Eastern Monmouth MLS at 4116

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

"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

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

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"

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

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..."

"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"

"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

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

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.