The Elusive First Time Buyer

From CNBC:

Housing Recovery Is Leaving Behind First-Time Buyers

Current homeowners are finally moving up, and distressed sales are making up less of the overall market—all signs of much-needed improvement in housing.

Current homeowners accounted for 54 percent of October’s non-distressed market, up from 50 percent in June, according to a new survey by Campbell/Inside Mortgage Finance.

This as the share of non-distressed sales surged to 64.7 percent, up from 55.7 percent as recently as February.

Unfortunately, first-time home buyers are seeing just the opposite, largely left out of this surge in sales and prices. Their share of the market, usually up in the 40 percent range historically, fell to 34.7 percent in October, the lowest in the Campbell/IMF survey’s three-year history.

The National Association of Realtors put their share even lower, at 31 percent.

Either way, they are the only group of buyers that have not seen their share of non-distressed home purchases rise over the past five months. The mortgage of choice for these buyers, FHA-insured loans, are increasingly tough to obtain.

From HousingWire:

The vanishing first-time homebuyer

It was only a matter of time before the market learned the true fate of the young, first-time homebuyer who may have a solid credit history and a good job, but lacks a 20% downpayment.

The reality is they are disappearing before our very eyes.

And the type of middle-class borrower that used to help drive new home sales is lost in translation as regulators continue to create a housing market that, while more careful in its future construction, may be more disruptive to the American dream.

If you read reports from Real Estate Economy Watch and Campbell/Inside Mortgage Finance, it seems first-time homebuyers make up less of the market today. In fact, Campbell/Inside Mortgage Finance said its HousingPulse Tracking Survey shows the share of first-time homebuyer purchases now at 34.7%, down from 37.1% in June and the lowest percentage in the survey’s history.

Real Estate Economy Watch notes the number of singles buying homes is declining, and the median credit scores for adults in the 25-34 and 35-44 ranges remain below the median scores required by the Federal Housing Administration and the mainstream providers of conventional mortgages.

While married buyers are still able to obtain the credit to access loans in the first-time homebuyer segment, the question is whether other borrowers are stumbling on tighter lending standards and an overregulated mortgage space.

Both sources reporting on this issue this week suggest lending standards are too tight. And at a time when rents are going up, a substantial portion of the first-time homebuyer market is not being served.

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145 Responses to The Elusive First Time Buyer

  1. grim says:

    From the WSJ:

    Five Reasons Home Prices Have Been Rising

    Home prices rose by 0.1% in September from the prior month and by 3.6% from one year ago, the largest such gain in six years, according to a report released Monday by Lender Processing Services.

    The LPS figures serve as a good reminder that it’s still hard to generalize about housing. Some markets are up sharply amid big declines in both prices and the share of distressed sales, while others are still soft. Generally, though, there are at least five significant contributors to rising prices:

    Housing affordability is attractive based on traditional metrics such as price-to-rent and price-to-income measures, largely because prices have fallen so far. Housing is even more affordable considering today’s low mortgage rates. Many buyers judge their decision based on the monthly payment of a mortgage. The average payment on a median priced home last month, assuming a 10% down payment and not including taxes or insurance, fell to $720 at prevailing rates, down from nearly $1,270 at the end of 2005.

    Household formation is revving up. The U.S. is on track to add 1 million new households this year, up from 630,000 last year and an average of 570,000 over the past five years, according to economists at Bank of America BAC -0.66%Merrill Lynch. Based on normal population growth, that rate should be closer to 1.2 million households. The upshot is that some pent-up demand is being unleashed, in part because job growth has picked up.

    Rents are rising. Falling mortgage rates and improving job growth didn’t do much for housing last year, in part because buyers didn’t have much confidence or urgency. Rising rents have changed that. Initially, they spurred more investor purchases of properties that could be rented out. More recently, they’ve given buyers a reason to get off the fence.

    The share of distressed sales, such as foreclosures, are down, and in many Western markets, they are down sharply over the past year.

    Inventories of homes for sale have plunged. Inventories of new homes for sale are at their lowest levels in nearly 50 years as builders sharply cut back construction over the past three years, while inventories of existing homes for sale are near a 10-year low, and down by one third over the past two years. Many homeowners have held back from selling because they owe more than their homes are worth, and even those with equity don’t want to accept big declines in prices.

  2. can i AX a question? says:

    what’s wrong here?

    A Minimum Tax for the Wealthy
    Last Updated: Nov. 25, 7:28 PM ET

    SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

    Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.

    Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

  3. grim says:

    From the NYT:

    Mortgage Interest Deduction, Once a Sacred Cow, Is Under Scrutiny

    A tax break that has long been untouchable could soon be in for some serious scrutiny.

    Many home buyers deduct their mortgage interest when assessing their tax bill, a perk that has helped bolster the income of millions of families — and the broader housing market.

    But as President Obama and Congress try to hash out a deal to reduce the budget deficit, the mortgage interest deduction will likely be part of the discussion.

    Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers.
    “This is definitely a chance worth jumping for,” said Amir Sufi, a professor at the Booth School of Business at the University of Chicago. “For a fixed amount of revenue, it’s better to remove deductions than increase marginal tax rates.”

    Such a move would be fiercely opposed by the real estate industry. The industry has played a crucial role in defending the tax break, even as other countries with high homeownership have phased it out.

    Housing market players who oppose any whittling down of the mortgage deduction still have plenty of time to press their case before Congress makes a decision. If President Obama and Congress do manage to reach an agreement to avoid the looming tax raises and spending cuts, their deal will be broad in nature. Then, over the following months, Congress will hash out details, like any caps on deductions.

