“What Buyers Are Looking For Has Changed Dramatically”
The Star Ledger reports from New Jersey. “In New Jersey, the numbers are skyrocketing, according to an Oradell-based company that lists foreclosed properties. ‘For years, we were averaging about 70 (lis penden) filings a day,’ said VP Cynthia Ehrlich. But since September, that number has ballooned to 140 filings a day, she said.”
“In February, New Jersey rang up 4,448 foreclosures in a single month, up nearly 36 percent from the same time last year.”
“‘We were in Alpine the other day, and the homeowner has a $2.9 million home and he has an $11,000-a-month payment on his house and his payment is going up to $17,000 a month,’ said Craig Laube, president of American Foreclosures. ‘Oh, and by the way? He is a Realtor, so it happens to everybody and it happens everywhere.’”
“(Realtor) Joyce Aponte who runs (a) foreclosure division, said banks are willing to do deals, including ’short sales.’ ‘In the last 10 years, I have done maybe five short sales, but this year and last year, I’m doing 8-10 a month,’ she said.”
The Herald News from New Jersey. “A risky mortgage market that boomed starting in 2000 is now crumbling. The ripple effects are far-reaching, and they are starting to show in New Jersey.”
“By 2004, at least a third of mortgages issued in nearly all of Paterson and Passaic were subprime. In much of Haledon and Prospect Park, between 22 and 33 percent of home loans were untraditional. And 16 to 22 percent of loans were subprime in stretches of Clifton, Lodi and Garfield.”
“At the end of 2006, about 13 percent of subprime loans in New Jersey were past due, according to a Mortgage Bankers Association survey. ‘Our office receives a minimum of four (foreclosure notices) daily,’ said Bill Maer, a Sheriff’s Department spokesman.”
“Last month, a somber mood prevailed at a mortgage bankers conference in Atlantic City, said Wendy Nastasi, a Pompton Plains broker who attended. ‘Everyone was there looking for jobs,’ Natasi said. The mortgage industry shed more than 6,000 jobs in the first three months of 2007, nearly double last year’s totals, a national study showed.”
“With the fraud, banks are making it harder for all prospective homeowners to get loans. ‘Lenders have raised the bar,’ said realtor Mary Ann Sgobba, the . ‘Certain credit scores are not going to acceptable now.’”
MSNBC from New Jersey. “Mark and Kerrie Russo, a Jackson, N.J., couple, are struggling to hang on. Less than a year after buying a home in 2005, a local mortgage broker began sending letters offering to refinance their loan.”
“What the broker didn’t explain, Kerrie Russo says, is that this was a ‘negative amortization’ loan. Russo says that when she called the broker to complain, she was told that because she failed to read the fine print, the responsibility for getting in too deep was hers.”
“After coming up with about $14,000 to get out of the downward spiral into yet another loan, Russo says she’s learned an important lesson. ‘I have learned a new term called ‘predatory lending,’ she said. ‘And that is what I am a victim of.’”
The Morning Call from Pennsylvania. “The average price of an existing home in the Lehigh Valley fell slightly in March as the rising number of houses for sale gave buyers more choices and power to negotiate prices.”
“The number of properties listed for sale rose 31 percent, compared with February, according to statistics released this week by the Lehigh Valley Association of Realtors. The large inventory of available homes has concerned economists, who say the law of supply and demand may slow the rate of appreciation and depress prices.”
“New listings outpaced home sales by nearly two-to-one last year, according to the Realtors association. Similar trends have continued during the first quarter of this year. In March, the number of homes sold fell for the 10th month in a row, declining 16 percent.”
“The total number of homes for sale last month in the Valley was up 45 percent, compared with the same period in 2006.”
“Sellers, by most accounts, have been slow to grasp the shift. ‘A lot of them think we are still in 2005,’ said Jeffrey Burnatowski, who’s been a real estate agent since 1983. ‘There are only so many buyers out there. And there are so many properties continuing to come on the market.’”
The Baltimore Sun from Maryland. “Home sales across the Baltimore metropolitan area tumbled nearly 10 percent in March from a year earlier. In Baltimore and the five surrounding counties, 2,866 homes sold, compared with 3,170 sales in March 2006.”
“The number of homes put on the market for the month continued to far outpace the number of sales contracts signed, a sign that the market is continuing to favor buyers.”
“While 6,324 homes were listed for sale in the region in March, just over half that number, 3,594 - went under contract, the statistics showed. Altogether about 16,000 homes were for sale, up from 12,000 a year earlier and 5,600 in March 2005, during the housing boom.”
“‘What buyers are looking for has changed dramatically. Two years ago [as prices rose rapidly] buyers were willing to make big bets on homes and they want to buy as much as they could finance. But today, the focus for buyers is value,’ said Anirban Basu, CEO of Baltimore-based Sage Policy Group Inc.”
“Joe and Carolyn Fuscaldo, who are selling their three-bedroom in Towson, have become so convinced that interest is picking up that they have decided against accepting any offers contingent on a buyer selling his own home.”
“The Fuscaldos were encouraged by an offer for their asking price of $449,000 made within a week of listing the house in February. The contract, which had a contingency clause, fell through when the buyer’s house didn’t sell in 30 days.”
