New Jersey Real Estate Report

From NJ Spotlight:

NJ’s housing market is booming. How long will that last?

The pandemic brought with it a number of unexpected economic surprises, among them a booming housing market in much of New Jersey, with low inventory and intense competition among buyers often leading to bidding wars; average home prices are at the highest level in state history.

Contributing to the competitive real estate market, says Morris Davis, the Paul V. Profeta Chair at the Rutgers Business School, is that millennials are reaching the age when they’re starting families and looking for homes. Correspondent Joanna Gagis reports.

Wow.

From the NYT:

F.D.A. Clears Johnson & Johnson’s Shot, the Third Vaccine for U.S.

 The Food and Drug Administration on Saturday authorized Johnson & Johnson’s single-shot Covid-19 vaccine for emergency use, beginning the rollout of millions of doses of a third effective vaccine that could reach Americans by early next week.

The announcement arrived at a critical moment, as the steep decline in coronavirus cases seems to have plateaued and millions of Americans are on waiting lists for shots.

Johnson & Johnson has pledged to provide the United States with 100 million doses by the end of June. When combined with the 600 million doses from the two-shot vaccines made by Pfizer-BioNTech and Moderna slated to arrive by the end of July, there will be more than enough shots to cover any American adult who wants one.

But federal and state health officials are concerned that even with strong data to support it, some people may perceive Johnson & Johnson’s shot as an inferior option.

The new vaccine’s 72 percent efficacy rate in the U.S. clinical trial site — a number scientists have celebrated — falls short of the roughly 95 percent rate found in studies testing the Moderna and Pfizer-BioNTech vaccines. Across all trial sites, the Johnson & Johnson vaccine also showed 85 percent efficacy against severe forms of Covid-19 and 100 percent efficacy against hospitalization and death.

From ABC News:

U.S. home prices rise 10.1% in December, fastest since 2014

U.S. home prices surged at the fastest pace in nearly seven years in December, fueled by low mortgage rates and Americans moving from crowded urban areas to houses in the suburbs.

The S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, climbed 10.1% in December from a year earlier. The year-end jump was the biggest since April 2014 and follows a strong 9.2% year-over-year gain in November.

Home prices climbed 14.4% in Phoenix , 13.6% in Seattle and 13% in Seattle in December. But prices rose all over. Chicago, which recorded the slowest price gain, saw a 7.7% uptick. Detroit was not included in the year-over-year figures because of record-keeping delays caused by the coronavirus pandemic.

“These data are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, global head of index investment strategy at S&P DJI.XX. But he said it was unclear whether the trend would last.

Prices have also been pushed up by the limited supply of homes on the market. “With mortgage rates remaining relatively low and the wave of eager buyers continuing to swell, it’s unlikely that this competition for housing, and subsequent strong price appreciation, will meaningfully abate in the near future,” said Matthew Speakman, economist at the real estate firm Zillow.

Homebound consumers are also sprucing up their living quarters. Commenting on a year-end surge of revenue and earnings at Home Depot, Neil Saunders of GlobalData calculated that Americans each spent the equivalent of $402 last year at the home-improvement giant.

From Barrons:

Four Things to Know About the Housing Market in 2021

Last year was an exceptional one for the housing market, which boomed in the second half. The National Association of Realtors’ January existing-home-sales data show the continuation of some of the same trends this year—as well as some key changes and rising challenges. 

Existing-home sales in January reached a seasonally adjusted annual rate of 6.69 million, faster than the 6.61 million FactSet consensus expected, and an increase of 0.6% from December’s revised rate. Sales were up 23.7% compared with last January, the release said.

That high rate shows the resale market is still hot after home sales shot up in the second half of the year. January’s seasonally adjusted rate is one of the highest since April 2006, second only to the rate reported in October 2020, Lawrence Yun, chief economist at the National Association of Realtors, said on a conference call with reporters.

While single-family sales remained strong at a rate of 5.93 million, condo and co-op sales made a greater leap. Sales of condos and co-ops increased 4.1% month over month and 28.8% year over year, compared with a single-family sales increase of 0.2% month over month and 23% year over year.

Single-family-home sales jumped 23% compared with last January—but the picture varies by price point. 

Homes priced between $250,000 and $500,000 comprised the greatest share of homes sold at 40.1%. Sales in this category grew 27% year-over-year.

A historically tight supply of existing homes for sale could have cut into transactions in 2020—a trend that shows little sign of slowing in 2021. Housing inventory set another record low in the first month of the new year, Yun said on the call, falling to 1.04 million units. Months’ supply, or how long it would take at the current sales pace to sell every home listed, remained at 1.9 months, flat with December but down from 3.1 months last year. “Sales could be even higher, but just inventory is simply not there,” Yun said.

