New Jersey Real Estate Report

The article isn’t important, but the comments are, especially when they are from a mainstream NJ news paper. From the Star Ledger:

Aging Baby Boomers changing real estate

Comments:

nokelhead
Posted by nokelhead
February 05, 2010, 8:43AM

This about a stupid an article as I have ever seen. And they say that I am a nokelhead.
…
Posted by dagesq
February 05, 2010, 10:03AM

I agree nokel!
Real estate brokers will NEVER say publicly what they say privately:
the real estate market STINKS!

This is just another puff piece to fill space.
…
Posted by ellanj
February 05, 2010, 10:14PM

I agree as well. This person either totally delusional or a liar. I’m a 33 year old still renting and truth is we don’t need (or want) all those ‘luxury’ mcMansions sitting empty - when my husband and I decide to buy it certainly won’t be in a state with such overpriced and overtaxed housing.
…
Hal12b
Posted by Hal
February 06, 2010, 8:32PM

Real estate agents are all insane. They pump out all these bs articles trying to promote an immediate need for people to buy now. Sales may be up but what they are neglecting to say is that nobody is getting what they want. Home prices will continue to plummet for a while. The government will not make the same mistake or at least in our lifetime and give free money to people that can’t repay it. On top of the highest property taxes in the nation, nj home prices will drop for another2-3 years if not longer.

My my, how times have changed.

From the Philly Inquirer:

Homebuyers rushing to get tax credit before it’s gone

Liv Mansfield is racing the clock, hoping to find and settle, or at least sign a purchase agreement, on a townhouse before the $6,500 tax credit for qualified repeat home buyers expires April 30.

While the credit is not as important as staying in the Wallingford school district, where her younger daughter will enter sixth grade next fall, Mansfield says it will help make expenses associated with the move “a wash.”

“It will help with moving costs, and with getting this house ready for sale,” said Mansfield, who has lived in the five-bedroom split-level Colonial she bought with her former husband nine years ago.

The house, which she says is far larger than what “two people and a small dog need,” will list for under $525,000 and heads for the market Feb. 15.
…
It seems less is known about the repeat-buyer credit. This incentive was added when the original $8,000 tax credit for qualified first-time buyers, which expired Nov. 30, was extended.
…
Moody’s Economy.com chief economist Mark Zandi says the credit will boost sales “modestly,” however, by 300,000, with one-third trade-up buyers.

“I don’t expect the credit to be extended again,” Zandi said. “Each time it is extended, it becomes less effective and thus more costly.”
…
Builder Bruce Paparone of Bruce Paparone Inc. in Stratford, N.J., said a better understanding of the credit would result in more sales for him.

Still, “the incentive has definitely affected the buying decision of at least five of our last seven sales,” he said.

From HousingWire:

TransUnion Sees More People Paying Plastic Before Property

More borrowers than ever before are choosing to pay down credit card debt over making mortgage payments.

The share of borrowers who are delinquent on their mortgages but current on their credit cards rose to 6.6% as of Q309 (from 4.3% in Q108), according to national credit bureau TransUnion.

At the same time, the share of borrowers that are delinquent on credit cards but current on their mortgages slipped to 3.6% from 4.1%.

This switch first appeared in early 2008, when TransUnion reported the share of borrowers current on credit cards and delinquent on mortgages surpassed the share of borrowers current on mortgage payments and behind on credit cards. Since then, the shift of borrower behavior in paying down debt is growing.

“Conventional wisdom has always been that, when faced with a financial crisis, consumers will pay their secured obligations first, specifically their mortgages,” said Sean Reardon, author of the TransUnion study on the changing payment hierarchy from Q208 through Q309.
…
“The implosion of the mortgage industry over the last 24 months, the resetting of adjustable-rate mortgages and the weak job market have all come together to redefine how consumers are managing their finances and meeting (or not meeting) their credit obligations,” said Ezra Becker, director of consulting and strategy in the TransUnion financial services business unit.
…
Another national credit bureau, Equifax, recently released analysis that indicates home equity lines of credit (HELOCs) represent a significant portion of borrowers’ revolving debt and, thus, a huge driver of default.

