From the NY Post:
Home prices set for double-digit plunge in major Western US cities: Goldman Sachs
Four US cities that experienced housing booms during the COVID-19 pandemic are set for major declines in home prices by the end of next year, according to Goldman Sachs analysts.
The pandemic boomtowns of Austin, Seattle, Phoenix and San Francisco will all experience double-digit price declines as an increase of available homes surpasses demand, the bank’s analysts said in a note to clients last Thursday obtained by Insider.
The largest decrease in home prices will occur in Austin, where values are projected to slump 19% by late 2024 compared to late 2022, according to the note. Prices are expected to sink in Phoenix by 16%, San Francisco by 15% and Seattle by 12%.
“Rather than being indicative of things to come across the country, we view the nascent oversupply in Pacific Coast and Southwest markets as reflecting local challenges, particularly very poor levels of affordability, pandemic-related distortions, and (in certain markets) a high concentration of employment in the technology industry,” the Goldman Sachs analysts said in the note, according to Insider.
As the analysts noted, Seattle and San Francisco are home to major tech firms — many of which, including giants such as Amazon, Google and Twitter, have conducted layoffs in response to worsening economic conditions.
On a national level, home prices are expected to plunge by 6.1% this year as the housing correction plays out, according to Goldman.
The once-red-hot US housing market has struggled over the last year during a surge in mortgage rates, which were hovering at an average of 6.5% as of last week, according to Freddie Mac.
The steep rates have pushed many prospective homebuyers to the sidelines and forced some owners to slash their asking prices to entice demand.
First
And NY/NJ/CT is once again, missing from this article. In fact, this area will rise slightly as all the players mentioned above decline amidst the blood-curdling screams of financial loss. Taxes and regulations are killing us in this area and yet, we continue to endure the pain. My house will cost you, my little, pudgy-fingered muppets. It’s warranted.
For those wanting to claim a stake in the NJ/NY region where unicorns are known to frolic, here’s the best you can hope for; a tired, worn pod capable of nothing more than shelter:
https://www.trulia.com/p/nj/saddle-brook/98-platt-ave-saddle-brook-nj-07663–2006734102?mid=0#lil-mediaTab
Mom’s in a facility now, here’s your chance for a “charmer” at only $2,800/month. Oh, you better have 80K to put down and another 50K in reserve. Unless, of course, you can live with the 70s décor for an indefinite period of time:
https://www.trulia.com/p/nj/elmwood-park/106-tuella-ave-elmwood-park-nj-07407–2006437553
Not even a dusting down here in Monmouth county. Kids are disappointed…
Decent snow up here, school closed, kids want to get out to play already.
From NPR:
Despite high inflation, Americans are spending like crazy — and it’s kind of puzzling
Something unexpected is going on in the U.S. economy.
Inflation remains high, yet many Americans went on a spending spree last month, eating out at restaurants and shopping for cars.
In ordinary times, that additional spending would be welcome news to an economy that’s heavily dependent on consumer dollars.
But there’s a catch: All that spending threatens to put more upward pressure on inflation at a time when the Federal Reserve is raising interest rates aggressively to keep prices in check.
That makes it critical to gauge how long that consumer spending can last.
A drop in consumer spending would help to cool inflation, but it would also raise concerns about a recession. On the other hand, if spending continues to grow at this pace, it could force the Fed to raise interest rates even more aggressively to bring prices under control.
Snow in Los Angeles including five feet of snow in Lake Arrowhead California with more coming, this is just outside LA their closest ski area Big Bear etc…..
Fast: We are special, the rest are not. And Bergen Co is even more special, and prestigious. You have to pay up for that.
I personally feel that pundits exaggerate how difficult it is to retrofit an office building into apartments. Too much internal, windowless space? Ok, so the apartments end up being really long and narrow. Outside of the apartments, there are huge, generous common hallways. Might be better than having an office building have 40% vacancy, and a dismal renewal rate as leases end.
Alternatively, isn’t the solution to too much vacancy to simply drop that office space rent? I understand that a lender might need to greenlight it, but over time office rent falls enough that supply and demand cross.
Anecdotally, I’m aware of companies that have gone full remote since Covid and handed in the keys for their office space. I’ll also anecdotally aware of some workers requesting a small WeWork style office space or shared space paid by an employer so that they have somewhere to go in person, even though the worker could have been fully remote as far as the employer is concerned.
https://nypost.com/2023/02/27/theres-no-easy-fix-to-midtowns-post-covid-half-empty-offices/
2’s/10’s 86 inverted
I see 6M bills clipping 514
Fucking 3M USD LIBOR 497
Picked up my daughter from dance at 9PM and it was a hard blowing wet snow that was sticking to the grass. It was 39 degrees at the time. Colder this morning, but all wet only.
