New Jersey Real Estate Report

From NJ.com:

More taxes, more spending, more borrowing! It’s party time in Trenton!

California cut $11 billion from its budget, hitting colleges and affordable housing programs. Georgia cut spending by 10 percent, pulling back spending on preschools and programs for the disabled. Tennessee lawmakers cut $1 billion, including transit programs.

New Jersey is charting a different course, increasing overall spending by 4 percent, and kicking off a new program to send checks to nearly 1 million households next summer, worth up to $500 a pop.

If we are outliers on spending, we are also outliers on borrowing.

So far, just one state has tapped into the Federal Reserve’s loan program for help. That’s Illinois, the only state that’s a worse basket case than New Jersey, with an even lower credit rating. And Illinois borrowed $1.2 billion with an agreement to pay it back in one year, a trifle by our standards.

New Jersey is about to borrow $4.5 billion, with a promise to pay it back over 12 years. That will cost us about $450 million a year, considerably more than the new millionaires’ tax will raise.

The Democrats, folks, are off the leash.

Even the party’s budget chairman, Sen. Paul Sarlo, seemed a bit embarrassed by the lack of discipline. “There is a point in time where we need to stop taxing and to do reforms,” he said, after a decade with the gavel. “We’re at the tipping point.”

From ROINJ:

N.J. unemployment jumps again after milestone week

After a week when unemployment claims slipped below the 20,000 mark in New Jersey, they jumped back up 25% during the week ended Sept. 19, according to the state Department of Labor & Workforce Development.

Initial unemployment claims for the week came in at 24,663, up from 19,636 the week before, and bringing the total number of workers seeking jobless benefits to more than 1.6 million since the COVID-19-related shutdown of the economy began six months ago.

The DOL has distributed $15.6 billion in federal and state benefits during the pandemic, including $286 million last week.

“New Jersey workers continue to struggle with the weight of unemployment and underemployment, and the accompanying financial worries of not having a job,” Labor Commissioner Robert Asaro-Angelo said in a prepared statement. “The Labor Department staff knows the difficulties our customers are facing, so they work hard every day to resolve as many cases and answer as many questions as possible.”

The state said 1.4 million people met the requirements for benefits, and 96% have received payment.

Nationally, the figure for seasonally adjusted unemployment claims was 870,000 for the week ending Sept. 19, up 4,000 from the previous week’s revised level.

The unemployment rate for the week ending Sept. 12 was 8.6%, down 0.1 percentage point from the week earlier.

From the NJ Herald:

NJ contracted $37M for contact tracing. Was there a better way to use taxpayer dollars?

It’s become a dangerous cycle.

Public health funding is slashed. An emergency strikes. Governments pour money into the problem and then cut funding once again after the crisis subsides.

Local health officials in New Jersey fear that this will happen again.

The Garden State agreed to pay close to $37 million in contracts to hire and train contact tracers for six months. This provisional workforce notifies those who spent time around an infected individual and helps them with what to do next, a crucial step to keep COVID-19 from spreading further.

…

The state plans to pay the Rutgers School of Public Health $13.3 million for developing a six-part course and hiring and training 1,000 students across the state from June 1 through Sept. 15, a memorandum of agreement shows. This nearly doubled the state’s workforce.

After that, Public Consulting Group is to take over administering the program and paying tracers for at least the next three months at a price tag of $23.5 million. About $20.7 million of that will cover wages for 1,200 tracers paid $35 an hour, according to the purchase order.

Federal funds are supposed to fill in the gaps, as the Murphy administration reduced certain state line items in his budget proposal, such as cutting “public health infectious disease control” from $2.5 million to $1.9 million.

But of the more than $650 million in federal stimulus money identified by the Centers for Disease Control and Prevention that the Garden State is allowed to pass down to local health departments over multiple years, the state has so far only allocated at most $74.3 million, or about 11%. Those funds have restrictions, and only a fraction, $2.3 million, has been passed out.

From Apple, this time looking at NYC:

From the NY Post:

Nearly half of NYC’s top earners have considered fleeing the city: poll

Nearly half of New York City residents earning six figures or more have considered fleeing the Big Apple during the coronavirus crisis over cost-of-living concerns, according to a new poll.

Researchers with the Siena College Research Institute and Manhattan Institute surveyed 782 city dwellers making $100,000 or more about life in the age of COVID-19.

In results released Wednesday, the survey, conducted between July 13 and Aug. 3, found that 44 percent have thought of leaving the city in the past four months, with 69 percent citing cost of living as the main reason to move.

Quality of life in the city that never sleeps has taken a hit, too, during the pandemic. Just under 4 in 10 respondents said quality of life is now “excellent or good” — a plunge from 79 percent who felt that way pre-coronavirus.

And it could be because many feel like there’s no end in sight — nearly 7 in 10 polled believe it “will take longer than a year” for life to return to normal.