From the Star Ledger:

N.J. loses $70B in wealth during four years as residents depart

More than $70 billion in wealth left New Jersey between 2004 and 2008 as affluent residents moved elsewhere, according to a report released Wednesday that marks a swift reversal of fortune for a state once considered the nation’s wealthiest.

Conducted by the Center on Wealth and Philanthropy at Boston College, the report found wealthy households in New Jersey were leaving for other states — mainly Florida, Pennsylvania and New York — at a faster rate than they were being replaced.

“The wealth is not being replaced,” said John Havens, who directed the study. “It’s above and beyond the general trend that is affecting the rest of the northeast.”
…
“This study makes it crystal clear that New Jersey’s tax policies are resulting in a significant decline in the state’s wealth,” said Dennis Bone, chairman of the New Jersey Chamber of Commerce and president of Verizon New Jersey.
…
Wealthy residents are a key driver for everything from job creation and consumer spending to the real estate market and the state budget, said Jim Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. In New Jersey, the top 1 percent of taxpayers pay more than 40 percent of the state’s income tax, he said.

“That’s probably why we have these massive income shortfalls in the state budget, especially this year,” he said.

Until the tax structure is improved, he said, “we’ll probably see a continuation of the trend, until there are no more high-wealth individuals left.”

He added the report reinforces findings from a similar study he conducted in 2007 with fellow Rutgers professor Joseph Seneca, which found a sharp acceleration in residents leaving the state. That report, which focused on income rather than wealth, found the state lost nearly $8 billion in gross income in 2005.

From the Wall Street Jounal:

Jersey Shore Retreat

## River Rd, Island Heights, NJ (Ocean County)
4 Bedrooms
3.1 Baths
Riverfront with Dock

Purchased: 2006
Purchase Price: $1,825,000

Approximately $200,000 in updates.

Current Asking: $1,650,000

Reason for Sale: Can’t afford 3 homes.

Potential loss: More than $400,000 (Closer to $700,000 when you factor in mortage interest, taxes and commissions paid).

From the Philly Inquirer:

Affordable-housing changes pushed in New Jersey

A plan to eliminate the state Council on Affordable Housing and put towns in charge of their own housing obligations is necessary to streamline an unwieldy bureaucracy, supporters said yesterday.

But as a Senate committee began hearing testimony on the proposal, opponents said it would deliver a serious setback to efforts to increase the number of affordable homes in New Jersey.

The housing bill, which drew a large crowd to a hearing yesterday, would move many of the council’s powers to the state Planning Commission.

“So much money goes down the drain in terms of all these planning mechanisms that’s not going into affordable housing,” said Sen. Ray Lesniak (D., Union), who sponsored the bill with Sen. Christopher “Kip” Bateman (R., Somerset).
…
Affordable-housing activists held a news conference before the hearing to say the measure would roll back New Jersey’s affordable-housing policies by 35 years and exacerbate racial and socioeconomic segregation.

The council was created under the Fair Housing Act of 1985, after state Supreme Court rulings that each of New Jersey’s 566 municipalities has a constitutional obligation to provide a “fair share” of the region’s need for low- and moderate-income housing.

A 2008 revision to COAH’s Third Round rules established a need for an additional 115,000 affordable housing units to be built in New Jersey by 2018 and increased the ratio of how many such units need to be built for every market-rate unit and new job created.

Towns, which were required to submit plans on how they would comply with the increased obligations, widely contested the state’s accuracy in calculating the number of affordable housing units for which they were responsible. Dozens joined the New Jersey League of Municipalities in a still-unresolved legal challenge to the rules.
…
The bill also would allow the restoration of certain Regional Contribution Agreements (RCAs), which had allowed wealthier towns to pay poorer communities so they could transfer their affordable-housing obligations.
…
Nicole Plett, a member of the New Jersey Regional Coalition, spoke out against such agreements, saying they concentrate poverty in cities such as Trenton, Perth Amboy, and Camden, and continue to make New Jersey one of the most economically and racially segregated states.
…
Gov. Christie has said he wants to “gut” COAH, and the proposed legislation bears some similarities to recommendations made in a report last month by his transition team.

From the APP:

Tolls on N.J. interstates weighed

Interstates 78, 80, 195, 287 and 295 are likely targets to become toll roads, transportation experts predict in response to a report submitted to Gov. Chris Christie that suggests that the state explore placing tolls on certain highways.

