Weekend Open Discussion
Observations about your local areas, comments on news stories or the New Jersey housing bubble, 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 small link on the bottom of each new message that reads "# 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 6 months. The archives can be found at the bottom of the right hand menu and are categorized by month.
For readers that have never commented, there is a small link on the bottom of each new message that reads "# 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 6 months. The archives can be found at the bottom of the right hand menu and are categorized by month.
53 Comments:
feh!
3-Month 5.09
2-Year 4.86
10-Year 4.79
Desperation is growing as properties rot on the market at ridiculous prices. The greedy grubbers are getting the message. Also the RE Pro's seem to be changing their tune. Some should drum up a few of those quotes from just the past few weeks and months to confront these slugs with their disgracefully wrong comments.
And they are referred to as "EXPERTS".
sell out for the money. That's all I see.
Chicago -
You mentioned the Ten a day or so ago, and I see you are mentioning it again. With the downturn in housing, would you be so kind as to elaborate on the benefits of moving more money into the Ten, as opposed to say, keeping a good amount in a money market mutual fund right now, which is what I have
Thanks...
short-term rates are higher than the 10-yr. Buy the 3-mo t-bill for a better deal.
Do you really think these sellers are getting the message yet?
There's a building in Fort Lee where most of the units are selling for $550k+. I know of one unit that the seller paid $400k two years ago, and have been trying to sell it for $630k for over a year, reduced it once from $660.
For what? It is a f'ing box, no upgrades. I asked for pictures once from the Realtor just out of curiosity - the walls are all different colors, so many toys and clutter it looked like a daycare center.
The ego on these sellers is amazing to me, to expect a insane profit for a sh*tbox, not even paint it or get it ready. These are the greedy, money-grubbing sellers that really do deserve to take the 30% haircut and I hope they get it soon.
"chicagofinance said...
feh!"
Chi,
Could you please take a minute to explain the significance of the inverted yields "...For Dummies."
I want to make sure I'm understanding what seems to be ominous signs for the future.
As always, thanks for sharing the knowledge.
Oh yeah, I hear rumors that you're getting booked on Conan next. True?
I'll be down on LBI this weekend so updates will be infrequent.
Of course, that all changes if:
a) The weather stinks.
b) The neighbor left his unsecured wireless router on.
Who is the patron saint of wireless connectivity? Will burying a statuette help my signal strength?
grim
And as always.. Have a great weekend everyone.
jb
Gato:
http://www.njrereport.com/forum/viewtopic.php?t=65
Anon: It is not an investment suggestion, but rather a POSSIBLE notable harbinger of the economy.
chicago
Thanks, Chi. I forgot all about that thread.
We just spoke to our financial guy, he said NJ is right behind the hurricane ravaged states in economy terms. We sent our 300k to rest with him for the next year - buying a house is on hold until things get real.
bc
Thanks for the link - interesting as a harbinger of future events.
But I'm also interested in the Ten as an investment strategy. I heard a discussion today on Bloomberg where an economist recommended putting cash in the Ten. He did this even though right now a money market mutual fund is returning roughly the same amount of interest. He said something about how a year from now, the Ten will be more valuable and be performing better than a money market mutual fund. I didn't completely get his entire reasoning as to why.
The idea is that interest rates will go down - longer duration bonds will get the most benefit as the prices of those bonds will shoot up! Of course, inflation could pick up and send rates shooting upward. 90 day is the safest bet and you get a decent yield at this point.
Math, like gravity, is law. ...I'll take that advice into consideration - check hasn't been sent yet!
PS - I'm a girl-no need for a urinal!
bc
speaking of cash and a urinal...here is some new styled cartoon
I am so out of the loop with today's popular tastes that I miss half the references...
http://stopthetaxman.org/
Chicago - Funny site - so sad but true!
Just bought yesterday afternoon.
%479.9 asking, bought at 445. seems to have been priced right.
DOM 10.
todd
Anonymous said...
"We sent our 300k to rest with him for the next year"
Don't confuse bc with me, I would never utilize a fp. BC, if you use a fp, make sure you have solid references. Also, you may want to choose one who charges a flat fee rather than one who receives commissions from your investments. Make sure he/she thoroughly understands your objectives and make sure you thoroughly understand where they are placing your $. Be more concerned with the return of your $ rather than the rate of return on your $. Just be careful.
BC Bob
From Piscataway (Middlesex) there are quite a few homes on the market that are also registered in foreclosure listings
I've picked 2 bedroom townhouses in Hidden woods (Piscataway) as an example. Hidden woods is not a big community(50 townhouses). There two townhouses listed in foreclosure listing that fit my match
1. 6860677
2. 6505273
On realtor.com hidden woods two bedrooms are listed from 299K MLS ID 702324 which is down 30K from last year.
how about 11k unoccupied
condo units in south
florida.
the guy in cranford should take
500k and be down the road before
the winter sets in.
