This isn't going to pass. No CEO of a billion dollar corporation is going to work for 500k. It's just not going to happen. I love Obama but he is out of his mind if he thinks this will actually work.

For the record I make nowhere near this figure and only wish that I was capped at 500k per year.

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Please provide a link to your source for this statement.

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the max cash pay (salary, bonus, etc..) cannot exceed 500k. But on top of the 500k cash, additional company stocks can be awarded. However those stocks cannot be sold until the company itself pays off all the borrowed government money (tarp).

It's a fair policy overall to regular americans across the country. But it is very bad for the financial sector and its surroundings (ie: nyc). Because now there is no incentive for the top producers (the guys pulling in the revenues) to continue perform. So if those top producers are only making 500k, then the company are forced to lower the salary for the rest across the board.

For example, person A pulls in 20mil revenue makes 1mil bonus, person B pulls in 10mil revenue makes 500k bonus. Now person A only makes 500k, so the company will force to lower the person B bonus proportionally to 250K. This will result in everyone getting paid less, hence cutting back on their spendings(+taxes) and bad for nyc, and in turn jc.

So saying stuff like this only affects "30 CEOS" is ludicrous.

Here is the Bloomberg news story associated with this proposal:

Obama Orders Pay Limits at Banks Getting Future Aid

By Roger Runningen and Hans Nichols
Feb. 4 (Bloomberg) -- President Barack Obama called bonus
payouts at banks getting rescue funds ?shameful? as he and
Treasury Secretary Timothy Geithner announced the government will
require financial companies getting aid in the future to cap
compensation of top officials at $500,000 a year.

?In order to restore our financial system, we?ve got to
restore trust,? Obama said at the White House as he set out new
rules for companies that seek ?exceptional? assistance from the
Treasury. ?And in order to restore trust, we?ve got to make
certain that taxpayer funds are not subsidizing excessive
compensation packages on Wall Street.?

Geithner said the economic crisis has been ?made worse by a
loss in faith? in the judgments of executives.

?There is a deep sense across the country that those who
are not responsible for this crisis are bearing a greater burden
than those who were,? he said, adding that he will outline a
?comprehensive? program for stabilizing the financial system
next week.

Obama also urged Congress to finish work on economic
stimulus legislation, saying that a failure to act ?will turn
crisis into a catastrophe and guarantee a longer recession.?


Public Outcry


Reacting to public outcry over bonuses paid to bankers
getting government bailout money, the administration is imposing
conditions that would force greater transparency for expenses
such as corporate jets, office renovations, entertainment and
holiday parties, and restrict severance pay when executives leave
the company.

While pay would be limited, there are provisions that would
allow additional compensation in the form of restricted stock
that can?t be sold until taxpayers have been paid back with
interest. Senior executive compensation plans also must be
submitted to a non-binding shareholder resolution.

The compensation cap may be waived for companies getting aid
through what the administration terms ?generally available
capital access programs? through full public disclosure and
submission of a resolution to shareholders if requested.

Companies also must have in place provisions to reclaim, or
?claw back,? bonuses and incentives from the top 25 senior
executives if they are found to engage in deceptive practices.

Outrage among the public and lawmakers has been building
since October, when Congress passed a $700 billion financial-
rescue plan for financial firms. Lawmakers complained that the
first half of the fund was doled out with little public
accounting of how the money was spent. A New York state
comptroller report that $18.4 billion in bonuses were paid out to
Wall Street executives and employees as the U.S. sank into a
recession further inflamed Americans.


?In Bad Taste?



?For top executives to award themselves these kinds of
compensation packages in the midst of this economic crisis is not
only in bad taste, it?s a bad strategy, and I will not tolerate
it as president,? Obama said.

Rules apply to companies that in the future take
?exceptional? amounts of bailout money from the Treasury, as
Citigroup Inc. and American International Group Inc. have in the
past. They don?t apply to companies that have already taken
rescue money, although those companies must in the future agree
to strict monitoring and oversight.

The compensation restrictions announced today are part of a
wider White House plan to overhaul rules governing the remaining
$350 billion in the Troubled Asset Relief Program.


Reworking Financial Rescue


Geithner and White House economic officials are reworking
the contours of the financial rescue program, which may include
establishment of a ?bad bank? to soak up soured assets and
revive consumer credit.

On Wall Street, there is concern that compensation curbs
would hinder a company?s ability to attract top-notch employees,
and that would lead to a talent drain, Meredith Whitney, an
analyst at Oppenheimer & Co., said on Bloomberg Television.

