NJ job market struggling, unemployment rises to 7.2%

Posted on April 18, 2014 by grim
Posted in Demographics, Economics, Employment | 61 Comments

From the Record:

NJ lost 1,300 jobs in March; unemployment rate ticks up

The loss of 1,300 jobs in March puts New Jersey down 1,900 jobs for the year, as even traditionally strong sectors such as health and leisure lost ground.

The state lost 600 government jobs and 700 private jobs in March, the second monthly fall in a row for the private sector, according to the monthly employment report released Thursday by the New Jersey Department of Labor and Workforce Development.

Unemployment, which stood at 7.1 percent in January and February, rose to 7.2 percent in March – above the national rate of 6.7 percent, the department reported.

Adding to the bad news, revised numbers for February showed that employment in the state fell by 1,100 more jobs than first reported, losing 4,800 instead of the previously announced 3,700 jobs.

“I think we sum up the report by saying that New Jersey’s labor market is going nowhere slowly,” said Patrick O’Keefe, director of economic research at the accounting firm CohnReznick. “Nothing stands out as a reason to be optimistic about where we are going.”

The 1,900 jobs so far this year is particularly weak compared to the 18,800 jobs added in the same period in 2013. New Jersey has recovered just 93,000, or 36 percent, of the 258,000 jobs lost in the recession and its aftermath.

In comparison, New York has recovered all of the 330,000 jobs it lost in the period and added about 164,000. Connecticut has regained about half of the 119,100 jobs lost. As of March the U.S. had recovered all the private sector jobs it lost.

The only New Jersey sectors with significant advances in the first quarter were construction, trade, transportation and utilities, and professional and business services.

Manufacturing lost 2,100, and leisure and hospitality, normally one of the state’s strongest sectors, lost 6,500 jobs. All of the losses came in the accommodation and food services sub-sector, which includes, hotels and restaurants.

And while educational and health services, in recent years the state’s strongest sector, added 300 jobs, the health and social assistance sub-sector lost 2,600 jobs.

“It seems like somebody has hit the economic pause button,” said economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “The first three months of the year, have been pretty flat. I don’t think anybody really knows why. I am puzzled by it, because national growth has been okay.” So far this year the U.S. has added about 530,000 jobs.

Realty Transfer Tax to be eliminated? Yeah right.

Posted on April 17, 2014 by grim
Posted in New Jersey Real Estate, Politics, Property Taxes | 90 Comments

From the Star Ledger:

In response to Christie, Republican senator plans to introduce bill to end NJ’s realty transfer fees

One day after Gov. Chris Christie said he would abolish reality transfer fees in New Jersey if given the chance, a fellow Republican responded with a bill seeking to do just that.

State Sen. Diane Allen (R-Burlington) said today she will soon introduce legislation that would repeal the fees that residents have to pay when selling a home here.

“When you sell your home in New Jersey, you’re getting whacked by this arbitrary tax, and that’s wrong,” Allen said. “This initiative will help struggling homeowners, including those who might be facing short sales or foreclosures. It will save property owners across this state a burden of thousands of dollars, which particularly hurts those who have lost equity in their homes due to the economic recession.”

Allen plans to introduce the bill April 28.

The fees are the seventh-largest source of tax revenue for New Jersey. State officials have projected that they will produce $287 million in the current state budget and $325 million in the spending plan that takes effect in July.

At a town hall in Franklin Township in Somerset County on Tuesday, a retired state trooper told Christie that he was hit with a $5,435 realty transfer fee when he recently sold his house.

Christie responded by saying if the state Legislature sent him a bill eliminating the fees, he would be happy to sign it.

“A realty transfer fee? From my perspective, it makes no sense,” the governor said. “It’s awful. It should be done away with.”

Ain’t your daddys real estate market

Posted on April 16, 2014 by grim
Posted in Demographics, Economics, National Real Estate | 95 Comments

From HousingWire:

5 brilliant insights in the CoreLogic April MarketPulse

1) Rise of short-terms

In 2006, 86.2% of all refinance originations were 30-year terms. In 2013, the share of refinance originations with a new 30-year term dropped to 60.1%.