From CBS:

Biden extends foreclosure ban for federally backed mortgages until June 30

President Joe Biden is extending a ban on housing foreclosures to June 30 to help homeowners struggling during the coronavirus pandemic.

The moratorium on foreclosures of federally guaranteed mortgages had been set to expire on March 31. On his first day in office, Mr. Biden had extended the moratorium from January 31. Census Bureau figures show that almost 12% of homeowners with mortgages were late on their payments.

The White House says the coordinated actions announced Tuesday by the Departments of Housing and Urban Development, Veterans Affairs and Agriculture also will extend to June 30 the enrollment window for borrowers who want to request mortgage payment forbearance — a pause or reduction in payments — and will provide up to six additional months of forbearance for borrowers who entered forbearance on or before June 30 of last year.

The White House says more than 10 million homeowners are behind on mortgage payments and Mr. Biden’s actions are to help keep people in their homes amid “a housing affordability crisis” triggered by the pandemic. It says “homeowners will receive urgently needed relief as we face this unprecedented national emergency.”

From the Star Ledger:

Finding a summer rental at the Jersey Shore might be harder than ever this year 

If you’re thinking about renting a house at the Jersey Shore this summer, brokers have one piece of advice for you: Don’t wait.

The increased demand that was seen last summer is continuing into the summer of 2021 as more people have discovered this close-to-home getaway and those who didn’t book in time last season who locked in earlier this time around.

“We saw a tremendous surge in May of last year once (Gov. Phil) Murphy said the shore would be open,” said Matthew Schlosser, vice president of Schlosser Real Estate in Lavallette.

The company booked 800 rentals between May and June, up 35 percent from the previous year.

And people who rented last summer began booking their stays for this summer even earlier than normal. By fall, Schlosser said, he had 30 percent more rentals booked for Summer 2021 than he normally does. And from Jan. 1 until now he’s done another 500 or so reservations.

“The problem is now, we’ve pretty much run out of inventory for late July/early August,” he said. Typically the inventory isn’t this low until April or May.

Real Estate, Liquor, and the Grim Reaper … Damn I’m good.

Pandemic Tax Windfall for NJ: Receipts from House Sales and Liquor Boost State Revenues

At first the coronavirus pandemic slowed New Jersey’s real estate market, but a huge rebound followed, even as many other industries struggled.

“It’s COVID-19, that’s probably one of the main reasons,” said Robert White, a Monmouth County realtor who noted buyers fleeing New York City have driven demand in his region.

The surge in home sales means a boost for New Jersey’s bottom line since it generates more revenue from a tax on real-estate transactions.

And real estate is not the only industry seeing a rise in sales during the pandemic and with it a corresponding lift in state revenues.

Taxes from alcohol sales have been surging in New Jersey during the pandemic, as have state Lottery revenues.

State tax data shows that transfer-inheritance tax receipts have also increased significantly amid the health crisis. But there may be more to that than just the grim reflection of the deadly pandemic.

From the Star Ledger:

N.J. hotline tells callers they can’t book a COVID vaccine appointment over the phone, residents say 

You can’t book an appointment.

That’s what some callers say they are being told when they call the state’s vaccine hotline, even though state officials said Monday the system was set up to help to them secure a slot.

The representatives did not say the appointments were unavailable because they were all booked, frustrated people told NJ Advance Media. But instead, callers said they were told the workers didn’t have the capability to make appointments at all.

The confusion comes after Health Department commissioner Judy Persichilli said at the governor’s Monday coronavirus briefing that the hotline had started making appointments.

She said more than 600 appointments had been booked through the hotline since Wednesday. Over the weekend, she said, the call center took more than 16,000 calls, registered 514 people with the New Jersey Vaccine Scheduling System (NJVSS) and made appointments for 286 people.

“They started making first dose appointments last Wednesday,” Persichilli said, noting she wasn’t sure if second dose appointments were being made.

Faisel Muhammad of South Brunswick said he called the hotline on Tuesday and was turned away.

“The person told me to wait for the second email after registering with NJVSS, that it will have a link for setting up an appointment,” Muhammad said. “No phone appointments.”

Carol Rayside said when she called, a representative said “they can only register people and could not make appointments.”

Vincent Tamburro said his mother, who is over age 65, called the hotline and a representative told her “they don’t know why they aren’t able to schedule anything.” And when he tried the hotline himself, the representative said she couldn’t even get into the scheduling system.

From the Star Ledger:

600 to lose jobs when N.J. Nabisco plant closes by end of summer

As many as 600 people could lose their jobs late this summer when the Nabisco plant in Fair Lawn closes, the borough’s mayor and the company said Thursday.

The North American division of Nabisco’s parent company, Mondelez International, said in November it was considering closing the 63-year-old plant and informed officials Thursday that its doors will shut in late August or early September, Mayor Kurt Peluso said in a Facebook Live on Thursday.