?If you cap compensation, the best and the brightest are
still going to figure out a way to make money and it may not be
on Wall Street, when those minds are needed most,? Whitney said.

William Cohan, a former investment banker at Lazard Ltd. and
JPMorgan and author of ?The Last Tycoons? about Lazard,
disputed that notion.

?What do they do? They push paper around,? Cohan said,
?Where else can you get paid $500,000 to do that??

Pressure has been building in Congress for restrictions on
executive compensation and more disclosure from companies getting
bailout money.


Congressional Action


Senator Claire McCaskill, a Missouri Democrat proposed last
week a bill to limit compensation in salary, bonuses and stock
options to $400,000 a year, the president?s salary. She said
small-business owners are calling the bonuses ?obscene? and
other lawmakers say they are getting angry calls and mail from
constituents on the subject.

McCaskill said today the Obama plan is in line with what
lawmakers are seeking in an effort to change ?the arrogant,
greedy culture that created this mess in the first place.?

Representative Elijah Cummings of Maryland today introduced
legislation to force TARP beneficiaries to disclose details on
corporate travel and marketing expenditures.

Cummings, a Maryland Democrat, called the ?profligate
spending and millions of dollars in bonuses? a ?slap in the
face of the American taxpayers.?

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon
said this week that it?s wrong for politicians to criticize Wall
Street pay without differentiating between companies where
compensation is commensurate with performance.


Making Distinctions


?It?s unfair to talk about us as one,? Dimon, who was paid
$1 million last year and didn?t accept a bonus, said at a
conference in New York. ?Not every company was responsible.?

Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch &
Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. awarded
their employees a cumulative $145 billion in bonuses from 2003
through 2007, according to estimates based on company reports.

That?s more than the annual gross domestic product of the
Philippines. Lehman has since gone bankrupt, while Bear Stearns
and Merrill have been taken over by commercial banks.

Wall Street firms? pay has traditionally been tied to
performance of the companies. As the bonus portion of employees?
pay has grown, many started to expect it regardless of
performance. Some employees have been receiving incentives ?for
basically turning up,? Barclays Plc Chairman Marcus Agius said
last week at the World Economic Forum in Davos.

As the public outcry over Wall Street pay escalated, top
executives at Morgan Stanley, Bank of America Corp., Goldman
Sachs and Citigroup have agreed to forego bonuses. Governments in
the U.K., Switzerland and France have pressured banks, including
UBS AG and Royal Bank of Scotland Group Plc to limit executive
pay after taxpayer-funded bailouts.

Bank of America CEO Kenneth Lewis, who was paid $24.8
million in total compensation in 2007, won?t receive a bonus this
year after the lender reported a $1.8 billion loss in the fourth
quarter, its first deficit since 1991.



--With reporting by Julianna Goldman, Lorraine Woellert, Heidi
Przybyla and Christopher Stern in Washington. Editors: Joe
Sobczyk, Laurie Asseo.

The plan limits executive "compensation". Does this include or exclude bonuses? Has that been made clear in the proposal?

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You are flat out wrong again, are you seriously this dense? Let me try 1 LAST time to make you understand, quoting from the artcle you linked to avoid any confusion:

1) The 500k limit applies to EVERYONE in the company who received tarp, not just the CEO and top 5 executive. The top 5+CEO rule is from the EXISTING restrictions already in place, not the new rules announced by obama today. You are confusing yourself.

2) The golden parachute is something different for when the person leaves the firm, and separate item from the 500k salary limit announced today.

3) I never said 50% of JC is made up of CEO (if you are trying to jab at me, at least make some sense). And if you dont understand the link between nyc and jc real estate prices, then there is nothing left to discuss.

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This is no longer newheights classic anymore, it's just plain sad

The bigger concern than any cap on pay should be the following:

"The New York state comptroller's office said last week that total Wall Street bonuses paid fell 44% in 2008, to $18.4 billion, while the average bonus fell 36.7%, to $112,020. Total bonuses paid in 2007 were $32.9 billion, and the average last year was $177,010."

Wibbit, You are embarrassing yourself.

It only applies to the CEO's or the top 5 executives of bailed out troubled banks receiving bonuses.

You're right though, 50% of Jersey City's demographic is comprised of bank CEOS.

Wibbit you should consider running for mayor, you seem to know more than the average JCer.

If you dont mind me asking, What do you do for a living?

http://www.marketwatch.com/news/story ... 461D-891C-1134821D0816%7D

Yet Another Wibbit Classic !

