The Jersey Shore Real Estate Bubble

APP Article on Hov

2007-04-29T10:26:00.000-04:00

During its nearly 50-year history, Hovnanian Enterprises has seen ups and downs in the housing market.

You can count this as one of those down times for New Jersey's largest home builder.

The company has lost money for two consecutive quarters and last month said it anticipated a loss in its next quarter as well. Wall Street has pummeled Hovnanian shares, which have dropped more than 35 percent over the last year.

Full article...

Blame it on the Weather

2007-04-24T21:21:00.000-04:00

[Existing-home sales plummeted 8.4 percent from February (6,680,000 units) to March (6,120,000 units) and 11.3 percent since March 2006 according to a report released by the National Association of Realtors (NAR) Tuesday. Erratic weather across the country and unrest in the mortgage industry are being blamed for the drop.

"For the last couple months we've been expecting a weather 'hit' on home sales finalized in March, but looking at overall activity in the first quarter we see that existing-home sales averaged 6.41 million -- a figure that is moderately higher than the sales pace during the second half of 2006," said David Lereah, NAR's chief economist. "We also may be seeing some losses as a result of the subprime fallout. However, this is masking improved fundamentals in the housing market, with lower mortgage interest rates and motivated sellers."]

Full article...

"I Saw the Bubble Bursting"

2007-04-23T19:53:00.000-04:00

"This past Saturday, I attended a barbecue at my friends' house in Maryland. I was surprised to notice as I pulled up out front that the house next door looked vacant and forlorn. Instead of a for-sale sign, there were pages glued to the front window.

As it turned out, forlorn might have actually translated into "foreclosed," since my friends' neighbors had apparently moved out in the middle of the night. (I can't help wondering whether the site was shown on the new "foreclosure" section Yahoo! (Nasdaq: YHOO) has added to its real estate hub.)"

Full article...

NJ Legislator Tries To Make Matters Worse

2007-04-11T21:05:00.000-04:00

There is probably not a faster way to reduce housing market liquidity than to tell banks they can not foreclose. Simply put, a bank will not make a loan if believes the state will impede its ability to collect their collateral should the home owner not pay principal and interest.

(ROSELLE) - Assembly Deputy Speaker Neil M. Cohen today called for a state-imposed moratorium on subprime mortgage loan foreclosures, pending an investigation into the burgeoning problems in the subprime lending market and its effects on New Jersey homeowners.

"The nation's subprime mortgage loan market is experiencing a total and catastrophic meltdown," said Cohen (D-Union), the chairman of the Assembly Financial Institutions and Insurance Committee. "A moratorium is needed to provided breathing room so regulators, investigators, and lawmakers can get a handle on what this meltdown means for New Jersey homeowners and what potential safeguards may be needed for consumers."

Full article...

Nice Deal For Carla Katz Corzine

2007-04-09T20:23:00.000-04:00

HOBOKEN — State workers' union boss Carla Katz, whose romantic history with Gov. Jon Corzine has caused him political headaches and shadowed recent contract talks, enjoyed a beneficial deal when she purchased a condominium four months ago in the same riverfront building where the governor resides.

So rare were the terms of Katz's $1.1 million purchase that only one other buyer of condominium units in the Hudson Tea Building got a better price in all of 2006, in terms of the ratio of the purchase price to a unit's assessed value.

And that buyer was a limited liability corporation consisting of three men whose names are listed as executives in the company that owns the building and is selling its condominiums — Toll Brothers of Horsham, Pa., a suburb north of Philadelphia.

Full article...

And according to Redbankgreen a judge from Little Silver will be taking a look into the matter.

Rumson House Back on Market - 2 Years After Original Listing

2007-04-05T18:12:00.000-04:00

An alert reader brings to our attention a house in Rumson that is back on the market. Way back in '05 we highlighted this house as an example of how delusional some home sellers had become about how much they thought their homes were worth. Two years after originally putting the house on the market, the owners are still looking for a buyer. (I think the home might have been rented out for awhile in the interim.)