Now , Richard, why would you attack the guy like that.
He thought he was smart.
I would have offered the 400k you
talk about.
Many people still , "they just
dont get it"
Well said, I'm going to make that it's own topic.
grim
whatever happened to this guy?
http://www.houseforsalesummit.com/
SAS
one down three more years to go
"Unless you bought last year (when prices peaked), you're probably in good shape."
Hi Richard,
Thank you for your response to our situation in a prior post. I appreciate you taking the time and your well thought and articulate thoughts.
I agree with you the paper value of our house will fall: but hey we need a place to live, and after all the numbers are crunched out for taxes, maintanence etc, buying this house is cheaper than renting for us.
I just found this blog and would appreciate some advice on our uncertain situation;
We have been looking to buy as our personal circumstances (baby) and our nyc rent(3500) make buying seem like the right thing to do.
Just made an offer that was accepted; Original asking was 699K and after some back and forth we have an accepted for 649K.
Can put 20% down with a 30 fixed.
Our combined gross is 250K so we can easily make our payments/taxes.
Expect to be in the house for 6-7 years.
Should we move forward with the deal or back out now?
Richard said...
anon 10:29, considering your NYC rent, combined income, cost of the house you're purchasing and the plan to stay for 6-7 years i don't think your decision to buy is a bad idea, IF you don't mind over the next couple of years potentially seeing the paper worth of your residence drop to $600k. when you sell you might only be walking away with what you paid off in principal.
while you are probably overpaying a bit sometimes the best financial decision isn't always the one you can make. good luck. what town are you buying in?
8/24/2006 11:26:37 PM
“The bad news is that the number of homes on the market has mushroomed. There (is) a staggering 14-month supply of inventory. ‘Sellers are slow to react,’ Yost says. ‘They don’t want to hear that the house they bought last year isn’t worth as much as it was a few months ago. Some of them are angry.’”
Angry?
A Bagholding Fool needs to look in the mirror and take responsibility for their actions.
The Backlash against the NAR must be growing among these underwater bagholding fools.As the number of bagholders grows so will the anti-NAR backlash.
Goal: Establish a floor (fair value) for the current price of a home.
I am trying to figure out what the lowest serious offer is that I can make on a home I am interested in purchasing. Serious being the key, not some crazy lowball. The home is located in Union County. I used the House Price Index found on the Office of Federal Housing Enterprise Oversight (www.ofheo.gov) to find the year over year price increases/(decreases) in the Northeast since 1978. So this will include the crazy increases from the mid-80's as well as the declines felt in the area through the early 90's. I get an average 8.2% I took the last purchase value of the home and grew the value at this rate to the current time. The resulting figure I get is 7.6% less than the current asking price. The seller has already dropped the OLP by 6%. If I ask for this additional 7.6% decrease, the total discount to OLP would be about 13% which is in line with the comps being posted on this site. Since the current owner has also put an extension on the house since he bought in, I feel like this could be a good value. If I buy, I would hate to see the home lose another 10% in value over the next few years but since I plan to stay for 10 years+, I don't mind losing 1-4% over the next few years. Is it time to buy assuming the owner will accept my offer? I welcome all thoughts and please call me on my math if it doesn't make sense.
I believe we need an approximate 30-35% downward adjustment (in real terms) over the next few years to retrace to the mean.
grim
http://www.robtv.com/shows/past
_archive.tv?day=fri
4:40 PM ET
The Wrap with Bruce Sellery
Is the U.S. headed for a nasty recession?
Nouriel Roubini, president, Roubini Global Economics
Duration: 8 m 57 s
Babababa
BUST!
It's a miserable day grubbers.
Gett'en a little worried yet?
desperate?
Denial?
RE nevers goes down? Right?
Or does it?
Ur problema.
BOOOOOOOOOOOYAAAAAAAAAAAAA
Bob
http://www.europac.net/
archives.asp#
What will come out of Lereah's mouth this week?
I would think the braintrust at the NAR must be coming up with another strategy and terms to use.
HAHAHAHHAHAHA!!!!!!!!!!
Anon 1:48
Grim is right. At least a 30% drop would get us back to the mean. I think it will definately happen, but this thing is going to take some time to play out. Remeber, you're in the drivers seat now as a buyer. My feeling is that if you really need a house now, then make a lowball offer (like 30% off olp). If they don't accept, that's fine. There's plenty of glut in the market, and chances are, you can find someone who will accept. But if you can wait at least 8 months, I think that is the best situation. Personally my wife and I are looking at buying our fist house, but we have decided to keep renting until September of next year to see what kind of summer we have next year. If it's as bad as this one, then there will definately be some panic in the marketplace. You need to be ready to pounce once that happens.
So the best scenerio really is to rent for now and let this thing play out. I understand that you plan to stay there for 10+ years, but if you don't have to lose 1-4% over the next few years, then why do it? There are plenty of homes out there you can rent for a while till this thing plays out.
