“I can get a lot of house there without spending a lot of money.”

Posted in Demographics, Economics, National Real Estate | 11 Comments

From HousingWire:

Chinese investors remain an X Factor for the US housing market

his year, for the first time, the Chinese surpassed Canadians as the top investors in American residential real estate. According to the National Association of Realtors, during the 12-month period that ended in March, investors from China (Mainland China, Taiwan and Hong Kong combined) invested $22 billion in the U.S. housing market. Canadians, the perennial leader in foreign investment, spent about $13.8 billion.

While this upsurge was difficult to predict, the Chinese have good reason to invest in U.S. real estate, and the impact is being felt in the California, Washington and New York markets, where more than half of China’s investment dollars have gone.

While it may come as a surprise to many in the American housing market, Chinese investors consider the U.S. market and even the coastal cities of California to be relatively inexpensive.

Compared with incomes, housing is expensive throughout China, and in the cities of Guangzhou, Beijing, Shanghai and Hong Kong/Shenzhen– where the combined official population of 75 million is equivalent to roughly 25% of the U.S. population – is far more expensive than desirable California markets like Los Angeles, San Francisco and San Diego.

In fact, a wealthy buyer from China can look at even the most expensive California markets like San Marino and think, “I can get a lot of house there without spending a lot of money.”

So what does this mean for homeowners and buyers?

In markets like Indianapolis, Columbus and Kansas City, the impact is negligible.

Most Chinese buyers are shopping with cash and doing so almost exclusively in California, New York and Washington, while Brazilians and other wealthy South Americans tend to buy in Florida. In those states, they are having an impact.

Cash buyers from other countries might be seen as a threat to domestic homebuyers in these states. These buyers must apply for a mortgage at a time when lending standards are tightened and approvals are slow.

While $22 billion in Chinese investment in U.S. housing sounds likes a large number, it is actually rather small: in a typical year, the total value of residential real estate transactions in the U.S. is around $1 trillion. But foreign buyers do have a large impact on specific markets, pricing some domestic buyers out of the market, but also bringing welcome relief to coastal California homeowners stuck in upside-down mortgages.

July home prices continue cooling trend, still up strongly from last year

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 92 Comments

From the WSJ:

U.S. Home Price Growth Slows Again in July, Says S&P/Case-Shiller

The yearly growth in home prices across the U.S. slowed more than expected in the middle of summer, according to a home price report released Tuesday.

The home-price index covering the entire nation increased 5.6% in the 12 months ended in July, said the S&P/Case-Shiller Home Price Index report. That is down from 6.3% in June. U.S. home prices were rising at double-digit yearly rates as recently as February 2014.

The home-price index covering 10 major U.S. cities increased just 6.7% in the year ended in July. The 20-city price index was also up 6.7%, less than the 7.3% expected by economists surveyed by The Wall Street Journal.

On an unadjusted basis, the national index increased 0.5% in July over June, while the 10-city index and the 20-city composite each increased 0.6%. Seasonally adjusted, the U.S. index increased 0.2% in July, the 10-city gauge and the 20-city composite each fell 0.5%.

“While the year-over-year figures are trending downward, home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.

“The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales,” he said. “The rise in August new home sales–which are not covered by the S&P/Case-Shiller indices–is a welcome exception to recent trends.”

Regionally, cities in the south and west that saw the largest price cuts during the recession, are seeing some of the strongest price increases now. But even in areas like Las Vegas and Miami, the yearly gains have slowed.

August Pending Home Sales

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 53 Comments

From HousingWire:

Pending home sales slowed in August

Despite slowing in August, pending home sales are still running at the second-highest level in the past 12 months, according to the National Association of Realtors.

Declines were evident in every region except for the West, which saw its fourth consecutive quarter of gains.

NAR’s pending homes sales index is a based on contract signings.

The index dropped 1% to 104.7 in August from 105.8 in July, and is now 2.2% below the reading in August 2013.

The index is above 100 – considered an average level of contract activity – for the fourth consecutive month and is at the second-highest level since last August.

Lawrence Yun, NAR chief economist, says contract signings are holding steady and fewer distressed sales and less investor activity are driving the decline.

“Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” he said. “With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.”

The index in the West rose for the fourth consecutive month, up 2.6% in August to 102.1, but still remains 2.6% below August 2013.

The Northeast saw the index slide 3% to 86.5 in August, but is still 1.6% above a year ago. In the Midwest the index fell 2.1% to 102.4 in August, and is 7.6% below August 2013.

Pending home sales in the South decreased 1.4% to an index of 117.0 in August, unchanged from a year ago. Existing-home sales are expected to be stronger in the second half of the year behind improved inventory conditions, continuously low interest rates and slower price growth.

Funny way of defining “success”

Posted in Demographics, Employment, South Jersey Real Estate | 48 Comments

From the South Jersey Times:

Real estate markets aren’t known for consistency, but as South Jersey inches toward pre-recession normalcy, one old adage appears to remain true — it’s all about location.

Specifically on the county level, data from recent reports on median home prices show Gloucester leading the pack, with Salem and Cumberland counties still struggling.

A recent report showed Gloucester’s median home prices increasing 3 percent year-over-year when looking at second-quarter numbers, a standout in the Greater Philadelphia region where many counties saw the same figure either stay flat or take a small dip.

It’s fair to say it’s something to be happy about, said Daren Blomquist, vice president of RealtyTrac, a website that reports and analyzes market trends and foreclosure rates.

“That’s been happening now for five consecutive months, home prices have been up from a year ago,” said Blomquist. “That’s another good sign it’s not just market fluctuations.”

But not a great sign for Cumberland and Salem counties, which had the same figure come in at a steep decline of 16 percent, something Blomquist said was “pretty extreme” but likely skewed by foreclosure rates.

“It’s a pretty big drop, and digging into some of the other data we have, I think the reason we can point to behind it is there’s a bigger share of distressed sales in those two counties,” said Blomquist. “In fact it’s increasing, and particularly in Cumberland County.”

Just 1.4 percent of home sales in the county last July were considered distressed, and that figure jumped to 4.7 percent this year.

While there wasn’t enough data to parse out the distressed sale rate in Salem County, Gloucester’s showed a higher percentage than Cumberland’s at 8.1 percent, but that represents a decrease from last year when 12.3 percent of the county’s sales were distressed.

Gloucester’s good news is likely the calm before the storm, said Blomquist, who anticipates distressed sale rates may rise again as a backlog in New Jersey’s court system delayed the finalization of many foreclosure proceedings.

While most of those are leftover from the last housing bust, the recent closure of major employers in South Jersey, particularly in Atlantic City’s crumbling casino market, may end up impacting the housing market as well.

“That additional job loss we’re seeing could certainly cause even more distress to hit the market,” said Blomquist.

The Gold Coast River Bank?

Posted in Demographics, Economics, Housing Recovery, New Development | 41 Comments

From the WSJ:

Comeback for Harrison, N.J.

The town of Harrison, N.J., has long offered its residents a friendly, diverse and safe community; easy access to Newark, Jersey City and Manhattan; and relatively affordable wood-frame houses on quiet streets.

“I just like the general feeling of being able to walk around the streets, talk to people,” says the mayor, James Fife, who moved in 1966 to Harrison, a Hudson County town of about 14,000 people situated across the Passaic River from Newark. “You know your neighbors. It’s a nice little town.”

But the little town is growing. The once-industrial community is in the midst of a major redevelopment, with about 700 new residences as well as hotels and retail establishments opening downtown and construction of a new, $256-million PATH station. The Red Bull Arena, home to a Major League Soccer team, opened in 2010. More housing and retail construction is under way.

Town leaders and developers are optimistic that the changes will revitalize Harrison. Once known as “the beehive of industry,” the town’s population of 14,000 ballooned to 90,000 each workday in the mid-20th century. But after its large manufacturers relocated to other states, the town suffered from decades of neglect, with rising taxes and shrinking services.

“We were left with big, hulking buildings and not too much revenue,” says Mr. Fife, who took over stewardship of the redevelopment projects from his predecessor, Raymond McDonough, who died earlier this year.

The plans have been more than a decade in the making, but were slowed by the Sept. 11, 2001, attacks and the economic recession. “It’s taken a while, but now we seem to be moving in a positive direction,” Mr. Fife says.

