From HousingWire:
Black Knight: Negative equity, distressed loans falling
Home prices have risen over the past two years and many distressed loans have worked their way through the system, the percentage of Americans in negative equity positions on their mortgage has declined considerably, Black Knight Financial Services’ “First Look” report for March shows.
Meanwhile, those loans already in the foreclosure process have been aging substantially.
According to Kostya Gradushy, Black Knight’s manager of Loan Data and Customer Analytics, both data trends point to a healthier housing market. ?
“Two years of relatively consecutive home price increases and a general decline in the number of distressed loans have contributed to a decreasing number of underwater borrowers,” said Gradushy. “Looking at current combined loan-to-value, we see that while four years ago 34% of borrowers were in negative equity positions, today that number has dropped to just about 10% of active mortgage loans.”
While negative equity levels have declined for both judicial vs. non-judicial foreclosure states from the peak of the crisis, non-judicial states are now at just under 8%, as compared to 13.4% in their judicial counterparts. Overall, nearly half of all borrowers today are both in positive equity positions and of strong credit quality – credit scores of 700 or above.
Four years ago, that category of borrowers represented over a third of active mortgages.
Love the name “Black Knight” for a company in the business of selling house debt.
Would love to see Tangelo Mozilo married to Black Knight.
it’s just a flesh wound
Love how this article tries to manipulate people into thinking there is not a set class in the 1 percent. What a bunch of bs. This guy ever hear of the book, “Capital in the 21st century”? The book’s whole premise is about a new super class based on heredity as opposed to self-made. This whole definition of 1% is garbage. They make it sound like everyone has been a billionaire at 1 point in their life. The anger is towards billionaires, not at somebody that was in the 1% income in a given year. Stop trying to paint the picture that the guy next door is the 1% billionaire setting govt policy.
Essex says:
May 5, 2014 at 4:39 am
Hey “Michael”….I’ll see your $200k and raise you……
Markets More: 1 Percent Marketplace Marketplace.org Income
Here’s How Much Money Someone Has To Make To Be In The 1%
Marketplace.org
Krissy Clark, Marketplace.org
May 4, 2014, 4:05 PM 69,751 38
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Marketplace
How much you have to earn in order to make it into the “1 percent” by year.
The “1 percent” and the “99 percent” have become household phrases in the last few years.
But in the course of moving discussions of income distribution percentiles beyond economic text books and in to the popular discourse of sound bites and protest signs, the nuances can get lost. Which brings us to some interesting new research about the 1 percent, discussed in a recent book called “Chasing the American Dream.”
Back when the Occupy Wall Street movement was fond of chanting “We are the 99 percent” the book’s co-author, Mark Rank, got curious about some of the assumptions buried in that chant. Who exactly is the 99 percent? What’s their relationship to that remaining, increasingly notorious 1 percent?
The whole debate struck Rank as very us versus them. “There’s this image out there that those two groups do not cross over — that they’re static groups,” he says.
Rank is a professor of social welfare at Washington University, and so he had the tools to see if this static image of the 1 percent versus everyone else was true. He and his co-author, Thomas Hirschl of Cornell, combed through four decades of survey data that followed the lives of thousands of Americans to see how much money they made each year. And what they found surprised them.
The top-earners club isn’t quite the bastioned, unreachable world it’s been painted out to be. “There actually is this really strong sense of fluidity in terms of folks entering the top income percentiles,” Rank says. According to Rank and Hirschl’s research, one in five Americans are in the 2 percent at some point in their lives. And one in eight spend at least a year in the one percent.
So who are these visitors to the 1 percent? Some might be your neighbors.
Barrett Yeretsian, 34, lives in the southern California suburb of Glendale, CA in a totally non-descript condo — the same one he grew up in. Yeretsian says growing up, he was solidly middle class. His mom, a widow, owned an Armenian book store in Los Angeles, and money was sometimes tight. Scholarships and help from family got him through college at UCLA.
When he graduated, he turned down acceptance at two top law schools in favor of trying to make it in the music industry, as a song-writer and producer. After years almost making it, a few years ago, a song he wrote in his bedroom, became this smash hit, Jar of Hearts, after it debuted on the reality show “So You Think You Can Dance.”
Literally over night, “everything changed,” Yeretsian says. Including his income. That year he catapulted in to the 1 percent. But, he says, tries not to live like he has. “Keep the overhead low. Enjoy life,” is his philosophy. (He was a philosophy major in college, and traces his non-lavish lifestyle back to reading Thoreau’s Walden.)
“Don’t get me wrong, I go to Hawaii every year,” he says. And he’s bought several rental properties as investments. “Financially, I’m in a comfortable position. I think that’s the big difference is you have that comfort.”
Jason Laan is another recent arrival to the 1 percent, who made the leap after his iPhone app made it big. For him, the surprising thing about being at the top is that it doesn’t always feel like the top.
“The 1 percenters we think of spend $10,000 on a commode,” Laan says. “If you make $340,000” — the approximate household income needed to break into the 1 percent in the last few years — “you’re not going to waste money on something like that.”
Laan says the year he made enough to qualify as a “1 percenter,” he asked his accountant about whether he should consider trying to take advantage of tax loop holes or off-shore accounts, to protect some of his money. His accountant laughed and told him he wasn’t rich enough.
“You’re not connected enough to try to hide your assets in such a way,” Laan recalls his accountant saying. “You can’t afford the overhead.”
Another thing about the latest research on the 1 percent from Rank and Hirschl: While one in eight Americans might visit the 1 percent for a year, only one in a hundred stay there for a decade or more.
Read more: http://www.marketplace.org/topics/wealth-poverty/making-it-1-percent-more-common-you-think#ixzz30pR040Uq
Fast eddie, you sure they are all underwater hanging on by a thin line? Looks like only 10% of mortgages are now distressed, and I bet that a lot of these are in ghetto areas, as opposed to places like ridgewood or woodcliff lake.
