New Jersey Real Estate Report

Many don’t know that Brigadoon is what Westfield-insiders refer to their town as when among locals. Really! Only outsiders call it Westfield and you’d stick out like a sore thumb if you called it that to someone familiar with the area. So don’t look like a dweeb, the next time you talk to a Brigadoon Realtor make it known that you are an INSIDER! For extra points, wink while you say it.

On to the comp killer (which must be a mistake, because Brigadoon prices never fall).

20 Woodbrook Circle, Westfield NJ
Purchased: January 1st, 2007
Purchase Price: $1,450,000

Bedrooms: 5
Baths: 4
Square Feet: 3900
Lot Size: 110×120
Taxes: $23,168

Listed for sale on January 11th, 2009
List Price: $1,325,000 (Ouch!)

Reduced to $1,275,090 on January 23rd.
Reduced to $1,199,000 on February 9th.
Reduced to $1,125,000 on February 27th.
Reduced to $1,075,000 on April 2nd.

The reduction to $1.075m was the magic number, 20 Woodbrook went into attorney review on 4/17 and went under contract on 4/30.

The big question is, what will it sell for? We won’t know until closing.

If it sells at asking price, the seller would have lost $375,000. Closer to $425,000 when you include the transaction costs associated with the sale. At asking, this property is selling at a discount of approximately 25% off it’s 2007 sale price.

Unfortunately, I don’t think it sold at asking. Westfield properties have been selling at about 95% of their last list price (on average) this year. If this property follows that trend, the closing price might be somewhere near $1.02m, and a much steeper loss for the owner.

Matt Woolsey from Forbes is reporting on the performance of the Mendham real estate market (an affluent Northern NJ suburb for those not familiar) as part of the Forbes Luxury Housing Index. The index is based on zip code data provided by Altos Research.

Anyhow, the report says that Mendham prices have increased 9.8% year over year (I’m assuming mid-April). Transaction activity in that zip is so small, I’m not sure if the sample size makes for any kind of meaningful statistic. In all of March, Mendham Boro and Twp saw 5 closed sales, year to date we are looking at 24.

Anyhow, I pulled the stats from the MLS to see what all the hoopla was all about. I didn’t find it.

Mendham Boro Closed Sales Average Sales Price
March 2008 - $655,000 (4 sales)
March 2009 - $500,833 (3 sales)
Prices down, but with that small sample size the number is meaningless.

YTD 2008 - $686,111 (9 sales)
YTD 2009 - $1,000,625 (8 sales)

Whoa! That must be it. Look at that increase in sales price! Let’s take a look at Mendham Twp.

Mendham Twp Closed Sales Average Sales Price
March 2008 - $2,910,000 (3 sales)
March 2009 - $399,500 (2 sales)
Prices down, but with that small sample size the number is meaningless.

YTD 2008 - $1,186,714 (21 sales)
YTD 2009 - $902,750 (16 sales)
Prices down, sample size is a little better here. I might be a bit more confident about this number

Ok, so what is up with that big jump in prices in Mendham Boro? Well, turns out that in February a $3.7 million home sold (one of two sold that month), and that is really pulling up that average.

Even if we look at the March contract data, to get the most recent indicator of the market, things don’t really look like prices are on the way up either.

Mendham Boro Contract Sales Average Last List Price
March 2008 - $1,077,667 (3 contracts)
March 2009 - $351,333 (2 contracts)
Keep in mind we’re talking about list prices here, we don’t know sale prices until the home closes. Same comment, sample size is tiny, the price change is noise.

Mendham Twp Contract Sales Average Last List Price
March 2008 - $2,614,667 (3 contracts)
March 2009 - $1,247,475 (2 contracts)
Same comment applies here.

I’m not sure what kind of magic data Altos has, or even how they could possibly get “real time” real estate data, but I’m not buying it. Even if they are basing their information on the current month contracts, which would be a very risky move, the sample sizes are so small in these towns that these median/average price changes are just statistical noise, up or down. This is one of the reasons you rarely see me talking about prices or sales volume changes on a town by town basis. Before you poo-poo me for ignoring the green shoots, this same report has Rumson home price *down* 30% in the same period.

