From the NY Times:
Home Prices Rise, Putting Country in Buying Mood
Americans are in a buying mood, thanks largely to the housing recovery.
The latest sign emerged Tuesday as the Standard & Poor’s Case-Shiller home price index posted the biggest gains in seven years. Housing prices rose in every one of the 20 cities tracked, continuing a trend that began three months ago. Similar strength has appeared in new and existing home sales and in building permits, as rising home prices are encouraging construction firms to accelerate building and hiring.
The broad-based housing improvements appear to be buoying consumer confidence and spending, countering fears earlier this year that many consumers would pull back in response to government austerity measures.
In January, the two-year-old payroll tax holiday ended, stripping about $700 from the average household’s annual income, according to the nonpartisan Tax Policy Center. Federal government spending cuts that started in March are also serving as a drag on economic growth, economists say. And some recent data on other parts of the economy, like manufacturing and exports, have also disappointed.
Yet consumer confidence reached a five-year high in May, according to a Conference Board report also released on Tuesday, with big improvements in Americans’ views about both the current economy and future economic conditions. Consumer spending has also been strikingly resilient so far this year, given the tax hikes.
“Five years after the start of the financial crisis in earnest, and four years and a week’s time from the beginning of the economic recovery, we’re finally starting to get more of a pickup,” said John Ryding, chief economist at RDQ Economics. “It’s been a very drawn-out process, but you have to remember what we’ve been digging our way out of.”
…
The positive impact of rising home values and the appreciating stock market is expected to offset at least a third of the fiscal tightening, according to Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors.
…
The double-digit housing price increase is being driven by a confluence of factors.For one, employers have added jobs for 31 straight months, so families are willing to start buying again. At the same time, the inventory of homes available on the market remains unusually low, thanks to little new building in the last few years and the large number of homeowners who are still underwater on their mortgages, making them reluctant to sell at a cash loss.
Now there are signs that higher prices are beginning to encourage some would-be sellers to come off the sidelines and place their homes on the market. That could be healthy for the market, countering concerns that housing might become overvalued again.
“You’ve had this dynamic that has been favorable for price increases now, but it’s also favorable for supply to come back on market, so that will mean some moderation in the pace of price increases,” said Daniel Silver, an economist at JPMorgan Chase, who said that he expected home prices to continue growing but not necessarily at the double-digit rate seen in May.
…
Also pushing up home price measures are the declines in distressed sales — that is, foreclosures and short sales. Homes in foreclosure typically sell at bargain-basement prices, which depresses the overall price levels reported.Now the composition of homes sold includes fewer sales at the depressed prices that bring down the overall numbers, said Michael Gapen, senior United States economist at Barclays Capital. The decline in distressed sales and so-called shadow inventory (homes that are behind on mortgage payments or in foreclosure, but not yet on the market) had been pushing up prices, Mr. Gapen said, but that upward pressure will fade over time.
Finally, home prices in many areas experienced severe, unsustainable plunges during the recession. The recent increases are coming off a very low base, so the growth looks strong even if the level of prices is still well below the peaks of the housing boom in the middle of the decade.
“Some of the areas with the largest declines in house prices during the crisis have shown the strongest increases in prices more recently,” Mr. Silver said. In Phoenix, for example, home values have risen 22.5 percent from a year earlier; Las Vegas posted a 20.6 percent gain.
…
Economists generally expect home prices to continue rising, particularly as the economy improves and more young people move out of their parents’ homes and into homes of their own. And many dismiss concerns of a potential bubble, not only because household formation is growing but also because housing prices remain well below their highs. Even after 10 straight months of year-over-year gains, the 20-city Case-Shiller composite price index is 28 percent below its previous peak in July 2006, which is probably a good thing.“Talk of a house price bubble seems premature,” said Ed Stansfield, an economist at Capital Economics. “In relation to incomes, rents or their own past, U.S. home prices still look low.”
…
“We usually think of bubbles as being driven by extremely easy credit, with people borrowing more than the outstanding value of the house and making little to no down payment,” said Mr. Gapen. “That’s not the case with credit standards today.”
From the WSJ:
Home Sales Power Optimism
Home prices surged during the first quarter at their fastest pace in nearly seven years, the latest sign of a sustained warm-up in an economic recovery that has otherwise been marked by starts and stops.
The housing-market revival—and an accompanying report on consumer confidence—adds new grist for a debate inside the Federal Reserve about how far to push its easy-money policies, including an $85 billion-a-month bond-buying program which has helped to keep mortgage rates near historic lows, boosted asset prices and begun to stimulate hiring and spending.
Fed officials say they have been considering when to wind down the program. Signs of a stronger housing market could give confidence to officials who want to be sure that the economy can stand on its own, without the bond buying. Still, they have been reluctant to get too enthusiastic about signs of an upturn, in part because the economy has disappointed before.
The latest reports were big factors driving financial markets Tuesday. Stock investors, encouraged by the strong data, sent the Dow Jones Industrial Average to a new high. At the same time, yields on the benchmark 10-year Treasury note climbed to 2.132%, the highest level in 13 months. Bond yields rise as prices fall, and the gain could have been a response to strong data—and also the prospect of a less active Fed.