Juice Box says:
February 28, 2023 at 7:37 am
Not even a dusting down here in Monmouth county. Kids are disappointed…
I don’t know if North Jersey is “special” perhaps it just offers a better deal than most boroughs in NYC that have millions of people. Attached homes in Brooklyn with no driveway or garage and traffic light on every corner are well over $1 million. My S.I. 3 bedroom, 1 bath, 40×60 lot bungalow with 850 square feet and no garage goes for about as much as my 4 bdr, 4 bath, 2,000 sq foot house with garage and 65×180 lot here in Cedar Grove.
My S.I house referenced above is what I grew up in.
As far as property tax, my brother pays over $7,000 on his SI house, folks move to NJ and pay more but rationalized that they save $8,000 a year per kid because the use catholic school in SI and figure they can use public in NJ
Upper Bergen County, parts of Essex, Morris, Hunterdon and Somerset are special and only privy to serious buyers. In fact, I think NJ should create a purchasers fee for anyone whom wants to bid on a house. It’s like buying a taxi medallion. If you don’t have the NJREM (New Jersey Real Estate Medallion), you can’t bid on a house. I think a one-time fee of $20,000 is fair, don’t you?
crushednjmillenial says:
February 28, 2023 at 8:56 am
“Anecdotally, I’m aware of companies that have gone full remote since Covid and handed in the keys for their office space…”
Speaking of WFH, or more specifically, the hybrid scenario…As my place has settled into a semi-formal 3/2 hybrid configuration, I’ve become aware of a character that I call the ‘Friday phony’. These are the employees that come into the office on less crowded days — Mon and Fri — put in some minimal number of hours, attend a few meetings, and head out mid-afternoon — easy to do if the boss isn’t around and the office is sparsely populated. Was in our NJ office on Fri and the woman next to me showed up at ~10:00 and was out before 3:30. Keep your eyes on this becoming the next headache for the old timers that want to restore some semblance of the traditional office.
Don’t remember defending the budget, could it have been something I meant to be sarcastic?
I’m just a working guy, never asked for any handouts, paid my taxes.
Now I get to live the privileged life of living with some strange individuals.
One lady here, not bad looking, (guys my age can’t be too picky.) Nice body for her age.
Met her once with a neighbor, very standoffish.
Saw her the other day- Just asked a few questions, she was a bit nicer ( maybe had a few glasses of wine perhaps?
Works part time, has not one ounce of desire to work a minute more. (not a part time lawyer either). Likes vacations. That’s about it.
She reminded me of my old days, I used to use something called Day Glo Orange- when that can was near empty, and you kept shaking it-the sound of the metal ball rattling around the inside…
leftwing says:
February 27, 2023 at 6:12 pm
“And by the way I have taken the test. Results say that I am a moderate Republican.”
I can see that, easily. Can’t see, with or without that, how you defend NJ budget.
Phoenix says:
February 28, 2023 at 9:52 am
“And by the way I have taken the test. Results say that I am a moderate Republican.”
Just wait — another decade or so of paying Fed+NJ taxes and you’ll become a full-fledged Small Gov Conservative…
Ten 398
“Admin is so top heavy in every district. Part of this is Christie’s fault…another set of BS positions like Assistant Business Admin and Director of Curriculum. Supervisors should be eliminated.”
You teach in high end towns with active communities, parents, and parent groups? Can’t blame the explosion in useless positions on Christie (or any other governor). Those decisions are made by the local BoE which determines these things, no? Trenton doesn’t dictate the number of Vice Principals in any one school (asking seriously). If/when the community doesn’t want this situation, it doesn’t have to suffer it.
“Just merging two neighboring towns could free up millions of dollars a year.”
Yeah, and I’ve got a bridge to sell you. You really want to take the other side of the argument that county level oversight of the civil administrative class after local mergers is more efficient and rigorous than individual local oversight?
“Special ed laws are out of control in this state making it the largest department in every district by far.”
Agree here, and a difficult topic. Society generally needs to contribute and enable integration and ultimately a manageable sustainable lifestyle for affected individuals while also alleviating the financial and emotional burden on their families while minors but by all appearances we have passed long ago the point of incremental return toward those goals through the current special ed programs in the public school systems.
