Otteau: Big jump for March contracts

From Otteau:

NJ Home Sales Up 25% YTD (Click for graph)

Home sales continued to surge in March as combined purchase-contracts for resales and new homes rose by 20% in March. YTD sales are now running 25% ahead of 2011 through Q1 2012 due to the combined effects of higher consumer confidence, low home prices and low mortgage rates. Another key driver for the increase is that home purchase affordability in New Jersey rose from 131% in Q4 2011 to 136% in Q1 2012, resulting in record high purchasing power for home buyers.

Through the first 3 months of 2012, home buyers have signed contracts to purchase 17,683 homes compared to 14,104 during the same period in 2011. Still more positive news comes from Unsold Inventory in New Jersey which stands 17% lower than one year ago. At the end of the 1st quarter there were 60,965 homes being offered for sale compared to 73,263 one year ago. This reflects a reduction of 12,298 homes including both resales of existing homes and new construction. The combined effects of a 25% increase in purchase demand with a 17% decline in Unsold Inventory are expected to stabilize home prices in 2012 and lead to modest price increases in 2013. One cautionary note is that sales pace has slowed in April due to rising asking prices.

Home buyers remain highly resistant to price increases at this stage of economic recovery which appears to be reducing the sales pace this month. Also affecting the April sales pace is that both Easter and Passover occurred during the month which had the effect of deferring some purchase demand into May.

This entry was posted in Economics, Housing Recovery, New Jersey Real Estate. Bookmark the permalink.

76 Responses to Otteau: Big jump for March contracts

  1. grim says:

    Most interesting is that it seems that the pace of contracts this year is matching what we saw in 2010, when we saw a surge in contracts activity due to the first time home buyer tax credit expiring.

  2. Essex says:

    It’s a great time to sell! For what you bought it for ten years ago. No.

  3. grim says:

    Maybe you’ll look at your back yard in a different light after reading this one… From the NYT:

    A Piece of the Great Outdoors for Sale

    THE high-priced outdoor space available at Toll Brothers’ newest condominium along the Hoboken waterfront in no way resembles a rolling meadow, or even a plot of grass. Nevertheless, demand has been brisk for the space — rooftop concrete patios surrounded by lattice-topped fences, and offering views of Manhattan.

    In fact the patios, ranging in price from $40,000 to $150,000 (depending on size, location and time of purchase) have sold faster than the condos.

    Of the 157 luxury units at 1450 Washington Street — some of them penthouses with attached outdoor space — two-thirds have sold, said John McCullough, an assistant vice president of Toll Brothers City Living. Of the 15 private terraces, only two remain.

    The private terraces range in size from 450 to 750 square feet. Five are on a seventh-floor rooftop, and 10 are on the top of the 12-story building. Each comes with gas, water and electric hookups; two lounge chairs; and an outdoor dining set. The two 550-square-foot patios still for sale are on the roof; each is listed at $80,000. Owners also have the option of reselling their terrace spaces to other residents. Toll Brothers offered a similar product in 2008 to residents of Harborside Lofts; all 11 private rooftop spaces on offer sold, at prices ranging from $50,000 to $200,000.

  4. grim says:

    And here I thought 400sqft of PVC decking and railing was expensive…

  5. freedy says:

    a family friend took a look at a price reduced in Bergen County. Price reduced from
    1.1 to 750k. Things where fine ,house needed a Kitchen do over, baths, etc.

    They took a look at the 25k tax bill and passed. Probably could have got the joint
    for 700k.

  6. Mike says:

    Good Morning New Jersey

  7. Shore Guy says:

    If anyone wants to lease part of my roof, let me know. I will toss in a lawn chair so you don’t need to schlep it up each time you catch some rays.

  8. Juice Box says:

    Lol that Toll building looks empty so far. I have an entire roof and a large trex deck included in my rent along with parking that is bigger than any of those toll bros places. Gonna barbecue tonight with charcoal too…It is good to be a gangsts.

  9. Mike says:

    5 Banks in Maryland, Minnesota, South Carolina & California Closed by Regulators
    Yesterday

  10. Shore Guy says:

    Yawn.

    http://news.yahoo.com/dubai-spends-250m-full-control-atlantis-062911411–finance.html

    Dubai spends $250M to get full control of Atlantis

  11. Shore Guy says:

    Trouble in the principality of Liechtenstein — population about that of Asbury, Ocean Grove, Bradley Beach, and Avon.

    http://www.vancouversun.com/news/Royal+family+vows+quit+referendum+trims+power/6535265/story.html

  12. Shore Guy says:

    Who the heck needs a hereditary monarchy in the 21st century? Well, aside from Saudi Arabia — which, when the Wahhabists take over at some point — is headed back to the 16th century.

