The New Jersey Home Price Index Tracker has been updated to include:
* October S&P Case Shiller (Aggregate, Tiered, Condo)
* Q3 FHFA Home Price Index (HPI, Purchase Only)
* Q3 NJAR Home Price Index (Statewide Median)
(click to enlarge)
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FHFA (Formerly known as the OFHEO) Home Price Index
HPI (Includes Refis) - Peaked in Q1 2007 and is down 12.42% from peak
Purchase Only - Peaked in Q2 2006 and is down 11.88% from peak
S&P Case Shiller NY Metro Commutable Area Home Price Index
Low Tier (Under $284606) - Peaked in October 2006 and is down 22.73% from peak
Mid Tier ($284606 - $417722) - Peaked in September 2006 and is down 19.65% from peak
High Tier (Over $417722) - Peaked in June 2006 and is down 15.09% from peak
Aggregate (Overall Market) - Peaked in June 2006 and is down 18.91% from peak
Condo-Only Index - Peaked in February 2006 and is down 15.63% from peak
NY Metro Area Aggregate Year over Year Changes
Oct 08 -7.72%
Nov 08 -8.74%
Dec 08 -9.22%
Jan 09 -9.73%
Feb 09 -10.32%
Mar 09 -11.66%
Apr 09 -12.36%
May 09 -11.87%
Jun 09 -11.49%
Jul 09 -10.24%
Aug 09 -9.42%
Sep 09 -8.66%
Oct 09 -7.73%
From the Record:
North Jersey homes prices flat in October
Housing prices in the New York metropolitan area, which includes North Jersey, remained flat in October and declined 7.7 percent compared to October 2008, reported the Standard & Poors/Case-Shiller Home-Price Indices.
Case-Shiller does not break down sales by county. But according to figures from the New Jersey Multiple Listing Service, median single-family home prices in Bergen County were $439,500 in October, down 2.9 percent from a year earlier.
In Passaic County, according to figures from the Garden State Multiple Listing Service as reported by Weichert Realtors, the average single-family home sold for $308,000, down 20 percent from a year earlier.
…
To economist Patrick O’Keefe with J.H. Cohn in Roseland, Case-Shiller’s October numbers for North Jersey show that the market reached its bottom in April and housing prices are up 1.4 percent since then, he said.
“I think it’s apparent in the data that the April point was the bottom,” said O’Keefe. “But the improvement since then – here in North Jersey area – has not been an unbroken upward line.”
The seasonally adjusted data, which he said is more appropriate for real estate, reports small, month-to-month declines of less than 1 percent in prices from August to September and again in October.
From the WSJ:
Home Prices Inch Up, but Outlook Murky
Home prices stabilized in October, but the latest reading on the S&P/Case-Shiller index of home prices didn’t dispel fears that prices are heading for a second dip.
…
The Case-Shiller index of home prices for 20 cities increased a seasonally adjusted 0.4% from September, the fifth consecutive monthly increase. Before seasonal adjustment, the index was unchanged. Home prices are 7.3% lower than a year ago, a less-steep annual rate of decline than in previous months.
The index, which is closely watched because it tracks the sale of the same houses over time, showed home prices in October were at the same level as they were in the fall of 2003 and 29% below the peak in the second quarter of 2006.
“All in all, this report should be described as flat,” David Blitzer, the chairman of the S&P index committee, said in a statement.
From Reuters:
Fannie mortgage holdings sink, delinquencies leap
Fannie Mae’s gross mortgage portfolio shrank sharply in November while the delinquency rate on single-family loans it guarantees leaped in October, the government-controlled U.S. home funding company said on Monday.
The company said its mortgage investments fell at a 26.1 percent annual rate last month to $752.2 billion. Year-to-date, the portfolio has declined by an annual 4.9 percent from $787.3 billion at the end of last December.
Fannie Mae also reported an ongoing jump in the rate of late payments on single-family loans it guarantees, a problem that has eaten into its capital and forced borrowing from the U.S. Treasury.
In October, the most recent figures available, the conventional single-family serious delinquency rate rose 26 basis points to 4.98 percent. A year earlier, the rate was 1.89 percent.
The multifamily serious delinquency rate dipped 1 basis point to 0.61 percent but remained starkly higher than the 0.21 percent rate in in October 2008.
Loans that are three months or more past due or in the foreclosure process for single-family homes and those that are 60 days or more past due for multifamily homes are considered serious delinquencies.