“It’s really sad news,” Peluso said. “It’s really sad news. Nabisco has been a big part of Fair Lawn. We’re disappointed to see it go and we feel horrible for all the employees.”

The plant produces baked goods under the Nabisco brand, including staples such as Oreo, Lorna Doone and Teddy Grahams.

Peluso said he was a part of a group of officials that included Gov. Phil Murphy and Rep. Josh Gottheimer (D-5) who were unsuccessful in talking Nabisco into staying in Bergen County. “It just sucks that through no fault of their own they’re losing their positions. We tried to persuade them to stay (but) we knew it was an uphill battle,” the mayor said.

The Fair Lawn facility is one of two on the East Coast slated to close — a factory in Atlanta will be shuttered while a Richmond, Virginia plant will stay open.

“Both Fair Lawn and Atlanta are no longer strategic assets from a geographic footprint perspective and both face significant operational challenges, including aging infrastructure and outdated production capabilities, which would have required significant investment to bring them to the modernized state required for the future,” the company said in a statement.

From the NY Times:

Covid-19: Third U.S. Vaccine Moves Closer as Johnson & Johnson Seeks F.D.A. Green Light

Age and gender are complicating vaccine skepticism among Black Americans. Health experts warned Super Bowl fans to keep up their guard. Wisconsin had a mask mandate. Then it didn’t. Then it did. Stay tuned.

Johnson & Johnson on Thursday submitted to the Food and Drug Administration an application for emergency authorization for its one-dose coronavirus vaccine, putting the company on track to potentially begin shipping it by early March.

The agency has scheduled a meeting with its outside advisory panel, which will vote on whether the F.D.A. should authorize the vaccine on Feb. 26, according to people familiar with the planning.

That leaves regulators about three weeks to pore over a large and complex application that includes clinical and manufacturing data. A decision on whether to authorize the vaccine could come within days of that meeting.

A similar timeline was used for the review of two-dose vaccines made by Pfizer-BioNTech and Moderna, which were authorized by the F.D.A. in December.

From Eyewitness News:

Nj residents want answers after not receiving unemployment benefits for weeks

Tens of thousands of people in New Jersey are still waiting for unemployment benefits — more than a month after they should have been paid out.

“I’m a mess because I don’t have nothing,” said Bayonne resident Anette Guagliardo.

“We are in the process of selling our car to buy diapers for our daughter,” said new mom Savannah Krout.

“I don’t know how we are paying our mortgage for February 1st,” said Kristen Lopez, as she choked back tears.

Everyone that spoke to 7 On Your Side is an unhappy member of a trio of Facebook groups critical of New Jersey’s Department of Labor.

The groups are 53,000 members strong and many say they are owed at least five weeks of unemployment benefits.

“$4,052 I’m down,” said Anthony Larose.

“My husband and I are owed $6,700,” said Marguerite.

…

“We need answers – we need communication to plan, I have exhausted all my resources,” Lopez said.

New Jersey’s Department of Labor says more than 75,000 residents – about 5% of all claimants – had their unemployment benefits run out after December 26.

A day later, then-President Trump signed the second stimulus bill authorizing 11 more weeks of unemployment, plus an additional $300 per week– federal money to be distributed by states.

“They say they’re on top of it, but they are not,” said unemployment recipient Joanne.

And when they try to call the New Jersey Department of Labor, Kristin Baum said, “you could talk to five different people, they give you five different answers.”

From Marketplace:

Are we in a housing bubble? 

Pending homes sales continued falling in December, the National Association of Realtors said Friday. Sales of existing homes that are under contract but haven’t closed dipped 0.3% from the previous month, the fourth monthly decline in a row.

When compared to the same month in the prior year, pending sales were still up more than 20% in December. But the month-to-month decline was a sign that high home prices — and tight supply — are starting to slow down sales.

According to the S&P CoreLogic Case-Shiller national home price index released this week, home prices were up 9.5% in November, and even higher in cities like Phoenix, Seattle and San Diego.

Such increases are reminiscent of the housing bubble in the mid-2000s, when a combination of low interest rates and loose lending standards fueled double-digit price appreciation.

Economists say today’s market is very different.

“I wouldn’t use the word ‘bubble,’ “ said Daryl Fairweather, chief economist at Redfin. “Bubble implies that it’s speculation that’s driving home prices high, and it really is the fundamentals of the market.”

Demand is high, thanks partly to record-low interest rates, while the supply of homes for sale is at an all-time low.

Federal Reserve Chair Jerome Powell was asked about a housing bubble at a news conference Wednesday. He called the recent price jumps “a passing phenomenon.”

“There’s a one-time thing happening with people who are spending all of their time in their house, and they’re thinking, either ‘I need a bigger house, or I need another house and a different house, or a second house’ in some cases,” Powell said.