  13. nwnj says:

    “Home buyers remain highly resistant to price increases at this stage of economic recovery which appears to be reducing the sales pace this month. Also affecting the April sales pace is that both Easter and Passover occurred during the month which had the effect of deferring some purchase demand into May.”

    Ah, what tormented logic, so April sales are down because of an annual holiday. Sounds to me that the mild winter pulled forward some sales by a few months — the 25% increase in sales is more noise — and the overall price trend is still down.

  14. gary says:

    Two questions:

    1) What percentage are distressed sales?
    2) In what price range is the biggest increase in sales?

  15. grim says:

    2) The Q1 data isn’t out yet, so let’s look at Q4:

    http://njar.com/upload/pdf/research/4th_quarter_nj_data3945.pdf

    Period – 2Br-/3Br/4Br+
    2010.Q4 – 13.6%/41.2%/45.2%
    2011.Q4 – 14.3%/42.5%/43.2%

    Looks like mix has shifted away from the 4br+ homes, down into the 3br and smaller.

    Geographically, Southern Jersey saw the largest increase of sales, followed by Central, and lastly North saw a dip in Q4.

    Put both of these together, and you can imagine a scenario where the aggregate median sales price shows a decline driven in part by mix and geography shift.

  16. grim says:

    Ah, what tormented logic, so April sales are down because of an annual holiday

    Prelim numbers show April contracts continuing to rocket along, not sure what Otteau is talking about.

    April Contracts (4/1-4/27 in 2012, full month in 2011)

    Morris
    2011 – 397
    2012 – 423

    Essex
    2011 – 324
    2012 – 369

    Passaic
    2011 – 171
    2012 – 238

  17. grim says:

    NJMLS lets me search by day, so for Bergen

    4/1-4/27/2011 – 602 Contracts – 363 Sold
    4/1-4/27/2012 – 761 Contracts – 373 Sold

  18. grim says:

    Just remember, when we are talking about pulling forward “sales” in Spring, we’re going to pull contracts forward, but not closings.

    Parents aren’t going to take their kids out of school in April.

  19. nwnj says:

    Yeah, I meant contracts(though I suspect even less are resulting in sales this year). But Otteau should stick to data and give up on forecasting. He’s reaching more with each missed call.

  20. gary says:

    grim, thank you for the stats!

    The average price for a house in Northern NJ dropped 6% from Q4 2010 to Q4 2011. That’s the only thing I’m interested in and the only thing that matters. I suspect you’ll see approximately the same drop from 2011 to 2012. All the rest of the talk is just noise. It’s all about price.

  21. gary says:

    One cautionary note is that sales pace has slowed in April due to rising asking prices.

    Let the blinded sheep sellers ask any f*cking price they want for their rat-infested clap trap. And sales can be up 100% for all I care. It’s all about price and that’s going to continue to be a slow, steady grind down. No job growth + declining income = zero. And consumer sentiment is like saying I took a good sh1t and now I feel good.

  22. 30 year realtor says:

    Recovery in housing? I guess that depends upon how you define that. As a broker/agent I define it by transactions. Most sellers I speak to define recovery by price. If you believe increasing prices define a housing recovery, we have got a long way to go.

  23. 3b says:

    How can the article claim that the housing affordability index for NJ is at a record high, when there is absolutely no mention of property taxes? Than the article talks about a slow down in April due to increased asking prices? So which is it? And again where is the discussion on property taxes?

  24. 3b says:

    #20 gary: Its all about price. And property taxes. Lower the price to keep up with the ever increasing property taxes.

  25. 3b says:

    #22 30 year:Most sellers I speak to define recovery by price.

    Do they ever discuss why they might feel that they should be increasing their asking prices now, assuming that some are?

  26. gary says:

    3b,

    Taxes and price: That’s why I say prices will continue to decline. The property tax will continued to rise unchecked; therefore, house prices may not increase again in our lifetime. Perhaps the only thing left now is anarchy and revolt.

  27. reinvestor101 says:

    Finally got one of my damn houses sold yesterday. The stinking buyer tried to weasel me down on the price and I refused. I dug in my damn heels and told him that he could take it or leave it, but I wasn’t about to just give my damn house away. I looked him dead in the eye when I told him that just so he’d know he’s not dealing with some spineless wuss who’s afraid to lose a damn sale. I let him know in no uncertain terms that he wasn’t going to get my house unless he paid my damn price. He got meek and hang dog like, like a stinking buyer is supposed to. I should have demanded that he pay me another damn $ 10,000 just for having the nerve to weasel me out of some bucks, but decided to cut him some slack.

