New Jersey Real Estate Report

One step closer to settlement, at a price

2012-02-07T09:27:24Z

From HousingWire:

More than 40 states to sign foreclosure settlement

More than 40 states will sign a settlement with the top-five mortgage servicers over alleged foreclosure abuses that arose more than one year ago, Iowa Attorney General Tom Miller said in a statement Monday night.

Last week, Miller extended the deadline to Monday for states wanting to sign the deal with Bank of America ($7.97 0.13%), Wells Fargo ($30.20 -0.43%), Citigroup ($33.30 -0.24%), JPMorgan Chase ($38.14 -0.14%) and Ally Financial ($22.95 0.03%).

“The sign-on deadline for the proposed joint state-federal mortgage servicing settlement passed Monday with more than 40 states signing on,” Miller said “This enables us to move forward into the very final stages of remaining work.Federal and state officials, as well as representatives from the banks, continue to address matters that they must complete before finalizing any settlement.”

Throughout the day, those representing states hardest hit by the foreclosure crisis signaled they are still working on the details of the settlement.

“We’re closer,” a spokesperson for California AG Kamala Harris said.

“My office is continuing to review the intricate draft settlement terms and advocating for improvements to address Nevada’s needs,” said Nevada AG Catherine Cortez Masto in a statement. “Receipt of important state specific information is necessary to make our determination and my office is still in discussions regarding that information.”

Florida AG Pam Bondi said she “remains involved in the settlement discussions in order to reach the best resolution for Floridians and all Americans.” She signed a joint letter with other republican AGs in 2010, saying a settlement that would involve principal reduction creates a moral hazard and lead to more strategic defaults.
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An official in one AG office said an announcement is expected at the end of this week at the earliest.

From Bloomberg:

California, N.Y. Are Among Fewer Than 10 Mortgage Deal Holdouts

California and New York’s attorneys general haven’t signed on to a proposed settlement with five banks over foreclosure practices that has won the support of more than 40 states.

California’s Kamala Harris and New York’s Eric Schneiderman, who have been some of the most outspoken in pushing for changes to the deal, are among those who hadn’t joined the agreement as of yesterday’s deadline for states to decide. More than 40 states signed on to the accord, according to Iowa Attorney General Tom Miller, who is helping to lead talks with the banks.

“Adding more numbers probably improves the political dimension of the settlement from the standpoint of the attorneys general,” said Ken Scott, a Stanford University law professor. “If you can say there were only a handful of diehards that didn’t sign on, that gives you some political protection.”
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Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last-minute demand that New York drop claims filed against them Feb. 3 as a condition of the settlement, a person familiar with the matter said.

The push by the three banks raised a new obstacle in getting Schneiderman’s support for the deal, said the person. New York, along with California, Nevada and Delaware said late yesterday they hadn’t signed on to the settlement.

New York sued Bank of America, JPMorgan and Wells Fargo in state court in Brooklyn, saying their use of a mortgage database known as MERS led to improper foreclosures. Schneiderman said the banks’ use of the Mortgage Electronic Registration Systems database misled homeowners, undermined foreclosure proceedings and created uncertainty about ownership interests in properties.

Foreclosure settlement to finally be reached today?

2012-02-06T11:25:43Z

From Bloomberg:

Foreclosure Deal Deadline Arrives as States Must Choose Whether to Sign On

States that balked at bank liability releases in a proposed $25 billion nationwide settlement over foreclosure practices must decide by today whether its mortgage relief and reforms are worth the legal claims they’ll give up.

While some states have already announced their intention to sign the deal, others including California Attorney General Kamala Harris have yet to publicly commit in part due to terms that protect the banks from future litigation. Without Harris, the deal’s value will drop by several billion dollars, according to a person familiar with the matter.

The agreement is “beyond fixing,” said George Goehl, executive director of National People’s Action, a network of community organizations which advocates for fair lending and affordable housing.

“People are very disappointed in what this is going to be both in terms of dollars and release of claims,” Goehl said in a telephone interview. “We’re giving away the store.”