“Kellie Langley, the real estate agent who listed the Fuscaldos’ house, said March has been a mixed bag. ‘I had a couple of listings that were put on and sold right away for full asking price, and that was great. A couple of other agents experienced the same thing, and we got excited like, ‘It’s back.’ But I’ve had a couple [of homes] that are lingering as well.’”
“Some real estate agents said the market showed signs of picking up in March, though many sellers are still pricing their homes as if the market hadn’t cooled.”
“‘Buyers are taking a little longer to make up their minds,” said Noah Mumaw, a real estate agent in the Cross Keys area of Baltimore. ‘They are more educated and want to see everything out there. There is so much stuff on the market, it takes a while to see everything. There is a lot on the market that is overpriced and slowing the market down.’”
“After coming up with about $14,000 to get out of the downward spiral into yet another loan, Russo says she’s learned an important lesson. ‘I have learned a new term called ‘predatory lending,’ she said. ‘And that is what I am a victim of.’”
Yeah, right. If your house had gone up in value, you’d be bragging about what a genius you are. How you’re the next Donald Trump.
Any remember a time when Americans actually took responsibility for their actions?
Arizona has a 72 hour right of recission for refinancings. That’s plenty of time to go home and think things through, read the documents, ask someone else questions, etc. But I suspect every refinancier didn’t read anything, didn’t care to ask a single questions, but only complained that they have to wait 72 hours after signing to get their “liberated equity.” Now they cry a f@cking river because they didn’t understand what they signed, yet had 72 hours to rescind.
No, you’re a victim of your own laziness and stupidity. Next.
Exactly! Whip out that trout ’cause this Betty needs a bitch-slapping. I’m sorry, how intelligent do you have to be to realize something is up when your payment on your 400K mortgage is only $900 a month?
I always say the simple math does not lie. $900/month X 360 months = $324,000. At some point along the line you have to know that the additional $76,000 principal + interest have to come due!
But these buyers simply do not understand, and will not take the time to understand their loan. They will wait until something goes wrong.
It is predatory lending! However the ultimate prey has yet to feel the pain. The buyers of CDOs & MBSs are going to take it in the shorts……Those are your pension plans and FCBs.
my in laws live in freehold which is right next to jackson
it has so many of these behomoth mcmansions being built all over on former farmland. no doubt these boobs live in one of these eyesores
i am sending this to my in laws who were pressurring me to buy during easter dinner
Don’t bother sending them anything. Allow them to wallow in their own mire.
I have been telling my brother in FL all along that renting in FL is better than buying. Recently, I found out my nephew in FL bought a two bedroom condo closet in FL. Now my nephew is slaving away his precious time working two jobs to support his ridiculous mortgage. The best years of his life, and for what?
I gave up completely on some of my relatives. Now I don’t talk real estate unless they bring the subject up, and even then I try to change the subject. Why bother?
I remember having long telephone conversations with this same brother explaining how I go about investing in securities. He did the exact opposite with his money (like putting everything in two stocks - don’t blame me - I don’t do it that way) and lost his a$$.
You simply can not help some people understand anything. Period, paragraph.
Unfortunately, experience will be their teacher, since they do not have any other demonstrable way of learning.
Got 10% down?
Arizona has a 72 hour right of recission for all refinancings. Thererfore, every one of them has plenty of time to go home, read the fine print, ask questions, and ultimately rescind the loan. Yet I suspect most just went home a little miffed after learning they can’t get their “liberated equity” until 72 hours later. Now they cry a tale of exploitation, but they had every opportunity to learn the detailed facts of their loans and take whatever action necessary to protect themselves. That’s the purpose of the law for Pete’s sake.
not just in AZ, but everywhere
If you had learned “an important lesson” it would be to read the frigging paperwork before you sign a contract. I have learned a new term called “stupid borrower”-meaning too stupid to be allowed to buy a house or to reproduce.
But there’s the rub: you can read the paperwork after signing and still be ok. The title company even gives you a preprinted form that all the borrower has to do is sign and fax in. The loan agreement is then deemed by law to be rescinded. The law makes sense and is adequate to prevent the type of lending so many FBs are now crying about. Victim….my @ass! They just couldn’t wait to get to Chilis after signing and bragging to their friends at the bar about how much money they just “made.”
Sorry for the double post earlier.
These people live in an imaginary world, “And they lived happily ever after.” Are you trying to shatter their fairy tale?
Good point. Everyone today wants to believe the “too good to be true” scenario. Folks, if it’s too good to be true, it’s too good to be true. Wake up! Like I just posted above under chick’s post, you don’t have to be able to know how to split the atom to understand that a $900 payment on a 400K makes no sense at all. I’m using these numbers because they applied to a friend of mine who called all excited about how WaMu was offering her this payment on her 400K mortgage. All I told my friend to do was to stop, think about whether it made any sense, and don’t be a friggin’ idiot like everyone else in this dummied-up country of ours!
Believe me, our society will be a lot better off when the majority walk over the edge of the cliff and into the financial abyss. The housing situation will take care of that.
Damn. At interest only, that makes the rate 2.7%. How hard is it to take $900, multiply by 12 and divide by 400K?