“Two years of relatively consecutive home price increases and a general decline in the number of distressed loans have contributed to a decreasing number of underwater borrowers,” said Gradushy. “Looking at current combined loan-to-value, we see that while four years ago 34% of borrowers were in negative equity positions, today that number has dropped to just about 10% of active mortgage loans.”
Michael,
Fast eddie, you sure they are all underwater hanging on by a thin line? Looks like only 10% of mortgages are now distressed, and I bet that a lot of these are in ghetto areas, as opposed to places like ridgewood or woodcliff lake.
Where’s the inventory? We’re in the meat of the selling season so, where’s the inventory?
10-year Treasury yields drop to lowest of year
MARKETWATCH — 4 MINUTES AGO
NEW YORK (MarketWatch) — Treasury prices rose Monday ahead of data on the service sector, pushing 10-year yields down to their lowest since last October on a closing basis. The 10-year note (10_YEAR) yield, which falls as prices rise, was down 2 basis points at 2.573%, according to Tradeweb. The 5-year note (5_YEAR) yield was down 3 basis points at 1.646%, and the 30-year bond (30_YEAR) yield was down half a basis point at 3.363%. Treasury prices rose on the back of . The Treasury Department will auction $69 billion worth of U.S. government debt between Tuesday and Thursday.
It’s like this. Why am I going to sell my nice house to go into a market with no nice houses available? There is your inventory problem. It will take time for the people that are not forced to sell, to come off the sidelines, and get back into the market.
Fast Eddie says:
May 5, 2014 at 9:02 am
Michael,
Fast eddie, you sure they are all underwater hanging on by a thin line? Looks like only 10% of mortgages are now distressed, and I bet that a lot of these are in ghetto areas, as opposed to places like ridgewood or woodcliff lake.
Where’s the inventory? We’re in the meat of the selling season so, where’s the inventory?
JJ: I had these low coupon GS step-up bonds that were just called 4-30….speaks volumes about the term structure and the forward view on rates……
Folks need to realize it is the 1% of the 1% that is really rich. And it is also based on where you live and your housing expense.
A 340k income for a 50 year old man with two kids in public schools and a paid off house in the surburbs of NY and two paid off American cars is plenty of income.
340k in the surburbs for a 40 year old man who bought a house at the peak of spring 2007 with very little down, has two leased German cars and two kids in private schools is very little money.
THe 40 year old and 50 year old may be next door neighbors. For instance the younger couple next door to me paid 200k more than me for the same house I live in and have 3k a year more property taxes and two leased cars.
That couple bought in Spring 2012 of all times and moved into the house as a newlywed couple instead of renting. What a mistake. First they spend a few months renvoating it, which all got ruined in Sandy. Then they ended up out of house for six months anyhow. Now houses on that block all redone showroom are worth slightly less than what they paid for a fixer upper. Insult to injury since they bought Spring 2012 assessor used that value for taxes. That is why they pay more.
JJ: did you hit this gig? sounds like a good opportunity for a broken down old man like you….
Dolled-up co-eds wearing masks and tight frocks filed into a trendy Midtown hotel Friday night, intent on changing their fortunes.
The pot of gold at the end of their rainbow included a short, balding gentleman with a gourd-shaped nose and two geezers in black suits — one shuffling around in untied orthopedic shoes.
It was only 9 p.m., and a masquerade ball to unite sugar daddies and their sugar babies was just getting started.
“I have a fancier lifestyle,” said an NYU student named Samantha as she hooked arms with a graying widower from Chicago. “I’m not going to downgrade to some NYU boy who buys dollar beers.
“Why drive a Mitsubishi when you can drive a Porsche?”
The 21-year-old junior, in a red dress and platinum heels, was one of nearly 150 women at the mixer hosted by Seeking Arrangement, a 2.7 million-member dating Web site that pairs cash-hungry co-eds with older, wealthier men for “mutually beneficial relationships.”
It was supposed to be a formal affair, but not all dressed the part.
Two slick-haired guidos didn’t bother with masks or suits, opting for jeans and button-down shirts.
One white-haired man flitted about the room like Zorro with a mask made from panty hose.
As the night wore on, the sugar daddies began groping women in plain view. A 50-something man in a gray blazer felt up a girl’s neck before grabbing her behind.
When one Bronx gal broke the ice with another silver fox, he sniffed, “Oh, no, I want a girl from Manhattan,” and turned away.
A brunette danced with the elderly man with orthopedic shoes, but when he leaned in for a smooch, she turned her cheek.
Still many seasoned sugar babies told The Post a lack of physical attraction is no problem.
“I haven’t found one that’s attractive to me, and my standards aren’t that high,” said a 25-year-old co-ed who traveled from Nashville with her longtime sugar daddy.
The blond Army soldier said her 59-year-old benefactor — who was diagnosed with terminal cancer — pays $4,000 a month for both her and her sister’s living expenses.
“He tries so hard to make me happy,” she said. “He’s going to be my No. 1 Sugar Daddy until he goes.”
One Pace University student, 22, said she dates sugar daddies instead of working a part-time job.
“I grew up with money. I’m not a poor person,” the woman sniffed. “My parents still give me money, but only a certain allowance.”
She said a businessman from Dubai gave her $1,000 to have coffee with him at a Times Square Starbucks. She sees a 40-something man who gives her $400 to $800 every time they hang out. It never goes beyond kissing, she said.
“You’re attracted to what they offer you,” she said, holding up a Louis Vu!tton bag. “I like luxury. It doesn’t matter what age they are.”
Seeking Arrangement founder and CEO Brandon Wade said the bash at Yotel was timed for diploma season, as many of the site’s female members are preparing to graduate with college debt.
