It’s different now, or is it a different kind of bubble now?

From Bloomberg:

Trouble in Housing? It’s More 1994 Than 2007

Housing market softness in the back half of 2018 has investors and the public wondering how bad things might get. It’s understandable that people would be worried, considering that the last housing downturn led to the worst economic crisis since the Great Depression. But housing market fundamentals in this cycle are nowhere near as risky as they were in the mid-2000s. Real-time data on mortgage applications suggest a milder path. Coincidentally, it looks a lot like 1994.

The economy in 1994 is remembered largely for financial market turmoil brought about by sharp increases in the federal funds rate by the Federal Reserve. During that year, the Fed increased its target rate for lending between financial institutions to 5.5 percent from 3 percent, a 2.5 percent increase in one calendar year. Perhaps not surprisingly, mortgage rates increased sharply as well. The average 30-year fixed mortgage rate increased by around 2 percentage points in 1994, ending the year north of 9 percent. New home sales slumped. In December 1993, the seasonally adjusted annual rate of new single-family-home sales was 812,000. A year later, in December 1994, it had fallen over 20 percent to 629,000.

The other noteworthy story of the 1994 economy was what happened to the yield curve. Because of the sharp increase in short-term interest rates, the yield curve flattened significantly. The spread between two-year and 10-year Treasury rates at the end of 1993 was 1.58 percent. By the end of 1994 the spread was at 0.15 percent — close to zero, but not quite inverted.

The story in 2018 is similar. While the increase in mortgage rates this year is not as severe as it was in 1994, the housing market is dealing with other headwinds — rising costs from land, labor and materials prices, plus a shortage of inventory after years of building fewer homes than population growth would seem to warrant. An increase of one percentage point in mortgage rates between mid-November 2017 and mid-November 2018 made homes less affordable.

It’s understandable why many fear this is a prelude to another big crash. Home sales have fallen, and inventories are rising. Home price appreciation has slowed, particularly for higher-end homes. The yield curve has flattened, with investors starting to anticipate interest-rate cuts in 2020 and beyond. Prospective buyers see negative stories about the housing market, get nervous, and decide to sit back and see how things go rather than putting in offers. It’s the same thing that happened before the onset of the housing bust and the great recession.

Except we’ve built nowhere near as many homes over the past decade as we did in the years leading up to the 2008 financial crisis. Underwriting standards remain strict, as anyone who has needed financing to buy a home in recent years can attest. Household mortgage debt relative to incomes or gross domestic product continues to fall. Job growth continues, and wage growth is accelerating at a slow pace.

And while it’s still too early to draw any conclusions, mortgage application data in recent weeks is starting to tell a different story. Because of the volatility in financial markets since the beginning of October, interest rates have fallen. The 10-year Treasury rate has fallen more than 0.3 percentage points from a peak of 3.24 percent in early November. Since the middle of November, average 30-year fixed mortgage rates have fallen by around 0.2 percentage points.

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 12 Comments

Another day another tax

From NJ101.5:

WHY FEWER CHEAP FLIGHTS MIGHT BE FOUND AT NEWARK AIRPORT

Your chances of finding a cheap flight out of Newark Liberty International Airport could soon go down dramatically.

You may want to expand your search to John F. Kennedy or LaGuardia Airports in New York. All three are run by the Port Authority of New York and New Jersey, but it’s only Newark flights that are about to be hit by a huge fuel tax.

The loss of cheap flights is just one of the so-called unintended consequences that are feared if state lawmakers give final passage to a bill that expands a bizarre fuel tax to include all the fuel in a plane’s tanks.

Currently, only the jet fuel that is consumed during takeoff and landing is subject to New Jersey’s fuel tax. However, an expansion of that tax is on the verge of final approval. It would cost Newark’s biggest carrier, United Airlines, more than $20 million per year. United accounts for two-thirds of all passengers flying out of Newark, and warned during a legislative hearing this week that passengers would pay the price.
There is a lot not to like, at times, about the way United Airlines does business and treats passengers. Entire websites are dedicated to hating on United. They are, however, a major contributor to Trenton tax collections and the New Jersey economy. A recent study showed the airline contributed $16 billion to the New Jersey economy in 2016 and United customers added $1.6 billion in economic activity.
At the same time, United’s vice president of state and local government affairs, Daniel Lynch, told lawmakers, “We pay over $400 million a year in taxes, rates, charges, and fees … we think that is a significant amount.”