Did she really think that 2.7% was always going to be the rate? Aren’t people used to the idea of teaser rates that go up later from credit cards?
This is not rocket science.
It was a OpARM loan, and they were adverising the NegAm payment.
How many buyers understand amortization, much negative amortization.
Any remember a time when Americans actually took responsibility for their actions?
No Never…
17000.00 house payment??? that sums it up. If you are buying a house that costs that much and have to finance, you shouldn’t be buying a house that costs that much, end of statement. but hey I drive an old car and am not cool
I totally agree with that. Unless your trust or lottery annuity is throwing that amount off monthly, that price range should be cash.
exactly, I missed the handbag thread a while back but it is same crap, over priced garbage that is not actually worth anything, retirement? who needs it? financial security? Ha… makes me sick . AND I WILL HAVE TO SUPPORT THESE PEOPLE IN THIER OLD AGE, makes emigrating almost appealing.
Right (ft laud) but can you reallly emigrate with your money? Doesn’t our govt limit the amt of assets you can take out of US?
Hey, I am sure with a little ingenuity… just kidding, couldn’t leave.
azlender, where did you get that info (limit the amt of assets you can take out of US??)
I’m pretty sure that you can move all of your assets out of the country—after all, this isn’t North Korea—but you have to declare large transfers of money. For example, you can only take 10K in cash out of the country with you on a trip without making a declaration. The government just wants to know if you’re a Mexican drug lord taking suitcases full of cash to Juarez. They’re worried about financial crime rather than the flow of legitimate funds.
yep, and that 10K amount hasn’t been indexed to inflation.
I love the fact that the owner is a realtor.
I was thinking about that. I wonder how many ’stated incomes’ were from RE agents, brokers, stating skyrocket commissions as recurring yearly income. Probably OptArm to account for the down months too.
Appraisers don’t get commissions do they? That would be hilarious and yet terrible.
I’m sure plenty of realtors, and the like, that were enjoying great commisions in the salad days bought well over their heads thinking it was never going to stop and now are eating mac & cheese regularly.
Hey,
I eat mac and cheese… Trader Joe’s (plug alert)
I’m also sure most realtors either do not have a college degree or barely got theirs. Oh, I’m sure one or two graduated with honors… But most? Nyet.
I’m with the other people, anything over 2.0M should be cash or trust fund range. I know plenty of people who own homes that cost over 2.0M (its LA, an egalitarian society with money). Most paid cash and think all of their neighbors did too. Ummm… guess what, real estate is set at the margins.
So I’m not going to be able to afford a 2.5M home… but the surplus on the market will drive down their price and thus push the 1.2 to 1.5M homes down into my price range.
The salad days of realtors ™ and mortgage brokers are over. Tranditionally in a boom market Realtors ™ make 0.6% of GNP as commisions. This time? 0.9%. That’s going to make the traditional downturn 0.3% of GNP for commisions sting that extra little bit. Does anyone else think that internet based realties, etc., won’t drive that down further?
People still talk about the 1990’s recession “week without a phone call” (at realtors offices). I’m thinking we’ll hit a period of a few weeks this time. Its happening faster.
Of course I blogged my opinion. http://www.recomments.blogspot.com.
Basically, my opinion is that we’ve lost the dampening factor to slow the maket. So the pace of change will be faster and overshoot more on the downside.
Neat thing, since the time to buy is so far away… we (buyers) can debate this for a long time before acting.
Got popcorn?
Neil
Like the drug dealers who do their own drugs, unsuccessful realtors drank their own Koolaid.
Great analogy!
I wonder how much the largest mortgage in America is for a single residence? Who is the USA’s potentially MFB? (most f’d borrower). And, on a related note (no pun intended) - what is the largest monthly payment out there that someone is actually paying?
ten years ago I was working in ‘loss mitigation’ and calling FB’s by the thousands. It was VERY rare to see a $4000+ mortgage payement back then. And that guy was a doctor or screenwriter ususally. Now is JANITORS with that kinda payment. or the unemployed!
Even allowing for wages to double in 10 years does not compute.
Read a post on one of the Seattle Realty site blogs where the realtor was bragging about her wisdom in taking out an Option ARM when she bought her negative cash flow rental properties.
Her “reasoning” was: 1) the lower payments early on would enable the properties to not negative cash flow *as much* and 2) by the time she was into a higher interest rate, rents would be higher in Seattle so all would be well at that point.
All I could think was “Man, how many clients did she share her “wisdom” with?”
I bet he’s like the ad where the guy is riding the lawmower. “I’m up to my eyeballs in debt, someone please help me!”
I love how “help” wasn’t moving into a smaller house in a less status-conscious neighborhood so he wouldn’t feel pressured to kill himself keeping up with the Joneses. Nooooo … the “help” was another friggin’ loan!
That commercial is a comment on the entire spirit of the age.
I agree - it’s like leasing a BMW instead of making reasonable ownsership payments Honda Accord. But hey - it’s more fun to brag to your friends that you’re driving a BMW.
To which my mother would say, “So what? It’s just four wheels and a motor.”
I like your mom.
I’m with her….it gets me from point A to point B (my 1998 Honda Accord, never had a note; paid in cash).