The study also gave insight as to how many top earners are working from home. A majority of respondents, 53 percent, are now calling their abode their new office, while 21 percent aren’t working at all — though the poll notes they could be retired, furloughed, independently wealthy and receiving passive income.

And the bulk of them (65 percent) believe working from home is Gotham’s new normal, with 30 percent of respondents citing the new setup as a driving force behind wanting to get out of Dodge.

From MarketWatch:

‘It’s a five-alarm fire, a 100-year fiscal tsunami’

As fall descends on their virus-weary city, New Yorkers have some fresh reasons for optimism.

More people are out on the sidewalks. Gyms are open again. Though Broadway’s still dark and Manhattan CEOs are grumbling about “widespread anxiety,” many offices aren’t quite as empty as they were before Labor Day. Meanwhile, indoor dining and classroom learning are both set to return by the end of the month—with restrictions.

But there’s still a big missing piece in the complex puzzle of New York’s slow resurgence, and transit officials are struggling mightily to fit it back in. The subway is still a relative ghost town.

“Come back,” Patrick Foye, chairman and CEO of the Metropolitan Transportation Authority, was saying a couple of hours after Gov. Andrew Cuomo instituted new $50 fines on Thursday for anyone caught on a train or in a station without a face mask.

Is the subway safe?

“Absolutely,” Foye said.

From Politico:

How Covid-19 made New Jersey’s Phil Murphy the most powerful governor in America

New Jersey endows its governors with the most executive power in the nation. Chris Christie knew it and used that broad authority to become a hero of the Republican Party — a state-level strongman who forced Democrats to do his will or face his wrath.

Few thought Phil Murphy, his Democratic successor, would consolidate that power even further. Murphy struggled early on to move his progressive agenda through the solidly Democratic Legislature. Rival factions formed to oppose him. His signature proposal — a new tax on millionaires — was rejected twice.

Now, six months into a global pandemic that’s shattered the state’s economy and killed roughly 16,000 residents, Murphy has become one of the most popular governors in New Jersey history — and discovered just how much say he has over the state and its government.

The question is, how long can it last?

From the Star Ledger:

N.J. was just approved for the new $300 unemployment benefit. But you’ll have to wait to get it.

New Jersey was approved late Friday for an expanded $300unemployment benefit created by President Donald Trump after Congress couldn’t agree on a new stimulus plan.

But that doesn’t mean the payments will reach unemployed residents any time soon.

It took Gov. Phil Murphy several weeks to decide to apply for the benefit, which was announced on Aug. 7. The state didn’t apply until Aug. 26, in part because of confusion over how the program would be implemented.

Because the funding comes from FEMA, federal rules don’t allow the state to use existing unemployment systems or employees to distribute the funds. That means it will take time before the state can process the payments.

Labor Commissioner Robert Asaro-Angelo said the payments probably won’t be distributed until October, and it will probably come as a lump sum rather than as a weekly payment.

We haven’t taken a look at the mobility snapshot in a few weeks. Very interesting trends! Congratulations NJ – Keep Walking!

From Eater:

New Jersey Will Start Indoor Dining on Friday, While NYC Restaurants Still Have No Plan

New Jersey Gov. Phil Murphy has announced that the state’s restaurants will be allowed to resume indoor dining starting on Friday. Similar to NYC, the state was originally supposed to resume indoor dining at the beginning of July, but plans were postponed due to concerns about indoor dining and the spread of COVID-19.

To start, restaurants will be limited to 25 percent indoor capacity and tables have to be spaced at least six feet apart, according to NJ.com. Customers will also be required to wear a mask unless they are eating or have underlying health issues, and they will have to provide a phone number if making a reservation in order to help with contact tracing if necessary. 

Taking a similar approach as NYC restaurateurs, New Jersey restaurants have been campaigning hard to push the governor to announce a plan for the return of indoor dining. On Monday, Gov. Murphy said on Twitterthat “reopening responsibly will help us restore one of our state’s key industries” while continuing to fight COVID-19.

Nearby, NYC restaurants are still without a plan for indoor dining. The news now makes NYC the only part of the tri-state area still banned from indoor dining, as Connecticut and the rest of New York state were allowed to start indoor dining earlier this summer. Philadelphia is set to start indoor dining on September 8.

In a press conference on Monday, New York Gov. Andrew Cuomo said that he is “aware of the competitive disadvantage” that NYC restaurants are at while indoor dining remains off the table in the city. But he’s first watching to see how events like Labor Day and the reopening of schools play out before making a decision, and he’s also monitoring the upcoming flu season. NYC Mayor Bill de Blasio shared similar sentiments last week about waiting to see how things go with the schools reopening before considering a return to indoor dining.

