The Silver Tsunami

Posted on April 1, 2008 by grim

From the Wall Street Journal:

Americans Delay Retirement As Housing, Stocks Swoon
Nest Eggs Shrink, Deferring Dreams; ‘Freaked Out’ Elite
By JENNIFER LEVITZ
April 1, 2008

As the falling real-estate and stock markets erode their savings, many aging Americans are delaying retirement, electing labor over leisure in uncertain times.

A three-decade veteran at International Business Machines Corp., Dick Boice had planned to sell his house, pack up and move to Arizona with his wife, Lauren, to take early retirement. But two months after the January date he set to exit the work world, Mr. Boice, who is 59 years old, is still on the job. He figures he’ll stay put for another couple of years.

The Boices had counted on proceeds from the house sale to boost their retirement income. After a year on the market, the roomy colonial in Blue Springs, Mo., didn’t move, forcing the couple to cut the asking price by $40,000 to around $250,000. The house remains unsold. Meanwhile, Mr. Boice has watched the value of his 401(k) and individual retirement accounts fall by roughly 20% so far this year, to a combined $240,000.

“Everything is just heading south,” says Mr. Boice, who works in client support for IBM in Kansas City, Mo. “You can’t hardly make any kinds of plans because you don’t know what you can count on.”
…
Mr. Boice has plenty of graying company at the grindstone. Millions of retirement-age Americans, stung by the recent economic pall, suddenly are having to reassess their plans — with many forced to quickly change course. In February, the proportion of people ages 55 to 64 in the work force rose to 64.8%, up 1.5 percentage points from last April. That translates to more than an additional million people in the job pool, according to the U.S. Labor Department. The ranks of those 65 and over in the work force rose to 16.2% from 16% in the same time span — meaning 212,000 more hands on deck. So far, the numbers for March continue to show a “sharp” increase, says Steve Hipple, a department economist.
…
According to economists and demographers, a huge exodus from the work force should be happening. The first of 78 million baby boomers, those born between 1946 and 1964, passed the 60-year-old mark two years ago. And 2008 was expected to be a banner retirement year, with the oldest boomers reaching 62 — the earliest age for collecting Social Security. When the first boomer drew a benefit on Feb. 12, the Social Security Administration described it as the start of “America’s silver tsunami.”

Posted in Economics, National Real Estate | 426 Comments

Two years out?

Posted on April 1, 2008 by grim

From Gallup:

Americans Not Expecting Quick Economic Turnaround

Posted in Economics | Comments Off on Two years out?

“The numbers for us continue to rise”

Posted on March 31, 2008 by grim

From the Trenton Times:

Singing the mortgage blues

Otis Boone describes his housing problem as “a funny situation,” but stories like his have become common in Mercer County and around the country.

In August 2005 he and his wife moved out of Trenton and got a zero-down loan on a newly built home on Saratoga Avenue in Ewing Township. Boone, who worked in the shipping department at a train manufacturer, hurt his back the following year, went on disability and saw his income cut in half.

He couldn’t keep up with the mortgage payments of $1,900 per month, plus taxes and other expenses, as well as the prospect of even higher payments when his adjustable rate mortgage resets, he said.

Putting the place up for sale brought no offers, so last August the couple moved out of their home, which remains unoccupied, and moved into an apartment in Hamilton.

“At the time when I wasn’t making the payments, something like this never happened to me before,” said Boone, 59. “I wanted to get an apartment before my credit really got bad. I don’t know where I can get the money unless I get a miracle.”

As years of unrealistic subprime loans collide with job losses, personal misfortune and the slumping housing market, hundreds of Mercer County residents face similar crises. The number of county properties entering foreclosure hit a recent peak in January, and mortgage counselors who try to help people keep their homes say they see no end in sight.

The county had 180 foreclosure filings in January, according to records kept by County Clerk Paula Sollami-Covello. The number fell slightly to 167 in February and remained relatively high in March, with 145 filings received through Tuesday.

In March 2007 the county had a similarly high 176 filings, while the figures were lower through much of last year. Banks and mortgage companies file foreclosures when homeowners fall behind in their mortgage payments, but most do not result in people losing their homes.

Tracking the number of foreclosed homes is difficult because some of the filings include more than one property. But records maintained by private real estate companies, and the experience of counselors, confirm that owners keep falling behind on their payments at high rates.