BayQT~
did you catch it was owned by a realtor?
lmao a realtor carrying 17k a month unfreaking real
and alpine is a beautiful area but 17k a month?
i am sure the investor did not plan on holding it long enough for the reset to happen. too bad jerkoff
Noah Mumaw doesn’t know.
“There is alot on the market that is overpriced and slowing the market down .”
Excuse me ,but as a realtor why doesn’t this jerk just show the well priced listings ? Why do the overpriced listings have to slow the market down ? Even if a RE agent got a GF to bite on a overpriced listing the lenders might balk at this point .
I think the realtors are not doing right by sellers when they string them along on some far-fetched hope of a spring/summer bounce to get their price . Allowing overpricing could cost the sellers a sale if they are on a time limit . When it comes to this RE market there is no room for screwing around . Also ,I think overpriced listings could be fraud deals or cashback/incentive deals ,so as a lender I would cut the deal back anyway or require more down . The days of sellers putting any darn price on the market and getting the appraisal are gone (or should be now).
Or why can’t the realtor have a motto of, “I’ll gladly submit any and all offers!” to assist with the lowballing and, thus, lower comps/prices.
There are two townhouses in my area I’m considering making offers on. My offers would be about 80-85% of asking. I used to be timid to do this. Now I could care less. All they can say is no. And then I can say ok - good luck!
Are you sure eastcoaster that you don’t want to wait for a foreclosure where you might get 50% or more off the current list prices ? I got a friend of mine a house in California for 42k in 1996 that was a foreclosure in good shape .
I need some education on foreclosures… I’ve seached my area on foreclosure.com. All of them are bankruptcies which, they warn, “Properties that are listed as part of a bankruptcy filing are often subject to liens and potential inconveniences that you must take into consideration.”
Any tips for me?
Pay for a good title search
Title insurance
I’m really tempted to call the listing agent on a condo in Bethesda that sounds nice in the newspaper blurb and offer 40% of the asking price. It was advertised for a few months this winter, disappeared and just showed up again at the EXACT SAME price. Asking $475K. I’d like to offer $190K just to see what would happen. Not sure my ear drums would survive.
By the way, it is a 2 bedroom corner unit with over 1400 sq ft., or so the ad says.
this a rule of thumb now in bubble areas..
offer 50% off the listing..no upward negotiation.
polly-
Submit it, the sooner people get with the program the better. If it were me and I just had to buy… don’t know why anyone is doing this now… I would find the closet comp and offer 30% less than that comp at least.
Better still, I could use someone to work with to help me find a deal like that…
eastcoaster-
Find a broker that specializes in fixers and foreclosures. Make sure it’s at least 80% of his business. If he/she offers to put you in a car and help you find a house. He doesn’t specialize in fixers and foreclosures. Give him/her a zipcode and tell them when he gets a listing in that area to give you a call.
If you don’t offer 30% under ALL asking prices your undercuting yourself.
If by lot the realtor means almost all houses on the market are overpriced, I would agree. This is why the market is slowed down. Prices are WAY overpriced, and not even a small discount here or there makes much difference at all. Of course,, the overall flow of money has slowed a lot, and the river has been reduced to a stream, since most buyers have a previous home to sell etc, and few first time buyers will qualify in the current market…
The agents drag buyers through the overpriced turkeys as a sales tool. They spend half a day or so looking at overpriced P’sOS then bring the buyer to a lower priced listing. “Wow, what value!” Sold.
Oldest trick in the book.
can’t believe a ‘realtor’ would actually do that… i’m shocked i tell ya.. shocked!
i have always hated driving around with realtors, instead i’ll ask them to send me ALL the listings in my criteria and then i’ll ask them to show me the only ones that i feel would work for me, and these are the ones i’ve already driven by and done a look-see of the neighbourhood. yes, its more work but that way i’m not getting spoonfed the ‘realtor’ BS.
got cash?
That’s so true, DC_Too. I know how my realtor friend sold my halfway fixed-up hundred-year-old POS in Maine last summer. He dragged the buyer through a couple of real DUMPY shacks that were priced at $130K, where the fix-up work that was needed was very obvious. This buyer was still working in Mass and did not want to engage in immediate fix-up projects. Then the realtor showed my place ($155K), no obvious fix-ups needed, upstairs water view, 85% owner financing available. Bingo. Buyer signed up for full price. You may well ask why I was willing to offer 85% financing when I believe the comps will eventually fall below $100K. The answers are (a) this particular buyer is unlikely to walk away from the down payment and (b) by the time the comps fall far, the buyer will have made the first 24 or 36 monthly payments, which I can re-assign to the “principal” column if I have to repossess the property. (Buyer performing very promptly so far.)
Wow. Suckah.
I grew up in Mass., and did go up to Maine in the summer one or twice, and I still don’t understand what it is about Maine that Massholes find so appealing (aside from cheaper title tax on cars). Is it the black flies? The rocky beaches? The Canadiens? The mind boggles.
You mean illegal cashback at close like CASEY SERIN?
Oh well, I suppose I benefit from my landlord’s notion that his house will sell (at $575K) in the next year or two. If he brought the price down to $475K, I might have to move out, because someone might actually pay it. Even az_lender might actually pay it, though not in 2007. Let him keep the price up for a while, where nobody will bid.
