From the Star Ledger:
Home prices in New Jersey continue to rise
The price to buy a home in New Jersey Home continued to climb in July, according to CoreLogic, rising by 4.1 percent over last year. The increase includes homes in which homeowners were behind in mortgage payments or in default.
Nationwide, the average home price rose 12.4 percent between July 2012 and July 2013, the monthly report said. Arizona and California led the way, with jumps of 27 percent and 23.2 percent respectively. It marked the 17th consecutive monthly year-over-year increase.
New Jersey’s increase was the 33rd highest in the country.
“Home prices continued to surge in July,” Mark Fleming, chief economist for CoreLogic, said in an e-mail. “Looking ahead to the second half of the year, price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand.”
…
The Newark-Union area outperformed the state as a whole, with a 5.9 percent increase in July 2013 compared to July 2012. On a month-over-month basis, home prices increased by 3.5 percent between June and July.
..
It noted the median price of home in the Newark-Union metropolitan area was $398,000, up 3.2 percent in the quarter. In the area surrounding Edison, the median price was $299,800, up 0.8 percent.
And no, we’re not talking about the city of Newark, the following Counties make up Newark-Union:
Essex County, NJ
Union County, NJ
Morris County, NJ
Somerset County, NJ
Sussex County, NJ
Hunterdon County, NJ
Pike County, PA
From the Fed:
Beige Book – September 4, 2013 – Second District – New York
Construction and Real Estate
Residential real estate markets in the District have strengthened since the last report. Buffalo-area contacts describe market conditions as very robust, as demand continues to outstrip supply. Thus far, there has been little new construction, and the lack of inventory has pushed prices up. Bidding wars are common for desirable properties. Similarly, sales activity in New York City’s co-op and condo market has been unusually strong in July and August. The inventory of available apartments for sale has declined further and is at new lows, except at the high end of the market. Prices have been rising only modestly in Manhattan, though in Brooklyn, prices are reported to be up by close to 10 percent over the past year. Manhattan’s rental market appears to be at a plateau: rents have leveled off and are up only marginally from a year ago. Brooklyn rents, on the other hand are up 5-10 percent over the past year. As in the sales market, the inventory of available rentals remains tight throughout New York City.
An authority on New Jersey’s housing industry reports that market conditions continue to improve gradually: sales activity has picked up somewhat and prices of existing homes are up roughly 2 percent from a year ago. Multi-family construction activity has been robust but single-family construction remains sluggish; there continues to be little or no spec building. A sizable inventory of distressed properties persists. The New Jersey shore rental market has not yet recovered to 2012 levels; markets in communities hardest hit by Sandy remain particularly depressed.
Commercial real estate markets across the District have been steady to slightly firmer since the last report. Manhattan’s office vacancy rate remains little changed at a low level and is down modestly from a year ago; asking rents for Class A properties have been flat, whereas rents on Class B office space have been trending up and have risen more than 10 percent over the past year. Office vacancy rates in Northern New Jersey, as well as in Westchester and Fairfield counties, have come down since the beginning of this year, though they remain elevated. Long Island’s vacancy rate is steady at a low level. Office markets in the Buffalo and Rochester areas have been stable, while Albany’s has been somewhat softer.
Speaking of Newark, Booker really did a good job cleaning the place up before his senate run. 10 days a in a row with a murder.
From the Star Ledger:
Underwater home owners in New Jersey are floating to the surface
The number of homeowners underwater on their mortgages may soon be able to breath again as rising home prices bring their home values closer to the surface.
A report by RealtyTrac showed that 250,000 New Jersey homeowners owe 25 percent or more of what their house is worth to a lending institution. Another 211,000, putting them on track to be able to seel their home in 15 months without resorting to a short sale.
“Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months,” Daren Blomquist, vice president at RealtyTrac, said in an e-mail. “Homeowners who already have ample equity are quickly building on that equity.”
About 27 percent of homes in the foreclosure process now have at least some equity in their homes, according to the findings, “giving them a better chance to avoid foreclosure without resorting to a short sale — assuming they realize they have equity and don’t miss the opportunity to leverage that equity,” Blomquist said.
#4 Huh?
“A report by RealtyTrac showed that 250,000 New Jersey homeowners owe 25 percent or more of what their house is worth to a lending institution. Another 211,000, putting them on track to be able to seel their home in 15 months without resorting to a short sale.”
Enjoy the final days of civilization. It’s all about to turn very, very ugly.
