Good luck buying that house

Posted on February 24, 2025 by grim

From Apollo:

Median Age of Homebuyers: 56

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 168 Comments

The future of NJ office parks

Posted on February 22, 2025 by grim

From RentCafe:

Record-Breaking 71K Apartments Set to Emerge From Office Conversions

Office-to-apartment conversions are surging in popularity, with 2025 set to reach a record-breaking milestone of almost 71,000 units in the pipeline. This surge comes amid a nationwide shortage of apartments for rent and intense competitionamong renters. More than just creating housing, this trend reflects a shift toward sustainable, community-focused urban spaces that cater to the evolving lifestyles and priorities of modern American cities. So, as remote work continues to reshape the workplace and a significant share of the U.S. office space remains empty, repurposing offices into residential spaces offers a practical response to the growing need for housing.

While the volume of office-to-apartments conversions is growing, indicating increased interest in this type of retrofitting, the carryover of pending projects from one year to another is quite large. This suggests that other factors like conversion feasibility, construction costs, and local incentives come into play. Of the 55,339 office-to-apartments in some phase of development in January last year, only 3,709 were completed by December, leaving 51,630 units that carried over into 2025. This, combined with 19,021 new proposed conversions, represents a significant 28% year-over-year growth in the pipeline at the start of 2025.

Notably, innovative office-to-apartment conversions are by far the most popular type of adaptive reuse project, accounting for almost 42% of the 168,500 future conversion projects — a considerable growth from last year, when this category made up 38% of all conversions. This comes in the wake of rising vacancy rates in office buildings across the country, stagnating rents, as well as declining commercial property values. All of this helps make revamping offices into unique living spaces more financially viable.

Interestingly, this trend has seen remarkable growth in recent years. For instance, in 2022, the number of upcoming office-to-apartment conversions totaled 23,100 units before nearly doubling to 45,200 in 2023. Then, the growth continued in 2024, when the pipeline reached 55,300 future apartments. Now, in 2025, it’s climbed to an all-time high of 70,700 offices to be converted. This significant increase highlights the evolving nature of America’s cities that are driven by shifts in living preferences and changes in work habits. Thus, as office spaces are reimagined to meet the demand for housing, it’s clear that adaptive reuse is playing a key role in reshaping urban landscapes.

Posted in Demographics, Economics, Housing Bubble, National Real Estate, New Development, New Jersey Real Estate | 47 Comments

Where will spring ’25 go?

Posted on February 21, 2025 by grim

From the WSJ:

Home Sales Likely Fell in January

Home sales in January likely declined, as home prices and mortgage rates remained too high to attract buyers.

Sales of previously owned homes likely fell 2.6% in January from December, economists surveyed by The Wall Street Journal estimate. The data is seasonally adjusted.

The report, from the National Association of Realtors, is due at 10 a.m. ET.

Homes typically go under contract a month or two before the contracts close, so the January data largely reflect purchase decisions made in December and November.

Existing-home sales in 2024 fell to the lowest level since 1995 for the second straight year.

Posted in Demographics, Economics, Housing Bubble, National Real Estate, New Jersey Real Estate | 138 Comments

Trump axes NYC congestion tolls

Posted on February 20, 2025 by grim

From the Hill:

Trump declares New York ‘saved’ from congestion pricing: ‘Long live the king!’

President Trump on Wednesday declared New York “saved” after his administration announced it would rescind the Biden-era approval of a congestion pricing plan.

“CONGESTION PRICING IS DEAD. Manhattan, and all of New York, is SAVED.” Trump posted to his Truth Social. “LONG LIVE THE KING!”

The move pulls back a toll charging $9 for drivers to enter part of Manhattan, a plan that New York City and state officials had touted as reducing traffic and air pollution, while opponents argued it overburdened commuters. 

“New York State’s congestion pricing plan is a slap in the face to working class Americans and small business owners,” Transportation Secretary Sean Duffy said in a statement. “Every American should be able to access New York City regardless of their economic means. It shouldn’t be reserved for an elite few.”

Trump’s added call of “long live the king,” which was reshared on the social platform X by White House press secretary Karoline Leavitt, comes just after protesters rallied in cities across the country on Monday, dubbing the Presidents Day holiday as “No Kings Day.” Demonstrations took place in Washington, D.C., and New York City, among other places.

Other White House officials echoed the Trump-as-a-king illustration.

White House deputy chief of staff Taylor Budowich doubled down, posting on X a screenshot of Trump’s message alongside an image of the president wearing a crown against a city skyline. The official White House accountshared a similar image likening Trump to royalty, with the label “long live the king.”