    “Until Congress introduces specific legislation, there’s nothing to say about any proposed changes to the mortgage interest deduction,” Gary Thomas, president of the National Association of Realtors, said in an e-mailed statement. “However, it has always been the N.A.R.’s position that the mortgage interest deduction is vital to the stability of the American housing market and economy, and we will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest.”

    With the mortgage interest deduction, households realized tax savings of $83 billion in 2010, according to figures from the Reason Foundation. The bulk of those savings are enjoyed by the higher earners.

    There are a range of ways to increase tax revenue by aiming at higher earners, some less comprehensive than others. For instance, the interest deduction relating to second homes could be ended. Also, the cap on mortgage debt eligible for the interest rate deduction — currently $1 million — could be reduced.

    There are broader approaches, too. In its proposed budget, the Obama administration plans to focus on top earners. The administration suggests capping deductions at 28 percent for high-income households, those earning more than $250,000.

  4. Mike says:

    Good Morning New Jersey

  5. grim says:

    Case Shiller Day!

  6. chicagofinance says:

    aw clot, don’t worry, we all know you are the real anti-Christ…..

    Ernest Money says:
    November 27, 2012 at 7:01 am
    Gator’s having the Antichrist!

  7. Brian says:

    Decline in first time buyers? The lead articles blame mortgage regulation or difficulty in obtaining FHA loans….but what if they just don’t want to own?

  8. Brian says:

    4 – they can get rid of the mortgage interest deduction once I am no longer a benefactor of it.


  9. 3B Buying says:

    #9The fact they are even talking about it, is a big change. The NAR will of course fight this tooth and nail.

  10. grim says:

    From MarketWatch:

    Case-Shiller shows home prices rise again

    U.S. home prices rose in September for the sixth month, signaling that the housing market is “in the midst of a recovery,” according to the S&P/Case-Shiller home-price index released Tuesday. The S&P/Case-Shiller 20-city composite posted a 0.3% increase in September following a 0.8% gain in August. Home prices are up 3% from the prior year. “We are entering the seasonally weak part of the year. Despite the seasons, housing continues to improve,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. Among the 20 cities tracked by the index, 13 posted monthly gains in September. Tuesday’s report on home prices is the latest news on a strengthening housing market.

  11. Peace, Love, Dope says:

    9 – typical “taker.”

  12. grim says:

    I’d love to see vacation and second homes excluded from the mortgage interest deduction, the problem is enforcement would be entirely impossible.

  13. Peace, Love, Dope says:

    13 – why are you attacking success???

  14. grim says:

    If “success” is so, why do they need vacation subsidies?

  15. Brian says:

    14 –
    The election is over you knucklehead. Get over it.

  16. Comrade Nom Deplume says:

    [4] grim,

    Cap it, restrict it, regulate it. Just do something with it soon.

    Smells like money!

  17. Peace, Love, Dope says:

    16 – nothing to do with the election…it is about policy. why should you be getting gov’t handouts? where is my renter’s deduction????

    15 – i was being facetious…that is a great question! same should be asked about oil, corn, etc., etc. subsidies.

  18. grim says:

    From Bloomberg:

    Home Prices in 20 U.S. Cities Rose 3% in Year to September

    Home prices rose in the year ended in September by the most since July 2010, showing the recovery in the U.S. real estate market is a source of strength for the economy.

    The S&P/Case-Shiller index of property values in 20 cities climbed 3 percent from September 2011, after advancing 2 percent in the year to August, the group said today in New York. The median forecast of 29 economists in a Bloomberg survey projected a 3 percent gain. Home prices from July through September climbed the most since the second quarter of 2010.

    Estimates in the Bloomberg survey ranged from gains of 2.2 percent to 3.6 percent. The Case-Shiller index is based on a three-month average, which means the September data were influenced by transactions in July and August.

    Home prices adjusted for seasonal variations increased 0.4 percent in September from the prior month, with 18 of 20 cities showing gains. Atlanta and San Diego showed advances of 1.7 percent. Property values dropped 0.7 percent in Chicago and were unchanged in Tampa, Florida. Unadjusted prices climbed 0.3 percent in September from the prior month.

    The year-over-year gauge provides better indications of trends in prices, according to the S&P/Case-Shiller group. The panel includes Karl Case and Robert Shiller, the economists who created the index.

    Eighteen of the 20 cities in the index showed a year-over- year gain, led by a 20.4 percent surge in Phoenix. New York and Chicago posted the two decreases in values from a year earlier. Year-over-year records began in 2001.

    “With six months of consistently rising home prices, it is safe to say that we are now in the midst of a recovery in the housing market,” David Blitzer, chairman of the index committee, said in a statement.

  19. Peace, Love, Dope says:

    #9 was written with a little smiley, wink, wink…but it is exactly how most people feel; take away someone else’s handouts and subsidies, but don’t touch mine! ie, “take your gov’t hands off my medicare.”

  20. Brian says:

    Respecting Voters Matters More Than Policy

    A Commentary By Scott Rasmussen
    in Political .Friday, November 23, 2012

    The Republican Party has won a majority of the popular vote just once in the last six elections. That dismal track record followed a party revival in the 1980s, when Ronald Reagan led the GOP to three straight popular vote majorities.

    To understand what went wrong, it’s important to remember Reagan was an insurgent candidate who defeated the Republican establishment of his era. When Reagan left office, however, the old establishment reasserted control. They consistently nominated candidates for president who opposed Reagan in 1980 and consistently lost elections.

    The difference is that Ronald Reagan believed in the American people and was skeptical of government. Today’s Republican establishment believes in government and is skeptical of the American people. That’s why most Republican voters today believe the party is out of touch with the base.

    Consider Mitt Romney’s infamous comments about the 47 percent who are allegedly dependent upon government. After the election, Romney even said that President Obama won by giving “gifts” to these dependent Americans. The Republican establishment grumbles about makers versus takers.