I’m still here. Just been sticking around hiding in the background.
#4
So….chicken or the egg question: If home prices rise and inventory increases, won’t that that lead to home prices falling, pulling those that haven’t sold (or just went back on the market) back underwater? Or is that just part of the stabilization process?
Btw, I said it before and ill say it again. Anyone that thinks zillow is accurate is a fool!!! I have seen some zestimates off by 200,000 on a houses under 500,000. Talk about being useless in some cases.
It’s a joke how people go around basing their asking price on zestimates. They don’t even have the correct tax records on there. According to zillow my property taxes have not gone up in 3 years. Love hearing my friends ask me how my taxes have not gone up. Thank you zillow, now they think I’m in some sort of conspiracy with the town.
For anyone living in wayne, please read and get on the petition before these dirtbags in office throw our town under the bus and change wayne forever. We do not need low income housing. Sickening!! This mayor can go to hell!!
http://www.signsofdesign.org/index.htm
HAHA Michael is a liberal NIMBY, whats the matter don’t want to let the Indians off the reservation?
In case you hadn’t noticed Wayne already has low income housing in the Garden Apartments on Valley. I think there are others off of Preakness as well. Grim would know better than I though.
Are you kidding? Mr Slobbering all over the poor, brother-lover Mike doesn’t want government subsidized projects built near him? These folks are ready for some DIY share-the-wealth schemes that involve pickpocketing, breaking & entering, and panhandling. Bro, you asked for it, now I hope you get it good and hard.
Yes, wayne already has low income housing, thanks to mt laurel. The point is that we have a small population of low income housing between those apartments and the river rats (who are slowly being bought out by the city and state). We do not want more.
Btw, I’m not a liberal for the millionth time. I’m a moderate. I only talk about helping inner city schools and funding welfare because I realize something you people don’t, if you don’t educate and provide welfare, these people will become desperate and do desperate things. Throw them a bone to stay content, before they come for your steak. The unemployment rate will never be at 0%, so we have no choice but to provide welfare to these individuals for the sake of a better society. I do not want to hire security anytime I go for a ride in my bmw.
Ragner, I’m fine with those people staying in Paterson. I do not want to be living with them or have them going to school with my kids. I rather help(welfare and Abbott funding) them survive in Paterson or passaic.
Is it just me but fatso loud mouth Chris Christie sitting on a beach singing stronger than the storm does not make me want to go to a Jersey Beach.
Kate Upton in a bikini singing. stronger than the storm would have been better.
People go to places like the Hamptons to get away from loud mouth middle age fat white trash folks like Chris Christie yet he does an ad campaign promoting folks like him to go. Also what is with the other ugly folk in the commercial and why are they all pasty and wearing street clothes. At least spray tan them.
Michael
Come clean, you’re either a teacher or somewhere in the edu-bureaucracy, that’s why you support massive funding for failing schools. It has nothing to do with the social benefit, which is completely unproven anyway. Today is Rosh Hoshana and the shools are closed, that’s why you are posting again.
There isn’t much room for high density in Wayne anymore. The only option for any kind of development at scale is going to be in the industrial zones, which are well segregated from most of the standard residential. I don’t see why this would be any kind of problem.
Any of the properties that are in proximity to the highways have a higher value as retail, so residential doesn’t stand a chance.
Property values are too high to do any kind of assemblage of lots with a teardown to acquire enough for a sizable development, if anyone attempted this kind of approach, luxury condos/townhouses would be the only viable option.
And as you said, the state/county/town are actively buying out the flood lots, and the town zoning wouldn’t permit future development in flood, so that takes a very wide swath of land out of circulation.
Besides, we have plenty of garden apartments, not that those are necessarily low income, but they have a fair share.
This redevelopment talk that includes 1000 new units colocated with mixed-use is a positive, frankly. Like I said above, dirt here is too expensive to build large scale low-rent developments, even with aid.
So what if you have a few dozen low-income or subsidized units as part of the 1000 new units added, these kinds of units are typical in developments throughout the state.
“Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months,” Daren Blomquist, vice president at RealtyTrac, said in an e-mail.
Let me hold my breath.
And the Wayne Hills Mall is an eyesore, I’ll personally welcome the bulldozers to that failure. Folks are freaking out about potentially tearing down one of the last remaining K-Mart’s in NJ? That entire complex has been hermetically sealed into 1982.