"Hey our favorite Rumson house that we have been following is back on the MLS. Original list price in April 2005-$939,000. Current list price-$679,000."

Eastern Monmouth MLS at 4116

2007-03-28T19:23:00.000-04:00

At this time last year there were 3509 homes on the Eastern Monmouth MLS.

Inventories hit a record 4772 in September of 2006.

Sub Prime Problems Hit Local Bank

2007-03-27T19:37:00.000-04:00

"OceanFirst Financial Corp. said Monday it could be forced to buy back as much as $47 million in delinquent subprime real estate loans made last year by a mortgage subsidiary.

Problems at the subsidiary, Columbia Home Loans LLC of Valhalla, N.Y., have already caused OceanFirst, which operates the largest bank based in Ocean County, to restate its fourth-quarter earnings. Instead of a $4.6 million profit, the bank said late Friday it lost $1.6 million."

Full article...

Bad Day for Builders

2007-03-27T19:34:00.000-04:00

Tomorrow is going to be a bad day for home builders. Beazer's stock is down 15% in after hours trading.

NEW YORK, March 27 (Reuters) - U.S. authorities are investigating the lending practices and some other dealings at Beazer Homes USA Inc. (BZH.N: Quote, Profile , Research), one of the largest U.S. home builders, BusinessWeek reported on Tuesday, and Beazer's stock fell nearly 17 percent in after-hours trading.

Beazer Homes said in a statement it could not comment on or verify any investigation, but added, "However, we will fully cooperate with any investigation by any government agency."

Full article...

Asbury Park Press Addresses Sub Prime Issues

2007-03-19T20:03:00.000-04:00

The APP has some article about the sub-prime mess and its effects on the local area. It's nice to see the APP jump on board. While the mainstream media is just waking up to the sub-prime problems, we took a look at this issue as far back as last August.

Here is what I said on August 21, 2006.

Wall Street is loosing its appetite for sub-prime, no doc loans and other exotic types of mortgages. When the mortgage companies loose the ability to sell the riskier mortgages to investors, they will stop offering these types of loans to certain home buyers. It looks like sub-prime lenders are scaling back these knds of loans already.

From the APP snip...

[Experts say the question this year in real estate-rich New Jersey is whether homeowners will be able to handle the added debt.

"What we're realizing now, and it's a hard lesson, is that the housing market goes down as well as up," said Rutgers University professor Joseph Seneca, who leads the New Jersey Council of Economic Advisors. "These things are amplified on the most vulnerable in the market."]

Full article...

"Deadline set for Kara plan"

2007-03-17T10:29:00.000-04:00

From the Asbury Park Press

A U.S. bankruptcy judge has ruled that Kara Homes Inc. must come up with a reorganization plan within 30 days or begin to pay its secured creditors interest.

Judge Michael B. Kaplan rejected Kara's argument that its business consisted of more than building and selling homes, which would have given the company more time under bankruptcy law to determine how it would emerge from bankruptcy.

East Brunswick-based Kara, one of the Shore's biggest home builders, filed for Chapter 11 bankruptcy last October.

But at Least Hoboken Did Well

2007-03-15T21:28:00.000-04:00

March 15 (Bloomberg) -- Toll Brothers Inc. Chief Executive Officer Robert Toll said the spring selling season has been ``pretty much a bust'' and he can't predict when the housing recovery will begin.

``When will the market rebound?'' Toll said at a conference in Las Vegas today. ``Who knows? The Shadow knows. I have no idea. I would've thought that it would've rebounded by now and I would've been dead wrong, and I was.''

Profit at homebuilders has plunged since the five-year housing boom ended a year ago. Rising inventories of unsold homes and hesitation by potential buyers on concern that the price of their house will drop has stifled sales.

Full article...

"Eminent domain reform remained stalled..."

2007-03-15T21:26:00.000-04:00

"TRENTON -- Eminent domain reform remained stalled in the Senate Thursday, as the apparent standoff between an Essex County senator and Gloucester County lawmakers seemingly widened.

