New Jersey Real Estate Report

Preliminary May sales and inventory data for Northern New Jersey (GSMLS) is in. Please note that this data is subject to revision.

The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 500, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.

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The second graph is another view at the sales data for the full year. Please note that this graph does cross at zero.

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The third graph displays only May sales, 2000 to 2009 YOY.

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The fourth graph displays an overlay of Sales and Inventory from 2003 to 2009.

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The fifth graph displays the year over year change in inventory on a month by month basis.

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The sixth graph displays the year over year change in sales on a month by month basis.

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The last graph displays the absorption rate (not seasonally adjusted), in months:

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Bonus Graphs!

March Sales By County (log scale):

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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.

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 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.”

GSMLS - http://www.gsmls.com
(Garden State Multiple Listing Service)
Single Family Homes, Condo, Coop
(Bergen, Essex, Hudson, Morris, Passaic, Somerset, Sussex, Union, Warren Counties)

10/18 - 19,035
10/25 - 18,940 (0.5% Decrease)

NJMLS - http://www.njmls.com
(New Jersey Multiple Listing Service)
Single Family Homes, Condo, Coop
(Bergen, Essex, Hudson, Passaic Counties)

10/18 - 9,183
10/25 - 9,121 (0.7% Decrease)

MLSGuide - http://www.mlsguide.com
Single Family Homes, Condo, Coop
(Hudson County)

10/18 - 2,804
10/25 - 2,832 (1.0% Increase)

From the Gloucester Times:

Local journalist tracks future of N.J. farming
By Jessica Beym

As housing developments sprout on farms and silos turn into smokestacks, Jerseyans are left to wonder:

Can New Jersey still proudly bear the title of the Garden State?

Charles Harrison, a journalist from Woodstown, set out to answer that question in his book, “Tending the Garden State: Preserving Agriculture in New Jersey.”
…
“You get a lot of negative or uninformed comments about New Jersey,” said Harrison, who teaches a magazine article writing course at Rowan University. “We’re the most urban state in the country. Our visitors fly into Newark or drive down the Turnpike, and that’s all they see. So I wanted to find out for myself what’s left of the garden state.”
…
But with the cities of New York and Philadelphia as neighbors, the need for housing soared and farms began to disappear after World War II, Harrison said.

For years, New Jersey’s southern counties — particularly Gloucester, Cumberland and Salem — stood their ground and kept farms from disappearing. It wasn’t until state highways 55 and 42 were built that the farmland of Washington Township was exposed to development, Harrison writes.

Since 1957, Washington Township’s 200 farms have shrunk to only two, while the population has skyrocketed from under 4,000 to today’s 50,000.

The problem, Harrison said, is that people need homes, developers need land to build them on, and when checks are waved in front of the farmers’ faces, they are faced with a tough question.

“It’s not that farmers are trying to get out - it’s a good business. But lots of farmers are finding out that their kids aren’t terribly interested in carrying on the family farming business,” Harrison said, adding that Duffield’s is one of the lucky, and the few.

GSMLS - http://www.gsmls.com
(Garden State Multiple Listing Service)
Single Family Homes, Condo, Coop
(Bergen, Essex, Hudson, Morris, Passaic, Somerset, Sussex, Union, Warren Counties)

10/11 - 19,084
10/18 - 19,035 (0.3% Decrease)

NJMLS - http://www.njmls.com
(New Jersey Multiple Listing Service)
Single Family Homes, Condo, Coop
(Bergen, Essex, Hudson, Passaic Counties)

10/11 - 9,261
10/18 - 9,183 (0.9% Decrease)

MLSGuide - http://www.mlsguide.com
Single Family Homes, Condo, Coop
(Hudson County)

10/11 - 2,787
10/18 - 2,804 (0.6% Increase)

From the Courier News:

Hundreds of housing units set for landfill

The Landfill Redevelopment Committee will present its vision for the former borough landfill to borough officials at 10 a.m. Saturday in the Somerset County Court House jurors room.

The committee’s plan calls for about 1,200 housing units, 80 acres of open space, 45,000 square feet of retail space, a 25,000-square-foot inn and conference center, 25,000 square feet of office space, and considerable room for civic uses and a cinema or cultural center.