    The damn housing market is swinging back to the real estate investors and homeowners. This sale almost reminded me of the good old days when the stinking buyers were begging and bidding to get houses. Those days are coming back and I’ve got a few more houses to sell and I don’t plan to give a single inch. It’s finally dawning on people that they ain’t making no more damn real estate. The days are over of having these buyers toying with me with lowball offers. The days are over of having no one come by a damn open house while I sit there steaming. Payback is now here and I’m gonna extract my fair share of it.

  28. reinvestor101 says:

    The damn property taxes are ridiculous because of liberals and damn RINO’s. What our state needs is a strong dose of tea as in T-party. If I could bring bottle Sarah Palin and bring her here, that’d solve that problem real quick. And just so you know, I’m having a real problem with Mitt and unless he gets Sarah as a running mate, I’m not voting.

  29. Bocephus says:

    28. Palin’s done, she essentially cost mcCain the Presidency. Stay home and finger your anus. Letting retards like you in a voting booth is the main reason we are here in the current mess.

  30. A.West says:

    Bo,
    Re101 is about as real as Fred Sanford’s heart attack. No genuine Republican actually wants Palin as VP again. I think Re101 is some pinko’s fantasy of how Repubs think. Just like Re101 isn’t actually a home flipper. He’s just an imaginary tard.

  31. 3b says:

    #27 STFU. Di@ckhead.

  32. 3b says:

    #26 gary: I agree. ANd I undestand when people finally do buy, their attittude shifts on where the RE market is going.Even if only subtly for some. I get the whole you sit where you stand. WIth me I have to buy before the end of the year. My cheap, cheap rental is coming to an end, and it makes no sense to rent again, and potentially have to move again in a couple of years. The difference with me is that even when I do buy , at a much lower price than if I had purcahsed a few years ago, I still fully expect prices to continue to fall. Because of never ending increases in property taxes, and many other reasons. Purchasing a house won’t change my belief in that.

  33. Shore Guy says:

    http://www.nytimes.com/2012/04/29/realestate/streetscapes-useful-vocabulary-for-building-watchers.html

    snip

    Here are a few definitions that anyone who wants fluency in New York architecture will find useful.

    snip

  34. Shore Guy says:

    Here is a deal. Hurry up and buy this, before it falls down onto its rented lot:

    http://www.realtor.com/realestateandhomes-detail/78-Main-St_Ocean-Grove_NJ_07756_M60776-76493

  35. The most interesting man in the world says:

    #27

    I support you. Good work my friend.

  36. reinvestor101 says:

    >>The most interesting man in the world says:
    April 28, 2012 at 5:14 pm
    #27

    I support you. Good work my friend.<<<

    I most humbly accept your praise sir. It's a rare instance where I get any praise around here as I've have the misfortune of having to deal with damn RINO wusses like AWest. RINO's like AWest are like Mitt Romney who is just another stinking liberal masquerading as a damn republican. Our party is riddled with these damn people and we intend to get rid of all of their asses–just like we did in the damn off year election. There is no compromise with true red blooded American conservatism and these damn RINO's, like AWest and Mitt Romney, make me want to throw the hell up. I'd rather see Obama get the hell back in, as much as I hate that, then to see one of these damn pretenders sitting on the throne.

    When I'm not dealing with RINO's here. I have to turn the hell around and deal with sickos like 3B–a renowned real estate terrorist. I hate like hell to bring this up in polite company, but this jerk is so damn cheap that he refuses to do like everyone else in America and buy some damn toilet paper, but has reverted to a practice unheard of since colonial times by using damn corn cobs. He is constantly raiding vegetable stands and gleaning farmer's fields for damn corn cobs. And what started off as what he believed was an innocent way to save money, has turned into a damn fetish with this damn pervert having to jam himself onto a damn corn cob with the same kind of regularity that a damn crack head draws on a crack pipe.

    There have been many times where I've just attempted to give this board up and say to hell with it, but someone has to deal with people like this. Yes, it's a damn dirty job, but someone has to do it.

  37. chicagofinance says:

    Which state? Maryland?

    reinvestor101 says:
    April 28, 2012 at 12:32 pm
    The damn property taxes are ridiculous because of liberals and damn RINO’s. What our state needs is a strong dose of tea as in T-party.