“The data we’re seeing tells the Fed we’re moving in the right direction, but I don’t know if it’s enough to really have the Fed scale back what they’re doing,” said Scott Buchta, head of fixed-income strategy at Brean Capital LLC.
…
At current interest rates, homes would still be affordable even if prices rose by 20% from their current levels, said John Burns, chief executive of a home-builder consulting firm in Irvine, Calif. “But what happens when [mortgage] rates go back to 7%? We’re going to have a bust.” He added, “If I were the Fed, I would stop buying mortgage-backed securities today.”
…
Others say it is too soon for alarm. Price gains largely reflect a rebound from low levels and prices remain largely in line with their long-run relationship between incomes and rents, said Christopher Thornberg, an economist with Beacon Economics in Los Angeles. “Could this thing go on too long? Absolutely,” he said. “Could it turn into the next bubble? Absolutely. But we’re not there yet, so I’m not going to start screaming ‘Bubble.’ ”
…
Rising home prices should help buoy consumer confidence and the broader economy because houses represent the largest financial asset for many Americans. The home-price gains also should help housing markets by freeing more homeowners from being underwater, where they owe more than their homes are worth. Many would-be home buyers have complained in recent months over a paucity of desirable homes for sale, and home builders have taken advantage of supply constraints to boost prices. If price increases encourage more sellers to test the market, the new supply could boost sales volumes while tamping down price growth.
From CNN/Money:
Consumer confidence at 5-year high
Consumer confidence surged to a five-year high in May, fueled by increased optimism about an improving job market.
The Consumer Confidence Index, which gauges how consumers feel about the economy each month, rose to 76.2 in May — its highest reading since February 2008, according to research firm The Conference Board.
It’s up significantly from last month’s reading of 69, and is also higher than the 72.5 predicted by economists surveyed by Briefing.com.
Consumer confidence has been on the rise for the past two months after plummeting in March when Americans worried about the effects of automatic government budget cuts.
Fueling the increase: consumers feel more positive about current business and job-market conditions and are considerably more upbeat about future prospects of economic and job growth, said Lynn Franco, The Conference Board’s director of economic indicators.
Continuing the topic of mind-blowing wealth from yesterday, from CNBC:
Summer Rentals Hit $1 Million in the Hamptons
If you think your rent is high, consider summer rentals in the Hamptons.
Brokers say there are now at least a half dozen homes and estates in the Hamptons that are renting for around $1 million—just for the summer. That works out to $9,803 per day, or $408 an hour. And the $1 million lease doesn’t include utility bills or other charges, which can run in the tens of thousands.
Brokers say the number of million-dollar rentals marks a new record.
“It’s unprecedented,” said H. Dolly Lenz, a Manhattan broker who also works with buyers and renters in the Hamptons. “The demand is not just strong, it’s unbelievable.”
Of the two drivers mentioned in the article; underwater owners and little new building; I would guess the first is the more important in our towns close to NYC…will we see the squeeze continue for another couple of seasons?
And some contrast against #3, also from CNBC:
No Paid Vacation? You Must Be an American
The United States is the only highly developed nation that doesn’t require employers to offer paid vacation time, according to a new report from the Center for Economic and Policy Research, a left-leaning think tank.
The report examined vacation policies in 21 developed countries, including the United States. The researchers found that every country except the U.S. had laws making employers offer between 10 and 30 paid vacation days a year.
…
The CEPR report argues that the data are evidence that the U.S. lags other nations in offering workers time off, and is especially tough on low-wage and part-time worker
From the WSJ:
Study: How Using Homes as ATMs Fueled Foreclosures
The conventional wisdom of the housing crisis goes something like this: Too many people bought homes as the housing bubble inflated. Some were unlucky in their timing, while others overextended themselves by putting too little money down. All of these top-of-the-market purchases led to an explosion of foreclosures once home prices dropped sharply and the economy hit the skids.
Amid the current debate about whether a new bubble is forming in the housing market, it’s worth looking at a paper published in March that challenges conventional wisdom by showing that a significant share of foreclosures came from people who bought their homes before 2004.
So why did so many people who bought their homes before the housing bubble fully inflated end up losing their homes anyway?
The answer: These homeowners aggressively used their homes as ATMs, extracting cash by refinancing into larger loans or using home-equity loans.
The paper, published by Steven Laufer of the Federal Reserve Board, examined a sample of homeowners from Los Angeles County and found that 40% of defaulting homeowners had purchased their homes before 2004. Home prices had risen so far in California that even after a 30% decline, prices in recent years have been roughly at levels equal to 2004. For more than nine in 10 of these borrowers, their original mortgage balances should have been less than the current value of their homes, leaving them with positive equity.
Enter the home-equity loan and the cash-out refinance, in which borrowers refinanced into a larger loan, extracting equity to fund everything from college tuition and medical bills to dinners out and vacation trips. In his Los Angeles sample, Mr. Laufer finds that borrowers ended up with loan-to-value ratios that were, on average, 50 percentage points higher than they would have been. (The study follows on earlier work that reached similar conclusions, including a 2009 paper that also examined Southern California.)