Because of this trend, the share of shorter-term mortgages has been rising. In 2013, 15-year loan terms accounted for 27.3% of all refinance mortgage originations, up from 26.7% in 2012 and boosted from 8.8% in 2007.
…
2) Return of the HELOCs

As borrowers regain their equity and interest rates continue to increase over the next few ?years, the incentive to stay in one’s existing home and finance home improvements though home equity lines of credit will likely increase relative to purchasing a new home or refinancing with cash out. This is good news for the home improvement industry and mortgage lenders who focus on home equity lending, as both will benefit from the resurgent consumer demand.

3) Short sales down

Although home price appreciation and other factors have contributed to the decline in short sales, the expiration of the Mortgage Forgiveness Debt Relief Act could be having an impact. Since the act expired on Dec. 31, 2013, CoreLogic data shows that borrowers are likely thinking twice about pursuing a short sale without the tax exemption.

4) No, it was not the cold (mostly)
…
Although colder weather is a substantiated factor, clearly, the monthly change in housing starts is not entirely attributable to the colder-than-average temperatures.

Past severe winters that have affected housing starts negatively were followed by a rebound after temperatures began to rise again. This analysis indicates there should be a rebound again this spring, but it will not be sufficient to counteract the current weakness in the market, which can’t be blamed on the weather.

5) Construction employment

According to a Bureau of Labor Statistics report released in early March, nationwide construction employment increased 2.6% year over year in February and has been increasing on a year-over-year basis since June 2011. Although these year-over-year increases look tepid, they are strong when compared to the period of double-digit decreases in construction employment from January 2009 to March 2010.

Will the market slow in 2014?

Posted on April 15, 2014 by grim
Posted in Economics, Housing Recovery, National Real Estate | 115 Comments

From HousingWire:

Here’s why the rest of 2014 will be rough for housing

The next couple of quarters may be rough going for the housing and finance industry.

Housing prices and mortgage activity will stay highly sensitive to the Federal Reserve interest rate policy and guidance because of a weak job market, affordability challenges and the declining pool of first-time homebuyers.

Worse still, home price appreciation may level off and even dip into negative territory by the third quarter of 2014.

“Housing price appreciation (is) already on the decline, with only six cities in the Case-Shiller index showing strength in recent indexing – Dallas, Las Vegas, Miami, San Francisco, Tampa, and Washington,” says Tom Showalter, chief analytics officer at Digital Risk, which handles $8 billion in loan volume monthly. “Moreover, while home prices have increased, at least 25% of all homes are still under water.”

December home sales showed that 40% of sales were all cash – suggesting strong investor participation. Originations are also at a 14-year low.

“As investors leave market, there is little evidence that typical retail buyer will take up the slack,” Showalter said.
…
These issues have been compounded by the fact that “many banks and lenders are exiting mortgage lending as application rates hit ten year lows, complemented by increasing regulatory burdens and penalties, and increasing capital requirements. New Basel III regs now require 5% capital ratios for mortgage lending, a requirement that is largely punitive,” Showalter said. “The ultimate causes have nothing to do with the weather. Rather the issues are weak job market, flat consumer income and excessive regulation.”

Commercial investors positive on Jersey market

Posted on April 14, 2014 by grim
Posted in Economics, Housing Recovery, New Development, New Jersey Real Estate | 78 Comments

From the Record:

Investors return for North Jersey real estate

A few months ago, a Hoboken multifamily building, The Artisan, sold for a record $569,000 per “door,” or apartment. The acquirer, a real estate investment management company, forked over $33.6 million overall for that nearly 60-unit asset.

Within weeks, two Edgewater apartment complexes, including the luxurious St. Moritz, were purchased for a total of $168.3 million by separate buyers, a large Massachusetts insurer and a giant Israeli investment firm.

After the tough years when buyers were reluctant to come to the table, investors are opening their checkbooks to buy multifamily residential, industrial and office real estate in North Jersey. The capital markets are looking more kindly on Bergen County and the Hudson River Gold Coast, drawn by the region’s lower prices compared with soaring markets in Manhattan and Brooklyn, the improving economy overall, low interest rates for financing, and the bargains available for Garden State properties versus what the cost would be to build such structures now.