From the WSJ:
Delinquencies Rise Further In Fannie Mae’s Portfolio In Oct
Fannie Mae (FNM) said delinquencies in its mortgage portfolio continue to rise as the mortgage financier reported its portfolio size shrunk.
…
Fannie said October serious delinquencies, or those at least 90 days behind, rose to 4.98% on single-family homes from 4.72% in September and 1.89% a year earlier. Fannie’s delinquencies have been higher than Freddie’s.
From the LA Times:
No more extensions of tax credit for first-time home buyers
The provision that puts up to $8,000 in buyers’ pockets won’t be renewed a third time, industry leaders and lawmakers say.
…
Proponents of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. And a lobbyist for the National Assn. of Realtors confirmed that at the group’s annual convention last month.
Lawmakers “made us promise practically in blood that we would not come back” for another extension, Linda Goold, the Realtor group’s director of tax policy, told her members.
During the debate, Sen. Johnny Isakson (R-Ga.), a former real estate broker and a longtime proponent of the tax credit, promised his colleagues, “This is the last extension.”
And Senate Finance Committee Chairman Max Baucus (D-Mont.) said, “It is important that this tax credit does not become a permanent fixture of the tax code.”
As it stands now, buyers who meet the income eligibility requirements have until midnight April 30, 2010, to ink a deal and must close by midnight June 30 to qualify.
From the APP:
2009: The year in review
In business for 25 years, Mary Burnetsky, the owner of Farley’s Ice Cream in Jackson, had seen enough economic cycles to believe that her industry might have been recession-proof.
hen came 2009. Her customers, hit by rising job losses, eliminated everything they didn’t need, including — gasp! — ice cream.
“Our business is way down this year,” Burnetsky said last week. “Why, I have no idea. I can only assume people can’t afford to buy ice cream as a luxury.”
The year 2009 ends this week, and few people are shedding a tear. The year will be remembered as the time when workers lost their jobs, homeowners fought to avoid foreclosure and consumers saw their credit-card interest rates rise.
It was part of the fallout of the longest recession since the Great Depression, and it left no one unscathed.
…
The state from January to November lost 88,900 jobs, and its unemployment rate rose from 7.3 percent to 9.7 percent. When the unemployment rate reached 9.8 percent in September, it marked the highest jobless rate since 1977, according to the state.
…
Behind the job losses was an economy trying to recover from the housing market’s collapse. The federal government tried to stabilize the industry to mixed results.
The government bought mortgage-backed securities and drove down mortgage rates to historic lows of less than 5 percent. And it offered buyers thousands of dollars in tax breaks to jump-start sales.
…
The government made less progress convincing lenders to modify the mortgages of homeowners who could no longer afford their payments.
…
The net result? The median price of an existing home in the region that includes the Shore was $343,800 during the third quarter, down 8.9 percent from $377,300 in the same quarter a year ago, according to the National Association of Realtors.
…
“It was really a year of stabilization and setting a stage for what should be recovery in 2010,” Jeffrey Otteau, an East Brunswick-based real estate analyst.
From the Philly Inquirer:
Looming unemployment-tax hike divides N.J. officials
A tax increase that could cost employers $1 billion is needed to replenish New Jersey’s depleted unemployment-insurance fund, according to Gov. Corzine’s labor commissioner.
With large shortfalls in the fund expected for several years, David Socolow said, the state needs to let an automatic tax increase take effect July 1 to rebuild reserves. Once the fund recovers, a process likely to take several years, taxes would begin to fall to previous levels.
“The time has come to let the trust fund replenish automatically and get that over with, so that it can be restored to full solvency and employers can then return to lower tax rates,” Socolow said this week.
He has publicly warned of a tax increase since at least April, but some Republicans say the state cannot afford another.
…
The fund, which temporarily aids workers who lose their jobs, is expected to have a $1.2 billion deficit on March 31. That would move the tax rate on employers, beginning in July, to the highest level allowed.
The increase would add about $1 billion to the current $1.7 billion levy on businesses, according to the Department of Labor and Workforce Development.
…
With the impact of the recession still being felt in the labor market, the projected March 31 shortfall is so large that the tax rate is set to slide from its second-lowest level - Column B of the tax chart - to the highest, Column E plus 10 percent.
For the hardest-hit employers, that could mean a tax increase of nearly $700 per employee. At the lowest end of the scale, the increase would be closer to $270 per worker. A business’ rate varies according to its history of firing or laying off workers. Workers also pay into the program, but their rates are not set to change.
From Inside Jersey:
Trying for a comeback: New Jersey’s housing market in 2010
After putting the nation’s economy through the spin cycle, the real estate market this year could take a break.
