No relief for first time buyers

Posted on July 17, 2007 by grim

From USA Today:

First rung on property ladder gets harder to reach

Headlines about skidding home sales and prices portray a buyer’s market for real estate. For first-time buyers, though, the view is quite different. For them, the market is more challenging now than at any time since the early 1990s.

Rising mortgage rates have eroded almost all the financial relief that buyers might have derived from the slight decline in prices in most areas. On top of that, lenders are now demanding that customers produce larger down payments, more cash reserves in the bank, higher credit scores and less debt — all of which many first-time buyers lack, especially in high-cost states such as California, New York and Florida.

Nearly half of first-time home buyers nationwide last year put down no money, according to the National Association of Realtors, compared with fewer than one in five repeat buyers. The remaining first-time buyers put down a median of just 2% of the purchase price.

“I could put anybody in a loan last year,” says Stephanie Gagnon, a senior loan officer at First Capital Mortgage in San Diego. But, “In the last six months, all of the big lenders are shutting down all special programs they were working with because they’ve realized it’s bitten them.”

Now, she says, “I’m turning away 50% of my first-time home buyers. They just can’t qualify.”
…
As lenders raise their standards for borrowers, the squeeze on first-time home buyers is constricting the broader real estate market and slowing the recovery. That’s because about one in three homes sold last year went to a first-time buyer. As these first-timers are shut out of the market, sellers ready to move up to bigger houses have a harder time selling their homes.
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“The decrease in sales at the lower end of the market has been kind of a surprise,” Shuffield says. “That’s usually where we have the greatest number of buyers. It’s tougher for first-time buyers to save deposits and come up with the cash necessary to close” a sale.

Which is why Chad Moskal, 33, an account executive at a printing company, gave up his apartment on the beach in Miami last summer and moved back in with his parents in Chicago. He and his brother Paul, 34, who’s working two jobs as a cardiovascular technologist and has also been living at home, are buying their first house together this month. A home in Chicago, Chad Moskal decided, would be cheaper to buy than a similar one in Miami.

The number of people who are moving in with friends or family, or sharing apartments or houses to save money, has caught economists at the Realtors association off-guard. The growth in “new households” — first-time buyers or first-time renters — has plunged 70% from last year’s rate.

“This is very unusual,” says Lawrence Yun, the NAR’s senior economist. “Even during a recession, household formations do not slow to this current level.”
…
Last year, about one in 10 first-time home buyers tapped their fledgling retirement or pension accounts to help come up with a down payment, according to the NAR. And that was back when mortgage companies seemed to be giving loans to anyone with a pulse.
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To scrounge up a 5% down payment, Rey and his wife sold their cars and cashed out the entire $36,000 Rey had socked away in his 401(k). To keep their monthly payments low, they took out a loan that lets them pay only the interest for the first five years. They’re taking a calculated risk, though, that the value of their condo will rise. With their interest-only loan, Rey and his wife will owe the same principal balance in five years. And their mortgage will reset, possibly to a higher interest rate.
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“You’re wiping out your retirement, and if that’s the only money you have for a home, maybe you shouldn’t be buying a home,” says Ed Slott, an accountant and IRA expert in Rockville Centre, N.Y. And after that money is gone, “What if the roof leaks, then what are you going to do? This is just the beginning” of the expenses of owning a home.

Posted in Housing Bubble, National Real Estate | 357 Comments

“A complete and thorough rip-off of taxpayers.”

Posted on July 17, 2007 by grim

From the Home News Tribune:

End rental deals for Somerset County workers

Somerset County rentals are among the most expensive in the region — unless, that is, the occupant is employed by the county’s Park Commission. According to a consultant’s report made public earlier this month, 11 parks employees are receiving either free or vastly reduced rents to live in homes owned by the county. The perks don’t end there, either. In some cases, free utilities are part of the deal, as is free gasoline for some. It all adds up to what the law firm of Wolff & Samson, contracted to review commission practices, called a “systemic failure” of management. Regular folks might call it something else: A complete and thorough rip-off of taxpayers.