One quarter of borrowers who purchased their homes between 2000 and 2003 had loan-to-value ratios of 140% when they ultimately defaulted, while 10% of borrowers had loan-to-value ratios exceeding 170% (that is, they owed 70% more than the value of their house). Without any equity extraction, the majority of homeowners would have had loan-to-value ratios of 60%, and fewer than 10% of borrowers would have been underwater.
The bottom line: equity extraction was responsible for around 80% of defaults among homeowners who purchased their homes before 2004, representing around 30% of all defaults between 2006 and 2009.
Good stuff:
http://www.federalreserve.gov/pubs/feds/2013/201330/201330pap.pdf
Section 6.1 discussing limits on refinance and home equity loans is particularly interesting with regards to policy implication.
[3] grim,
Interestingly, much of that is foreign wealth. I’d love o see wealth stats from other nations, both OECD and “emerging” nations, to see how much wealth inequality exists overseas or even over our borders.
[7] grim
Great. As if I don’t have enough to read.
9 – Limiting equity extraction through refinancing or equity loans will have a substantial impact on reducing defaults and home price declines. For example, set a minimum equity level of 20% on refi and heloc, you can’t extract an amount that would put you below the minimum. Keep the skin in the game.
This is very different from current thinking, which is almost exclusively focused on lending standards for purchases. Not that lending standards aren’t important, they are, but this angle on equity extraction has been largely overlooked from a policy perspective.
The kicker is that this isn’t just a theoretical/academic discussion, the state of Texas has legislation in place today that does this, and it’s plausible that this legislation played a large role in the fact that the state saw substantially lower home price declines than many areas, and a much lower default rate.
Re the MBS crash yesterday, will be interesting to see how far they go today. Also the Fed must be nursing some big losses.
I’m curious how a rise in mortgage rates will affect the current fashion for buying houses, maybe 5% 30y’s will make people realise how expensive places really are.
Some additional color from the mortgage industry, lest readers not realize quite the level of severity here… From MND last night:
Mortgage Rates Vault Catastrophically Higher
There is no adequately descriptive language for movement in Mortgage rates today. “Vaulting catastrophically higher” only begins to capture the brutality of the movement. Until today, December 7th 2010 had been the largest day-over-day increase in 30yr rates that we’d logged since ‘Black Wednesday’–which was essentially the worst day for mortgage markets in the post-meltdown era (it’s a bit chilling to consider the date was 5/27/2009). Today’s move is about 50% larger than December’s and right in line with Black Wednesday. The conventional 30yr fixed rate with the most efficient combination of cost and payment for a perfect scenario (best-execution) skipped completely past 3.875% and moved soundly into 4.0%. Many lenders are already at 4.125% or higher, but almost all of them moved higher by surprisingly similar amounts (given the size of the move).
I’ve routinely called the MBA mortgage apps numbers less than useful simply due to the huge swings/volatility that is common to the index. But I’ll play the confirmation bias card today and post.
U.S. mortgage applications down 9% last week: MBA
The total number of mortgage applications filed in the U.S. last week fell 9% from the prior week as refinance applications fell for a third consecutive week and interest rates jumped to their highest level in a year, the Mortgage Bankers Association said Wednesday.
The market composite index was down 8.8% on a seasonally adjusted basis for the week ended May 24 from the previous week, according to the weekly survey covering more than three-quarters of all U.S. residential-mortgage applications.
The refinance index slipped 12%, the largest single week drop in refinance applications this year, from the prior week to hit its lowest level since December. On a seasonally-adjusted basis, the purchasing index increased 3% from the prior week.
Late 80’s neighbors just walked away. They were in their home over 45 years. Greedy mortgage bankers were giving them home equity to pay medical expenses for the past 10 years. The house is severely underwater.
Lots of senior owners are getting screwed by HECM.
“Reverse Mortgage” is a clever marketing term to get borrowers to think somehow they aren’t taking on additional high-interest rate debt. These loans carry huge fees and mortgage rates that border on insane. It can’t be a mortgage, it’s nothing like a mortgage, the complete opposite, it’s a reverse mortgage, they pay me!
Most would be better off with a simpler home equity loan, they would save substantially on fees and get a much more competitive rate. Even better, sell and downsize.
Lets time travel. Back in the 1980s. Ron Perlman bought a house on Dune road in Hamptons in Spring 1986, back them Wall Street was booming. However, Hurricane Gloria in 1985 was nasty in the Hamptons and washed out to sea a few mansions on Dune road. On Dune road the remaining homes for sale were Cash only, and you could not get homeowners or flood insurance. Ron bought one for one million cash.
The NY Post interviewed Ron Perlman back then and he had the best line ever. Reporter said how can you spend one million cash for a house that can be washed out to sea with just one big wave. Rons answer, it is only one days pay for me. Not that big a deal. Yep Ron Perlman made one million a day salary in the late 1980s. The really rich are really different from you and me.
grim says:
May 29, 2013 at 6:33 am
Continuing the topic of mind-blowing wealth from yesterday, from CNBC:
Summer Rentals Hit $1 Million in the Hamptons
If you think your rent is high, consider summer rentals in the Hamptons.