Housing Wizard-I happen to know this young man. He helped my daughter sell her Condo and buy a house. He did a great job and and there was no BS. Always looking out for my daughter and getting things done right. He is not a jerk! Not at all like 90% of the people out there.
Goes to show how 90% can mess up the market . It’s just some people have a serious need to sell and a realtor that leads that seller to believe they can get their price will end up getting the seller less when they become desperate .I know that some realtors are honest, but right now the REIC reminds me of a bunch of drones mouthing the NAR talking points .
Frankly, if 90% of the realtor’s were like this young man, we would not be in the mess we are in. Ethics and a sense of morality are dying values. What a shame.
I’m in the Lehigh Valley and everyone swore (last year) that there was no bubble here… It’s different here because every douche from NJ wants to move here… Guess not…
On another note, I’ve got NJ as a darkhorse to end up with the worst price declines in the nation. Anyone else on board?
check out the NJ link on the right -LOW BALL
bids taken 25% off list
Hmm… In a word, no.
I used to live outside of Philly in NJ. Yes, prices there are a bit nuts (Cherry Hill). However, there is industry in that area, jobs pay pretty well, and, most importantly, speculators were not flipping 10+ houses at a time.
That’s not to say they won’t see price drops; they certainly will! However, now living in one of the big bubble areas (Palm Beach), and traveling for work to the others frequently (CA primarily); let me tell you, NJ just doesn’t stand a chance.
Until you have the sign flippers; the lines that start 3 days before opening to put a deposit on a POS condo, the insurance crisis, a totally f**ked up tax system… You are going to be in 2nd place my friend. Take a number, FL is the first into the toliet, followed by Vegas. After that??
Also, this is just my opinion, but FL and Vegas get my bets because of the total psychosis centered around housing. In percentage drops, I don’t think anyone is going to take the crown from these 2.
However, in absolute dollars? Definately CA. Starting from a MUCH higher number; with far more “bubble areas” (like the whole stinking state), and a TON of homes. The amount of money vaporized in the next 5 years in CA is going to be truly staggering.
California will go into the crapper BIG TIME!.
ditto ^^^
i’ll vote AZ as a close third.
One thing going for NJ is the industry base, and the somewhat higher wages as compared to other bubblecious regions.
So %age vice my list looks like:
1- FL
2- NV - vegas
3- AZ -
4 - CA - may be tied to # 3 but higher in absoluet $’s
I don’t know much about the northeast, so i’ll defer..
got cash?
Prices haven’t been a ‘bit’ nuts in NJ, they have been crazy. The high taxes and insurance, the fleeing of the middle class into PA and DE, and the insane run ups at the shore leave me believing we’ll see some major declines. It is just gonna be under the radar compared to CA or FL.
Good point about the taxes and flight to PA. Pennsylvania’s income tax is a flat 3%. In NJ you pay about 3% on the first $75K of income, but then the marginal rate is six point something (until you reach $500K of income, which is of no concern to me personally).
Southern NJ is not as inflated as Northern NJ. But there are more mortgage banking jobs in Southern NJ. And when the state is forced to start paying its debts and public employee pensions, its taxes will be higher than the states around rather than lower.
I thought Florida was already a toilet, so how could we go into the toilet?
Also, this is just my opinion, but FL and Vegas get my bets because of the total psychosis centered around housing. In percentage drops, I don’t think anyone is going to take the crown from these 2.
However, in absolute dollars? Definately CA. Starting from a MUCH higher number; with far more “bubble areas” (like the whole stinking state), and a TON of homes. The amount of money vaporized in the next 5 years in CA is going to be truly staggering.
I think you’re probably right about this. Most parts of the country, and especially the coasts, are going to drop big time, but even here in D.C/Northern Va. I don’t see the absolute craziness of Florida, Vegas, or Phoenix. There it’s a whole frenzied mentality, here and in California (apart from the OC), it seems to be just classic stupidity.
We NEED all that money to go to money heaven ASAP. Apparently there is 3X the dollars in the world as in 1990. but salaries only doubled?
Heck no, I say inland area of SD (Mira Mesa, Poway, Escondido etc),Mesa, Gilbert and Chandler AZ, but if I only had to pick one it would be Cloverdale or Ukiah CA. Highest welfare in the state, avg. income 35,000 a year yet you couldn’t touch a 20 yr old 3b/2b house under 450 last year.
Not going to take you up on that one. In addition to the other comments, NJ has public transportation infrastructure and a culture where even rich people are used to taking the train. Means that people will not always decide to live in NYC or Philly if they can. And NYC and Philly will always have a good supply of well compensated jobs.
I reserve the right to change my position if the entire hedge fund industry collapses.
Anybody have predictions about eastern Massachusetts?
May go down to 1994 prices, but it won’t go down to 1980 prices. Some areas were undervalued because of white flight/racism. While the Boston Public Schools still SUCK (for the most part), the racism and prejudice has decreased a lot … you’ve got the lesbians in Roslindale, blacks (!!) in West Roxbury, and of course a bunch of theatre fags in what used to be Tent City. Used to be when blacks moved in, the Irish moved out … well, not this time. Not that there aren’t still racist neighborhoods (*cough*, Dedham, South Boston), but these neighborhoods have been economic losers strangely enough (although their property values went up too … expect to see those areas drop like stones in a summer brook–kaDUNK!).