From the Star Ledger:

N.J. teachers ‘next up to bat’ for COVID vaccine eligibility, Murphy says. He hasn’t said when.

New Jersey teachers are “next up to bat” to receive a vaccination for the coronavirus when eligibility expands, Gov. Phil Murphy said Wednesday. But how soon they’ll be able to get the shot remains unanswered.

Murphy, speaking during a morning CNN interview, said he understands the stress educators have to deal with while working during the pandemic. He has also advocated for as much in-person learning as possible, citing the benefit it has for students — particularly those who live in low-income households.

“When we add groups, I want to be able to add educators as fast as we can,” Murphy said.

“They’re in the on-deck circle,” he said. ”Educators are next up to bat.”

Currently, those eligible to receive the vaccine in New Jersey include health care workers, police, firefighters, long-term care residents, those over 65 years of age, those between 16 and 64 with certain health conditions and smokers. That’s more than 4 million people. The state has received 1.09 million doses from the federal government, according to the Centers for Disease Control tracker.

From ROI-NJ:

Is it time to reconsider regional reopening plan?

New Jersey Chamber of Commerce CEO Tom Bracken said he had little hope when his organization approached Gov. Phil Murphy’s administration about a regional reopening plan last summer. His inclination proved correct.

“It was something that we, along with other organizations, presented to the administration,” he said. “They summarily dismissed it, saying, ‘One size fits all is the way we’re going.’”

Bracken said there’s reason to hope that’s no longer the case. He feels a bill (S3093/A4910) to create Red-Yellow-Green regional reopening zones around the state — one that passed through Senate (5-0) and Assembly (11-0) committees unanimously — has a chance.

“If you listen to the governor today, he’s starting to say that things are looking a little better,” Bracken said. “And we’ve got an economy that’s in the dump. So, I think this is one way to intelligently open the economy.”

The bill, which is sponsored by Senate President Steve Sweeney (D-West Deptford), will certainly reach the Senate floor for a vote.

And, while passing the Senate — and the Assembly — is no guarantee of success (see the recent outdoor dining bill), there is one other thing that’s different in 2021: It’s an election year.

“That can only help,” Bracken said.

Christina Renna, the CEO of the Chamber of Commerce Southern New Jersey, certainly hopes. Her group also presented a regional reopening plan last summer, only to see it shot down.

The idea still makes sense to her.

“Encouraging a wider reopening of the state’s economy and caring about the health, safety and welfare of the state’s residents are not and should never be categorized as mutually exclusive,” she said. “A statewide, one-size-fits-all approach that refuses to consider the vast disparities in health metrics throughout different geographical areas of New Jersey has unnecessarily stalled portions of our economy. However, a geographic approach that collectively evaluates the health and demographic data in certain areas of the state is a reasonable method to decide where certain businesses can safely have higher occupancy rates and quicker reopenings.”

Renna, as the governor himself might say, appears to be following the data.

“This approach simply makes sense — and, if a geographic-based reopening plan has worked for many states in the nation, why can it not work in New Jersey?”

From NJ Insider:

NJDOL: State Unemployment Rate At 7.6%

Preliminary estimates produced by the U.S. Bureau of Labor Statistics indicate that total nonfarm wage and salary employment in New Jersey decreased in December by 7,700 to reach a seasonally adjusted level of 3,890,000. Losses were recorded in both the private (-7,100) and public (-600) sectors of the state’s economy. 

The state’s unemployment rate fell by 2.6 percentage points to 7.6 percent in December, primarily due to New Jersey residents leaving the labor force rather than finding employment.  

The December data suggest that employment recovery from its pandemic-related April low point appears to have stalled in the 4th quarter of the year. New Jersey has regained a total of 479,400 jobs in the six months since April, or about 58 percent of jobs lost due to the coronavirus pandemic and measures taken in response to it. However, since September, total employment has contracted by 2,100 jobs. See the technical notes at the end of this release for information about the impact of the coronavirus on this month’s employment estimates. 

Based on more complete reporting from employers, previously released total nonfarm employment estimates for November were revised higher by 1,400 to show an over-the-month (October – November) increase of 8,500 jobs.  Preliminary estimates had indicated an over-the-month gain of 7,100 jobs. The state’s revised November unemployment rate was unchanged, remaining at 10.2 percent. 

In December, employment decreases were recorded in only four out of nine major private sectors. Sectors that recorded employment decreases include leisure and hospitality (-8,900), financial activities (-1,900), education and health services (-1,600) and information (-1,300). Sectors that recorded employment increases include construction (+3,100), professional and business services (+2,900), manufacturing (+300), trade, transportation, and utilities (+200), and other services (+200). The public sector recorded a decrease of 600 jobs over the month.