“This is almost like a job fair, because a sugar daddy is a mentor, provider and gentleman,” Wade said, adding the average sugar baby gets $3,000 a month in money and gifts. “Why not date someone who can help you?”
When the site launched in 2006, one in four female members were college students. Now nearly one in two are, he said.
“As for the sugar babies, we want them to be sexy in a classy way,” he said.
Or speaks volumes abut how GS as a Bank as opposed to a Broker Dealer has such cheap access to cash.
Oppenheimer and Jefferiess have some decently high coupons still outstanding. But they dont have access to cheap cash.
Jefferies in particular is the largest IB that is not a bank. It is a pretty rock solid firm yet it pays a higher interest rate due to mere fact it is not a bank holding company.
9.chicagofinance says:
May 5, 2014 at 9:09 am
JJ: I had these low coupon GS step-up bonds that were just called 4-30….speaks volumes about the term structure and the forward view on rates……
Tell ‘Em Like It Is!
Michael says:
May 5, 2014 at 8:50 am
Love how this article tries to manipulate people into thinking there is not a set class in the 1 percent. What a bunch of bs. This guy ever hear of the book, “Capital in the 21st century”? The book’s whole premise is about a new super class based on heredity as opposed to self-made. This whole definition of 1% is garbage. They make it sound like everyone has been a billionaire at 1 point in their life. The anger is towards billionaires, not at somebody that was in the 1% income in a given year. Stop trying to paint the picture that the guy next door is the 1% billionaire setting govt policy.
I dont age and have the staying power of a Siberian Tiger these events are for mere mortal men.
11.chicagofinance says:
May 5, 2014 at 9:17 am
JJ: did you hit this gig? sounds like a good opportunity for a broken down old man like you….
You would buy Jeffries paper? I stare at it all the time on the boards…..it isn’t TBTF, so that is a legit credit event waiting to happen, no?
JJ says:
May 5, 2014 at 9:19 am
Or speaks volumes abut how GS as a Bank as opposed to a Broker Dealer has such cheap access to cash.
Oppenheimer and Jefferiess have some decently high coupons still outstanding. But they dont have access to cheap cash.
Jefferies in particular is the largest IB that is not a bank. It is a pretty rock solid firm yet it pays a higher interest rate due to mere fact it is not a bank holding company.
It will take time for the people that are not forced to sell, to come off the sidelines, and get back into the market.
Really? Please explain your theory on this one.
$255 million muni bond deal for a New Jersey stadium project to hit the new issue market this week.
What the heck is Jersey doing building tax payer funded stadiums again?
Jefferies is also partially owned by ITG. They are very smart guys and last IB standing. I would buy some Jefferies. However, most employees on Wall Street have Jefferies on the restricted list so compliance wont let you buy the stock or the bond anyhow. Jefferies is no knight or lehman.
15.chicagofinance says:
May 5, 2014 at 9:29 am
You would buy Jeffries paper? I stare at it all the time on the boards…..it isn’t TBTF, so that is a legit credit event waiting to happen, no?
However, I dont want Jefferies even if I could buy it at under 6% yield. Not worth the small risk of bk. Above 6 nibbling, above 7% buying, above 8% like a vegas buffet
BANK AMER CORP SUB INTNTS BE
7.00000% 08/15/2038CALL
CHIFI this is an interesting bond. It is callable and should have been called already. For some reason BAC lets every call date slip by. It rarely trades much above PAR due to chance of call. Zero chance of capital appreciation but it keeps humming at a 7% coupon. The BAC coupon is almost double the 30 year treasury coupon.
I bought it a two years ago at 101.
@garyyounge: The violent dystopia the NRA claims to be resisting is the very same one it is largely responsible for creating. http://t.co/53ODt0NZIG
No one is going to sell their nice updated house to buy another house that is not move in ready. Doesn’t this describe you? Well guess what, you are not the only one in this situation. The only people selling nice houses are people that are forced to move due to job relocation, can’t afford it, or retiring. Yes, it’s not enough to keep up anywhere close to the demand for these properties.
Fast Eddie says:
May 5, 2014 at 9:30 am
It will take time for the people that are not forced to sell, to come off the sidelines, and get back into the market.
Really? Please explain your theory on this one.
When I, I would immediately bench the non-passers for a shift or two, even if they managed to get a goal. The parents would go crazy. And I would tell the parents that I know where that learned trait came from. If they pulled the kid from my team, better for our team.
Sorry about 24. I needed to find which word triggered the post dump and it appears to be that popular brand of leather hanbags.
Well, after 15 years my hot tub has gone kaput. This will allow me to do whole scale renovation on my 18 year old cedar deck. What are thoughts about replacing the deck, assuming all my supporting structures remain in place. Replace with some wood or go with composite? 20×20. Thanks!
i bet you guys own these bonds
@BloombergNews: Holder signals criminal charges coming against some banks: http://t.co/rGOgaovGbg
-23 the surprise is that they don’t have a large HELOC balance to boot
Flippers and folks asking too much are selling updated houses. I have been desperately looking for a bigger house these past few weeks. But there leads I have one owner is getting divorced and wife wants to keep house he does not the fight goes on. Second, guy is way behind in mortgage but is just living for free now and wait a few years till bank takes it back, third and fourth way overpriced and they dont care. Claims they are waiting till market catches up to their price.
Meanwhile I stopped work on my house. I feel I am pouring money already into it after Sandy. When I find the new house. I will paint it etc, move in. Then once my house is empty, replace rusty screen door, sand and stain floors, paint whole house and do all minor repairs then list. Lazy newlywed couples it seems love turnkey houses. If I cant sell in three months put it up for rent. Tons and Tons of folks looking for houses rentals near me still after Sandy as folks are raising houses still and Sandy related folks are in the town at least for another 1-2 years. Then put it up for sale again in 2016 and at that time take whatever I get.