The plan has been developed during the last year as professional planners and volunteers in the borough met and invited the public to give input. Now, it’s ready to be presented to a joint meeting of the Borough Council and Planning Board.

Colin Driver, the borough’s director of economic development, said the exact details of the plan, presented last week at a Stakeholder Committee meeting, are subject to change.

The 160 acres of the Landfill Redevelopment Site include the old landfill along Route 206, NJ Transit property and other adjacent land.

One of the highlights of the plan is a mixed-use transportation building near the train station, Driver said.
…
Driver said the current plans for housing on the site would bring in about 1,900 new residents to the borough, including 80 children, based on data from similar housing developments. There would be no restriction on families with children, he said.

From the New York Times:

Orange Gets Creative

FIVE years in the making, the plan to create an arts district in a section of Orange where empty factory buildings now predominate has been refined and readied to go, with construction set to start in early January.

A total of 66 live-work lofts for artists, 8 arts-related retail stores, 17 artist studios and spaces for 9 arts programs are planned for what will be known as the Valley Arts District. Some new construction is planned, but the first large project will involve reconstruction of the seven-story Berg Hat Factory building, which has been empty for decades.

The rehabilitated Berg will house 29 loft condominiums, the 17 artist studios and 3 program spaces for printmaking, dance or recording studios, gallery space or the like.

The core of the Valley Arts District is a five-block stretch of Jefferson Street that cuts across the border into West Orange. Most of the district, however, is set within a city of Orange redevelopment district, and all plans have been developed in concert with Orange city officials, said Patrick Morrissy, the director of Hands, the nonprofit community development company that spearheaded the project and will be one of its three builders.

Hands secured state and federal grant money to help plan and develop the project — joining with the city in a promise to keep the spaces “permanently affordable.”

From the Montclair Times:

Township officials: Planners could start the eminent domain process

A nearly 110-year-old house at the corner of Orange Road and Irving Street could be on its way to becoming municipal property after township officials’ attempts to get the homeowner to repair it failed.

At its meeting this coming Monday, the Planning Board will consider advising the Township Council to declare the vacant house at 249 Orange Road an area in need of redevelopment.

Mayor Ed Remsen said many times that designation simply pressures the owner into either rehabilitating the property or selling it to someone who will.

“Sometimes this is the only thing folks understand,” said the mayor. “It begins a process that very often” gets the owner to take action, he said.

But if it provokes no response, the mayor said the council can then order a property valuation, seize the land using eminent domain and pay the owner fair market value.
…
“(Washington) is just not paying attention to the property,” Kadus said. Although he is paying his taxes, investigators found.

Kadus said the Planning Department will try notifying the homeowner via the bank about next week’s hearing — scheduled for 7:30 p.m. in the Council Chamber at the Municipal Complex — so perhaps he will attend and discuss his plans for the property.

GSMLS - http://www.gsmls.com
(Garden State Multiple Listing Service)
Single Family Homes, Condo, Coop
(Bergen, Essex, Hudson, Morris, Passaic, Somerset, Sussex, Union, Warren Counties)

9/27 - 19,108
10/11 - 19,084 (0.1% Decrease)

NJMLS - http://www.njmls.com
(New Jersey Multiple Listing Service)
Single Family Homes, Condo, Coop
(Bergen, Essex, Hudson, Passaic Counties)

9/27 - 9,270
10/11 - 9,261 (Flat)

MLSGuide - http://www.mlsguide.com
Single Family Homes, Condo, Coop
(Hudson County)

9/27 - 2,774
10/11 - 2,787 (Flat)

(please note these are two week changes)

Preliminary September sales data for Northern New Jersey is in..

The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 1000, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.

(click to enlarge)

The second graph is another view at the sales data for the first nine months of the year. Please note that this graph does cross at zero.

(click to enlarge)

The third graph displays only August sales, 2000 to 2006 YOY.

(click to enlarge)

The last graph displays YOY August sales, broken down by county.