“There’s a lot of capital out there,” said Andrew Merin, vice chairman of the Metropolitan Area Capital Markets Group of Cushman & Wakefield of New Jersey Inc. in East Rutherford.

Buyers range from the traditional, risk-averse institutional investors such as public and private real estate investment trusts, pension funds and insurance companies looking to buy trophy Class A properties to regional players making deals.

It’s a far different scenario than during the Great Recession, when few banks were lending and one of the few properties selling in North Jersey were distressed office buildings. The hottest sectors today are multifamily — witness Hoboken and Edgewater — and industrial, area real estate executives said.

“The activity is certainly stronger than it’s been in the past couple of years,” said Joe Garibaldi, managing director of real estate firm JLL’s Capital Markets Group in East Rutherford. “Fundamentals have stabilized or are improving, depending [on] which sector you’re looking at. … The good news is that on every deal that we have in the market, there’s numerous buyers that are showing up.”

Foreclosures down (but not here)

Posted on April 10, 2014 by grim
Posted in Economics, Foreclosures, New Jersey Real Estate | 192 Comments

From HousingWire:

Foreclosure activity at lowest level since 2Q 2007

There were 117,485 foreclosure filings in March 2014, which is up 4% from February but still down 23% compared to March 2013, according to RealtyTrac’s “U.S. Foreclosure Market Report.”

RealtyTrac’s report on foreclosures — that includes default notices, scheduled auctions and bank repossessions — covers the month of March and the first quarter of 2014.

March was the 42nd consecutive month where U.S. foreclosure activity decreased from a year ago, helping to drop first quarter foreclosure activity to the lowest level since the second quarter of 2007.

“Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,” said Daren Blomquist, vice president at RealtyTrac. “This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states like California, where an increasing number of judicial foreclosure filings boosted foreclosure starts in the first quarter.”

The monthly increase in foreclosure activity was driven by a 7% month-over-month increase in foreclosure starts — the initial public notice starting the foreclosure process — and a 6% monthly increase in scheduled foreclosure auctions.

Homeowners saw lenders repossess 28,840 properties in March, down 5% from the previous month and down 34% year-over-year to the lowest level since July 2007 — an 80-month low.

About 341,670 properties had a foreclosure notice in the first quarter, down 3% from the previous quarter and down 23% from a year ago.
…
Despite the decrease in overall foreclosure activity in the first quarter, 29 states posted annual increases in scheduled foreclosure auctions, including Utah (up 226%), Oregon (up 177%), Connecticut (up 131%), New Jersey (up 79%), Delaware (up 49%), New York (up 47%), Maryland (up 46%), Massachusetts (up 37%), Nevada (up 21%) and Florida (up 21%).

Meanwhile foreclosure starts in the first quarter increased from a year ago in 19 states, including New Jersey (up 83%), Maryland (up 43%), Indiana (up 38%), Delaware (up 24%), Connecticut (up 13%), and California (up 10%).

Optimism is in the air

Posted on April 8, 2014 by grim
Posted in Demographics, Economics, Housing Recovery, National Real Estate | 201 Comments

From HousingWire:

American optimism trends higher as home buying season starts

As the market enters the spring homebuying season, more homeowners are beginning to think now is a good time to sell a home, in addition to it being easier to get a mortgage, a government agency said.

According the latest Fannie Mae National Housing Survey, the share of respondents who say it is a good time to sell a home escalated to 38% in March, up from 26% for the same period a year ago.

Meanwhile, 52% of people believe it is easy to get a mortgage today, compared to 47% a year ago, matching the all-time survey high.

Americans are also beginning to feel more confident about their financial situation, with the percentage of people who expect their financial situation to worsen during the next 12 months dropping from 21% in 2013 to 12% in March.

On top of this, the share of people who say their personal financial situation improved during the past year reached an all-time survey high of 40%.