Home prices look as if they’ve reached their lowest points, and people are starting to take deep breaths and buy again. It’s beneficial, too, that the federal government has helped keep mortgage rates down, in the 5 percent range, and Congress extended and expanded tax credits so they reach almost all potential buyers — not just first-timers anymore. Together, this means houses remain more affordable than they were for decades.
However, it’s tough to pay your mortgage without a job, and New Jersey’s labor market is key to a recovery in home prices.
“The worst is behind us, but the labor market is the big cloud going forward,” says Rutgers economist Joseph Seneca. If the economy does what’s being called a “double dip” or a “W,” more people could lose their jobs, and eventually their homes. But for now, most local markets have already stopped their price slide, and some markets are even coming back.
Overbuilt Hudson County will continue to struggle. Manhattan’s weak market is sapping demand from Hudson County, and deep South Jersey is hurt by being far from major job centers — Philadelphia and New York — and by Atlantic City’s losing streak.
…
Good news for home sellers is that while they don’t exactly have the upper hand, they may not feel as desperate to sell before prices fall any further. “It gets better from here,” Otteau says. “Some markets will be experiencing modest, gentle price increases.”
…
Still, sellers will be up against more competition from the “shadow market” — something that’s not quite as spooky as it sounds. This market is composed of sellers who had been waiting on the sidelines, because they figured it wasn’t worth putting their homes on the market when buyers were scarce. They’ll come out, adding to the supply.
…
BEST THING THAT COULD HAPPEN:
Home prices rise slowly. It could take years to get back to the highs of 2005 and 2006. Jeffrey Otteau, who tracks home prices, predicts no change in 2010 prices. However, New Jersey should see a 3 percent rise in 2011.
WORST THING THAT COULD HAPPEN:
The economy retreats, consumers and employers get scared, and more people lose their jobs. The government pulls back support, mortgage rates rise and sales fall. Foreclosures and fear send prices down again.
From the Today’s Sunbeam:
Bill in New Jersey Legislature calls for real estate professionals education
A measure sponsored by Senate Majority Leader Steve Sweeney, which would require real estate professionals to complete continuing education courses as a condition of their license renewal was approved last week by the Senate Commerce Committee.
“The real estate market crisis of the past few years was caused, in part, by home buyers securing loans and purchasing properties that they simply could not afford,” said Sweeney, D-3rd Dist.
“The role of a professional real estate agent is to guide potential buyers, and help them to select the property that best fits their needs, that is also within their price range. As the federal government continues to work to improve the real estate market, it is imperative that real estate professionals know ins and outs of the market, so that they can best advise their clients on making responsible purchases.”
Sweeney’s bill, S-2068, would require real estate brokers and agents to complete continuing education requirements as a condition of their license renewal. The New Jersey Real Estate Commission would be responsible for determining the course content, and the number of credits needed to gain the biennial license renewal.
“Buying a home is the most expensive purchase that most people ever make, and those purchases should be guided by professionals who have the needs of their clients in mind,” Sweeney said.
From LoanPerformance:
National HPI for September - Home Prices Down 9.8% vs 2008
National home prices, including distressed sales, declined by -7.8 percent in October 2009 compared to October 2008, according to First American CoreLogic and its LoanPerformance Home Price Index (HPI). This was an improvement over September’s year-over-year price decline of -9.5 percent.* On a month-over-month basis, however, national home prices declined by -0.7 percent in October 2009 compared to September 2009.
…
Including distressed transactions, the HPI has fallen -30.1 percent from its peak in April 2006. Excluding distressed properties, the national HPI has fallen -21.5 percent from the same peak.
LoanPerformance National HPI 12 Month Change: - 7.8%, Single Family Combined Series, October 2009
New York-White Plains-Wayne NY-NJ*
Single Family Combined -11.10%
Excluding Distressed -7.74%
*Includes the following counties:
Kings County (Brooklyn), NY
Queens County, NY
New York County (Manhattan), NY
Bronx County, NY
Richmond County
Westchester County, NY
Bergen County, NJ
Hudson County, NJ
Passaic County, NJ
Rockland County, NY
Putnam County, NY
From the Courier News:
New Jersey real estate trends don’t mirror national patterns
As the real estate market seems to be stabilizing nationally and the number of foreclosed homes across the country fell for the fourth straight month, according to Realty Trac, closer examination of local markets shows that New Jersey is not following that trend.
