Tax cuts (income or property) not looking likely as NJ revenue misses

Posted on May 16, 2012 by grim
Posted in Economics, New Jersey Real Estate, Property Taxes | 142 Comments

From Bloomberg:

Tax-Cut Pledge May Trap Christie as N.J. Revenue Misses

Governor Chris Christie, a Republican who has spent the past four months promising New Jersey income- tax cuts, now confronts the challenge of selling his plan’s feasibility against a backdrop of continuing revenue shortfalls.

April receipts fell 5.3 percent short of budget forecasts, after March collections missed by 2.5 percent, according to statements from Treasurer Andrew Sidamon-Eristoff. So far for the fiscal year that ends in June, the state has brought in $230.3 million, or 1.2 percent, less than projected.

Christie, 49, didn’t remark on the latest figures during two public appearances in Atlantic City and Camden yesterday, when the April data was released. He will continue barnstorming the state with a public forum planned for today in East Hanover. He has regularly pitched the three-year, 10 percent tax cut at such meetings as a key to what he calls the “Jersey Comeback.”

“To back off now would smell of political weakness,” Brigid Harrison, who teaches law and politics at Montclair State University, said yesterday by telephone.

Christie’s $32.1 billion spending plan for fiscal 2013 counts on a 7.3 percent revenue gain, the most since before the recession that began in December 2007. Should revenue miss budgeted amounts for the current year, the state would start the next with less cash than estimated.
…
New Jersey collected $3.26 billion last month, less than the $3.44 billion forecast. Income taxes trailed estimates by 2.8 percent and corporate levies fell 22 percent under budget, Sidamon-Eristoff said in a statement.

“This is one month’s worth of collections,” said Kevin Roberts, a spokesman for Christie. “We still have two months.”

So far in fiscal 2012, revenue is $500 million, or 2.7 percent, greater than for the first 10 months of the previous year, reflecting economic growth, Roberts said yesterday.
…
“With revenue projections coming in much lower and the governor’s revenue estimates being ridiculously unreachable,

it would be irresponsible at this time to support any type of tax cut,” Senator Raymond Lesniak, an Elizabeth Democrat, said by telephone yesterday, before the April numbers were released. “I know that other members I’ve spoken to agree.”

Gordon MacInnes, president of New Jersey Public Policy Perspective, a Trenton nonprofit research group that focuses on social and political issues, said this is no time to cut taxes.

“New Jersey already has the third-lowest credit rating in the country, greatly increasing our borrowing costs,” MacInnes, a former Democratic state senator and assemblyman from Morristown, said in a statement. “Our leaders should concentrate first on putting the state’s fiscal house in order, not on politically appealing, but reckless, proposals to cut taxes. This is exactly how we got into this mess.”

April Revenue #’s Gone Missing

Posted on May 15, 2012 by grim
Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 111 Comments

From the Star Ledger:

N.J. Treasury delays release of April revenue figures without explanation

A joint news conference between Gov. Chris Christie and Senate President Stephen Sweeney wasn’t the only thing that didn’t go off as scheduled today in Trenton.

The state’s Treasury Department failed to release April revenue figures as expected. The department declined to explain the delay.

April is a critical month in the budget cycle where the state receives the bulk of its income tax collections.

A memo written earlier this month by the non-partisan Office of Legislative Services said business and income tax collections in April failed to meet expectations, but did not provide specifics. In March, OLS and the Christie administration were already $537 million apart on revenue projections through fiscal year 2013, with the OLS anticipating a slightly lower revenue rebound.

The slumping revenue figures cast doubt on Christie’s and Sweeney’s ability to deliver the tax cuts — and already have some Senate Democrats rethinking the wisdom of offering them while revenue is weakening.

Christie and Sweeney were poised today to announce a compromise on their competing tax cut proposals, but the surprise news conference was abruptly canceled. Sweeney cited “minor” health issues, but sources say he failed to notify key Democratic lawmakers of the compromise and was the target of some internal criticism that prompted him to delay the announcement.

