Bits Bucket And Craigslist Finds For November 2, 2006
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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“Among other laggards, sales at home furnishing seller Pier 1 Imports (Charts) tumbled 13.7 percent last month.”
I can imagine this is the first of many months like this for ‘home’ retailers… The ripple effect will be far-reaching.
Recession coming soon.
David
http://bubblemeter.blogspot.com
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Everyone and their brother has been predicting a recession which means it probably won’t happen (any time soon). Will it happen someday? Sure, but nobody can predict when. Are some of you actually hoping for a recession? I sometimes get the feeling that that’s the case.
Know what you know and know what you don’t and can’t know.
I don’t know about that (high expectations for a recession). Wall Street certainly is priced in for a “soft landing.” The most important people are the ones voting with their money and they seem to be a long ways from a recession. VIX and Put/call ratios are both low, indicating that sentiment is still for a strong finish to the year in the stock market. The market is now sputtering, but it would have along way to fall if a recession is immenent.
“Everyone and their brother has been predicting a recession which means it probably won’t happen (any time soon).”
Care to name all the economists predicting an impending recession? I can only think of a few.
Ditto. After Gary Shilling and Chris Thornburg, most economists are predicting a soft landing?
This site? A lot of people. Then again, we were crazy enough to predict the housing slowdown.
Recession by 2Q 2007. Not a hope. I just look at who has borrowed what and how they’re employed. I also assume a bunch of jobs are created in some area that I wasn’t interested in. But this time… the math says recession.
Look at restaurant sales. That’s always been a good indicator. They’re down and continuing to decline. The middle class is getting hammered.
Neil
“After Gary Shilling and Chris Thornburg, most economists are predicting a soft landing?”
I guess you can include Thornburg in the recession camp, although by tomorrow he’ll be back into the soft landing camp.
““Everyone and their brother has been predicting a recession which means it probably won’t happen (any time soon).”
You can count on one hand the economists predicting a recession.
12 months ago, you could count on one hand the number of economists predicting a housing bust.
(BTW, I don’t know that Thornberg has taken an official stand on the recession issue. Anybody have a link to his conclusion?)
Dude… the yield curve is 8% inverted. If that isn’t a signal of a recession, you need a truncheon to the skull.
John Doe
Did I say I don’t see a recession coming, dude?
The only economists I know that are predicting a recession are Roubini and Shilling. The Pimco guys were negative, but I cannot recall them saying recession.
I will go with the bond market, whose inverted yield curve ought to be telling you something. And as for the asset markets this very moment, all I have to say is “Whoa, Nellie!”
http://www.marketwatch.com/tools/marketsummary/default.asp
“Everyone and their brother has been predicting a recession”
Big signs of consumer spending slowing Christmas ‘07 (a year from now). Recession to follow.
I do not have a brother, but he would predict a resession as well.
My nephew is predicting a recession
Suzanne is predicting boom times ahead. She researched this.
It’s not like predicting a recession takes magic!
The only thing preventing a full crash is gov. spending, consumer spending, and private spending. All of which are fueled by … come on youn can say it…credit/debt!
As the largest credit bubble in human history deflates (oh by the way it seems to have started), we will go way past recession.
Or if you don’t like facts, just call it a lucky guess!
I visited local CostCo and Trader Joe’s last night (Carmel Mountain). Either it was an atypically slow Wednesday night, or the retail recession is here now. I have never been in either of those stores when they were so empty — for instance, the lines at CostCo were only two customers deep at 7:30pm, and that with half the lines closed. (”Normal” line depth would be at least five, with all lines open).
I was able to get a pink Ipod nano at Costco. That surprised me. Used to be you couldn’t touch one of those.
A pink ipod nano. All my respect for you is officially gone!
Gone I tell you!
What the hell is a pink ipod nano? Is it one of those devices that end up in the “secret drawer” of the nightstand?
What’s the significance of it being pink? Does it only play Pink songs?
There are pink ones available because people are now buying the limited edition red ones or summin’ (got a request for one of those for XMas :P)
I am sorely tempted to cruise the streets with a fire extinguisher, hosing down every iPod zombie who lurches into view. Has EVERYBODY decided to tune out into their own little world?
County’s growth falls to 2.9%
Area drops below state, national figures
By Dean Calbreath
STAFF WRITER
November 2, 2006
For the first time in six years, San Diego County’s economic growth is lagging the rest of the state and nation, according to a report released yesterday by the Greater San Diego Chamber of Commerce.
San Diego’s gross regional product is growing by an estimated 2.9 percent this year, the second-slowest growth rate in the past decade. In comparison, the report said, California has shown 3 percent growth this year and the United States 3.2 percent.
Next year’s growth will be even slower, although San Diego will resume its position of outperforming the state and nation, the chamber predicts. The forecast projects that next year the county’s economy will grow 2.5 percent, compared with 2.4 percent for California and 2.1 percent nationwide.
“San Diego has really been the harbinger for the state and national economy,” said economist Kelly Cunningham, who prepared the forecast.
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James Hamilton, economist with the University of California San Diego, said there are signs that housing may be bottoming out. Since July, he said, mortgage rates have dropped by almost half a percentage point, which could be enough to bolster the market.
He noted that it typically takes up to 16 weeks for home prices to reflect changing interest rates, which means that the market could improve soon.
However, there are several factors that could keep prices declining, he said. A spike in loan defaults and foreclosures “could give us a much uglier scenario.” And home buyers might be slow to enter the market, hoping that the longer they wait to buy a house, the cheaper it will get.
“I think it’s a little more likely than not that we have reached the bottom (in housing prices),” he said. “But there’s still a very significant possibility – maybe 30 or 40 percent – that things could get much more frightening.”
(Methinks Professor Hamilton should read this blog more often…)
http:/www.signonsandiego.com/uniontrib/20061102/news_1b2forecast.html
Link did not work; trying again:
http://www.signonsandiego.com/uniontrib/20061102/news_1b2forecast.html
Did Shamu go get a real estate license?
“Since July, he said, mortgage rates have dropped by almost half a percentage point, which could be enough to bolster the market.”
Between 1991 and 1996 San Diego RE fell about 20% of value. Does anyone know the interest rates (average) on mortgages starting say in 1989 through 1998? I thought rates were falling during this last RE crunch meaning that lowering interest rates can’t change the psycholgy of a downturn. But actual numbers would be nice.
Thanks!
Mortgage rates fell steadily in the early 1990s. Not sure if Hamilton (the time series guy) would know about this…
http://research.stlouisfed.org/fred2/series/MORTG?&cid=22
Thanks GetStucco. So I’m guessing that lowering the rates will not save the market? Wow. What a shock.