From Forbes:

New Jersey Suburb’s Prices Holding Up

Mendham, N.J., is a small township of 5,000 residents 40 miles from New York City. With tree-lined streets and large, traditional houses on quiet, wooded acres owned by affluent residents–the median income is $145,000–it’s every bit the picture of an idyllic small-town suburb.

It’s got good schools and just-close-enough proximity to a big city to make it desirable, just like dozens of similar communities that fill the Tri-State, northern Chicago or Bay Area suburbs.

However, as the nation’s real estate market declines, Mendham has been one of the best performers in the Forbes Luxury Housing Index, which ranks the 500 most expensive ZIP codes in the country, using real estate statistics provided by Altos Research, a Mountain View, Calif.-based real estate derivates research firm. What’s stirring in Mendham? Why are prices up 9.8% from this time last year?

The whole of 2008 was a very slow year. While early 2009 has been an improvement so far, it’s still well behind sales rates of 2006 and 2007.

Brokers say that the depressed market has area homeowners pulling their homes entirely rather than trying to find sellers. Last year at this time there were 76 homes listed for sale while this year there are 105.

That’s a higher inventory, but in a wealthy marketplace where the median income is $145,000 and distressed homes are virtually nonexistent (Mendham has only three foreclosures, according to RealtyTrac), it’s also a sign of sellers’ increased confidence in finding a buyer.

“In 30 years, I’ve never had as bad a year real estate wise as I did last year,” says Betty Kiser, a broker at Coldwell Banker. “2007 was a really good year, but in 2008 it fell apart.”

Sadly, it’s not yet time to ring the recovery bell. Prices are still off from 2006 and 2007, by between 15% and 20% according to local brokerages, and still sliding a bit. According to our index, the median price has fallen to $1.26 million from $1.275 million in the last week. This calculation is a rolling average of the previous 90 days.

The New Jersey Home Price Index Tracker has been updated to include:
* February S&P Case Shiller (Aggregate, Tiered, Condo)

(click to enlarge)

(click to enlarge)

S&P Case Shiller NY Metro Commutable Area Home Price Index

Low Tier (Under $300k) - Peaked in October 2006 and is down 20.53% from peak

Mid Tier ($300k-$445k) - Peaked in September 2006 and is down 17.7% from peak

High Tier (Over $445k) - Peaked in June 2006 and is down 14.55% from peak

Aggregate (Overall Market) - Peaked in June 2006 and is down 17.45% from peak

Condo-Only Index - Peaked in February 2006 and is down 9.35% from peak

NY Metro Area Aggregate Year over Year Changes
Feb 08 -6.69%
Mar 08 -7.48%
Apr 08 -7.98%
May 08 -7.74%
Jun 08-7.04%
Jul 08 -7.04%
Aug 08-6.61%
Sep 08 -7.13%
Oct 08 -7.71%
Nov 08 -8.71%
Dec 08 -9.15%
Jan 09 -9.70%
Feb 09 -10.15%

Unlike the broader market, which showed a slowing pace of price declines in February, the NY Metro Area saw price declines continue to accelerate to the fastest pace yet this cycle.

From the Record:

Home prices in N.Y. region fell 10.2 percent in February

Home prices declined 10.2 percent in the New York metropolitan area, which includes North Jersey, from February 2008 to February 2009, the Standard & Poor’s Case-Shiller index said this morning.

From MarketWatch:

Home prices falling at a slower pace in February

Home prices in 20 major cities fell 2.2% in February after a 2.8% decline in January, according to the Case-Shiller home price index released Tuesday by Standard & Poor’s.

Prices in 20 cities are down 18.6% in the past year, compared with a 19% drop in the 12 months ending in January. It was the first time in 16 months that the year-over-year decline in prices did not set a record.