Brokers say there are now at least a half dozen homes and estates in the Hamptons that are renting for around $1 million—just for the summer. That works out to $9,803 per day, or $408 an hour. And the $1 million lease doesn’t include utility bills or other charges, which can run in the tens of thousands.
Brokers say the number of million-dollar rentals marks a new record.
“It’s unprecedented,” said H. Dolly Lenz, a Manhattan broker who also works with buyers and renters in the Hamptons. “The demand is not just strong, it’s unbelievable.”
If rates keep rising at this rate, CHIFI will learn the hard way why they are called bullet bonds.
grim: there are much worse things than reverse mortgages; believe it or not, they are very tightly regulated and it is actually a fairly above-the-board process. There are high expenses, but it is not due to gouging.
grim says:
May 29, 2013 at 8:12 am
Lots of senior owners are getting screwed by HECM.
“Reverse Mortgage” is a clever marketing term to get borrowers to think somehow they aren’t taking on additional high-interest rate debt. These loans carry huge fees and mortgage rates that border on insane.
Most would be better off with a simpler home equity loan, they would save substantially on fees and get a much more competitive rate. Even better, sell and downsize.
I have short durations, floaters, callable TruPS and step-ups……I am prepared….
JJ says:
May 29, 2013 at 8:57 am
If rates keep rising at this rate, CHIFI will learn the hard way why they are called bullet bonds.
Grim,
Can you help me figure out the status of this property? This link says the auction date passed and it wasn’t auctioned… meaning nobody was interested? How can I find out what’s going on? I stopped by to check it out and the grass is about 3ft high. :) Seems to be in a good location, about a block out of Wyckoff and over half an acre.
http://www.bergenjerseyforeclosures.com/bjf/PropertyDetail?id=13285
The frenzy going on right now may be short-lived……I sense a good deal of top ticking this market should interest rates kick back up a bit….most of what is happening is pure exasperation of lives being put on hold and also people being squeezed out of NYC with exploding rents…….or being enticed to trade down (or laterally cost-wise) into a cheaper real estate market…..
Can you help me figure out the status of this property? … How can I find out what’s going on?
Call the Passaic County Sheriff. Their online foreclosure listings don’t work anymore, so there isn’t any way to look them up online. It was probably adjourned, most foreclosures are these days, they can be adjourned by the lender multiple times, for months at a time. Two other alternatives exist, a settlement or a bankruptcy. I’m not sure they’ll be of much help on the phone though, they might just tell you the list is posted on a bulletin board at the county courthouse or the sheriffs department and to come look for yourself.
This link says the auction date passed and it wasn’t auctioned… meaning nobody was interested?
If it didn’t get sold or taken back, it didn’t make it to the courthouse steps. If nobody is interested the lender takes possession. Nobody being interested is actually the typical situation at a sheriff sale, realize that the buyer is responsible for all outstanding liens. If the liens are higher than what the property is worth, nobody is going to bid, lender takes it back, it becomes a REO at some point in the future. There isn’t a “try again” here, when it comes up for auction, that’s it.
See in WSJ today, more BAC Trups being called.
What kind of step-ups do you have, I never really see them anymore. Last time I owned a step up was one from Xerox in the 1990s. Dont see them too much. Do you have issuer names cusips you can give me.
I am mainly in muni and corporate high coupon callable bonds right now. Duration straight up is 15 years but call wise I am looking at 7 tops. I have some munis with 6% coupons and some corporate with 9% coupons and I highly doubt I will have them to maturity.
Also what type of floaters do you have? Other than Ibonds I dont have any of that. Dont see that too much either.
I sold a lot of C-rated junk in April to pay for my condo which closing got delayed anyhow. But I am glad I sold them. I am paying cash but unloading 300K of crap is same as locking in a low mortgage.
chicagofinance says:
May 29, 2013 at 9:01 am
I have short durations, floaters, callable TruPS and step-ups……I am prepared….
JJ says:
May 29, 2013 at 8:57 am
If rates keep rising at this rate, CHIFI will learn the hard way why they are called bullet bonds.
The Lis Pendens was filed in late 2009 with an upset of $300k. If they haven’t paid since 2009, with interest, fees and penalties that number might be closer to a 4 handle than a 3.
[14] NW
I’m pretty sure my SIL and her husband walked away from their place in MD. I knew they had to be underwater on it due to location and when they bought. Wife kept saying that it was too big for them and that sister was carping about upkeep. But they spend like drunken sailors (new cars, camper, all the toys) and don’t have a lot of income, something I had noticed some time ago. Then, suddenly, we learn that they are living closer to us in a shiitehole of a city. Probably renting, and likely did the midnight move and/or jingle mail.
I’m sure I will get hit up for legal advice now. Fortunately, I’m not barred in this state yet so I can easily beg off.
In what can only be described as an eerie coincidence, my daughter’s old cheer squad, Central Jersey All-Stars, is now part-owned by someone named . . .