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I know it's only firms who received TARP money, that's a given. I didnt think something so obvious needs to be stated, but apparently it does!

Again you are way off on your reality. It's not "30 or so CEOS", it will be all the top tier workers in those banks, which are the bread and butter of nyc economy. Did you really think only the "30 or so CEOs" makes over 500k in those banks.

The cluelessness is mind boggling. This is really like talking to the iraqi information minister, i give up.

Bugsboy

Thanks for correcting Wibbits error. Wibbit stop just reading the headlines and do some research before you spew false information.

Last time I checked the 30 or so CEO's that will be effected by this don't drive Jersey City's real estate market.

Another Wibbit Classic !

The cap of executives' salaries applies only to those companies receiving bail out money. So, not all wall street execs will be affected.

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they just did, 500k cap. http://www.cnbc.com/id/29013179

you may also want to read this article, i thought it was pretty good. http://money.cnn.com/2009/01/30/real_estate/New_York_next_bust/

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another classic by newheights.

Who knows when real estate will rebound. If buying a place to live, I would look at whether I can afford, can afford maintenance/repairs and taxes.

Is my job secure? I would buy with the intention to live in the place for a long time, not to flip in a year or two

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One thing about this crime wave. It hasn't really made it all the way to the waterfront and 77 Hudson's neighborhood. It's very much been focused around the Van Vorst and Hamilton Park areas.

Personally when I was looking to purchase a condo in JC, I didn't even think about anything west of Marin Blvd/Grove Street because of crime concerns.

Now, yes, crime can spread but the direct waterfront parts of JC are a lot less mixed in their income demographics.

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At some point this year, the year over year comparisons for many industries will no longer look as terrible as they do now. This will be especially the case for the home building industry which is currently hitting new lows in starts and sales. Then people will be saying: "New home sales are only down 5% from the prior year. That's not so bad when we've been experiencing double digit declines month after month. Maybe the bottom is near and I should buy now." And if enough people think like that, the bottom will be at hand.

The primary risk to this scenario is: what will the government do? The government is now the primary economic actor in this country. It they take the right steps, the bottom will be had sometime this year. If not, you will be proven right. From an investment standpoint, the decision to buy or not now hinges on whether the government does the right thing (and whether you know what the right thing is).

I think there has never been a riskier time to be long RE around here. There is no way you can break even on an owner's equivalent rent basis in the nyc metro area. It'll take a significant haircut on the cost psf before that happens, so "cashflowing" isn't an option. Rates are going up, no matter what the govt does. Wait til the Chinese decide they're leary of US Treasuries and watch how fast rates head up. Furthermore to buy a brownstone you're going to need a jumbo and those rates are high on a relative basis and going higher imho.

The big problem around here is that RE just had the best 10 year wave in history. That wave did wonders for many parts of Brooklyn including Ft Greene which was a crack warzone in the early 90s. I feel like JC blew the opportunity of the 10 year wave and didn't truly gentrify enough to turn the corner. Now that the wave is back at sea and not likely to reappear for quite awhile, I have concerns about what will happen to downtown JC.

Clearly crime is still an issue and it seems the trend is worse. I'm not sure many of the yuppies who decided to take a chance on JC really want to be around shootings, regular muggings etc. Add to that a ton of new yuppie supply via 77 Hudson, Grove Pointe, etc. If the yuppies get gunshy who's gonna buy those places at today's prices? No one. So add it all up and I think there's a good chance psf heads down and brownstones go back under a million. This won't play out overnight but if we're still as jittery economically come November you can guarantee it.

Look, I don't know why this thread is getting so defensive, but I'm getting dizzy with all this spinning.

Donald Trump says it's a good time to buy? I always laugh at those ads when i get on the path: "Get in while you can!" Well, I'm sure the CEO of GE told everyone that their stock was Cheap at $35/shr -- It's at $12 now... So before you take advice, consider the source...I would work on formulating your own opinion rather than listening to the so-called "experts" -- And don't let your own positions color your view on things. Just because I own a few stocks doesn't mean I should always be bullish on them. Just cuz you're long real estate doesn't mean it's a good time to buy...

Timing the market in real-estate may be futile, because it's the one industry that has such massive transaction costs. I mean where else can a broker/real-estate agent charge 5-6% and get away with it - that wouldn't fly in the stock market. It's been an immense gravy train for all parties involved: The Banks, Brokers, Lawyers, Appraisers, Realtors, all up and down the food chain.