On paper it seemed there was compromise, as the Senate Community and Urban Affairs Committee listed a merged substitute of two pieces of legislation -- one sponsored by committee chairman Sen. Ronald Rice, D-Essex, and another sponsored by Sen. Stephen Sweeney and Assemblyman John Burzichelli, both D-Gloucester."

Full article...

"Why Your Home Is Not the Investment You Think It Is"

2007-03-15T21:23:00.000-04:00

"Too many people rely on their home as their primary savings strategy. That's a mistake.

Planning your retirement? Don't bet the house on it.

Your home means a lot of things to you, most of them good. Your home gives comfort and protection to you and your family, and it could well embody all your material hopes and dreams.

But houses have become much more than just places to live. Your home is probably your biggest asset, and the price you could ask for it today is almost certainly much higher than what you paid for it back whenever."

Full article...

Inventory tops 4000

2007-03-12T22:29:00.000-04:00

The MLS for Eastern Monmouth says inventories are 4004. Although the market is supposedly stronger according to anecdotal accounts, it is clear that we are going into the spring selling season with record inventories for our area. Meanwhile, in other parts of the country, it looks like some markets are headed for a complete collapse, especially with sub-prime liquidity drying up.

Take a look at this comment from Ivy Zelman.
"We believe that 40% of the market ... is at risk of significant fallout from tightening credit and increased regulatory scrutiny. In particular, we believe the most pressing areas of concern should be stated income (49% of originations), high CLTV/piggyback (39%), and interest only/negative amortizing loans (23%)...."

Less Blogging

2007-03-01T18:40:00.000-05:00

Unfortuneatly my ability to blog has been curtailed just as things are getting interesting. Also, since the other blogs have done a great job, such as Grims Site, covering other markets, I've tried to limit my postings to info that is only pertinent to the Jersey Shore. As a result, I have not been posting much here lately. If anyone wants to be a guest blogger for awhile let me know and maybe we can arrange something. Send me an e-mail at silvered.little@gmail.com.

It's Going to be Hard to Get a Mortgage

2007-02-25T09:28:00.000-05:00

HARTFORD, Conn. (AP) -- Homeowners with troubled credit histories are finding it harder to get mortgages or refinance homes because softening in the housing market is making lenders less likely to handle riskier loans.

Several lenders of subprime mortgages - used primarily for home equity loans and for people with spotty credit - have shown signs of trouble after the housing bubble popped and more homeowners began defaulting high-interest mortgages.

On Wednesday, shares of Kansas City, Mo.-based Novastar Financial Inc. plunged more than 42 percent to $10.10 per share after the subprime lender posted fourth quarter losses of $14.4 million. Company officials set aside $45 million in anticipation of defaulting mortgages and said they were unsure Novastar would turn a profit in the next five years.

Full article...

Bubble Info Here

2007-02-22T20:53:00.000-05:00

Since my blogging has been slow lately, it probably worth taking a look at the Seeking Alpha Website for relevant housing bubble commentary. Here is the link to Seeking Alpha

"Judy Weil submits: Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can get this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service."

No More Credit; No More Price Gains

2007-02-17T10:19:00.000-05:00

"America's riskiest mortgages are set to pop. Where will the shrapnel land?"

The Economist

"LAST March, ResMAE, a mortgage lender catering to risky borrowers, cut the ribbon on its new headquarters in Brea, California. The sprawling, 135,000-square-foot building dwarfed the company's 458 local employees. But it fitted the firm's outsized ambitions. Less than a year later the company, rather than its ribbon, was facing the chop. This week it said it had filed for bankruptcy and was selling its assets for a diminutive $19m."

Full article...

Housing Construction Plunges

2007-02-17T10:16:00.000-05:00

WASHINGTON — Housing construction plunged to the lowest level in nearly a decade last month as the housing industry continued to struggle with a severe slowdown.

Meanwhile, wholesale prices dropped by 0.6 percent in January, the biggest amount in three months, providing fresh evidence that inflation pressures are easing.