“The housing recovery continues to proceed in fits and starts. Rising mortgage rates and a lack of supply have dampened housing market momentum,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“However, we see several positive signs going into this year’s spring home buying season, compared with last year. For example, consumers are less pessimistic about their personal finances, and more optimistic about the current selling environment and their ability to get a mortgage,” Duncan said.
…
In addition, the percentage of respondents who say home prices will increase in the next 12 months declined slightly to 48%, while the amount of people who say home prices will go down dropped to 5%: an all-time survey low.

Winter chill hits NJ market

Posted on April 7, 2014 by grim
Posted in Economics, Housing Recovery, New Jersey Real Estate | 105 Comments

From the Record:

Chilly forecast for North Jersey home sales

This spring — traditionally the busiest time in the housing market — buyers may find they’ve got fewer choices than they’d like, because the inventory of homes on the market is down, compared with last year. In Bergen County, the number of single-family homes for sale dropped 25 percent in January and February, and in Passaic County, about 15 percent.

One big reason is that many sellers have held off because of the unusually harsh winter weather, and they’re likely to list their properties soon, which may bring a surge of properties to the market.

But other homeowners — especially those who bought during the housing boom — still can’t sell without taking a loss, and those properties are likely to stay off the market, shrinking the potential pool of available homes.

“There are still sellers waiting for the market to improve in order for them to get out,” said Jeff Adler, a Keller Williams agent in Ridgewood.

“A lot of sellers have been taken aback by the amount of decline from the peak to where the market is now,” agreed Jorge Ledesma, a Re/Max agent in Teaneck. “It’s a bitter pill to swallow when you see so much equity in your home, and through no fault of your own, you see it go away.”

Home prices in the region are still, on average, about 20 percent below their 2006 peaks, so owners who bought during the housing boom may well be “underwater” — that is, owing more on the mortgage than their home is worth. Others may not be underwater but still have 2006 prices stuck in their heads as the “real” value of their home, and are reluctant to sell for less.

As home prices rise, more of these homeowners will be willing and able to sell, observers say. With prices up statewide an estimated 4.3 percent last year, many homeowners are already moving out of the underwater category, said Jeffrey Otteau, an East Brunswick appraiser who follows home prices statewide.
…
The bad weather was a factor in many sellers’ decision to delay listing their homes, real estate agents say. Ledesma said he knows of sellers who held off because they couldn’t do exterior painting and other “curb appeal” chores during the bitter cold. Other sellers didn’t like the idea of buyers tracking snow into the home.
…
“If you’re going to sell, you want to put your best foot forward,” Funabashi said.

“Normally our spring market starts in March, but it’s really late this year because of the weather,” said Ellen Horowytz, an agent with Prominent Properties Sotheby’s International Realty in Franklin Lakes. “People have been waiting; they’re saying, let’s wait till things start to bloom a little bit.” She expects a surge of listings soon.

The laws of supply and demand would suggest that tight inventory should push prices up, and agents report that attractive properties are drawing multiple bids and higher prices.

But buyers and appraisers seem to have limits on how high prices can go, they said.

“It still has to be priced right,” Horowytz said. “Buyers are very savvy out there. Everybody does their due diligence.”
…
Some homeowners who are not underwater, but are holding out for a higher price, may have to wait a while. Otteau estimates that average prices in New Jersey — outside of the most desirable towns — won’t return to their housing-boom peaks until 2022. And if prices go up, sellers will have to pay more for their next house.

“A lot of people come to us and say, ‘We’ve got to wait till we get X dollars for our house,’ but if you wait, the next house you get will go up by the same percentage,” Aiosa said.

“Whatever you gain by waiting on the house you’re selling, you’re going to give back on the house you’re buying,” Otteau agreed.

Jersey Shore – GTL? Nah. TBTF.

Posted on April 5, 2014 by grim
Posted in Housing Recovery, New Development, Shore Real Estate | 72 Comments

From the NYT:

Back to the Jersey Shore

With beaches replenished, boardwalks rebuilt and stores reopened, the Jersey Shore is gearing up for a summer busy enough to make last year’s anemic one a distant memory.

