I get the feeling that Google and its various organs such as Adsense sometimes make sport of their users.
I'm a Republican. I try not to be excessively political, I avoid beating people over the head with it, but you can probably tell from the values I express on this blog and, previously, in my writings for worldlyinvestor.com if you remember the good old days. My values are the values of self-reliance, personal responsibility, equality of opportunity for all, free trade, open markets, strong national defense, and sound public finances.
So it is queer to see an Adsense ad for New Jersey's Democrat Governor Jon Corzine in the right margin. "Re-Elect Jon Corzine", it orders. "Committed to New Jersey Values Working for New Jersey's Success JonCorzine09.com".
Look, by all means click through. I need the money to pay taxes that are among the highest in the nation. But I'm not going to vote for Jon Corzine myself if he pays me hundreds of dollars, which research shows is pretty much how much this Goldman Sachs limousine liberal does pay for every vote he receives. His bad works and those of his Democrat predecessors and co-dependent Democrat legislators are catalogued in a previous article. And if you live here too, I hope you are not going to vote for him either.
Monday, June 22, 2009
Sunday, June 21, 2009
Fathers' Day
A couple of things as I wish all fathers well.
The most important work I do is as father to my daughter. I hope all fathers feel the same way about their children.
On another personal note, my father's best Father's Day was the day I took him to the final round of the 1993 U.S. Open golf tournament at Baltusrol. It was glorious to see all our golf heroes in their natural habitat. He died a year later. There is never a day when I don't miss my father, think about him, and honor his memory.
The most important work I do is as father to my daughter. I hope all fathers feel the same way about their children.
On another personal note, my father's best Father's Day was the day I took him to the final round of the 1993 U.S. Open golf tournament at Baltusrol. It was glorious to see all our golf heroes in their natural habitat. He died a year later. There is never a day when I don't miss my father, think about him, and honor his memory.
Tuesday, June 16, 2009
Dispatches from the Front Line of the Real Estate Wars
In March, I contributed a piece called "The Coming Real Estate Recovery By The Numbers". I have also written extensively on various plans for real estate recovery policy, my own and other people's, and got some excellent feedback from people in the academic and policy establishment. But in general, the phone has not not stopped ringing. As Chris Mayer of Columbia told me, there is a loss of momentum for all real estate plans.
I can't just sit around writing, as I am among other things a real estate practitioner, a licensed salesperson in the state of New Jersey. Most of my work has been investment and commercial in the urban areas near New York City , but I do residential, I go out of my local market, and have trusted contacts all over the east coast and in California.
At the moment I am working with a couple who have two young children and want to buy in one of the elite towns with a top-rated school system. They have very particular requirements with respect to price, condition, proximity to public transportation, and several other factors. Even in a buyer's market, these limitations make the search challenging.
The action of several recent weekends and the treatment of various offers makes me believe that conditions are moving away from buyers having it all their own way.
On one miserable cold and wet Saturday morning, we found ourselves queuing up to see a new listing that had come on the market at the extreme low end of the price. The wife was hopeful. "It must be a wonderful opportunity at such a low price, and with so many people come to see it." Inside, what a let-down it was. Dirty, small, poor condition. Garbage, even at the price, and disgraceful really to market a house complete with dirt and cobwebs.
And yet the couple who viewed it before us stood across the street in the rain after finally letting us go in, with the husband gazing longingly at it all goo-goo as if it were Megan Fox in her birthday suit instead of a knock-down. The house went under contract immediately, probably to them. If they got any competition for it, no doubt they paid more than asking.
My clients did not compete for the dirty house. On the next one they saw, they did compete and aggressively so, through not one but two rounds of "best and final" offers. This house had the following good points: clean and tastefully decorated living room, dining room, and three good-sized bedrooms, all with good re-done hardwood floors. And it had the following bad points: lousy bathrooms, lousy kitchen, central air on its last legs, and washing machine separated from dryer by 25 feet of dirty unfinished basement. On balance I rated this house just OK, nothing special, and yet if the listing agents are to be believed (agents lie -- I make no judgments on these particular agents) there were a dozen offers. However many offers there were, my clients' full-price offer with 20% down and no house sale contingency was not successful.