Wait for it . . . .
JJ.
Someone named JJ owning a gym and program where there is a surfeit of young girls. You cannot make this stuff up.
grim: there are much worse things than reverse mortgages
I suppose someone might persuade them to take a big reverse mortgage and roll the funds into an annuity…
My concern is that the typical interest rate will be somewhere around 7 or 8 percent, and that’s based on current *ATYPICAL* interest rates. HECM are adjustable, and most can adjust upwards by up to 5 percent, making the cost of funds for one of these 13% plus management fees (in addition to the origination fees, which can be upwards of $10k).
Let’s say a borrower owns a $400k house outright, and wants to borrow $100k.
Right out of the gate, 10% is lost due to origination and management fees, that $100k cost you $110k. Now, let’s add in interest. At 15 years, the borrower easily owes $300k, or more. It’s easy to imagine a scenario over 20 years, with a higher rate, where the entire market value of the house, equity included, are entirely consumed by the cost of this $100k loan.
I have a hard time imagining a scenario where the borrower wouldn’t be substantially better off using their own savings and investments instead (if they have them), or selling and downsizing to extract that $100k at a significantly lower cost.
I’ll gladly pay you Tuesday for a hamburger today.
Grim [15];
CR’s Tanta on Reverse Mortgages
I suppose worse would be those crazy native american loansharks at “Western Sky”.
I wonder if the pretty girl on the commercial is the one reaming your ass with a the 139% interest rate tomahawk after you sign the note.
Purchased in November 2011
CUSIP 61745E3F6
got nicked up a bit when MS credit was smack and also when AAPL flooded market with floaters…..
JJ says:
May 29, 2013 at 9:32 am
Also what type of floaters do you have? Other than Ibonds I dont have any of that. Dont see that too much either.
61745E3F6
smack = smacked
also, I stuck them in client accounts to cover my costs only, so they went in under par….
We’ve hit the top of the real estate market……literally….
Malkin family says stakeholders have approved plan to sell Empire State Building in IPO, setting stage for one of largest real estate IPOs in years.
Grim they used to scalp them with tomahawks now they do it with legalize.
Nom i don’t know why but the image of JJ leading a cheering squad made me chuckle in a Caged Heat sort of way
Grim [29];
I was recently reminded how out of control government regulation is — a green energy company I worked with was testing their hardware on reservation land. Once they came to a deal with the tribe, no reams of federal environmental regulations to comply with. That’s GREEN ENERGY! Things were loosening up for the company once they found a relationship within a certain Democratic Senator’s office.
Banana Republic (and not the clothing retailer — are they still around?) crony capitalism.
NEW YORK (Reuters) – Worries the Federal Reserve may begin to slow its stimulus efforts sent U.S. mortgage rates last week to their highest level in a year, drying up demand for home refinancings, data from an industry group showed on Wednesday.
The Mortgage Bankers Association said interest rates on fixed 30-year mortgage rates surged 12 basis points to average 3.90 percent in the week ended May 24. It was the highest level since May of last year and the biggest jump in 14 months.
And the little frenzied muppets bought in, yet again, to the “buy now or be priced out forever” mantra. Two things will live forever: c0ckroaches and the art of the con.
Holy annoying refinance closing.
Now the loan officer is requiring us to have 6-month rental loss coverage on our multi even though we have not been vacant for a single day since we purchased the place in 2004. This wouldn’t be too bad, but our insurer doesn’t offer it. As I’m getting quotes from other insurers, not only are they significantly higher (even without the rental loss coverage) but they are requiring us to have both the primary and the rental under the same insurance company. This too wouldn’t be too bad, but the quotes I’m getting on the primary are like $500 more per year than what I am currently paying. No-cost loan my @ss. I went back to the loan officer and told her to find me a competitive quote. I could always back out of the refi on the multi if I had to and I’m close to threatening them with this. It’s all really wacky anyhow as the mortgage broker will sell the mortgage a month after we close. What PITA this refinance is compared to 2004, when you could easily get the same loan without a pulse. F you, all of you financial illiterates.
37 – How long is your lock? I’m guessing this came up as part of underwriting?
45 days. Still plenty of time. And yes, it came up during underwriting. Otherwise, we are approved.
Buyers under contract should be extremely vigilant about losing their locks given the significant jump in rates over the past 2-3 weeks.
If the timing isn’t right, all it takes is a seller who can’t quite meet the closing date and needs to push out a week or two and POOF. Problems with the CO? Scheduling issues, etc etc etc.
Extending a lock by 30 or 60 days is not free, and is not cheap.
CHFI, dont laugh but last year I collected a lot of callable bonds bought at close to par with above average coupons. I also have a lot of callable muni bonds with 5% coupon. 5% to me is the normal coupon one should gets when we have normal yields.