As renters rush to book their summer houses and buyers snatch up newly vacant land, a different Jersey Shore is taking shape one and a half years after Hurricane Sandy, one in which the small working-class bungalows that once defined communities like Ortley Beach are being replaced with spacious dream homes intended to entice wealthy vacationers.

Warnings of climate change and rising sea levels have done little to deter buyers who see opportunity in disaster. For some, the storm-tossed shore is a blank canvas, awaiting new construction that could redefine the look and feel of the coastline. Others, in the market for a safer bet on the beach, are zeroing in on areas that emerged relatively unscathed. In short, Hurricane Sandy hit the reset button on the Jersey Shore.

“At the end of the day, we’re going to be in a better spot,” said Eric J. Birchler, the owner of Birchler Realtors, which sells properties in Ortley Beach and Lavallette, two of the hardest hit areas. “You just stepped the entire gentrification of Ortley Beach forward five years because everything had to be rebuilt.”

Soon after Hurricane Sandy destroyed the vacation house and seasonal business of Chris Marino and Joanne de França-Marino in Lavallette, the couple began putting their lives back together. At first they planned to rebuild their 2,500-square-foot house across the street from the bay. But then they saw a listing for a nearby 12,000-square-foot parcel on a cove with 180 feet of bulkhead on the bay.

Before the storm, the property had been listed for $1.898 million. But the Marinos bought it in March for $999,000. They plan to tear down the existing 1,600-square-foot brick house and invest about $1 million in a 4,200-square-foot, two-and a-half-story replacement. Outside will be a gazebo and an in-ground pool.

“It’s a phenomenal buying opportunity,” said Mr. Marino, whose family has been summering on the Jersey Shore for generations. “It’s one of the largest bulkheads on the whole island.”

As for the home the storm destroyed, the couple will replace it with a five-bedroom house with 2,800 square feet that they plan to sell for about $900,000. Ms. de França-Marino hopes to reopen her home décor store, the Beach Home, at a new location in Lavallette in time for the Memorial Day rush.

Shadows no longer looming over market

Posted on April 4, 2014 by grim
Posted in Foreclosures, Housing Recovery, Mortgages, National Real Estate | 73 Comments

From Investors Business Daily:

Housing Recovery Boosted By Drop In Shadow Inventory

The housing market got more evidence that it’s on the road to recovery Thursday with new data showing a sharp decline in “shadow inventory,” or seriously delinquent homes that have not yet been listed for sale.

According to a report from CoreLogic (CLGX), 1.7 million homes in January were still lurking in the wings as “shadow inventory” vs. 2.2 million in the same month a year earlier, a decline of nearly 23%.

The value of January’s shadow inventory was down $70 billion from a year ago to $254 billion, the report said.

Meanwhile, the number of homes in some stage of foreclosure was down 35% nationwide in February vs. a year earlier, to 752,000 from 1.2 million.

Completed foreclosures, or the number of homes lost to foreclosure, fell 15% in February from last year’s same month to 43,000. Since September 2008, when the financial crisis began, 4.9 million homes have been lost to foreclosure.

“Although there is good news that completed foreclosures are trending lower, the bigger news is the impressive decline in the foreclosure and shadow inventories,” stated Mark Fleming, CoreLogic’s chief economist.

Such distressed, pending-supply inventory, when it hits the market, typically sells at substantial discount, often dragging down values nearby.

Every state, Fleming said, showed “double-digit, year-over-year declines in foreclosure inventory, which is reflected in the $70 billion decline in the shadow inventory.”

The stock of seriously delinquent homes and the foreclosure rate “are back to levels last seen in the final quarter of 2008,” added Anand Nallathambi, CoreLogic’s CEO.

What REO?

Posted on April 3, 2014 by grim
Posted in Foreclosures, Housing Recovery, National Real Estate | 85 Comments

From HousingWire:

Fannie and Freddie can’t get REO to market fast enough

The market is ravenous for more REO-to-rental properties, but the inventory is struggling to keep pace.

According to the latest report from the Federal Housing Finance Agency, REO inventory increased slightly in the fourth quarter as property acquisitions outpaced dispositions for the second consecutive quarter.

The total number of property acquisitions dropped 13% while dispositions decreased 7% during the quarter.