Mount Laurel, special ed, and the permanent (and permanently expanding) administrative class have blown a 12 gauge hole through the abdomen of the local school districts of the middle and productive classes. If one were to take a whiteboard with the express goal of drawing a public ed system that would produce sub-optimal educational results for the second through fifth decile of students and not move the needle on the lower 50%, all while extracting the maximum amount of money and wealth from the relatively smaller number of households funding that burden you would create what currently exists.
Which, of course, originated and continues to exist in the deep Blue Garden State.
Fast
That 2nd house lost like a set from that 70’s show.
I never knew Catholic schools were heavily subsidized by the Church, although this is really obvious in retrospect. I always thought they cost as much as a non denominational private school, and it had me scratching my head how some blue collar folks were able to put two or three in there. S.I. school is $750 a kid, with a discount for the second. Meanwhile, the closest thing here is Dwight Englewood Preparatory Day @ ~$4K per seat.
Boomer, it appears the NY Archdiocese is subsidizing the schools in NYC. My SI high school (now) is about $6,000 a year, while I paid $12,000 for Seton Hall Prep and $17,000 a year for Mt. St. Dominic years ago. Our parish k-8 school receives no funding from the Newark Archdiocese and is about $4,000 per kid.
Catholic schools in NYC are closing rapidly, another 7 last week in the Bronx will be closed at the end of the school year.
The Catholic church is also subsidizing the child molesting priests with donations.
Anyone watch Long Shot on Netflix? 45 minute very interesting show.
Average cost per student, NYC schools K-12: $28,004
Average cost per student, NJ schools K-12: $18,208
Average cost per student, NJ Parochial schools K-12: $11,530
Parochial schools produce better results overall because they insist on accountability, obligation, discipline and responsibility.
The higher costs in public schools are probably for battle pay and combat training. Oh, and money laundering to democrat coffers.
Fast Eddie says:
February 28, 2023 at 11:39 am
Parochial schools produce better results overall because they insist on accountability, obligation, discipline and responsibility.
Difference is mostly the parents. Schools are maybe 10 percent at most.
Take the kids from one school, switch them, you will get similar results.
Geez,
Even attorneys know they aren’t going to beat a woman in court. Damn what could she have said that was so bad he felt he couldn’t win in a courtroom and had to resort to this? Just sue her, you are a lawyer you numb knutz.
An attorney from Bergen County was charged with grabbing a woman by the throat, slamming her into a refrigerator and threatening to kill her, according to a law enforcement report.
Leftwing,
You are right about special education costs. The problem again is the lack of regionalization. To make matters worse, the state mandates for special needs schools are even more ludicrous, expensive and mostly a waste of time that could be used to further educate the kids that need it the most. I would argue that the biggest issue is special education is the way promotions are performed in the public sector. You end up with 50 and 60 years old former educators (if you are lucky) who were teaching when lobotomies were still commonly performed. They know nothing of ABA and other modern methods that really help the learning disabled develop. If you think learning cursive/script is a waste of time for your elementary school student, you should come watch kids with learning disorders take standardized tests.
My kid is an excellent speller. During a recent evaluation performed by GR public schools, they gave him a pencil to help him with spelling. Due to D’s lack of fine motor control (as the result of his brain surgery), he can barely write. Though he can type like a mofo. Nonetheless, they gave him a pencil. When it was time to check his spelling, he performed terribly. I’m guessing, they asked him to write the spelling of each word. If he was asked to type it or dictate it, he would have blown the evaluator away. But in the public sector, there is no incentive for individual adaptation. It’s been, there is only one write answer for so long, I am surprised we aren’t ranked among the average African country when it comes to literacy.
But getting back to regionalization. It’s especially important in Special Education due to the individualized programs necessary to teach kids with such unique learning disabilities. It’s simply too expensive to create programs to cover all of those disabilities in every district. It’s simply stupid. Instead, we van these kids everywhere after parents sue their schools, where they end up paying insane transportation costs, mad for-profit private school tuition and reimbursement for the legal fees which usually start at 6-digits and sometimes grow to 300K. Just those legal fees alone would be enough to pay for 5 to 15 non-special needs kids to be educated. It’s crazy! Worst of all, these lawsuits pull caseworkers, educators, therapists and highly compensated directors of special education, out of their schools and classrooms with insane irregularity. They are rarely around to perform their specified roles. But this is NJ. The worst government money can buy.
Leftwing,
Be careful. If someone replied like this to you, the response would be something like look at you going all Punkin on me…taking my measured statement to the extreme and then arguing against that position.