My other issue like that GR couple is most bigger houses I see have outrageous taxes. 18K is my cut off and guess what that is hard to find. Given I got a tax credit recently from Sandy so I am not paying another property tax bill till 2016 also slows down my search.
22.Michael says:
May 5, 2014 at 10:20 am
No one is going to sell their nice updated house to buy another house that is not move in ready. Doesn’t this describe you? Well guess what, you are not the only one in this situation. The only people selling nice houses are people that are forced to move due to job relocation, can’t afford it, or retiring. Yes, it’s not enough to keep up anywhere close to the demand for these properties.
Fast Eddie says:
May 5, 2014 at 9:30 am
It will take time for the people that are not forced to sell, to come off the sidelines, and get back into the market.
Really? Please explain your theory on this one.
Libturd [23],
Exactly! Now multiple by a zillion and that’s the number paddling to keep their head above water. A gigantic money vacuum. Down payment is gone and they’re surviving. And you are right, maybe two years ago was a brief window but at the same time, the financial spigots were turned on full blast. We could be at the edge of a cliff or we could be staggering along for the next decade. If I find what I’m looking for, I’ll pull the trigger. If I don’t, I’ll stay where I am.
Grim…how has the experience been with your composite deck? What material was that?
thx
The real bonehead move they made was buying in GR before they had a kid in school. Huh?
Kids are 5 and 7? That means the earliest they should have considered buying would have been 2012.
Love the composite but I’ll tell you, we got the kind with the deep grooves that looks more like weathered wood – it holds dirt, pollen, etc – you still need to clean. Once or twice a year I take everything off the deck and fill a bucket with soapy water, stiff brush broom cleans it up nice. That’s the trade-off with some of the fancier 3d products. You can get it very clean though, now that the weather is nice I have no issues with letting the little one play on the deck, crawl around, etc. No splinters, no screws or nails, etc.
I’m sure if I cut down the overhanging trees, I’d have much less of a problem.
I used Trex Transcend with the hidden fasteners, was very easy to cut and install. Very pleased, neighbor two houses down liked mine so much he built an almost identical deck.
I’m actually surprised the dogs haven’t scratched the hell out of it, very durable. Doesn’t stain at all, plenty of red wine, sauce, juice, blood spilled on it.
http://wealthmanagement.com/viewpoints/attractiveness-municipal-bonds-should-not-be-overlooked-2014
nice muni bond piece
They are idiots for buying, but they didn’t get killed.
They’re dead men walking. If they sell, they lose tens of thousands. How many were idiots for buying? How many sales occurred between 2004 and 2007? That’s a lot of transactions! Multiple that by a decrease in salary and benefits and you have a horrific scene buried just below the surface.
For me, the idiot move everyone seems to make is not living in their homes long enough to ever put a dent in their mortgages. And forgetting about the costs of moving and all of those initial purchases you make right after moving in. I’m cheap and I bet I spent 10-20K on our mile move.
Here is the only recent comp with the same date ranges – 56 Sommer Ave, Glen Ridge
Purchased 12/14/2007 – $415,000
Cheap kitchen and bath remodel
Sold 4/30/2014 – $492,000
Go figure.
It wouldn’t have mattered, they would have spent $300k to rent for 7 years.
What if they bought in 2000 and then sold in 2007. They would’ve made a killing. Would it then matter? :)
The bottom line is if they just rented, the down payment of $150,000 (20%) wouldn’t have evaporated. They paid the PITI up until now which equates to nothing more than just paying rent. Now, they’re set to lose thousands if they sell on top of the “rent” they’ve been dishing out every month. I think it matters.
A normal market would’ve realized a 3.5% gain in appreciation YOY. The housing scandal of the period of 2002 through 2007 left a lot of bodies in its wake.
40 – just went through the original listing details, they are idiots.
You gotta tell me more.
They bought in a bubble. Only time you should be renting is in bubbles. So they went against rule #1, try not to buy in a bubble. I know if you have a family, then you have no choice, and must buy in a bubble. If you do buy in a bubble, make sure you can afford to stay in that house for at least 20 years, or don’t cry if you have to take a hit, and sell before the market rebounds. Since they don’t want to sell and lose that equity, it’s time for dad or mom to get another job, or cut spending drastically. I feel bad for them, I do, but it comes with the game of real estate, which is based on capitalism, which means there are winners and losers. Most of the winners and losers are picked by pure luck, by picking the right time to buy.
Anyway, they really didn’t lose that much money if they sold now. I don’t know the size of the house or anything, but if they had to rent that same house instead of owning it, I’m sure the rent would be at least 3,000. 3 * 12= 36,000 36,000 * 7= 252,00
I don’t know how much their down payment was, but based on this, they didn’t really lose money. This also shows why owning is so much better than renting.
“Well getting back to our friends. They spent 750K on a GR home on Ridgewood Avenue near a park at the height of the peak (2007). The taxes are a mere $16,200. They have 5-year old twin girls and a 7-year old son who is classified ADD. When they bought the house, mom was an ‘interior designer’ and dad made 20% more than he does know. Surprisingly, they put down 20% so they are not underwater. The problem is, that they simply can not afford that house on dad’s salary alone and have been getting by check to check for years to pay for the home. They could probably sell the place for $575,000 so they essentially rented the house for the last 7 years. They certainly would have been much better off renting (see Michael?).”
3,000. 3 * 12= 36,000 36,000 * 7= 252,00
Is this calculation in Aramaic?
$575k looks like it is in the ballpark, they significantly overpaid, I suspect heated bidding war. The initial list at that point was $689k, which was already high, and they went ahead and pushed it $60k upwards yet.
and for us gun lovers and those who respect the constitution F the supreme court and F NJ
http://news.yahoo.com/strict-n-j-rule-gun-permits-stands-supreme-160135075.html
That house would rent for $3,500-$3,750.
Yup. Thanks.