    Reagan had a different view. He asked, “How can we love our country and not love our countrymen?” When he passed a major tax reform bill, he was proud that it removed millions of low-income Americans from the income tax rolls. Reagan looked at low-income Americans and saw people who wanted an opportunity to work hard and get ahead. He saw a nation that was happy to extend a helping hand to all who were willing to work.

    Today’s Republican establishment looks at the same group and declares them to be deadbeats waiting for a gift from the rest of us. Today, voters still agree with Reagan on this point. Fifty-nine percent think the first $20,000 anyone earns should be tax free. Just 24 percent are opposed.

    Remember, Reagan’s view won a majority of the vote three times in three elections. Without Reagan, the GOP establishment has won a majority twice in the last 11 tries.

    For Republicans to win again, they will have to respect the people they want to represent. This cannot be faked and will likely require substantive changes in party leadership. A good starting point would be to recognize that tens of millions of Americans see an economy that is rigged in favor of those who are already well off. Rather than complaining about it, Republicans could address the issue by cutting government programs that benefit the wealthy.

    One example, recently brought to light by Hurricane Sandy is the government practice of subsidizing flood insurance for those fortunate enough to own beachfront property. That’s a program that benefits the well-off more than anybody else, and only 31 percent of voters think it should continue. There are plenty of other perks like this that could be eliminated.

    On a grander scale, lower- and middle-income Americans would like to see all personal tax deductions eliminated for those who make more than $250,000 a year. That’s consistent with the stated Republican goal of major tax reform and lower tax rates.

    And the GOP could turn its budget-cutting attention to the corporate welfare programs that are costing the nation tens of billions of dollars every year with little public support.

    But more than any specifics, Republicans need to believe and convey an attitude that is based upon basic American principles of fair play and ensuring that every American has a chance to pursue their dreams.



  21. grim says:

    S&P Case Shiller – NY Metro – As of September 2012 (Unadjusted)

    Low Tier (Under $269876)
    April 161.46 <-Trough May 165 June 168.16 July 170.86 August 172.65 September 173.91 <- Current (Up 7.7% from April) YOY Change -1.08% Mid Tier ($269876 - $443800) March 159.42 <-Trough April 159.87 May 161.29 June 163.56 July 165.72 August 167.93 September 168.65 <-Current (Up 5.8% from March) YOY Change -0.54% High Tier (Over $443800) March 152.06 <-Trough April 152.37 May 154.49 June 157.67 July 159.35 August 159.85 September 159.55 <-Current (Up 4.9% from March) YOY Change -2.57%

  22. yome says:

    The mortgage interest deduction is for the original amount of the mortgage.After refinancing, the current mortgage interest is not deductible.You can deduct the amount of interest equal to the original remaining amount of the original mortgage plus upto $100K in second mortgage.

    Everyone I know deduct the full interest on the refi.Some have refi many times and the mortgage just kept on getting larger with mortgage interest deduction.

    IRS should impose this rule to create revenue

  23. Brian says:

    21 – Sort of fits in to Seif’s discussion of policy, The discussion recently about flood insurance, etc.

    I think Rasmussen’s commentary illustrates how the regular guy on the street feels about politics, policy, etc.

  24. livinginpa says:

    Long time no post. Like others here, inventory issues made it much harder for us to find the “move up” purchase we sold our other home for. Been renting for 1+ year, but have finally found one to buy. Now, looking for info re: mortgages. In the jumbo realm, has anyone seen rates fall below 4%?

  25. yome says:

    Was it Rasmussen that had Romney ahead by 11 points on the Battleground Poll?

  26. grim says:

    Looking for the link now… NJ Personal Income up 4.23% in 2011.

    Big Winners
    Hudson County – Up 5.66%
    Passaic County – Up 5.09%
    Union County – Up 5.08%
    Bergen County – Up 4.83%

  27. Peace, Love, Dope says:

    it does not fit into the discussion – and yes, rasmussen is the now discredited pollster trying to cover his ass with that article.

    i was talking about YOUR personal take on policy. you get angry about “obamaphones”…hate to break it to you but mortgage interest deduction is your obamaphone, only much more expensive.

  28. grim says:

    27 – This is now two years of personal income/per capita income growth in NJ, in many counties the 2011 personal income has eclipsed the 2008 peak.

  29. POS cape says:

    I like in the 2nd subject article, you read “In fact, Campbell/Inside Mortgage Finance said its HousingPulse Tracking Survey shows the share of first-time homebuyer purchases now at 34.7%, down from 37.1% in June and the lowest percentage in the survey’s history.” and you think, “Wow, in the entire survey’s history, that probably goes all the way back to the Depression” and find out in the 1st article the survey history is only 3 years. Big deal.

  30. Anon E. Moose says:

    Dope [18];

    that is a great question! same should be asked about oil, corn, etc., etc. subsidies.

    So you’re FOR federal spending cuts now? Or is your support limited to when other people’s oxes are being gored?

  31. Anon E. Moose says:

    Dope [28];

    hate to break it to you but mortgage interest deduction is your obamaphone, only much more expensive.

    Try measuring what’s “more expensive” by dividing the subsidy by the amount of federal income tax the recipient pays, and get back to me. Usually, someone who is better at math than our President would have a problem dividing by zero. However, bennies like the Earned [ha!] Income Tax Credit mean that Obama-phone lady and the rest of the 47% gets a refundable tax credit for taxes never paid, her denominator is negative. Krugman would tell us that giving a tax credit to those who receive taxes instead of paying them increases revenue!

  32. grim says:

    We had water in the vaults but, “all inventory is intact and in good shape.”

    Thank goodness it didn’t spoil.

  33. Brian says:

    28 –
    I don’t get angry about obamaphones, I apply for them. You have me confused with someone else.