Lowering rates will only save the market if everyone believes the make believe stories that MSE (mainstream economists) like Hamilton and Greenspan are spinning…
I was in Lowes last month and saw the same thing. It was a lovely Saturday morning in Tucson, and I felt that I’d stumbled into my own private big box. Only one cashier was needed to handle the checkout line.
along these same lines, a STARBUCKS recently shut its doors for good near here. that seems like big news to me, can’t say I’ve ever heard of that happening.
Wow. That’s news. Where are you located?
Continuing this theme …
A big Barnes & Nobles store, in the heart of downtown Pittsburgh, is closing (won’t renew their lease at the end of the year).
I’m really surprised. This B&N is at a great location, lots of business folks and shoppers, always packed.
Oh no! I like that place! That was good for running in to buy a quick techie or reference book in a pinch, or just browsing if I was there on a Saturday. I do wonder if it’s a building-lease problem, or if it’s really traffic/sales. Pity.
But I can second the folks who have seen low crowds at the local big box stores. It sure is nice these days when I don’t have to wait in the cashier line, but I worry when I own stock in those very same companies — yikes!
(Whoops, talking about B&N Pittsburgh in case I wasn’t clear above.)
Here is some retail commentary and analysis from my blog. Suffice it to say furniture isn’t exactly flying off the shelves…
The October retail sales data is out — sales rose 3% YOY, the weakest growth since June. Here’s the real kicker: Furniture store sales plunged 13.7%. That was much worse than the 5.1% YOY decline in September. It’s also the worst YOY decline going back at least four and a half years (I don’t have ready access to data before April 2002 right now). If you’re looking for evidence of more “second round” impacts from the housing bust, you’ve got it.
http://interestrateroundup.blogspot.com
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“Economists have correctly predicted nine of the last five recessions.” - Nobel Prize-winning economist Paul Samuelson
So that means that if “economists” are predicting recession, we can surmise there is a 5/9 chance (more than 50-50) that they are right?
I remember shopping at Pier One while I was in college. These days, college students also shop at Ikea. Wonder how they will fare in the coming months.
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i hate that wicker crap!
hey, i love that wicker crap….
Fat guys and wicker do not get along. . .
College students buying furniture? We had old hand-me-downs in my day. And walked to class uphill both ways! Seriously, nice new furniture is not needed for college housing.
When I was in college, I lived in places where I didn’t need to buy furniture.
We just had hand me down furniture from our parents or friends. Even the washer and dryer were used. I did not buy or knew of anybody who did buy new furniture during my college years.
All of my college furniture came from Goodwill.
bean bag seating was luxe
My big college furniture purchase was senior year, when I got a futon bed and a frame to put it on.
Hand-me-downs, Goodwill, and Cinderblocks ‘n Milkcrates ‘n Things were where we shopped for furniture.
Word!
I had two truckloads of milk crates till I was in my 30s. Zip tie em together to make any needed furniture; tables, shelves, tv stand, headboards, etc..
When it’s time to move remove the balnkets and towles over crates, clip ties, flip crates up and fill with your stuff…. Ready to move!
Hi5! MilkCrates and Cardboard boxes covered in sheets!!!
The floor in my college apartment was plywood on dirt. You could hear the termites eating at night. I imagine they were drinking the spilled beer too, but I really don’t know for sure if they like beer.
I was a milkcrater, too. Then one year there was a crackdown on “real” milkcrates (i.e. swiped from outside the local 7-11 vs. bought at a store). I had to disguise my “illegal” milkcrates because I was afraid they’d be taken from me. Still have them! (Though no longer use them as furniture…) Thanks, Rosenberg’s Dairy!
Rosenberg’s! You just made me homesick. My college dorm furnture had a few rosenberg’s crates… (grew up in Buck’s county).
Some of my funiture came from dumpster diving. Which of course was recycled when I was done with it.
Don’t forget the “cinder blocks and boards” entertainment center/bookshelves!! Smiles!!
DOC
I still haven’t bought furnature other than a few cheap bits and pieces from IKEA and I have been out of school for 6 years. Until I settle down, why buy something that is just going to get banged up in the move. OTOH, I do have a couple of really nice antiques that I got either free or really cheap and then refinished. I would be a bit upset if those got banged up….
When I was in college I bought some nice, but worn, maple bedroom furniture at a yard sale. It was old but well made. A few years ago I refinished it, and still haven’t replaced it, since it’s perfectly serviceable, and rather nice. Maybe for my 10th Anniversary I’ll get some Amish furniture.
Use it up
Wear it out
Make it do
Do without!
The key to financial security
college kids buying furnishings = mommy and daddy’s money, usually.
Of course renting furniture to sell vacant houses is on the up .
In California we call it staging! Some people will actually move their own crapy funiture out and rent good stuff to show the house.
“In California we call it staging! Some people will actually move their own crapy funiture out and rent good stuff to show the house.”
This practice drives me nuts. As a potential buyer, I’m not interested in anything in a house that I don’t get to keep for myself!
LOL …That’s it ,the sellers could offer all the furniture if the GF would just buy the POS.
The foreclosed house I wrote about in April was finally sold:
http://louminatti.blogspot.com/2006/04/sign-of-real-estate-bubble-in-texas.html
The moving van was in the driveway last night. Can you guess where the family is from?
When analyzing the TX market, people forget that equity lending was not available until late 1998. I think that has a lot to do with the persistently high foreclosure rate, good market or bad. The idiots were protected from themselves for a long time but no more.
I don’t know anyone who’s actually HELOC’d. No friends, family, or coworkers (that I know of) have done this.
FWIW, Carol Keeton Strayhorn was big on this:
http://www.cpa.state.tx.us/comptrol/homeeqty.html
She called it a “store of wealth”.
This has to be the most worthless governor’s race yet.
I don’t know about that - we got a freakin’ ex-NFL player running here in PA. Please.
have you asked them or actually investigated the facts for yourself? I think the outcomes might be quite different.
“This has to be the most worthless governor’s race yet.”
Try California. We have a choice between a crook and a hollywood fake.
I think I will vote for the crook. At least you know what your getting.
Art Olivier and Libertarian candidates all the way down the ticket, baby!
Arnold is going to win in a landslide.
Moning polls had the Governator losing in LA, even in SF Bay area and waaaaay ahead in the rest of the state
“Can you guess where the family is from?” - Uh, let me guess……..California.
“U.S. productivity was unchanged in the 3rd quarter, expectations were for a rise. Jobless claims rose to 327,000. More soon.”
The hits just keep on comin’. Expectations don’t seem to mean much of anything the past few weeks… The influx of ‘less than expected’ readings is troublesome…
But luckily, the stock market always goes up, even on a steady stream of ‘less than expected’ readings (esp. in the homebuilder sector).
Weeks ago there used to be a lot of folks who said watch out for deflation, not inflation (me included)
Unit Labor Costs up while productivity flat and initial claims up, I’m going to start re-examining by beliefs…
The Fed is walking on a tightrope, with the deflationary alligators down below on one side and the inflationary dragon on the other.