“While the declines in residential real estate continued into February, we witnessed some deceleration in the rate of decline in some of the markets,” said David M. Blitzer, head of the S&P index committee.

From the AP:

Home prices post 18.6 percent annual drop in Feb.

Home prices dropped sharply in February, but for the first time in 25 months the decline was not a record, another sign the housing crisis could be bottoming.

The Standard & Poor’s/Case-Shiller index released Tuesday showed home prices in 20 major cities tumbled by 18.6 percent from February 2008. That was slightly better than January’s 19 percent and the first time since January 2007 the index didn’t set a record.

The 10-city index slid 18.8 percent, the first time in 16 months its decline was not a record.

But the good news was mixed. All 20 cities in the report showed monthly and annual price declines, but half recorded annual records. Prices fell by more than 10 percent in 15 cities, including Las Vegas, San Francisco and Phoenix. In fact, Phoenix home prices have lost more than half their value since peaking in July 2006.
…
Prices in the 20-city index have plunged 30.7 percent from their peak in the summer of 2006, and the 10-city index has lost more than 31.6 percent.

From Bloomberg:

Home Prices in 20 U.S. Cities Declined by 18.6% in February

Home prices in 20 major U.S. metropolitan areas dropped in February at a slower pace, adding to evidence the market may be stabilizing.

The S&P/Case-Shiller index’s 18.6 percent decrease compares with a record 19 percent decline the month before. The gauge has fallen every month since January 2007, and year-over-year records began in 2001. For the first time since the measure started dropping in 2007, the 20-city index didn’t post a record year-over-year decline in February.
…
Economists forecast the index would drop 18.7 percent from a year earlier, according to the median of 27 projections in a Bloomberg News survey. Estimates ranged from declines of 17 percent to 19.2 percent.

Compared with a month earlier, home prices fell 2.2 percent in February, after a 2.8 percent decline in January, today’s report showed.

From Bloomberg:

Boomer Bows Out in Shakeout That Led to Vermont Beard

In early 2008, David Roberts’s morning routine at the Ridgewood, New Jersey, train station was as unchanged as the view from its platform, which overlooks a downtown anchored by the Daily Treat diner and a 77-year-old movie theater. Roberts would sip coffee, eat a corn muffin, scan the Financial Times and step aboard the 7:50 train.

This was not the same trip he had made for the 14 years he worked for three Wall Street firms. This was a commute to nowhere.

Roberts, 61, was bound for an outplacement center on New York’s East 37th Street, where he pursued job leads and the dream of starting a consulting firm with former colleagues. Like many of his neighbors in Ridgewood, Roberts had been thrown out of work after the credit markets seized up last year, joining thousands of commuters in the competition for jobs that don’t exist anymore.

Roberts, an economist at Dominion Bond Rating Service until January 2008, was fired 13 months after he predicted in a published report the recession that would end his livelihood.

“You can see a train wreck coming,” Roberts says. “But that doesn’t mean you can get out of the way.”

Roberts has suffered through a chain of unanswered job applications, an ill-fated relocation to Washington, and depression. As of April, he had lost or spent more than half of his $1.4 million in savings. One of the few risks he takes with money these days is at the poker table.
…
Roberts and his wife — who is battling multiple sclerosis — are moving to Vermont, where they honeymooned and often vacation. He has grown a gray-and-white beard more befitting the Green Mountains than Wall Street.

Knowing that the money he has left won’t last forever, Roberts must figure out a new way to earn a living. “I don’t know where the income is going to come from,” he says.

Roberts is one of 26,000 people who lost financial services jobs in New York City from January 2008 to March 2009, according to Moody’s Economy.com. Many live in bedroom communities such as Ridgewood — a Bergen County enclave of 24,300 people 25 miles from Wall Street.