Developers say they are drawn by the town’s location along the PATH line, offering residents a quick commute to job hubs in Newark, Jersey City, Hoboken and Manhattan, as well as the existing urban infrastructure.

Price growth being driven by mix shift?

Posted in Economics, Housing Recovery, National Real Estate | 69 Comments

From HousingWire:

Home-price growth in August slows in 18 of 20 largest housing markets

Home-price growth is slowing even as the sales of homes under $200,000 slip and the share of home sales above the $500,000 price point grow, according to the August home report from RealtyTrac.

Residential properties, including single-family homes, condominiums and townhomes, sold at an estimated annual pace of 4,508,559 in August, down one-half% from the previous month and down 16% from a year ago — the fourth consecutive month where annualized sales volume has decreased on a year-over-year basis.

The median price of U.S. residential properties sold in August — including both distressed and non-distressed sales — was $195,000, up 3% from the previous month, and up 15% from a year ago to the highest level since August 2008, a six-year high.

“Higher-end properties are taking up a bigger share of a smaller home sales pie, boosting the median home price nationwide higher even as home price appreciation slows to single digits in many of last year’s red-hot local housing markets,” said Daren Blomquist, vice president at RealtyTrac. “On the other hand, markets where large institutional investors and other buyers have not picked clean lower-priced inventory are continuing to see strong, double-digit increases in median home prices.”

The share of sales in the $200,000-and-below price range was down 9% from a year ago, while the share of sales in the above-$200,000 price range increased 10% from a year ago.

Among 197 metropolitan statistical areas with a population of 200,000 or more and with sufficient sales data, 124 (63%) saw lower annual home price appreciation in August 2014 compared to August 2013.

Home price appreciation slowed in 36 of the nation’s 50 largest markets (72%) and in 18 of the nation’s 20 largest markets (90%).

“We continue to see the traditional housing cycle this year with most of the price appreciation happening in the spring and early summer months,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market. “Inventory in the Southern California coastal markets has become far more balanced, giving buyers a good level of choice and a moderate amount of negotiating room.”

August home sales disappoint

Posted in Demographics, Economics, Housing Recovery | 212 Comments

From the WSJ:

U.S. Home Sales Falter as Investors Pull Back

U.S. home sales slumped in August as investors continued to pull away, raising doubts about the market’s underlying strength.

Sales of previously owned homes fell 1.8% from July to an annual rate of 5.05 million, the National Association of Realtors said. That ended four months of gains and pushed sales down 5.3% from a year earlier.

The decline reflected fewer purchases by investors, who helped fuel the housing-market rebound. The share of overall sales that went to investors fell to 12% last month, the lowest level since late 2009. Investors accounted for as much as 23% of sales in early 2012 as they bought up properties, many in foreclosure, at bargain prices.

Lawrence Yun, the NAR’s chief economist, said investors may be getting skittish about the prospect of higher interest rates as the Federal Reserve winds down a bond-buying program that was designed to pump up the economy. There are also fewer “distressed” properties for investors to quickly snap up.

The pullback means that the market will increasingly rely on demand from traditional home buyers who typically need a mortgage, including first-time buyers, Mr. Yun said. But lenders are still imposing tight credit underwriting standards, preventing many families from obtaining a home loan, he said.

Monday’s report suggested tight inventory may be weighing on sales. The number of for-sale homes has risen 4.5% over the past year to 2.31 million in August, but the level is still low by historical standards. Economists say many prospective buyers want to see more options than the market currently offers before they sign a contract.

At the current pace, it would take 51/2 months to exhaust the supply of homes for sale.

Home prices continue to rise, but at a more moderate pace compared with earlier in the housing recovery. The median sale price for a home last month was $219,000, up 4.8% from a year earlier.

The New Gold Coast

Posted in Demographics, Economics, Housing Recovery, New Development | 69 Comments

From the WSJ:

Jersey City’s Housing Boom Expands

Jersey City’s residential construction boom is spreading beyond its waterfront area to neighborhoods farther inland where planners and developers have long dreamed about building with little to show for it until now.