As a long time inflation proponent, I am not happy with the news. I wish I was wrong and that the fed and allied economists were right and that this will be a soft landing, but the fed is well aware that the nations debt cannot possibly be paid back in a deflationary environment. Inflation will only get worse.
The FED is private and consists of bankers. They are not going to devalue what they are owed if they can help it.
The Fed exists at the pleasure of the lawmakers. Until that changes there is a political dynamic that must be addressed. Devalue or default, that is the question for the Fed as there is no “third way” unless/until the “amero” gets instituted. I don’t know the answer but my guess is devalue since at least that solution is still politically viable and has been the trend for the past 80 years or so.
Oh I agree devalue in the long-term. Just not while they can avoid it. But once they’ve moved out of dollar assets… boom inflate away.
Since you mentioned the “amero”, you need to also mention http://www.spp.gov so everyone will know what our new country will look like.
Here is a more comprehensive explanation on the SPP.
http://www.augustreview.com/index.php?module=pagesetter&func=viewpub&tid=4&pid=14
From the OC Register:
Lenders’ home-equity loans standards “not relaxed”
The Consumer Bankers of America trade group says an annual study shows that U.S. home-equity lending has been prudent, saying “lenders have not relaxed their underwriting standards in the face of higher interest rates or cooling housing markets.” The CBA report, off data from June 30, finds …
• Average credit score for home equity borrowers in 2006 held steady at 730, compared to 727 in 2005 and 726 in 2004
• The average size of new home-equity line of credit commitments grew 12% to $84,813 from last year’s $75,984. The average size of new straight equity loans was $57,786, up 14% from $50,709 a year earlier.
• The average size of old home-equity line of credit “in dollars outstanding, grew 7% to $42,158, and the loan size grew 2% to $44,204, from a year earlier.
• The overall average LTV for home-equity lines of credit was 71%, similar to 72% a year earlier. For equity loans, the average LTV increased from 67% to 70%.
http://www.cbanet.org/cbar/Nov_06/home%20equity%20study.htm
My question is when will they start tightening things up? From this article you would think that things are all normal, No?
‘Lenders’ home-equity loans standards “not relaxed”’
(Cough… choke… gag…)
How do you get coffee spills out of a keyboard?
“lenders have not relaxed their underwriting standards in the face of higher interest rates or cooling housing markets.”
The standards were all thrown away around 2004, so how could they relax the standards any further?
Oh, lenders have not relaxed lending standards .How can you go any lower than making loans to guys like Casey ,people in prison ,dead people ,you neighborhood crooks ,40% speculation buyers , and people with no jobs .
I guess you could really go lower and give 150% LTV loans to people so they can live off the cash back or maybe they could get a car .Oh wait , they have already been doing that .
Well all you have to replace is a keyboard. I’m on a laptop! Should I be worried the orange that shot through my nose is now making the thing smoke?
orange juice
Lip - I think it’s averages diguising whats happening at the scarier end of the lending spectrum. Maybe the “average” customer isn’t going to default, but the bottom 10 to 25% that may be at risk of defaulting. I wish i had some additional numbers to back this up.
but i think a closer reading of your stats also loan sizes increasing rapidly, LTV’s rising, and outstanding debt also rising. Overall, more debt and less equity.
Thanks, I appreciate the help understanding all this stuff.
Note this data is from June. “The Memo” only went out at the end of September. So it seems the first report for the new, “tightened” standards will be dated December, available May 2007…
txchick,
FYI…it looks like those young clowns in Orlando (Casey Young and Jaime Ballance) did in fact sell their house. Go to the Orange County Property Appraiser’s website for more details:
http://www.ocpafl.org
Do a record search on 3519 Stonefield Dr. The four new BH’s bought the 2876 sq. ft. house on October 16 for $325k. Here are their names:
NI CHAO WANG
ZHAO XIAOYUN
ZHAO RUGAN
JIANG HAIRONG
Maybe it’s that Chinese family from the Century 21 commercial?
Four of them?
Figures . . . guess the koi pond worked. They’ll probably eat the fish.
Mmmmm….. sushi!
“Chinese, Japanese, or Vietnamese?” - Hank Hill
Chinese names alert us to the possibility that housing might not really crash in nominal USD terms, if the Chinese would like to buy ALL our real estate. There are certainly enough of them to live in our housing stock. Only the dollar is crashing … now 9:25 Eastern, time to call Merrill Lynch and get more bonds in any currency but USD.
Alan Greenspan, Former Federal Reserve Chairman
“We’re beginning to see some move from the dollar to the euro, both from the private sector … but also from monetary authorities and central banks.” – October 26, 2006
How’s Panama looking these days?
Dollar-pegged.
http://en.wikipedia.org/wiki/Panamanian_balboa
I thought I read somewhere that Panama’s population is now majority Chinese. They’ve had massive immigration in recent years.
Cajun — can’t get the site to respond. Is this place in the SE quadrant of the Orlando area? If yes, I’d guess there’s a good chance they are UCF students, maybe graduate school or even newbie profs, sharing the place.
Chip — Yes, the house is near UCF. So there is a fairly good chance these people are UCF students/profs. But like txchick said, “Four of them?”
Condo developer holding auction
Atlanta Business Chronicle - October 27, 2006
The owner of a Buckhead condo project completed just over a year ago is resorting to an auction to sell off nearly half of the units that haven’t sold.
Fifty-five units at The View @ Chastain at 3820 Roswell Road will be auctioned Nov. 14, or 44 percent of the building’s 125 units. The auction comes at a time when the city’s condo market could be headed for an oversupply.
“There is no question there is a great deal of [condo] supply,” said Jonathan Berzack, acting manager for The Lofts at Chastain LLC, which built the $30 million project. “This will allow us to take our remaining inventory and sell out of the building in a reduced time frame.”
The auction is not a fire sale, Berzack said, but it will provide condos at a discount. Berzack expects to get anywhere from 88 percent to 95 percent of the asking price for each condo, originally $229,000 to $499,000.
Financed by Regents Bank, The View @ Chastain began construction in January 2004 and was completed in June 2005. “We don’t have a bank knocking at our door,” Berzack said. “We’re not out of money.”
The developer could keep marketing the 55 remaining units, but with slower sales, that could take at least a year.
“We thought we would sell out six months after completion,” he said. “But guess what? We have 55 left after 14 months. We did not do as well as we had planned. We’ve had four to eight sales a month. There is a lot of competition out there.”
Auctions are not always a distress sale, said Janis Kirtz, president of Morris & Raper, Realtors. “It’s a marketing decision, not an indication of the market.”
It could be an indication of things to come, said Randal Lautzenheiser, principal and managing broker at Atlanta Intown Real Estate Service. “Because of the oversupply, there are literally thousands of units coming out of the ground.”