If rates rise significantly and they dont get called I can hold on. Why GMAC never called a single bond is beyond me. Guess they are hoping when they get IPO cash to start calling all their bonds over 7%. But really, letting a long term 9% bond go all the way to maturity is crazy
GENERAL MOTORS ACCEPTANCE CORP9.00000% 07/15/2015CALL
ASSOCIATED BANC-CORP CALL 9.25000% 10/15/2018
BANK AMER CORP SUB INTNTS BE 7.00000% 08/15/2038 C
COUNTRYWIDE CAP III SB CAP-B 8.05000% 06/15/2027
GENERAL MOTORS ACCEPTANCE CORP 8.65000% 08/15/2015 CALL
MERCER INTL INC SR NT 9.50000% 12/01/2017
NEW YORK N Y G.O. SERIAL BDS SER. 1990 07.75000%
NEW YORK N Y CITY INDL DEV AGY REV 06.12500% 01/01/2029
OPPENHEIMER HLDGS INC 8.75000% 04/15/2018 SR
WILLACY CNTY TEX PUB FAC CORP PROJ REV SR 08.25000%
BORDEN CHEMICAL INC SINK DEB 8.37500% 04/15/2016
I had a small amount of shares in the Rock Center Reit years ago and lost money. I stay away from that stuff.
chicagofinance says:
May 29, 2013 at 10:56 am
We’ve hit the top of the real estate market……literally….
Malkin family says stakeholders have approved plan to sell Empire State Building in IPO, setting stage for one of largest real estate IPOs in years.
the word “bubble” is trending on twitter.
As long as the IRS was targeting political enemies of the Administration, they may as well be anti-semitic for good measure……I am not going to say what I think because it would be misinterpreted…..
Curious IRS Timing
Did the tax agency also target groups that support Israel?.
The IRS has admitted targeting groups that wanted to speak on issues during the 2012 election season. But did the agency also target tax-exempt groups that opposed Administration policy priorities?
At a House oversight hearing last week, Treasury Inspector General Russell George opened the door on the possibility of more IRS political targeting. Asked by Chairman Darrell Issa whether there were other political criteria that IRS workers had been told to “be on the lookout” for, Mr. George said he could “not give you a definitive answer, sir, at this time. But I certainly will.”
A definitive answer is needed because troubling cases are surfacing. The Arlington, Virginia-based Leadership Institute, a 501(c)(3) that trains young conservative activists, says it was audited in 2011-2012 and had to produce some 23,000 pages of documents for the IRS as well as answer questions about where its interns came from and where they are currently employed.
Curiously, the intrusive questionnaire came from the IRS’s Baltimore office on February 14, 2012, soon after the Cincinnati office asked the Hawaii Tea Party on January 26, 2012 to “provide details regarding your relationship with the Leadership Institute” and “provide copies of their training materials.” The group’s audit fell squarely within the IRS’s 2010-2012 season for conservative targeting.
A Pennsylvania pro-Israel group called Z Street says it filed for 501(c)(3) status in December 2009, intending to operate purely as an educational group. Founder Lori Lowenthal Marcus says that its tax counsel called the IRS in July 2010 to check on the slow pace of approval, and the IRS acknowledged its targeted enforcement.
Asked about the slow pace of approval, the IRS auditor on the case, Diane Gentry, said the application was taking so long because auditors were supposed to give special scrutiny to groups “connected with Israel.” Ms. Marcus says Ms. Gentry further explained that many applications related to Israel had to be sent to “a special unit in D.C. to determine whether the organization’s activities contradict the Administration’s public policies.” Z Street filed suit in August 2010 in federal court in Pennsylvania alleging “viewpoint discrimination,” and its case has since been moved to Washington, D.C. Ms. Gentry did not return our phone calls.
All in the name of campaign finance reform.
A housing bubble era loan makes a comeback, with a twist
More and more people are borrowing against their brokerage accounts to buy condos and expand their businesses.
http://finance.fortune.cnn.com/2013/05/29/margin-loans-comeback/?iid=HP_LN
well, anecdotal, but just found out an hour ago, days away from being out of attorney review, that sellers got a higher offer that I’m not matching. this shit sucks.
Bears Fan. Don’t give up yet. We had this happen to us a number of times and the sellers came back as higher bidders either got cold feet or weren’t as qualified as they said they were. It’s not over. Also, we were lucky to be outbid on a few houses as they paled in comparison to what we eventually found and for 100K or more to boot. Remember, don’t fall in love with any thing you are about to purchase. It completely clouds your ability to think rationally.
When you buy a house you dont find out till several years later if it was a good deal or not. Who knows maybe you will pick up that place in an REO in a few years for half price
BearsFan says:
May 29, 2013 at 2:16 pm
well, anecdotal, but just found out an hour ago, days away from being out of attorney review, that sellers got a higher offer that I’m not matching. this shit sucks.
BearsFan,
When the deal falls through on the d0uchebag sellers for being all greedy and sh1t, tell them to burn your number and shove the house up their f.ucking @ss.
BearsFan [47];
I’m with Eddie [47]. You should try to find out what the new bid is. When the seller comes back to you your offer should be at least as far lower from your current offer. They were willing to screw you for $X, they should fully expect to get screwed for the same amount when the shoe is on the other foot.