In August, for example, Kushner Real Estate Group and National Realty Advisors broke ground on the first of three planned towers at a giant development in Journal Square, known as Journal Squared, which will have a total of 1,840 units and 36,000 square feet of retail. Builders are currently excavating and underpinning the project’s foundation.

“We really believe in the market,” said Jonathan Kushner, president of Kushner Real Estate Group, citing Jersey City’s transit options and growing night life.

Also in the Journal Square area, renters will soon start moving into Kennedy Lofts, a converted office building. There is already a waiting list forming for the units—which run from $1,500 a month for a studio to $2,100 for a two-bedroom, says Heriberto Camacho, with Keller Williams City Life Realty.

Other Journal Square projects are close to moving forward. A venture of developer Kenneth Pasternak and Kushner Cos.—a different branch of the Kushner family—are planning to convert the building that used to house the Jersey Journal, into a mixed-use project including rental apartments.

That same group also is purchasing a huge site across the street from the Journal building. It is approved for a tower that could soar 60 stories.

“We see some of the same dynamics of Brooklyn here at half the price point,” said Mr. Pasternak, whose real-estate company is named KABR Group.

Overall, Jersey City is seeing a record level of new apartments being built. There are 5,609 units this year under construction in the Journal Square and downtown areas compared with 3,009 last year and 5,122 in 2008, which had been the peak year until now, according to statistics provided by the mayor’s office.

Jersey City is being bolstered by its proximity and convenient transit options into Manhattan, including the ferry and PATH train. Also, like many other urban areas throughout the country, Jersey City is attracting young people as more rural parts of the state have shed jobs and lost population, said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

“Millennials don’t want to work in suburban office campuses,” said Mr. Hughes. “They want edgier environments.”

Mickey Mouse Deadbeat Renters 1936

Posted in Humor | 10 Comments

Mickey and Donald miss 6 months of rent payments then avert the Sheriff Sale by packing up their belongings and skipping out the back door. The more things change…

NY/NJ Makes Top 10 Buyers’ Markets

Posted in New Jersey Real Estate | 46 Comments

From Zillow:

Fall Housing Market Cools, Revealing New Top Metros for Buyers and Sellers

U.S. home values rose more slowly in August than they have in a year, and the cooling market offered a clear view of local markets that favor either buyers or sellers.

The nation’s hottest markets on the West Coast continued to favor sellers with quick sales and high asking prices. But some still-recovering markets remained a bargain for buyers as more homes went up for sale.

According to the latest Zillow analysis of buyers’ and sellers’ markets, sellers in the Bay Area, Seattle and Dallas have the most negotiating power, with final sale prices largely at or above asking. For those looking to buy a home, the Northeast and Midwest offer the most favorable conditions, as buyers are less likely to be faced with the fierce bidding wars seen across the West Coast and in larger cities across the country.

In this analysis, a sellers’ market is not necessarily one where home values are rising, but rather one in which homes are on the market for a shorter time, price cuts occur less frequently and homes are sold at prices very close to (or greater than) their last listing price. In buyers’ markets, homes for sale stay on the market longer, price cuts occur more frequently and homes are sold for less relative to their listing price.

Top 10 Buyers Markets

1. Providence, RI
2. Cleveland, OH
3. Philadelphia, PA
4. Milwaukee, WI
5. Chicago, IL
6. Pittsburgh, PA
7. Tampa, FL
8. New York/Northern NJ
9. Chincinnati, OH
10. Jacksonville, FL

“Prospects slightly better in New Jersey”

Posted in Foreclosures, Housing Recovery, New Jersey Real Estate | 123 Comments

From HousingWire:

New York’s foreclosure backlog isn’t going away until 2016, at least

The backlog that keeps the average property in the state New York in foreclosure proceedings for more than four years isn’t going away anytime soon. In fact, the foreclosure logjam isn’t expected to dissipate until at least 2016, according to a new report from Moody’s Investors Service on foreclosures for loans in private-label residential mortgage-backed securitizations.

Due to New York’s judicial foreclosure process, a private-label RMBS loan in New York currently spends an average of 1,498 days in foreclosure proceedings before exiting. That’s up from 1,339 days as of 2013’s fourth quarter.