The “ghetto” neighborhoods are taking a hit because they went from being relatively low in violence to pretty scary again in a few short years–it’s the crack baby juvenile deliquent wave. Fun.
However, many neighborhoods enjoyed real improvements (not fake condo conversion crap) over the last two decades–better transit, gutting/rehabbing, quality new building, new retail/street level development and business activity, improvement of adjoining City infrastructure, etc.
Basically, Boston took a horrible hit in the 1960’s. It probably will never return its 1960 level, but in the 1990’s it did come up a LOT. The fabled ‘deals’ of yore aren’t coming back, unless Dorchester does well in the next upturn … could happen, especially if the T follows through on the Indigo Line thing. Any property near the station sites should do well long term, even if it’s hurting now. Worth looking into.
As for the rest of Boston–old factory towns like Lowell, Lynn, Fitchburg, Springfield (not, technically, Eastern Mass.) were, and are, toast. Fuggedaboudit. Snooty west suburbs are already seeing price drops… if you “extracted equity” in Wellesley or Lexington, you’re f@cked … and I’m laughing at you.
I think the worst stuff will be in areas that still have plenty of buildable land at the edges of exurban growth — builders are still going to build — and they are going to build cheaper and cheaper stuff on the way down just to try and keep up with a diminishing market. Stuff like NW Arizona communities that bill themselves as the next distant Vegas suburb, or central Florida sprawl radiating away from Orlando, where there is still cheap-ish agricultural land to convert — that’ll be stuff that rides a long, slow brutal train down. Northern Jersey migh suffer less (though still suffer) just because of the comparative lack of still-developable land.
“…the homeowner has a $2.9 million home and he has an $11,000-a-month payment on his house and his payment is going up to $17,000 a month,’ said Craig Laube, president of American Foreclosures. ‘Oh, and by the way? He is a Realtor…”
And we know his commission checks are few and far between these days. I wonder how much this house will go for at foreclosure.
Most of NJ is still in the “it can’t happen here” stage. I work with a part time broker who still believes it to be true. Lucky for him, he hasn’t quit his day job yet.
I almost got in a fist-fight at Christmas when some NJ dope told me, “renting is throwing money away”. They all thought it was a great time to buy. With every passing day I look more right and they look more dumb. Time can be a wonderful thing.
I bet they are still in denial. New Jersey is so special. Bwahahaha.
“‘We were in Alpine the other day, and the homeowner has a $2.9 million home and he has an $11,000-a-month payment on his house and his payment is going up to $17,000 a month,’ said Craig Laube, president of American Foreclosures. ‘Oh, and by the way? He is a Realtor, so it happens to everybody and it happens everywhere.’”
I Love the used and abused “sob stories” …but I’d hate to be a Realtor in this bubble market with a White Elephant eating $17k a month.
Pass the peanuts …QUICK !!!
That story takes on an even greater impact when you realize his income is plummeting as the mortgage payment ratchets up.
I hear it in New Jersey exactly like this: “It’s different here, its just different.”
They are right. Just not for the reasons they think.
Banner up at cnbc.com…
National Association of Realtors Cuts Outlook For 2007 Home Sales; Subprime Problems Will Slow Recovery
“Will Slow Recovery”? Heh. How about this: Alt-A problems will accelerate collapse.
“Slow Recovery” = “send prices down the toilet”
(Jimmy Jazz’s comment wasn’t showing when I wrote mine)
Along the same lines, I love the statements in the post from the PA paper: “average price in the Lehigh Valley fell slightly in March…law of supply and demand may slow the rate of appreciation” — still writing as if there WERE appreciation. I would say
“slow the rate of appreciation” = “speed up the depreciation”
It can’t happen in newark
Hi there aladinsardonic
I love the smell of sardonic, in the morning.
Smelled like… Victory.
Someday this war’s gonna end~
I love the smell of Newark in the morning. It smells like feces. Wait, I don’t love that smell. Newark will be a disaster (bigger disaster) when this is all said and done.
The lehigh valley is down 20-30% and that’s a fact. Check the multiple listing for Emmaus, PA on Minor Street. 2 townhouses side by side. One listed for 149k the other 170k. The one for 149k was just purchased for 130k. That means since they were selling for 170k last year that’s a 40k loss already. Do the math, when the summer inventory hits it’s going to get worse. Our prices are going back to 2002 prices easily, these fools from NJ are going to be crushed!
Americans love a good mania. Dot com, then we jumped from that frying pan into the fire of a housing mania….
What’s the next mania?
Human slavery?
“What’s the next mania?