But just take a step back and think about what the last 6-8yrs have been about: Borrow money and Buy an asset. It's as simple as that...That asset will either go up in value or throw off income and that will allow you to buy another asset with borrowed money. Rinse and Repeat... The one with the most leverage makes the most money. But me thinks those days are over...The margin calls are coming (or have come).

And lets throw in a *BIG* caveat about mortgage rates being at all time lows. Anyone who thinks that these are truly market rates for mortgages is kidding themselves. The government has been attempting to prop up home values by keeping the mortgage rate artificially low. In the first 6 months of this year, the Fed will buy $500 *billion* of Fannie Mae/Freddie Mac Mortgages. They've also indicated they're willing to buy treasuries in case those rates start rising (never mind the fact that the US government will be issuing massive amounts of treasuries to cover major deficits). My point is, these 30yr lows in interest rates are being manufactured by the government, it has nothing to do with typical lending and the pricing of risk. If a bank actually had to hold these mortgages on their books, they'd probably be charging 7% or more -- just look at where Jumbo Mortgage rates are if you want to see a market that can't be laid off onto the fed's balance sheet.

I don't have the stomach for this game? Maybe not (although how would you know). Or maybe i just don't think the risk/reward is there or that there's any value right now in some of these buildings. You claim to have all sorts of investors with *M*illions to spend... That's all well and good, but this is a multi-Billion dollar problem (nationwide, well over a trillion dollar problem). Millions won't make a dent -- In my humble opinion.

Wow ! Do you really think the government will put $400,000 limits on wallstreet salaries?

Trump has no clue ? I'll take your advice any day over his when it comes to real estate.

Wibbit, Don't you think he's seen this before?

You must have missed my point, the players with cash to buy can purchase these buildings with NO loans.They esentially are the bank.

If the tri state area gets to the point where I am unable to rent my apartments than it really doesnt really matter cause everyone will be up sh!ts creek anyway.

Again, I dont even worry about it because If it gets that bad everyone will have been unemployed and starving long before I do.

Oh wait, I'll just rent to all section 8. there will be more people with there hands out in this economy and with Obama pumping more money into the welfare system i'll increase my rents.

People like you can say "I told you so" all day but I really hope for everyones sake it doesnt get to that point.

Be careful what you wish for Wibbit.....

donald trump? that's what i like about you newheights, you just keep digging and digging...pure comedy.

We are in the midst of a depression with no end in sight and 100k job loss a WEEK, with everyone out for wallstreet blood. If they limit the max pay for wallstreet to 400k a year, nyc is going to be in a major shitstorm.

Your entire real estate investment is leveraged and rely heavily on rent as cash flow, what happens when people stop renting.

But keep buying! i know the best time to buy is now! How long have you been saying that? for the last 1 and half years i think while the housing market crashes.




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Funny thing about that, if I had a few empty towers I was trying to sell and someone was offering me a spot on cable news, I would probably talk about how great a time it is to buy too.

Slyng

Last night on CNN Donald Trump said its a great time to buy property and hold for long term to acquire wealth. He did say prices will continue to slide and people should be buying along the slide but don't time it.

Investors on the sidelines with cash are really starting to buy up properties in the area. I know of some rather large transactions going on.

As a realtor I've never worked with more investors with so much capital. I am referring to investment groups with millions to invest.

Rates are at an almost all time low and its crazy not to take advantage of this if you are in positon to.

Timing the market is impossible but if you are one of those people that will hesitate to pull the trigger for the next 20 yrs than your only kidding yourself.

You propbably just don't have the stomach for this game.

A few things Chief:

a) I started the thread, therefore I'm interested in the topic and would be likely to post on the thread...

b) Rates are at 30+year lows (might be more like 60yr lows), if you're not getting alot of refi business you're doing something wrong. The fact that you're posting useless 2 sentence posts on this thread and then following them up with defensive tirades makes me wonder exactly how much business you actually are getting, but that's neither here nor there...

c) There may be a lot of money on the sidelines but the people with that money are scared of losing their jobs and don't want to buy inflated real estate

d) Whether a person is a renter or owner does not invalidate their opinion on the topic

e) I don't know about your claim that your property would "cashflow" but I assume by that you mean it will cover all the costs of owning that property. That claim, I highly doubt.

Good Luck with your townhouse - I wish you nothing but the best!

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Yes, but only some of us are right.

No Offense SLyng but how many posts DO you have on this thread? I'm actually doing more business now with Refi's than purchases, but I can tell you that there is a lot of money sitting on the sidelines waiting to buy.

I'm interested but everyone has a different opinion on what is going on, how long will it last, what is overpriced, etc.