“The numbers for us continue to rise,” said Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, whose Trenton office has been overwhelmed with homeowners seeking help. “We’re at overcapacity and we see nothing letting up.”
…
RealtyTrac, a California company that has its own system for tracking foreclosures, reported a recent high of 452 filings in September in Mercer County and 349 in October. Last month the company reported 216 foreclosures.

New Jersey as a whole had 5,598 foreclosures in February, the highest figure in at least a year, according to RealtyTrac.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 267 Comments

Morris County not immune to slump

Posted on March 30, 2008 by grim

From the Daily Record:

Morris hasn’t escaped crunch of foreclosures

The Morris County Sheriff’s Office reports that the number of houses put up for auction within the first two months of this year was 40 percent higher over the same period last year. And houses placed on the sheriff’s list are much more likely to be sold at auction this year than they were last year at the same time, with fewer homeowners able to get their homes off that list.

And while Morris County foreclosure filings increased at a slower rate than the state average, according to state court statistics, they have been going up dramatically within the past two years after remaining stable for a decade:

• There were 1,146 foreclosure filings in Morris last year, up 36 percent from the previous year, 69 percent from 2005, and 89 percent from 1997.

• Within the first two months of this year, 74 homes were scheduled to be auctioned at a Morris County sheriff’s sale compared with 53 homes within the first two months of 2007. Last year, 21 homes were sold over that time and 31 homes came off the list. This year, 39 homes were sold and 16 came off the list.

Housing counselors here, as elsewhere, report that they began getting calls from homeowners having trouble keeping up with their mortgages last summer, and that the volume became larger in December. They report hearing many of the same stories — buyers receiving mortgages too large for their incomes, often with no money down and with adjustable rates that kept going up and left them unable to make payments.

Maria Jacome, director of ACORN Housing in Newark, which counsels low- to moderate-income homebuyers across the state, said most of her clients with mortgage problems are from Essex and Hudson counties. But 10 percent of her clients come from affluent Morris County. Some housing experts say middle- and upper-income families sometimes are more likely to get bad deals on mortgages because low-income families often participate in workshops sponsored by affordable-housing groups.
…
The National Association of Realtors reports that the median sales price of Morris homes for the fourth quarter of 2007 was $470,300. That’s an 8.7 percent decrease from the $515,300 median at the end of the previous year. Hudson was the only county reporting a steeper decline when comparing those periods.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 6 Comments

Weekend Open Discussion – Part II

Posted on March 29, 2008 by grim

Now Open, Part II!

Prior weekend thread closed due to comment overflow.

Posted in General | 248 Comments

Weekend Open Discussion

Posted on March 28, 2008 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 411 Comments

Aim low, sell fast

Posted on March 28, 2008 by grim

From the Star Ledger:

Bid for reality

Lenny Klein thinks home sellers could learn a thing or two from eBay.

Nothing draws bidders quicker to an auction than a low opening bid, the real estate agent said. Setting a list price slightly below market value builds excitement and is more likely to create a bidding frenzy — which can ultimately drive up the final price in the end.

“If you look at ebay, sellers start with the lowest price,” said Klein, a sales agent with Schweppe Burgdorff ERA in Upper Montclair. “They say 99 cents and no matter what the product is, it’s going to find its value in the market place.”

It’s a lesson homeowners across the state are learning well, these days.

Certainly, Realtors have a vested interest in pricing homes so they move quickly since their compensation is tied to sales — and a slumping real estate market has put a major dent in their commissions.

But new data from a New Jersey consulting firm suggests over-priced homes not only take longer to sell, they consistently sell for thousands of dollars less than similar homes that were priced lower in the first place.

The study by Otteau Valuation Group measured and analyzed more than 15,000 transactions annually over a period of several years. The same pattern emerged in every price range, regardless of whether the properties in question were entry-level or luxury million-dollar homes: Sellers who priced their home below the market from the beginning, often received a higher price and a faster sale.

“We haven’t hit bottom yet,” said Jeffrey Otteau, a long-time consultant and appraiser. “For every buyer that comes to the market there are two, or three or more sellers who put their home on the market.”
…
During 2005, when home prices were doing like Marie Osmond and dancing with the stars, there were about 30,000 homes for sale in New Jersey, he said. Right now, that number has more than doubled, to 62,000 homes for sale.
…
At the peak of the housing boom, there were 105 buyers for every 100 sellers in New Jersey, he said. Today, there are typically just 10 or 20 or less.

In Bloomfield, for example, there are roughly 18 buyers for every 100 sellers, he said. In Mendham and Scotch Plains, eight. Even Montville, which ranked 13th in Money magazine’s best 100 places to live in the United States in 2007, can only conjure up four buyers for every 100 sellers.