The report, released on Jan. 22, also suggests having voters decide whether to raise the state’s gasoline tax, after all revenue that is supposed to be dedicated to the state’s Transportation Trust Fund has been returned to that purpose.

The report, which notes that the Transportation Trust Fund will run out of money in 2011 to pay for any highway, bridge or mass transit projects in fiscal year 2012, made six general recommendations about how to raise revenue but did not go into details.

Revenue from the state’s gas tax will raise enough money just to cover the estimated $895 million debt payment in July 2011, the report said.

It recommends exploring “limited tolling of select interstate highways to pay for improvements to those highways,” but didn’t identify highways to be considered.

Transportation experts said the most likely candidates for tolling would be east-west interstates I-78, I-80 and I-195, along with other high-volume highways such as I-287 and I-295. Doing that requires federal approval, which would require state officials to demonstrate why toll money is needed to fix that specific highway.

From the Daily Record:

FORECAST 2010: Is real estate turning the corner?

Real estate professionals around Morris County agree: If the next 11 months are anything like the last few months, 2010 could be a pretty good year.

Overall, 2009 will go into the books as another tough one for real estate in Morris, New Jersey and most of the United States. But a close look at last year’s residential real estate statistics in Morris County shows there was a measurable turnaround from the second to the third quarter, followed by more improvement in the fourth quarter.

“The second half of the year was much better than the first, and the end of the year was even better,” said Jacqueline “Jackie” Scura of Re/Max First Choice Realtors in Parsippany. “This year is starting off a little slow. There’s not a lot of inventory out there right now. But we expect more people will be listing their homes soon and, if they are priced right for the market, they should sell in a reasonable amount of time.”

Adding to the perceived January market chill, Scura said, is that the reduced inventory includes “a lot of homes that have been sitting there for a long time.”

While the number of homes for sale hasn’t dropped to the level of the boom years in the early 2000s, when homes were often claiming multiple bids within days of their listing, the recent reduction of inventory could be good news for some home-sellers.

“But make no mistake, this is not a seller’s market by any means,” said Lyle Wolf, Realtor associate and co-owner of Exit Realty Gold Service in Mountain Lakes.
…
With the recession and credit crunch still weighing down the market in 2009, it’s no surprise that nearly all municipalities in Morris County, echoing the national trend, experienced further annual drops in average home-sale price. The average number of days on the market per home increased.

From the Press of Atlantic City:

Maybe last year wasn’t so bad for southern New Jersey’s real estate market

The widespread belief that real estate had a terrible 2009 is being disproved by the data for the southern New Jersey market released this week.

Compared with the prior year, sales were almost even in Atlantic and Cape May counties, and significantly higher in Cumberland County. Prices fell, but by single digits, and the time it took to sell homes remained about the same.

Real estate offices said the second half of 2009 in particular was strong, and the momentum is continuing into this year.
…
Prudential Fox & Roach’s HomExpert Market Report this week showed 551 home sales in Cumberland County in 2009, 21 percent more than the year before. The median price fell 8.3 percent to $154,000, and the average days a house spent on the market increased from 104 to 113.
…
In Atlantic County, home sales fell 1 percent to 2,602 last year, according to the market report. The median price dropped 9.6 percent and days on the market inched up from 115 in 2008 to 119 in 2009.
…
In Cape May County, which isn’t covered by the market report, the county Association of Realtors reported this week that 2009 sales dropped 1 percent to 1,879. The median price fell 8.1 percent to $296,000 and average time on the market was unchanged at 221 days.
…
For all of southern New Jersey, the report said sales were down 1.4 percent in 2009 and the median price declined 8.3 percent to $199,000 from the prior year.

From the Star Ledger:

N.J. home sales may be adversely affected by FHA guidelines

Measures intended to protect government-backed loans from widespread defaults and foreclosures could have an adverse effect on the state’s housing sales, according to industry experts.

Earlier this month, the Federal Housing Authority announced increased minimum down payments for borrowers with low credit scores and higher mortgage insurance premiums for those that take on the loans.

The restrictions will take effect in the spring and early summer.

The latest moves are part of a strategy outlined last year to shore up the FHA’s loan portfolio, which is increasingly under pressure from defaults and delinquencies.

