Eminent domain, good or bad?

Posted on February 1, 2008 by grim

From the Asbury Park Press:

Pros, cons of eminent domain debated

A state Supreme Court decision last year that found municipalities must prove property is blighted before it can be seized for redevelopment has had a chilling effect on projects throughout the state, but at least one proponent of the controversial power of eminent domain believes it will remain a viable tool when the political smoke clears.

Long Branch Mayor Adam Schneider said that eminent domain — the government’s right to seize private property after paying just compensation — needs to remain a tool for municipalities to assemble property for redevelopment projects.

“The Gallenthin case didn’t take it away, and I don’t think the Legislature is going to,” he said.

The Gallenthin casewas a unanimous 2007 state Supreme Court decision. In it, the justices invalidated Pauls-boro’s redevelopment classification of property owned by Gallenthin Realty Development Inc., determining the municipality failed to prove by “substantial evidence” that the property was blighted, instead relying on a superficial determination that the land was “not fully productive.”

New Jersey’s top court weighed in two years after the U.S. Supreme Court in the Kelo decision determined that government could use the power of eminent domain to acquire property for economic development projects.

The 5-to-4 decision was widely reviled by property rights groups, leading to reform in many states, although legislative reform appears to have stalled in New Jersey.

Posted in National Real Estate, New Development, New Jersey Real Estate | 1 Comment

Another turn for the worse

Posted on January 31, 2008 by grim

From the WSJ:

S&P Ramps Up Mortgage Downgrades
By AARON LUCCHETTI and SERENA NG
January 31, 2008

Standard & Poor’s downgraded or threatened to downgrade more than 8,000 mortgage investments and projected a widening array of financial institutions would ultimately face mortgage-securities losses totaling more than $265 billion.

The new sweep of downgrades — the largest of several during the past few months — threatens to create new turmoil in a market already shell-shocked by write-downs of about $100 billion at big financial firms and declines in housing values that have put the economy on the brink of a recession.
…
“Banks are bracing for another chapter in the unfolding story of their mortgage-market problems,” wrote Tanya Azarchs, an S&P analyst, in a report released yesterday after the market closed.

From Bloomberg:

MBIA Posts Biggest Loss, Considers New Capital Plans

MBIA Inc., the world’s largest bond insurer, posted its biggest-ever quarterly loss and said it is considering new ways to raise capital after a slump in the value of subprime-mortgage securities the company guaranteed.

The fourth-quarter net loss was $2.3 billion, or $18.61 a share, raising concern the Armonk, New York-based company will lose its top credit ratings. The loss came a day after FGIC Corp.’s insurance unit became the third company to be stripped of its AAA grade.

From the WSJ:

Derivatives Write-Downs Hit MBIA
By LAVONNE KUYKENDALL
January 31, 2008 4:29 a.m.

MBIA’s fourth quarter derivatives write-down is more than 10 times as large as the $352.4 million write-down it reported in the third quarter, an indication of the rapidly worsening U.S. housing market and its effect on securities backed by loans made to credit-challenged customers.

Of the $3.5 billion charge, MBIA estimated it would realize $200 million of credit impairment or actual claims payments on the portfolio. In addition to the credit impairment on its derivatives portfolio, MBIA also set aside $713.5 million of pretax loss and loss-adjustment expense due to an expected loss of $613.5 million on its guarantees, and a special addition of $100 million to the unallocated loss reserve for MBIA’s prime, second-lien mortgage exposure.

Second lien, or home-equity loans, have shown rising losses as home values plunge in some parts of the country.

From the WSJ:

More Subprime Pain in Store
UBS Write-Downs, Insurer Downgrades Point to More Unraveling
By DAVID ENRICH and PETER EAVIS
January 31, 2008; Page C2

After racking up more than $100 billion in mortgage-related losses in recent months, banks and their investors had hoped they were out of the woods. They aren’t.

“When it becomes clear [as we think it will] that more charges are on the horizon, we believe the market will take another turn for the worse,” Ms. Whitney wrote.

Fueling the concerns, Standard & Poor’s predicted yesterday that the carnage might spread to a wider range of financial institutions, with total losses potentially exceeding $265 billion.

Posted in Housing Bubble, National Real Estate, Risky Lending | 278 Comments

“Subprime victims are the new heroes.”