Waiting for Godot the Bulldozer

Posted on May 14, 2012 by grim
Posted in Economics, Foreclosures, New Jersey Real Estate | 125 Comments

From the Record:

North Jersey foreclosures haunt neighbors

Maywood homeowner Joe Leichtnam spent some time recently trimming the shrubs, mowing the lawn and fixing the siding.

Not at his house; at the empty house next door. It’s a small effort to contain the chaos at the property, which is in foreclosure and has been vacant for several years. The house has a blue tarp covering a hole in the roof and overgrown bushes that threaten to engulf the deck.

The house on Edel Avenue is just one of thousands of vacant homes left by the housing bust all across North Jersey. Neighbors say they’re discouraged and disheartened by the sight of these neglected homes, which can remain empty for years while the foreclosure process grinds slowly forward.

If a neighboring house is empty and in disrepair because of a foreclosure, homeowners can complain to their town’s code enforcement officer. The town then has the power to contact the foreclosing lender, which by law is supposed to correct violations of the property tax code. If that doesn’t work, the town can send in workers to clean up the property and then place a lien on it to pay for the work. That way, the town is repaid either when the lien is purchased by an investor or when the house is sold at sheriff’s auction.

“It just detracts from the whole neighborhood,” said Leichtnam, a retired telecommunications professional. “It definitely has an impact on the value of the homes in the area.”

These homes are orphans of the real estate storm. The homeowners are gone. Foreclosing lenders don’t own the property, and generally do the minimum — mow the lawn or board up windows. Towns can step in, but their workforces are already stretched, and they don’t know when they’ll be reimbursed for the work. Without the level of care that homeowners typically give, the properties can fall into neglect and disrepair. So neighbors like Leichtnam, who see the value and appeal of their own homes threatened, take matters into their own hands.

The blight has not hit just lower- and middle-income areas. On McCain Court in Closter, for example, an empty McMansion sits in a cul-de-sac of half a dozen similar houses. The owner paid $929,000 for the home in 2000, but lender Keystone Nazareth Bank and Trust filed to foreclose in July 2008, according to public records.

Today, the house sits with expensive but overgrown landscaping, a knocked-over mailbox and signs of damage in a high corner where the side wall meets the roof. There’s a notice on the door from United Water, dating to December, warning that the water’s about to be turned off because of an unpaid bill of $1,367.
…
Mortgage companies will often turn off the water in a house to prevent burst pipes. But they don’t always act in time. Theresa Rolaf says an empty house on her street, Terrace Street in Bergenfield, was flooded when an upstairs pipe broke.

“I called the police and they came to shut the water off,” said Rolaf. “I’m sure there is a lot of damage inside.” The house is now owned by JPMorgan Chase, according to property records. A note on the door from the bank’s lawyers indicates that the homeowners gave the bank the deed, to head off a foreclosure.
…
The homes can stay vacant for years. It now takes, on average, more than 2½ years for lenders to go through the legal process to evict New Jersey homeowners who can’t pay their mortgages. The New Jersey foreclosure pipeline came to a near-halt in 2011 over sloppy paperwork by lenders — called “robo-signing” because lender representatives allegedly signed documents without checking them, in the rush to evict homeowners. The foreclosure machine has shown recent signs of starting up again in New Jersey, but with the backlog of properties in the system, distressed properties are likely to linger for years.

Because vacant homes can be a “calamity” in a neighborhood, Affuso, of the bankers’ group, said the state should try to streamline the foreclosure process on empty properties, since the homeowners obviously aren’t contesting the foreclosure. A recent bill proposed in the Legislature to turn foreclosed homes into affordable housing would help, because it sets out a way to identify vacant homes and allow banks to repossess them more quickly, he said.

Come to NJ – Get Rich!