  34. grim says:

    Discuss … NJ Per Capita Personal Income
    2000 – 38,667
    2001 – 39,635
    2002 – 39,936
    2003 – 40,423
    2004 – 42,302
    2005 – 43,880
    2006 – 47,500
    2007 – 50,256
    2008 – 52,141
    2009 – 49,221
    2010 – 50,428
    2011 – 52,430 (This number released by the BEA on Monday, I’m not rehashing old numbers)

  35. Fast Eddie says:

    Speaking of income, and not that anyone really gives a f.uck, but I just landed a job in Upper Haughytville for a 20 percent increase over my current base. They recruited me, I didn’t call them. BTW, it’s listed as one of the top ten firms in NJ to work for. Reporting live, from a gas station as my flat tire gets fixed. :)

  36. Peace, Love, Dope says:

    35 – like I said…taker

  37. Peace, Love, Dope says:

    37 – congrats eddie.

  38. Fast Eddie says:

    Thanks, peace.

  39. Peace, Love, Dope says:

    you are partially responsible for the increased income stat in NJ

  40. BearsFan says:

    36 – Discuss … NJ Per Capita Personal Income

    are people finally leaving?

  41. Bozo the Clown says:

    Where in the world is JJ and why has he forsaken this blog?

  42. Comrade Nom Deplume says:

    Eddie, nice!

    Snowing heavily here in PA. Very pretty even if not sticking much. Saw hunters at end of street. Certainly different out here.

  43. Brian says:

    38 –

  44. Comrade Nom Deplume says:

    [40] Eddie,

    Dope is happy for you because you move from taker to maker and can pay for the rest of us.;)

  45. Peace, Love, Dope says:

    exactly! ever since obamaphone 5 came out i must have it!

  46. Comrade Nom Deplume says:

    [47] dope

    Is there an android obamaphone? I might upgrade.

  47. Peace, Love, Dope says:

    48 – don’t worry, you are on the rolls. you will be getting it in time for xmas.

  48. Peace, Love, Dope says:

    (or Chanukkah, Hanukkah, Kwanza, etc, etc)

  49. grim says:

    Apologies to our buddy in Weehawkin for not quoting the Case Shiller Condo Index.

    Want to talk about the superstar during this recovery? It’s Condos.

    YOY change in NY Metro Condos? Up 4.5%

  50. grim says:

    are people finally leaving?

    Or did only the low wage earners lose their jobs?

  51. Richard says:

    I’d love to see vacation and second homes excluded from the mortgage interest deduction, the problem is enforcement would be entirely impossible.

    Would be simplest to have just one mortgage deductable.

    In any case with the cliff coming, lower mortgage rates, AMT and NJ property taxes I dont think people will be deducting much anyway.

  52. Fast Eddie says:

    Fast Eddie made it home – nice guys at the gas station. They removed the tire from the rim, patched from the inside, done correctly. They were old school, offered me coffee and everything. Too bad that type of approach hardly exists anymore.

    And who said I wasn’t still going for Bomma phones, Bomma unicorns and anything else Obamunism has to offer? Whether I’m paying a little more or less, I’m still getting my fair share. I mean, isn’t this what this mandate was all about?

  53. Brian says:

    Is it me or does it seem like companies would rather pay more bonus money/Merit pay these days during good times over giving a salary raise? I even saw that my town government was doing this.

    52.grim says:
    November 27, 2012 at 11:18 am
    are people finally leaving?

    Or did only the low wage earners lose their jobs?

  54. Theo says:

    Re: #52

    My experience in cubeville is that the last 5 years or so have decimated any position you might consider office grunt work. A lot of this I believe is technology driven, making it easier for one person to produce more and making the others redundant. I know in my own group we are very top heavy: 3 associates, 6 sr. assoc, 3 supervisors, 2 Asst. Directors, 6 Assoc. Directors, 6 Directors and 1 partner. Ten years ago the director count would have been halved and the associate and sr. associate levels would have had a headcount of 10-15 higher. Nowadays no one is expected to spend longer than 2 years at an associate level. If you don’t get promoted, chances are you are on the way out. This is back office support, we generate no revenue.

  55. Fast Eddie says:

    Theo [56],

    Tell me, who generates revenue? Are sales people the only ones worthy? Marketing? A broker? Realtors? Who?

  56. Ernest Money says:

    chi (7)-

    I’ll let Johnny & Sid perform my theme song:

  57. Ernest Money says:

    grim (34)-

    How does tungsten- treated with gold Krylon- react to saltwater?

  58. chicagofinance says:

    Eddie: congrats…..prima facie evidence that pencil pushers are utterly prejudiced about employed/contracting/unemployed….basically, if you are not fully employed they just chuck your resume in the garbage….most of these corporate drones are so insulated from the real world that they just make subjective judgments and overlook some of the best talent out there….mentally lazy and entitled….they couldn’t give a rat’s a%% why you are out there……

    Fast Eddie says:
    November 27, 2012 at 10:45 am
    Speaking of income, and not that anyone really gives a f.uck, but I just landed a job in Upper Haughytville for a 20 percent increase over my current base. They recruited me, I didn’t call them. BTW, it’s listed as one of the top ten firms in NJ to work for. Reporting live, from a gas station as my flat tire gets fixed. :)

  59. Ernest Money says:

    “Exactly two years ago, some of the more politically biased progressive media outlets (who are quite adept at creating and taking down their own strawmen arguments, if not quite as adept at using an abacus, let alone a calculator) took offense at our article “In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year.” In it we merely explained what has become the painful reality in America: for increasingly more it is now more lucrative – in the form of actual disposable income – to sit, do nothing, and collect various welfare entitlements, than to work. This is graphically, and very painfully confirmed, in the below chart from Gary Alexander, Secretary of Public Welfare, Commonwealth of Pennsylvania (a state best known for its broke capital Harrisburg). As quantitied, and explained by Alexander, “the single mom is better off earnings gross income of $29,000 with $57,327 in net income & benefits than to earn gross income of $69,000 with net income and benefits of $57,045.”