Most states don’t have the resources to go it alone and fight the banks in court, said James Tierney, director of Columbia Law School’s National State Attorneys General Program. States such as California that may reject the agreement must decide whether the time and money needed to fight for a better deal is worth it, given that the settlement provides immediate relief for homeowners, he said.

“How long does it take and how much better?” Tierney said of a state pursuing its own deal. “Is it so much better that it warrants the cost and delay?”
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Today’s deadline, extended by the parties from Feb. 3, comes almost 16 months after all 50 states announced they were investigating bank foreclosure practices following disclosures that faulty documents were being used to seize homes.

CoreLogic: December Home Prices

2012-02-03T11:15:09Z

From CoreLogic (no link):

CoreLogic® Home Price Index Shows Fifth Consecutive Month-Over-Month Decline

Home prices in the U.S. decreased 1.4 percent on a month-over-month basis, the fifth consecutive monthly decline. However, the HPI excluding distressed sales posted its first month-over-month gain since July 2011, rising 0.2 percent. The CoreLogic HPI shows that, including distressed sales, home prices in the U.S. decreased 4.7 percent in 2011 compared with December 2010. This year-end report shows that home prices continued the trend of year-end decreases—this is the fifth consecutive year with a decrease in the HPI. The HPI excluding distressed sales shows that home prices decreased by 0.9 percent in 2011, giving an indication of the impact of distressed sales on home prices in 2011.

Highlights as of December 2011

Including distressed sales, the five states with the highest appreciation were: Montana (+4.4 percent), Vermont (+4.0 percent), South Dakota (+3.1 percent), Nebraska (+2.5 percent) and New York (+1.7 percent).

Including distressed sales, the five states with the greatest depreciation were: Illinois (-11.3 percent), Nevada (-10.6 percent), Georgia (-8.3 percent), Ohio (-7.7 percent), and Minnesota (-7.5 percent).

Excluding distressed sales, the five states with the highest appreciation were: Montana (+7.7 percent), South Dakota (+3.5 percent), Indiana (+3.3 percent), Alaska (+3.1 percent), and Massachusetts (+2.9 percent).

Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-9.7 percent), Minnesota (-5.2 percent), Arizona (-4.9 percent), Delaware (-4.2 percent) and Michigan (-3.5 percent).

“While overall prices declined by almost 5 percent in 2011, non-distressed prices showed only a small decrease. Until distressed sales in the market recede, we will see continued downward pressure on prices,” said Mark Fleming, chief economist for CoreLogic.

NJ contracts continue to post positive prints

2012-02-02T11:23:23Z

From the Otteau Group (no link):

Home Sales Up in December Making it 7 of the Last 8 Months

The New Jersey housing market continues to build momentum as it turned the corner into the new year. Combined purchase contracts for resales and new homes rose in December by 8% compared to one year ago which was the largest single monthly increase since June. That the rise in December, which is traditionally a slow period for home sales, was the largest of the year suggests a more robust spring selling season ahead.

Case Shiller: NY metro prices fall 2.3% in November

2012-02-01T11:22:45Z

From the Record:

Region’s home prices drop 2.3%

Home prices in the New York metropolitan area, including North Jersey, dropped 2.3 percent in November, compared with a year earlier, the Standard & Poor’s Case-Shiller index reported Tuesday. Nationally, prices dropped 3.7 percent.

Prices in the region have fallen 23 percent since the market peak in 2006, and are back to early 2004 levels. Nationally, prices have declined 33 percent since the peak, and are back to the levels of mid-2003.
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In Bergen County, the median price of a single-family home fell 8 percent, to a median $400,000 in November, while the number of sales dropped about 3 percent. In Passaic, prices dropped 8.4 percent, to a median $288,500, while the number of sales dropped 13.7 percent.

These numbers are from the N.J. and Garden State multiple listing services, and reflect the mix of properties sold during the month. Case-Shiller does not break down data by county, but its numbers are considered more accurate because it tracks the value of the same properties over time.
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“The trend is down, and there are few, if any, signs in the numbers that a turning point is close at hand.”