“Homeowners who already have ample equity are quickly building on that equity.”
I’m a half block from a NYC bus stop and can hit 5 major highways in under 5 minutes. I could put a “for sale” sign written in blood on the front lawn and be sold within 48 hours. The price is not negotiable. It was 12 months ago; it isn’t now. In other words, “f.uck you, pay me.”
NWNJ, give it up already. Your conspiracy sucks. I told you a million times already why I support education funding for these cities. Did you see what happened in New Orleans after Katrina? Those 2 years of no schooling left that city with bands of crazy teenagers who did not care about the law whatsoever. Be careful what you ask for.
So….chicken or the egg question: If home prices rise and inventory increases, won’t that that lead to home prices falling, pulling those that haven’t sold (or just went back on the market) back underwater? Or is that just part of the stabilization process?
Don’t ask silly questions. It’s tails I win, heads you lose. It’s always a good time to buy and sell. Just click your heels together and say, “there’s no place like home.” Realtors are never wrong… that’s why they’re realtors.
I thought we were still 20% off of peak? If you fogged a mirror to get a a NINJA loan or put 3% down, how the f.uck are you in a position to sell without coming to the table with a check? Why is it that these questions raised but nobody has a logical explanation?
Didn’t realize it was such a rough hood…
http://newjersey.news12.com/news/wild-turkey-causes-5k-in-damages-to-kinnelon-home-1.6014538
#21,
And yet I can up 100 houses in CT town that I am targeting and show homes sitting for months and new foreclosures all over the place. Recovery narrative by media to draw fools into overpaying for overtaxed dumps. Of course lots of fools are out there especially the bidding war morons.
Yeah, it would be a real shame if any cities in NJ ended up like that. http://www.nj.com/essex/index.ssf/2013/09/nine_days_nine_dead_shooting_deaths_plague_newark.html#incart_m-rpt-1
Michael says:
September 5, 2013 at 9:29 am
NWNJ, give it up already. Your conspiracy sucks. I told you a million times already why I support education funding for these cities. Did you see what happened in New Orleans after Katrina? Those 2 years of no schooling left that city with bands of crazy teenagers who did not care about the law whatsoever. Be careful what you ask for.
Of course lots of fools are out there especially the bidding war mor0ns.
People are sheep… getting life altering advice from some fat f.uck who knows less than they do.
Grim, how do you feel about the traffic situation with more housing? Also, do you trust developers?
Gator, I would have just shot then fried it.
Micheal, having been to some of the poorer sections of NOLA I can confirm those roving bands of wild teenagers were there pre Katrina. Are we going to attribute Sandy to the murder rates in Camden and Trenton next?
Inventory continues to drop folks, it’s barren out there.
Morris
August 2012 – 4132
August 2013 – 3394 (Down 17.8%)
Passaic
August 2012 – 2844
August 2013 – 2299 (Down 19.2%)
Union
August 2012 – 3292
August 2013 – 2671 (Down 18%)
Somerset
August 2012 – 2809
August 2013 – 2237 (Down 20.4%)
Essex
August 2012 – 3585
August 2013 – 2797 (Down 22%)
29 – What traffic? Are you talking about 80/46/23?
Very little of this traffic has anything to do with Wayne and everything to do with the fact that we sit on a major junction of highways and a major (existing) retail center.
If you are talking about traversing Wayne from Pines Lake over to 23 – Well – You are just shit out of luck there buddy, the last time that trip was a fast one was in ’79.
Only if you measure in dollars. In real terms the water level is just decreasing and some of the rotting corpses wearing concrete shoes are starting to be exposed to air once again (smells great). They’re still dead in the water (pun intended) and they aren’t going anywhere. At least they still drive nice cars. Just ask gary.
Underwater home owners in New Jersey are floating to the surface
At least they still drive nice cars.
That’s beautiful! :) Images mean a lot! Hey, people don’t have to know there’s a case of cup-a-soups in the trunk of the BMW!
[33] …and the illusion of rising home values only applies withing fairly tight commuting radius around the cities. Beyond the prime band there isn’t even the illusion of rising rising prices. Just ask Brian.
Traffic on 23? Easy, get rid of the lights. Packanack is probably the biggest issue. There is no way they should have ever allowed that with a light across 23 (yeah yeah, it was built long before 23 had traffic). It needs to be replaced with a big dirty bad overpass, and yes, it will be a hardship for the Packanack residents.