It should go without saying that government of every size and at every level should strive to spend the public’s coin wisely. The park system’s sweetheart housing agreements spit on that notion.

How is it possible, for example, to justify the $500-a-month rent charged to commission Executive Director Raymond Brown, who already earns $163,813 a year, for the tree-shaded home in which he resides in the Martinsville section of Bridgewater? The commission pays for Brown’s gasoline as well. Or the no-rent deal that Darrell Marcinek, the county’s golf courses superintendent, gets for his sprawling abode in Hillsborough? Or the $437-a-month rent charged to a golf maintenance manager who rents the historic Dunlop House in Branchburg. Or the $520 paid every four weeks by the foreman of the Natirar property, the 491-acre former estate of a Moroccan king, who occupies the Lawton House off Main Street in Peapack-Gladstone — the highest rent, by the way, that any of the employees pay?

On top of these way-below-market rates, none of the tenants pay heating costs. Those charges are picked up by the county.
…
Even so, Brown, the recreation superintendent, had the temerity to suggest that Somerset County was following the norm. He complained, “If we were to charge market rates for some of these (homes), some of our employees wouldn’t be able to afford them.” Welcome to the real world, Mr. Brown. That’s what workers in the private sector deal with every day, but they find a way.

Posted in General | 4 Comments

Lehigh Valley market weakens in June

Posted on July 17, 2007 by grim

From the Morning Call:

House sales still dropping

The number of homes sold in the Lehigh Valley continued to fall last month, as average home prices dipped slightly and the time homes sat on the market before selling lengthened.

At the same time, the number of new listings — which reached an all-time high in May — fell in June for the first time in 10 months, compared with the same period last year.

Aside from the welcome decline in new listings, there was little reprieve in June from the downward trends that have dominated the housing market in the Lehigh Valley for nearly a year: the rate of home appreciation has slowed, and the number of houses sold has declined sharply.

Indeed, home sales fell for the 13th month in a row in June, declining 14 percent, according to statistics released by the Lehigh Valley Association of Realtors. The average price of an existing home in Lehigh and Northampton counties fell 0.4 percent in June to $236,000, compared with the same period last year. It was one of only four months in the past three years in which the average price of existing homes has fallen year-over-year.
…
The number of pending sales, or homes that are under contract but have not closed yet, fell 12 percent to 622 in June, compared with May. Pending sales is an important measure because it gives an indication of future sales activity.

Posted in National Real Estate | 1 Comment

“There are likely many more very small builders and developers in distress”

Posted on July 17, 2007 by grim

From the Wall Street Jounal:

Loan Spree to Come Back Against Small Banks
By DAVID ENRICH
July 17, 2007; Page A12

Falling home prices are about to take a big bite out of many midsize banks’ profits.

Until recently, banks were eagerly doling out loans to real-estate developers looking to capitalize on soaring home prices. Today, as housing markets cool rapidly, banks are starting to reappraise the collateral behind those loans, often finding that land and property values have deteriorated, forcing the lenders to take painful write-downs that are taxing earnings.

“Going in and reassessing the collateral is going to be the key for everybody in the next 12 to 18 months,” says Gerard Cassidy, a bank analyst at RBC Capital Markets. “It’s going to take a pound of flesh off of the lenders.”

Some sizable Midwestern banks — including Huntington Bancshares Inc. and Citizens Republic Bancorp Inc. — already are warning about the declining value of their real-estate construction loans. Their rolls may grow as a slew of regional banks around the U.S. report second-quarter earnings this week.
…
Banks have been like “a kid in a candy store” when it comes to construction lending, gladly financing even speculative projects, says Mike Castleman, president of Metrostudy, a Houston research and consulting firm that advises banks and home builders.

While some banks have been scaling back on construction loans, they still represent regional banks’ fastest-growing type of loan, according to a June study by Atlanta research firm FIG Partners LLC.