Otteau estimated home prices in New Jersey will not recover to 2005 peak levels until the spring of 2015, at the earliest.

All of this, has Realtors and homesellers scrambling to figure out the best listing price. It’s an inexact science at best.
…
The traditional thinking in pricing a home was to aim high so there’s wiggle room for negotiations. But in a market with a glut of properties for sale, a price that undercuts the competition is a surefire way to make your home stand out and attract more prospective buyers.

And Sobeck said when buyers smell a good deal, it creates a sense of urgency and pits them against one another.

Posted in New Jersey Real Estate | 5 Comments

Abandoned homes, abandoned pets

Posted on March 28, 2008 by grim

From MarketWatch:

Foreclosing on Fido

Call it reckless abandonment. Shelters and animal rescue organizations across the country are packed cage-to-cage with dogs and cats, even birds and reptiles, that have been ditched or dropped off as scores of foreclosed-upon homeowners relocate. It is a disturbing trend and a sign of the tough economic times that has prompted a number of organizations to form hotlines for pet foster homes and to implore pet owners — or what the industry calls “pet parents” — to seek help for their animals before they head off.

“There are a lot of people who are just walking away and leaving their pets behind, which breaks everyone’s heart,” said Windgassen, the president of Anthem Pets, a nonprofit animal welfare organization in her community.

The number of abandoned pure-bred dogs in her neighborhood alone has jumped 10-fold just since Christmas. “It just boggles my mind,” she said. “It’s cutting across all income levels and age levels.”
…
There are no national statistics on pet abandonment or on the number of pets found in vacant properties. But Stephanie Shain, director or outreach for the Humane Society of the United States, said shelters are reporting full capacity and rescue organizations tell of sharper increases in the numbers of animals coming in.

“The economic times are making everyone pull their belts in a little tighter and people are having trouble taking care of their pets or keeping them if they’ve lost their home,” she said. As consumers face foreclosures they often move first to rental apartments or homes that won’t allow pets. They’re also likely to give their pets up if they find themselves imposing on a family member for housing.
…
Vivian Kiggins, executive director of the Liberty Humane Society in New Jersey, said her center has an extraordinarily large number of mature cats in need of adoption now. That’s atypical of most early springs that are relatively quiet until the “kitten season” kicks in.

“We should be at a low point right now, but we’re packed with adult cats,” she said, noting that it could be a reflection of the economy.

“We’ve had people say they can’t afford their pets and we do everything in our power to make sure that they can keep them with free-food programs and low-cost veterinarian appointment opportunities,” she said.

Posted in Economics, National Real Estate | 2 Comments

Spring 2008 Trends – Short Sales

Posted on March 27, 2008 by grim

Source: A Realtor (R) Association Newsletter

Need I say more?

Posted in New Jersey Real Estate | 39 Comments

Saddle River Lowball!

Posted on March 27, 2008 by grim

Congratulations to Mary J. Blige on her skillfully executed Saddle River Lowball!

Original List Price: $17,000,000
Last List Price: $13,900,000
Sale Price: $12,300,000
(28% under original list price!)

From the Daily News:

Mary J. Blige pays $12M for N.J. mansion

It’s a castle fit for the Queen of Hip Hop.

Grammy winner Mary J. Blige plunked down $12.3 million in cash for a Saddle River, N.J., mansion, the Daily News has learned.

“She fell in love with this one,” a source said of Blige, who checked out several houses in the swanky area before settling on the 18,250-square-foot dream pad.

Thanks to the sagging housing market, the 37-year-old best-selling singer got a relative bargain.

The house originally went on the market last year for $17 million and was reduced this year to $13.9 million, the source said.

Posted in General | 389 Comments

Watchung Comp Killer

Posted on March 27, 2008 by grim


445 Johnston Court, Watchung NJ
Purchase Price: $915,000
Purchased: 4/26/2006
Current Asking Price: $749,900 (Short Sale)
18% under 2006 purchase price

History
MLS# 2468806
Listed: 12/20/2007
Original List Price: $749,900
Days on Market: 98
Active

Posted in Comp Killer, Price Reduced | 9 Comments

Crystal Springs Comp Killer

Posted on March 27, 2008 by grim


9 Little Tarn Court, Hardyston/Hamburg NJ
Purchase Price: $850,000
Purchased: 3/3/2006
Current Asking Price: $698,800 (Short Sale)
18% under 2006 purchase price

History
MLS# 2270030
Listed: 4/24/2006
Original List Price: $935,000
Reduced: $885,000
Days on Market: 338
Withdrawn

MLS# 2390640
Listed: 3/27/2007
Original List Price: $885,000
Days on Market: 279
Expired

MLS# 2486815
Listed: 2/7/2008
Original List Price: $729,900
Reduced: $698,800
Days on Market: 49
Active

Posted in Comp Killer, Price Reduced | 6 Comments

Fourth Quarter GDP – Recession?