— David M. Blitzer, chairman of the index committee at Standard & Poor’s

“With the prospect of rising foreclosures — as the legal and administrative issues are resolved — we can expect the downward pressure on prices to increase in the coming months, despite historically low mortgage rates.”

— Patrick O’Keefe, an economist with J.H. Cohn in Roseland

“There’s been a substantial decline in prices in the New York metropolitan area, but that’s not quite enough to bring prices back in line with household income levels. By the summer of 2012, home prices in the area are expected to fall an additional 7.7 percent.”

— David Stiff, economist, Fiserv Inc.

Fed: NJ economy outpacing NYC

2012-01-31T11:22:02Z

From the Record:

NJs economy picks up as NYCs slows

As New York State’s economic activity has leveled off, New Jersey’s has picked up — and the state job market is stronger than the unemployment rate of 9 percent suggests, according to the Federal Reserve Bank of New York.

New Jersey’s economy has generally been less healthy than that of New York City and state since the recession ended. In July, the city’s jobless rate was 8.6 percent, and New York State’s was 8 percent, compared with 9.5 percent in New Jersey.

New Jersey’s growth was “quite robust” in the last three months of 2011, while New York State has seen only “minimal job gains” since August, William C. Dudley, the bank’s president, said at its quarterly briefing on Friday.

“In contrast, New Jersey’s economy, which was sluggish throughout 2010 and into the first half of 2011, has picked up noticeably,” he said.

The unemployment rate in New Jersey and New York City is the same — 9 percent for December — and New York State’s is 8 percent.

The bank president’s comments came a week after New Jersey released figures showing the state added 39,400 private-sector jobs in 2011, the largest annual increase since 2000. The state’s jobless rate still lags behind the national rate of 8.5 percent.

Jason Bram, an economist for the federal bank, said New Jersey’s unemployment rate would likely be lower, except for the strong influx of people into the state labor force.

“In New Jersey, it’s really much better than it would appear,” Bram said. “More people who weren’t in the labor force are looking for a job.”

People who had stopped looking for work are now more optimistic and are looking again, Bram said.

He said Bergen, Hudson and Passaic counties added jobs at a faster rate than the national employment increase of 0.7 percent from June to December last year. New York City also increased employment faster than the nation in that period, he said.

I think I can, I think I can

2012-01-30T11:27:20Z

From CNN/Money:

The housing recovery that wasn’t

Over the past few months, a spate of good news about the U.S. housing market has led some to think a recovery is finally on the horizon.

The evidence is compelling. It now costs almost as much to rent as buy. Since the housing bubble burst in 2006, home prices have fallen by 33% nationwide — more than they did during the Great Depression. Waves of foreclosures and tighter lending standards have helped drive a surge in rentals. And during the third quarter, the median monthly mortgage payment totaled $698 compared to the median monthly asking rent of $700, according to Capital Economics, citing data from the National Association of Realtors and the Census Bureau. What’s more, the cost of borrowing has fallen to record lows, with interest rates for 30-year fixed rate mortgages hovering around 4%.
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That optimism is well-deserved, right? Not exactly.

Since the housing market imploded, analysts have predicted year after year that prices might at long last bottom out. Will it finally happen this year? Perhaps next? Bottoming necessarily out precedes turning the corner — and until that happens optimists should be cautious. Economists widely cite the short-term obstacles weighing down prices. These factors range from high unemployment and household debt to the so-called “shadow inventory,” or all the properties that have yet to come into the market because of pending foreclosures or skittish homeowners delaying sales until prices improve.

These threats are very real. But there’s a bigger threat — and drag on any future recovery — that doesn’t get nearly the attention it deserves: rising interest rates.

Admittedly, rates probably won’t increase any time soon. In a sign that the economy is recovering slower than expected, the Federal Reserve announced last week that it would keep its record-low rate for another three years. The central bank has already kept its key rate at nearly zero for three years. And last summer, officials launched “operation twist,” whereby the central bank bought $400 billion in long-term bonds in hopes to give the economy a boost and, more specifically, lower the cost of taking out home mortgages.