Home and land values have been sliding for more than a year, but thanks to a common but rarely scrutinized type of bank loan, many smaller developers are only now beginning to come under financial pressure.

When a bank lends to a developer, it also typically issues an “interest-reserve” loan that covers the monthly interest payments that the developer owes on the primary loan. The interest reserves generally are meant to last about 18 to 24 months — covering the period from when construction begins until the project is complete and cash starts flowing from sales of the new homes.

Bankers and analysts say the interest-reserve loans have masked underlying weakness in banks’ portfolios of construction loans.

Developers are just now depleting the interest reserves on loans that were made two years ago at the peak of the housing market. As they struggle to sell newly completed properties at a profit, more builders are falling behind on their loan payments. This forces the lender to write down the loan’s value to reflect its odds of getting repaid and, in the event of a default, the amount the bank can realistically hope to recoup through seizing land or property.

“The numbers keep going lower and lower,” says Terry McEvoy, an analyst with Oppenheimer & Co. “That’s really the core of the problem for many of these companies.”

Posted in National Real Estate, New Development | 1 Comment

The end of easy money?

Posted on July 17, 2007 by grim

From Bloomberg:

Goldman, JPMorgan Stuck With Debt They Can’t Sell to Investors

Goldman Sachs Group Inc., JPMorgan Chase & Co. and the rest of Wall Street are stuck with at least $11 billion of loans and bonds they can’t readily sell.

The banks have had to dig into their own pockets to finance parts of at least five leveraged buyouts over the past month because of the worst bear market in high-yield debt in more than two years, data compiled by Bloomberg show.

Bankers, who just a few months ago boasted that demand for high-yield assets was so great that they would have no problem raising debt for a $100 billion LBO, are now paying for their overconfidence. The cost of tying up their own capital may curb earnings and stem the flood of LBOs, which generated a record $8.4 billion in fees during the first half of 2007, according to Brad Hintz, the former chief financial officer at New York-based Lehman Brothers Holdings Inc.
…
As the market began to turn sour last month, Goldman Sachs, Citigroup Inc., Lehman and Wachovia Corp. had to buy $725 million of bonds that Goodlettsville, Tennessee-based Dollar General Corp. was selling to finance Kohlberg Kravis Roberts & Co. purchase of the company for $6.9 billion. All of the securities firms are based in New York, except Wachovia, which is located in Charlotte, North Carolina.

Posted in General | Comments Off on The end of easy money?

Easy money “won’t cure the bust.”

Posted on July 16, 2007 by grim

From Bloomberg:

Fed Isn’t Boxed in by Open Windows or Dry Powder

Eons ago, when Alan Greenspan was running the Federal Reserve and transparency was something between him and favored journalists, there was a lot more excitement about policy meetings and changes in interest rates.
…
For example, in the early 1990s, the U.S. economy was slow to respond to the steep decline in the Fed’s benchmark rate from 9.75 percent to 3 percent. As the rate approached what turned out to be a generational low, economists protested that the Fed couldn’t cut again because it had to “keep its powder dry” — presumably to defend against some future attack.
…
Another market metaphor was the “open window” (not to be confused with Frederic Bastiat’s “broken window”). The Fed was thought to have a small window of opportunity to raise or lower interest rates, after which the economic news would preclude any adjustment because it would be unpalatable to Mr. Market. Which makes you wonder why a change was advocated in the first place.

Then there’s the Fed-in-the-box routine. Sometimes external events would conspire to keep policy makers’ hands tied, according to this line of thinking. The Asian financial crisis in 1997 created an international deterrent to the Fed’s raising rates. Greenspan couldn’t tighten because the rest of the world needed monetary sustenance. By the time Russia defaulted in 1998, Greenspan had to calm financial markets with three rate cuts rather than minister to the booming domestic economy.
…
Dissecting the Fed’s post-meeting statements in the hope of finding signs of a shift to a more neutral stance has been fruitless. Despite a word change here or there or a shift in emphasis, the Fed remains firmly in the camp that the risks lie with the failure of inflation to moderate.