Human slavery? ”
Too late…In sweat shops across 3rd world countries and the illegal immigrant based underground US economy, human slavery is already booming.
lol
Actually, Human Slavery may not be far off as the next mania. I mean, Circuit City pretty much fired all their $10 an hour sales floor people so they could hire folks for $6.50 an hour. I’ve been told by people that the health benefits where I work are “too good” and “everyone else has crappy health benefits these days, so should you”. People think Wal-Mart is God. If all of us on this board owned a company a made millions, how many of us would give it back to our employees in higher wages and better benefits? Not many. So yeah, Human Slavery is next. By the year 2012, people will have to PAY employers. “Its an honor to work, you should have to pay for that honor”. In fact, for folks who work for minimum wage at places like Wal-Mart they pretty much do. All their salary goes BACK to Wal-Mart for food, clothes, etc.
I owe my soul to the company store….
Federal Reserve Notes the new Walmart script?
Got 10% down?
uranium…
The Baltimore Sun from Maryland. “Home sales across the Baltimore metropolitan area tumbled nearly 10 percent in March from a year earlier. In Baltimore and the five surrounding counties, 2,866 homes sold, compared with 3,170 sales in March 2006.”
Hmmm…well not even a year ago, I think, 18 months tops, The Baltimore Sun ran a ruge Sunday edition piece on how crazy the housing market has become in B-More. York, PA is now a suburb of Baltimore. People were quickly picking up houses in South Central PA because they had already been priced out forever in the Baltimore area. I am so confused.
and now the drive up 83 into PA is crazy. I know someone who bought up in PA but works near Baltimore… they are trying to sell their home now, because taxes are skyrocketing in PA. It’s quite a drive from York to Baltimore every day …
I know someone that does the train - how good can the house be to go through that abuse daily
“What the broker didn’t explain, Kerrie Russo says, is that this was a ‘negative amortization’ loan. Russo says that when she called the broker to complain, she was told that because she failed to read the fine print, the responsibility for getting in too deep was hers.”
What? What do they mean it was her responsibility? That’s bogus man! Kerrie did not have time to read all that mumbo jumbo. Kerrie had to get home to find out who won on American Idol. Come on give her a break!! Said Kerrie “reading hurts my head”
I’ve been lurking here for a while and it is an interesting board. I’m a formerly turtled “home owner” but have managed to make the conversion to renter with savings. Last year houses here in WNY were bid up over list, now there seem to be almost as many for-sale signs as mailboxes and the few closings are often 20% below ask and the asks are less. There is one piece of land for sale nearby that the realtor told me to “offer anything, she’s from California” but I didn’t like the place. It does make me think I should start to get ready, even if it makes sense to watch from the sidelines for a while. I’d like to buy a modest place cash (cheap) and settle in. Friends suggest looking at foreclosures.
Anyone here have any suggestions for me how to familiarize myself with this process? There seems to be a lot of internet hype that I’m reluctant to subscribe to. Should I be lurking at the courthouse, subscribe to an internet search, making friends at the bank, or am I just as likely to find that bargain in the multi list? Suggestions welcome.
Thanks,
Blue Skye
You need to wait awhile for good foreclosure prices because people are still willing to catch a falling knife . Eventually the banks will need to unload at lower prices .
Yeah - to keep the theme of today’s threads - wait until the head of the NAR (not DL - he’ll be gone soon I”m sure) proclaims in a future January “After years of falling housing prices, we’ve given up projecting rising prices only to be proven wrong, so we now start this year’s projection at -1% for the year”.
Then it’s time to buy.
In the UK there was a similar situation with so called “Endowment mortgages”. These products were really just savings schemes and after 25 years the buyers were assured that appreciation in the savings fund would outpace the interest rate charged on the loan. At the end of the term the house would be yours and chances are you would also recieve a large cash lumnp sum. When the products were sold, these endowment funds were doing well and it was a tempting option for many buyers. However, several stock market declines later, many people are facing huge shortfalls when the mortgage terms finish.
All the people that were sold these products were subsequently awarded compensation for the mis-selling, as they were not made fully aware of the downside risk. I would be surprised if there was not a great deal of mis-selling going on in the past few years. That is probably why so many of these companies have shut up shop; to escape the coming wave of litigation.
(hope this doesn’t double post)
I’ve been lurking here for a while and it is an interesting board. I’m a formerly turtled “home owner” but have managed to make the conversion to renter with savings. Last year houses here in WNY were bid up over list, now there seem to be almost as many for-sale signs as mailboxes and the few closings are often 20% below ask and the asks are less. There is one piece of land for sale nearby that the realtor told me to “offer anything, she’s from California” but I didn’t like the place. It does make me think I should start to get ready, even if it makes sense to watch from the sidelines for a while. I’d like to buy a modest place cash (cheap) and settle in. Friends suggest looking at foreclosures.
Anyone here have any suggestions for me how to familiarize myself with this process? There seems to be a lot of internet hype that I’m reluctant to subscribe to. Should I be lurking at the courthouse, subscribe to an internet search, making friends at the bank, or am I just as likely to find that bargain in the multi list? Suggestions welcome.
Thanks,
Blue Skye
This is not a “how to buy distressed real estate board.”
Most people here will tell you to save your money, rent and wait.
But welcome. What exactly is WNY? Western New York State? Buffalo area? There may be someone here who can enlighten you on the factors contributing to the bubble in your area.
I figured it was really a poke at distressed home owners board, but thought I might cast for some advice. Getting out of the overmortgaged doll house was the best accident that ever happened to me! Sorry if my post was an intrusion. Yes, I meant western NY. Not all the way to Buffalo though, more specifically Finger Lakes.