Problem is, interest rates can’t stay low forever. Eventually they’ll have to rise, which could very well drive home prices down since the cost of taking out a mortgage becomes more expensive. Even if rates rise slowly over several years, prices could either fall much further or, at best, stagnate. This is partly why the Fed has been so obsessed with keeping rates down. “The market will look like a frog in boiling water once rates rise,” says Lance Roberts, CEO of Streettalk Advisors, a Houston, Texas-based investment advisory company. Roberts, who also contributes to Advisor Perspectives, which publishes newsletters and online articles focused on investment strategies, laid out his case in a recent post.

At some point, interest rates will start rising back toward the long-term median of 8.9% from the current 4%. Depending when and how quickly, the jump would make homes much less affordable for the average American family. Roberts notes that, back in 1968, U.S. households on average spent 7% of their real disposable income on their mortgage payment with a down payment typically at 20%. Assuming the same down payment, that share has more than doubled to 15% today or likely higher since many mortgages approved over the last decade required little or no money down. “With real disposable incomes stagnant as inflation pressures rise, that 15% of the budget is becoming much harder to sustain,” he says.
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So while the housing market may eventually overcome the immediate bumps of foreclosures, high unemployment and the like, real optimists should be looking at the direction of interest rates before they get their hopes up.

Which gets cut: Income taxes or property taxes?

2012-01-27T11:16:58Z

From Bloomberg:

Christie Pushes Income-Tax Cut as Democrats Eye Property Levies

Governor Chris Christie told a group of business leaders that Democrats in the Legislature may jeopardize New Jersey’s economic recovery by putting social issues ahead of job-creation and tax cuts.
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“They want to play around with social issues to try and make people look bad,” Christie said. “Here’s what the public is going to care about: Are they working? Are they working in a job that pays well and provides their family with health insurance?”

Christie’s remarks echoed his Jan. 17 State of the State speech to the Legislature and a subsequent series of public meetings in which he pressed his case for hastening what he calls “the Jersey comeback” by cutting taxes. The Washington- based Tax Foundation yesterday ranked New Jersey last among U.S. states in terms of business climate.
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Assembly Majority Leader Louis Greenwald, a Cherry Hill Democrat, said his party is weighing “a couple of ideas” to lower pressure from New Jersey’s highest-in-the-nation property taxes. He declined to give specifics following Christie’s speech, while saying any relief would be both immediate and long-term.
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Christie took office in 2010 pledging to cut taxes as the state’s economic conditions improved. He said his proposed reduction would spur the state’s economy, which he added should be the top issue in Trenton.

“Do they care about the stuff we’ve been talking about for the past week?” Christie said, referring to state residents. “What they care about is whether their husband or wife will have a job, will they have money to put food on the table?”

The governor has so far declined to say how he’d make up for the revenue if taxes are cut. Democrats have said a 10 percent rollback may mean as much as a $1.1 billion decline in state receipts.
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“People care about civil rights, and they also care about the middle-class property tax relief and job creation plans this governor vetoed as he zealously protects and advocates for tax cuts for the rich,” Tom Hester, a spokesman for Assembly Speaker Sheila Oliver, said last night. “His priorities are so out of step with working class New Jersey.”

Oliver, a Democrat from East Orange, has said that an analysis by her office showed a family with a $50,000 annual income would pay $80 less in taxes under Christie’s plan, while someone earning $1 million would save $7,200.

Where have all the foreclosures gone?

2012-01-26T11:27:17Z

From the Record:

One in 12 N.J. home sales was a foreclosure in third quarter

About one in every 12 New Jersey home sales in the third quarter of 2011 involved foreclosed properties — a steep drop from the previous year, according to RealtyTrac, a California company that follows the foreclosure market.

Nationally, foreclosure sales made up 20 percent of sales in the third quarter, down from 30 percent in the same period a year earlier.

Lenders have sharply pulled back on foreclosure activity since fall 2010, when reports arose that lenders’ representatives were “robo-signing” affidavits and other documents — signing them so quickly they couldn’t be verified. Lenders are now trying to show courts in New Jersey and other states that they are not cutting corners in foreclosures. And state attorneys general are close to a settlement with lenders over their foreclosure practices.

“Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales,” said Brandon Moore, chief executive officer of RealtyTrac. “In 2005 and 2006, foreclosure sales consistently accounted for less than 5 percent of all sales nationwide.”
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Foreclosed properties typically sell at a steep discount, which tends to pull down the prices of competing properties. In New Jersey, foreclosed properties sold for an average of $208,801 in the third quarter, a 38 percent discount to regular properties. Nationally, foreclosed properties sold for an average $165,322, a 34 percent discount, RealtyTrac said.

“The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties,” Moore said.

What part does hope play in economic forecasting?

2012-01-25T11:25:21Z

From HousingWire:

RealtyTrac: Several economists missed the mark with 2011 projections

Every new year brings predictions on how the economy is expected to fare, especially in terms of home sales, prices and gross domestic product growth.

But with 2012 still in its infancy, RealtyTrac took a different approach this week by revisiting economists who released positive forecasts in January 2011.

In hindsight, the economists told the real estate data firm they were correct in stating the nation would avoid a double-dip recession in 2011. But they failed when making forecasts on housing and were off when projecting a home-price bottom, larger increases in GDP and improving consumer confidence.

“As housing goes, it shaped up pretty much as we expected. Prices are a little softer than expected. I thought price declines would stop at end of the year (2010), but they haven’t,” said Christopher Thornberg with Principal Beacon Economics. “We said no second recession. No double dip. We’re being proven dead on that call.”
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Mark Zandi, chief economist with Moody’s Analytics, also said his 2011 home price forecast was off.

“The housing market didn’t exactly hit bottom in 2011 as I had expected,” Zandi said. “Home sales and housing construction have likely hit bottom, but house prices will likely decline a bit more in 2012. All in all, housing and the economy were a bit weaker this year than I had hoped for.”
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In the end, 2011 was a flat year, said Jay Butler, professor emeritus with the W.P. Carey School of Business at Arizona State University.

“I was a little more optimistic than it turned out to be. It was pretty much a flat year,” Butler said. “People moved their expectations out even further to 2014-2015 until things get much better.”

He also said property is going up in some places and foreclosure prices edged higher.

“The motivation is the deal,” according to the professor. “Everybody is looking for inexpensive homes. Investors are still dominating the market. The problem is there’s no real clear trends. It’s like the stock market.”

The economists expect distressed properties to remain a large part of the housing inventory.

“I expect the share to rise from closer to one-third (of all inventory ) in 2011 to as high as 40% early next year,” Zandi said. “The number of first mortgage loans in the foreclosure pipeline remains very high, but is down a bit from where it was a year ago.” He added, “Once the state AG suit is settled, this inventory should begin to decline in earnest. It is very encouraging that early state delinquency (less than 60 days) is low and falling quickly.”

Mortgage settlement near?

2012-01-24T11:01:37Z

From Bloomberg:

Bank Foreclosure Deal Reviewed by States as Delaware Drops Out

State attorneys general reviewed a proposed settlement with banks over foreclosure and mortgage- servicing practices that negotiators are pressing to complete as Delaware said it would reject a deal said to total $25 billion.

Representatives of Democratic attorney general offices met at a Chicago hotel yesterday to discuss the negotiated terms and ask questions, said Iowa Attorney General Tom Miller. Miller, who is helping to lead talks, said an agreement with the banks is getting closer.

“There are still issues to be worked out,” Miller said in an interview. “This is one step along the way, and it was a very productive day.”

State and federal officials have been negotiating a settlement with the five largest mortgage servicers — Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. (C), Wells Fargo & Co. (WFC) and Ally Financial Inc (ALLY). Talks were triggered by disclosures that the companies were using faulty documents in seizing homes.