If that sounds more like sellers' market conditions, so too did the response of sellers through their agent to my clients' next offer. This time they bid on a house they liked at 95% of asking price. The sellers countered at 99.6% of their asking price, essentially throwing my clients' offer back in their faces with little consideration. Moreover they told us haughtily not to come back without meeting a number of onerous conditions that are not customary in this market.
Guess what? We did not extend ourselves to meet those conditions, and we did not go back to them. My clients found something else instead and had their full-price offer accepted.
A few days later the haughty agent called, and was more than a little miffed that we had done exactly as she told us to do.
The general point is this. At current rates, the inventory in this town will take 10.3 months to clear compared to over 11 months around the county; however, there are micro-markets within the town that are much hotter than that and the behavior of buyers and sellers has to adjust accordingly.
There are other factors to note. One, the $8,000 first-time homebuyer tax credit is going away soon if nothing is done, and the direction of policy-making in DC suggests nothing will be done. That provides impetus in this segment of the market, at least. Two, rising mortgage interest rates can also get buyers off the fence -- if they have been hanging in for lower rates and instead see them going the wrong way, they may be pushed to act for fear their inaction will cost even more later.
I can't just sit around writing, as I am among other things a real estate practitioner, a licensed salesperson in the state of New Jersey. Most of my work has been investment and commercial in the urban areas near New York City , but I do residential, I go out of my local market, and have trusted contacts all over the east coast and in California.
At the moment I am working with a couple who have two young children and want to buy in one of the elite towns with a top-rated school system. They have very particular requirements with respect to price, condition, proximity to public transportation, and several other factors. Even in a buyer's market, these limitations make the search challenging.
The action of several recent weekends and the treatment of various offers makes me believe that conditions are moving away from buyers having it all their own way.
On one miserable cold and wet Saturday morning, we found ourselves queuing up to see a new listing that had come on the market at the extreme low end of the price. The wife was hopeful. "It must be a wonderful opportunity at such a low price, and with so many people come to see it." Inside, what a let-down it was. Dirty, small, poor condition. Garbage, even at the price, and disgraceful really to market a house complete with dirt and cobwebs.
And yet the couple who viewed it before us stood across the street in the rain after finally letting us go in, with the husband gazing longingly at it all goo-goo as if it were Megan Fox in her birthday suit instead of a knock-down. The house went under contract immediately, probably to them. If they got any competition for it, no doubt they paid more than asking.
My clients did not compete for the dirty house. On the next one they saw, they did compete and aggressively so, through not one but two rounds of "best and final" offers. This house had the following good points: clean and tastefully decorated living room, dining room, and three good-sized bedrooms, all with good re-done hardwood floors. And it had the following bad points: lousy bathrooms, lousy kitchen, central air on its last legs, and washing machine separated from dryer by 25 feet of dirty unfinished basement. On balance I rated this house just OK, nothing special, and yet if the listing agents are to be believed (agents lie -- I make no judgments on these particular agents) there were a dozen offers. However many offers there were, my clients' full-price offer with 20% down and no house sale contingency was not successful.
If that sounds more like sellers' market conditions, so too did the response of sellers through their agent to my clients' next offer. This time they bid on a house they liked at 95% of asking price. The sellers countered at 99.6% of their asking price, essentially throwing my clients' offer back in their faces with little consideration. Moreover they told us haughtily not to come back without meeting a number of onerous conditions that are not customary in this market.
Guess what? We did not extend ourselves to meet those conditions, and we did not go back to them. My clients found something else instead and had their full-price offer accepted.
A few days later the haughty agent called, and was more than a little miffed that we had done exactly as she told us to do.
The general point is this. At current rates, the inventory in this town will take 10.3 months to clear compared to over 11 months around the county; however, there are micro-markets within the town that are much hotter than that and the behavior of buyers and sellers has to adjust accordingly.
There are other factors to note. One, the $8,000 first-time homebuyer tax credit is going away soon if nothing is done, and the direction of policy-making in DC suggests nothing will be done. That provides impetus in this segment of the market, at least. Two, rising mortgage interest rates can also get buyers off the fence -- if they have been hanging in for lower rates and instead see them going the wrong way, they may be pushed to act for fear their inaction will cost even more later.
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