Posted on January 31, 2008 by grim

From Yahoo News:

The Politics of Foreclosure

Who says bipartisanship is dead? From President Bush to Hillary Clinton, Barack Obama and John Edwards, to Mitt Romney and John McCain, virtually everyone in Washington agrees: The government must Do Something to stop home foreclosures across the country. These leaders agree on the total presumption of homeowner innocence. The borrower-as-victim and lender-as-predator storylines are etched in stone. Can’t let reality get in the way of election-year pander-monium.

Special guests at the State of the Union address are usually extraordinary heroes, entrepreneurs or citizens who’ve gone above and beyond the call of duty. On Monday night, one of those guests was an Indiana woman whose claim to fame is that she called a 1-800 number and was assisted by the “Hope Now Alliance,” a group Bush convened, which, according to him, “is helping many struggling homeowners avoid foreclosure.”

Subprime victims are the new heroes. Welcome to the politics of foreclosure.
…
I certainly have sympathy for borrowers who may have been misled. But for every “predatory lender” out there, you can find a predatory borrower. For every fraud-minded loan officer or mortgage broker, you can find a homeowner who secured financing and bought a home he knew he couldn’t afford with little money down and bogus or no income verification. Washington is silent about this reckless behavior, which it is encouraging both tacitly and explicitly.
…
The true victims in this “crisis” are those who paid for homes within their means and those who waited to enter the housing market. A reader in New York City wrote me last week:

“My husband and I patiently sat back and watched while our friends made a killing in real estate over the past six years. … Now, after several years, we are ready to move to the ‘burbs, and we feel it is responsible people like us who are going to get hurt by this mortgage mess. We’re the ones who have to sit back and wait for housing prices to fall, while our government, looking to protect only the homeowners, keeps prices artificially high with bailout programs and artificially low interest rates.

“What about programs to help out renters who didn’t make any money in this bubble because we were responsible? What about government intervention to lower the still-high housing prices so we aren’t locked out of the market? A natural correction in the housing market is in order, but the government seems hellbent to prevent it from taking place. In the meantime, we are priced out of the market because we aren’t willing to get in over our heads financially (unlike some of these revered homeowners).”

Posted in Housing Bubble, National Real Estate, Risky Lending | 8 Comments

Reval’s in a declining market

Posted on January 31, 2008 by grim

From the Press of Atlantic City:

Cape May wants reval postponed

The city has accepted the need to do another property revaluation but is fighting when it must be done.

The Cape May County Tax Board recently ordered a revaluation for 2008 that would go on the books in 2009. City Manager Lou Corea said the city is trying to put it off one year, doing it in 2009 and getting the new assessments on the books in 2010.

The city is arguing the real estate market is slow and there is even some preliminary evidence the ratio of assessed to market value is now going in a reverse direction. Corea said the city wants the market to settle a bit before another revaluation.

“There are a lot of homes here on the market, and they have the ‘price reduced’ on them,” Corea noted.

One trigger for a revaluation is when assessments slip below 85 percent of market values. The city is at 82.86 percent, but that figure may be starting to rise instead of continuing to fall.

The trend is being seen in other shore towns. Ocean City, according to Cape May County Tax Administrator George Ray Brown III, has seen a recent 5 percent drop in selling prices and its ratio is rising.
…
“There’re quite a few people out there that think this is a bad time to do revaluation because the market is declining, but people don’t like to do it anytime. They didn’t want us to do it when the market was peaking,” Brown said.

Posted in Housing Bubble, New Jersey Real Estate, Politics | 1 Comment

Fed to cut rates again

Posted on January 30, 2008 by grim

From Bloomberg:

Fed May Cut Rate to 3%, Hold Out Chance of More Cuts

The Federal Reserve may lower interest rates for the second time in nine days and indicate a readiness to go further if the economy deteriorates.

The Federal Open Market Committee, ending a two-day meeting today, will probably follow the Jan. 22 emergency reduction with a half-point cut in its benchmark rate, according to 48 of 85 economists surveyed by Bloomberg News. Such a move would bring the rate to 3 percent.

Officials may cite “appreciable” risks to growth, a word used for the first time last week, avoiding what analysts said were the mistakes of 2007’s statements. Through December, the FOMC referred to “inflation risks,” confusing some investors about its intentions. To avoid the impression of a blank check, Chairman Ben S. Bernanke will also seek language that notes the cumulative cuts since September, Fed watchers said.

“The statement will have a soft bias,” said Brian Sack, a former research manager at the Fed’s monetary affairs division, and now senior economist in Washington at Macroeconomic Advisers LLC. “It certainly won’t promise additional rate cuts, but it will talk enough about downside growth risks to leave that option open.”