The $25 billion deal would fund loan principal writedowns for homeowners and provide refinancings, a person familiar with the matter said before yesterday’s meeting. The proposal also sets requirements for how the banks conduct home foreclosures. The settlement would drop to $19 billion if California Attorney General Kamala Harris decides not to sign on, the person said.
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Delaware Attorney General Beau Biden won’t sign on to the proposed agreement as drafted, Delaware Deputy Attorney General Ian McConnel said in a phone interview. He declined to comment on the reason for Biden’s decision.

Biden has been among a group of attorneys general, including New York’s Eric Schneiderman and Harris in California, who have said any settlement shouldn’t protect banks from claims that haven’t been fully investigated, such as claims stemming from the packaging of mortgages into securities sold to investors.

From the NYT:

Political Push Moves a Deal on Mortgages Inches Closer

About one million homeowners facing foreclosure could have their mortgage burden cut by about $20,000 each as part of a long-awaited deal taking shape among state attorneys general, federal officials and the nation’s largest mortgage servicers.

But a final agreement remained out of reach Monday despite political pressure from the White House, which had been trying to have a deal in hand that President Obama could highlight in his State of the Union address Tuesday night.
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The agreement could be worth about $25 billion, state and federal officials with knowledge of the negotiations said, with up to $17 billion of that used to reduce principal for homeowners facing foreclosure. Another portion would be set aside for homeowners who have been the victim of improper foreclosure practices, with about 750,000 families receiving about $1,800 each. But bank officials said Monday that the total amount of principal reduction and reimbursement would depend on how many states eventually sign on.

Why do we keep believing we can fix housing?

2012-01-23T10:54:45Z

From the WSJ:

Economists See Ways to Aid Housing Market

he underpinnings of a housing recovery are hiding in plain sight: sharp price declines, low mortgage rates and rising rents have made owning more affordable than renting in a growing number of markets.

Yet housing largely remains in a funk. The prospect of continued price declines—led by the oversupply of foreclosed homes—has deterred some potential buyers, while others can’t qualify for loans.

Many economists, including some at the Federal Reserve, are urging President Barack Obama to do more, and the president will be “aggressive on housing” in his State of the Union address on Tuesday, his housing secretary said last week. The administration is already rebooting a refinancing initiative and putting finishing touches on programs to convert some foreclosed properties into rentals.

What more can be done? Economists cite three broad ideas that could advance a housing recovery.

First, local investors could play a greater role in spurring a recovery in their own communities. Some mom-and-pop investors have begun to buy up excess housing stock and rent it out.
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Second, policy makers could restore clarity to lending by finalizing a clutch of pending regulations. The government’s extraordinary steps to rescue Fannie and Freddie helped prevent a cataclysmic shock but it has made no real movement to overhaul the companies and the nation’s broader housing-finance machinery.
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Third, a growing number of economists are warning that the overhang of debt in some of the most distressed housing markets will linger for years, particularly if more borrowers default. They say mortgage investors and banks should consider reducing debt for more troubled homeowners.
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Mustering the political will to take any of these three steps wouldn’t be easy. Given the state of the market, “there isn’t a solution which will make everyone love you and cost no money,” Mr. Ranieri says.

Indeed, no single idea will fix all of housing’s problems. Many involve taking on more risk or rewarding bad behavior.

Après-ski (or sled) open discussion

2012-01-21T13:18:17Z

Some weekend gossip, from the Real Deal blog:

NBA veteran suffers big loss on NJ condo sale

Atlanta Hawks center Jason Collins sold his North Bergen condo — fully stocked with electronics and furniture — at a 58 percent loss this week, according to New Jersey Multiple Listing Service data.

Collins sold the 2,400-square-foot duplex penthouse he owns in the Mirabelle on the Hudson, at 8125 River Road, for $700,000 — exactly $1 million less than he paid for it in 2005, when it was a new development. He bought it when played for the New Jersey Nets, but has since signed with the Atlanta Hawks and settled on a home in that area.

“The real estate bubble hit everyone, [Collins] included,” said Joshua Baris, the Coldwell Banker agent who listed the property. “People made decisions based on the market at the time, and he obviously took a big loss, but he handled it gracefully.”

The Mirabelle is home to several other celebrities, and the rapper and reality TV star Ice-T lives two units down, according to a source with knowledge of the building.