Posted on May 10, 2012 by grim
Posted in Economics, New Jersey Real Estate | 163 Comments

From the NYT:

Memo to Would-Be Members of the 1%: Move to the Northeast or Mid-Atlantic

Reaching for the American dream? Your best chances are probably in New York, New Jersey or Maryland.

Those states are best at helping Americans move up the income ladder, both in absolute terms and relative to their peers, according to a groundbreaking new study from the Economic Mobility Project at the Pew Center on the States.

Generally speaking, states in New England and the mid-Atlantic had the most upwardly mobile residents, whereas states in the South had the least mobile populations.

The study, which appears to be the first to try to measure economic mobility at the state level, looked at the incomes of Americans in each state over a 10-year period using data from the Census Bureau and the Social Security Administration. Researchers tracked a group of nationally representative Americans who were age 35 to 39 at any point from 1978 to 1997.

They then examined how each individual’s earnings had changed exactly one decade after the initial income number was collected.

Across the country, the income of the typical American rose by about 17 percent in inflation-adjusted terms during that time. There was great variation among the states, though.
…
To measure this “relative upward mobility,” the authors focused on people in the bottom half of the income distribution and tracked whether those individuals were able to move up at least 10 percentiles.

For example, a person who started out in the 20th percentile would have to climb to at least the 30th percentile after a decade in order to be considered “upwardly mobile” in this study.
…
Using all three metrics together — absolute income gains, relative upward mobility and relative downward mobility — the researchers determined that New York, New Jersey and Maryland performed best in the country. They were, in fact, the only three states that outperformed the country as a whole on all three measures.

Mixed bag for Jersey prices

Posted on May 9, 2012 by grim
Posted in Employment, Housing Recovery, New Jersey Real Estate | 144 Comments

From the APP:

Home prices rise in half of U.S. cities, fall in NJ

Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized. But in the region that includes Monmouth and Ocean counties, they fell 3.6 percent.

The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report Wednesday. In the fourth quarter, only 29 areas had gains.

The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said.

“The housing market is still depressed but it had a good quarter,” Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., said in a telephone interview Wednesday. “We’re on the mend but it’s still something that will take two or three years before we’re back to normal.”

The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group.

In the Edison market, which includes Monmouth, Ocean, Middlesex and Somerset counties, the median was $292,400, down from $303,200 in the same period a year ago.

Similar tales were found in other New Jersey markets. Parts of northern New Jersey sell 3.2 percent to $363,800, and the newark-Union area fell 9.6 percent to $326,000. The Camden region fell 2.8 percent to $193,500 and the Trenton region fell 6 percent to $205,500. The Atlantic City region saw the only increase in the state, rising 3.7 percent to $220,600.

North Jersey Contracts – April 2012

Posted on May 7, 2012 by grim
Posted in Economics, Housing Recovery | 294 Comments

(Source GSMLS, except Bergen which is NJMLS)

Pending Home Sales (Contracts)
——————————-

Bergen County
April 2011 – 669
April 2012 – 813 (Up 21.5% YOY)

Essex County
April 2011 – 324
April 2012 – 402 (Up 24.1% YOY)

Hunterdon County
April 2011 – 100
April 2012 – 141 (Up 41% YOY)

Morris County
April 2011 – 397
April 2012 – 472 (Up 18.9% YOY)

Passaic County
April 2011 – 171
April 2012 – 260 (Up 52% YOY)

Somerset County
April 2011 – 284
April 2012 – 339 (Up 19.4% YOY)

Sussex County
April 2011 – 107
April 2012 – 140 (Up 30.8% YOY)

Union County
April 2011 – 333
April 2012 – 360 (Up 8.1% YOY)

Warren County
April 2011 – 75
April 2012 – 95 (Up 26.7% YOY)

Shocking News: Banks Screw Borrowers

Posted on May 7, 2012 by grim
Posted in Mortgages, National Real Estate | 81 Comments

From Bloomberg:

Look Who’s Pushing Homeowners Off the Foreclosure Cliff

One of the more confounding aspects of the U.S. housing crisis has been the reluctance of lenders to do more to assist troubled borrowers. After all, when homes go into foreclosure, banks lose money.