Jill Kaplan, president of the New York/New Jersey region for United Airlines, says the company has made over $2 billion in unsubsidized investments at Newark Airport.

Privately, United officials have told me they see this as punitive, and directed specifically at them. Why else, they ask, would smaller commercial New Jersey airports like Atlantic City and Trenton-Mercer be exempted from the higher fuel taxes? As a last-minute change, lawmakers included an exemption for airports with less than 20,000 flights per year, which includes TTN and ACY.

Will the additional fuel cost be passed on to passengers? Yes. But with 28 million United passengers per year at Newark, it would amount to less than a dollar per ticket.

However, United execs say that’s not the point. Why pay the higher tax if you don’t need to? They have already signaled any growth in flights, services, capital improvement, and job growth will be directed to other airports, like Kennedy and LaGuardia. Said Lynch, “(This tax) will curb growth. It will stop job creation at Newark Airport. It will drive that growth to LaGuardia and JFK. I don’t think that’s a smart economic plan for this state.”

Posted in Demographics, Economics, Employment, New Jersey Real Estate, Politics | 103 Comments

Optimistic … but

From NJ101.5:

HOW NJ BUSINESSES FEEL ABOUT ECONOMY, MINIMUM WAGE IN 2019

New Jersey businesses don’t really like much about the state in which they operate, but most expect an uptick in sales and profits in 2019, according to a survey released Thursday.

And, the survey finds, if the Garden State eventually comes around to instituting a $15-per-hour minimum wage, you can expect a spike in prices at a number of spots.

The New Jersey Business & Industry Association’s 60th Annual Business Outlook Survey took the pulse of nearly 900 member companies.

“Our members are really bullish on their own performance. Basically, the things they can control, they feel very confident about,” NJBIA President and CEO Michele Siekerka told New Jersey 101.5. “But when we ask them about New Jersey’s economy, sadly they don’t feel so bullish.”

Sixty-two percent of businesses believe their sales will rise in 2019, and 9 percent expect a decrease in sales. That differential is better than what was recorded with last year’s survey.

More than three-quarters of respondents said they would provide wage increases in 2019, ranging from 1 to 4.9 percent. Nearly 40 percent expect to increase hiring.

But while 83 percent of businesses rated the performance of the U.S. economy as “excellent” or “good,” only 40 percent gave the same grades to the Garden State.

At least half of respondents said New Jersey is worse in taxes and fees; controlling government spending; controlling healthcare costs; attracting new business; controlling labor costs; and regulatory compliance costs, compared to other states.

New Jersey is at or near the top among all states in tax categories including income, sales, property, corporate and inheritance taxes, the NJBIA report noted.

Concerned with a potential increase in the state’s minimum wage, 66 percent of NJBIA member companies said the move will impact their business; 39 percent said the impact would be significant.

About a third of businesses said they’d raise prices to offset increased costs caused by a hefty hike in the minimum wage. About a quarter indicated they’d reduce staff and/or hours.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 142 Comments

What’s more important, whether people have jobs, or what they get paid?

From NJ Patch:

Approximately 1,000 NJ Jobs Will Be Gone By The New Year

Some of the announcements came before the stock market plummeted on Tuesday, and talk of a possible recession arose. But the sting of about 1,000 layoffs coming to New Jersey will still hurt nonetheless.

New Jersey will have at least 1,311 layoffs within the next two months – 826 of which will come by Jan. 1. Much of the layoffs will happen in retail, where New Jersey has had a number of store closings this year, and in the health care industry.

Gov. Phil Murphy addressed the issue recently when he responded a report from The United Way that said more than 1 million families in New Jersey are “income-constrained” He said the assessment “proves beyond any doubt” the need for efforts to both grow the economy and make it more fair.

Murphy said his economic agenda has a clear focus on creating good new jobs and on expanding workforce development.

“But, we must also recommit to taking immediate action to raise New Jersey’s minimum wage and put it on a path to $15 an hour,” he said. “The Legislature has given its strong support in the past to raising the wage. I have never wavered in my commitment. We must make this a legislative priority and work to enact it before the end of the upcoming holidays. Economic stability would be among the best holiday gifts we could possibly give our ALICE families. We can, and must, deliver.”

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 60 Comments

Jobs boom over, or room to run?

From Bloomberg:

Will the U.S. Jobs Boom Last?