  60. chicagofinance says:

    Ernest Money says:
    November 27, 2012 at 12:55 pm
    chi (7)- I’ll let Johnny & Sid perform my theme song:

    clot: Punk in 2012…..
    “I am an anti-christ; please buy my merchandise”
    Billie Joe Armstrong

  61. Fast Eddie says:


    Thank you. It’s funny, for years I wished to land a position in the area I just landed but to no avail. Now, without even looking, if falls in my lap. It’s gonna be a demanding position but I guess no b@lls, no glory.

  62. 3B Buying says:

    Don’t you need the first time buyer to have a housing recovery? Just saying.

  63. Libtard in Union says:

    Way to go on the new job Gary. The 47% thank you for your increased contribution to their livelihood.

  64. 3B Buying says:

    #37 Fast (gary) Congrats!!! You earned it and sdeserve it!!! Now all you need is a new house!!

  65. Fast Eddie says:

    3B [65],

    The stats are a bunch of bullsh1t. You and I know it as we’re out there every day looking to buy. The asshats can’t even get the lies straight any longer. The so-called data is a f*cking comedy scribbled in crayons. Just throw a bunch of numbers on a spreadsheet and publish it. Who’s gonna question it? An audit? LMAO!! They know even less than the m0rons tauting the line of sh1t. It’s all a shell game.

  66. Fast Eddie says:


    I completely expect to outmaneuver the 47% for first dibs of the Oblama pie in any manner possible.

  67. grim says:

    65 – What’s the right percentage of first time buyers?

    From the NAR 2011 Profile of Buyers and Sellers:
    % of First Time Buyers (Nationally)

    2002 – 42%
    2003 – 40%
    2004 – 40%
    2005 – 40%
    2006 – 36%
    2007 – 39%
    2008 – 41%
    2009 – 47%
    2010 – 50%
    2011 – 37%

    So, we’re essentially talking about the current percentage being 3 out of 10 buyers, versus 4 out of 10 buyers as typical.

  68. 3B Buying says:

    #68 Fast: I agree, I don’t see it. House looking is on hold until after the holidays, nothing out there! I am seriously considering even buying where I am now, just for the chance of having a bigger pool of krap to look at!

  69. grim says:

    Should we even be comparing against 2009 and 2010? Those are clear outliers to the trend.

    Did POS Cape nail in in #30 above, if you are only looking back 3 years, your comparison is crap.

  70. Fast Eddie says:

    My suggestion for anyone coming out of high school: become a professional con artist. Amerikans are slow, dimwitted dopes, sleepy from carb poisoning and primed to be snookered.

  71. Fast Eddie says:


    From the NAR 2011 Profile of Buyers and Sellers:

    You should’ve tossed it away after that sentence. NAR is code for, “hook the sucka.”

  72. Theo says:


    My point about revenue generation was the change I see in expectations in the back office, not that I believe we don’t provide value. Demands and expectations are simply higher for everyone.

  73. Nicholas says:

    I would look into the definition of first-time homebuyer.

    I think that it might be misleading. It probably at one time meant someone who has never bought a home before and who is now buying a home. I think somehow it has morphed to mean someone who hasn’t bought a home in the last x number of years with that number being set by the federal government for purposes of identifying flippers.

    Yes by virtue of this data being published by the NAR I also completely disregard because it is misleading. first-time doesn’t mean first-time.

  74. Nicholas says:

    Another thing to consider about the data is that it is % of buyers who are “first-time”. Perhaps first-time homebuyers who are generally nieve about the process continued to buy during this period while the seasoned home buyers understood that it would be better to wait. It isn’t that more first-time homebuyers appeared but rather fewer second-time homebuyers stepped forward thus driving the ratio north.

    Also this data is voluntary and probably not rigorously vetted.

  75. grim says:

    Let me know if you have a source for a first time buyer ratio other than the NAR.

    Corelogic has one, but they don’t make it public, and only ever distribute data in a piecemeal fashion. It’s also categorized by mortgage type, so it’s somewhat biased as it would exclude cash buyers, or those purchasing with a non-traditional loan.

    NAR’s survey included almost 100,000 buyers and sellers in 2012. From a statistical perspective, it’s as good a sample as we could hope for.

  76. 3B Buying says:

    #76 What I find suspect, is that for the last few years we have been told over and over by the media, and the NAR. that in order to have a housing recovery , the KEY is that we need the first time buyer. And without that buyer there can be no recovery. Now we are told there are still no first time buyers, but we are having a housing recovery.

  77. Ernest Money says:

    3b (65)-

    No. All you need are enough banksters and media types to parrot the same lie over and over.

    “Don’t you need the first time buyer to have a housing recovery?”

  78. joyce says:

    (Yup, we live in a great society where the noblest of us all have nothing but good intentions)

    If you liked Tim Geithner as Treasury Secretary, then you’re going to absolutely love Jamie Dimon in the role, according to Warren Buffett.

    Last night America’s beloved grandpa investor — and lover of chocolates, Coca-Cola and equitable taxation — told Charlie Rose in a PBS interview that he thought the JPMorgan Chase CEO would make a great Treasury Secretary, particularly in a crisis.

    “If we did run into problems in markets, I think he would actually be the best person you could have in the job,” Buffett said, according to Bloomberg. “World leaders would have confidence in him.”

  79. Ernest Money says:

    Again, housing stats won’t matter once we’re all roaming the country in armed packs.