Bears,
I put offer in several months back and seller rejected within 1% of his purchase price. Someone bid slightly more and it has been under contract for months. Last week the place across street went into FK. Talk about a bullet dodge. Keepbypur chin up.
Twenty years ago this week our bid was accepted on our current house. We verbally agreed over phone, we drove right over to the house to sign the bid and found out they received multiple higher offers (1993) from bidders as we were driving over. The seller stuck with his verbal and we have been in the house ever since.
Is there some type of loyalty in Attorney Review?
I mean someone comes to me and says I will pay you 300k for your house contingent on my inspection, contingent upon me getting a mortgage, contingent on me selling my house and I want a week or so of attorney review while I nickle and dime you for other stuff.
Then a second guy comes up and says you know what I will give you 305K non contingent upon anything if you bust that contract. Why wouldn’t seller do it. Even more importantly realtor wants 6% so higher price the better.
My brother did it. He went to contract and told guy it is as is. Look very carefully before you bid. Guy came back a second time. Then he did an inspection. My brother once again said it is as is. If you do find something serious like a cracked foundation I would consider fixing it or you can back out, but no nickle and diming. Guy them comes back and wants money off to clean chimney. Brother is pissed. Lawyer goes call next guy who made and offer and he tops it by 5k and is ok with as is.
First guy they never get back to as a real estate contract is void when you change the terms and conditions. So guy chases down lawyer who tells him place is sold, you altered terms and conditions, then guy goes I was just fishing for a few more bucks I would have closed anyhow without chimmney being cleaned. Lawyer goes so what, we closed with a dirty chimmney and an extra 5k.
Did that make up for money you lost on the 1987 condo?
BTW how much is your 1987 condo worth today as opposed to how much you sold it for. I looked up my Coop I sold in 2000 and it makes me want to puke how much it is worth today
1987 condo buyer says:
May 29, 2013 at 3:43 pm
Twenty years ago this week our bid was accepted on our current house. We verbally agreed over phone, we drove right over to the house to sign the bid and found out they received multiple higher offers (1993) from bidders as we were driving over. The seller stuck with his verbal and we have been in the house ever since.
I’ve tried to snipe deals out of attorney review, they’ve been declined by sellers every time. Lots of folks stick to their word.
It’s fairly common, you’d be surprised if you saw how many people jump off their ass to bid on a house as soon as they see it go ARIP. Folks come crawling out of the woodwork to bid. Hell, they’ll pay more. It’s almost like they needed some kind of confirmation, once they see it go ARIP and know someone is interested, it just makes them even more interested.
Suppose this is also why offer shopping is so commonplace. You know what happens to all the cards you see in the ashtray or on the coffee table at a listing? When the agent gets an offer, they call every one of those agents back and tell them that they’ve got interest, and if their buyers are at all interested, they better put in a bid.
Sucks from the buyer perspective, but it works. Usually they’ll make up a little story about it, they got a shitty offer, they are going to take it reluctantly, but they really liked your people and would rather they have it. Blah blah blah.
Thanks guys for the words of encouragement. Some solid folk on this blog.
Yeah, this one is def stinging. I’d like to be hopeful and imagine some scenario where it falls through and they come back hat in hand, but I doubt it.
#55…..Here is my NJ Housing history…and it is a loser…
1984 Robbinsville Condo for Investment: Bought $92,000…Sold in 1999: $92,000
1987 Belleville Condo: Bought $132,000 Sold in 1999 for $92,000 Peaked at $225,000 in 2006..now around $120-$130,000 (interesting)
1993 House..bought for $195,000, put about $200,000 in it over 20 years, worth about $400,000 based on reval and Zillow….
P.S. owe nothing on house..
If realtors were a little bit slimier. They would put properties in AR or pending at below market, then let rats crawl out of woodwork to top it.
I think Realtors have a lot of bird in the hand is worth two in a bush and dont really encourage deal breaking. Look at sites like redfin and they wont let you put in offers on things under contract, or back up offers etc. Also I noticed with my last two purchases the realtor stopped advertising it. Last purchase realtor dropped it from MLS completely and all webmarketing as soon as I agreed to buy it.
In a FSBO the seller gets offers directly and the first offer is just the starting point. With a realtor the seller usually does not even know about offers after he gets first one. In fact realtors often refuse to share the offer price till after closing. I have seen one or two homes that sold cheap where if I knew the price I would have jumped in and bought while it was in AR. But realtor got 5% of 300K and does not want to deal with double work just to get 5% of 310K and create bad feeling with first buyer.
This should be a freekonomics story
grim says:
May 29, 2013 at 4:08 pm
I’ve tried to snipe deals out of attorney review, they’ve been declined by sellers every time. Lots of folks stick to their word.
From the JJ Files:
Drunk driver crashes while having s-x; leaves ejected lover on the road then hides behind cactus
ALBUQUERQUE, N.M. — A New Mexico man faces multiple charges after police say he was having s-x with a woman while driving drunk and crashed, ejecting the woman from the vehicle.
The Albuquerque Journal reports 25-year-old Luis Briones was found with one shoe on and his shorts on inside-out Monday night after he wrecked his Ford Explorer in Albuquerque.