The number has continually grown since the fourth quarter of 2006, when properties were in foreclosure proceedings for an average of 271 days.

And while the number of loans in foreclosure fell from 40,693 to 38,213 in the second quarter of 2014, the figure is still above the foreclosure total at the end of 2009, when 36,844 properties were in foreclosure.

Just behind New York in ranking of states with the highest exposure to 60-plus days delinquent loans is New Jersey.

“New York and New Jersey together account for more than 20% of all loans in private-label RMBS that are more than 60 days delinquent, and the foreclosure timelines in the two states (which currently are five times as long as they were before the financial crisis) are the longest in the U.S. after Florida,” Moody’s said.

“The prognosis for New Jersey is better than for New York, however, because New Jersey’s lengthy foreclosure timelines are mainly the result of legacy issues.”

A private-label RMBS loan in New Jersey currently spends an average of 1,322 days in foreclosure proceedings before exiting, up from 1,080 days in 4Q13.

In New Jersey, the liquidation timeline for an REO property has dropped to 69 days from a peak of 175 days in September 2011. In New York, even though liquidation timelines extended in the second quarter of 2014, they have still narrowed to 114 days from 173 days at their peak.

Stuck In Place

Posted in Demographics, Economics, Employment, National Real Estate | 131 Comments

From HousingWire:

American mobility at historic low and not changing soon

The U.S. Census Bureau’s current population survey released on Tuesday shows that mobility is flat – at the same low level of 11.7% as the year before.

This comes despite the common assumption about those demographic darlings in the under-35 age range.

Just over one in 10 Americans moved in the year ending March 2014, unchanged from the year ending March 2013.

Jed Kolko, chief economist at Trulia (TRLA) said that at this rate, the typical American stays put eight and a half years between moves.

“Remember the old rule of thumb that people move every seven years? Well, that was true until around 2003. In fact, the mobility rate has been falling for decades, as we pointed out in this post last year,” Kolko says.

He notes that 50 and 60 years ago, Americans moved every five years on average. By the year 2000 that was changing to every seven years, and that average is growing.

“With the percentage of Americans moving stuck at 11.7% in 2014, mobility remains near the all-time low of 11.6% in 2011. That’s considerably below the 14% rate from the early 2000s,” Kolko writes. “The housing bust and recession offer possible explanations why people are stuck in place – things like negative home equity and few job opportunities to move for.”

Time to move out kids!

Posted in Demographics, Economics, Housing Recovery | 120 Comments

From CNBC:

Millennials start leaving Mom and Dad’s nest

As the U.S. economy improves and adds jobs, younger Americans—millennials—are slowly starting to move out from their parents’ basements, where a record number of them have been living for the past few years. They’re not buying homes as much as they are renting them, but how much and where is crucial to know in order to understand where the housing recovery is headed.

Over the past year, all the growth in net household formations has been among renters, according to the U.S. Census. For those 35 years old and younger, their home ownership rate has fallen from 44 percent to 36 percent over the past decade, which is why construction of multi-family apartments is at the highest level in a quarter-century this year.

But back to that migration from the basement. How big is it? Millennials will spend $1.6 trillion on home purchases and $600 billion on rent over the next five years, more per person than any other generation with more of them opting for more affordable rents versus paying the big price tags to buy homes, according to a new report from The Demand Institute, a non-profit think tank operated by The Conference Board and Nielsen. Millennials will form just over eight million new households, albeit most of them rental households.

The report found the millennials do aspire to home ownership, just as previous generations did, and they will be important drivers of the housing market. The difference between them and other generations, however, is that their time horizon for home ownership will be shorter, and their aspirations have been altered somewhat simply by the fact that they came of age in the Great Recession.

Is it really so easy to downsize?

Posted in Demographics, Economics | 132 Comments

From Forbes:

The Next Housing Crisis: Aging Americans’ Homes

There’s another potential housing crisis coming and this one won’t be a collapse in home values.

The nation is facing a lack of affordable, physically-accessible and well-located homes for America’s aging population — especially those with low incomes, according to a new, gloomy study released today by the Harvard Joint Center for Housing Studies & AARP Foundation.