Posted on March 27, 2008 by grim

From Bloomberg:

U.S. Economy Probably Expanded at Slower Pace in Fourth Quarter

The deepening housing slump brought U.S. growth to a near standstill in the fourth quarter and has now probably tipped the world’s biggest economy into a recession, economists said ahead of a government report today.

Gross domestic product advanced at a 0.6 percent annual rate in the last three months of 2007, matching the weakest pace in five years, according to the median projection of economists surveyed by Bloomberg News. The economy grew at a 4.9 percent pace in last year’s third quarter.

So far this year, consumer spending has stalled, and business investment and commercial construction have joined home building in decline. The Federal Reserve’s interest-rate reductions and the government’s rebate checks won’t influence the economy soon enough to sustain the six-year expansion.

“We’re getting a picture of the economy that looks like what you would expect for a recession,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York.

The Commerce Department is scheduled to release the GDP report at 8:30 a.m. in Washington. The 70 estimates in the Bloomberg News survey ranged from no growth to 1 percent. The figures are the second revision of data first issued in January and will, for the first time, include estimates on corporate profits.
…
“The consumer is under extreme stress,” AutoNation Inc. Chief Executive Officer Michael Jackson said in a Bloomberg Television interview on March 19. AutoNation is the largest publicly traded U.S. car dealer.
…
“The weakness coming from consumer and business spending will be ugly,” said Scott Anderson, a senior economist at Wells Fargo & Co. in Minneapolis.
…
More and more economists are forecasting a recession. Martin Feldstein, the Harvard economics professor who heads the research group that determines when downturns begin, said this month that a contraction had already begun.

Posted in Economics, National Real Estate | 6 Comments

Have mercy on us

Posted on March 26, 2008 by grim

From the Associated Press:

NJ lawmakers call for cities, towns to impose their own taxes

Assembly lawmakers on Tuesday said the state should weigh allowing cities and towns to impose their own taxes as more woes were predicted for New Jersey’s troubled state finances.

The Legislature’s budget official predicted the state will collect $289 million less in taxes next fiscal year than Gov. Jon S. Corzine has estimated as economic activity slows in the coming months.

“It should be clear that most of the risk in this forecast is on the downside, and it is easy to imagine plausible economic scenarios in which the outcome is considerably more dire,” David Rosen, the legislative budget and finance officer, told Assembly lawmakers.

Corzine’s $33 billion budget already calls for cutting spending by $2.7 billion to try to right finances plagued by high debt and taxes.

A $289 million shortfall would require either additional cuts or increased taxes, but Corzine has said he currently doesn’t support tax increases. He has also said he wouldn’t be surprised if less revenue came in than was estimated.
…
But Greenwald said lawmakers should look at how other states let municipalities charge their own taxes.

New Jersey local governments raise nearly all their revenue from property taxes, which average $6,800 per property owner in New Jersey, twice the national average.

But New York, for instance, allows local governments to add their own sales taxes. Many states and cities allow local income taxes. Some have a personal property tax on cars, trucks, motorcycles and other vehicles.

“We ought to look at that, too,” said Assemblywoman Joan Quigley, D-Hudson.
…
Corzine said letting municipalities impose their own taxes “makes sense and could potentially go a long way to relieving some of the pressure that exists with property taxes,” but was uncertain amid economic worries.

“I’m not particularly inclined to think that having new taxes at a time of economic recession is a good idea, so I’d be a little hesitant about the immediate imposition,” Corzine said.

Posted in New Jersey Real Estate, Property Taxes | 306 Comments

Livingston Comp Killer

Posted on March 26, 2008 by grim

14 Fernwood Road, Livingston NJ
Purchase Price: $995,000
Purchased: 1/22/2007
Current Asking Price: $799,000 (Short Sale)
20% under 2007 purchase price

History
MLS# 2430585
Listed: 7/30/2007
Original List Price: $995,000
Reduced: $799,000
Days on Market: 240
Active

Posted in Comp Killer, New Jersey Real Estate, Price Reduced | 10 Comments