Posted in New Jersey Real Estate, North Jersey Real Estate, NYC, Politics | 186 Comments

Don’t come here

Posted on February 19, 2025 by grim

From the Record:

Property taxes in NJ are still the nation’s most expensive.

Property taxes are a thorn in the side of homeowners. While many of us wish we didn’t have to pay them, we don’t have a choice. Just how much you pay depends on where you live, as taxes fluctuate from state to state and from town to town.

In the Garden State, property taxes are significantly higher than those in the rest of the country. In fact, New Jersey has the highest real estate tax rate in the nation, according to a recent report from WalletHub.

With an estimated effective real estate tax rate of 2.23% and a median home value of $427,600, the report found that New Jersey residents pay an average of about $9,541 annually in property taxes. WalletHub — which ranked all 50 states and the District of Columbia by their real estate tax rates — placed New Jersey in the report’s 51st spot.

Illinois has the second-highest real estate tax rate in the nation at 2.07%. Homeowners there pay about $5,189 in property taxes annually on a home with a median value of $250,500, according to the report.

Ranking third, Connecticut has a real estate tax rate of 1.92%, with homeowners paying about $6,575 on a home with a median value of $343,200. New Hampshire and Vermont round out the remaining top five states, at 1.77% and 1.71%, respectively.
…
“Americans who are considering moving and want to maximize their take home pay should take into account property tax rates, in addition to other financial factors like the overall cost of living, when deciding on a city,” said WalletHub Analyst Chip Lupo.

Posted in New Jersey Real Estate, Property Taxes | 188 Comments

“How can the housing market keep growing in 2025?”

Posted on February 18, 2025 by grim

From JP Morgan:

The outlook for the US housing market in 2025

The U.S. housing market is likely to remain largely frozen through 2025. Some growth is still expected, but at a very subdued pace of 3% or less. Demand — often understood through existing home sales (EHS) — remains exceptionally low. And though housing inventory is creeping back up, it still remains below the historical averages. 

“Existing homes for sale have reverted to more normalized levels across several key Metropolitan Statistical Areas (MSAs), and new homes have become fairly plentiful,” said Michael Rehaut, head of U.S. Homebuilding and Building Products Research at J.P. Morgan. “New homes for sale are at 481K, the highest level since 2007, and speculative homes for sale are at 385K, the highest since 2008. These metrics are roughly 50%/40% respectively above long-term averages. Supply should be less of a support for the housing market in 2025.” Nationally, single-family existing homes for sale are up roughly 20% year-over-year, but the number remains near record lows, around 20-30% below prior troughs.
…
But another key issue is at play, which is restraining supply more than any potential underbuilding. People are staying put for longer due to high interest rates, so housing stock is not being freed up. “The lack of supply is primarily a lock-in issue,” said John Sim, head of Securitized Products Research at J.P. Morgan. “More than 80% of borrowers are 100 basis points (bps) or more out-of-the-money. These are borrowers who have a significant disincentive to sell their home, and this is creating the dearth in supply.”

The current housing market stagnation is more closely tied to interest rates than anything else. “The situation is not going to change until we get mortgage rates back down toward 5%, or even lower,” Sim said. “And we aren’t forecasting mortgage rates to breach 6% in 2025 — they should ease only slightly to 6.7% by the year end.” Based on this, demand looks set to remain at exceptionally low levels.

The presence of vacancies is also suggestive of a demand issue, as lower vacancy rates point to potential supply constraints. Vacancies indicate that there are enough homes available, but these may not be the right type, in the ideal location, or at an affordable price point. 

With such low levels of supply and demand, how can the housing market keep growing in 2025? “The wealth effect from borrowers with significant home equity and/or equity market growth should maintain positive home price growth, though at a very subdued pace,” Sim said. While income has not kept pace with home price growth, existing borrowers are in good shape. And for those who own equities — particularly renters — there’s likely more money available toward down payments to effectively buy down the mortgage rate. Despite affordability challenges, this wealth effect helps to explain why home price growth is expected to continue. 

Posted in Demographics, Economics, Housing Bubble, Mortgages, National Real Estate | 130 Comments

Florida should thank NYC

Posted on February 17, 2025 by grim

From the NY Post:

Wealthy New Yorkers flock to Palm Beach, causing house prices to skyrocket: ‘Supercharged migration’

At the height of the COVID-19 pandemic, wealthy New Yorkers eager to escape the confines of the Big Apple fled south toward the tony, sun-soaked island of Palm Beach, FL—sparking a migration trend that has continued ever since, sending local home prices skyrocketing in the process.