  80. Ernest Money says:

    joyce (81)-

    Dimon as Treasury Secretary would pretty much be the signifier that the Antichrist is among us.

  81. Ernest Money says:

    Fox, please guard the henhouse.

  82. Libtard in Union says:

    Yup. Anyone from Chase should be trusted wholeheartedly.

    I recall when they pushed all of their low budget banking customers (like me) into trying to opt in on a policy where you agreed Chase would not be responsible for any fraudulent debit card transactions. The masses are asses.

  83. grim says:

    77 – 79 – So what you are saying is you believe the first time homebuyer ratio has been manipulated by the NAR as far back as 2001?

    Or do you not believe that the current ratio is 31%

    I don’t understand what you are saying the conspiracy here is.

  84. grim says:

    The alternative is to basically say we have no reliable data on first time buyers, and therefore have absolutely no visibility into the number or percentage of sales that are due to first timers, period. No discussion at all, don’t even bother making a comment about there not being any first timers, because you are just making shit up.

  85. Juice Box says:

    Sign of the times. My inlaws just returned from a visit to their Son’s house for Thanksgiving. They came home to a burgled house. Cops think the Perps were pros, they went though every drawer, nook and cranny in the house and no prints left behind. Took jewelry, watches, cash, blue rays/dvds and a part of his sports memorabilia collection (good stuff only). They knew which autographs were worth scratch and left the rest behind.

    Cops also think a woman was involved since they took perfume and handbags too.

    My FIL had a wad of cash in his sock drawer. Moron……….

  86. 1987 Condo Buyer says:

    #87, as a former Staten Islander who moved to NJ and became a first time buyer, I would not be surprised if more folks from SI, Queens and LI move to NJ given the impact of the storm. There are thousands of families who really can not stay where they were. Commutes from the South Shore of SI are at best 90-120 minutes into NYC, so NJ makes sense from a number of perspectives.

  87. pete says:

    2009 and 2010 are artificially inflated because of the first time homebuyer tax credits that were available.  Additionally, it was discussed much here that the credits didnt stimulate incremental sales it simply brought forward those who were going to buy anyway.  Hence you would expect a dip in first timers in the year(s) proceeding.

  88. grim says:

    Found a footnote in a research article that discussed the ratio from the AHS surveys.

    “This number averaged 41.75% during the 1980s and 1990s”

  89. Juice Box says:

    One of my neighbors is now tripling down on his Real Estate losses. He owns two condos in Hoboken (both peak purchases and arguably 20% + underwater but one rented and current occupied top floor unit will rent quick). He is now closing on a house in Upper Haughtyville. I think he is doing it to get the wife away from NYC and her hobbies of trying to get on one of those Real Housewives shows and attempting to be a Socialite and driving him nuts in her spare time. He will be adding three hours to his commute everyday. I can see this one ending really badly….gunfire…that wife of his is nuts.

  90. Nicholas says:


    I think the point I’m trying to make is that the data isn’t valuable because of where it comes from, how it was collected, and how it is presented.

    1. NAR is biased.
    2. It was voluntarily collected without vetting.
    3. It is listed as a % when what you really need is the underlying ratio

    NAR has proven time and time again that they are spin doctors always trying to putting the shiny shoe forward when the other one is covered in doo-doo. I was working with an agent recently and he asked, “are you first time homebuyers?” and I said yes even though I have already own a home. Finally, what you need is the raw data, # of first-time homebuyers and the # of non first-time homebuyers to make any good comparisions from one year to the next.

    This data is less than useful and because of its source is most likely meant to decieve rather than inform.

  91. Nicholas says:

    Again, I believe that the definition of first-time homebuyer has changed since four years ago ushering a divide between pre 2008 and post 2008.

    Pre 2008 first time homebuyer = qualifies for a withdraw from his/her IRA
    Post 2008 first time homebuyer = someone who hasn’t bought a home in 3 years

    What good does it do us to compare to historical trends when the underlying definitions are changing?

  92. Joe Piscopo says:

    [43] JJ’s done. Like all blowhards, even the loveable ones, they are never wrong and they are never sorry. Well JJ was wrong not to carry flood insurance in a flood plain and he should be sorry he made that decision, which lead to his psych breakdown. Now he’s probably locked up in the LI equivalent of Bergen Pines, heavily medicated and monitored, muttering and drooling, “I can’t be wrong. I’m never wrong. I don’t exist unless I’m right. Where am I? Oooh, Jello!”

    Where in the world is JJ and why has he forsaken this blog?

  93. grim says:

    94 – Cite your source for the posted differences in survey methodology

    (I’m not talking about HUD’s definition,

  94. 3B Buying says:

    #79 grim: No. Simply saying that we were told, for the last few years, that there could be no housing recvery without the first time home buyer, and in addition move up buyers could not move up without the first time home buyer. Everything hinged on having a solid first buyer market Now (according to the article posted), we are in a housing recovery, but we don’t have the first time home buyer. I just like consistency. Either it is or is not, or we do or we don’t.

  95. fka 2010 Buyer says:

    Issues with First Time Homeowner Data

    1) We all know you have to take any data from the NAR with a grain of salt and a shot of whiskey
    2) [Who] qualifies as a first time homeowner coupled with how the data gather [defines] a new homeowner is extremely fluid
    3) Outside of NAR and CoreLogic, who else collects this data?
    4) See #1

    Related…how accurate do you think the [primary vs investment] property question is answered on a mortgage application?

  96. The Original NJ ExPat says:

    [94] LOL.

    Mid 80’s first time homebuyer = Single guy 2-5 years out of college who saved for his down payment.