JWR
I've heard "hard landing?" how about a "crash landing", on Bloomberg radio this past week. I don't recall who said it.
The House Price Index referenced in an earlier post (establishing a fair floor value) is worth reviewing. I took a look myself and noticed that in the past 28 years, the worst year-over-year loss was (7.4%) in 1990-4Q. Even in the worst case scenario when you got in at the market peak in 1988 and then sold in 1997 just prior to the real estate market turnaround, you had a cumalative loss of (2%). So lets say you bought in '88 for $100,000, if you sold in '97, you got only $97,435. However, if you bought it to LIVE in and say you didn't need to sell until 17 years after you bought the place in 2005, you would get back $201,392. Its not a great return on your money but factoring in the tax breaks and the fact that you were not paying rent somewhere, it could be worse. I think if the buyer can negotiate the price down another 10% and not be worried about losing paper money over the next 1-4 years, s/he can come out ahead if this is a home for living in and not an investment property. Otherwise, you have to believe that we are in for year after year of a downward spiral not experienced in the past 3 decades.
You need to adjust the HPI for inflation using CPI less shelter.
Otherwise we're confusing appreciation and inflation.
A 1988 dollar is not the same thing as a 2005 dollar, you need to compare apples to apples.
grim
What depressing weather today to visit open houses...seems like even the clouds are not cooperating with the open houses this weekend.
Richard & Annon 10:22,
I forgot to mention that the house was in Bergen County. That alone should make the hose hold its value. Bergen county just isn't like the rest of NJ and especially any other part.
Todd
This is just typical jealousy by those who wish they could afford to live in BC..
Anyone know if there are laws regarding rent increase percentages in Mt Arlington, NJ? Where should I look fo rhelp? Landlord is milking us, knowing damn well we are looking to buy at some point.
"I forgot to mention that the house was in Bergen County. That alone should make the hose hold its value. Bergen county just isn't like the rest of NJ and especially any other part."
Wow, the realtors found a live one.
I've been apartment shopping and can't believe the number of rentals on the market. I was worried about getting a November 1st rental--willing to grab something good right now, but looks like there will be plenty to choose from! Also, looks like I will be paying $400 month less than I'm currently paying in rent. What a savings! I guess I can put that extra money towards my new house in 2008!
--Shelley
Shelley:
In my area (Bucks County, PA), I'm not so much floored by all the rentals (expected considering inventory) as much as by the homes relisted this week that were pulled a couple of months ago.
Duh. Especially since the listing prices are the same as they were in the Spring.
There are still sellers just testing the waters. Why? I cannot understand what they have to gain by this.
Pat
OK, for those of you who believe that the next few years will see the housing market crash, you still seem to agree that there is some value in owning real estate over the long term. If you had to explain to your six-year old how much she should pay today for a NNJ home that sold for $100,000 in 1997, how would you come up with a number?
Rental equivalent.
Pat
todd-
if you are for real, can you please post the MLSID of the property you bought?
Anon9:17,
Can't do that as we haven't closed yet.
T
to the Mt Arlington person:
I can't say for your town but in Clifton there is NO rent control whatsoever. I asked for a delay on increase and then a smaller increase for 4 months and got it.
Also, I saw all the Reduced homes listed in the Star Ledger today and feel like a crash is iminent sooner rather than later. I was thinking that this rain will be good for those who want cheaper prices. I knew August would bring some pain to sellers, when taxes are added to the picture houses seem still way too high. And don't most people want to sell before winter? Could there be another dip come fall?
I am not sure what the top is that this 20% decline falls from. I have been looking in essex and seeing 60K drops. A house in Belville was OLP:449 and now 339 but that's an odball. It seems the OLPs were based on house prices being higher than 2005. It would seem that the ole suply-demand would take care of prices soon.
Richard,
I won't jeopardize the close with too much information. All I'll say is that it's not Alpine or Saddle River.
T
"you're being a bit too conspiracy theory-ish."
It has nothing to do with any conspiracy, it's just common sense that disclosing an accepted offer before it closes can ruin athe closing if others piece together which property is being discussed publicly.
And what's this "blow up " crap anyway?
T
we live in manasquan. most houses are way overpriced. we are looking to downsize. our house sits on one of a handful of double lots, walking distance to the beach, on one of the most desireable streets, not in a flood zone (one of a handful), and completely gutted-rebuilt. the realtor told us its worth 1.2 million. for 800k buyers are not even getting 3/4 of the house that we have, so i believe our house is really worth close to the 1.2
she also told me that 77% of their buyers are from NYC or north jersey. should we hold off selling? we want to purchase something in red bank area or stay in manasquan, but only pay at most 700k. prices are coming down in this price range, but has anyone heard about homes 1 million and over? i've heard that the market corrections are greatest in this upper-mid range 500-800k where we want to buy. and that a buyer for a million dollar house wouldn't be effected by this trend. any thoughts??????
Post a Comment
<< Home