Ridgewood retailers say some stores’ Christmas receipts were off 40 percent last year. As many as 30 stores and restaurants in the business district are for sale. The village government trimmed three building inspectors after a two-year, 46 percent drop in construction activity.
…
Nestled in the foothills of the Ramapo Mountains, Ridgewood has had a symbiotic relationship with New York’s financial district since the mid-1800s, when tycoons built summer homes there. Commuter trains soon carried dad to the financial jungle while mom stayed home and raised the kids. “It’s for domesticated masters of the universe, a throwback to the 1950s,” says Erik Sorenson, chief executive officer of online career firm Vault.com and a Ridgewood resident.

Ridgewood’s projected median household income for 2009 is $129,394, according to market research firm Nielsen Claritas, which makes it the 17th-most-affluent U.S. community in the 20,000 to 50,000 population range. From 1991 to 2006, the average home sale price more than tripled to $864,000, according to the New Jersey Multiple Listing Service.

Now that market has reversed. Ridgewood averaged 11.3 home sales a month in the first quarter of 2009, versus 32 in the first quarter of 2007, a 65 percent drop, according to Otteau Valuation Group Inc., a real estate analysis and consulting firm in East Brunswick, NJ.

Roberts says he and his neighbors who worked on Wall Street “do not understand: You lose your bonus, you lose your job, and you have no prospects.”
…
“We have no income coming in,” he says. “I’m just trying to get by. I don’t know what the end scenario is going to be.”

The Robertses have found getting out of Ridgewood is easier said than done. They put their house on the market for $899,000 in October and had to lower the price three times before getting a contract — for $760,000. That fell through in March. As of mid-April, they had a new contract for $775,000.
…
They’ve lined up a rental house in South Newfane, Vermont, for $1,800 a month, roughly half their current mortgage payment. Next, Roberts must figure out how to stop the money drain, which has reduced his nest egg by half to $720,000. More than 70 percent of the money disappeared in the market crash, he says, lamenting that he didn’t act on his own prediction that a recession was coming.

“As an economist, I have no excuse whatsoever,” he says.

From the Record:

Complex fed up with delinquent fees

“Love thy neighbor” is under fire at The Glens in Pompton Plains.

Even before the economy nose-dived, Cathy Winterfield said neighbors were burdening neighbors with the cost of maintaining property they all enjoy. About 37 are behind on their homeowners’ association fees — some by years — at the 583-unit, mixed-housing development, running up at least $40,000 in delinquent bills that other residents have had to absorb through increased fees.

The complex also has had to put certain maintenance needs on the back burner, said Winterfield, president of the board of trustees at The Glens, a mix of town houses, duplexes and condo units that went up in the 1990s in Pequannock.

Delinquency has grown to the point where management intends to do something about it.
…
The Glens has already placed liens on debtors’ properties, she said, but that won’t bring in any cash unless the owners decide to sell and have equity. Delinquent households also were offered a payment plan to get back on track, but only one responded, Winterfield said.

So The Glens has reached out to the township to join in action against the worst offenders, since the bulk of the problem lies with those living in the fair housing units, which fall to an extent under the township’s Fair Housing Committee guidelines, Winterfield said.

But the township is not eager to join in any foreclosure proceedings — the strongest legal remedy left to The Glens.

“The concern of the township and the Fair Housing Committee is, in the event a unit is foreclosed upon, we could perhaps lose it as a fair housing unit,” said Township Manager David Hollberg.
…
“The only thing we’re permitted to do is make a friendly call and remind them they signed a paper that they would pay their maintenance fees,” he said.
…
“It must be a sign of the times,” that people are getting so behind, he said. “I don’t know. There’s some that just can’t pay their bills like others.”

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

From the Record:

N.J. builders feel the pain

New Jersey builders used the words “brutal” and “unprecedented” repeatedly at a statewide trade show Tuesday to describe a housing market undermined by surging unemployment and tighter mortgage lending.

Attendance at the annual New Jersey Builders Association convention is off by a third amid a U.S. recession one economist described as the deepest since World War II. The event — which normally draws 15,000 builders, developers and subcontractors — has about 10,000 registered attendees.