Construction of new homes and apartments plunged by 14.3 percent in January, pushing total activity down to a seasonally adjusted annual rate of 1.408 million units, the Commerce Department reported Friday. Construction starts were up only in the Northeast, a gain of 8.9 percent.

full article...

3928 Houses on the MLS

2007-02-14T21:57:00.000-05:00

Inventories are probably going to hit the 4000 mark in a week or two. Anecdotally, it sounds like houses are moving faster now than they were a few months ago. I would attribute this to sellers finally lowering their prices. I've seen some meaningful price reductions since the start of the year and I'm getting more "price change" notifications in my e-mail.

Too Many Banks

2007-02-11T09:54:00.000-05:00

This article is only marginally real estate related, however, it brings up some good points. The article points out the proliferation of bank branches in many downtown areas of NJ. I've noticed this is Red Bank, Chatham, Hoboken, and other "downtown" areas in the state. While I believe banks have the right to put branches anywhere they want in commercial areas, it is frustrating to see them drive out businesses that people actually come downtown to visit. What's the point of having a downtown shopping district if the only things to shop for is mortgages or CD rates?

"To stand at Fort Lee's Main and Schlosser streets is to be in the middle of a gold rush.

Banks from near and far have flocked to that corner in recent years for a share of northern New Jersey's wealth of deposits. One can turn around in a circle and spot branches of national banks, such as Bank of America Corp. and J.P. Morgan Chase, regional players North Fork Bank and 1st Constitution and local start-ups that include Bank of New Jersey and North Jersey Community Bank."

Full article..

It's Not Over Yet

2007-02-05T19:18:00.000-05:00

WASHINGTON — Housing is proving to be one of the biggest wild cards in the economy in 2007 as analysts are deeply divided about whether the worst in the downturn is over or there is much more pain to go.

Only 9% of economists say the housing decline ended in 2006, according to a USA TODAY survey of 55 economists taken Jan. 18-24. Another 42% said the downturn will end in the first half of the year, and 45% said housing will bottom out in the second half.

"This is one of those hot-button issues," says Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. He estimates the downturn ended last year. "I don't know why people are so pessimistic."

Full article...

"Spring Thaw"

2007-02-04T17:20:00.000-05:00

"It's the dead of winter -- a slower-than-slow time in the real estate world.

But a recent open house in the tony hamlet of Short Hills drew so many people that even the listing agent, Howard Bunn of Keller Williams Realty in Summit, was left scratching his head.

"I've never seen this many people at an open house ever, and I've been doing this for 10 years," he said.

The house, a vacant, five-bedroom fixer-upper built in 1923, was listed at $999,000. An elderly couple that lived there for decades had died within one year of each other. Sitting on a half acre of land, the colonial needed a complete makeover of the slate roof, the kitchen, bathrooms and a paint job. And it needs a homeowner with a lot of spare cash and patience.

Still, surrounded by $1.6 million dollar homes, house hunters were all thinking the same thing: Bargain.

The next day, the house received 11 offers -- all but one of them at list price or higher, Bunn said."

Full article...

The Jersey Shore Real Estate Bubble

APP Article on Hov

Blame it on the Weather

"I Saw the Bubble Bursting"

NJ Legislator Tries To Make Matters Worse

Nice Deal For Carla Katz Corzine

Rumson House Back on Market - 2 Years After Original Listing

Eastern Monmouth MLS at 4116

Sub Prime Problems Hit Local Bank

Bad Day for Builders

Asbury Park Press Addresses Sub Prime Issues

"Deadline set for Kara plan"

But at Least Hoboken Did Well

"Eminent domain reform remained stalled..."

"Why Your Home Is Not the Investment You Think It Is"

Inventory tops 4000

Less Blogging

It's Going to be Hard to Get a Mortgage

Bubble Info Here

No More Credit; No More Price Gains

Housing Construction Plunges

3928 Houses on the MLS

Too Many Banks

More Sub Prime Problems

It's Not Over Yet

"Spring Thaw"