    I remember talking real estate all the time with guys at lunch when I was in my mid-20’s, back in the mid 80’s. All the kids from Bronx and Brooklyn were buying houses with tiny yards. All the rest of us who grew up painting and mowing lawns in the NJ burbs only wanted condos. Car loans were never more than 3 years, and a lot of us paid off our new cars in 1 or 2 years. We never had a credit card until we were out of college either. Most guys went wild, got themselves $5K into debt, then worked their way back out promising never to do that again. Different times.

    Pre 2008 first time homebuyer = qualifies for a withdraw from his/her IRA
    Post 2008 first time homebuyer = someone who hasn’t bought a home in 3 years

  97. Nicholas says:


    It is a voluntary survey from the RE agents that are closing the deal. “Are you a first-time homebuyer?” is the question that they ask. If the cultural definition of first time homebuyer changes due to, lets say, congress debating and changing what it means to be a first-time homebuyer to include anyone except flippers, then the underlying methodology remained the same but the definitions have changed.

    The data is not vetted by the NAR – meaning that they don’t go back and fact check your statements. Without vetting the data it becomes subject to fluctuation of the underlying definition of “first time”.

    It is similar to the same question “are you gay” throughout the years from 1900 to 2012. In the 1900’s you might have a majority of respondents affirm that indeed they are gay people. Eventually popular culture changes and the word stops meaning “happy” and becomes “homosexual” and the same question in 2012 would result in a majority of respondents indicating that they are not gay.

    The methodology has not changed, it has remained the same. The problem is that the definitions have changed.

    That survey data from 2008 on is worthless when compared to earlier years. I fully expect that there would be a higher number of people qualifying as first-time buyers under the looser definition.

  98. Ernest Money says:

    If all the plankton are dead, Plankton Theory is out the window.

  99. 3B Buying says:

    #99 Agreed. We all bought homes back in the 80’s 2 or 3 years out of college. I do not see that today at all, at least in this area of the country. In fact when we are out looking, (and we are looking for a small modest home), all the people we see at open houses, are late 30’s and then well into their 40’s and older. Did they all sell like we did and then rent for a few years? Doubtful to say the least. Or are we supposed to believe that many of these are looking to pick up a house for their newly married children? I don’t buy that either.

  100. chicagofinance says:

    Case-Shiller’s Case Sees `Beginning of Recovery’ (Audio)
    Nov 27, 2012
    Karl Case, the economist who co-created the S&P/Case-Shiller index, says in the housing market there is a “steady, slow beginning of what looks like a recovery.” Case talks with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.”

    Absolute must listen at minute 9:40 of 13 minutes regarding risk-based mortgage pricing….

  101. Nicholas says:

    NAR mailed an eight-page questionnaire in July 2012 to a national sample of 93,502 home buyers and sellers who purchased their homes between July 2011 and June 2012, according to county records and using the Tailored Survey Design Method. It generated 8,501 usable responses; the adjusted response rate was 9.1 percent. All information is characteristic of the 12-month period ending in June 2012 with the exception of income data, which are for 2011. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent

    Interesting, seems like the survey is voluntary, not vetted, and could also be subject to selection bias by the NAR.

  102. The Original NJ ExPat says:

    I just realized it’s been a full month now since JJ last blathered posted.

  103. Fast Eddie says:

    If all the plankton are dead, Plankton Theory is out the window.

    Any questions?

  104. nwnj says:

    Yeah, JJ will show up elsewhere explaining why being flooded with raw sewage while not carrying insurance is a good thing.

  105. Anon E. Moose says:

    Money [101];

    If first-time buyers are the plankton, it might be good to remember that they get eaten and sh!t out. Gotta feed the machine!

  106. BearsFan says:

    Not to stray off topic of first time buyers, but wanted to share some more anecdotal info as it relates to something someone posted a few months back. I’ve been hunting for 2 plus years in monmouth county, and the last 2 places we put offers in on, they ended up getting sold 2-3 months later at or close to what we offered. Someone here discussed recently how those of us who are bidding aggressively into sellers who are in la-la land price wise… never end up getting the call back 2 months later when the reality kicks in…they take the next offer instead of calling you back.

    Well, this has happened to me twice in 6 months and it really sucks :) I am pissed at my realtor for not staying on top of the selling agents. The damnation of it all is that these two properties were the only two we really liked from an end-game perspective out of nearly 100 seen in a year. I’ll echo Gary, the inventory is shit, bid/ask spread is still way off, and I feel like it’s a game of chicken, while the thought of the “last dumb money” money cloud follows me everywhere.

    Whoever detailed that scenario above, a hat tip to you (sorry I cannot remember who).

  107. Ernest Money says:

    IMO, the Monmouth County RE market is more prone to completely collapse than any other RE market in NJ.

  108. The Original NJ ExPat says:

    [110] EM – Hmmm…, that might make sense. I’ve been thinking that the next leg down, if not all-out collapse, will begin in the outer reaches will begin on the outer edges of the NYC commuting radius but places like Monmouth probably have a lot more room to fall than Warren county, Sussex, etc. Does this thinking on Monmouth pre-date Sandy?

    IMO, the Monmouth County RE market is more prone to completely collapse than any other RE market in NJ.

  109. Fast Eddie says:


    Wade through all the bullsh1t and the f.ucking nonsense. And believe me, it takes a while but eventually, the light bulb goes on and an epiphany of epic proportion occurs. Everyone is so totally full of sh1t and the game reeks so badly, it’s beyond description. The buyers of my house are gonna be raging mad when they waited patiently all this time for nothing. My words to them will be don’t blame me, blame the @ssholes who bought into the sucka game back in 2005, bought way more than the could afford and now have a thumb up their @ss because they owe more than the piece of sh1t is worth. It’s not my fault that there’s 3 f.ucking houses to view, one worse than the other and all ridiculously overpriced. We ain’t TARP. Tough f.ucking luck.