Berzack has other projects in the works, including the 28-unit SoNo Lofts under development.
“We still believe there is a trend of people moving into the city,” he said. “I think we are going through some growing pains [in the condo market], but I still believe in Atlanta.”
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No deals yet - not even close. This is a marketing tactic to lure some greater fools by making them *think* they are getting a *deal*. But we are at least 12-36 months away from any real “deals”.
Thanks Gekko,
I was beginning to feel this way too. We are going to inspect the property and watch the bidding. They are advertising 15 unit auctions at “absolute” price. Probably for the worst units.
Watch and wait. “Lay in the weeds” for a while. Think of it as a game. Your patience will be rewarded.
“15 unit auctions at “absolute” price” And about 30 shills to make sure the absolute price is a money maker for the seller. “Absolute” price auctions are for people who believe in Santa Claus and the Tooth Fairy
That’s OK. Bring 10-15 friends and the first bid that goes above a pre agreed upon (severe low ball bid) price, everyone starts getting up and leaving the auction. Just make sure you spread out around the room so that it isn’t obvious. That ought to send a signal to the builders.
Yesterday they said that something like 14 of the units would be auctioned absolute — no minimum, no reserve. This sounds like a backpedal.
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“Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Let no debt remain outstanding,” - Romans 13
Election day getting closer — feel the bile rising. I’ve posted this screed before, so forgive me — but both political parties are like two hairy ass cheeks around the same stinking bunghole: predatory capitalism. Both parties are on the make and on the take, devoid of any core principles or convictions beyond an overweening desire to con 51% of the sheeple who actually vote into perpetuating their stranglehold on the levers of power. The Esteemed Gentlemen of both parties lurch through the corridors of power, whoring for the special interests, swindling their constituents, sodomizing interns and taxpayers with equal gusto. The sheeple, meanwhile, make no effort to educate themselves on this issues or candidates, and instead file lemming-like into the voting booth and leave feeling like they’ve done their civic duty, as if that was enough.
Remember that when you pull the lever on Election Day. It’s time for REAL change.
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It’s all about picking the lesser of two evils.
The thought of wild-eyed liberals like Nancy Pelosi, Harry Reid, Barney Frank, John Conyers, Charlie Rangel, Henry Waxman, and Teddy Kennedy having any more power scares the absolute shiit out of me.
Whether they’re wild-eyed or not, they certainly want to give your money to some third party.
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Yup. They want to confiscate my hard-earned money and give it to their special interest groups so they can keep on getting re-elected. 36%+ of my income is not enough for these people. They want more and more and more. How much is enough?
A few weeks ago I received a knock at the door from a local Fireman out promoting yet another sales tax increase for building new fire stations (among other things). I told him the city/county/state/fed gov has to realize that we only have 100% to give, and we really need some of it to live on!
I always smile and agree in face-to-face encounters with firefighters and policemen. Not necessarily at the ballot box.
I read several of your posts and concluded you must be a Republican. Nobody else posts such nonsense.
You proved me right!
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Me a Republican?
You have an uncanny ability to recognize the obvious.
Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.
Romans 13:7-10
“It’s all about picking the lesser of two evils.”
No, it’s about picking the lesser of two weasels.
“It’s all about picking the lesser of two evils.”
Yeah, but, in the end you’re still picking evil.
but i thought we were all libertarians
s’matter with you guys?
I’m a Democrat and not ashamed to say so. If the government is going to spend our tax money, I would much rather it get spent here in the USA than pissed away into the desert sands (along with the lifeblood of our soldiers) on an unwinnable war we should never have started.
The lesser of two evils is still evil.
The only lever I’m pulling on Election day is the one on the porcelain throne.
LOL. Looking at election results, I’ll probably be doing the technicolor yawn into that same porcelain throne.
The Great Flush-Out of 2006? I like it. Shall we say, 3:00 EDT, 2:00 Central, 1:00 Mountain and 12:00 noon Pacific? Other areas can check http://www.time.gov/ for their specific region.
I won’t waste my time voting either. I believe in bullets, not ballots.
Seek help.
At a minimum, we should ensure that never again do we have just one of those two parties in charge of the White House and both houses of Congress at the same time.
I couldn’t agree more.
EXACTLY. We have one group of thieving liars running the largest bank on the planet accountable unto themselves. Never again.
If Americans knew anything about their own history, they would understand that this is the very reason why the Founding Fathers set up the House, the Senate, and the Presidency in the first place.
Well, it’s why the Founding Fathers didn’t want direct elections of Senators, or necessarily the President.
I think they were very wise in those notions.
That is a pipe dream. Third party choices only serve to drain votes from the other two. Clinton got elected because of Perot. Bush got elected because of Nader. See what I mean?
Pick the party that best represents what you want, whatever you think you want. I have three issues:
1) War: Do you want to fight the Islamo-Fascists in Iraq or in New York City?
2) Taxes: Who is going to raise my taxes more?
3) Abortion: Who is going to create laws that will reduce abortions?
In all of these I choose the REPUBLICAN. They’re far from the libertarian ideals, but they’re better as a whole IMHO.
Abortion? Oh, please! Reagan screwed you with O’Connor and Kennedy. Bush screwed you with Souter. Little Boots tried to screw you with Meiers. Now tell me, did Lockeed, Hughes, General Dynamics, McDonnell Douglas et al, get screwed? You’re way way way in the back of the line. BTW, how’s that constitutional amendment to prohibit gay marriage coming along?
LMAO…. There’s nothing worse than a man (at least anatomically) telling women what to do with their vagina…
Not only that, but imagine for a second that a guy COULD actually tell a woman what to do with her vagina. Would abortion even make the list?
OK. I just can’t contain myself any longer. Here we go:
1)Republicans represent the rich.
2)Democrates represent the middle class and the poor.
3)There are far fewer rich people than middle-class and poor people.
4)Therefore, the Republican party should theoretically NEVER win a democratic election.
5)However, Republicans (the rich) have historically fooled everyone else into voting for them based on “superior” morals (the morals of the rich, which seem virtuous to all of us struggling low-lives).
6) Don’t be fooled. Vote Democrate if you’re middle class. Vote Democrat if you’re poor. If you’re rich, be a good guy and vote Democrat.
Strike “Democrate”. Insert “Democrat”.
Absolutely correct, Big V. The whole abortion/gay marriage wedge issues are the only thing Republicans can use to suck in the sheep (and trying to convince them that they are actually “rich” while earning $80K and mired in $600K debt).
If you work for a living (as opposed to living off capital gains, etc.), you should vote Democrat.
HA HA- your perverted sense of reality astounds me.
1) There is a huge fallacy that fighting in Iraq somehow prevents radical islamic terrorists from attacking the US. It actually has increased the radical islamic movement and has been a recruiting tool for our enemies according to all 16 of our intel agencies. Meanwhile most of the recommendations of the 9/11 commision that would actually help prevent a future terrorist attack have not been implemented.