“I want as much economic activity as quickly as possible,” Cuomo said at the press conference. “We also want to make sure the transmission rate stays under control. That is the tension. We’re trying to find the balance, and we’re calibrating every day.”

From the Jersey Journal:

Hudson County real estate market thrives as NYC couples, families, continue migrating for more value

For years, Hudson County real estate has enticed scores of New Yorkers to ditch the Big Apple in favor of more space and lower rents without sacrificing city access.

The coronavirus pandemic seems to be accelerating those migrations.

As New York City real estate suffers amid the pandemic, with vacancy rates spiking and rents falling, Hudson County’s market has continued to flourish, industry professionals say. In recent months it’s proven to be a haven for both renters and prospective buyers who are working from home and looking to spread out.

…

Average rent in Jersey City during April, May and June was up by 0.2% from the same time last year, according to Apartment Guide’s mid-year rent report. Meanwhile, in Manhattan, average rent was down about 6% between July 2020 and July 2019, according to the Douglas Elliman real estate company, signalling less demand for rentals. That difference grew to 10% when landlord concessions were included.

“There’s a certain appeal to not being in Manhattan and saving the money and being near transportation,” said Jonathan Kushner, president of Kushner Real Estate Group. “We’re very definitely seeing some tenants saying, ‘I don’t want to be in Manhattan right now with everything going on … we feel safer here. There’s more space.’”

…

About 40% of renters who move into brand new buildings in Hudson County are relocating from Manhattan, Kushner said, adding that his firm has seen a slight uptick in that percentage during the pandemic.

From the Star Ledger:

Murphy hopes some N.J. indoor dining will reopen before mid-September

With the state’s gyms allowed to reopen with restrictions next Tuesday, Gov. Phil Murphy said he hopes to permit some indoor dining at bars and restaurants by the middle of next month as coronavirus numbers continue to improve.

Murphy was asked Wednesday during his latest coronavirus briefing in Trenton whether rumors are true about a Sept. 14 or 15 target date for the state to allow limited indoor dining.

The governor said he “hadn’t heard” that date but stressed “I hope it’s before then.”

“I hope that we’ve got some indoor dining before then,” Murphy said. “I’m not hanging my hat on it. I’m not trying to make news. That’s not a date I’m using at least.”

But, he said, “if data we look at stays as good as it is, I hope we beat that date.”

The governor also said it’s likely movie theaters will be allowed to reopen in New Jersey at the same time.

“My guess is, if I had to predict now, they will move at the same time, whenever that is,” Murphy said.

6 months…

From ROINJ:

Gov. Murphy, asking for some internet friends: Where is COVID finish line?

I didn’t intend for my tweet to start a Twitter storm. To be honest, I didn’t think it would draw as much attention as my shameless pic of some pretty good-looking fajitas I had whipped up Saturday night.

I was simply responding to a Saturday afternoon tweet by Gov. Phil Murphy — one in which he said the state is “not over the finish line” despite having dropped from 8,013 hospitalizations to 376.

I tweeted: “Not trying to be a wise guy, but is it fair to ask, ‘Where is the finish line?’ This is the frustration I hear from the business community.”

In the next 24 hours, I was bombarded by more than 150 likes, retweets and comments — that’s a lot for me. Clearly, I had struck a nerve. And no one thought I was being a wise guy.

Of course, the internet being the internet, you never what you’re going to get. Or from whom. Here’s what I got.

Some offered an answer, saying Murphy had given a finish line: When there’s a vaccine.

I’m not so sure about that. I’ve listened to all but a handful of his briefings, and that has never come up.

Many — including Pat Rowe, a former councilman from Madison — said the finish line was election day.

From CNBC:

July home sales spike a record 24.7% as prices set a new high

Sales of existing homes soared 24.7% in July from June, according to the National Association of Realtors. 

That’s the strongest monthly gain in the history of the survey, going back to 1968, and the highest sales pace since December 2006.

Sales were 8.7% higher from July 2019. 

The numbers represent closed sales, meaning contracts signed in May and June. 

The increase in sales came as supply fell, prices rose and mortgage rates stayed low.

The supply of existing homes plummeted 21.1% annually, with just 1.5 million homes for sale at the end of July. This represents a 3.1-month supply at the current sales pace, down from a 4.2-month supply a year earlier. It’s the lowest July supply in the history of the inventory survey, which has been tracking single-family supply data since 1982.

“The new listings are running a little higher than one year ago but all those new listings are being grabbed by the buyers and taken off the market,” said Lawrence Yun, chief economist for the Realtors.

That shortage drove the median price of a home sold in July up 8.5% annually to $304,100. This is a record high nominal price but also the highest price when adjusted for inflation. When adjusted, it is 3.4% higher than the bubble high set in 2006, when mortgage lending was loose and borrowers could buy a home with no down payment and little to no financial documentation.