  110. 3B Buying says:

    #112 Fast: It is not just the ones who purchased in 2005, otheres out there still expecting top dollar because their friends, family neighbors sold for top dollar in 2005. Many of the Boomers/Old timers sellers out there are the absolute worst.

  111. livinginpa says:

    Bears 109 – Totally feel your pain. Exact same thing has happened here for me in Bucks County. Inventory is crap. The two houses we did bid on were ultimately sold 6-9 mos later right around where we bid. In our area, one listing agent in particular is THE problem. Agent does not seem to tell sellers from the outset what their comps are and lists about 25% higher than comps. The agent’s average days on market is well over a year. And his list to sale ratio is right around 75%. You’d think some sellers would do some research before hiring this clown.
    That said, we found a property with no help from a realtor and are now looking at financing options. Anyone have recent experience (good or bad) with a particular lender? Anyone have opinion on rates getting lower as we approach the fiscal cliff?

  112. The Original NJ ExPat says:

    [113]3B – My prediction has been that a critical mass of these exact types will suddenly wake up, drop their price, and sell. This will cause a rush to the exits by exactly these Boomers/Old timers and there you will have your next leg town and gary will be in inventory heaven.

    #112 Fast: It is not just the ones who purchased in 2005, otheres out there still expecting top dollar because their friends, family neighbors sold for top dollar in 2005. Many of the Boomers/Old timers sellers out there are the absolute worst.

  113. Jill says:

    3b #102: They are probably people like me, who realized that there is no way a postwar cape should cost nearly a half-million dollars and decided to wait. I didn’t have a house until I was 40…I rented on my own till I was 28, then met the DH, we married at 31, rented a cheap apartment and saved until I called in all my markers at 40 and said “I want a house.”

  114. fka 2010 Buyer says:

    [livingin pa]

    I just started looking in Montgomery county, there is plenty of overpriced inventory out there. Although I’ve heard that nicely priced homes are being listed for less than a month. I like the character of the older homes but like the newish (2005) development homes better.

  115. Anon E. Moose says:

    Bears [109];

    In any rational free market, being right and/or first yields rewards. You buy the breakout stock when its unknown; after the CEO becomes a household name you sell before his coke habit becomes tabloid fodder.

    Comparing that to the situation you described (and it happens over and over again) illustrates how dysfunctional the market for real estate is. No reward for being right, no reward for being first; no penalty for being wrong or last.

    A society in which there is no penalty for failure will have an abundance of failures.
    -George Will

  116. Ernest Money says:

    expat (111)-

    Yes. Crappy commute to NYC, absence of meaningful employment growth and the feeling that most of the county is like the set of Clerks drove my thinking on this.

    Also expect the pop of the edumacation bubble will annihilate skools like Monmouth U.

  117. Fast Eddie says:

    ExPat [115],

    No, see… what happens is it takes just one really stup1d motherf.ucker to perpetuate the notion that it’s “different” in Blythe and Branson’s town and then another equally brain dead motherf.ucker who buys into the hype, eagerly signing their life away for a piece of sh1t just to say they live in Upper Asswipe, NJ. It doesn’t matter that they don’t have a pot to p1ss in. And if no one believes me, take a ride when we go look at these sh1tholes and tell me how many $80,000 cars you see in the garage while the place is falling apart.

  118. Ernest Money says:

    I just want to be a witness when Gary finally snaps.

  119. Ernest Money says:

    …I also hope I’m wearing a Kevlar suit when this comes to pass.

  120. relo says:

    Re: Housing Stock:

    My FIL is now alone in the house my wife and sibs grew up in, as is my own Dad. They each basically use two rooms of 3/4 bed, 2 1/2 ba. The former wants to downsize, the latter has no interest in going anywhere else. The former, however, won’t “give it away”. Neither will be going anywhere any time soon. Why they want to pay the associated taxes I’ll never know.

  121. BearsFan says:

    just to add to my story from above, both of the eventual buyers bought with FHA loans. 15K down on a $565 purchase, one of ’em was.

    If I were so inclined, at 15K out of pocket and likely 24-36 months of basically renting, you can really come out ahead if it takes em 3 years to toss ya and you never make one payment. People like us “joke” about this scenario, but I wonder how many actually execute it as their stated intentions.

  122. Fast Eddie says:


    Part of me wouldn’t hesitate in the least to reenact a scene out of Goodfellas on a few of these stup1d b@stards but the punishment far outweighs the cause. I’m much too smart to even consider it. I’ll humbly d1e in the four walls I’m currently occupying before I fund some fat f.ucks lifestyle.

  123. Fast Eddie says:

    15K down on a $565 purchase

    Is it any wonder why I’m borderline deranged?

  124. BearsFan says:

    congrats Fast Eddie! best of luck with the new gig.

  125. Fast Eddie says:


    Thank you! :)

  126. 1987 condo buyer says:

    #127….Gary, i looked for years an decided to add a mbr suite to my house and opennup the kitchen to the family room, etc. i saved on the commissions, moving, and related costs, got what i wanted, knew the house, kne th neighborhood, calculated the tax impact. I looked at all the step up homes in north caldwell and realized i had tonpay $200k more for the location nd thn another $100k to bring it up to current, so i sent that on my current instead.

  127. Essex says:

    Say what you will about The Boss, But after decades he continues to inspire.

    JJ on the other hand….

  128. Ragnar says:

    I watched a NatGeo channel show “doomsday preppers” about people into doomsday survival skills, and waiting for attacks. These people are way more likely to die by shooting each other, or from heart attacks, than from terrorist attacks.

  129. Comrade Nom Deplume says:

    [135] ragnar,

    Statistically true, and they are also flogging their own cottage businesses, or at least several are.

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