2) Taxes = spending. Bush did not increase taxes he shifted the tax burden from current generations to future generations and from wealth to wage earners. Because spending increased Bush increased taxes, simple as that.
3) Republicans controlled the supreme court, presidency, house, senate, and the majority of governor’s mansions for most of the last 6 years. If they had any plans on outlawing abortion it would have happened already. They don’t want to lose abortion as an issue because the issue mobilizes their base and turns out voters. The status quo is best for republicans on abortion because their are many naive voters who are blind to all other issues and actually think voting R might make a difference.
That is a pipe dream. Third party choices only serve to drain votes from the other two. Clinton got elected because of Perot. Bush got elected because of Nader. See what I mean?
It’s this attitude that led me to stop voting. It’s useless when so many people will be snowed into lockstep behind “their team”.
…sort’a missing Jas’ comments, sniff.
Umm… how do you propose to do that when so many states’ laws require the electors to vote either for the democrat or the republican candidate? How do you suggest that REAL change be brought about when independent candidates get neither funding nor airtime nor ballot space? I am genuinely curious, because the only viable options I have seen presented previously are a) vote with your feet, or b) vote with violent measures.
Just think, we could have predatory socialism instead.
Any system built on theft from others is doomed to fail.
has there ever been any other system? Someone mentioned the ancient Egyptians. The Native Americans of the Great Plains? You’re either taking, or you’re ripe for the taking.
“I can picture in my mind a world without war, a world without hate. And I can picture us attacking that world, because they’d never expect it.”
- Jack Handey
“predatory socialism?”… lmao…..Silly strawman arguments is why republicans will lose this election. Yet some seem simple and foolish enough to continue to use them.
It was not a Republican comment. I have never voted Republican and never will. It was a comment on my opinion of both sides being the same.
feepness,
At least with “predatory socialism” a greater number of people would be able to have the basic necessities. With socialism, the wealth of the PRODUCTIVE (those who actually work) is paid to them as opposed to being siphoned off by those who control the workers.
Just Borrow it and Spend it Anyway:
http://wallstreetexaminer.com/blogs/winter/?p=79#more-79
Great graphs on the 90’s RE bust. Showing where we are now compared to then. Bottomed out…yeah, right. ROFL
http://streetlightblog.blogspot.com/2006/10/is-worst-really-behind-us.html
The theory that we have “hit bottom” is rather amusing, isn’t it?
Page 6 of today’s Sun section in the Las Vegas Review Journal has a guest commentary by Paul Krugman entitled, “More bad news on economy still to come.” The commentary begins, “Here are the five stages of housing grief,” followed by appropriate from Greenspan, Paulson, and the president of the Fed bank in Dallas.
I have tried to find a link to the commentary on-line but cannot. Some key quotes include: “There’s a lot of evidence that home prices, although they’ve started to decline, are still way out of line…This means that home prices still have a long way to fall.”
This is pretty heavy stuff for a newspaper that still has a weekly cheering section devoted to real estate each Sunday. Of course, Krugman is writing about a national bubble and its impact on America’s economy, so I suppose there will still be Las Vegans who will read it and think, “but not here.”
The original article was published in the NYTimes (Krugman is a columnist) on Monday Oct 20th. Someone posted a link on this list but there was no discussion about it which suprised me. The article could not be more bearish — it was at grizzly bear level.
Here’s the link but it is behind their paid subscription service.
What suprised me is that the article did not become one of the most emailed articles on the NYTimes. Usually Krugman’s articles are very popular. I can only surmise that 1) politics is all anyone is thinking about, not matter how stupid (e.g. Kerry’s remarks), 2) Fewer people want to talk about the housing bubble anymore since it really has arrived and is probably adversely affecting most.
Monday Oct 30th.
You want to see another take on Krugman, see Don Luskin’s columns on http://www.trendmacro.com
Luskin is a smart guy and very funny. He ran that Openmarkets fund which unfortunately opened and blew up in the bear market in 2000.
As anyone who reads here semi-regularly knows, I don’t invest. So what do I know about the Openmarkets fund? Nadda.
But I do read. And based on the several articles I’ve just read at TrendMacro, you are right: Luskin is very funny, and some of his perspectives certainly do strike me as “smart.”
I have just bookmarked this site. Thanks for the link, Txchick.
Luskin has an interesting perspective although I think he is stuck in the ’80s with his supply side beliefs. I don’t really understand how eliminating the estate tax or capital gains tax would promote growth.
His desire for less regulation would be pro-growth in the short run although the negative externalities (pollution, corruption, etc.) would hinder growth in the long run.
Or maybe everyone who read it is scared sh*tless and doesn’t want the truth to get out.
Here’s a link to a copied version of the uber-bearish Krugman article (for those who don’t pay the nytimes.com subscription fee):
http://mparent7777.livejournal.com/14112072.html
I am truly flattered, as I think I may have introduced Kuebler-Ross’s five stages of grief here myself (or if not, I stole the idea much earlier than Professor Krugman!)…
“Here are the five stages of housing grief:
1. Housing bubble? What housing bubble? “A national severe price distortion [in housing] seems most unlikely in the United States.” (Alan Greenspan, October 2004)
2. “There’s a little froth in this market,” but “we don’t perceive that there is a national bubble.” (Alan Greenspan, May 2005)
3. Housing is slumping, but “despite what you hear from some of the Eeyores in the analytical community, a recession is not visible on the horizon.” (Richard Fisher, president of the Federal Reserve Bank of Dallas, August 2006)
4. Well, that was a lousy quarter, but “I feel good about the U.S. economy, I really do.” (Henry Paulson, the Treasury secretary, last Friday)
5. Insert expletive here.”
Thank you all for providing links to the article!
Some WSJ articles…
“Weak U.S. Manufacturing Data Signal Slowdown in Economy”:
“The Institute for Supply Management, a purchasing managers’ trade group, said its manufacturing index fell to 51.2 in October, from 52.9 a month earlier. The new-orders component of the index, which offers a glimpse of potential manufacturing activity, fell to 52.1 from 54.2. Any number above 50 suggests expansion, but the October readings indicate that the manufacturing sector, which makes up about a fifth of the economy, was losing momentum as it entered the current quarter.[...] Economists said the deceleration in manufacturing suggests that slowdowns in both the housing and automobile sectors are spreading to the broader economy, as a drop in home and auto construction translates into fewer orders for factories. Mr. Ore named wood products, appliances, plastics and fabricated metals among the sectors that had seen the sharpest declines in October.[...] Recent data have shown significant declines in housing and housing- related industries. Last week, the government estimated that residential investment fell at an annualized, inflation-adjusted rate of 17% in the third quarter — the largest quarterly drop since 1991. Yesterday, the Commerce Department reported that overall construction spending fell 0.3% in September from a month earlier, and the National Association of Realtors said its index of pending home sales slipped 1.1% in September from August. Also in September, production in several housing-related sectors — such as wood products and furniture — dropped more than 1%, according to the Federal Reserve. All the data are seasonally adjusted.”
