The TRIMA Blood Machine Drive for Somerset Medical Center and Steeplechase Cancer Center is about to begin! There is now a public website available that offers specific information on the machine, our fundraising project and both Paypal and Google Checkout links for donation. Branchburg Rotary is also being joined by the Rotary Clubs of Bridgewater/Somerville, Bound Brook and Hillsborough in this county-wide project.

For more information, or to make a donation, go to:

http://www.trimamachinedrive.org/

The following table contains closed residential real estate transactions in Branchburg for January, 2007. However, unlike the inaccurate information promulgated by most agents and media sources, the “DOM” (Days on Market) column indicates the sum of days-on-market accrued through serial listings of the same home (it is a common agent “trick” to withdraw and re-list a home, in order to create the public impression of a “fresh” home that has seen fewer days on market). In addition, the “OLP” (Original List Price) column reflects the list price of each home at the time it was first offered for sale.

Sales statistics posted at Branchblog will always be cross-checked to provide the most accurate and unbiased housing market snapshot possible.

Please direct specific inquiries to Chip Hughes at (908) 334-2329 or chip.hughes@att.net. Better yet, leave a comment!

All information is deemed accurate, but not guaranteed, and is provided courtesy of Garden State Multiple Listing System:

AVERAGES: 141 Days-on-Market; SALE PRICE 91% of original list price.

Here’s an item I wrote in response to a 400-plus comment thread at James Bednar’s excellent New Jersey Real Estate Report (www.njrereport.com). Much time is spent there fighting over whether the market will go up, down or nowhere. As informed as many particpants are, the back-and-forth- as you might imagine- is tinged with more than a little self-interest. Comments, please, on the following:

Has housing “permanently become a risk-charged, high-flying investment”

This massively long thread has gotten me to thinking about risk. More specifically, it’s gotten me thinking about how people define acceptable vs. unacceptable risk.

Back in our parents’ day (the end of WWII thru the 1970’s), a primary residence was desirable and important in the grand scheme of a family’s finances, but it was never the crown jewel. Families who possessed any significant degree of wealth held that wealth in traditional, liquid investments such as stocks, bonds and money market instruments. Housing was more about emotional security and keeping a roof over one’s head; any appreciation that came a homeowner’s way was considered “gravy”, and annual appreciation rates that barely tracked inflation were considered adequate. And, people hardly ever changed jobs or moved. I can remember going to “mortgage burning” parties of my parents’ friends, celebrating making the last payment on a traditional 30-yr note. RE in those days was a valuable, but not very risky investment.

Fast forward to now. After a gigantic asset bubble burst in the late ’90s; the rise of vehicles that allow owners to liquefy home equity; the spread of hot, cheap money worldwide; and the “nesting” of America spurred by the events of 9/11, the average American family now has over 70% of its wealth tied up in real estate.

So, the question is: now that RE is the preferred means of wealth creation for American families, how far have the stakes been raised? And, how has this elevated risk changed the game forever? Whether the market and home prices are up or down, the public wants and values RE. Even now, even here in permabearland, I don’t hear anyone saying “I don’t ever want to own a home.”. The overwhelming consensus opinion is that homeownership is a desirable thing. But the stakes are bigger, so the risks of ownership are, too.

I have no idea of what the long-term implications of this sea change are. However, I strongly suspect that the extraordinary risk that has been unleashed is a genie that cannot be put back in the bottle.

Anyway, many who post here are- by their own admissions- famously risk-averse. Their “wait things out” stance assumes that at some point of further market decline, the risk of homeownership will recede vs. the perceived benefits. However, what if that point comes…and our risk-averse friends STILL cannot pull the trigger, because falling housing prices are now accompanied by some other troubling external factors, like recession, credit collapse and/or runaway inflation? Even a slow, grinding unwinding of housing prices is bound to be woven into a fabric of some other very unpleasant economic stuff.

Here’s the ultimate question: are we all fighting about the wrong thing? Could it be that whether prices will go up or down isn’t really going to determine the future of housing in America? Could it be that the real problem has been that simply TOO MANY people own houses? And, finally, if housing has permanently become a risk-charged, high-flying investment, what constitutes an appropriate level of American homeownership, and what investment vehicles will replace homeownership for scores of risk-averse Americans?

The following table contains closed residential real estate transactions in Branchburg for December, 2006. However, unlike the inaccurate information promulgated by most agents and media sources, the “DOM” (Days on Market) column indicates the sum of days-on-market accrued through serial listings of the same home (it is a common agent “trick” to withdraw and re-list a home, in order to create the public impression of a “fresh” home that has seen fewer days on market). In addition, the “OLP” (Original List Price) column reflects the list price of each home at the time it was first offered for sale.