So they went against rule #1, try not to buy in a bubble. I know if you have a family, then you have no choice, and must buy in a bubble. If you do buy in a bubble, make sure you can afford to stay in that house for at least 20 years, or don’t cry if you have to take a hit, and sell before the market rebounds.
Is this like, if it’s raining outside, I should bring an umbrella and if it’s not raining, I shouldn’t bring an umbrella?
The End Is Nigh (Commode Edition):
SAO PAULO — Brazil’s sports tribunal has ordered a second-division team to play its next two home matches in an empty stadium because of the death of a man struck in the head by a toilet bowl thrown from the stands during fan violence this weekend.
The tribunal has also suspended all of the team’s fan groups from attending matches anywhere in Brazil until the person who threw the toilet bowl is turned over to authorities.
Santa Cruz’s Arruda Stadium had already been closed by the Brazilian football federation on Saturday, a day after the 26-year-old fan was killed in the fighting in the northeastern World Cup host city of Recife.
The death prompted Brazilian President Dilma Rousseff to call for actions to contain fan violence in Brazil’s stadiums.
Are we in a bubble? Is now a time to rent or buy?
Sorry, I wrote my post before reading all the other posts. Glad to see we are on the same page. No idea when it comes to the owning vs renting debate, people always leave out the cost of rent.
grim says:
May 5, 2014 at 11:55 am
It wouldn’t have mattered, they would have spent $300k to rent for 7 years.
You want idiocy? I think the family belongs to that country club Lifetime Fitness gym.
What are you fcuking Haitian?
grim says:
May 5, 2014 at 11:42 am
Doesn’t stain at all, plenty of red wine, sauce, juice, blood spilled on it.
And people always leave out the buried costs of owning.
53 – if we’re in a bubble, the rent bubble is bigger than the buy bubble
If you sold today to rent, you are selling at a relative discount and renting at a relative premium.
57 – What, they didn’t join the country club too?
What, they didn’t join the country club too?
Ha ha.
I can’t tell you how many times people have asked us to join. If we did, they would probably regret their decision to have sponsored us.
54- *No idea why, when it comes to the owning vs renting debate, …
61 – what does it cost these days, $50k?
Exactly!!! WEll SAID!!
Libturd in the City says:
May 5, 2014 at 11:59 am
For me, the idiot move everyone seems to make is not living in their homes long enough to ever put a dent in their mortgages. And forgetting about the costs of moving and all of those initial purchases you make right after moving in. I’m cheap and I bet I spent 10-20K on our mile move.
We are in still in a housing bubble. Rent/buy doesn’t matter. Either way, you are going to pay more for shelter as a percentage of take home pay than any generation in US history. (Same for education.) But hey, at least high fructose corn syrup and iPhone data plans are cheap, and the tab for my end-of-life healthcare will be picked up by my fellow taxpayers, regardless of the cost or benefit…so at least I have that going for me, which is nice.
I have no idea. I was turned off by the dining requirement and didn’t inquire further. Plus there’s a denim ban there too.
66 – I’ve cycled by and seen some members, they’d be better off with a saggy ass ban (no, not saggy pants).
Wow that lifetime fitness place costs $150 a person per month?
Cancel the gym membership, perhaps now that the weather is nice, they can do some yardwork and remodeling to stay in shape.
Tell them to cancel the cable too, and you’ve saved them a PITI payment or two.
Thank you for highlighting why it’s better to own than rent. If they bought at the right time and sold at the right time (I know it’s not easy to do), they would have gotten paid to live there. Of course, if you bought at the wrong time and sold at the wrong time, you are now president of the “I hate real estate club”. Talk about killing it, you saved all that money in rent, and on top of that the asset went through the roof in price. Real estate is a dangerous but really rewarding game.
Fast Eddie says:
May 5, 2014 at 12:24 pm
It wouldn’t have mattered, they would have spent $300k to rent for 7 years.
What if they bought in 2000 and then sold in 2007. They would’ve made a killing. Would it then matter? :)
I don’t think we are in a bubble. Have houses been doubling in price with a coat of paint?
Why do people keep thinking we are in another bubble in north jersey?
Phoenix says:
May 5, 2014 at 12:50 pm
Are we in a bubble? Is now a time to rent or buy?
We are in an abnormal market for sure. Rents and home prices are both very high and like everything else squeezing the American Middle class ZIRP policies from the central banks are the most likely culprits. Low rates continue to spur home prices higher than they should be and the high costs of homes coupled with wall street involvement in rental housing and the demand for rentals after the housing bust or shall I refer to it as period of volatility. Makes for rents that are far too high and like Stu I don;t think it’s sustainable, rents will likely come down some and once interest rates rise some home prices will fall, but I think this limited inventory dance will be around for a while and buttress values to a large extent.
It’s not “another” bubble. It’s the same one, just on artificial life support.
Case Shiller is still >150; volatility post 2005 is remarkable for such a “safe asset”.
http://us.spindices.com/indices/real-estate/sp-case-shiller-us-national-home-price-index
Obviously, what America needs is employee pricing on housing.
ZIRP only hurts folks who got in fixed income late to game or sitting in cash.
“coupon clippers” go for higher coupon bonds which are generally long term. It is like a 32 year bull market for 10-30 year treasuries, munis and investment grade bonds.
71.jcer says:
May 5, 2014 at 1:54 pm
We are in an abnormal market for sure. Rents and home prices are both very high and like everything else squeezing the American Middle class ZIRP policies from the central banks are the most likely culprits. Low rates continue to spur home prices higher than they should be and the high costs of homes coupled with wall street involvement in rental housing and the demand for rentals after the housing bust or shall I refer to it as period of volatility. Makes for rents that are far too high and like Stu I don;t think it’s sustainable, rents will likely come down some and once interest rates rise some home prices will fall, but I think this limited inventory dance will be around for a while and buttress values to a large extent.