And maybe that’s how it’s supposed to be. The Fed’s dual mandate — maximum sustainable growth and price stability — is fine for public consumption: It keeps members of Congress off its back. But as far as policy makers are concerned, price stability is both an end in itself and a means to that end and therefore commands the upper hand.

The idea that a central bank can produce faster growth by tolerating a little more inflation has been “entirely discredited,” Bernanke said last week in a speech to the National Bureau of Economic Research’s Summer Institute in Cambridge, Massachusetts. “Policies based on this proposition have led to very bad outcomes whenever they have been applied.”
…
If the Fed is worried about the housing slump, increasing subprime loan delinquencies and home foreclosures, deteriorating credit conditions and a ticking time bomb in the derivatives market, there is no sign of it just yet. Or, more correctly, there is no indication policy makers are ready to move off the bench and provide some juice to the economy.

To the extent that easy money created the housing bubble, easy money won’t cure the bust. In an ideal world, the Fed would let the air come out of the housing market and some of the sting out of inflation without doing anything.

Should conditions deteriorate enough to put economic growth at risk, all bets are off. The Fed will ride to the rescue with interest-rate relief, unconstrained by any boxes, windows or dry powder.

Posted in Economics, Housing Bubble, National Real Estate | 156 Comments

Gimmicks, robbery, and “financial ruin”

Posted on July 16, 2007 by grim

From the Home News Tribune:

Proposed sale of toll revenue nothing short of highway robbery

In one of New Jersey’s most elaborate fiscal gimmicks since Gov. Jim Florio had the state sell itself a portion of a New Jersey highway in 1991, Gov. Jon S. Corzine and Democrats in the Legislature are preparing to sell the rights to future toll revenue generated by the New Jersey Turnpike to private investors. Put simply, this is highway robbery.

Not only will this result in toll increases every year for decades to come, but much like the $37 billion mountain of state debt, it will deprive the state of much needed revenue for operations in the future that will likely result in higher taxes.

This would be just the latest in a long line of fiscal gimmicks that have undermined state finances, ensuring a bleak future for New Jersey’s budget and the state’s taxpayers.

Disturbingly, administration sources have indicated to the media that the governor was unlikely to push for the proposal until after Election Day, and Corzine has refused to provide any details about his plan.

This delay in providing the public with answers about the plan gives Democratic legislators the ability to tell voters now that they have “grave concerns” about the asset sale, but then after Election Day they can approve it and say they “have no choice.”

Meanwhile, the state budget approved by the Legislature in a largely party-line vote on June 21 gave the governor a blank check to negotiate this asset sale deal. The budget provided for an unlimited amount of money to be spent on “legal and engineering fees, financial advisers and other consultants and services associated with, as well as any other costs determined necessary in preparation for, the monetization, sale or lease of public assets.”

Later realizing the unpopularity of the plan to sell the toll road, Corzine vetoed out his own use of the word “sale.”

The governor and other Democrats are jittery about calling it a sale — preferring to use terms like “asset monetization” or “asset extraction.” But the Wall Street jargon can’t conceal the truth. Whether it’s selling the Turnpike to a corporation or selling the tolls collected on the Turnpike, the state will be exchanging something of value for money, which is the common-sense definition of a sale.

.

Posted in Politics | 6 Comments

Goldman “a boon for local job hunters”

Posted on July 16, 2007 by grim

From the Jersey Journal:

Company lowers the estimate of residents to work at new tower

Goldman Sach’s proposed second office tower at 50 Hudson St. will prove a boon for local job hunters, according to Joseph J. Seneca, a Rutgers professor at the Edward J. Bloustein School of Planning and Public Policy.