“Auto Sales Rise but More Bumps May Lie Ahead; Despite October’s 6.1% Gain, Slowdown in Housing Sector Is Expected to Cut Demand”:
“Next year may be tougher for auto makers because of the slowing U.S. economy, especially in housing, which damps demand for pickups. In a conference call, Mr. Ballew said the housing slump ‘is likely to have some impact in the coming quarters.’ Ford Motor Co., in a separate conference call, said it expects “modestly below-trend growth in the coming year.’”
“MasterCard’s Net Rises 82% on Fees Tied to Card Use”:
“MasterCard Inc. said third-quarter net income jumped 82%, driven by strong consumer spending that sent more electronic transactions through its payment network. Such spending also has pumped up recent results at banks and other credit-card issuers.[...]Last month, American Express Co. as well as bank issuers of credit cards reported consumers’ continued strong purchases and borrowing despite concerns that a U.S. housing-market slowdown would discourage spending. Chris McWilton, MasterCard’s chief financial officer, said the company “didn’t see any evidence” of slowing U.S. consumer spending. According to the latest report from the federal government, Americans appear to be spending more, bolstered by falling energy prices, wage increases and stock-market gains.”
news snippet from the Netherlands:
National Mortgage Insurance limit increased to 265.000 euro. That means that basically, all mortgages up to this amount are fully insured against losses by a semi-gov. fund (in case the owner has to sell the home at a loss, the fund will pay the difference). As a result, all homes with a significantly lower price are ‘POS’. Yet another trick to keep the Dutch housing bubble growing, just in time for the elections.
Yeah, but what can you get for E265.000 there? In any bubbly area of the US it’ll still get you laughed at.
as mentioned, for that price you get something that is just a little above ‘POS’ level, because the system guarantees that almost anyone can get a mortgage for that amount. So, it is a sure way to push up the minimum home price. In comparing to the US you should also consider that wages in NL are lower than in the US (median 30-35K euro), and taxes for the lower income levels are higher.
http://www.smartmoney.com/aheadofthecurve/index.cfm?story=20061013
I think the deciding factors will be these:
a) Can George Bush continue to keep his mouth shut and stay out of the limelight for another week? You may have noticed his utter lack of any major announcements, speeches or similar big public undertakings lately. He is seen as a liability for all but the hard-core, fifth generation Republicans and Neo-Cons right now. He does not have the center with him.
b) Will the Republicans actually do anything effective to secure the borders? This one action, this one issue could net them a big gain from middle-of-the-road voters.
c) Will the Republicans make any effort or reference to fiscal conservatism or to shrinking the federal government? If they made any effort - any - to return to Reagan Republicanism, they would enjoy a huge uptick in their support.
Notice that all of these are dependent on the actions of the Republicans. I think they’re clearly in the drivers’ seat. The Democrats haven’t even managed to make themselves anything other than the second worst choice. Their agenda is a mystery, their platforms a joke, they don’t even have a consistent position on the direction of the wars (yes warS) which are ongoing.
I really believe that a viable third party could have made a good showing at this election and think that by 2008, with a lot of work and committment, a third party could usurp the stranglehold the current incompetents and kleptocrats have on our government.
Item 2) You will NEVER see the immigration problem resolved to the [i]satisfaction of the voters.[/i] The republican have proven over and over again that they want US citizens to compete with these disposable immigrant workers in the labor markets. I find it laughable when election pundits repeatedly say “but the republican economy is roaring, why doesn’t that echo with the public?” It’s quite simple; 1)the working class is fed up with having to compete with these immigrants, 2) Pensions are evaporating, 3) republicans publicly stated that they want “social security to wither on the vine” all at a time when a huge demographic is looking at retirement soon 4) Employers are dropping health insurance at an unprecedented rate.
When the leader of the currently elected govt. continues to harp on the “great economy”, the silent majority tunes him out as it is not reality for that majority. You govern by fear, you got exactly that…. a fearful electorate looking elsewhere for real leadership on economic issues that effect said electorate every single day.
Actually, the Republican committment to a program which permits illegals to change their status (whether you call it amnesty or whatever) only seems like a mystery. Most of the staunch Repubs can’t understand why their leadership wants to allow 12 million illegals to suddenly become citizens. The truth is, aside from the lifetime Repub votes which such folks would cast, the influx of that many new, contributing, workers would permit the Social Security system to stay afloat for another generation or two. This is why Democrats aren’t particularly opposed to the measure either. The only ones who oppose it are… citizens who have paid taxes and performed their civic duties all their life, and people who spent the time and money to come to this country through the legal process. You know. Law abiding citizens. Those are the folks who are being robbed. That’s why they hold the politicians in contempt and openly state that there isn’t a dog’s hair worth of difference between the parties nowadays.
Either that or the Democrats need to come up with a new Bill Clinton type who is not Hillary Clinton.
“The Republicans are in the driver’s seat.” Really? I don’t know what or who you are reading, but my research tells me that the financial powers- that-be have turned against the Republican and are looking to Bill Clintonesque, DLC types to right this economy and deal with the huge gap between the haves and have-nots that threaten to take this economy down in a big way. History teaches that nations with such economic disparities either must change, or die–ie., self-destruct. You can look it up.
So… you’re suggesting that the “haves” have decided that they need to give away what they have worked so long and so hard to acquire so that there isn’t a revolution? Or are you suggesting that the “have-nots” have somehow acquired the political will and strength of arms to do something about it? Quite frankly, I see no support of either of these propositions.
Irrespective of whether you support either one, history has shown that Susan is exactly right. You better hope the economic disparity reverses itself as a means to preserve any semblance of what was once known as the USA.
The revolution will start when Obama or Hillary is elected president. And it will be fully justified.
I would be perfectly happy with a Clinton running the White House, Jack Abramoff running the House, and Bill Frist running the Senate. Best (least-bad) government we had in last 40 (50?) years.
Hey, Bush is going to be here in Springfield, MO on Friday. If that’s not being in the LIMELIGHT what is?
What? You don’t think that a little town in the Ozarks population 150K is the center of the U.S. political scene???
My rule of thumb is watch how Mississippi and Alabama are voting, and vote some other way.
add Georgia to that roster.
now you really didn’t mean to sound so condescending, did you?
However, if you happen to reside in a paradisical oasis of sophistication, intellectual superiority and au courantness(yes I know it’s a manufactured word), please enlighten the rest of us as to its location so we can join you and create a mini-RE bubble there.