Now it turns out some lenders haven’t merely been unhelpful; their actions have pushed some borrowers over the foreclosure cliff. Lenders have been imposing exorbitant insurance policies on homeowners whose regular coverage lapses or is deemed insufficient. The policies, standard homeowner’s insurance or extra coverage for wind damage, say, for Florida residents, typically cost five to 10 times what owners were previously paying, tipping many into foreclosure.

The situation has caught the attention of state regulators and the Consumer Financial Protection Bureau, which is considering rules to help homeowners avoid unwarranted “force- placed insurance.” The U.S. ought to go further and limit commissions, fine any company that knowingly overcharges a homeowner and require banks to seek competitive bids for force- placed insurance policies. Because insurance is not regulated at the federal level, states also need to play a stronger role in bringing down rates.

All mortgages require homeowners to maintain insurance on their property. Most mortgages also allow the lender to purchase insurance for the home and “force-place” it if a policy lapses or is deemed insufficient. These standard provisions are meant to protect the lender’s collateral — the property — if a calamity occurs.
…
Here’s how it generally works: Banks and their mortgage servicers strike arrangements — often exclusive — with insurance companies in which the banks agree to buy high-priced policies on behalf of homeowners whose coverage has lapsed. The bank advances the premium to the insurer, and the insurer pays the bank a commission, which is priced into the premium. (Insurers say the commissions compensate banks for expenses like “advancing premiums, billing and collections.”) The homeowner is then billed for the premium, commissions and all.

It’s a lucrative business. Premiums on force-placed insurance exceeded $5.5 billion in 2010, according to the Center for Economic Justice, a group that advocates on behalf of low- income consumers. An investigation by Benjamin Lawsky, who heads New York State’s Department of Financial Services, has found nearly 15 percent of the premiums flow back to the banks.

It doesn’t end there. Lenders often get an additional cut of the profits by reinsuring the force-placed policy through the bank’s insurance subsidiary. That puts the lender in the conflicted position of requiring insurance to protect its collateral but with a financial incentive to never pay out a claim.

The water is nice, but don’t turn your back on the waves

Posted on May 5, 2012 by grim
Posted in Economics, Housing Recovery, Shore Real Estate | 29 Comments

From the NYT:

Partly Sunny at the Shore

JOEL NAROFF, an economist who last year won a prize from the National Association for Business Economics as the country’s most accurate forecaster, found his prediction skills wanting four years ago when it came time to buy his own vacation house at the Jersey Shore.

“I was hoping we had gotten a good portion of the decline behind us and I was ready to make the move,” said Mr. Naroff, speaking of the house he bought in Margate in 2008 not long before Lehman Brothers crashed. The market had indeed skidded by then — but not anywhere near as much as it was about to. “I made what I thought was a reasonably low offer, but clearly we had not hit the bottom yet.”

Today, however, as the president of Naroff Economic Advisors of Holland, Pa., Mr. Naroff says he is confident that the market has truly bottomed out. And based on a recent flurry of activity at the Jersey Shore, he is hoping that he and his neighbors can start to turn the page on losses suffered these last few years.

“What we’re seeing now are very reasonable prices for expensive homes,” Mr. Naroff said. “The high-end real estate has come down to where people are getting back into it. The one-percenters have the money, and they’re seeing there are good deals out there.”

A few trouble spots aside, brokers up and down the shore seem to agree with Mr. Naroff. Randy Leiser, a sales representative with Avalon Real Estate, said the first quarter had been his agency’s strongest since 2006, with 97 new contracts so far this year, versus 75 in the first quarter of 2011 and 55 in the first quarter of 2010. Lee Childers, a broker-owner of Childers Sotheby’s International Realty, said the first quarter of 2012 had been very active for his office as well, but most activity was taking place in lower to middle price range.