“Now most of our transactions are FHA, so the word on the street is that there are all of these changes,” said Jonathan Kessler, president of the Hunterdon Somerset Association of Realtors. “FHA loans have often been the only means for some buyers to purchase property.”

He said changes made to the government-backed program could hurt deals.

Indeed, last year, the FHA endorsed roughly 59,000 loans in the state — about 55 percent more than in 2008.
…
These new stricter guidelines, however, are a necessity, said Peggy Yanuzzelli, president of the Middlesex County Association of Realtors.

“Some agents may look at it as a decrease in buyers, with no money and lower credit scores,” she said. “But for the future economy, this has to be done.”

From the NY Times:

Builders Reassess the Market

THE number of new-housing permits issued statewide in 2009 did not even reach 12,000. The last year the tally was that low: 1945, when New Jersey was still mostly cow and corn country.

If the housing crisis was finally over and the overall economy was headed toward recovery, it would still take at least two years for housing starts to recoup, according to market analysts.

“Traditionally, after past recessions, housing starts have doubled within two years,” said Jeffrey G. Otteau, whose Otteau Valuation Group provides advice on state real estate trends. “Because of the severity of this recession, though, there may be lingering wounds.”

Yet even in the face of these sobering numbers, several builders of multifamily projects have forged ahead — some actually building, others planning on it as soon as weather permits.

Their reasons are varied, based on interviews with developers of several large projects. Some asserted that their condominium developments held special appeal despite the general slowdown in sales; others said they had used the “down time” of the economic crisis to reconfigure plans and now felt that they understood the changes in buyers’ requirements.

From HousingWire:

Treasury Changes Guidelines for Getting Borrowers into HAMP

The U.S. Treasury Department and the Department of Housing and Urban Development (HUD) changed guidelines on how servicers introduce borrowers into the Home Affordable Modification Program (HAMP) to go into effect June 1, 2010.
…
Servicers began ramping up efforts to gather more documents after the November HAMP numbers revealed a little more than 31,000 permanent modifications. Herb Allison, the assistant secretary for the Treasury said that at the program’s outset, the goal was to reach as many people as possible and obtain documentation during the trial period.
…
Effective for all trial period plans with effective dates on or after June 1, 2010, a servicer can only evaluate a borrower for HAMP after receiving an initial package that includes a request for modification and affidavit (RMA) form; the Internal Revenue Service (IRS) 4506T-EZ form, which gives servicers the ability to pull the borrower’s tax return; and two pay stubs from the borrower for proof of income.

From USA Today:

Want a loan modification? Bring documents

Homeowners applying for mortgage modifications will soon have to provide paperwork upfront showing that they qualify.

The new documentation process is aimed at getting homeowners more rapidly into permanent modifications with lower monthly payments.
…
To accept homeowners into the program, many lenders accepted borrowers by taking proof of income over the phone. Getting the documentation needed to get into a permanent modification then took time, lengthening the process.

Under the change, homeowners will provide the documentation upfront.

“Were there some struggles with documentation? Absolutely. Are we learning from those lessons? Absolutely,” says Phyllis Caldwell, who heads the Treasury’s Homeownership Preservation Office.
…
Wage earners will need:

•Two pay stubs.

•An electronic form that allows a servicer to pull up a tax return online.

•A request for modification that includes a hardship affidavit.

From the WSJ:

Paperwork Eased in Loan-Modification Program

The Obama administration is trying to simplify the paperwork for people seeking lower home-mortgage payments in an effort to avert more foreclosures.

The Treasury outlined new guidelines Thursday aimed at streamlining requirements for mortgage relief under the administration’s Home Affordable Modification Program launched a year ago.

The guidelines specify that borrowers must provide three items to loan servicers, the companies that collect mortgage payments: a form requesting a loan modification, authorization for the servicer to seek tax information from the Internal Revenue Service and evidence of income, such as two recent pay stubs. Previously, some servicers have asked borrowers to fax in copies of their tax returns. Borrowers sometimes couldn’t find the needed tax forms or complained that servicers repeatedly lost material faxed to them.

The previous documentation requirements were “somewhat overwhelming” for some borrowers, says Morgan McCarty, head of mortgage servicing at Regions Financial Corp., a banking company based in Birmingham, Ala.