Bush is smart. The only chance for Talent to win reelection is to get the heartland to turn out. Every election in Missouri is a proxy fight between the liberal KC and St. Louis areas (heavily McCaskill) and central/southwest Missouri (traditionally conservative). I am especially worried about Talent’s chances because the sentiment in central MO seems to trend towards McCaskill, hence why Bush is in SPG tomorrow for a last hope chance.
-
false. Bush is all over the COUNTRY campaiging and giving speeches. it’s Kerry, Pelosi, Reid who are hiding in their holes afraid to come out.
‘Insulting and Shameful’
http://tinyurl.com/y4s627
Jean-Francois really stepped in the merde this time
I couldn’t agree more. The time’s come for universal compulsory participation in the military.
Denver Fraud Hearing
http://www.denverpost.com/ci_4588025
A major North Jersey paper did a story on my blog as well as a bio on myself. For all the Jersey folks here, if you read the Star Ledger or Trenton Times, you’ve already seen it. First page of the business section:
My turn: The renter who blogs on real estate
Faithful readers of the New Jersey Real Estate Report blog know its author James Bednar by his on line pseudonym, “Grim.”
It’s a nickname the 30-year-old software architect picked up back in the 1980s when the Garbage Pail Kids — a gruesome gallery of children’s bubble-gum cards spoofing the Cabbage Patch Kids — were at the height of their popularity.
Someone — he can’t remember who — gave him the “Grim Jim” card one day, a funny caricature of the Grim Reaper, and the name just stuck. But today, “Grim” just about sums up how Bednar feels about the New Jersey real estate market.
…
Caveat Emptor!
jb (aka Grim)
What I find particularly sad about politics today is the fact that there seems to be no room in either party for moderates. As a Republican, I dislike the far right as much as I dislike the far left.
When it comes to political leanings it would seem that many of us are neither all red nor all blue….kinda purple really
Moderates are the worst of both sides. Soccer mom and dad fascists.
Wouldn’t a Dad Fascist be much further to the right than a moderate?
Merced Flipper in trouble on cragslist: http://tinyurl.com/yxfpmh
The home was bought for 385K in January 2006 and is now on the market for 365K.
Note No. 12
Active Trader Update
Things I Am Hearing
By Doug Kass
Street Insight Contributor
11/2/2006 11:09 AM EST
URL: http://www.thestreet.com/p/markets/activetraderupdate/10319549.html
in real time, please click here.
1. Regulatory authorities will allegedly shortly implicate and indict a number of individuals for insider trading in advance of the proposed Chicago Board of Trade (CBOT) /Chicago Mercantile Exchange (CME) merger.
2. Two large retail acquisitions are allegedly in the works. Sear’s (SHLD) Lampert is allegedly involved in the analysis of both.
3. Martha Stewart Living (MSO) will allegedly shortly announce a meaningful acquisition of a company away from its core business.
4. Morgan Stanley (MS) , JPMorgan (JPM) and Lehman Bros. (LEH) are allegedly aggressively courting additional hedge funds for acquisition.
5. PC makers are allegedly upset about the increase in the wholesale licensing fees (and its implications for profit margins) that Microsoft (MSFT) will charge for its Vista Home Basic product.
6. Wal-Mart (WMT) will stun investors and allegedly announce its forecast for slightly negative November comps (contrary to expectations of a recovery by the Street).
7. News Corp. (NWS) and several venture capital firms are allegedly eying Digg, a social news site, following the recent acquisition of Reddit by Wired Digital.
8. Google (GOOG) is allegedly targeting a number of smaller acquisitions (like JotSpot’s wiki products) in order to compete more effectively with Yahoo! and Microsoft. As well, Google is allegedly considering playing a minority role in private equity’s possible Clear Channel Communications (CCU) acquisition. Finally, a large secondary will shortly be announced.
9. E-Trade’s (ET) online fraud problem has allegedly increased both within its company and in other online trading companies.
10. Executive reshufflings are allegedly rumored at Citigroup (C) and JPMorgan.
11. One member of the “Icahn group” is allegedly selling its entire position in Time Warner (TWX) into the recent climb.
12. Several subprime lenders are allegedly in a financial free fall. There are rumors of vultures interested in acquiring assets in this industry.
13. A large fund of funds is allegedly planning a large reduction in its fee schedules.
Is any of this sufficient singly or collectively to cause a rush for the exits? What do you think would be?
Nah, probably not but it will all be offered as excuses when the selloff finally gets going.
Don’t forget to feed the squirrels!
http://www.breitbart.com/news/2006/11/02/D8L51GN00.html
Whole Foods (WFMI) getting whacked afterhours. Guess the high end is suffering a bit.
Just heard a REaltor tell someone she closed on ten houses these past ten weeks: one house a week, that’s a pretty good clip. She said she’s slowing down to one house every two weeks.
She was getting her nails done on the station next to mine, had all her MLS Trend print-outs sitting on top of the nail polish bottles, and she was wearing her earpiece phone. SHe was doing business as she got her pedicure. I wanted to pick her brain about how she was doing such good business in this down market, like did she have some subliminal hypnosis technique to get her sellers to lower their prices, but I was afraid she’d try to sell me a house.
This is in Chester County, PA
FWIW she works for Remax
What I take away from this story is that the rate of closings fell by half since five weeks ago. Which would mean that the rate of sales contracts fell by half from September to October. Wow.
http://money.cnn.com/magazines/moneymag/moneymag_archive/2006/11/01/8392461/index.htm?postversion=2006110213
Slow-market crisis: Stuck with two homes
Imagine you buying your dream home only to discover you’re unable to sell your current one.
By Stephen Gandel, Money Magazine senior writer
November 2 2006: 1:43 PM EST
(Money Magazine) — When Chicagoans John and Judy Peeler decided to move to Philadelphia last spring, they blithely assumed they’d get more space for their money. Indeed, the couple quickly found a 2,500-square-foot, four-bedroom colonial in a well-regarded school district for $440,000, just about what they figured their 2,000-square-foot Windy City condo would fetch.
Perfect. Or so they thought.
Since then the seemingly ideal move has devastated their finances. The Peelers’ Chicago condo has generated little interest, even after they dropped the price - twice - to its current $389,000. And it has been four months since they relocated, which means they’ve been carrying two mortgages and a home-equity line of credit at a cost of $4,000 a month.
Having depleted their savings to pay for this, they’ve had to seriously cut back on spending. They went without air conditioning this past summer, despite sweltering heat and the fact that Judy was eight months pregnant.
They’ve also put off fixing the brakes of their second car, which the mechanic says should be replaced soon. “We don’t spend money on anything that isn’t critical,” says Judy. “Everything goes toward the mortgages.”