The U.S. unemployment rate is at an almost 50-year low. Companies increasingly say that workers are hard to find. So how much longer can hiring keep up the pace of the past several years?

The not-so-satisfying answer: It depends.

U.S. employers added an estimated 155,000 workers to nonfarm payrolls in November — a bit less than expected, but still enough to keep the three-month average at a respectable 170,000. The performance also extends the country’s longest-ever streak of net monthly job gains to eight years, two months.

Once upon a time, economists would have considered such a rate of job growth unsustainable. They estimated that the population of willing and able workers was increasing at somewhere between 50,000 and 100,000 a month, so they figured the unemployment rate would remain steady as long as employers hired roughly that number of people. If hiring stayed above that breakeven level, it would eventually exhaust supply.

By most measures, the U.S. should be getting close to that exhaustion point. Consider the share of prime-aged workers (aged 25 to 54) who have jobs. As of November, it stood at 79.7 percent, not far from its pre-recession average of 80.1 percent. Closing that gap would take almost 500,000 jobs — something that, given a breakeven level of 100,000 or less and monthly job gains averaging 170,000, could happen within a year.

The breakeven level, though, depends on a lot more than population growth. If, for example, people start retiring later, then more new jobs will be needed to accommodate the young folks just starting out. Or if abundant opportunities draw more people into the labor force, supply could keep expanding. For such reasons, some economists now think job growth of as much as 200,000 a month could be sustainable for quite a while. This might also help explain why wages haven’t been rising faster.

In short, the U.S. economy can’t keep generating this many jobs every month forever. But that doesn’t mean it has to end soon.

Posted in Demographics, Economics, Employment, National Real Estate | 29 Comments

The king falters

From the WSJ:

New York’s Wealthiest Cut Losses as Manhattan Real Estate Falters

When actor Brian Kerwin decided to sell his longtime Manhattan home—an 1880s Romanesque townhouse he and his late wife had carefully restored—he was hoping it would go for about $12 million, based on similar sales in the neighborhood. When he and his agent, Kim Mogul Wright of Douglas Elliman Real Estate, agreed on a price tag of $8.5 million, he thought there would be “five takers within a week,” said Mr. Kerwin, 69, who has appeared in movies such as “The Help” and “27 Dresses.”

So he was shocked when the Upper West Side listing got “absolutely zero interest.” Finally, after a year on the market and several price cuts, the redbrick house is now in contract for about $5.5 million.

Accepting that the home would sell for far less than he had imagined was a gradual—and emotional—process, said Mr. Kerwin, who bought the house for less than $1 million in the early 1990s and raised his children there. “It’s like hitchhiking; after standing there for 10 hours you’ll take anything,” he said.

Mr. Kerwin is one of many Manhattan homeowners struggling to accept the new reality of the New York City real-estate market, as prices slide after a decadelong boom.

This year has brought into sharp focus all the pressures on the market. The slowdown began at the time of a stock market rally and record-low New York City unemployment—factors that typically accompany strong real-estate sales in the city. For that reason, many owners are reluctant to accept lower prices, even as buyers determinedly seek bargains. New York is facing the convergence of several large economic forces: an oversupply of new condos, a drop in international buyers as some countries impose capital controls, changes to the tax law that cap state and local deductions, and rising interest rates.

New York is facing the convergence of several large economic forces: oversupply of new construction condos, a drop in international buyers as some countries impose capital controls, tax law that makes it harder to deduct high state and local taxes, as well as rising interest rates. There is also a shift in taste from uptown to downtown.

As Lee J. Stahl of the design/build firm the Renovated Home put it: “It’s a crazy Bermuda Triangle of forces that have lined up against people trying to sell and buy these properties.” The Upper East Side luxury co-op market in particular is “a train wreck,” said Mr. Stahl, who often works with agents listing properties in need of renovation.

In August, for example, financier Ramesh Singh sold his sprawling Park Avenue duplex for $13.75 million—far less than the $20.365 million he paid in 2008, according to public records.

Posted in Demographics, Economics, Employment, New Development, NYC | 172 Comments

Realtors no longer positive on housing?

From Marketwatch:

Why 2019 won’t lead to a home buyer’s market

As 2018 winds to a close, the housing market has shown signs of a slowdown.