No bubble in NJ real estate. This beauty still hasn’t sold and the latest price cut took it below $2mn. Let me know if any of you plan to buy it.
http://www.trulia.com/property/1084324941-5-Caruso-Ct-Bridgewater-NJ-08807
I tend to agree with you most of the time, but not on this issue. If we are in a bubble, that means prices will come down by at least 30%. If prices come down that much, say goodbye to the economy. If it drops 50%, say goodnight. I really can’t see it dropping like that. That will lead to conditions worst than the great depression. The stock market would crash, and the economy would literally crawl to a stop. We would be in a state of deflation, that would build up like a snowball coming down a hill. It would be one of the biggest economic battles of all time. I do not want to see this happen at all, for my daughter’s sake.
clotluva says:
May 5, 2014 at 1:09 pm
We are in still in a housing bubble. Rent/buy doesn’t matter. Either way, you are going to pay more for shelter as a percentage of take home pay than any generation in US history. (Same for education.) But hey, at least high fructose corn syrup and iPhone data plans are cheap, and the tab for my end-of-life healthcare will be picked up by my fellow taxpayers, regardless of the cost or benefit…so at least I have that going for me, which is nice.
74 (JJ)
ZIRP only hurts folks who got in fixed income late to game or sitting in cash.
Since when is it seen as no big deal to punish people for holding cash? Oh, I know: Since banks have been given infinite liquidity, thereby precluding their need for it.
It’s not a bubble, because nobody is buying at that price. If it was a bubble, people would be fighting each to buy the house. That is certainly not the case.
Ragnar says:
May 5, 2014 at 2:18 pm
No bubble in NJ real estate. This beauty still hasn’t sold and the latest price cut took it below $2mn. Let me know if any of you plan to buy it.
http://www.trulia.com/property/1084324941-5-Caruso-Ct-Bridgewater-NJ-08807
Just because you have a bunch of houses asking for unrealistic pricing does not mean we are in a bubble. It just means those people are out of touch with the market. By putting your house up for 200,000 more than the market dictates, means, you are not participating in the market. Plain and simple. Transactions make a market, not a seller’s imaginary price.
Michael requires two posts to agree with what I said in the first place.
rags, my fault. I read your post quickly and misread it. I’m trying to work at the same time.
70 – It’s a shame Gordon Gecco isn’t in the market for a gem like that.
The rent is too damn high!
No, we are in another bubble…but it is popping all around. Summer will be lowball. Too much weak inventory, weak demand and high prices for work needed. I just saw house on Sat. which had loose asbestos, old baths/kitchen, oil furnance, chimney crack, aluminum wiring and rotted old windows and siding etc. He said he priced it 30k below comps to account for work. Anyone think this is 30k worth of work? You have to very careful out there. Comps are a joke and I his attitude prevalent. He has been on market for 2 months and will continue to sit unless some fool walks in.
they should be punished. game of thrones style.
Actually it encourages invesment. I was planning on going house hunting all spring and summer. But so far cant find a large house with decent taxes. I had stuff mature and I have 100K cash in savings at near zero. Come August I am forced to do something with it. I cant afford to live 100K at 8/10 of a percent income that is taxable to boot. It is called encourging investment. It words even better at corporate level for firms hording billions in cash.
.clotluva says:
May 5, 2014 at 2:25 pm
74 (JJ)
ZIRP only hurts folks who got in fixed income late to game or sitting in cash.
Since when is it seen as no big deal to punish people for holding cash? Oh, I know: Since banks have been given infinite liquidity, thereby precluding their need for it.
That house is bigger than many of the hotels in Key West.
Ragnar says:
May 5, 2014 at 2:18 pm
No bubble in NJ real estate. This beauty still hasn’t sold and the latest price cut took it below $2mn. Let me know if any of you plan to buy it.
http://www.trulia.com/property/1084324941-5-Caruso-Ct-Bridgewater-NJ-08807
I suspect only those here with MLS access have a real appreciation for what it costs to rent a nice house in North Jersey.
Here are some rough approximates based on the last 4 months of leasing in BC.
Allendale 3br $3,400
Allendale 4br $3,750
Closter 3br – $3,500
Closter 4br – $3,900
Cresskill 3br – $3,800
Demarest 4br – $3,900
Edgewater 4br condo – $3,950
Edgewater 4br condo – $4,900
Englewood Cliffs 5br – $5,000
Fort Lee 3br – $3,750
Fort Lee 4br – $4,800
Montvale 3br condo – $3,600
Northvale 4br – $4,000
Northvale 4br – $4,950
Oakland 4br – $4,200
Oakland 4br – $4,300
Old Tappan 5br – $5,000
Paramus 4br – $4,900
Parabus 3br – $4,000
Ridgewood 4br – $5,950
Ridgewood 3br – $5,000
Ridgewood 6br – $7,000
Ridgewood 4br – $4,200
Ridgewood 4br – $5,000
Ridgewood 3br – $3,500
Tenafy 3br – $3,700
USR 4br = $4,350
USR 3br – $3,850
Wyckoff 3br – $3,500
Wyckoff 5br – $4,000
Wyckoff 5br – $4,300
There is a mansion in Englewood that just leased for $14,500/mo and a condo in Demarest that just leased for $9,200.
If by “encourages investment” you mean “forces people to take on risks they can’t possbily understand or manage”, then I agree with you.
But hey, who doesn’t like trading against computer algos and holding stocks with outrageous P/E ratios?
This house just leased for $7,000 a month – it was for sale with an asking price of $1.3m
http://www.zillow.com/homedetails/1-Haworth-Dr-Haworth-NJ-07641/37934910_zpid/
$7k a month is essentially the full PITI with 20% down.
They are paying a mortage price to rent the house…
NEW YORK, May 5 (Reuters) – Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, said on Monday that investors should bet against the SPDR S&P Homebuilders ETF because he does not see the expected rebound in single-family housing occurring.