From the WSJ:

December Chilled New-Home Sales

Demand for new homes in December fell, as cold weather and continuing joblessness put a chill on hopes for a housing-market recovery.

Single-family home sales fell 7.6% from November to a seasonally adjusted annual rate of 342,000, the Commerce Department said Wednesday, though it noted the drop was within the margin of error. December’s reported drop followed a 9.3% plunge in November. Meanwhile, on a positive note, home inventories fell last year, compared with 2008, but prices fell, too.

“The new-home market continued to wilt late in 2009,” Mike Larson, an analyst at Weiss Research Inc., wrote clients. “The buyers who are willing and able to buy are flocking to cheaper, distressed, ‘used’ homes.”

Home sales for all of 2009 dropped sharply, by 22.9% to an unadjusted 374,000, from 2008’s 485,000, as the industry struggled after collapsing from its multiyear boom.
…
“Overall, the housing-market recovery remains fragile,” BNP Paribas’s Anna Piretti wrote to clients. “Tight credit conditions, ongoing deleveraging, a likely increase in mortgage rates and a 10% unemployment rate all point to sluggish housing demand after the tax-credit program expires.”
…
Regionally, December new-home sales were mixed, rising 42.9% in the Northeast and 5.2% in the West, falling 41.1% in the Midwest and 7.3% in the South.

The New Jersey Home Price Index Tracker has been updated to include:
* November S&P Case Shiller (Aggregate, Tiered, Condo)

(click to enlarge)

(click to enlarge)

FHFA (Formerly known as the OFHEO) Home Price Index

HPI (Includes Refis) - Peaked in Q1 2007 and is down 12.42% from peak

Purchase Only - Peaked in Q2 2006 and is down 11.88% from peak

S&P Case Shiller NY Metro Commutable Area Home Price Index

Low Tier (Under $284606) - Peaked in October 2006 and is down 23.3% from peak

Mid Tier ($284606 - $417722) - Peaked in September 2006 and is down 20.6% from peak

High Tier (Over $417722) - Peaked in June 2006 and is down 16.2% from peak

Aggregate (Overall Market) - Peaked in June 2006 and is down 19.7% from peak

Condo-Only Index - Peaked in February 2006 and is down 14.4% from peak

NY Metro Area Aggregate Year over Year Changes

Nov 08 -8.74%
Dec 08 -9.22%
Jan 09 -9.73%
Feb 09 -10.32%
Mar 09 -11.66%
Apr 09 -12.36%
May 09 -11.87%
Jun 09 -11.49%
Jul 09 -10.09%
Aug 09 -9.30%
Sep 09 -8.53%
Oct -7.75%
Nov -7.12%

From the Courier Post:

Home sales drop beyond expectation

Sales of existing homes, plumped up by government incentives in November, melted 16.7 percent in December, the largest month-to-month drop in 40 years. The steep decline, reported Monday by the National Association of Realtors, was worse than the 10 percent drop predicted by economists.

Overall, prices fell dramatically in 2009, declining 12.4 percent nationwide to a median of $173,500, the largest decline since the Great Depression.
…
But the most recent numbers for New Jersey — for sales in the third quarter — indicate prices are still softening.

“The good news is that homes are still moving, even if the price points are lower,” said Allan Dechert, president-elect of the NJAR and co-owner of Ferguson-Dechert Real Estate in Avalon.

In Burlington County, the median sales price for an existing, single-family home slid 7.4 percent compared to the same quarter a year ago, from $247,000 to $228,000.

In Camden County, the median price inched down 3.3 percent, from $203,200 to $196,400. In Gloucester County, the median price shed 10.8 percent, from $232,100 to $207,100.

From the Philly Inquirer:

Philadelphia-area existing-home sales down in December

The end of the first housing tax credit, as expected, took its toll on sales of existing homes in December, national and regional data show.

Sales fell about 35 percent in December from November in the eight-county Philadelphia region, according to a Prudential Fox & Roach HomExpert report.

Nationally, the month-to-month drop was 16.7 percent, according to the National Association of Realtors.
…
Some economists question whether the extended credit will jump-start the real estate market as much as the first one did.