“You’ve got a scenario with the largest generation we’ve ever had moving into their senior years combined with the fact that longevity is increasing,” says Jonathan Smoke, chief economist at Realtor.com, the site of the National Association of Realtors. “And we’re fairly ill prepared to address the housing needs and challenges of them.”

Fortunately, there’s time to address this crisis — but not much. In 15 years, one in five Americans will be 65 or older. And by 2040, we’ll have 28 million who are 80+.

“If things don’t change, low-income older people will be compromising their well-being in many respects,” says Chris Herbert, acting managing director of the Harvard Joint Center for Housing Studies. “It’s an issue that will affect us all.” Housing, says Vivian Vassallo, vice president of Housing for AARP Foundation “is a lynchpin for well-being.”

Many houses and apartments — which are often old themselves — lack basic accessibility features, preventing older adults with disabilities from living safely and comfortably in their homes, according to the report.

Only 1% of U.S. housing units have all five of what are called “universal design” features: no-step entry; single-floor living; extra-wide doorways and halls; accessible electrical controls and switches and lever-style door and faucet handles. Just 57% of homes have more than one of them.

And, the study notes, no-step entryways appear in homes of only 46% of households headed by someone at least 50 and which have a person with serious difficulty walking or climbing stairs.

Say hi to Alice

Posted in Demographics, Economics, New Jersey Real Estate | 120 Comments

From the Star Ledger:

Struggling to survive: 38 percent of N.J. households can’t meet basic needs

Every day, Kim Ticehurst walks a financial tightrope.

A single mother in Montclair, Ticehurst lost her job in the construction industry in January. At 50, she has decades of experience in project management, planning, organization and design, but the scores of resumés she has submitted have been met with no response.

“It’s a horrible feeling,” she said last week. “You definitely confront times when you’re like ‘how do I get through this day?’”

She has pieced together employment, working part-time in childcare while she tries to get her new home-organization business off the ground. For the first time in months, she’s feeling optimistic.

But she knows the littlest of things, from a toothache to a car accident, could turn her life upside-down.

A new study conducted by the United Way of Northern New Jersey shows an alarming number of New Jersey residents are in Ticehurst’s position. Data compiled by the group show that 38 percent of New Jersey households are struggling to meet basic needs. These households are just scraping by, one lost job or medical emergency away from potential fiscal ruin.

The report, called ALICE (Asset Limited, Income Constrained, Employed), paints a stark picture of how widespread financial hardship like Ticehurst’s is in New Jersey.

While 11 percent of state residents fall below the Federal Poverty Line, which stands at an annual income of $22,811 for a family of four, the report found that when adjusted for cost of living the same family needs nearly triple that — $61,200 – just to meet a basic survival budget.

In one of the wealthiest states in the country, 1.2 million households fall below this threshold. And while the state’s economy has shown signs of recovery in the wake of the Great Recession, the number of households struggling by the United Way measure increased by about 24 percent from 2007 to 2012, the most recent data available.

“I had expected things would have improved since the recession, to be honest,” said Stephanie Hoopes Halpin, the author of the report and director of the New Jersey DataBank at Rutgers University. “I think what strikes me most is how vulnerable these people are. You look at Superstorm Sandy, for example. You had tons of people who didn’t even take on any water during the storm, but had their savings wiped out just by not working for two weeks. You have to think about the fact that there are individual emergencies like that every day that don’t get national headlines.”

Among the findings:

• ALICE households exist in every age bracket in New Jersey, but the largest segment of the group is those who are typically in their income earning prime. Households headed by those aged 25-64 represent 75 percent of those beneath the ALICE threshold.

• The average budget needed to provide basic needs, both for the individual and the family household in New Jersey, increased by 19 percent from 2007 to 2012.

• High paying jobs are scarce. Jobs paying less than $40,000 a year now comprise 53 percent of all jobs in New Jersey, and these jobs are projected to be the primary source of labor growth in the coming years.

“I think this sort of verifies for all of us that ALICE isn’t going away,” said John Franklin, CEO of the United Way of Northern New Jersey. “People really begin to understand that we’re not just talking about some number somewhere. We’re talking about a huge portion of our population.”