Throughout this year, observers have begun to speculate that the country’s housing market may have hit its peak. Meanwhile, millions of Americans continue to wait on the sidelines. Housing inventory remains incredibly tight, meaning that buying a home is a very expensive and difficult proposition for many. At the same time, expensive rents and low wages have constrained people’s ability to save up for a down payment.

And 2019 appears set to bring more of the same. “I would still rather be a seller than a buyer next year,” said Danielle Hale, chief economist at real-estate website Realtor.com. Here is what forecasters predict the New Year will hold for America’s housing market:

As of Nov. 21, the interest rate on a 30-year mortgage was 4.81%, which is 89 basis points higher than a year ago. But by this time next year, experts predict it will be even higher.

Realtor.com estimated that the rate for a 30-year mortgage will reach 5.50% by the end of 2019, while real-estate firm Zillow estimated that it could hit 5.80% in a year’s time. Mortgage liquidity provider Fannie Mae was more moderate, predicting that rates will only increase to 5% by then.

Either way, homebuyers can expect to pay more in interest if they buy next year. And rising mortgage rates will cause ripple effects throughout the market, said Daren Blomquist, senior vice president at real-estate data firm Attom Data Solutions.

“What’s driving the slowdown in price appreciation and the rise in inventory is not so much that inventory is being created, but that demand is decreasing,” he said. “This is an extremely mortgage-rate sensitive housing market.”

Posted in Demographics, Economics, Mortgages, National Real Estate | 69 Comments

The big slow continues

From CNBC:

Home price gains shrink to the lowest level since January 2017: September S&P Case-Shiller index

Home values are still rising, but the gains have now shrunk to the lowest level since January 2017, as rising mortgage rates cut into affordability.

Prices increased 5.5 percent annually in September, down from 5.7 percent in August, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. The 10-City Composite annual increase came in at 4.8 percent, down from 5.2 percent in the previous month. The 20-City Composite rose 5.1 percent year-over-year, down from 5.5 in the previous month.

“Home prices plus data on house sales and construction confirm the slowdown in housing,” says David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “One factor contributing to the weaker housing market is the recent increase in mortgage rates.”

The average rate on the 30-year fixed mortgage is now a full percentage point higher than it was one year ago, and affordability has fallen to the weakest level in over a decade. Blitzer also pointed to weaker sales of both new and existing single family homes, which peaked one year ago in November 2017.

“Sales of existing homes are down 9.3 percent from that peak. Housing starts are down 8.7 percent from November of last year. The National Association of Home Builders sentiment index dropped seven points to 60, its lowest level in two years,” Blitzer added.

Posted in Demographics, Economics, Employment, Mortgages, National Real Estate | 168 Comments

Yes, NJ is a manufacturing powerhouse

From ROINJ:

Manufacturing is (hidden) gem of N.J. economy

Manufacturing is not dying, it’s evolving.

So said John Kennedy, the CEO of the New Jersey Manufacturing Extension Program, at a recent Financial Executives International meeting.

“Manufacturing in New Jersey is very hidden,” he said. “People (don’t realize) there are 11,130 manufacturing companies (here),” Kennedy said to the room of around 40 senior financial executives.

“Do you realize there are 378,000 people working for those companies? Do you realize the average income is higher than any other industry, including finance, at $90,000 per person?”

Kennedy said the most relevant issue facing the manufacturing industry is a skills gap that leads to staffing issues.

That may be partially due to the fact few people know how big manufacturing is, he said.

Kennedy said people also aren’t privy to the existence of the over 11,000 manufacturers in the state because they don’t know where they are.

People drive by them without knowing what they are, which, he said, means the facilities are clean and organized — and don’t perpetuate the stereotype of a manufacturing facility.

Kennedy said they are run by highly skilled technicians, who are becoming increasingly difficult to find.

“That’s the No. 1 problem in the state for manufacturing companies,” he said. “Can’t find people. People don’t go into the industry anymore. We figure there’s at least 33,000 open jobs we can’t fill.”

According to Kennedy, after adding up the numbers, manufacturing’s economic impact in the state is about 1.1 million jobs. And every manufacturing job, Kennedy said, drives four other jobs no matter the industry.

Kennedy went on to explain the way technologies such as 3D printing are contributing to the evolution of manufacturing. 3D printing can allow the creation of products, particularly prototypes for auto and aviation, at a drastically lower cost.

Kennedy credits the stigma surrounding the trades and vo-tech schools as the reason young people don’t look at manufacturing as a viable career option. When young people begin to be exposed to a more diverse range of industries, Kennedy said, the negative narrative surrounding trades begins to be addressed.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 30 Comments

Sorry Jersey, not for you.