Sales statistics posted at Branchblog will always be cross-checked to provide the most accurate and unbiased housing market snapshot possible.

Please direct specific inquiries to Chip Hughes at (908) 334-2329 or chip.hughes@att.net. Better yet, leave a comment!

All information is deemed accurate, but not guaranteed, and is provided courtesy of Garden State Multiple Listing System:

AVERAGES: 190 Days-on-Market; SALE PRICE 87% of original list price.

Take a look at Money magazine’s new advice to buyers:

Best Idea for Home Buyers

It’s a buyer’s market. Drive a hard bargain.

Real estate in 2006 turned a corner - and not a good one. In the past year, home prices have dropped 2.2%. In this kind of a market, once you’ve found the house you want, start the bidding at least 15% below the asking price. Barry Miller, a broker and owner of Denver-based Buyers Only America Realty, says that’s the average discount his clients are getting. Paying a buyer’s agent an agreed-upon fee, if you can in your area, makes sense as well. Having a negotiator who is working for you will probably lead to a lower price.

Other ideas

Buy from a builder. Many homeowners will wait out the bust. Builders can’t afford to. Besides a lower price, many are offering thousands in upgrades. Skip the stuff and ask the builder to buy down your mortgage rate. That’s worth more than any perk in the long run.Get a second opinion. If you are still not sure you got the best deal, spend $350 to hire your own appraiser. Often the appraiser brought in by the lender is motivated to inflate the price so the bank can make the largest loan possible. If your appraisal comes in at less than the agreed price, renegotiate. And if the seller won’t budge, walk. You can find another house.
- Stephen Gandel, Money Magazine senior writer

Sometimes all the talk in the world leads us nowhere. Then, a statement of simple common sense reveals all. From Barry Ritholtz, Ritholtz Analytics, commenting in his blog, “The Big Picture”, Friday, December 29, 2006:

I was chatting with the CEO of Coldwell Banker Real Estate in the green room of Kudlow this week. In addition to pointing out this remains the 3rd best year on record, he revealed a lot of common sense with this statement (I am paraphrasing): “Price your house at a reasonable level and it will sell quickly. Overprice it, or assume it’s still 2005, and it won’t move. Houses get stale, and pricing it wrong to begin with is a guaranteed way not to sell it.”

More conflicting data; some good news, some not-so-good. From the AP:

By MARTIN CRUTSINGER, AP Economics Writer 2 hours, 51 minutes ago WASHINGTON - Sales of existing homes managed to eke out a small increase in November but the price of homes sold fell for a record fourth consecutive month, a real estate trade group reported Thursday.

The National Association of Realtors reported that sales of previously owned homes rose 0.6 percent in November to a seasonally adjusted annual rate of 6.28 million units. That followed a 0.5 percent sales increase in October and marked the first back-to-back sales gains since the spring of 2005.

The slight increases in sales were not enough to halt a slide in home prices. The median price for an existing home sold in November dropped to $218,000, down 3.1 percent from the price a year ago. It was the first time on record that sales prices compared to a year ago have fallen for four straight months.

The report on existing home sales offered further hope that the serious slump in housing that has occurred this year may be bottoming out. It followed a report Wednesday that showed that new home sales rose 3.4 percent in November, the third gain in the past four months.

David Lereah, chief economist for the Realtors, said he believed that September’s sales activity may represent the low point for sales this cycle but he cautioned that home prices would probably continue declining for a few more months. By region of the country, sales were down 1.6 percent in the South and they were unchanged in the Midwest. However, the Northeast posted a strong 6 percent sales gain and the West saw sales rise by 0.8 percent.

The housing industry has been in a severe slump this year after posting five consecutive years of record sales of both new and existing homes. Lereah said he believed sales of existing homes would fall by 9 percent this year and post a smaller drop of 1 percent in 2007 as the markets undergo a correction following what many economists believe was a real estate speculative bubble.

“We’ve entered a more sustainable period of home sales now and we expect greater support for prices over time as inventory levels are eventually drawn down,” Lereah said. He predicted price declines would continue in December and probably for the early part of 2007. He said these were necessary adjustments that were luring buyers back into the market.

From The Associated Press:
Wednesday December 27, 10:14 AM EST

WASHINGTON (AP) — Sales of new homes rose in November while the backlog of unsold homes fell for a fourth straight month, providing hope that the serious slump in housing could be ending.

Sales of new single-family homes rose by 3.4 percent last month to a seasonally adjusted annual rate of 1.047 million units, reflecting solid sales increases in every region of the country except the South.

The increase was better than had been expected and offered hope that the steep slide in housing may be starting to bottom out as builders, using a wide array of incentives, begin to make a dent in the record level of unsold homes.