Gundlach, speaking at the Sohn Investment Conference in New York, said that problems dogging the housing market include expected rises in mortgage rates and the amount of student loan debt carried by young adults, which makes saving for a down payment difficult.
He also said that if mortgage financiers Fannie Mae and Freddie Mac were wound down by the government, mortgage rates would rise.
They’re not making any more dirt.
82 Grim
Aren’t those basically the same as what one would pay in PITI for those properties? In other words, it’s not intuitive based on that data that buying would necessarily be a better proposition, for those towns and properties.
88 – It’s not so clear cut, you can’t just make a broad statement that renting/buying is better, it’s very situation.
Here is about as rough of a rule-of-thumb I can come up with:
If you are single or married with no kids – you have the rental advantage if you are willing to be flexible with where you can live.
If you are married with 3 kids, and have strict school requirements, with little flexibility – you are at a huge rental disadvantage.
For example, the Glen Ridge case – at this point in time you have 1 rental option.
That’s it – 1 rental – take it or leave it.
Is it not possible for two people two exchange different kinds of items and both benefit?
40.Michael says:
May 5, 2014 at 12:35 pm
I do, but it comes with the game of real estate, which is based on capitalism, which means there are winners and losers.
Fun housing stats, waiting for the April data to be posted, looking at some March Data for Essex County.
Active Listings:
Glen Ridge
March 2006 – 42 Active – $706,238 Avg List Price
March 2014 – 33 Active – $761,203 Avg List Price
Millburn
March 2006 – 190 Active – $1,854,570 Avg List Price
March 2014 – 127 Active – $2,041,471 Avg List Price
Irvington
March 2006 – 159 Active – $208,443 Avg List Price
March 2014 – 187 Active – $105,463 Avg List Price
East Orange
March 2006 – 217 Active – $227,901 Avg List Price
March 2014 – 274 Active – $125,571 Avg List Price
Newark
March 2006 – 427 Active – $278,458 Avg List Price
March 2014 – 421 Active – $152,701 Avg List Price
Eddie [87];
So how’s that Hopey-Changey stuff working out for the millenials?
Damn…
I guess the Dairy Queen in Irvington is not having as great of an impact on property values as they had hoped.
If you are a renter and a rent bubble pops, you can take almost immediate advantage of the price reduction.
If you are a home
ownermortgagor and the housing bubble pops…not so much.I just sense an almost evangelical desperation amongst the home mortgagors. All out on soapboxes, trying to convert the sinning renters (renting sinners?).
I’m pretty close to my mortgage broker. Their business has always been plagued by peaks and lulls. I would expect some dramatic undoing of the already too soft changes that were put into place after the subprime debacle. When? That depends on how much the traditional bank lobby is willing to give to the dems.
If you are a renter and a rent bubble pops, you can take almost immediate advantage of the price reduction.
How much would rents need to fall in order to have a 1 year payback once you include moving costs and commissions (1.5m). What do you do in situations where you need to sign a lease that begins prior to your current lease ending (relatively common for me to see 1 month overlaps).
What are the situations under which a rental bubble would burst? When the housing bubble burst – it pushed up rents in many places. In order for the rent bubble to burst, do we need another housing bubble?
The renters bubble bursts when the no money down mortgage comes back into fashion.
I’m guessing there is no renters bubble in Irvington, Newark, or East Orange.
Looks like they’ve had a healthy readjustment in prices.
Sports footage (JJNBA Edition):
https://vine.co/v/MrVtWtvzduP
History Rhymes folks. Mortgage purchase index is down -22.2% yoy and the refi index is down -73.0% yoy.
Serfdom is our past Neo-serfdom is our present, fog a mirror will be back folks.
If I was looking for a bubble, here’s where I’d start:
http://www.housingwire.com/articles/29902-the-15-best-and-15-worst-performing-housing-markets?page=2
Peak Hamptons?
http://hamptons.curbed.com/archives/2014/05/05/this_beautiful_further_lane_property_just_sold_for_a_recordbreaking_147m.php
haveyoutgotanickle aka the Popsicle Twins from Gong Show I think was my favorite think I ever saw on Daytime TV. For some reason just popped into mind and started laughing. It is on youtube still
Moose [93],
The millennial muppets are f.ucked. I don’t know how else to say it. Yeah, they got royally screwed, barbecued and screwed again.
http://www.mercedsunstar.com/2014/04/25/3617701/no-job-no-house-no-kids-welcome.html
I agree, it’s 1% of 1%. We don’t even know who these people are and that’s the way they like it. Forbes 400 is only the main st names everyone knows. The billionaires that nobody knows by name are the one’s to be afraid of. The one’s that keep everything shrouded in mystery and secret.
Your other two examples make sense for normal rich people, but the people I’m talking about laugh at a 375,000 salary. You can never become a billionaire off of that kind of money. These are the people who take way more than they should. Just do the math, how does one accrue 30 billion in 20-30 years. The #s are staggering. It makes me sick to my stomach. Never mind how much they make an hour to accrue that much wealth, but how much per second. How is that even real? How do you accrue that much per second, every second of a day. I don’t care wtf you do, there is no way a single human being can be worth that much per second. Nothing you do can be worth that much money per second. Rich aren’t the problem, the people above them are.
JJ says:
May 5, 2014 at 9:13 am
Folks need to realize it is the 1% of the 1% that is really rich. And it is also based on where you live and your housing expense.
A 340k income for a 50 year old man with two kids in public schools and a paid off house in the surburbs of NY and two paid off American cars is plenty of income.
340k in the surburbs for a 40 year old man who bought a house at the peak of spring 2007 with very little down, has two leased German cars and two kids in private schools is very little money.
THe 40 year old and 50 year old may be next door neighbors. For instance the younger couple next door to me paid 200k more than me for the same house I live in and have 3k a year more property taxes and two leased cars.