“We’re still experiencing some drifting downward, particularly in the upper end,” Mr. Childers said. “There’s still plenty of seven-figure stuff sitting on the market.” He estimated overall prices at the shore in northern Ocean County were down 5 percent since last year, and 20 to 30 percent since the peak.
…
eal estate activity has picked up, if a little less robustly at the shore than the rest of the state as a whole, according to Jeffrey Otteau, the president of the Otteau Valuation Group. Statewide, first-quarter sales were up 25 percent over last year’s; looking at the shore separately, activity increased by only 15 percent, Mr. Otteau reported.

But it is another story for prices. Overall pricing at the shore was down by 3.5 percent in March, as compared with March 2011. The picture is even less positive for the southern shore, where Mr. Otteau said prices were down 6.1 percent. In towns from Long Beach Island northward, the decline is more like 1 percent.
…
Kevin Gillen, an economist with the Econsult Corporation of Philadelphia who studies real estate trends in the Philadelphia area and the southern Jersey Shore, said overall shore values were down by 30 percent from their height in the mid-2000s, and closer to 50 percent in Atlantic City. The latter, a year-round market as well as a vacation destination, has seen a severe drop in gambling activity since casinos opened in Pennsylvania. That decline in turn has hurt the housing market, Mr. Gillen said.

Another urban shore community that has suffered greatly since the downturn has been Asbury Park, whose market has been “decimated,” according to Gerald Scarano of Exit Realty. He said houses had lost 30 to 50 percent of their value since the heyday of the early 2000s, when gay New Yorkers discovered the city as a hip alternative to Fire Island and the Hamptons.

“The Good Ship Lollipop is stuck on a sandbar,” said Mr. Scarano, an investor turned broker who once earned tidy profits buying, renovating and selling homes in Asbury Park. As evidence of the continued weakening, he cited a 2,064-square-foot Dutch colonial in the desirable Deal Lake area that was listed six years ago at $775,000 and finally sold in March for $520,000. Nearby, a Victorian sold for $349,000 in late April, having started out at $469,000 last fall.
…
Mr. Naroff says he doesn’t like to think about how much value his Margate home has lost, noting that such speculation is fruitless anyway. “It’s not a loss,” he said, “if I don’t have to sell.”

National asking prices continue to rise (not so much here)

Posted on May 3, 2012 by grim
Posted in Economics, Housing Recovery | 147 Comments

From the WSJ:

Report: Asking Prices Bode Well for Spring Sales

A report out Thursday says that strengthening asking prices for homes point to higher sales prices as early as June, which would be a welcome turn for the beleaguered sector.

Asking prices nationally were 0.5% higher in April than in March on a seasonally adjusted basis, said Jed Kolko, chief economist for home-listings company Trulia. Similarly, seasonally adjusted asking prices rose 1.9% over the quarter. Compared with this point last year, however, home price tags have only risen 0.2% nationally.

“When we look back years from now and try to figure out when the turnaround in prices actually happened, September 2011 is the time when prices look like they stabilized,” Mr. Kolko said.

The market may stabilize but it has a long way to go to reach pre-bust housing prices. As of February, the S&P/Case-Shiller indexes showed home prices dropping to new post-bubble lows. The 20-city composite index is hovering near late-2002 levels.

Trulia’s report tracks the most recent listing-price data in the largest 100 metro markets and takes into account comparable property types for a more apples-to-apples comparison. Month-to-month and quarterly data are seasonally adjusted to discount the typical springtime bump in prices. It also records year-over-year rent changes.

“It’s been a strong few months for housing, but some of that was frontloaded” during the winter months, when home construction and sales picked up because of unseasonably warm weather, Mr. Kolko said.

On the tenant side, rents have risen a more robust 5.6% nationally, according to Trulia, driven by job growth and a tightening rental supply in several markets. Would-be buyers are also being deterred by strict lending standards.