Merging two neighboring towns does not equal full county-wide consolidation.
leftwing says:
February 28, 2023 at 10:33 am
“Just merging two neighboring towns could free up millions of dollars a year.”
Yeah, and I’ve got a bridge to sell you. You really want to take the other side of the argument that county level oversight of the civil administrative class after local mergers is more efficient and rigorous than individual local oversight?
Leftwing,
From last night. You are focused on public sector compensation. But my argument is two folds.
1- Those towns that have that public abuse want it. Either because those highly paid teachers, cops and taxes are the gate in their ungated community keeping out the undesirable that in TX, FL will be kept out by gated community or kept in crappy schools – Just look up Chris Rocks videos as he drives around Alpine. Or they are political machine towns, which take care very well of the those that participate in the machine and generally do a decent enough job to all other residents that no one get upset too much and mounts a challenge, as political machines usually control enough votes to regularly win, but not if enough people are ticked off at it and challenge it.
2- You ignore the profit motive of the HOA, private and public/private contractors because their abuse is in areas of cutting corners that you don’t see until stuff happens like Northfolk Southern running trains opposite the way it has been done since railroading began (heavy loaded cars in front near engine, light empty in rear) because it would save several hours of labor in putting the trains together the traditional way.
On another subject.
Lawyers ins the house speak up.
Dominion Voting vs Fox News.
In deposition Rupert Murdoch is quoted ” Is not about red or about blue, is about green”.
I’m guessing a 500Million to 1Billion settlement, unless Dominion wants to take down Fox for everything and bankrupt it. Rupert looks like he’s pissed off at his kids, so he’s in I built it – I’ll destroy it mode.
Either way 2024 might look quite different with a neutered FOX and with NewsMax and other similar outlets being checked by their legal department.
I nearly forgot in the cutting corner department and HOA – The Surfside Condo building collapse….
For Stu (aka Hockey Dad):
https://www.youtube.com/watch?v=YHFE6WZK71s
Left: was looking for a description of Cornell undergraduates in a survey. Here is one response.
Isaac
Intolerant bastards, i cant stand them, they should all be killed.
Judiciary problem in NJ. Civil and family trials suspended in many counties.
Murphy isn’t nominating them. 15% of judge seats are currently empty. NJ news barely covering the story.
https://www.nbcnews.com/news/us-news/divorce-civil-cases-halted-6-new-jersey-counties-judge-shortage-rcna69568
https://newjerseyglobe.com/judiciary/judiciary-committee-continues-to-eat-judicial-vacancy-elephant-one-bite-at-a-time/
Biden goes to Ukraine before EP, Ohio.
US aid to Ukraine so far = $76B
EU institutions = $30B
Some rumblings in DC that Ukraine won’t keep getting the blank check forever.
https://www.cfr.org/article/how-much-aid-has-us-sent-ukraine-here-are-six-charts
Love the Pink Panther Chi,
Went to see most of them with my wealthy grandparents on my father’s side in the 70s and 80s. They loved them. I found them well done too. Thanks for the memory.
Interest rates on CDs are finally going up again, on 11/16/2022 TD Ameritrade had a cd for 5.5%.Yesterday 2/27/2023 one CD finally hit 5.431% these are both 5 year CDs paying interest monthly. In between those dates the rates went as low as 4.6% even though Powell raised interest rates two times. Everybody was talking pivot and it moved the needle down. The Fed has never changed their stance, but people hear it differently. This could take a few years before rates really drop, I think rates should stay high and make the dollar King again.
On Sunday I was preparing an application for the town of Newton on my 4 unit building in the same town. Newton is charging a new fee for lead based paint testing of each unit ( $750) every two years, I already pay $1,000 a month for taxes, plus water and sewer to the town. Talk about trying to get blood from a stone. Where does it end??? I had to go to my original contract of purchase ( 40 years ago) for some information and low and behold I found out that my original interest rate was 11.5%. Dammit rates were way too low the past 15 years. People are crying now @ 5%.
Just recognize that rates are lower, but prices are higher. It is the fallacy of “rates are low; it is a good time to buy”. The correct thinking should be “prices are low; it is a good time to buy”.
The 40 year rally in bonds was a inflation transmission mechanism for real estate appreciation, since mortgages are fuel. Although it is not the same situation, you can kind of see a bit of a similar mechanism in West Orange, where the property taxes are so high, it actually causes the price of homes to be discounted.
