From the Press of Atlantic City:
Here’s a new economic indicator: The more jokes about economists, the worse the outlook.
James Hughes repeatedly lightened his speech Tuesday to the Mid-Atlantic Multifamily Conference & Expo, but those were the only bright spots in his dismal picture of the state’s future.
Hughes, a leading New Jersey economist and dean of Rutgers University’s Bloustein School, at least had some good news for his apartments-industry hosts: With the homeownership rate falling, more people will need to rent their apartments.
With five straight months of private sector job losses already, the U.S. economy will only muster a long, shallow recovery stretching into 2009, he said.
The now-tightened mortgage market will continue to dampen the housing industry, and the real estate price decline will be “a multiyear phenomenon,” Hughes said.
New Jersey went through the last expansion without the employment growth typical of the good times, about 74,000 new jobs a year, he said.
Instead, from 2004 through 2006, the state averaged just 23,000 new jobs per year. Last year, New Jersey added just 3,700 jobs and erased all of those in the first quarter of this year, Hughes said.
Through the 1980s and ’90s, the Garden State was the powerhouse of the Northeast, he said.
“We’re no longer the economic locomotive of the Northeast. We’ve slipped to the caboose,” he told the opening session of the N.J. Apartments Association’s conference, which runs through today at Trump Taj Mahal Casino Resort.
For the assembled apartment developers, owners and managers, at least, the state’s drop in home ownership – from 70 percent in 2005 to 68.3 last year and soon into the low 65s – is welcome news.
A fifth of the state’s population is foreign-born, which also contributes to demand for apartment rentals, he said.
And the potential for more multifamily housing is boosted by its good transit systems and nation-leading population density (higher even than in Japan and India), he said.