During the estimated three-year construction phase, the $560 million project will generate the equivalent of 274 one-year construction jobs – or 11 percent of all the direct construction jobs – for Jersey City residents, according to an economic impact analysis Goldman paid the university to conduct, Seneca said.

The project will create 17 other indirect construction jobs for local residents as well as the equivalent of 213 one-year jobs created by the construction, Seneca said.

Once the building is occupied, Jersey City residents should land 413, or 12 percent of the 3,440 financial jobs at the facility – jobs paying on average $156,000 a year, Seneca said.

Though significantly lower than the 51 percent goals the company agreed to seven years ago, they are still above the figures Goldman has achieved at 30 Hudson St.

Like 30 Hudson St., the proposed new tower will be filled mostly by workers already on the payroll, Goldman officials said.
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The company is shedding leases in Manhattan with the goal to consolidate its metro area operation at Battery Park and its two Jersey City towers. No date has been set for construction to start on the proposed Jersey City tower.

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

Capping capital contribution fees

Posted on July 16, 2007 by grim

From the Courier Post:

Corzine to review bill on N.J. condo fees

What started out as litigation here is now legislation in Trenton that will limit but also legalize a standard practice of charging an upfront fee to condominium buyers.

The bill, which has passed both chambers of the Legislature and is now on the governor’s desk, will allow condominium associations, only through their master deed or bylaws, to charge a one-time, nonrefundable “capital contribution fee” upon closing.

Lilo Stainton, Gov. Corzine’s press secretary, said she said she does not know whether he is expected to sign it.

“We do not have a date on this one yet. It’s still under review,” Stainton said.

For condo associations, charging this fee is nothing new. However, the bill, if signed, will allow associations to charge up to nine times the amount of a unit’s monthly maintenance fee, in addition to legally protecting the practice.

The amount was amended in the Senate from 18 times the monthly maintenance fee.

Currently, no law governs what condo associations are allowed to charge, and some have charged “whatever they wanted to new members,” said Peter Botsolas, the chief of staff to Assemblyman Frederick Scalera, D-Essex, who is one of the bill’s primary sponsors and a former condo association president.

“It (the bill) validates their master deeds or bylaws for the purposes of defraying common expenses, and furthermore it safeguards and earmarks those funds so that they are not used as some sort of slush fund,” Botsolas said.

He added that the common capital contribution fee is between three and six times the monthly maintenance fee.

“That (the cap) is something new, and it provides parameters for associations and gives them guidelines where there were no guidelines before, so we view that as very positive,” said Kurt Macysyn, executive vice president of the Community Associations Institute, New Jersey chapter, located in Hamilton, just outside Trenton.

Posted in New Jersey Real Estate | Comments Off on Capping capital contribution fees

North Jersey June Residential Sales

Posted on July 15, 2007 by grim

Preliminary June sales and inventory data for Northern New Jersey is in..

The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 1000, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.


(click to enlarge)

The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.


(click to enlarge)

The third graph displays only June sales, 2001 to 2007 YOY.


(click to enlarge)

The fourth graph displays an overlay of Sales and Inventory from 2003 to 2007.


(click to enlarge)

The last graph, new this month, displays the year over year change in inventory on a monthly basis.


(click to enlarge)

Posted in New Jersey Real Estate | 406 Comments

Signs under scrutiny

Posted on July 15, 2007 by grim

From the Record:

Towns restrict ‘open house’ signs

“Open house” signs posted by real estate agents are coming under more scrutiny, with a few towns imposing tougher restrictions.

This week, officials in Wood-Ridge are scheduled to introduce an ordinance that would control the placement, dimensions and number of signs.

Officials said the measure is needed to keep the borough from becoming overrun with signs, creating a hazard to motorists by blocking their vision.

“We were getting some complaints that some signs were on private property,” said Christopher Eilert, the borough administrator. “People were complaining about their view [of the street] being obstructed while backing out of the driveway. … It’s a balancing act, because we want to respect our residents’ right to sell their home.”

The issue focuses on directional signs that are set up as landmarks to guide prospective buyers to homes for sale.