Jim says:
February 28, 2023 at 3:21 pm
I had to go to my original contract of purchase ( 40 years ago) for some information and low and behold I found out that my original interest rate was 11.5%. Dammit rates were way too low the past 15 years. People are crying now @ 5%.
Inversion 89 bps on Feb close
The correct thinking should be “prices are low; it is a good time to buy”.
Yes, yes and yes. People are financial morons. I am far from a financial expert but to not have a basic understanding of money fundamentals is a crying shame. If a fool and his money are willing to part, then let it happen.
Small
We are 3/2, just switched to Monday for the commute. Can not do Fridays with everyone driving out to the poconos for the weekend.
Oh boy
https://www.forbes.com/sites/javierpaz/2023/02/27/binances-asset-shuffling-eerily-similar-to-maneuvers-by-ftx/?sh=1152df02bccd
Twitter looking to sublease out 200k square feet in NYC?
In the game of capitalism, there is no individual free ride. Nj actually offers “good value” on subsidized “rich lifetime.” Name another state that doesn’t have gated communities at its highest levels. I will wait…
“Is generally the republican towns and areas that want to continue the present system and with all its problems and benefits.
For the sake of argument let’s take 3 random upper class towns. Franklin Lakes, Livingston, Bernards Township.
-The NJ way – in all 3 towns you pay a premium to buy into the public school and public safety system. Key word is public with its attendant elections, politics, taxes and benefits that it pays.
-The FL,TX,AZ way – pick 3 private upper class development in a county that provides basic services. Key word is private. You want better public safety – the developments are gated with private security and hire Rural Metro for Fire and Medical response. You want better schools – pay for private school of your choice.
I can foresee some elected official walking into Rutgers and pulling out the multitude of studies done on municipal consolidations. If I remember correctly 20 yrs ago the most efficient size is a population of ~110,000.
Just realize that if you get a county based system (like in TX, FL, etc), the likes of Alpine will create a HOA and gate what was the town overnight. Over a few years the schools will be atrocious as everyone that can go private will have done so – think Englewood, where the conservative jewish community controls the towns and it makes sure they don’t spend anything but the minimum on school because they send their kids to religious school, everyone else sends to private if they can afford it.
At the end of the day. The monthly nut for the lifestyle is likely to be the same. Sort of what Musk recently pulled with dropping Tesla’s price, but if you are financing, the rates went up several percentage point and it all comes out at the same monthly nut.”
Not rich lifetime, but lifestyle
Yes, actually a good time to buy if you can wrap your head around inflation and the big picture.
chicagofinance says:
February 28, 2023 at 3:41 pm
Just recognize that rates are lower, but prices are higher. It is the fallacy of “rates are low; it is a good time to buy”. The correct thinking should be “prices are low; it is a good time to buy”.
The 40 year rally in bonds was a inflation transmission mechanism for real estate appreciation, since mortgages are fuel. Although it is not the same situation, you can kind of see a bit of a similar mechanism in West Orange, where the property taxes are so high, it actually causes the price of homes to be discounted.
You will never understand that north jersey is nyc…it is the stupid value of nyc zip codes. One day you will realize it. Good luck on continuing to double down on cheaper real estate in north jersey because your biased perspective can’t justify pricing. Wake the f’k up. We are special.
3b says:
February 28, 2023 at 8:48 am
Fast: We are special, the rest are not. And Bergen Co is even more special, and prestigious. You have to pay up for that.
North jersey is the costco of nyc pricing….
1987 Condo says:
February 28, 2023 at 9:26 am
I don’t know if North Jersey is “special” perhaps it just offers a better deal than most boroughs in NYC that have millions of people. Attached homes in Brooklyn with no driveway or garage and traffic light on every corner are well over $1 million. My S.I. 3 bedroom, 1 bath, 40×60 lot bungalow with 850 square feet and no garage goes for about as much as my 4 bdr, 4 bath, 2,000 sq foot house with garage and 65×180 lot here in Cedar Grove.
Wow, someone that gets it.
1987 Condo says:
February 28, 2023 at 9:28 am
My S.I house referenced above is what I grew up in.
As far as property tax, my brother pays over $7,000 on his SI house, folks move to NJ and pay more but rationalized that they save $8,000 a year per kid because the use catholic school in SI and figure they can use public in NJ
Someone that gets it…
Wake up you f’ks! Your bias blinds you! You think of nj real estate as expensive when it’s cheap. 3b, you dinosaur.
Simplified pt: like lib has pointed out, you are losing to inflation. Real estate is true inflation hedge. To think nj real estate will go down in an inflationary environment is wishful thinking. That’s greedy.