Same goes for Black Oak, Alexander and Jackson, they’ve all got to go (I believe Alexander and Jackson are both in Pequannock technically).
grim,
Every time I go up 23 past Gary’s wine shop and that hamburger place, I always say they need to put in an overpass at that light. The traffic is always backed up for a mile.
[36] Route 23 – In the mid 80’s when they started removing the traffic circles I thought it would be a very short amount of time before 23 became the next Route 80 (this is back when Route 80 was actually fast, kiddies) and the real estate values in Sussex would soar and there would be huge mountaintop estates off of 515 where you could ski down the mountains making first tracks each morning before driving to Manhattan in 40 minutes. I used to call Sussex the “Sleeping Giant” of NJ Real Estate. One of my worst market calls ever (luckily I didn’t put my money where may mouth was).
[5] Shhhh! That’s one of the things we’re pretending away to the cornfield, along with high unemployment, stagnant wages, rising property taxes and the impossible spectre that interest rates could ever rise to the rate they had been from 1964 to 2008. That was just a 44 year anomaly, that won’t happen again.
So….chicken or the egg question: If home prices rise and inventory increases, won’t that that lead to home prices falling, pulling those that haven’t sold (or just went back on the market) back underwater? Or is that just part of the stabilization process?
I just thought of something, those “Get yourself out of debt” commercials have completely gone away, haven’t they? Maybe they were on the IRS hit list too.
Since I haven’t ‘chirped’ about the Locust Generation recently, there’s this from Althouse:
Demographics….
http://finance.yahoo.com/blogs/daily-ticker/why-incomes-could-fall-next-30-years-151334171.html
Every downturn in America’s economic history has been followed by a recovery. And since the 1930s, those recoveries have only taken a couple of years to materialize.
Even now, in the aftermath of a deep recession, the economy is growing and the unemployment rate is falling. But the next few decades could be uncharacteristically bleak, according to a new study.
Economists Richard Burkhauser of Cornell University and Jeff Larrimore, a staffer on the Congressional Joint Committee on Taxation, warn that demographic factors — which have largely aided the U.S. economy in the past — could end up pushing incomes down for the next 30 years or more. If other factors don’t force incomes up, we may be at the beginning of the longest period of economic decline in American history.
It’s well understood that incomes went up in the 1980s and 1990s but stagnated from 2000 to 2007. The median income fell sharply during the 2007-2009 recession and has yet to recover.
Related: Detroit Favors Wall Street Over Workers’ Pensions: Dean Baker
The new study, which will be published as part of a Russell Sage Foundation book later this year, breaks down income trends since 1979 into various causal factors, then projects how demographic changes will affect median income through 2050. The biggest factor helping to boost incomes between 1979 and 2000 was the growing percentage of women in the workforce, along with rising earnings for those women.
Starting around 2000, however, the contribution of female workers to income growth plateaued. Around the same time, male earnings began to fall, detracting from income growth.
Two other trends will exert powerful influence on incomes in the future: the aging workforce and the growth of minorities—especially Hispanics —as a percentage of the overall population. As the baby boomers retire, the U.S. population will become top-heavy with a larger portion of lower-earning seniors. And since average earnings for blacks and Hispanics are lower than the national earnings average, the median income will fall as lower earners become a greater percentage of the workforce.
Related: McDonald’s Strikes: A Sign the Labor Movement Is Staging a Comeback?
These trends alone could reduce the median income by 0.43 percentage points per year between now and 2020, 0.52 points per year between 2020 and 2030, and 0.2 points per year between 2030 and 2040. By then, most baby boomers will have headed to the great planned community in the sky, and the aging of the workforce will ease. But the changing racial makeup of the country will still cut median income by 0.24 points annually between 2040 and 2050.
Those numbers might sound small, but over time they would add up to a significant loss of purchasing power for the typical American and a long era of decline for the nation as a whole. A typical worker earning $50,000 today would earn only about $48,400 by 2020 if his or her income fell by the amounts projected in the study. The worker’s income would fall to about $45,900 in 2030, $45,000 in 2040 and to less than $44,000 in 2050. In a society built upon consumer power and the idea that succeeding generations leap ahead of preceding ones—rather than fall behind them—four decades of falling incomes could be catastrophic.
The study only makes income projections relating to demographic changes. Other changes could either offset those income declines, or exacerbate them. Future tax hikes or cutbacks in Social Security—some combination of which seems likely, to deal with mounting government debt—would reduce income even more, for instance.