Along with that, completed third-party sales and foreclosure sales continued a downward trend with a 15% reduction in the fourth quarter and foreclosure starts down 3%.

But this comes with news of the market continuing to heal.

The FHFA also reported that Fannie Mae and Freddie Mac completed more than 3.1 million foreclosure prevention actions since the start of conservatorship in 2008, helping more than 2.5 million borrowers stay in their homes.

Meanwhile, the inventory of REO homes steadily declined year-over-year since 2010.
…
For two months straight, acquisitions outpaced dispositions, with 49,149 acquisitions and 46,673 dispositions in the fourth quarter of 2013 and 56,794 acquisitions and 50,277 dispositions in the third quarter of 2013.

The last time acquisitions were greater than dispositions was in 2010 when the numbers, granted, were much larger.

Lynn Effinger, noted in a HousingWire blog, “Many note that with so much government intervention over the past several years with programs such as foreclosure moratoria, HAMP, HAFA, and others purportedly created to help struggling homeowners avoid foreclosure, the for sale REO market began drying up in late 2009.”

February Corelogic – 2 years of price gains

Posted on April 2, 2014 by grim
Posted in Economics, Housing Recovery, National Real Estate | 62 Comments

From HousingWire:

CoreLogic: Home prices increase into second year

Home prices, including distressed sales, jumped 12.2% in February 2014 compared to a year prior, marking 24 months of consecutive year-over-year increases in home prices nationally, the latest CoreLogic report said.

Month-over-month it slightly increased by 0.8% in February compared to January.

And the same level of ferocity is seen at the state level.

Fourteen states showed double-digit growth year-over-year, in addition to 22 states posting at or within 10% of their price peaks.
…
Taking away distressed sales, home sales nationally grew 10.7% in February from a year ago and 0.9% month-over-month.

“As the spring home-buying season kicks off, house price appreciation continues to be strong,” said Mark Fleming, chief economist for CoreLogic. “Although prices should remain strong in the near term due to a short supply of homes on the market, price increases should moderate over the next year as home equity releases pent-up supply.”

Last month CoreLogic introduced a new forecast metric that provides and advanced indication of trends in home prices. Home prices, including distressed sales, are estimated to increase 0.5% month-over-month from February to March.

In addition, home prices, including distressed sales, are expected to increase 10.5% year-over-year from March 2013 to March 2014.

“February marks two straight years of year-over-year gains in national prices across the United States,” said Anand Nallathambi, president and CEO of CoreLogic. “The consistent upward movement in home prices should ultimately prove to be an important stimulant for higher levels of sustained market activity and growth in the housing economy.”

Where’s the money coming from?

Posted on April 1, 2014 by grim
Posted in Economics, Housing Recovery, NYC | 91 Comments

From the WSJ:

Manhattan Apartment Prices Up, Headed Higher

There is little relief in sight for Manhattan apartment hunters, brokers and analysts said, as low inventory and high demand have driven up prices to near or above record levels.

Prices in the first quarter rose across many market categories, with especially strong price growth in sales of new condominiums. The median price for a new condo rose to $1.73 million, up 30.6% from the first quarter of 2013, according to a market report by Douglas Elliman.

Brokers said that during much of the housing recovery, buyers had been very cautious about prices, which typically moved up and down in a small range. But with inventory falling to record lows, prices have pushed higher in the last few quarters, and now have surged still higher.

The Douglas Elliman report found that the median price of a Manhattan co-operative apartment set a record at $760,000 in the latest quarter, as did the median condo price of $1.355 million. The average price per square foot of $1,363 also was a record. The prices exceeded peaks set in 2008, near the end of the last real-estate boom.

“People have to be prepared to bid more than they want, sometimes more than the asking price,” said Gregory J. Heym, the chief economist at Halstead and Brown Harris Stevens.

The median price of a Manhattan apartment was $972,428, up 18.5% over the same quarter in 2013, the Elliman report found. The average apartment price was $1.77 million, up 30.9%.