The 3.4 percent rebound in sales last month was the third increase in the past four months. It helped to lift the median price for a new home to $251,700, an increase of 3.2 percent from a year ago. The median price is the point where half the homes sold for more and half for less.

The housing industry has undergone a severe slowdown this year following a prolonged boom that had been fueled by the lowest mortgage rates in more than four decades.

This year’s slump followed five years in which sales of both new and existing homes had set records.

What some are calling a recession in housing has been a big factor in the economy’s overall slowdown, cutting 1.2 percentage points from growth in the July-September quarter, a period when the economy expanded at a lackluster pace of just 2 percent.

Many analysts believe housing is continuing to act as a drag on growth in the current quarter and will continue to depress activity through the early part of 2007.

The number of unsold homes fell by 1.4 percent in November to 545,000. It was the fourth straight decline in inventories after they had hit an all-time high of 573,000 units in July. Builders have been cutting prices and offering various incentives such as helping to cover closing costs in an effort to move finished homes and reduce high cancellation rates.

It would take 6.3 months to exhaust the current supply of homes at the November sales pace, down from 6.7 months in October and 7.2 months in July.

Sales last month increased in all parts of the country except the South, where they fell by 9.3 percent. Sales were up 22.5 percent in the Northeast, a rebound from a huge 35.5 percent drop in October. Sales rose by 22.4 percent in the Midwest and 19 percent in the West.

The following letter, from Dr. Julie Ann Juliano in Branchburg, tells the whole story. Please call me at (908) 334-2329 or chip.hughes@att.net if you would like more info, want to volunteer or wish to make a donation:

You are in a major auto accident and rushed to the hospital. You are having surgery. You are elderly and severely anemic, you have a blood cancer or are undergoing chemotherapy. Or…you need a blood transfusion, platelet transfusion, or plasma transfusion. You never think to worry about it; the blood and blood products will be there when you need them…or will they? The pool of available blood donors grows smaller each day. To keep the blood supply safe, fewer and fewer people are eligible to give. Those that do give can only give once every 6 weeks. What if you need blood, and it is not there?

Blood donation and blood banking are a very vital part of medical care. It is not something we often think about, but when you need it, you don’t want to hear that the blood “will be here in a few hours” after it is driven from another location. When you or your family member need a transfusion, you don’t want to wait or hear that there is a shortage. Until now, Somerset Medical Center has been able to keep up with the blood supply needs of its patients. With the addition of the new Cancer Center, the need for blood and blood products will greatly increase. The question is how to best do this.

The Rotary Club of Branchburg has taken a long look at this subject along with the blood bank at the hospital. The best answer is called a TRIMA Accel Collection System machine. This machine will allow the specific donation of red cells, platelets or plasma. This will allow for donors to give far more often and will keep the blood supply flowing at the hospital. The Rotary is always looking for local and international projects to help the community. In the past we built the playground in White Oak Park, and last year we constructed the Challenger Baseball Field next to Old York School. This year we are looking to serve the larger community of Somerset County with the purchase of this vital machine.

While the hospital is building its new facilities it is not financially able to upgrade in some areas, although it would greatly benefit the hospital and the patients. That is where Rotary comes in- helping in the community – for the good of all concerned. The cost of this machine is $85,000. We are appealing to the general community to help us in our fundraising efforts to purchase this machine for the hospital, for the common good.

Blood is life. Blood is lifesaving. Healthy blood is hard to find, and the demand keeps growing. Help us to help you. Help us to keep the supply safe and abundant at our local hospital. Your support has always been appreciated in the past, and we are looking to you again. Together we can, and do, make a difference.

Sincerely,

Julie Ann S. Juliano, MD

High home prices have helped drive many first-time buyers out of the housing market. Now, with prices falling in many areas, there are some signs that buyers are beginning to drift back.

The share of first-time home buyers dropped earlier this year to its lowest level since 1987, according to the National Association of Realtors. First-time home buyers now account for 36% of home purchases, according to a study released last month by the Realtors group, down from 40% in the three previous years.

First-time buyers play a key role in the housing market. They provide a source of new demand for homes, and they also make it possible for owners of entry-level properties to trade up, creating a ripple effect that affects higher-priced sectors of the market. Declining affordability has made it difficult for first-time buyers to buy homes in many parts of the country, an important factor in the recent housing downturn.

But as more sellers begin to cut their asking prices and rates on fixed-rate mortgages have moved lower, some real-estate agents are reporting renewed interest from people shopping for their first home. Sam Schneiderman, broker-owner of the Greater Boston Home Team, says he has seen “a real surge in first-time buyer activity” in the last two to three weeks as lower prices draw buyers who think the market may be close to bottoming out. Kevin Freadhoff, an agent with Realty Executives of Southern Arizona in Tucson, says in the past 60 days he is seeing first-time buyers “start to warm back up again. They are seeing that houses have become more affordable.”