On the other hand, demographic changes aren’t written in stone.
“We could change some of this if we wanted to,” says Burkhauser, one of the study authors. “What we need to do is come up with better education, better training and a greater effort to encourage blacks and Hispanics to stay in the labor force.”
If incomes for lower-earning groups were to tick upward, that would obviously boost incomes overall. That might happen if new immigration laws encouraged highly educated foreigners to come to America and start businesses, similar to the way Canada attracts talented foreigners, for example.
It’s also possible there could be widespread innovations that inject fresh prosperity into the economy. Forecasting firm IHS Global Insight recently calculated that new sources of domestic oil and gas could significantly boost business activity in the United States and add $3,500 to the typical household’s income by 2025. It would be foolish to hope for such deliverance while ignoring basic economic problems, but America, among other things, is the land of the lucky break. Maybe one more is coming.
The traffic is always backed up for a mile.
The Rt 3/46 intersection in Clifton is by far, the worst major intersection in all of NJ given the volume of traffic that traverses that area every day. “No brainer” except that further bottlenecking that area would make it a nightmare for years, and well, there isn’t much dirt left to do anything else.
Watching all the new construction at Fette Ford, I can’t help but think they built those new buildings not because they needed them, but because it would make it impossible for the state/county to take that property via eminent domain (or anything less than a $25 million dollar buyout).
There aren’t many options that won’t result in at least partial elimination of some of the 4 Valley Road ramps, if not all.
What a disaster, the property acquisition costs are going to be in the mid double digit millions, easily. They’ll need to buy up everything from 6 Brothers to the intersection, easily. Probably the VW dealership too. Fette, maybe the new self storage place, the gas station on the westbound side just after, etc etc.
#43..need some fancy “Texas style” flyover lanes
@RBReich: Even Wall St Journal now understands good wages are key to a growing economy. Trickle-down economics a cruel hoax.http://t.co/8mTOqDiO4t
Ragner, I’m fine with those people staying in Paterson. I do not want to be living with them or have them going to school with my kids. I rather help(welfare and Abbott funding) them survive in Paterson or passaic.
You don’t seem to get it. Abbott funding doesn’t help the teachers or kids on those districts. It helps admins pad their salaries, hire their friends, and divert money to politically connected construction firms.
Now I understand why you were so against vouchers. You don’t want any of those Paterson kids in your schools.
Speaking of interchanges, I tried to get on I-78 W from 1/9 N coming out of Newark Airport this week. Whoever designed that was a masochist. I think I crossed 78 at least four times and got turned around twice as many cloverleafs. Thank God I had a GPS in the car and was operating on west coast time three hours ahead of my midnight arrival.
The average rate for the 30-year fixed-rate mortgage rose to 4.57% in the week that ended Sept. 5, close to the highest rate in two years, from 4.51% in the prior week,
Guys when we hit 5% mortgages in a few weeks and it is the dead of winter is when we will get a complete housing slowdown. Most sales I see are marked pending. Lots of folks put offers in during July and August they cant back out of. Some have already locked in their rates anyhow. Remember rates are up five days in a row. Even if you locked in last week you are good to go. Now that school year has started and summer is over. Down by shore you have a double whammy.
That combined with fact entire southshore of LI, Staten Island and NJ Shore home buyers fail to realize come 10-1-2013 and 1-1-2014 flood insurance rates start rising very quickly. Folks today buy get a quote for a few hundred and say big deal. Real Estate Agents, Sellers, Insurance Agents are not really telling folks that rates are set to rise quickly next four years. They just say congrats on your new house your new policy if $440 a year, then afterwards they find out starting 10-1-2013 at every renewal rates rise 25% a year till they hit full rate of several thousand a year. Meaning when they try to sell ten years down the road the magic of compounding at 25% a year will be a killer.
Come January when folks make an offer and find out flood is a few thousand and mortgage rates are 5% and maybe add in town taxes are rising to cover unpaid fema bills that is also an issue.
Funny part about the beach house I find is we have a ton more renters who are rich. It seems the floods and hurricanes scarred them off owning but they still want to rent in the summer. But it still scares me that folks with mortgages and little equity who bought in Spring 2003 till September 2012 when hit with an extra few hundred a month for flood insurance in their monthly payment may drop like dominos.
Lots of folks put offers in during July and August they cant back out of.