From Forbes:

Rising Home Prices: Coming to a Market Near You

Nationally, housing prices have bottomed and are on the rise. Asking prices on for-sale homes were 1.9% higher in April than one quarter ago. A 0.5% month-over-month rise in April, on top of month-over-month price increases in March and February, makes for three months in a row of rising asking prices, after adjusting for typical seasonal trends. In fact, prices have been stable or rising for the past eight months, except for a dip in December 2011. This marks a new milestone: asking prices were 0.2% higher in April than a year ago. Before April, prices were still falling year-over-year.
…
Even within a metro area, neighborhoods have their own price and rent trends. This month we looked at trends within five large metros: New York, Los Angeles, Chicago, Washington DC and the San Francisco Bay Area.

In the New York area, prices rose year over year in Brooklyn, Manhattan and Staten Island, while declining in the rest of the region. But rents rose everywhere – both in the City and suburban areas.
…
New York City Area
Borough or County Y-o-Y % Change in Asking Price Y-o-Y % Change in Rent
Brooklyn 2.4% 5.7%
Manhattan 1.1% 6.8%
Staten Island 0.8% *
Hudson, NJ (Jersey City) -0.2% 7.7%
Queens -1.6% 7.1%
Bronx -1.7% 4.7%
Nassau, NY (Long Island) -2.1% 4.5%
Bergen, NJ (Hackensack) -3.0% 2.0%
Westchester, NY -3.1% 3.4%

Do renters really want to be owners?

Posted on May 2, 2012 by grim
Posted in Economics | 237 Comments

Or is Pulte just pushing a load of crap? From the WSJ:

Renters Really Prefer Owning, Builder Survey Says.

A survey from PulteGroup — one of the nation’s largest home builders — has found a surprising result: Many renters want to buy homes.

Given the source, some caution is in order. Still, this comes as many builders and real-estate agents say the previously moribund housing market is reviving. In some markets, bidding wars – not seen since the housing market crashed – have returned. Rising rents may also be pushing people to consider buying, particularly given low home prices and mortgage rates.

Pulte’s survey found that, among renters who plan to purchase a home in the future, 60% have “increased their intent” to do so from a year ago, meaning they are inclined to hop off the sidelines. Half of those surveyed apparently “like being able to call themselves homeowners,” while 44% “view it as a good financial investment.” (That figure seems a bit high since home values are down by a third or more from the peak.)

More believable are the survey’s findings on why people aren’t buying: More than half think they don’t have enough money for a down payment, while nearly 30% believe renting is cheaper than buying. More than 20% cite uncertainty with employment status as a deterrent to buying a home.

Where the wealth is

Posted on May 1, 2012 by grim
Posted in Economics, National Real Estate | 73 Comments

From CNBC:

America’s 10 Richest Counties

10. Westchester County, N.Y.
Average income: $128,127
…
9. Morris County, N.J.
Average income: $128,371

Morris County, located about 25 miles from New York City, is another county within easy commuting distance to Manhattan. It includes Harding Township once named one of the richest zip codes in the U.S. by Forbes.

Morris County has numerous Revolutionary war-era historic sites, such as Washington’s Headquarters and Jockey Hollow, where the Continental army endured the brutal winter of 1779-80. The county’s unemployment rate for 2011 was 7.3, nearly 3 points lower than the state average of 10 percent according to the N.J. Department of Labor and Workforce Development.
…
8. Marin County, Calif.
Average income: $128,544
…
7. Somerset County, N.J.
Average income: $129,222

Somerset County is another wealthy location in the New York metropolitan area. Area companies include Johnson & Johnson, Verizon, Pfizer and UPS. Somerset includes the picturesque hilly town of Bernardsville, location of the former estates of Jackie Onassis, Mike Tyson and Malcolm Forbes.
…
6. Fairfield County, Conn.
Average income: $130,074
…
5. Hunterdon County, N.J.
Average income: $130,723