In Madison, Wis., rising interest rates and home prices knocked many first-time buyers out of the market early in the year, says Phil Sveum, broker-owner of Coldwell Banker Sveum Realtors. But in the past month, Mr. Sveum has seen an increase in tenants looking to buy their first home. The recent drop in interest rates “has created some momentum for first-time buyers, not to write an offer today, but to start looking again and be serious about moving in January or February,” he says.

First-time buyers are particularly sensitive to rising housing costs, in part because they don’t have equity from an existing home they can tap as prices shoot higher. And lower incomes provide less of a cushion when monthly payments climb. In a sign of just how hard it is for first-time buyers to come up with the cash needed to buy a home, 45% of first-time buyers bought their home with no money down, according to the recent National Association of Realtors survey, up from 43% a year earlier.

But recent data have been encouraging for first-time buyers. The National Association of Realtors reported that the median price of an existing home fell 3.5% in October from a year earlier, the largest decline since the group began collecting these data in the late 1960s. The average rate on a 30-year fixed-rate mortgage now stands at 6.16%, the lowest level since October 2005, according to HSH Associates in Pompton Plains, N.J.

A growing number of first-time buyers in Florida’s Tampa Bay area are taking advantage of special deals from builders looking to unload newly constructed homes that are bloating their inventories, says Craig Beggins, president of Century 21 Beggins Enterprises.

Jason Colon, a bank analyst, bought a new three-bedroom, 2½-bath townhouse in Apollo Beach, Fla., last month after looking for his first home for roughly a year. Mr. Colon paid $163,000 for the property, which was originally priced at $242,000. The builder also picked up $5,000 of his closing costs. “It was crazy for me not to jump on it because it was brand-new and I’m buying the model unit, which has all the upgrades,” says Mr. Colon. Falling interest rates have made the purchase more affordable, he adds.

Yet affordability remains a problem for many would-be buyers. In the second quarter, buyers had to stretch more than ever before in 25 of the top 50 markets, according to Bank of America analyst Daniel Oppenheim. Even with the recent price declines, he estimates that it would take a further 7% fall in home prices, combined with a 4% annual increase in nominal incomes, to bring affordability back in line with average levels over the past decade by 2008 — if interest rates remain stable.

In recent years, many first-time buyers had been able to stretch their dollars by taking out adjustable-rate mortgages and so-called affordability mortgages, which allowed them to lower their monthly payments or buy a home with little, if any, down payment. But as short-term interest rates have climbed higher, the benefits of adjustables have declined.

At the same time, some first-time buyers have become more cautious. Sheila Doyle, an agent with Baird & Warner in Glenview, Ill., says that more of the first-time buyers she works with are getting their parents to help them with a down payment and fewer are financing 90% or 100% of the purchase price. “I don’t see them doing the crazy financing that was so frequent last year,” she says.

New guidelines for nontraditional mortgages, recently issued by federal banking regulators, could make it tougher for some first-time buyers to use these products. Some lenders are also beginning to tighten their standards as mortgage delinquencies rise.

Many would-be buyers are taking a wait-and-see approach. When home prices were soaring, many first-time buyers jumped to buy houses they could barely afford, believing they would be shut out of the market if they didn’t act quickly. Now, with prices falling in many areas, “there’s no immediate need to buy, and so they kick the tires more,” says Frank Borges LLosa, owner of FranklyRealty.com, a brokerage in Arlington, Va.

Arthur Orkisz, a speechwriter in the Washington, D.C., area, says he expects to hold off until at least next summer before buying his first home, “unless something so dramatic happens that it’s absolutely silly to pass it up.” Giveaways such as flat-screen TVs are “all nice and dandy, but at the end of the day anyone capable of doing the arithmetic realizes that’s a gimmick to get me in the door,” he says. “That’s not enough of an incentive” to buy.

Scott Steiner, managing broker of Help-U-Sell Lakeview Realty in Lake Elsinore, Calif., says he’s getting fewer calls and doing fewer showings for the properties he’s listing. But fliers describing the properties are being snapped up faster than ever before — a sign, he says, that many first-time buyers are taking their time and waiting for the market to stabilize before making a move.

In much of the country, renting remains a bargain compared with owning, according to an analysis prepared for The Wall Street Journal by Torto Wheaton Research, a unit of CB Richard Ellis Group Inc. In markets such as Las Vegas, San Diego and Washington, the monthly cost of renting the average apartment is roughly half what it would cost to own the median-price home in the third quarter. “Renting is only marginally less of a bargain” even with the latest decreases in home prices, says Torto Wheaton senior economist Gleb Nechayev.