Standard NJ purchase offers/contracts contain a mortgage contingency that includes a provision for maximum mortgage rate. This is to prevent buyers from executing on a deal should mortgage rates spike unexpectedly and make the property unaffordable.
That combined with fact entire southshore of LI, Staten Island and NJ Shore home buyers fail to realize come 10-1-2013 and 1-1-2014 flood insurance rates start rising very quickly.
I wonder if this is going to increase demand for inland/non-flood properties.
The average rate for the 30-year fixed-rate mortgage rose to 4.57% in the week that ended Sept. 5, close to the highest rate in two years, from 4.51% in the prior week,
In the last 5 days (which included a Sunday, and a partial day today) – 309 properties went UC in Bergen, Essex, Morris, Passaic, Somerset and Union.
This is a strong number, and if I pull it out to a 7 day period, it is still up from last year.
A little snapshot of total properties that went Under Contract in August. August started with the PMMS 30 year at 4.39 and finished at 4.51. Where is the armageddon? August 2012 had rates ranging from 3.55-3.66. Almost a full percentage point higher in 2013 depending on the week.
Bergen
2012 – 715
2013 – 804 (Up 12.4%)
Essex
2012 – 296
2013 – 413 (Up 39.5%)
Morris
2012 -442
2013 – 463 (Up 4.8%)
Passaic
2012 – 213
2013 – 303 (Up 42.3%)
Somerset
2012 – 321
2013 – 354 (Up 10.3%)
Sussex
2012 – 139
2013 – 170 (Up 22.3%)
Union
2012 – 258
2013 – 373 (Up 44.6%)
Call me a cheerleader all you want, but for some of the counties above, the last time we had an August this strong was during 2005 and 2006. Read that over a few times to make sure you understand it.
Could be what we are seeing is the last big “Pile In” as rates rise, but we won’t know that for a few more months. What we do know is a near 1% increase in mortgage rates doesn’t appear to have had much impact yet. We now have two months of year over year gains in contract volumes despite increased rates. For reference mortgage rates spiked above 4% during the week of June 27th, and were near 4% for most of June.
Grim it’s different here?! Honestly, the current boom in the area defies all logic based on economic uncertainties, labor market and cost of entry. Fog a mirror? NINJA loans? government intervention? Just don’t get it but obviously someone has scratch they are willing to lay out for housing.
I think interest rate increases won’t put that much of a damper on housing sales, though if it does, I’m happy either way as it should help maintain the rental demand for my multi.
The masses don’t look at the interest rate, much like the way they look at purchasing a car or paying off their credit cards. The masses only look at what they can afford per month. They never look at the fact that over 30 years, they will pay, for example, $150,000 more for the home than had they purchased it a year earlier. Too most, it’s can I afford $2,500 per month. Even if rates increase by 2%, so it’s like $2800 per month. See, hardly looks like a big deal at all to the average buyer. Especially when the realtors will be saying that 4.5% is good as the historical average is 8%. I already got one of those emails recently. Oh…and don’t forget that interest is deductible. :P
Trulia is saying rents in NY Metro are up 3.7% over last year.
So if you were paying $2,500 a month rent last year, you’ll be paying $2,600 this year.
Does the increase in rents mute the impact of the increase in rates?
JJ, Nom, and other guys my age should like this:
http://www.messynessychic.com/2013/09/04/the-time-capsule-ghost-town-waiting-to-be-brought-back-to-life/
What realtor or seller in the their right mind would put that in a contract?
Who determines the rate it is pegged to and who determines what is too much of a rate hike? Also what is time frame. I mean you can lock in a rate within days of closing. If someone waits six weeks to lock in a rate and rates rise why should seller suffer.
grim says:
September 5, 2013 at 12:36 pm
Lots of folks put offers in during July and August they cant back out of.
Standard NJ purchase offers/contracts contain a mortgage contingency that includes a provision for maximum mortgage rate. This is to prevent buyers from executing on a deal should mortgage rates spike unexpectedly and make the property unaffordable.
[56] Check out all these 70’s houses with no additions in Kitsault. There are bi-levels with a car port underneath instead of a garage and some bi-levels with no garage (talk about cold floors!), all living space instead.
http://www.youtube.com/watch?v=lI7oh-NtiYs
I mean cold floors for the car-port under models.
“Does the increase in rents mute the impact of the increase in rates?”