The Fed’s announcement is scheduled for about 2:15 p.m. in Washington. While most economists predict a half-point move, 21 in Bloomberg’s survey forecast a quarter-point cut, one called for 0.75 percentage point and 15 saw no change.

Posted in Economics | 362 Comments

Despite downturn, homes still not affordable

Posted on January 30, 2008 by grim

From the Center for Housing Policy:

DESPITE HOUSING DOWNTURN, MOST AMERICAN FAMILIES REMAIN PRICED OUT (DOC)

Homeownership has become slightly more affordable during the current housing downturn, but still remains far out of reach for the majority of workers nationwide, according to Paycheck to Paycheck: Wages and the Cost of Housing in America. This new study compares housing costs in more than 200 U.S. metropolitan areas with the wages earned by workers in 60 occupations and was released today by the Center for Housing Policy, the research affiliate of the National Housing Conference (NHC). Specifically, when looking at the five highest-growth occupations – registered nurses, retail salespersons, customer service representatives, food preparation workers and office clerks (in order of growth) – based on median annual income, homeownership is unaffordable for all five occupations in the majority of the 201 metro areas studied. Even registered nurses, who have relatively higher salaries, are unable to purchase a median-priced home in 108 of the markets, which represents only a marginal improvement when compared to 114 metro markets that were unaffordable to these workers in 2006. The second-highest paying occupation of these five, customer service representatives, cannot afford to buy a home in 185 of the markets. Retail salespersons and food preparation workers were priced out of all 201 markets, representing – surprisingly – no change in homeownership affordability for these workers in today’s economy.

Income Needed to Purchase a Home from 2006 to 2007

Income Needed to Purchase a Home
Qualifying Income 2007
New York, NY – $171,505
Suffolk-Nassau, NY – $147,004
Newark, NJ – $133,611
Ocean City, NJ – $139,037
Edison, NJ – $113,030
Trenton, NJ – $86,569
Atlantic, NJ – $84,936
Camden, NJ – $73,502
Vineland, NJ – $52,922

Posted in Economics, Housing Bubble, National Real Estate, New Jersey Real Estate | 5 Comments

Homeownership rate falls, Vacancies up

Posted on January 30, 2008 by grim

From the Census Bureau:

CENSUS BUREAU REPORTS ON RESIDENTIAL VACANCIES AND HOMEOWNERSHIP (PDF)

National vacancy rates in the fourth quarter 2007 were 9.6 (+ 0.4) percent for rental housing and 2.8 (+ 0.1) percent for homeowner housing, the Department of Commerce’s Census Bureau announced today. The Census Bureau said the rental vacancy rate was not statistically different from the fourth quarter rate last year, or the rate last quarter (9.8 percent each). For homeowner vacancies, the current rate was not statistically different from the fourth quarter 2006 rate or the rate last quarter (2.7 percent each). The homeownership rate at 67.8 (+ 0.5) percent for the current quarter was lower than the fourth quarter 2006 rate (68.9 percent) and also lower than the rate last quarter (68.2 percent).

From CNBC:

Home Ownership Fading And So Is American Dream

It’s not like you couldn’t have predicted this, but the home ownership rate in the U.S. fell in the fourth quarter of 2007 to its lowest level since the beginning of 2002–this from a record high in the middle of 2004.

President Bush, as I recall, touted that record rate in his mantra of an “ownership society.” Oh well. I’m guessing the current gang of Presidential wannabes will jump all over this one.

But what really gets me in this report released today from the U.S. Census is the little-reported homeowner vacancy rate. It’s up at 2.8 percent, which is a full percentage point above where it was 2 years ago. There are currently close to 18 million vacant homes stretched across this country, a full million more than just a year ago. The bulk of the increase, of course, is in foreclosed homes.

Think about it–more and more empty houses in neighborhoods across America, as the home ownership rate continues to fall. Where’s the “American Dream” hiding in all that?

Posted in Economics, National Real Estate | 1 Comment

S&P: November Home Prices Fall

Posted on January 29, 2008 by grim

From MarketWatch:

Home prices falling at record rate in November

The decline in U.S. home values accelerated in November, with prices falling for the third month in a row in all 20 cities tracked by the Case-Shiller home price index released Tuesday by Standard & Poor’s.
For the 20 cities, prices fell a record 2.1% in November. In the past three months, prices fell at an annual rate of 16.2%.

Among those 20 cities, prices have fallen a record 7.7% in the past year. For the original 10-city index, which has a longer history, prices are down a record 8.4% in the past year, exceeding the drop recorded in 1991.
Home prices fell in all 20 cities in November, led by a 3.6% drop in Los Angeles.
The outlook is grim, economists said.