As demand for homes on the barrier island surged, it caused not only a significant surge in the median property price but also prompted a notable drop in available inventory.

“Palm Beach saw a massive uptick in housing demand during the pandemic, which drove home prices higher and inventory levels lower,” says Realtor.com® senior data analyst Hannah Jones.

The median home price in the luxury town, which has a population of fewer than 10,000, peaked at an eye-watering $4.15 million in April 2022 after years of growth, according to Jones.

Although the median asking price has since slipped, it remains well above 2019 levels.

“Despite improvement, home prices remain well above pre-pandemic levels in Palm Beach as the effects of pandemic-era demand persist,” adds Jones.

And the deep-pocketed residents of the Empire State are largely responsible for Palm Beach’s stratospheric home prices, according to experts.

“It’s a wealth migration from New York City,” Ana Bozovic, a Miami-based real estate agent and founder of Analytics Miami, tells Realtor.com, addressing the unprecedented changes in Palm Beach.

Posted in Demographics, Economics, Housing Bubble, National Real Estate, NYC | 51 Comments

Will federal job cuts pop the bubble?

Posted on February 16, 2025 by grim

From HousingWire:

The impact of job cuts on the DC housing market

Is the Washington, D.C. housing market facing a sudden collapse ignited by DOGE’s job-cutting? A whirlwind of social media posts from dubious figures has sparked speculation that a large influx of inventory is hitting the market. Could this be a tipping point that sends the D.C. housing scene into a tailspin? Is there already a crash underway?

Let’s first examine the national inventory data. This has always been a key indicator for housing as we move toward normalcy. Although inventory levels are not yet back to average, it’s encouraging to note that we are significantly above the all-time low inventory level of 240,497, recorded in March 2022. We experienced a slight increase in inventory last week and we can anticipate the typical spring surge soon. 

  • Weekly inventory change (Feb. 7-Feb. 14): Inventory rose from 632,367 to 637,991
  • The same week last year (Feb. 9-Feb. 16): Inventory fell from 494,819 to 493,987
  • The all-time inventory bottom was in 2022 at 240,497
  • The inventory peak for 2024 was 739,434
  • For some context, active listings for the same week in 2015 were 954,581

Now let’s look at the DC Metro housing market and see if we can see any signs of the massive inventory surge that’s trending on social media. So far, it looks like we’re not seeing it materialize. 


The inventory in the DC metro housing market isn’t much higher than the COVID-19 inventory lows. Remember to be careful when listening to people who have never tracked housing economics. When working from such a low base, inventory exploding higher will be easy to see, much like what we saw in the 2018 data, so if and when it happens, we’ll know.

Posted in Crisis, Housing Bubble, National Real Estate, Politics | 38 Comments

Price growth slowing, but not here

Posted on February 14, 2025 by grim

From Mansion Global:

U.S. Home Sellers Are Getting More Flexible on Price as Market Stalls

U.S. home buyers faced a less competitive market in January amid a sluggish activity, according to a Redfin report Wednesday. 

Homes took longer to sell than usual, and with the biggest average discount on their asking prices in two years. Homes in most metros sold under asking, with Florida properties selling at the largest price reductions. 

In January, listings idled on the market for an average of 56 days before going under contract—the longest in the last five years, according to Redfin. 

“The upside of a slow market is that buyers have an opportunity to negotiate on price and terms for certain homes,” the report said. “Redfin agents in some parts of the country report that it feels like a buyer’s market.”

The average home sold for 2% lower than its full asking price in January, the steepest markdown since the start of 2023, the report noted. 

Sellers who have struggled to close are “open to lowering the price,” the report wrote.

Stubbornly high mortgage rates compared to the pandemic-era lows paired with inflated home prices have slowed the U.S. housing market and last year, led to the lowest level of transactionssince the 1990s. 

But a slower market is not a surefire buyer’s market.

Charles Wheeler, a Redfin Premier agent in San Diego, said that the homes sitting on the market are often in “unpopular neighborhoods or require renovation.”

“Relatively affordable, move-in ready homes close to highly rated schools are selling quickly, often with multiple offers,” he said.
…
Only seven of the 50 most populous U.S. metros recorded average sales above asking price, led by the pricey Bay Area in California. The average home in Nassau County in New York and Newark, New Jersey, also sold above list price in January.