  38. Neanderthal Economist says:

    I completed inspection today with the uberinspector. He found some stress cracking and bulging in basement cinderblock walls which is my biggest concern, cracked driveway, rotted deck and a few issues with the pigtailing of aluminum wiring at the outlets. So i’ll have to schedule a few specialists to give quotes before i ask seller to reduce price further. The uber also did the thermo imaging to find energy loss and to find hot wires. Pretty cool.

  39. Neanderthal Economist says:

    I recently came across some interesting info on housing in nj. (1) people are no doubt moving back to citys and reinventing the cities to be cleaner and more livable.this is just the beginning of this trend. (2) the pres will be going after mortgage deduction hard after reelection but wont eliminate just pare down for rich and second homes. (3) immigrants will be driving this housing recovery. In this region hispanic and indian will lead the effort. (4) in many regions mcmansions will be subdivided into multi family or turned into multi generational households. (4) ny gained back 128% of jobs lost during recession compared to 78% for the nation, which helps to explain why prices have not crashed as much. (5) ny metro is home to the oldest housing stock in nation.. many of these things are discussed here regularly but i heard them all in one conversion with some well known housing economists and was surprised at how mainstream some of these ideas have become.

  40. chicagofinance says:

    How great is that guy……thank my wife for finding him…..

    Neanderthal Economist says:
    April 28, 2012 at 7:34 pm
    I completed inspection today with the uberinspector. He found some stress cracking and bulging in basement cinderblock walls which is my biggest concern, cracked driveway, rotted deck and a few issues with the pigtailing of aluminum wiring at the outlets. So i’ll have to schedule a few specialists to give quotes before i ask seller to reduce price further. The uber also did the thermo imaging to find energy loss and to find hot wires. Pretty cool.

  41. Neanderthal Economist says:

    Thank you mrs chi fi. He’s definately thorough and a nice guy but i’ll base my overall impression on the report he produces. I’m guessing he’ll come through with something impressive.

  42. AG says:

    21,

    Gary,

    I disagree. Its all about property taxes and the potential for exponential increases. Property tax revolt NOW!

  43. AG says:

    28,

    Ron Paul is the only viable vote He just won Louisiana. Its all going to sh_t I promise you. Never give up your guns. You are going to need them.

  44. AG says:

    40,

    Neandrathal. You are looking at 16k right there. Run.

  45. AG says:

    CNN = the promotion of race war

    Fox = the promoton of Iran war

    Which one benefits me? Neither. Its all a game folks. Dont be a brainwashed German idiot. The fascists and communists killed millions of innocent civilians. Top down control of both the economy and politics.

    Your g_vernment is your enemy.

  46. The gubmint has already rendered us all idiots. Next, they will disenfranchise us and steal everything we have.

  47. Neanderthal Economist says:

    #47 & 48: Is this really how you wake up in morning? The gubt cant operate a self sustaining mail delivery service yet its somehow a well oiled machine when it comes to secretly conspiring against you? I dont think so.

  48. Fabius Maximus says:

    Clot

    Have you been drinking Sports Direct Brown Ale and watching cartoons again?

  49. Shore Guy says:

    “How can the article claim that the housing affordability index for NJ is at a record high, when there is absolutely no mention of property taxes?”

    If one just focuses on “can one afford to buy the product,” then, yes, housing may be highly affordable. If, onthe other hand, one focuses on the total cost of ownership and whether one can afford to keep the asset once purchased, that may be another matter entirely. Once the home is sold, the RE agent couldn’t care less if the new buyer can afford to keep the place. In fact, one could see a benefit to the RE agents if people buy more than the can afford and have to sell the property sooner than they might have planned.

  50. Shore Guy says:

    http://online.wsj.com/article/SB10001424052702303592404577361891800868180.html

    Steven Malanga: How Retirement Benefits May Sink the States

    Illinois is a lesson in why companies are starting to pay more attention to the long-term fiscal prospects of governments.

    Chicago Mayor Rahm Emanuel recently offered a stark assessment of the threat to his state’s future that is posed by mounting pension and retiree health-care bills for government workers. Unless Illinois enacts reform quickly, he said, the costs of these programs will force taxes so high that, “You won’t recruit a business, you won’t recruit a family to live here.”

    We’re likely to hear more such worries in coming years. That’s because state and local governments across the country have accumulated several trillion dollars in unfunded retirement promises to public-sector workers, the costs of which will increasingly force taxes higher and crowd out other spending. Already businesses and residents are slowly starting to sit up and notice.