Hunterdon County is located in the northwestern part of New Jersey between this list’s No. 9 county, Morris, to the northeast, and No. 7, Somerset County, to the east. It’s more rural than its Central Jersey neighbors and is a destination for fishing and hunting white tail deer. In Hunterdon, commuters are split between New York City and Philadelphia.
…
4. Fairfax County, Va.
Average income: $132,662
…
3. Loudoun County, Va.
Average income: $134,098
…
2. Pitkin County, Colo.
Average income: $134,267
…
1. Nantucket County, Mass.
Average income: $137,811

The fear is gone?

Posted on April 30, 2012 by grim
Posted in Economics, Housing Recovery, National Real Estate | 136 Comments

From the WSJ:

Housing Ends Slide but Faces a Long Bottom

Nearly six years after home prices started falling, more U.S. housing markets appear to be nearing a new phase: a prolonged bottom.

Hitting a bottom, of course, isn’t the same as a full-fledged recovery, which is still years off for many housing markets—as well as for millions of people who purchased homes or took cash out during the bubble.

The good news is that housing construction and home sales appear to have hit a floor. Home builders cut back heavily in the past four years and began construction on just 434,000 single-family homes last year, the lowest level on record. Research firm Zelman & Associates estimates builders will start construction on 540,000 homes this year, a 24% increase.
…
Sales of previously owned homes, meanwhile, are up 32% from their low point of mid-2010, when sales plunged following the expiration of home-buyer tax credits.

That leaves prices as the last measure that hasn’t yet stopped falling. But there are signs of progress on that front, too, as the pace of declines is slowing.

In February, home prices fell by 2% from their level of a year earlier, according to CoreLogic Inc., a real-estate-data firm. But after excluding foreclosures and other distressed sales, prices were down by just 0.8%, the smallest year-over-year decline since May 2010.

“If you remove the distress, you’re looking at housing prices not falling much further,” said Jonathan Miller, president of Miller Samuel Inc., a New York-based appraisal firm.

The problem, of course, is that foreclosures are still a very high share of sales in many of the hardest-hit markets.
…
Housing economists are debating whether that shadow inventory will spoil any housing recovery. “That’ll be like a ball and chain,” said Mark Fleming, chief economist at CoreLogic. “It won’t prevent a recovery, but it could drag it out over several years.”
…
Ms. Zelman, who was among the first to warn that the air had begun seeping out of the housing bubble six years ago, said the shadow inventory is “not going to result in the double dip that people always talk about.” She points to a burgeoning appetite for housing from investors, who are scooping up homes that can be converted to rentals, and six years of pent-up demand from traditional buyers who feel better about their financial prospects. “The fear is gone,” she said.
…
Ms. Zelman, who was among the first to warn that the air had begun seeping out of the housing bubble six years ago, said the shadow inventory is “not going to result in the double dip that people always talk about.” She points to a burgeoning appetite for housing from investors, who are scooping up homes that can be converted to rentals, and six years of pent-up demand from traditional buyers who feel better about their financial prospects. “The fear is gone,” she said.

Otteau: Big jump for March contracts

Posted on April 28, 2012 by grim
Posted in Economics, Housing Recovery, New Jersey Real Estate | 76 Comments

From Otteau:

NJ Home Sales Up 25% YTD (Click for graph)

Home sales continued to surge in March as combined purchase-contracts for resales and new homes rose by 20% in March. YTD sales are now running 25% ahead of 2011 through Q1 2012 due to the combined effects of higher consumer confidence, low home prices and low mortgage rates. Another key driver for the increase is that home purchase affordability in New Jersey rose from 131% in Q4 2011 to 136% in Q1 2012, resulting in record high purchasing power for home buyers.