Posted in Demographics, Economics, Housing Bubble, New Jersey Real Estate | 168 Comments

Northeast sees strongest price growth in Q4

Posted on February 12, 2025 by grim

From MortgageOrb:

NAR: Home Price Growth Picked Up Steam Again in Q4

The national median single-family existing-home price was $410,100 as of the end of the fourth quarter, an increase of 4.8% compared with the fourth quarter of 2023, according to the National Association of Realtors (NAR).

That is up significantly from the end of the third quarter when the annual gain was 3.2%.

Regionally, and year-over-year, existing-home prices in the fourth quarter were up 2.1% in the South, 10.6% in the Northeast, 8.0% in the Midwest and 4.0% in the West. 

Fourteen percent of the 226 tracked metro areas posted double-digit price gains, up from 7% in the third quarter.

”Record-high home prices and the accompanying housing wealth gains are definitely good news for property owners,” says Lawrence Yun, chief economist for NAR, in a statement. “However, renters who are looking to transition into homeownership face significant hurdles.”

In the past five years, from 2019 to 2024, the median home price rose by 49.9%, according to NAR’s data.

Housing affordability marginally improved in the fourth quarter. The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,124, down 0.8% from the third quarter ($2,141) and down 1.7% – or $37 – from one year ago. 

Almost 11% of markets (24 of 226) experienced home price declines in the fourth quarter, down from 13% in the third quarter.

“While recognizing many workers may not have the option to relocate, those who can or are willing to move may find more affordable conditions, especially given the wide variance in home prices nationwide,” Yun says.

Posted in Economics, Housing Bubble, National Real Estate | 380 Comments

Still not building enough homes

Posted on February 11, 2025 by grim

From Fortune:

2024 new home sales hit their highest pace in three years. Does that mean lower home prices are around the corner?

Home values have skyrocketed over recent years. The median sales price in the final quarter of 2024 was $419,200 and the average price was $510,300, according to the U.S. Department of Housing and Urban Development—both figures a hair below all-time highs.

But one industry expert predicts we’ll see even more new construction in 2025, and that should offer price relief for those seeking to jump from renting to homeownership or looking to move. 

Noelle Tassey, CEO of the real estate platform Redy, makes the case that more new inventory will put downward pressure on prices for both new builds and existing homes as sellers strive to attract price-sensitive buyers.

There were 683,000 new homes sold in the U.S. in 2024, per Census Bureau data. That compares to 666,000 in 2023, 641,000 in 2022, 771,000 in 2021, and 822,000 in 2020. These figures fall far short of the all-time high in annual new home sales—1,283,000 homes in 2005.

“Right now, the United States is missing about 4.5 million homes,” says Tassey. “That inventory shortage has driven up the cost of homes significantly.” 

Complicating matters is where Americans are moving to. High-growth regions experiencing an influx of residents probably won’t see home prices easing as much as elsewhere.

“The South, specifically in the Sunbelt region, will likely keep seeing a significant population boom and high demand for new construction,” says Tassey. 

New home sales in the South were 411,000 in 2024, roughly flat with 2023 levels and up slightly from 2022. Redy sees supply increasing in areas like the Sunbelt, but demand is climbing faster than new homes can be built. 

“Buyers are incredibly price-sensitive right now,” says Tassey. “Between high mortgage rates and elevated inflation, buyers are very aware of how much money they’re spending.”

Posted in Demographics, Economics, National Real Estate, New Development | 168 Comments

Sounds about right

Posted on February 10, 2025 by grim

From Patch:

NJ Residents Struggling To Pay Rent, Mortgages, Study Says: Report

If you’re struggling to pay your rent or mortgage on time, you’re not alone. In fact, New Jersey residents are finding it harder than most to manage the cost of housing, according to a new study.

Real estate and deed website Deeds.com recently analyzed data from the U.S. Census Bureau’s Household Pulse Survey to determine the average delinquency rate for each state, according to the study obtained by the Asbury Park Press. 

The study found that more than 6.6 million U.S. households are behind on mortgage payments. Meanwhile, more than 9.4 million renters are struggling to pay rent.

New Jersey came in at No. 5 for delinquencies, topped only by Mississippi, Illinois, Delaware and Wyoming, the report said. 

On average, delinquencies ranged from 11 to 12 percent, with 5.57 percent of homeowners in New Jersey late on mortgages and 17.70 percent of renters in the Garden State late on rent payments.

Posted in Demographics, Economics, Employment, Foreclosures, New Jersey Real Estate, Risky Lending | 86 Comments

Spring Market!