In Wood-Ridge, officials would limit the number of signs for each sale to three. They also would restrict the height of the signs.

Hasbrouck Heights, which adopted a similar ordinance in February, also limits signage to three – one on the property and two giving directions – and restricts signs to 3 feet in height and 24 inches across.

“In the height of the real estate season, they could be all over the place,” said Michael Kronyak, the Hasbrouck Heights borough administrator. “It’s also an issue of aesthetics.

“We want [real estate agents] to be able to conduct business in the community, but it’s also an issue about the public right of way,” he said.

Posted in New Jersey Real Estate | Comments Off on Signs under scrutiny

“I wound up with a foreclosure notice. What am I to do?”

Posted on July 15, 2007 by grim

From the NY Daily News:

Borrowing nightmares

Carol David was sure her dream of home ownership was about to come true when she answered an ad offer to move into a house 30 days after making a $10,000 down payment.

“But it was the beginning of a nightmare,” David told a panel of state Senate and Assembly Democrats who gathered on Monday to address the growing problem of foreclosures.

David said her attorney did not attend the closing on the three-family, $699,000 house in Bedford-Stuyvesant.

“The paperwork wasn’t explained. It was just ‘sign here, sign there,'” she said. “When I went home and went through it, I realized I had been tricked.”

David was expecting her mortgage would be $1,776 a month. In reviewing the paperwork, she discovered two interest rates, and when her first house note came due, she discovered she was to pay $6,069 a month. David, a city employee, has taken the matter to court.

State Sen. Jeffrey Klein (D-Bronx) estimates that more than 50,000 New Yorkers stand to lose their homes to foreclosures from loans they took out in 2005 and 2006, due in part to increases in subprime loans and predatory lending practices.
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Several state lawmakers have proposed bills to better protect homeowners from unscrupulous lenders. And a group of Democrats is now traveling the state to hear from homeowners and advocates. Bedford-Stuyvesant was the lawmakers’ first stop.

Since 2002, that community has had the highest rate of foreclosure notices in New York, according to state Sen. Velmanette Montgomery (D-Brooklyn).

Sara Ludwig, executive director of the Neighborhood Economic Development Advocacy Project, said there also has been a concentration of foreclosures in Flatbush, East New York, Canarsie, Bushwick and Ocean Hill in Brooklyn.

In Queens, the concentration is in Rochdale, Jamaica and St. Albans, Ludwig said.

Posted in National Real Estate, Risky Lending | 3 Comments

Where is the “doom and gloom”?

Posted on July 14, 2007 by grim

From the NY Times:

Demand for Offices, but Not Homes

As for the residential market, the latest report from the Otteau Appraisal Group, Mr. Otteau’s East Brunswick-based firm, is downbeat. “Any significant recovery will likely be pushed off until 2008 at the earliest,” it predicted.

By June 1, the number of unsold homes in New Jersey hit 71,000, which the Otteau Group calls the highest on record since it began its monitoring in 1986. The previous record, 68,000, was set last September, according to Mr. Otteau.

The supply of homes on the market right now is enough to meet demand for the next eight months, he said, and several brokers agreed. A year ago, there was a seven-month supply of homes for sale, the Otteau Group reported.

What is more, Mr. Otteau said, the inventory is likely to keep increasing over the summer months, when people are more likely to put homes up for sale, and not recede until fall.

“As the inventory grows,” he said, “it is very unlikely home prices will hold at current levels.” He estimated that prices had already sunk about 10 percent since last year. “It appears there will be additional decreases over the second half of the year.”

Many real estate sales agents insist that isn’t so. “If doom and gloom is happening, then it isn’t happening here,” proclaimed Linda Grotenstein, a sales agent based in Montclair. Her Coldwell Banker colleague Elaine Pruzon said she had sold three homes priced around $1 million in Short Hills within one week earlier this month.