Tough question, but personally I doubt many people would even look at it this way. For me, I want interest rates to rise to the moon even if my wages only increase to meet it half way. I’m super leveraged in fixed mortgage debt and will not need a major loan for anything in my foreseeable future. Rising rates make renting more affordable than owning unless the landlord passes an interest rate increase onto their tenants, which is quite ludicrous. I do not increase the rents more than my taxes increase. It encourages the current renters to stay because they end up getting a good deal and it doesn’t cost me anything. I only seek current market rent when a unit turns over. The cost of repainting, cleaning and upgrading is far more expensive than an extra $1200 to $2400 rental income per year. Plus the place is already spinning off about $12,000 per year over an above carrying costs. My time has value and I’d rather have caring tenants who don’t wreck the place because they have a good deal than tenants who could care less since they are paying a king’s ransom to live there.
To 42 – Condo 1987:
I remember in the early 90’s someone wrote a book about the upcoming Big Depression because of the low population demographics with the Gen Xrs. By 1998, I remember a Baron’s article laughing at the book’s premise.
I would stipulate, that what is coming is worse than that early 90’s book’s prediction. Simply because, a lot of the demographically caused economic malaise which started to be felt in the early 90’s (as the book predicted), were wiped out by Greenspan’s easy money policies that gave us the Tech Stock & Housing Bubbles.
So now we have the original Geezer Locust Boomer issue + Gen X demographic drop + the excess debt weight from all the bubbles + the Gen Y – Millenials demographic issues.
Demographics….
http://finance.yahoo.com/blogs/daily-ticker/why-incomes-could-fall-next-30-years-151334171.html
Every downturn in America’s economic history has been followed by a recovery. And since the 1930s, those recoveries have only taken a couple of years to materialize.
Even now, in the aftermath of a deep recession, the economy is growing and the unemployment rate is falling. But the next few decades could be uncharacteristically bleak, according to a new study.
Rates won’t affect sales. I’m already in this situation. Rates spiked a few days prior to me coming out of attorney review. In my case, it means I gotta put down more money as I’m already maxed out for the Fannie/Freddie guidelines. For most people, it would be a contract killer as the discrepancy between the loan amount before and after the interest rate rise was about $30k.
Most people in a similar situations will just look for a smaller house to buy. The sales will still happen. They’ll be buying smaller homes, which probably affects the median prices.
Moreso than interest rates, people should be worried about the stock market tanking (which its going to do). When peoples stocks and bond portfolios tank, that’s the less money they have for downpayments.
the Gen Y – Millenials demographic issues
What is the issue here? The Gen Y/Millenials are now poised to be a larger demographic than the Baby Boomers.
Ben stocks and bond tanking effects cash buyers like me. I bought my place in June for cash. Back in June rates were low and stocks were high. I had more than usual in cash as there were very little buying opportunities in June in either stocks or bonds. I did sell some bonds also and that also worked out and then paid cash.
Flash forward to September 2013 a whopping 3 months later. Now I would not sell any bonds I own as prices are down I will just hold them and I have less cash as I am starting to see buying opportunities. Heck I saw 7.5% PR munis and 5.6% NYS munis today. Market is thinly traded and not much on buy side. I am also seeing values in dividend stocks too. Come mid sept we will have some dips in market and buying opportunities.
Housing in April-June 2013 when stocks and bonds were higher ment good time to sell and buy real estate, just three months later stocks and bonds have swooned and RE has gone up in value the value proposition has gone away.
Cash buyers jump in more when their portfolios are rising. Look no one sold stock in March 2009 to buy a house, plenty did in March 2000, March 2006 and March 2013.
In an odd sad way even if my place did not go up a nickle in value or fell slightly since I bought it I feel like I am a winner. With closing in June it forced me to avoid the market in April/May and sell some rather than just buy more
Yahoo new logo? Fail. Yawnn!
their whole new website is a fail grim
http://nypost.com/2013/09/04/tom-brady-and-gisele-bundchens-20-million-mansion-2/#1
Home of the week!!!!!
Michael (14)-
This sounds like the concept of “separate but equal”. I think that’s an eensy bit illegal.
BTW, I’m taking over/under action on when Michael lets the “n” word slip.
“Ragner, I’m fine with those people staying in Paterson. I do not want to be living with them or have them going to school with my kids. I rather help(welfare and Abbott funding) them survive in Paterson or passaic.”
Michael (22)-
Why not treat a shortage of education with some actual education? Throwing money at the problem has been proved not to work.