While New Jersey’s statewide foreclosure rate is 0.03 percent — a third of the national rate — Realty Trac, a national company that tracks real estate statistics indicates that the number of people behind on their mortgage payments is not falling every month. In fact, New Jersey figures for July through October are significantly higher than numbers for fourth-quarter 2008 and first-quarter 2009.
HARD-HIT PROPERTIES: While there are foreclosures in every town, communities with the densest populations and oldest housing stock - the more urbanized areas - have been hit hardest. In Central Jersey, the number of homes receiving foreclosure notices is about three times higher in Middlesex County than the combined number in Somerset and Hunterdon counties. Middlesex County also has more urban centers and a higher population than Somerset and Hunterdon counties.
…
Several reasons exist for the higher foreclosure rates in Middlesex County:
First, the least affluent homeowners live in the most urbanized areas, where housing has traditionally been less expensive because the homes are older and built closer together.
“Those owners are the least likely to have savings if they lose their job,” Crivello said.
Second, when the economy weakened, the jobs that disappear first are the lower-paying service and retail jobs that these homeowners were likely to have, according to Jeffrey Otteau, chief executive officer of Otteau Valuation Group, an appraisal company in East Brunswick that also studies industry trends and market forces.
Third, many of these homeowners were given subprime loans or no-documentation loans, mortgages that carried significantly more risk.
…
ames Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick, pointed out that the key to stabilizing the housing market is a stable employment outlook — and New Jersey’s employment picture has been in decline for some time.
The state’s unemployment rate, at 9.7 percent, remains just below the national figure, but New Jersey will this decade with fewer jobs than when it started in 2000. The recession has only worsened the situation.
“Since the recession started in January 2008, we’ve lost 179,400 jobs,” Hughes said.
The prospects for job growth in New Jersey are not good, either. The state is losing high-paying jobs and replacing them with very low-paying jobs. In fact, from 2005 to 2008, household income has declined here, at a rate 100 times greater than the national average, according to Otteau.
“New Jersey is not attractive to business because of our high cost of living and of doing business, our high taxes and our restrictive practices,” Otteau said. Some of those practices relate to environmental, zoning and building regulations, among others.
Didn’t we talk about this the other day?
From the New York Times:
Agent or No Agent?
Are real estate brokers — like travel agents and other middlemen coping with the increasingly digital culture — in danger of becoming expensive anachronisms?
After all, it is only logical that as people feel more empowered based on their access to information and their ability to connect without help, they are at least questioning the wisdom of the conventional way of buying and selling a home.
According to the National Association of Realtors, the percentage of homes sold nationally by their owners has actually declined, from 14 percent in 2004 to 11 percent in 2009. But Real Trends, a company that monitors the residential brokerage industry, considers those findings to be low, and estimates that the number of for-sale-by-owner, or FSBO, homes was almost one in five three years ago, when it stopped tracking them.
“I’ve been in this business for 33 years and I’ve always wondered why more people didn’t say, ‘I’m going to take a shot at this myself,’ ” said Steve Murray, the editor of Real Trends’ reports. “Now, with the technology available, that would seem to be inevitable. We tracked FSBO numbers through 2006 — before the market collapsed — and we were already seeing substantial differences between the attitudes and habits of people under 35 and those over 50.”
Younger people, he said, are far more likely to embrace the multitasking and risk taking involved in selling their own homes. If the decision to use an agent is becoming generational as well as situational, that would not augur well for real estate agents.
“This is going to sound bad, but I just don’t give a lot of credence to what brokers do,” said Cynthia LeStar, who is selling her studio apartment on the Upper East Side. “I mean, what do they do that I can’t do on my own?”
From Bloomberg (Hat tip CR!):
Harvard’s Feldstein Says U.S. Economy Still Mired in Recession
The U.S. economy remains mired in a recession, prospects for next year are weak and home prices may resume declines, Harvard University economics professor Martin Feldstein said.
“The recession isn’t over,” Feldstein said today in an interview on Bloomberg Radio in New York. “It will be a while before we have enough information to know if the recession ended.”
Feldstein is a former president of the National Bureau of Economic Research and remains a member of the group’s Business Cycle Dating Committee, the panel charged with determining when recessions begin and end. His comments are at odds with those of the panel’s chairman, Robert Hall, who said early this month that the recession may have ended.
…
Regarding the residential property market, where the recession initially emerged, Feldstein said the Obama administration’s effort to revive the housing market is a failure and home prices will continue to decline.
“It was just not well enough designed,” Feldstein said. “They ended up failing.” That suggests the housing slump will “continue to push down house prices,” he said.