Police say Briones’ female passenger was found naked outside the SUV after being ejected. She had deep cuts to her face and head.
Authorities allege Briones tried to drive away after the crash and leave his passenger behind, but a witness grabbed his keys from the ignition. He also allegedly tried to hide from responding officers behind a cactus and refused to keep his pants on when he was in the back of the police car.
Briones is charged with aggravated DWI, reckless driving and evading police.
No attorney was listed for him.
Once I drove over Throgs neck bridge at 4am to drop off a girl who got stranded at a club in LI whose friends ditched her. She started blowing me on Cross Island parkway and was going at it really good on bridge. I forgot about toll (no ezpass) back then till it was too late and pulled up and paid it. Girl was too embarrassed or too drunk to look up and kept on bobbing while I paid and got change.
chicagofinance says:
May 29, 2013 at 4:39 pm
From the JJ Files:
She didn’t offer to pay the toll?
JJ says:
May 29, 2013 at 4:45 pm
Once I drove over Throgs neck bridge at 4am to drop off a girl who got stranded at a club in LI whose friends ditched her. She started blowing me on Cross Island parkway and was going at it really good on bridge. I forgot about toll (no ezpass) back then till it was too late and pulled up and paid it. Girl was too embarrassed or too drunk to look up and kept on bobbing while I paid and got change.
chicagofinance says:
May 29, 2013 at 4:39 pm
From the JJ Files:
Even worse. I get up there and she had strict parents and she was going to sneak in. So turns out she left her key at her friends house on LI she was supposed to stay at. Anyhow she starts looking around for hidden key but by now it is 5am her lipstick is smeared and she had that I just swallowed a load look, you know what I am talking about.
Then she sees nieghbors light come one and she hops back in car and says just drive, so we are headed back to LI, she remembered her friends Mom’s last name and we can hit a payphone, so I pay a second toll. So we get to LI and now it is near sunrise, so to thank me for return ride she starts blowing again, so I pull into a park and out of blue some weird guy jumps in front of car dressed in a boy scout uniform and sticks his head in window to yell at me as there is some boy scout jamaberee going one. There I am in drivers seats with some guys head in front of me and girls head still bobbing down, guy is in complete suprise, so tells me just head over to track field. So I get out of car with her and I go enough of this just lay down and lets just do it right here, I drove you too damm much for a bj. So anyhow I finally am getting some business after a long night and all at once two joggers doing a sunrise jog are headed towards me at this point I dont even tell girl as she is near climax and as she reaches that the two joggers run around us and one almost trips looking over her shoulder, then we hit payphone and we get address, OMG is is levittown and every house looks the same, nearly 7am and I get her to right house
Kids today have it so easy, if cell phones or smartphones existed back then it would have been a short and boring night.
chicagofinance says:
May 29, 2013 at 4:54 pm
She didn’t offer to pay the toll?
I am very pleased to have heckled our MC…..
JJ en fuego…
http://www.businessinsider.com/historic-home-buying-opportunity-ending-2013-5
dedicated to chifi :)
Ok, so for the last week my Great Dane has been deathly afraid of the cicada noise, we are talking about Xanax to stop him from hiding in the master bathroom. Sheer terror, not happy.
So today, (if you aren’t thoroughly grossed out) big stupid decides he enjoys eating them, not just a bug or two, we are talking about this dog being on a mission. Easily dozens, probably more.
Someone said they taste like shrimp.
It’s not uncommon for dogs to eat them Grim. It’s also not dangerous for them.
No cicadas in BC, its different here … :*)
AR is a pain.
My view is that when AR is over the buyer is done and control heads back to the seller. In AR you commit your inspection costs and at that point you should be ready to lose that amount. I have seen friends carry through with closing as they couldn’t walk away from the $1K-$3K they had already invested. The inspection throws up $10K-$50K of repairs, they just waive it off. If the seller wont adjust, walk. You can always come back to the house and re-open negotiations, but why would you sign yourself into a bad deal. Once you produce your inspection report the seller is obligated to disclose that to any subsequent buyers. That is a big leverage point. “I will drop a dime to your new buyers and they will sue you after close and win”. Now if sellers try and break AR for a higher offer, I would put in a “time is off the essence” and pretend that we are carrying through with the contract. When they try to break, you threaten. Honestly you have nothing to stand on, but you will find out if they actually know that. I had to bit my lip at my last closing. We were in their attorneys home office and hat tip to Eddie Ray, the DC court of appeals velum had pride of place on the wall. That’s when you know how hard you can push. Any time you can fluster the other side it is good.
Last time I sold, the escrow still hadn’t shown up after 10 days. I was very happy. I told the seller they just broke contract. The cash then showed up and my response was to tell them to shove their nickel and dimming I will happily not close and sit on their escrow until they do close. It came down to a $800 termite treatment for old damage. I said I was taking no piece of it and in the end the Realtors eat the cost. The best piece of advice is always for buying or selling, “Its not personal, its business”. For me it is a poker game and me and Mrs Fabius play a mean game.
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