From Fortune:

Long Island City Real Estate Booms After Amazon Announces New York Office, Report Says

Though Amazon said it won’t begin hiring for its newly announced office in Queens, N.Y. until 2019, condo sales in the neighborhood are already booming.

For example, one Long Island City brokerage firm said it sold 150 units in just four days, The Wall Street Journal reports.

It’s only been a week since Amazon revealed plans for the New York office and another in Arlington, Va. The two cities offered the company billions of dollars in tax incentives in an effort to get the high-paying jobs that come with the Amazon expansions.

Just before news broke of the new headquarters’ location, two Amazon employees reportedly beat the rush and bought units in New Jersey and Queens, The Wall Street Journal reports. Lawyers told the paper that they’re not aware of any broken laws associated with employees making real-estate transactions based on nonpublic information.

Posted in Economics, Employment, NYC | 32 Comments

Buyers prefer used houses

From the USA Today:

Rising mortgage rates, home prices are becoming a toxic cocktail in the housing market

Rising mortgage rates and continued home price growth are hurting affordability and fast becoming a toxic cocktail for the nation’s homebuilders.

Sentiment among homebuilders dropped 8 points in November to 60 in the National Association of Home Builders/Wells Fargo Housing Market Index. That is the lowest reading since August 2016, but anything above 50 is still considered positive. The index stood at 69 in November of last year and hit a cyclical high of 74 last December.

“Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices,” said NAHB Chairman Randy Noel, a builder from LaPlace, Louisiana.

Of the index’s three components, current sales conditions fell 7 points to 67, sales expectations in the next six months dropped 10 points to 65, and buyer traffic registered an 8-point drop to 45. Buyer traffic had broken out of negative territory earlier this year but now appears to be back in it solidly.

Some of the nation’s largest publicly traded homebuilders, like Lennar and KB Home, lowered their expectations for sales in 2019 in recent earnings releases. There is still a shortage of homes for sale, but newly built homes come at a price premium, and as interest rates rise, new home buyers are consequently hit hardest.

The average rate on the popular 30-year fixed mortgage is now more than a full percentage point higher than it was a year ago. The huge home price gains seen over the last two years are now shrinking, but prices were still up a strong 5.6 percent year over year in September, according to CoreLogic.

“For the past several years, shortages of labor and lots along with rising regulatory costs have led to a slow recovery in single-family construction,” said the NAHB’s chief economist, Robert Dietz. “While home price growth accommodated increasing construction costs during this period, rising mortgage interest rates in recent months coupled with the cumulative run-up in pricing has caused housing demand to stall.”

Posted in Demographics, Economics, Mortgages, National Real Estate, New Development | 71 Comments

How to get rich quick? Have a legislator carve you out a loophole.

From the Press of Atlantic City:

NJ’s leveling of room tax playing field also dug a loophole

We’ve long felt it was unfair and detrimental to the hospitality industry for New Jersey to pile room taxes and fees on hotels while giving online room renters such as Airbnb a free ride. So we were glad that legislators and the governor finally leveled that playing field in this year’s budget agreement.

Unfortunately, Democratic leaders did this in a way that created a loophole for one accommodations segment and handed the real estate industry a big gift.

Now everyone who rents out rooms and homes on a short-term basis will pay the state sales tax of 6.625 percent, the state occupancy 5 percent tax, plus local room taxes — a total that can approach 14 percent — except those who pay a licensed real estate broker to hand guests the key.

Really. That doesn’t make any sense, and the Democrats who reached this compromise didn’t offer an explanation or argument in support of this combination tax exemption and real estate industry subsidy. That suggests it’s a shameless ploy for support from brokers and certain vacation property owners.

Democrats may have arrived at this freakishly distorted tax policy, however, somewhat by accident. And the alternatives, such as they are, probably won’t appeal to those on the losing side of this unfair tax scheme.

t may seem like only a politician could love such an unfair solution that just happens to reward a narrow constituency. But the property owners who rent their rooms and homes on their own might come to prefer it as well.

The only legislative alternative we see is, as Sweeney proposed, to tax all short-term renters of rooms and houses equally. Just strike the words from the new law that rentals aren’t “considered transient accommodations … where the keys to the property … are provided to the lessee at the location of an offsite real estate broker.” That’s a ridiculously untrue statement anyway.