Jeffrey G. Otteau, an economist with the Otteau Valuation Group, said New Jersey has a year’s worth of unsold housing inventory and prices typically fall whenever there is more than five months’ worth of inventory.

“We are not in a recovery,” said Otteau, who delivered the association’s economic outlook. “Home prices will continue to decline.”

Otteau’s presentation was marked by exclamations and quiet discussions among attendees.
…
Another speaker, Rutgers University economist Joseph Seneca, said the state will see a “new normal” in which consumers will spend less and save more, and fewer people will own homes. Fewer people will work in the finance industry, and they’ll make less, Seneca said.

“The bottom of the current economic debacle is close at hand,” he told the builders.

But he cautioned that the state is not there yet. This year will be a weak one, and the recovery will begin in 2010, he said. Problems in the financial sector and in several European countries are troubling, and the worst of commercial real estate problems have yet to come, he said.

Otteau said the New Jersey housing slowdown is being aggravated by the number of people leaving the state, which has the nation’s highest tax burden. He said New Jersey ranks third among U.S. states in population loss, and its housing market is unlikely to recover until the end of this year at the earliest.

Otteau estimated that housing prices have declined 36 percent from their peak and New Jersey prices have fallen 24 percent.
…
New Jersey issued 1,507 permits for new home construction in January and February, according to association data. That number represents 33 percent of the 4,543 permits issued for the same period of 2006.

“It’s brutal,” said John Kirkenir, co-manager of Alliance Homes in East Windsor. “We have three homes under construction right now and we feel fortunate to have three. Normally, we’d have 20.”

From Bloomberg:

Tax-Weary New Jersey Residents May Reject More School Budgets

New Jersey residents may reject a greater percentage of school budgets than last year when they go to the polls today amid dissatisfaction with rising property taxes that are already the nation’s highest.

Schools represent the largest portion of the real-estate tax bill in New Jersey, where the average levy exceeded $7,000 last year from about $4,100 a decade ago. Citizens in more than 90 percent of the state’s 603 districts have the chance to vote on schools’ annual spending plans.

A year ago, 74 percent of school budgets were approved in an election that drew 14 percent of voters. The last time fewer than half of spending plans passed was 1976. The threat of higher taxes may draw more people to the ballot box to vote “no” in a year when residents are already coping with rising unemployment and foreclosures, plunging stock values and a state budget that proposes other tax increases.

“The school districts are aware of the financial conditions out there,” said Frank Belluscio, a spokesman for the New Jersey School Boards Association. “We’re going to have a drop off of approvals from last year, but a majority should pass.”

Most of New Jersey’s school districts must have budgets approved by voters every April. Planned spending this year is largely flat or anticipates a less than 4 percent increase, because educators understand that voters’ personal finances have deteriorated, Belluscio said.

“If there’s going to be a year when we’re going to see a major number of them rejected, I would expect it to be this year,” said Jerry Cantrell, president of the New Jersey Taxpayers Association, an anti-tax group. “New Jersey is a state that has been majorly impacted by the fiscal downturn.”

From the NY Times:

Dissecting the ‘Heart of Orange’

A GLOBAL economic crisis provides the perfect opportunity to rethink the design of an old city — be it Paris or Orange — said a French urbanist who has been engaged in doing that recently, both there and here.

“Cities have this time to consider intelligently what they are going to be in the future,” said the urbanist, Michel Cantal-Dupart, through an interpreter, as he conducted a walking tour on a rainy day in early April along the streets of Orange’s mostly dreary downtown section. “Then, when things improve,” he said, “the cities will know what to do.”

Mr. Cantal-Dupart recently served on a team of architects and planners commissioned by the French government to re-envision the master plan for Paris, which at the age of 2,000 faces special challenges in becoming a “sustainable” city of the future. The team’s proposals were unveiled in March.

This month, he was asked to help to do something similar for 200-year-old Orange, at the behest of a nonprofit development corporation called Hands Inc. Harnessing federal, state and private grant money to rebuild troubled neighborhoods in Essex County, the group has been based here since the early 1980s.