(click to enlarge)

The numbers:

January
Average Sales (2003-2005): 2000
2005 Sales: 2013
2006 Sales: 1705
(Down 15.3% Year Over Year)

February
Average Sales (2003-2005): 1583
2005 Sales: 1578
2006 Sales: 1395
(Down 11.6% Year Over Year)

March
Average Sales (2003-2005): 2193
2005 Sales: 2256
2006 Sales: 2033
(Down 9.9% Year Over Year)

April
Average Sales (2003-2005): 2322
2005 Sales: 2383
2006 Sales: 1817
(Down 23.8% Year Over Year)

May
Average Sales (2003-2005): 2615
2005 Sales: 2725
2006 Sales: 2298
(Down 15.7% Year Over Year)

June
Average Sales (2003-2005): 3486
2005 Sales: 3682
2006 Sales: 2911
(Down 20.9% Year Over Year)

July
Average Sales (2003-2005): 3495
2005 Sales: 3338
2006 Sales: 2428
(Down 27.3% Year Over Year)

August
Average Sales (2003-2005): 3661
2005 Sales: 3668
2006 Sales: 2599
(Down 29.1% Year Over Year)

September
Average Sales (2003-2005): 2854
2005 Sales: 2655
2006 Sales: 1968
(Down 25.9% Year Over Year)

Caveat Emptor!
James (aka Grim)

From the Record:

New complex in Mahwah would blend shops, homes

A $200 million “lifestyle center” that could include a movie theater, 200 residences and a bevy of retail is being planned at the Sheraton Crossroads site in Mahwah.

The 100-acre plan is the latest idea for developing a swath of land wedged between the intersection of Routes 17 and 287 and the Ramapo River. The site, zoned for offices, has been eyed for development for at least a decade. But soon the Mahwah Council is expected to introduce an ordinance that will rezone the property to fit a very specific vision – that of a lifestyle center.
…
The proposal, by Crossroads Developers, calls for a Main Street-style area with concrete paver sidewalks, benches, tables and chairs, fountains, boutiques, restaurants and a movie theater. Only one store would be larger than 100,000 square feet. Most of the parking would be hidden behind the buildings.

The investment could mean another $2 million each year in taxes for the township. And it would give residents a place to shop without having to head south to Paramus or north to Woodbury Common, in Central Valley, N.Y. Twenty acres along the Ramapo River, which is on the southern end of the site, would be set aside for passive recreation such as a river walk.
…
That plan evolved into the new proposal, which mixes residences with high-end retailers in an open-air format.

The residences in the Crossroads development are planned to be no bigger than two bedrooms. Still, some worry that could strain the township’s already burdened schools. There also are concerns over increased pressure placed on the police and fire departments.

From the Jersey Journal:

Sky’s the limit in Jersey City
By JARRETT RENSHAW

Jersey City is quickly becoming Vertical City.

Already home to the state’s four tallest buildings, by decade’s end it could have the 10 tallest, further transforming nearly everything Downtown east of Grove Street into Manhattan-style high-rises, supported by an extensive public transportation system.

The city’s Planning Board is expected to consider a 775-foot residential tower, dubbed the Metropolitan, on land just south of the Newport Mall, at the site the Pep Boys Automotive store.

If completed, the $200 million Metropolitan would become the state’s second tallest building, after the 781-foot Goldman Sachs building on Hudson Street. The tower is one of several that may be built in the 18-acre shopping area currently anchored by a Shop-Rite supermarket and a BJ’s Wholesale Club.
…
It was just months ago that Donald Trump made his splash on the Gold Coast, announcing plans for Trump Plaza Jersey City, boasting that its two towers would be the tallest residential buildings in the state.

But with the announcement of the Metropolitan, Trump can no longer make that claim.

Jersey City has the four tallest buildings and another, Harborside Plaza 5, that is tied with Borgota in Atlantic City as the fifth. A number of projects slated for construction during the next several years will move into the state’s top 10 list.

They include 111 First St., Trump Towers, the Metropolitan and 77 Hudson St.

“It is really a reflection of the pressure put on Jersey City to become vertical,” said Bob Antonicello, the executive director of the Jersey City Redevelopment Agency.