Prime example of desperate evangelism. Rents fell everywhere! I’m sure I could dig out many references on this blog. Nobody remembers the voluntary discounts landlords were giving in NY? Moving costs? Get real. How many times in your life have you heard a renter say that they can get a better deal somewhere else but they just can’t come up with the moving costs? I know moving costs aren’t trivial, I paid $7800 at “closing” to rent a home in Long Island and a about $2000 more to move in ’98. I got a lot of that back as returned deposit when moving out though. When you are a real renter you know your deposit travels with you so it’s kind of like traveling escrow you can depend on. I’m just realistic. Don’t stretch yourself to merely occupy a house, put 40% down and take on a mortgage you can double-pay with one income. If you can’t save 40% you’re shopping in too high price a neighborhood or don’t know squat about saving money.
grim says:
May 5, 2014 at 3:52 pm
If you are a renter and a rent bubble pops, you can take almost immediate advantage of the price reduction.
How much would rents need to fall in order to have a 1 year payback once you include moving costs and commissions (1.5m). What do you do in situations where you need to sign a lease that begins prior to your current lease ending (relatively common for me to see 1 month overlaps).
What are the situations under which a rental bubble would burst? When the housing bubble burst – it pushed up rents in many places. In order for the rent bubble to burst, do we need another housing bubble?
Exactly what I said to fast Eddie yesterday.
Michael says:
May 4, 2014 at 10:14 am
Fast Eddie, this is what you are talking about. Problem is, you keep focusing your real estate search where the top 5% of the population want to live. The crash has already hit. It hit all the places where poor people live. 30 year realtor provides all the evidence you need in this post. The top of the market is only going up, that’s where people still have excess money to push up prices. You want your fire sale deals, there are plenty of properties worth less than 50-80% of peak value in 2006 for sale in Newark and Paterson. Too bad you won’t touch it.
Truth is, this is probably going to be a golden opportunity to buy property in these areas. You can buy them dirt cheap, and charge a good return on rent based on price. There is nobody in Paterson that can afford to buy a house, hence, there is no market to support prices. This means no competition in purchase price and basically a name your own price, since sellers will take whatever they can get, since their properties are essentially worthless with no market to sell to. Economic conditions will change, and the market will return to Paterson real estate. That’s when you sell your properties, that you bought at a time when no one wanted them, at a nice profit.
30 year realtor says:
May 4, 2014 at 9:00 am
Urban areas are finally seeing the much anticipated influx of REO. Currently I have several properties in Paterson. The single family market in Paterson is DEAD! A 1600 square foot 3/4 bedroom single family home is decent condition, in a better than average neighborhood can be purchased for under $120,000 and there are few if any takers. This is only the beginning of the slide. Inventory is only starting to build
Michael says:
May 4, 2014 at 10:28 am
The only way places like Ridgewood or Woodcliff lake go down is if sh!t hits the fan, and you have a revolution. These are wealthy people that are the last one’s to feel economic pain. So if they are feeling the pain, it means it’s over for everyone.
Michael says:
May 4, 2014 at 10:44 am
Look at this. Bought for 300,000 in 04 and sold in February for 50,000. Now for sale at 105,000. Fast eddie, you see your real estate theories are being applied to the wrong area. Ridgewood is not going down anytime soon. Wealthy people are doing way better than they were in 2008. So keep waiting for golden deals in the affluent towns.
263 Carroll st Paterson, nj
05/02/14Price change$105,000-8.7%
04/16/14Listed for sale$115,000+130%
02/20/14Sold$50,000-75%
11/08/07Sold$203,220-32%
05/14/04Sold$300,000
May 5, 2014 at 3:25 pm
Fun housing stats, waiting for the April data to be posted, looking at some March Data for Essex County.
Active Listings:
Glen Ridge
March 2006 – 42 Active – $706,238 Avg List Price
March 2014 – 33 Active – $761,203 Avg List Price
Millburn
March 2006 – 190 Active – $1,854,570 Avg List Price
March 2014 – 127 Active – $2,041,471 Avg List Price
Irvington
March 2006 – 159 Active – $208,443 Avg List Price
March 2014 – 187 Active – $105,463 Avg List Price
East Orange
March 2006 – 217 Active – $227,901 Avg List Price
March 2014 – 274 Active – $125,571 Avg List Price
Newark
March 2006 – 427 Active – $278,458 Avg List Price
March 2014 – 421 Active – $152,701 Avg List Price
BTW, rental commissions are 1.5 times rent now? I’ve paid 1x at most and usually .5x with the other .5x paid by the landlord. I’m probably out of touch as I haven’t paid a rental commission in almost 15 years.
You see that fast Eddie. Look at the #s and try applying your theories based on national avg statistics to both of these. Now realize you can’t use national avg statistics to form theories on real estate because real estate is very localized. The towns you are looking in are not getting any cheaper. So keep waiting. The drop you imagined from the bubble bursting did happen in nj, just not where you are looking. You can get the 100,000 property here in northern nj, but it’s just not where you want to be. You can’t say nj is not affordable. You just have expensive taste. Woodcliff lake and Ridgewood are the equivalent to a range rover SUV. You don’t expect to get a “great deal” when you go into a high end car dealership. If you are looking to get the deal of the month, better off at the honda dealership.
Millburn
March 2006 – 190 Active – $1,854,570 Avg List Price
March 2014 – 127 Active – $2,041,471 Avg List Price
Irvington
March 2006 – 159 Active – $208,443 Avg List Price
March 2014 – 187 Active – $105,463 Avg List Price
re # 112 – And Millburn still sucks even with the good news, and I know I have spent plenty time there. Let’s go to Ridgewood and push some strollers around the Duck Pond! Yay!!! Where is my drink?
Black Knight sees distressed housing improvement | New Jersey Real Estate Report
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