Through the first 3 months of 2012, home buyers have signed contracts to purchase 17,683 homes compared to 14,104 during the same period in 2011. Still more positive news comes from Unsold Inventory in New Jersey which stands 17% lower than one year ago. At the end of the 1st quarter there were 60,965 homes being offered for sale compared to 73,263 one year ago. This reflects a reduction of 12,298 homes including both resales of existing homes and new construction. The combined effects of a 25% increase in purchase demand with a 17% decline in Unsold Inventory are expected to stabilize home prices in 2012 and lead to modest price increases in 2013. One cautionary note is that sales pace has slowed in April due to rising asking prices.

Home buyers remain highly resistant to price increases at this stage of economic recovery which appears to be reducing the sales pace this month. Also affecting the April sales pace is that both Easter and Passover occurred during the month which had the effect of deferring some purchase demand into May.

Northeast pending home sales up 18.4% YOY in March

Posted on April 27, 2012 by grim
Posted in Economics, Housing Recovery, National Real Estate | 151 Comments

From Bloomberg:

Pending Sales of U.S. Existing Homes Increased 4.1% in March

Signed contracts to buy U.S. homes rose more than forecast in March as low interest rates drew buyers back into the market.

The index of pending home purchases rose 4.1 percent to 101.4, the highest level since April 2010, after a 0.4 percent gain in February that was revised from a previously estimated 0.5 percent drop, the National Association of Realtors reported today in Washington. The median forecast of 43 economists surveyed by Bloomberg News called for a 1 percent rise in the measure, which tracks contracts on previously owned homes.
…
“It’s good news,” said Sean Incremona, senior economist at 4Cast Inc. in New York. “It does suggest that improvement in the housing market is continuing.”
…
Compared with a year earlier, March pending home sales climbed 10.8 percent after a 14.9 percent surge in February.

From Reuters:

Pending homes sales near two-year high in March

Contracts to purchase previously owned homes increased solidly to a near two-year high in March, suggesting the spring selling season got off to a firmer start and offering hopes of a pickup in housing.

The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed in March, jumped 4.1 percent to 101.4, the highest level since April 2010.

Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to rise 1.0 percent after a previously reported 0.5 percent fall.

March’s strong rise in signed contracts pointed to a pick up in home resales after they stumbled in the past two months.
…
Signed contracts were up 12.8 percent in the 12 months to March.

Property taxes are too damn high!

Posted on April 26, 2012 by grim
Posted in Economics, New Jersey Real Estate, Property Taxes | 110 Comments

From the Philly Inquirer:

Realtors’ group poll: Property taxes irk N.J. residents

If you want to rile a New Jersey resident, two words will do it: property taxes.

Most state residents — 89 percent of the 800 registered voters surveyed in early April by the state’s Realtors, according to the poll’s results — maintain that property taxes are too high, but they are less united about proposals to lower them.

“Property taxes continue to be a major concern, even ahead of the economy and jobs,” said Joe Goode, senior vice president of American Strategies, who has been conducting the poll for the New Jersey Association of Realtors for the last five years.

What changed this year is the mood of the voters polled, Goode said.

Forty-seven percent said the state was headed in the right direction, while 42 percent disagreed, he said. In 2009, just 19 percent said the state was on the correct path; in 2010, 31 percent said it was.

Gov. Christie’s proposal to cut the state’s income tax by 10 percent was supported by 63 percent of the voters the Realtors’ group polled this year.
…
When asked why housing cost so much in their areas — 49 percent had complained about it — the largest percentage, 28 percent, blamed home sellers and builders trying to make too much profit.

Nearly half those polled said foreclosures remained a huge problem in the state. There was virtually unanimous support, Goode said, for a program that would renovate foreclosed properties into affordable housing.

Fifty-two percent of those polled said they want the state to abolish its real estate transfer tax, and they strongly opposed proposals to allow municipalities to levy their own transfer taxes and impose a sales levy on vacation rentals.

A small majority favored managed-growth policies as a way to combat sprawl, the poll results showed.