No better way to lock another generation into the cycle of poverty than to try and bury the problem under a pile of free money.
The easiest way to make someone a slave is to take away his God-given right to fail.
expat (35)-
Sorry. Brian’s out in his garage right now, fell@ting his car’s exhaust pipe.
“Beyond the prime band there isn’t even the illusion of rising rising prices. Just ask Brian.”
JJ, stocks and bonds affect most people buying. Every person that I know that has bought a home only was able to do so because stocks and bonds were high enough for them to cash out and put it all towards a downpayment. As stocks/bonds tank, so do people’s down payments.
Grim,
This man’s opinion: this “Michael” is not the same “Michael” who splashed the NJRER Comments just two short weeks ago — if it is, he’s playing us and/or psychotic (maybe both). I’m sticking with my prediction — not real.
10-year Treasury yield climbs to 3%!!!!!
And trapped in starter homes like my parents era, not that my parents could afford to trade up but my starter home block was full of doctors, lawyers, businessmen who bought their first homes in the late 60s to mid 70s by the time they could trade up mortgages were 16% and they had 5-8% mortgages that trapped them for years. None ever traded up because by the time 1993 came and rates fell like a brick it was too late.
Scrapple n’Ricin says:
September 5, 2013 at 4:44 pm
No better way to lock another generation into the cycle of poverty than to try and bury the problem under a pile of free money.
The easiest way to make someone a slave is to take away his God-given right to fail.
Relax. Go visit the hills in bedminster. It’s not the end of the world.
Michael says:
September 5, 2013 at 8:41 am
For anyone living in wayne, please read and get on the petition before these dirtbags in office throw our town under the bus and change wayne forever. We do not need low income housing. Sickening!! This mayor can go to hell!!
http://www.signsofdesign.org/index.htm
The best way to solve NJ’s problems is for everyone to listen to Johnny Cash, ride Harley Davidson’s, and make ccw’s a requirement of living here.
Why don’t you do the work a great service and swallow some of your 223?
Scrapple n’Ricin says:
September 5, 2013 at 4:47 pm
expat (35)-
Sorry. Brian’s out in his garage right now, fell@ting his car’s exhaust pipe.
“Beyond the prime band there isn’t even the illusion of rising rising prices. Just ask Brian.”
>> 10-year Treasury yield climbs to 3%!!!!!
Tomorrow is going to be a fun day.
Good chance we push straight through 4.75% if the jobs number is above expectations.
Apparently, we’ve already done that. 5.0% here we come.
UST-10 at 3% is going to trigger some very messy dashes for the exits.
Brian, I can’t shoot myself as long as there are more deserving fools like you.
@GuardianUS: “I work at Walmart for $8.25 an hour and no benefits. Ask me anything.” http://t.co/Lzaq6lTVLq
Most people taking $8.25 at Walmart are overpaid, relative to their skill sets.
u mean the supply chain management? how many r those as % of their total labor force
Grim, did u delete your post? why?
I’m beginning to think anon is the spambot.
Only mumps?
http://www.nj.com/politics/index.ssf/2013/09/mumps_outbreak_may_be_tied_to_popular_belmar_bar_monmouth_county_health_official_says.html#incart_river_default
…Bernie Sanders’ personal spambot
Too much info
If Meyer had any balls she’d have renamed yahoo to Alibaba Holding Corp and fired the entire US staff.
yahoo sucks
10 year…
“The leap in the US ISM non-manufacturing index in August, to a seven-year high of 58.6 from 56.0 in July (consensus 55.0), implies that the economic recovery is gathering a real head of steam. When taken with the rise in the ISM manufacturing index (which was released on Tuesday), it points to an acceleration in annualised GDP growth in the third quarter to around 4.0%, from the second quarter’s 2.5%. We don’t think growth will be quite that good, but demand appears to be strengthening. The new orders index rose to a two-year high of 60.5, from 57.7. Retailers, construction firms and IT companies all reported stronger demand. The more modest rise in the new export orders index, to 50.5 from 49.5, suggests that most of the improvement is homemade. Finally, the increase in the employment index, to 57.0 from 53.2, is particularly encouraging as it is consistent with non-farm payrolls in August (data due Friday) rising by around 250,000. That would be better than our forecast of a 200,000 gain. Overall, this survey supports other evidence suggesting that the economic outlook is strong enough to warrant a tapering of QE3. “
Can’t worry about any of this stuff right now…watching twerking videos on YouTube.