Until now, it has relied mostly on a strategy of “finding the worst houses on the block, and turning them around one by one,” said Patrick Morrissy, the group’s executive director.

In fact, several days before the activity in Orange, Hands expanded on its primary strategy with the announcement of a nonprofit alliance to buy 47 abandoned and neglected houses in Essex County — all foreclosure properties owned by the former Washington Mutual Bank.

The houses are in Orange, West Orange, Newark and Irvington, all communities hit especially hard by foreclosures.

“We have to keep up this critical work,” Mr. Morrissy said, “because the current crisis is threatening the impact of all we have done in the last 25 years.”

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

From Prudential Fox & Roach:

Greater Philadelphia Housing Prices Decreased 7.4 Percent in the First Quarter of 2009; (no link)

reater Philadelphia region* median home sale prices decreased 7.4 percent to $199,000 in the first quarter of 2009, according to Prudential Fox & Roach, REALTORS’® HomExpert Market Report©. The median sale price in the first quarter of 2008 was $215,000. The region’s median sale price decreased 8.7 percent compared to the first quarter of 2007 when the median sale price stood at $218,000.

In the first quarter of 2009, the region saw 9,162 homes sold, a 26.2 percent decrease, compared to 12,408 homes sold in the first quarter of 2008. The region decreased 45.7 percent compared to the first quarter of 2007 when 16,883 homes sold. The average number of days a home remained on the market increased from 81 days in the first quarter of 2008 to 95 days in the first quarter of 2009. In the first quarter of 2007, homes remained on the market for an average of 70 days. Additionally, monthly average inventory for the first quarter of 2009 was 54,891 compared to 58,553 in the first quarter of 2008 and the first quarter of 54,833 in 2007.

Delaware County performed the best in the region with a 3.1 percent decrease in median sale price in the first quarter of 2009. The county median price of homes sold fell from $194,950 in the first quarter of 2008 to $188,875 in the first quarter of 2009. Philadelphia County and Gloucester County median sale prices both fell 3.7 percent to $128,500 and $192,500 respectively. With a 16.3 percent decrease in median sale price, Mercer County saw the region’s largest decrease in the first quarter of 2009 falling to $220,000, compared to $262,825 in the first quarter of 2008. Burlington County saw the region’s largest decrease compared to the first quarter of 2007, falling 14.9 percent to a median sale price of $199,900 in the first quarter of 2009.
…
Center City median home prices decreased 18.2 percent to $326,000 in the first quarter of 2009, compared to the median sale price in the first quarter of 2008, which stood at $398,750. In the first quarter of 2009, Center City saw 149 homes sold, a 50 percent decrease, compared to 298 homes sold in the first quarter of 2008.

The average number of days a home remained on the market increased from 109 days in the first quarter of 2008 to 137 days in the first quarter of 2009. Average inventory decreased 4.8 percent in the first quarter of 2009 to 1,634 homes for sale.
…
Main Line median home prices decreased 13.7 percent to $309,500 in the first quarter of 2009, compared to the median sale price in the first quarter of 2008, which stood at $358,575. In the first quarter of 2009, the Main Line saw 344 homes sold, a 22.5 percent decrease, compared to 444 homes sold in the first quarter of 2008.

The average number of days a home remained on the market increased from 82 days in the first quarter of 2008 to 89 days in the first quarter of 2009. Average inventory decreased 0.8 percent in the first quarter of 2009 to 1,687 homes for sale.
…
New Jersey Shore Counties (Outside the Greater Philadelphia Region)

Atlantic County median home prices decreased 15 percent to $216,700 in the first quarter of 2009, compared to the median sale price in the first quarter of 2008, which stood at $255,000. In the first quarter of 2009, Atlantic County saw 396 homes sold, a 35.3 percent decrease, compared to 612 homes sold in the first quarter of 2008. The average number of days a home remained on the market increased from 110 days in the first quarter of 2008 to 124 days in the first quarter of 2009.