“We saw a little pause in home-price declines in the summer but I think that was because of the first-time home buyers program,” Feldstein said. “We’re not going to get that boost.”
From Bloomberg:
Luxury Homeowners in U.S. Use ‘Short Sales’ as Defaults Rise
Homeowners with mortgages of more than $1 million are defaulting at almost twice the U.S. rate and some are turning to so-called short sales to unload properties as stock-market losses and pay cuts squeeze wealthy borrowers.
“The rich aren’t as rich as they used to be,” said Alex Rodriguez, a Miami real estate agent with JM Group USA Inc., whose listings include a $2.9 million property marketed as a short sale because the price is less than the mortgage, leaving the bank with a loss. “People have reached the point where they can’t afford the carrying expenses of a $2 million home.”
Payments on about 12 percent of mortgages exceeding $1 million were 90 days or more overdue in September, compared with 6.3 percent on loans less than $250,000 and 7.4 percent on all U.S. mortgages, according to data from First American CoreLogic Inc., a Santa Ana, California-based research firm. The rate for mortgages above $1 million was 4.7 percent a year earlier.
…
The Fed purchases haven’t affected the high end of the market because they exclude so-called jumbo loans. Mortgages above the $729,750 limit set by Congress for the nation’s highest-priced markets cost almost 1 percentage point more than conforming loans, according to Keith Gumbinger, vice president at HSH Associates, a mortgage-data company in Pompton Plains, New Jersey. That’s quadruple the historic spread.
“There is no refinance market for you if you are underwater and outside the Fannie and Freddie framework,” Gumbinger said. “High-end neighborhoods are all suffering from the same problems of diminished income at a time when there is little equity to work with.”
…
“The reason the low end stopped falling is because the government stepped in with affordable loans,” said Scott Simon, managing director at Pacific Investment Management Co., a Newport Beach-based investment firm that runs the world’s largest bond fund. “There is no political will to bail out a million-dollar house.”
From the APP:
Weak holiday hiring leads to loss of 9,400 jobs in November in New Jersey
New Jersey lost 9,400 jobs in November in part because retailers added fewer workers than expected for the holiday shopping season, the state Department of Labor and Workforce Development said today.
…
The November report showed that New Jersey’s labor market continued lose jobs despite signs that the economy is beginning to recover from the longest recession since the Great Depression.
The state lost 10,900 private sector jobs and added 1,500 public sector jobs during the month. All of the public sector job growth was at the local government level, the report said.
From the Record:
N.J. lost 9,000 jobs in November
New Jersey lost 9,400 jobs in November in sharp contrast to the modest job gains the month before, and the state unemployment rate stayed at 9.7 percent, figures released today show.
The state lost 10,900 private sector jobs, but added 1,500 government jobs, according to the monthly report by the New Jersey Department of Labor and Workforce Development.
New Jersey’s unemployment rate remained below the national level, which fell from 10.2 percent to 10 percent in November. Economists have predicted that the rate will continue rising well into next year.
New Jersey’s unemployment rate fell in October from 9.8 percent to 9.7 percent. The state reported a job loss of 1,800 that month, but revised the figure today to a gain of 1,200 jobs.
State labor commissioner David J. Socolow said the weak retail sector was a key factor in the November job loss.
From the Philly Inquirer:
N.J. jobless rate stable, but total jobs fall
The biggest job losses last month from October were in the trade/transportation/utilities category (down 9,700 jobs), construction (down 2,800), professional/business services (down 1,900) and financial services fields (down 1,200).
“The usual retail hiring increases at this time of year did not reach the levels recorded in prior years,” state Labor Commissioner David J. Socolow said.
From the Star Ledger:
N.J. unemployment rate holds at 9.7 percent
The unemployment rate in New Jersey stayed at 9.7 percent in November, even though the private sector lost almost 11,000 jobs, the state labor department said today.
Retail stores hired fewer people than usual for the holiday season this year, resulting in a loss of about 9,700 jobs when adjusted for seasonal hiring patterns.
But the numbers are not firm, and estimates are regularly adjusted from month to month. For example, the Department of Labor and Workforce Development now says the state actually gained 1,200 jobs in October, instead of losing 1,800 as previously estimated.
Also, not everyone was firing employees. The manufacturing sector gained about 2,500 jobs, and the leisure and hospitality industry gained 2,100 jobs in arts, entertainment and recreation. Local government payrolls helped the public sector grow by about 1,500 jobs.
Boarding a red-eye back to reality.
Open thread, game on.