That would be the fairest approach and surely state officials would welcome the additional tax and fee revenue.

Discount rental key offices will probably arise up and down the shore, competing on price for the simple business of handing out keys. Condo associations may even find it worthwhile to get together and get someone licensed as a real estate broker to hand out keys.

Posted in New Jersey Real Estate, Shore Real Estate | 44 Comments

How can the housing market be slowing?

From the NYT:

Why the Housing Market Is Slumping Despite a Booming Economy

These should be happy times for the housing sector. The economy is booming, with more people working at higher pay, and with the sizable millennial generation reaching prime home buying age.

Instead, the housing market has gone soft, acting as a drag on the overall economy rather than as a force propelling it forward.

Sales of new single-family homes were down 22 percent in September from their recent high in November 2017, and existing home sales in September were down 10 percent. This tepid residential investment subtracted from G.D.P. growth in each of the first three quarters of 2018.

Home prices have not declined nationally, at least according to the most widely followed indexes. But their rate of increase has declined, and more and more home sellers are finding they must reduce asking prices to find a buyer.

Given how central housing is to the broader economy — it is the biggest driver of both wealth and indebtedness for most families, and its fluctuations have frequently been major factors in past booms and busts — this slump isn’t something to be taken lightly for anyone hoping the good times will last.

So what’s going on?

Posted in Demographics, Economics, Employment, National Real Estate | 29 Comments

Monopoly for Millennials is making them mad

Given the weather and hellacious afternoon commute in store for us, I thought I’d post something entertaining. From Fortune:

Millennials Tell Hasbro Just How Insulting ‘Monopoly for Millennials’ Really Is

Hasbro has released a new game, “Monopoly for Millennials,” and it’s getting some blowback from the very demographic the game is supposedly meant to entertain.

The game’s rules and cover art all play up stereotypes the age group is known for.

The box for the game shows Mr. Monopoly taking a selfie, wearing headphones and a participation medal and holding a coffee. The taglines read: “Forget real estate, you can’t afford it anyway,” and “Adulting is hard. You deserve a break from the rat race!” Rather than win by collecting the most money, the game prompts players to collect experiences—including visiting a friend’s couch, going to a vegan bistro, and hitting a week-long meditation retreat. Game pieces include a hashtag and crying emoji.

Though some people are amused by the game, others found the mockery infuriating and took to Twitter to express their irritation.

Many people expressed their annoyance by taking a jab at Baby Boomers.

Can you provide the URL for the Hasbro-official website featuring “Monopoly for Millennials,” where you trash on my age demographic because baby boomers caused an economic catastrophe that rendered us financially impotent for a decade? Thanks!

Posted in Demographics, Economics, Employment, Humor | 154 Comments

A better outcome for NNJ?

Is this actually the best result for NJ? Discuss. From the WSJ:

New York City and Northern Virginia will be the homes for Amazon.com Inc.’s second and third headquarters, according to people familiar with the matter, ending a more than yearlong public contest that started with 238 candidates and ended with a surprise split of its so-called HQ2.

The imminent announcement is expected as soon as Tuesday, according to the people. Other cities may also receive major sites, some of the people said.

Amazon is dividing the second headquarters evenly between New York’s Long Island City and Arlington County’s Crystal City neighborhoods, which are both located directly across from the major city centers. The company plans to evenly split the offices with as many as 25,000 employees.

The decision effectively gives Amazon a major presence in three coastal hubs that politically lean left, at a time when tech companies are under scrutiny for their perceived elitism and liberal social views.

Amazon declined to comment.

New York City Mayor Bill de Blasio discussed the Amazon deal Monday night during his weekly television appearance, although he didn’t confirm that the city had been officially selected. He was hopeful that HQ2 would come to New York City. “We’re talking about the single biggest economic development deal in the history of New York City,” he said.

Amazon’s move to New York pits it against rival Google, which is gearing up for its own expansion in the city. The Wall Street Journal reported last week that the Alphabet Inc. unit will add office space for more than 12,000 new workers, an amount nearly double the search giant’s current staffing in the city, people familiar with the matter said. On Monday night at the Journal’s D.Live tech conference, Google financial chief Ruth Porat confirmed the company plans to double its New York City staff of 7,000 over a decade.

Posted in Economics, Employment, North Jersey Real Estate, NYC | 161 Comments