    “Companies don’t want to buy shares in a phenomenal tax burden that will unfold over the decades,” the Chicago Tribune observed after Mr. Emanuel issued his warning on April 4. And neither will citizens.

    Government retiree costs are likely to play an increasing role in the competition among states for business and people, because these liabilities are not evenly distributed.
    snip

  51. Shore Guy says:

    From that same article:

    Indiana’s debt for unfunded retiree health-care benefits, for example, amounts to just $81 per person. Neighboring Illinois’s accumulated obligations for the same benefit average $3,399 per person.

  52. gary says:

    When I see the words, “potential”, “cozy” and “possibilities,” while reading the real estate listings, my body starts to convulse and the onset of projectile vomiting becomes imminent. The description might as well just tell us what we already know: the house is small, outdated, st1nky and over-priced.

    BTW, I’m starting to see asking prices for 4/2 splits approaching the “4″ handle in some of those “to die for” towns. We know that stup1dity still reigns over common sense for most but the facts still hold true: no job growth + stagnant wages + cost of living + runaway property taxes = price decline.

    Tick… tick… tick… tick…

  53. WickedOrange says:

    A steal at $549k

    http://goo.gl/MfPI4

    Christ, what is wrong with sellers.

  54. Comrade Nom Deplume says:

    [50] fabius,

    Better dead than ( arsenal) red

  55. Comrade Nom Deplume says:

    Met daddyo today. Always interesting to put a name with a face

  56. Comrade Nom Deplume says:

    [52] shore,

    If they are smart, Govs. Daniels and Walker are putting on a full court press.

  57. Comrade Nom Deplume says:

    [52]. What isn’t being said publicly is that Rahm wants the feds to bail out public pensions.

  58. Anon E. Moose says:

    Nom [59];

    And Krugrman is out with a piece openly calling for massive inflation. (http://www.nytimes.com/2012/04/29/magazine/chairman-bernanke-should-listen-to-professor-bernanke.html?_r=1&ref=magazine&pagewanted=all)

    Debasing the currency will: bail out the Blue states; buy off the unions; and stick the public with the bill — win/win/whatever from the left’s POV, no?

  59. cobbler says:

    moose [60]
    He is calling for 3 or 4% inflation. It is a major stretch to call this “massive” – it actually is less than what we’ve had through most of the 1980s and 1990s. It is easy to create price inflation at this level – though not necessarily for RE, as we’ve seen. The problem is how to translate it into the wage inflation (the only one that improves on all the items you’ve listed since price inflation doesn’t add to the tax base), and there is no obvious answer.

  60. gary says:

    Here’s a novel idea, how about if the Fed gets the F*ck out of the way and lets the market correct itself instead of keeping the corpse on a respirator!

  61. cobbler says:

    gary – do you have access to enough land, water, tools and seeds for subsistence agriculture?

  62. Juice Box says:

    Krugman again calling for more Government deficit spending, calling out Bernake and his Ivory Tower papers from his Princeton days he wrote on Japan and even citing that Japan does not have unemployment problem to back it up. Japan workforce of 67 million is now fully 1/3 part time temps, that was not the case even a decade ago, and when Bernake wrote those papers in the first place. They are now facing even worse stagnation than they did in the 1990s. Krugman’s liberal conscience knows the unemployment rate must fall so they can claim another term in Nov.

  63. Comrade Nom Deplume says:
  64. Comrade Nom Deplume says:

    [63] cobbler

    “do you have access to enough land, water, tools and seeds for subsistence agriculture?”

    Yes, and I am not telling you where.

  65. cobbler says:

    Nom – I’d been asking Gary in response to his suggestion about letting the dice fall as they might, not you. I know that YOU do have everything (beware, btw – seeds tend to go bad after a while, ideally get a 0°F freezer to store them until the utility power is gone).

  66. cobbler says:

    Nom[65]
    Wouldn’t you like to have dinner with Kate Upton?

  67. Comrade Nom Deplume says:

    [67] cob,

    I’m not actually all that prepared. Farm is not mine but immediate family. Still working up a decent prep cuz it is a helluva lot cheaper to build incrementally. Will be shipping 100 canning jars to the farm tomorrow with a visiting family member. They are mostly pasta sauce and salaam jars that happen to have the same dimensions. Cost=$0.

  68. Comrade Nom Deplume says:

    Salaam s/b salsa

  69. Comrade Nom Deplume says:

    [68] cobbler

    Good point

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  71. Chap Man says:

    A spade is a spade and Otteau, I call BS!

    Aren’t you bought & paid for by the state & RE industry, Otteau?

    Hmmm?

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