I just find it amuzing that people that do not own property want housing to crash just so they can buy low. I just don't think that you are going to pick up a mint brownstone in VVP for under 1 million. I'm just being realistic. These same people if they were owners today would be saying the polar opposite.

Truth be told no one knows exactly how much prices will drop or for how long. One thing that I do know is that one that waits for the bottom usually misses it.

I'm actually looking at townhouses downtown right now so a little haircut in prices would be great for me even if I take a small hit on my condo which I don't plan on selling anytime soon. I can rent it out today and it would cashflow.

At the end of the day I just don't think that downtown JC is or was ever that expensive. I still see it as a good value with plenty of upside in the future and if I can pick up a townhouse with a fixed rate under 5% I am a happy camper.

I guess I'm a glass half full kind of guy.

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Awesome contribution to the thread!

No offense chief, but you're hardly a disinterested observer given that you have an advertisement for your mortgage banking services right there in your signature. But whatever - no one here claims to be an expert we're just having a civil conversation about JC real estate. I'm not sure that qualifies us as "obsessed"...

Anyway, Back to the thread:
Add Zephr lofts to the "lots of units in the building on the market" category. However I am not sure that I'd really call that a Jersey City building... to me, that's Hoboken. But I saw one on the market --> 1437 sq ft 2br/2ba for $469k - that works out to about $325sq ft - and this particular unit has a caveat saying they seller will pay 2 full years of maintenance on the unit...I gotta believe the taxes & maint on that building are pretty high given the low price/sqft - anyone know?

Edit: After doing a little digging i found a 1,050 sq ft unit with maintenance fees of $660 and since generally Maint is allocated based on sq footage, this particular unit would be around $900/mo, so getting 2 free yrs of maintenance would be worth about $22,000 -- Yikes!

Once again, I just think these so-called "luxury" buildings will be the hardest hit in the coming downturn...People are looking to save money where ever they can and the true cost of living in one of these places is a *lot* higher than the mortgage payment. But this was the first time i'd seen someone go so far as to give 2yrs of free maintenance to a buyer -- imagine *that* cost of living increase at the end of 2yrs!!

You guys are funny.

I love all the experts here obsessed with Real Estate.

Gotta back up wibbit on this one - price in b/t purchase and sale matters a ton. Where do you think all the HELOC withdrawals of the last 8 years came from? The reason much of the economic "growth" of the 2000s is specious is because it was borrowed against an asset with volatile pricing as people are now learning the hard way.

I'm fascinated by how JC brownstones and for that matter Brooklyn brownstones stay at elevated levels. I guess there's going to be a lag time between Wall St layoffs/lack of new hiring and RE prices. I realize the PSF pricing in downtown is much cheaper than Brooklyn but if everywhere starts getting cheaper than people will look at Manhattan and Brooklyn before JC. Corp law jobs and most other high paying jobs are dependent on Wall St for their growth and it ain't happening. My sense is that these 1-1.5mm brownstones could easily be cut 33% or maybe more with just one year of tough times on Wall Street. And JC looks even worse if prices head south as you know the county won't lower Prop Taxes ever.

I think the white collar brownstone owner defaults are the next shoe to drop. Jumbo loans in general are starting to falter as the headlines noted the other day. We shall see, but I think this whole flock back to the utopian hip cities may ultimately just be a short term phenomenon once the easy dough dries up....

Not to be rude, but what kind of stupid comment is that. This doesnt even deserve my time to type up an explanation.



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For many people a sizable portion of their net worth is tied up in their home, so for them the market value of their real estate is relevant.

Furthermore, if what you say were actually true, why are people (who are upside-down on their mortgages) defaulting in record numbers. The reason is that they no longer wish to pay for something that they have no equity in that is declining in value.

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I'm pretty sure he *gets* it...

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Just for clarity sake -- There is nothing wrong with a "Jumbo" mortgage. All that means is a loan amount greater than can be insured by Fannie Mae or Freddie Mac (this limit used to $417,000 but has increased for certain "high cost" areas). Just because someone takes on a large mortgage doesn't mean they can't afford it.

In any case, JC & NYC are not detroit, but there are certainly similarities...Prior to this downturn most housing market declines were related to shocks to the job market in geographical areas (Oil Bust in Texas, Base closings, Factory Closings, etc). The Wall Street mess is exactly the same, however layered on top of that, you have a massive housing bubble that preceded it. So, I tend to think the ripple affects from the wall street crisis are still in their infancy. In past history you merely had job losses, but now you have job losses and a massive contraction in available credit.

Anyway, just my 2c.