“With supply overhang enormous and mortgage financing tougher to obtain, home prices are going to decline considerably further in the quarters ahead, most likely to a double-digit pace on a year-over-year basis before too long,” wrote Joshua Shapiro, chief economist for MFR Inc.

“We reached another grim milestone in the housing market in November,” said Robert J. Shiller, chief economist at MacroMarkets LLC and one of the developers of the index. He noted that prices fell at a record pace in November in 14 of the 20 cities. In eight of the cities, prices have been falling for more than a year.

From Standard & Poor’s:

Record Declines in Home Prices Continue in November According to the S&P/Case-Shiller® Home Price Indices (PDF)

Data through November 2007, released today by Standard & Poor’s for its S&P/Case-Shiller® Home Price Indices, the leading measure of U.S. home prices, show broadbased declines in the prices of existing single family homes across the United States, marking the 11th consecutive month of negative annual returns and a full two years of decelerating returns.

From Standard & Poor’s:

S&P/Case-Shiller® Home Price Indices (XLS)

NY Metro area home prices down 4.84% year over year in November.

NY Metro area home prices are down 5.54% from the peak set in June of 2006.

NY Metro area home prices have fallen to August/September 2005 levels (not inflation adjusted).

Posted in Economics, Housing Bubble, National Real Estate | 219 Comments

Foreclosure filings up 75% in 2007

Posted on January 29, 2008 by grim

From the Wall Street Journal:

Foreclosure Filings Surged 75%
In ’07 as Subprime Mess Grew
By MIKE BARRIS
January 29, 2008; Page D3

Foreclosure filings soared 75% in 2007 from a year earlier as credit trouble and falling home values fell on homeowners, a foreclosure-listing service said.

There were 2.2 million foreclosure filings last year. More than 1% of all U.S. households were in some stage of foreclosure during the year, up from 0.58% in 2006, RealtyTrac said.

In December, foreclosure filings zoomed 97% from a year earlier, giving the fourth quarter the highest quarterly total since RealtyTrac, Irvine, Calif., began issuing its report in January 2005.

RealtyTrac Chief Executive James J. Saccacio said that for the year, properties in some stage of foreclosure increased 79%. That statistic, he noted, indicates “some properties may have just entered the initial stage of foreclosure in 2007 and could be going through the rest of the foreclosure process in 2008 unless lender and government intervention efforts begin to gain more traction.”

From RealtyTrac:

U.S. Foreclosure Activity Increases 75 Percent in 2007 According to RealtyTrac U.S. Foreclosure Market Report

RealtyTrac(R) (http://www.realtytrac.com), the leading online marketplace for foreclosure properties, today released year-end data from its 2007 U.S. Foreclosure Market Report, which shows a total of 2,203,295 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,285,873 properties nationwide during the year, up 75 percent from 2006. The report also shows that more than 1 percent of all U.S. households were in some stage of foreclosure during the year, up from 0.58 percent in 2006.

A total of 215,749 foreclosure filings were reported in December, up 97 percent from December 2006 and bringing the fourth-quarter total to 642,150 filings on 527,740 properties — up 1 percent from the previous quarter and up 86 percent from the fourth quarter of 2006.

Posted in Housing Bubble, National Real Estate, Risky Lending | 67 Comments

Tapped out, taxed, and tired

Posted on January 29, 2008 by grim

From the Record:

Open-space skimping assailed

New Jersey needs more money to save open space, maintain its parks, and support hunting and fishing, officials and environmental activists told state legislators Monday.

At a hearing to set the Legislature’s environmental agenda for the coming year, money woes were at the top of list for many speakers.

Neighboring states “are investing in their parks and they’re getting our tourism dollars,” Tom Gilmore, president of the New Jersey Audubon Society, told the state Environment Committee in Trenton. “If we’re going to have world-class parks and keep our ecotourism dollars here, then we’re going to have to invest in that.”

The state faces a quarter-billion-dollar backlog in capital and maintenance projects at state parks.
…
New Jersey voters approved $200 million in borrowing in November to replenish the Garden State Preservation Trust, the state’s fund for conserving open space, farms and historic sites. But that money is expected to run out by 2010.
…
Conservation groups would like the state to dedicate $325 million a year — some from annual revenues, some from borrowing — to land acquisition, the park system and wildlife programs, said Joanna Wolaver, Audubon’s policy director.
…
There are signs that tax-weary voters are getting tired of paying more, even for normally popular open-space programs, warned state Sen. Jeff Van Drew, a Cape May Democrat. Last November’s referendum passed, but the vote was closer than in the past, he said.