Posted on February 9, 2025 by grim

From the Record:

NJ housing inventory spiked by 53% from the end of 2024. Our January market update

As New Jersey’s real estate market picked back up in January from December’s end-of-year lull, the Garden State saw significant increases in new home listings in every single county.

Overall, New Jersey had 6,444 new home listings in January. While this is a 5.85% increase from this time last year, this is a 52.99% increase from December 2024, according to Realtor.com’s monthly market data.

Changes in home prices varied across New Jersey’s 21 counties during January, but the state’s median listing price of $535,000 was a 1.91% increase from last year and a 01.37% decrease from December 2024.

As for the number of days active listings stayed on the market, listings in New Jersey typically stayed on the market for about 58 days in January — a 2.68% increase from last year and a 4.55% increase from December 2024.

Nationwide, January marked the 15th straight month of housing inventory growth with a 24.6% increase, according to Realtor.com’s Monthly Housing Market Trends Report. The median price of homes for sale was down 2.2% in January — with a median price of $400,500 — and homes spent abut 73 days on the market, making January the slowest month since 2020.

Thirteen of New Jersey’s 21 counties had an increase in new listings compared with January 2024, with six of them growing by more than 10%. And all 21 New Jersey counties had an increase in new listings compared with December 2024, with nearly all of these increases being by 25% or more.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 33 Comments

First Jobs Report of 2025

Posted on February 7, 2025 by grim

From CNBC:

The big January jobs report comes out Friday. Here’s what to expect

When the Bureau of Labor Statistics releases its nonfarm payrolls count for January, it is projected to show growth of 169,000, down from 256,000 in December, but nearly in line with the three-month average.
…
The U.S. labor market likely began 2025 in solid fashion, in a bit of a step down from where it closed the previous year.

When the Bureau of Labor Statistics releases its nonfarm payrolls count for January, it is projected to show growth of 169,000, down from 256,000 in December, but nearly in line with the past three-month average. The unemployment rate is projected to stay at 4.1%, according to the Dow Jones consensus for the report, which will be out Friday at 8:30 a.m. ET.

While the takeaway could be that job creation is slowing, the broader view is that the employment picture is holding solid, and it’s not likely to be a problem for the Federal Reserve any time in the near future.

“With inflation at least for now at tolerable levels and firms very comfortable making sustained investment, there’s no reason why we shouldn’t continue to see job growth around 150,000 per month, which is the upper end of what’s needed to keep the labor market stable,” said Joseph Brusuelas, chief economist at RSM. “In other words, we’re at full employment. This is a good problem to have.”

By the time the Fed concluded its final three meetings of 2024, it had cut its key borrowing rate by a full percentage point. In good part, this was because policymakers sought to support a labor market that showed signs of weakening.

However, recent indicators show that while hiring has leveled off, layoffs aren’t increasing and workers aren’t quitting, though job openings are on the decline

Posted in Demographics, Economics, Employment, National Real Estate | 145 Comments

Prices Up, Inventory Down

Posted on February 4, 2025 by grim

From the Record:

Single-family home listings in NJ were down in 2024. See by how much

The number of new listings for single-family homes in New Jersey grew in 2024 compared with the prior year, but that number remained well below the levels seen in 2022.

The Garden State saw a total of 75,101 new single-family home listings in 2024 — a 4.5% increase from 2023. But this number was 14.6% lower than the 91,781 new single-family listings the state had in 2022. This suggests that elevated mortgage rates and rising home prices continue to keep homeowners from putting their properties on the market.

This is according to New Jersey Realtors — a state branch of the National Association of Realtors — which released its 2024 end-of-year report that recaps how real estate performed throughout the state.

With a total of 56,541 closed single-family home sales last year, the report said, the state had a 0.8% decrease in single-family homes sold compared with the previous year.

Home prices were on the rise last year compared with 2023, though, just as they have been for the last several years. The median sales price in New Jersey was $560,000 at the end of 2024, an 11% jump from 2023, the report said. The report said most New Jersey homes sold over asking price in 2024, at about 102.8% of what they were listed for.

Single-family homes stayed on the market for about 35 days in New Jersey last year, 5.4% less time than in 2023.

As for the townhouse-condo market, the report said there were a total of 19,760 housing units sold in 2024, or 2.3% more than in 2023. New listings increased by 8.7%, with 27,380 listings.

The prices of these housing units were 11% more in 2024 than the year before, with a median sale price of $417,000. And most of these properties sold for about 101.6% of their listing price — 0.2% more than 2023 — after staying on the market for about 34 days, according to the report.

Posted in Housing Bubble, New Jersey Real Estate | 361 Comments