“So far, the second credit appears to be having a minimal effect,” said IHS Global Insight economist Patrick Newport.

“Mortgage applications to purchase homes [the four-week moving average] are near their lowest level since 1997,” he said. “Applications are down despite the fact that mortgage rates, which are at historically low levels, are likely to go up during 2010.”

Newport said he believed sales would be weaker in 2010 than in 2009.

Prices fell 3.2 percent year-over-year in the eight-county Philadelphia region, but that reflects the continued presence of first-time buyers in the market, with or without the tax credit, snapping up lower-priced homes.

From the WSJ:

Existing-Home Sales Plunge

Home sales plunged in December, raising fresh concerns over the housing market’s ability to recover when government support winds down.

Sales of previously owned homes fell 16.7% from November to a 5.45 million annual rate, the National Association of Realtors said Monday, after a looming tax-credit deadline pushed buying decisions into previous months. The drop brought the pace of sales down to the lowest level since August.

The government’s first-time home-buyer tax credit was initially scheduled to end Nov. 30, and there was a race to finish deals before it expired. But the tax credit was eventually extended until spring, complemented by an additional tax break for repeat buyers.

For all of 2009, there were 5.16 million home sales, up 4.9% from 4.91 million in 2008. It was the first annual sales gain since 2005.

Although economists expected Monday’s report to show declining December home sales, few thought they would fall so sharply. The decline called into question the sector’s ability to bounce back.

“We have a very fragile housing system,” said Michael Carey, an economist with Calyon Securities in New York. He worried that as the government withdraws support from the housing market, prices could begin slipping again. That would put more homeowners into the position of owing more on their mortgage than their home is worth and could lead to another wave of foreclosures.
…
Regionally, December sales fell 19.5% in the Northeast, 25.8% in the Midwest, 16.3% in the South and 4.8% in the West.

From the WSJ:

Tishman Venture Abandons Stuyvesant

A group led by Tishman Speyer Properties has decided to give up the sprawling Peter Cooper Village and Stuyvesant Town apartment complex in Manhattan to its creditors in the collapse of one of the most high-profile deals of the real-estate boom.

The decision comes after the venture between Tishman and BlackRock Inc. defaulted on the $4.4 billion debt used to help finance the deal. The venture acquired the 56-building, 11,000-unit property for $5.4 billion in 2006—the most ever paid for a single residential property in the U.S. The venture had been struggling for months to restructure the debt but capitulated facing a massive debt load and a weak New York City economy that has undercut rents and demand for high-priced apartments.

The property’s owners signaled they would be unable to reach a deal with lenders and instead decided to allow creditors to proceed with what amounts to an orderly deed-in-lieu of foreclosure, which means a borrower voluntarily gives the property back to lenders to avoid a foreclosure proceeding.

From the NYT:

Huge Housing Complex in N.Y. Returned to Creditors

The owners of Stuyvesant Town and Peter Cooper Village, the iconic middle-class housing complexes overlooking the East River in Manhattan, have decided to turn over the properties to creditors, officials said Monday morning.

The decision by Tishman Speyer Properties and BlackRock Realty comes four years after the $5.4 billion purchase of the complexes’ 110 buildings and 11,227 apartments in what was the most expensive real estate deal of its kind in American history.

The surrender of the properties, first reported by the Wall Street Journal, ends a tortured real estate saga that saw the partnership make expensive improvements to the complex and then try to rent the apartments at higher market rates in a real estate boom. But a real estate downturn and the city’s strong rent protections hindered those efforts, leaving the buyers scrambling to make payments on loans due for the properties, which have been a comfortable harbor for the city’s middle class since they opened in the late 1940s.

From the APP:

More offices, shopping centers delinquent on loans

The Whiting Town Center is a sprawling complex on Lacey Road in Manchester whose tenants include restaurants, doctor’s offices and a Super Foodtown that serves as an anchor. There are a few empty stores, but nothing that would signal distress.

Until you talk to one of the tenants.

“The middle class, they’re just dead in the water,” said Cathy Lada, owner of the flooring store, A Lada Flooring. “We’re basically (living) paycheck to paycheck right now. There’s no security.”