Weichert’s vice president for northern New Jersey, Dominick Prevete, says he does weekly calculations for sales at 33 offices, and has not seen a drop in average prices.

Posted in Housing Bubble, New Jersey Real Estate | 3 Comments

Kaplan sues Highlands

Posted on July 14, 2007 by grim

From the Express Times:

Builder fights Highlands

A lawsuit filed Friday in Superior Court in Warren County seeks to invalidate the state Highlands preservation act on the grounds that it blocks the construction of affordable housing.

The complaint was filed by Kaplan Co., a major housing developer that is frustrated it cannot follow through on plans to build 132 age-restricted homes, including 14 affordable units, on a 47.5-acre property on Old Allamuchy Road in Independence Township.

The complaint asks the court to permit construction to move ahead under the so-called builder’s remedy, which allows a developer to build projects that bring needed affordable housing to a municipality. More than 100 builder’s remedy lawsuits have been brought against municipalities in recent years but the Kaplan complaint marks the first time the legal tactic has been used against the state government.

Named as defendants are the Highlands Water Protection and Planning Council, the Department of Environmental Protection and the Council on Affordable Housing.

The complaint alleges the Highlands Act violates the state Supreme Court’s so-called Mount Laurel Doctrine — which holds municipalities statewide have an obligation to provide affordable housing — as well as the constitutional and statutory rights of the poor, elderly and middle-income households, and the property rights of landowners.
…
Carl S. Bisgaier, the Cherry Hill-based attorney for Kaplan, argues the property was arbitrarily included within the boundary of the Highlands preservation area, making development impossible despite the fact construction is permitted under Independence’s zoning ordinance, is a part of the township’s affordable housing compliance plan and is consistent with its master plan.

Bisgaier said the property was also located within a DEP-approved public water and sewer service area until the Highlands Act banned additional sewer and water line construction near the property.

“Through the adoption and implementation of the Highlands Act, the state has usurped municipal control over land use in the Highlands preservation area,” Bisgaier said. “As such, the constitution obligates the state to assess the housing needs of the poor and to adopt a realistic plan to meet the constitutional mandate of providing a realistic opportunity for the creation of affordable housing within the preservation area and the Highlands region. Here the state has done neither.”

Posted in New Development, New Jersey Real Estate | Comments Off on Kaplan sues Highlands

“It’s a great time to buy or sell a home.”

Posted on July 13, 2007 by grim

From the NY Sun:

National Housing Horror Gets Gorier

Although some real estate markets, such as New York City’s, are percolating, it’s clear that the national housing horror show is far from over. If anything, it’s getting gorier.

As one worried trader, who asked not to be identified, put it: “The stock market’s in for more hell from housing; the subprime mortgage debacle seems like it’s still in its early stages.”
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Raymond James Financial’s chief investment strategist, Jeffrey Saut, seconds the trader’s analysis. “Plainly, the lackadaisical lending standards by the mortgage crowd just a few years ago are now showing up at Wall Street’s doorstep,” he wrote in a market commentary he fired off to clients the other day. He also took note of a couple of other potential land mines for the economy and the stock market, namely much tighter lending standards and the chance the Fed, instead of lowering interest rates, as widely expected, might keep them the same or actually raise them.
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Clearly, the experts have turned out to be dead wrong on housing. Last fall, the National Association of Realtors ran an ad campaign proclaiming, “It’s a great time to buy or sell a home.” It was followed by a slew of rosy economic forecasts suggesting the housing slump was ending and a spirited housing rebound was on the way in this year’s second half.

Recent numbers unmistakably demonstrate just the opposite. In May, for example, new-home sales fell another 1.6%, to an annual rate of 915,000, down almost 16% from a year earlier, and off 34% from the 2005 peak. Existing homes did even worse that month: Sales slumped to a four-year low, while median prices slipped 2.1% versus a year ago. It was the 10th monthly drop in a row, a new record.

(emphasis added)

Posted in Housing Bubble, National Real Estate | 1 Comment