Cape May County median home prices decreased 19.6 percent to $410,000 in the first quarter of 2009, compared to the median sale price in the first quarter of 2008, which stood at $510,000. In the first quarter of 2009, Cape May County saw 152 homes sold, a 32.7 percent decrease, compared to 226 homes sold in the first quarter of 2008. The average number of days a home remained on the market increased by one day in the first quarter of 2008 to 141 days in the first quarter of 2009.

From the Federal Reserve:

The Beige Book - Second District - New York

Construction and Real Estate

Commercial real estate markets in the District were mixed in the first quarter. New York City’s office market continued to deteriorate, with vacancy rates climbing to a 4-year high at the end of March and asking rents on Class A space falling 14 percent from a year earlier. A major commercial broker cites a huge increase in available sub-lease space, mostly from financial service firms. In contrast, office markets in outlying areas were steady to slightly stronger in the first quarter: vacancy rates and asking rents were little changed in northern New Jersey, Westchester and southwestern Connecticut; in Long Island, vacancy rates improved to a 3-year low, while rents edged higher. Similarly, office markets in upstate New York showed resilience: office vacancy rates declined in the Buffalo and Syracuse areas and were little changed in metropolitan Rochester and Albany; rents were little changed across the board. The purchase market, however, is still reported to be exceptionally sluggish throughout most of the District.

The rental market for industrial space was steady to softer in the first quarter, as was the market for retail space. Manhattan’s retail market softened more than others: while vacancy rates were steady at low levels, asking rents declined sharply for the second straight quarter, and a relatively large volume of new retail space is due to be completed in the fourth quarter of 2009, much of it still unleased.

Housing markets have continued to weaken in much of the District since the last report–particularly in the multi-family segment. New York City’s rental market continued to soften in March: asking rents in Manhattan were estimated to be down just 5-6 percent from a year earlier, but with the growing prevalence and size of concessions (waiving of rental fees, 1-3 months free rent, etc.), effective rents have reportedly fallen much more sharply–especially in full-service buildings. The inventory of rental listings has continued to increase, particularly in non-doorman buildings; one large brokerage firm reports that the rental vacancy rate has nearly doubled over the past 12 months. Manhattan’s apartment sales market deteriorated markedly in the first quarter: the median sales price for condo re-sales was down 16 percent from a year earlier, while co-op prices fell 22 percent. The number of sales transactions fell nearly 50 percent from a year earlier, while the inventory (number of units listed) jumped 34 percent. Moreover, an industry contact maintains that there is a sizable “shadow” inventory of apartments–new condo units that are unsold but not yet listed. While quarterly data are not yet available for other parts of New York City, Brooklyn’s market has reportedly slackened to an even greater extent than Manhattan’s, largely due to a huge supply of newly constructed units.

The market for single-family homes has been mixed but generally weaker since the last report. A New Jersey industry consultant notes that resale activity, though still sluggish, picked up a bit in March–even after accounting for seasonality–but only on properties with fairly steep price reductions. However, a real estate broker in northern New Jersey maintains that traffic has been unusually quiet in recent weeks. Both contacts estimate that prices are off about 20 percent from their peaks, on average, and note that much of the activity is in “short sales”, where the mortgage holder agrees to forgive part of the debt to the extent that it exceeds the selling price. Real estate contacts in upstate New York indicate somewhat more favorable market conditions. Home prices in the Buffalo-Niagara Falls area have reportedly remained steady thus far in 2009, though sales activity has fallen roughly 20 percent from 2008 levels. Contacts in both upstate New York and northern New Jersey note that the new tax credit for first-time home buyers has spurred at least some interest among potential buyers. Industry contacts throughout the District indicate that new home construction is running substantially lower this year than in 2008.

