/2009. Almost everyone of my peers did. I opted to knock five years off my mortgage with each refi.
Grim,
I’m going with Trusty Tree for the four trees I need removed since I never heard back from you on Steve’s phone number not working snafu. They are very responsive (local), and their price is about 20% less than the two other estimates I received. Work will be done later this week. Will probably plant a weeping willow as a replacement. We have a lot of water in our backyard.
this website is the leading website.http://www.musicaeletra.net
UsgUxR Looking forward to reading more. Great post.Much thanks again. Really Cool.