Collins commissioned Baris through a mutual acquaintance, and Baris said it was “awkward” to tell the 7-footer what he realistically thought the apartment would sell for. Baris listed it in June for $788,000.

“It was priced like a short sale. But for him to hold on to a property that wasn’t going to increase anytime soon was a liability,” Baris said. “So he cut his losses.”
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“My clients took advantage of the current market and received a great deal,” said Gershon Adjaye, the Keller Williams NYC agent who represented the buyer. “All the furnishings and electronics were included. A ‘pack-a-suitcase-and-move-in’ style purchase.” Adjaye, who has licenses in New York and New Jersey, would not disclose the buyer’s identity.

NJ unemployment ticks down to 9 in December

2012-01-20T03:27:02Z

From New Jersey Newsroom:

N.J. jobless rate drops to 9%, lowest since May 2009

New Jersey’s unemployment rate in December dropped 0.1 percent to 9 percent, the lowest jobless rate in the state since May 2009, 31 months ago.

And while the state’s unemployment rate has declined in four of the last five months, that is not welcome news to the 7,200 New Jerseyans who lost their jobs in the private sector. Another 7,300 people found work, including 2,400 who obtained public employment, mainly in municipal and county governments.

Job losses occurred in construction 2,800, manufacturing 200, trade, transportation and utilities 4,100, and leisure and hospitality 100. Job gains were made in financial activities 1,800, professional and business services 1,500, other services 1,300, and education and health services 300.

The number of New Jerseyans who had jobs at the end of last month was 3,881,100. Another 410,700 are unemployed.

“The numbers show that 2011 was the best year for private sector job growth since the year 2000,” state Chief Economist Charles Steindel said. “We still have a long way to go to get back close to full employment, but it’s evident we are going in the right direction.”

From the Record:

NJ adds 400 jobs in December

New Jersey added just 400 jobs in December and unemployment fell slightly in a weak finish to a year in which the state added a relatively healthy 39,400 private sector jobs.

The state lost 2,000 private sector jobs and added 2,400 government jobs, according to the monthly jobs report by the Department of Labor and Workforce Development.

Unemployment, fell from 9.1 percent to 9 percent, leaving it still above the national rate of 8.5 percent.

For the year, the state added a total of 36,400 jobs, losing 3,000 government positions.
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The report also revised downwards the previously released figures for November, reporting 10,000 jobs added, instead of 10,300.

I’d like a tax cut, but can we afford it?

2012-01-19T11:23:57Z

From the APP:

Gov. Christie takes rosy look at state revenues

By calling for a 10 percent income tax cut, Gov. Chris Christie must believe boom times are coming to state finances.

Because with the scheduled increases for pension payments and transportation funding, it will take tax revenue jumps of 4 percent or 5 percent a year — or smaller increases combined with further state budget cuts — to pay for the proposed tax cut that would eventually reach some $1.2 billion or more.

It was hard for most analysts and experts to see that scenario on Wednesday as the state reported that tax collections for the current budget were $325.7 million, or 3.2 percent, under the administration’s own expectations.

Meanwhile, New Jersey is required by law, under reforms Christie enacted, to pay $484 million toward its pension system by June 30, and then dramatically increase that contribution to $1 billion in the next fiscal year and $5 billion by fiscal year 2016.

“The governor set out a laudable goal of reducing the tax burden, but I would caution that we do it in a prudent way,” said Raphael J. Caprio, a professor of public administration at Rutgers University who was part of a group that issued a dire report on state finances last year.

“As we phase in tax cuts, we will be phasing in pension liabilities and other obligations. We need to careful of undermining one at the expense of the other,” Caprio said.

In addition to pension costs, the state plans to spend $8 billion, through 2016, for the Transportation Trust Fund, which pays for large-scale bridge and road repairs, new trains and rail, and other major projects.
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Private estimates Wednesday pegged the Christie tax cut as a $150 million cost to the upcoming budget, then grow to $350 million in fiscal 2014 and $950 million in fiscal 2015 before being fully implemented at $1.2 billion a year later.