(emphasis added)

From the NJ Department of Labor and Workforce Development:

New Jersey Unemployment Rate at 8.3 Percent in March; Employment Down by 17,200 Over the Month

New Jersey’s labor market continued to tighten in March as employment fell for the 14th consecutive month. The state’s unemployment rate moved slightly higher to 8.3 percent in March, up by 0.1 percentage point from February’s 8.2 percent. New Jersey’s unemployment rate was below the U.S. rate of 8.5 percent in March.

According to preliminary estimates from the New Jersey Department of Labor and Workforce Development’s monthly survey of employers, nonfarm wage and salary employment in the Garden State decreased by 17,200 jobs in March, to a total of 3,956,100. All of the loss occurred in the private sector (-17,400) as public sector employment rose by 200. Based on more complete reporting, the previously released February estimate was revised higher by 5,200 to reflect a January-to-February loss of 14,500, rather than the 19,700 originally reported.
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Job losses in March were recorded in eight of ten supersectors. The largest contractions occurred in leisure and hospitality (-5,900), professional and business services (-4,600), manufacturing (-3,700), and trade, transportation and utilities (-1,800).

The loss in leisure and hospitality was mainly in the accommodations and food services component as hotels and restaurants have felt the squeeze from reduced consumer spending during the recession. Casino hotels in Atlantic City have been especially hard hit by the economic slowdown leading to layoffs and other staff reductions.

All three categories of professional and business services were lower over the month with the largest losses in administrative support, waste management/remediation (-2,700) as companies trimmed payrolls of temporary support workers in an effort to cut costs. Professional, scientific and technical services (-1,300), and management of companies (-600) also saw losses.

Modest gains were recorded in the construction (+500) and education and health services (+400) supersectors.

From the Wall Street Journal:

Banks Ramp Up Foreclosures
Increase Poses Threat to Home Prices; Delinquent Borrowers Face New Scrutiny

Some of the nation’s largest mortgage companies are stepping up foreclosures on delinquent homeowners. That will likely lead to more Americans losing their homes just as the Obama administration’s housing-rescue plan gets into gear.

J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks. Those companies say they have lifted internal moratoriums which temporarily halted foreclosures.

Some mortgage companies had stopped foreclosing on borrowers as they waited for details of the Obama administration’s housing-rescue plan, announced in February, which provides incentives for mortgage companies and investors to reduce borrowers’ payments to affordable levels. Others had temporarily halted foreclosures while they put their own programs in place, or in response to changes in state laws.

Now, they have begun to determine which troubled borrowers are candidates for help, and to move the rest through the foreclosure process.

The resulting increase in the supply of foreclosed homes could further depress home prices and put additional pressure on bank earnings as troubled loans are written off.
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Foreclosure sales had dropped in the second half of 2008 as mortgage companies delayed taking action against delinquent borrowers. But sales have been edging up this year, according to LPS Applied Analytics, which tracks loan performance. Foreclosure-related filings increased by nearly 6% in February from the month earlier, and were up almost 30% from February 2008, according to RealtyTrac. The backlog of seriously delinquent loans has been growing.
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J.P. Morgan Chase has increased foreclosure actions since the expiration of a moratorium on new foreclosures that began on Oct. 31, and a later moratorium put in place at President Obama’s request.
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Citigroup Inc. says it stopped all foreclosures until March 12, at the Obama administration’s request, on loans serviced for Fannie and Freddie. Since then, says a spokesman, it has “reverted to our previous business-as-usual moratorium.”
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Wells Fargo has also increased foreclosure actions since the expiration of its foreclosure moratorium,
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Both Fannie and Freddie have stepped up sales of foreclosed properties since their moratoriums ended on March 31
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GMAC’s mortgage division, which had temporarily halted foreclosures while awaiting details of the Obama plan, is now reviewing loans to see which ones will qualify under the program. So far, about 10% of borrowers in some stage of foreclosure appear to be eligible for the federal program, a company spokeswoman says.
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Many have been “playing for time” while the moratoriums have been in place, he says. But the delays have only increased the amount of interest and fees they owe, making their loans “nonviable in the long run.”