Jonathan Miller, an appraiser at Miller Samuel Inc. who prepared the Elliman report, noted that last year’s first quarter was weak because sellers rushed to close on transactions before the end of 2012 to obtain of favorable capital-gains rates. But since then, he said, sales had been usually strong, while the number of listings contracted. There is now a 4½-month supply of apartments on the market, at the current sales rate. “With no relief in sight, we saw a pop in prices,” he said.

Despite the rising prices, demand remained usually strong and broad, brokers said. Rather than driving buyers out of the market, the rise in prices, has convinced more people that it was a good time to buy, brokers said. “We are seeing the largest and most diverse group of buyers I have seen in my real-estate career,” said Pamela Liebman, president of Corcoran Group.

Commercial and Residential Tax Appeals Swamp NJ

Posted on March 31, 2014 by grim
Posted in Economics, New Jersey Real Estate, Property Taxes | 93 Comments

From NJBIZ:

With April 1 deadline looming, N.J. facing surge of property tax appeals

With many types of commercial real estate still reeling from the downturn, New Jersey faces a tidal wave of property tax appeals from thousands of weary, often cash-strapped building owners across the state. And it’s only likely to get worse.

Exactly how much worse will become clearer after April 1, the deadline for filing property tax appeals in most towns in New Jersey. But the backlog already is staggering: Nearly 44,000 cases were pending before the state’s tax court through last June, according to the annual report from the judiciary.

That includes more than 25,000 new cases that were filed during fiscal year 2013, a total that’s more than double the new filings in 2008 and one that has grown in all but two of the past 10 years, the report said. Half of those new cases came just from Bergen, Essex and Passaic counties — which have large concentrations of commercial property — while Morris, Monmouth and Middlesex each had more than 1,500 new filings.

Experts say there are no signs of a slowdown on the horizon. Frank Ferruggia, a McCarter & English attorney who specializes in property tax appeals, said the market for properties such as office buildings has not recovered to pre-recession levels — and expenses are rising as rental and occupancy rates remain stagnant.
…
“There’s really very little incentive for towns to reassess and reflect a declining market,” said Ferruggia, a partner with the Newark-based firm. “People have to file appeals and get their remedy, and those are not happening that quickly.”
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Local governments are taking any number of steps to deal with the avalanche of appeals, Dressel said. They include trying to set aside extra cash in their budgets for settlements, short-term financing, reducing services and even raising taxes, he said.

It’s a perfect storm that is only adding to New Jersey’s backlog of pending property tax appeals, one that has been swelling since the downturn. Ferruggia said the state’s tax court, which currently has six judges, is “trying to manage their case load as best they can,” but the sheer volume means it can take more than a year to settle a case.
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The state also is grappling with appeals for residential property, which are lumped in with the tax court data. But experts say those are largely handled by county tax boards, which hear appeals for property assessed below $1 million and tend to resolve cases more quickly.

3,700 fewer jobs in February

Posted on March 28, 2014 by grim
Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate | 135 Comments

From the Star Ledger:

NJ shed 3,700 jobs in February as unemployment rate remained unchanged

New Jersey shed 3,700 jobs in February due to private sector cutbacks, though the state’s unemployment rate remained unchanged at 7.1 percent, according to preliminary data released today by the state Department of Labor and Workforce Development.

State officials blamed the harsh winter weather for the declines.

But the report had a touch of good news. It said revised data for January shows the state gained 6,300 jobs during the first month of the year, instead of losing 3,900 as initially reported.

Employment gains were felt in the trade, transportation and utilities sector, which added 3,900 jobs; professional and business services, which grew by 2,700; and the information sector, which netted 1,000 workers.

Among the industries that lost jobs, the leisure and hospitality sector shed 4,800 workers; financial activities cut 3,200; and construction jobs were 2,000 lower.

Government jobs grew by 1,200, according to preliminary data.

“The winter has clearly affected the state’s job market—the February count, especially in a sector like leisure and hospitality, was probably held down by the big storm around Valentine’s Day,” said Charles Steindel, chief economist for the state Department of Treasury, in a statement.

“The large and welcome upward revision for January suggests that in these conditions the preliminary numbers may be less reliable than usual. We anticipate that the numbers should get better with the weather,” he added.