The Peelers are among the increasing ranks of “tweeners,” or people who’ve inadvertently ended up juggling the costs of two homes as a result of the slowing market. Many victims of this fearsome financial trap have been wooed by the upsides of the new buyer’s market: increased choice and better prices.
“But they forget the other side of the equation,” says Albert Hepp, owner of BuySelfRealty.com in Minneapolis. Only when they try to unload their old house do they realize just how hard it is to sell.
Then, like the Peelers, they find themselves stuck with one more property and one more mortgage than they’d like or can afford.
Though no group has tallied the number of tweeners out there, it’s clear that there are more of them around now and that they’re bound to multiply if the housing market continues its current trend.
Nearly 4 million homes are for sale in the U.S., according to the most recent data from the National Association of Realtors (NAR). That’s a million more sellers looking for buyers than this time a year ago.
What’s more, the number of houses sold nationwide in August fell 12% from last year. For those who’ve just signed contracts to buy, it’s less and less likely they’ll be able to sell their old houses before closing on their new ones. To understand what that means, do the math: In Massachusetts, a state particularly slow for sales, it takes the average seller 114 days to find a buyer. That’s almost four months of double house payments.
With a $300,000 mortgage, you’d pay about $10,000 in interest, taxes, upkeep and insurance while house No. 1 sits on the market.
Even the savviest sellers can get stuck in this situation. NAR head Tom Stevens is himself a tweener: He’s been trying to off-load his Virginia home for more than a year. “The housing market is going through a period of adjustment,” he told Congress. “I have experienced this firsthand.”
How to Avoid Tweenerdom
Yes, it’s grim out there for sellers, but consequently, it might just be the best time in years for buyers to trade up. So how can you take advantage of this market without getting hurt by it? By doing the following:
Sell First, Fall in Love Later Indeed, it’s hard to resist the bargains. All that inventory! Your dream home is finally on the market! But your best bet is to avoid shopping until you unload your current home. Better to get the harder part over with first.
Buying will be comparatively easy; in this market, there will always be another house to fall in love with. Even if you have to live in a hotel while you look, you will likely come out ahead compared with carrying two homes.
Price Like a Buyer If you can’t avoid buying before you’ve sold, however, there’s a fallback plan: sell smarter. According to Chang-Tai Hsieh, professor of economics at the University of California at Berkeley, the growth of tweeners is caused not so much by a lack of buyers as by the inability of sellers to accept that prices are falling.
Owners grow attached to their homes, he says, and they find it difficult to reduce the price enough to get buyers interested. “It’s not that you can’t sell; it’s that you can’t sell at the price you want.”
Thus you must think like a buyer when pricing your house. Start your research by visiting open houses of similar homes in the area. Consider not just what the house is listed for but what you’d offer for it. Apply that to your house. (Forget charging more because you have a newer kitchen; these days upgrades may get your house sold but usually won’t get you more money.)
Then cut your price by at least half of your potential carrying costs, suggests Chicago financial planner Richard Potter. To calculate these, multiply your monthly expenses by the average selling time in your area, which a broker can tell you.
Leave Yourself a Loophole Contingency clauses, which require the seller to wait until the buyer has sold his house to close, all but disappeared in the early 2000s. Back then most sellers had more than one buyer for a property, and bidding wars were common.
Now, realtors say, contingencies are making a comeback. “Sellers are realizing that they have to give buyers more time,” says Mary Kaljian, a ReMax realtor in Los Banos, Calif. If a seller won’t accept a traditional contingency clause on a property you want, ask for a 72-hour clause, which allows him to keep marketing his house while you try to sell yours.
If he gets a better offer, he must give you three days’ notice to decide if you want to be a tweener or to let the other buyer have the home.
Going for it? Buy yourself extra time by asking for the longest closing period possible. Most sellers will agree to 90 days; some, 120.
How to Survive Tweenerdom
Already stuck? Or think you’re about to be? While you try to sell, these methods can ease the hit you’ll take from the down payment and double mortgages.
Borrow From Yourself To help you with the down payment on your new house, lenders will try to sell you on so-called bridge loans, short-term interest-only loans designed for buyers whose assets are tied up in another house. But these have up-front fees and interest rates of up to 10%.
“Avoid them if at all possible,” says Chicago financial planner Todd Lebor.
There are two ways to do this: If you have not yet put your house on the market, open a home-equity line of credit, which can be as much as two percentage points lower than the average bridge loan. Most banks won’t issue a HELOC on a house that’s for sale, however. In that case, you might consider borrowing against a 401(k), says Lebor.
Though 401(k) loans normally are not recommended, rates on your retirement account will be as much as one percentage point better than those on a bridge loan and you’ll pay the interest back to yourself.
Become a Landlord Another way to use your vacant house to float you: rent it out. A combination of more renters and fewer units is expected to drive rents up 5% next year on average nationwide, according to the NAR, and that may be a boon to struggling sellers.
After Jeff Greene’s company relocated him from Tampa to Boulder in June, he and his wife put $15,000 into their home to get it ready to sell. Didn’t work. They cut the price $60,000. Still no takers.
Carrying the house while it sat on the market 90 days cost them $7,500; meanwhile, they were also paying the mortgage on their new house. It was fast becoming impossible for them to hold on to both.
Then, by chance, they found a renter. The $2,500 a month they collect covers mortgage, insurance and taxes. They now plan to rent their house out until the market recovers. “We still don’t have as much freedom with our budget as we’d like,” says Jeff. “But it’s definitely stopped the bleeding.”
Hey there
Did anyone else hear on NPR at the end of morning edition the news that the highest number of HELOC’s were taken out last month than in the past 16 years?!! The commentator even called them housing ATMS. If the housing market is tanking sooo bad, what is it that these people are going on to be able to refi for more than what they owe? And if Home Depot and other places like it are so quiet what are they spending the cash on, the mortgage? Very interesting.
what are they spending the cash on, the mortgage?
food
Perhaps they are getting HELOC’s while they still can…….just in case
At last, some news out of Atlanta. From he Atlanta Journal Constitution, http://tinyurl.com/yxmshc
“But the quick rise of 17th, and the rest of Midtown, has some concerned. Tim Holdroyd, a longtime Midtown real estate broker, agreed that 17th is Midtown’s latest focal point. He bought an acre at 17th and Spring streets nine years ago. But he worries that developers and investors are paying too much for Midtown real estate in an uncertain office and condo market. Office leasing around the city — though improved — is tepid compared to demand for suites in the 1990s. And local condo demand, which has exploded in recent years, has cooled in the past two months, Holdroyd said.
The cost of land is getting so high it’s making it harder for developers to make a decent profit off their projects, Holdroyd said.
The same thing happened in the district in previous decades, and some properties grew weeds because developers paid too much and couldn’t get their projects out of the ground, he said.
“You have individual developers picking up huge pieces of land for huge numbers — you saw this in the 1980s and 1990s. I don’t get it,” he said.”