“People are tapped out and they are taxed out and they are tired,” Van Drew said.

Posted in Politics, Property Taxes | 3 Comments

A “landmark lawsuit.”

Posted on January 29, 2008 by grim

From MSNBC:

North County Woman Sues Real Estate Agent

A North County woman who says she paid too much for her home, which she bought at the height of the housing boom, is taking her case to court.

In 2005, Marty Ummel and her husband bought a four-bedroom house in Carlsbad for $1.2 million. The Ummels say their agent was dishonest about the price of other homes in the neighborhood, and then rushed them to close the deal before the Ummels found out comparable houses on the same street sold for as much as $175,000 less.

She has now filed suit against her real estate agent, claiming fraud.

“We feel that we were misled. We feel disappointed. We do feel angry,” she said.

Ummel believes she has every right to be angry.

“We’ve worked hard and to think that we’ve done that our whole lives — and then for a realtor not to tell us about the biggest purchase of our lives — that there was a house selling for much less,” she said.

But in a deposition, an expert witness hired by the defense said of the Ummels: “They simply didn’t do what is expected of a knowledgeable sophisticated buyer, and are now looking for someone other than themselves to take responsibility.'”
…
Experts said the agent’s job obligation is simple.

“If they have information that is pertinent to their purchaser they should disclose it, but at the end of the day, the buyer is responsible for their own actions,” said Robert DeLeonardis, the former president of the Manhattan Association of Realtors.

People in the real estate industry are calling this a “landmark lawsuit.”

Posted in Housing Bubble, National Real Estate | 5 Comments

“It looks like the floor fell out of the housing market in December”

Posted on January 28, 2008 by grim

From the AP:

New Home Sales Fall by Record Amount

New home sales plunged in 2007 by the largest amount on record while home prices tumbled sharply in December. Analysts forecast more trouble in 2008 as housing tries to emerge from its worst slump in more than two decades.

The Commerce Department reported Monday that sales of new homes dropped by 26.4 percent last year to 774,000. That marked the biggest decline on record, surpassing the old mark of a 23.1 percent plunge in 1980.

The government reported that the median price of a new home barely budged last year, edging up a slight 0.2 percent to $246,900, the poorest showing since prices fell by 2.4 percent during the 1991 housing downturn.

And the slump in sales and prices appeared to be worsening at year’s end. December sales fell by 4.7 percent, a bigger-than-expected drop, while the median price of a home fell by 10.4 percent last month, when compared to December 2006, the biggest 12-month decline in 37 years.

“It looks like the floor fell out of the housing market in December,” said Mark Zandi, chief economist at Moody’s Economy.com. He said the current slump is already on par with the deep housing downturn of the 1980s and could end up being the worst in the post World War II period.

The data on new homes followed earlier reports that sales of existing homes dropped 13 percent last year, the biggest decline since 1982, while construction of new homes and apartments fell by 24.8 percent, the largest drop since 1980.

Posted in Housing Bubble, National Real Estate, New Development | 42 Comments

“Now we’re in a bust.”

Posted on January 27, 2008 by grim

From the Record:

Desperate owners turn to short sales

What do you do if you’re a single mother who can’t afford your mortgage payments of more than $3,700 a month, but can’t sell your house for anywhere near the amount you owe on the mortgage?

That’s the dilemma facing Anna, a Bergenfield woman who bought her Cape Cod, no money down, for $445,000 two years ago. Now, in a much slower market, her real estate agent says she’d be lucky to get $380,000.

The solution for Anna, who asked to be identified by her first name only, is the one being used by an increasing number of distressed homeowners: a short sale.
…
The number of short sales is on the rise, both nationally and in North Jersey, though they still make up only a small fraction of all sales.

“The values of a lot of these houses were inflated as a result of the real estate boom. Now we’re in a bust. The values aren’t there. It’s all starting to catch up with everyone,” said Frank Ciambrone, a Rochelle Park real estate lawyer.

And it may be getting worse. Bob Caruso, national servicing executive at Bank of America, said requests for short sales have accelerated over the past year.

“We expect 2008 to be a very tough year, especially if the job situation worsens,” Caruso said. “It’s one thing to have house prices decline, but if unemployment increases, that’s really a deadly mix.”
…
“A lot of people making $80,000 a year were buying $600,000 houses because of the interest-only loans and teaser rates that were in place,” said Angelo Di Ianni of New Century Realty in Clifton. But eventually the interest rates adjust upward, and the homeowner has to start paying on the principal.