With tenants hurting and unemployment rising, banks are bracing for another round of shaky loans, this one to borrowers who own property such as shopping centers and office buildings.
…
“Definitely we’re seeing more stress on our commercial real estate loans and our borrowers,” said Bruce Dansbury, chief operating officer of Sun Bancorp, the Vineland-based parent company of Sun National Bank. “It’s there. It’s real. You can see it as you ride around. You see vacancies in shopping centers and office buildings. It seems like everywhere you go there is a “For Lease’ sign.”
…
The result: About 4.6 percent of commercial mortgages in the region that includes Monmouth and Ocean counties were at least 30 days past due during the third quarter of 2009, up from 2.1 percent during the fourth quarter of 2008 and mirroring the national rate, according to Foresight Analytics, an Oakland, Calif., research firm.

From the Star Ledger:

N.J. commercial landlords tack on incentives to fill vacant space

The deserted office building off Prospect Plains Road in Cranbury looks as if it could still be occupied, with 42 acres of manicured landscaping and traffic signs advising employees where to park.

But it’s been more than two years since Aetna Insurance moved out of the space at 1 Continental Drive, leaving the 500,000-square-foot building empty as the day it was built.

The agency trying to lease the five-story building has dropped the price to $4.95 a square foot, or about $10 less than the 2006 price. The agency tells potential tenants that a square foot of premium office space off exit 8A of the New Jersey Turnpike — where the building is located — is now as affordable as a “golf ball” or “hamburger.”
…
At the end of last year, about 34.7 million square feet of office space was on the market in central and northern New Jersey — up from 31.5 million available square feet at the end of 2008, according Grubb & Ellis, a commercial real estate firm.

But that doesn’t include the “shadow market” of space that landlords are simply not bothering to try to lease, said Matt Dolly, managing director of research in the New Jersey office of FirstService Williams.

Dolly said with that space could amount to hundreds of thousands of extra square feet.
…
The jobless rate in New Jersey has now hit 10.1 percent, with more than half of those out of work “knowledge-based workers,” or those that would likely work in offices, according to an estimate from the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

And the glut of commercial office space on the market has dropped asking prices to similar lows. The average asking rate for Class A space — the highest quality — has dropped to its lowest level in more than five years — $28.80 a square foot in the northern and central parts of the state, according to Grubb & Ellis.

From the Press of Atlantic City:

Malls struggling to fill vacancies in tight economy

The row of blacked-out stores at Heather Croft Square gives the impression of a retail ghost town. For more than 20 years, the big draw at the shopping center on Tilton Road in Egg Harbor Township was a Superfresh, until it closed in 2007.

The impending recession gutted the center. A dollar store went bust, a lending company left and a dinette and bar stool supplier shut down. Larry Delany watched helplessly as his neighbors’ stores suffered.
…
The alarms were ringing for retail mall and strip center operators a year ago, when major chains such as Circuit City and KB Toys prepared to go out of business after a weak holiday shopping season.

In April, Chicago-based General Growth Properties Inc., which operates four malls in northern New Jersey, filed for one of the largest commercial real estate bankruptcies ever after struggling with a $27.3 billion debt load. Its malls remain open as it works to restructure its debt.
…
In September, Taubman Centers Inc., of Bloomfield Hills, Mich., reported a negative cash flow with its luxury shopping mall in Atlantic City, The Pier Shops at Caesars, and said it did not think it could pay off its $135 million mortgage. A company spokeswoman said last week that a plan to turn over the property to lenders is still in negotiations.
…
The Shore Mall in Egg Harbor Township was reportedly in jeopardy of closing after its anchor, Boscov’s, filed for bankruptcy protection in 2008 and threatened to go out of business. It has since come out of bankruptcy and is adding staff.

The department store’s survival was especially critical after Value City closed that same year. Shore Mall, which opened in 1968, is made up primarily of smaller, independent retailers as opposed to the national chains with greater access to capital.
…
Streb said the region remains “overmalled,” and weaker properties that don’t upgrade face difficulties. He ranks malls with a letter grade, and said modern, fresher properties such as the Cherry Hill Mall can be considered an A. He gave the Hamilton Mall in Mays Landing a B, and the Shore Mall a C.

“The A malls are going to survive,” he said. “It’s the B malls that should upgrade, and the C malls, if they don’t do anything, can potentially close.”