If you have the time and the knowledge there is no better place than the courthouse. If time is an issue DataQuick’s foreclosure stuff is a close second.
welcome to the board Blue:
ok, 1st things is to get familiar with the pricing/value in the area you are interested in, especially the historic sale prices going way back to 2000 timeframe, look up the ‘register of deeds’ website and the local GIS for info.
Next, find a ..gasp… ‘realtor’ who especializes in foreclosures and REOs, fixer-uppers and such. this person would probably look nothing like the smiley faces you see plastered on realtor ads. look for a local real estate investement club and get references.
if you don’t feel comfortable with your 1st realtor, feel free to change, if the realtor pushes you to sign a ‘buyer’s agreement’ upfront.. bail, and look for another. signing a ‘buyer’s agreement’ just protects the agent incase you close on a property that he/she showed you but you decieded to do the deal without e’m. it usually has a clause that you can fire them anytime.
above all be patient.. it might take a couple of years for this market to stabilize, so don’t rush.
that’s all i can think of for now, and good luck.
got cash?
Thanks zee. Three of my kids live in Phoenix.
Yes I am counting on cash. I enjoy being debt free too much to re-join the mortgage mill. I will be patient, sitting in a little farmhouse on 400 acres, a twenty mile view, with $500 rent makes it easy to be patient. Figure I’ve got those two or so years. If we are already in the slide then I want to be prepared to survive at the bottom. I’m safe on the contract thing, I’m not uncomfortable saying no. I really don’t think this area is sophisticated enough to have a real estate investment club, has hunting and boat clubs, wineries and Amish schoolhouses.
What’s GIS? Geo Info?
Thanks also mrincomestream.
“(Realtor) Joyce Aponte who runs (a) foreclosure division, said banks are willing to do deals, including ’short sales.’ ‘In the last 10 years, I have done maybe five short sales, but this year and last year, I’m doing 8-10 a month,’ she said.”
…and where are all the buyers for these short sales going to come from, exactly? Prices are going to have to come WAY down (as in the 50% range) to get enough renters to take the bait. IMO, you’d be crazy to buy before we see just how devasting 2008 is going to be. I’ve read that that’s when the greatest number of re-sets will occur (on all the 2, 3, and 5 year ARMs). And, shouldn’t we wait to see how far the contagion has spread, before we consider buying? Many friends of mine are prime borrowers who were allowed to borrow WAY too much. These are (seemingly) educated people in their mid-late 30’s. They will be in no better position to re-finance than the sub-prime borrowers. So, why the distinction?
If sellers have the right to insist on 2005 prices, don’t I have the right to insist on 1996 prices?
Guess who’s going to get their wish? Tick…tock…tick…tock
1996 prices are what I’m looking for too.
Not only do we have to wade through a ton and a half of bad loans in every category, including prime, after that we’ve got a huge layer of outright illegal/crimnal junk to go through.
Thankfully, the time frame that all this news is coming out in the MSM (now that it’s finally begun coming out) has been very rapid.
We’ll be hearing out Prime goof-ups within a month or so and then onto the trully illegal stuff. That’s my hope anyway, by the end of summer everyone will be aware that the high home prices were a total fake.
The Lehigh Valley is getting ugly, sometime soon the Morning Call is going to have to report on the rapid number of foreclosures popping up. Our prices have dropped 20-30% easy yet no reporting on this. They would report instantly when the prices rose $100 dollars in 2004. Like Dylan said, “Oh the times, they are a changing”.
Here’s something that non-New Jerseyans may not know about Alpine, New Jersey. It is one of the wealthiest suburbs in one of New Jersey’s wealthiest counties (Bergen County). Some of Alpine’s most famous residents include folks like Jay-Z, P. Diddy, Russell Simmons, and Chris Rock. So if this Chris Laube individual in the Star Ledger story quoted above is trying to keep up with THOSE Joneses, it’s no wonder that he can’t afford the town. He’s just a realtor, he isn’t one of the Toll Brothers or Hovnanian — those are the kinds of people who could live that kind of lifestyle in Alpine, not an “imaginary playah” (to steal the title from an old song by one of Alpine resident Jay-Z) like this Laube guy.
Unfortunately, New Jersey is chock full of “imaginary playah” types like this guy — especially so the closer one gets to NYC. Believe me, if I only had a dollar for every time one of that lot has said “it’s DIFFERENT here!” or “all of that Wall Street bonus money will keep North Jersey properties sky high,” I would be able to buy into and afford to stay in a place like Alpine myself.
“Sellers, by most accounts, have been slow to grasp the shift. ‘A lot of them think we are still in 2005,’ said Jeffrey Burnatowski
Oh, for f*ck’s sake, HOW IS THIS STILL HAPPENING?
How are people still not aware of the market’s decline? The MSM is picking up steam on a daily basis and people “still think it’s 2005″???
Do people not read, watch the news, browse the web??
Quote: “buyers no longer qualify for today’s more demanding loans. ‘They actually wanted the buyers to have a pretty good credit history and a job and some income coming in…”
Wow, how rude! They actually want people to be able to afford what they buy. (/end sarcasm)