“I don’t know how some of these people got a mortgage to begin with,” said Jeff Bennett, owner of New Jersey Home Relief in Wayne, a company that works with short sellers.
…
Another short seller, a Lodi woman who asked not to be identified by name, owes $620,000 on her two-family house, which she bought in 2006. She’s a saleswoman who works on commission, and got a so-called stated income mortgage — one where the borrower is not required to offer proof of income. She said the mortgage broker encouraged her to overstate her income to qualify for the loan.

But when her commissions slowed down, she found she could not afford the monthly payments of $6,100, even with her tenant’s rent check. She found a buyer willing to pay $525,000 — which she said was in the market range for the house — but in the long wait for approval from her lender, the buyer gave up on the deal. Now she is looking for a new buyer.

“I’m partly to blame,” the homeowner said. “I should have known better.” But she thinks the lender should have known better, too: “I should never have been able to get that loan, and I’m sorry I did.”

Posted in Housing Bubble, New Jersey Real Estate | 255 Comments

Realtor ads “misleading”

Posted on January 27, 2008 by grim

From AdvertisingAge:

What Housing Crisis? Realtors’ Ads Defy Reality

The housing bubble has burst. Almost three-quarters of a million Americans are in foreclosure. The median price of a single-family home recently fell for the first time in at least 40 years, and many are predicting it’ll drop further in 2008.

But none of that stopped the National Association of Realtors promulgating a $40 million ad campaign urging Americans to think of buying a house as a get-rich opportunity.

“We believe there’s a psychological block” to buying a home due to negative media coverage of the subprime crisis, said Frank Sibley, senior VP-communications and conventions for the National Association of Realtors.
…
However, in the light of the current market the “housing-market facts” could also be read as a historical look at an overheated market rather than a good predictor of what’s to come. Gary S. Becker, a Nobel Laureate, author and economic professor at the University of Chicago, said the ads leave out important information that consumers need about home ownership. “It’s a risky investment — unless borrowers recognize that, they could be misled,” he said.

Mory Brenner, a veteran consumer-debtor attorney who now writes on debt issues from a consumer point of view, put it this way: “Were the ads trying to lead you down a road with blinders on? I thought so. I found it objectionable and a little offensive,” he said. While without patently false statements or data, Mr. Brenner said the ads “are misleading and not especially forthright and, in a way, the way we got into this situation [the subprime-mortgage crisis] in the first place.” He chided the association for not producing a campaign more befitting its station. “They’re not some [real-estate agent] on the corner,” he said.
…
Others were concerned about the premise the Realtors put forth in the ads that housing values are going up. Patrick Newport, an economist with Global Insight, an economic-forecasting firm, said: “In a lot of markets, housing prices are dropping, and in some markets — such as Florida and California — they are dropping a lot. If you buy a home, you take on a big risk,” especially if national housing prices drop 10%, as some predict, or if you lose your job and are unable to make mortgage payments, he said. He added that in many cases, “renting may be a much better deal than buying a house.”

Greg Daugherty, executive editor, Consumer Reports, said he understood that the Realtors are trying to make their case to stimulate business for their members. But “generally speaking, we don’t think people should look on their house as an investment,” he said. “Even if you double your money over 10 years, it’s not a huge return compared to the stock market,” he said, citing Consumer Reports studies that back up that point. “If you need a home, it’s always a reasonable time to buy one. But consumers should not look at buying a home as a get-rich-quick, or a get-rich-ever, scheme,” Mr. Daugherty said.

Jeff Lancaster, a wealth-management adviser in San Francisco and Silicon Valley, said the ads are sweeping some important facts under the rug. “I don’t think, in general, advising people today to buy homes for financial reasons is good advice. There’s very good reason to believe the price of residential housing in most communities in this country will be lower a year from now than it is today,” he said. “You could lose money.”

Posted in Housing Bubble, National Real Estate | 6 Comments

Weekend Open Discussion – Part II

Posted on January 25, 2008 by grim

Now Open, Part II!

Prior weekend thread closed due to comment overflow.

————————————————————–
Save the Date!
We’ll be meeting up on Saturday, February 9th in Morristown NJ.
6pm Sharp!
Grasshopper off the Green
41-43 Morris Street, Morristown NJ
————————————————————–

Posted in General | 251 Comments