A manufacturing mecca again?

From the Star Ledger:

How manufacturing jobs will come back to N.J.

Is New Jersey’s manufacturing era forever behind us?

Are the days when ceramics, glove molds, sinks and legendary Lenox china poured out of Trenton’s factories gone for good? When textiles, firearms and silk helped make Paterson a teeming metropolis? When naval submarines roared off assembly lines day and night in Elizabeth?

Not according to members of a new “manufacturing caucus.”

A bipartisan panel of state legislators is looking to technology to inject new life into what was once a defining portion of the Garden State’s economy – and still is a force to be reckoned with.

During the last century, half the state’s jobs were in manufacturing. And despite a decline over the last decades, the industry is still bringing in $40 billion, employing some 360,000 people in more than 10,000 companies.

The fledgling caucus believes those numbers can and should be even higher. And one way to start, the lawmakers suggest, is by ramping up the state’s vocational-technical training.

While she welcomed news of a possible new state bond issue to provide for more vo-tech learning, she also lamented the fact that too many people continue to look down their noses at those who pursue this path, rather than opting for a college-prep education.

“Truth be told, there is still a stigma,” Savage acknowledged.

And yet, as another meeting speaker pointed out, manufacturing jobs offer an average annual salary of more than $90,000 – way better than the state’s median household income.

That’s reassuring news in a state that’s still struggling to shake off the effects of the Recession of 2008.

Shoring up the state’s training programs is just one strategy to make manufacturing king again. Transportation infrastructure also is a big component, as is a penetrating look at both regulations and tax structures.

Posted in Economics, Employment, New Jersey Real Estate, Politics | 110 Comments

Otteau September Update

From Otteau Group:

September MarketNEWS

After declining by 7% in April, home purchase contracts in New Jersey have increased for four consecutive months. In August, the number of purchase contracts rose by 3% compared to the same month last year. Considering the 18% increase one year ago in July of 2016, home sales have increased at a compounded rate of 22% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of August since 2005, signaling high demand. Overall, home sales have increased in New Jersey by 6% y-t-d.

While the number of home sales has increased across all price ranges this year, the largest gain has occurred for homes priced over $600,000, rising by 9%, while homes priced below $400,000-$599,999 have seen the smallest increases. It’s important to note that home sales in excess of $2.5-Million are increasing for the first time in more than a decade. The gains for more expensive homes is attributable to the continuing economic expansion which is causing greater confidence among higher income households.

Shifting to the supply side of the equation, the supply of homes being offered for sale remains constricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has declined by more than 6,500 (-13%) compared to one year ago. This is also about 30,000 (-41%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.1 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 4.9 months.

Currently, the majority (95%) of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson County is presently experiencing the strongest market conditions in the state with just 2.9 months of supply, followed by Middlesex, Essex, Union, Monmouth, Burlington, Bergen, Somerset, Mercer and Passaic Counties, which all have fewer than 4.0 months of supply. The counties with the largest amount of unsold inventory (6 months or greater) are concentrated in the southern portion of the state including Atlantic (6.8), Cape May (7.0), Cumberland (7.6) and Salem (8.3), however, these counties are also beginning to exhibit strengthening conditions.

Posted in Economics, New Jersey Real Estate | 53 Comments

NJ’s “middle class” about to be slaughtered

From the APP:

Trump tax plan kills key deductions, wallops NJ homeowners

New Jersey taxpayers would lose key deductions under a proposal unveiled this week by President Donald Trump: property taxes and state income taxes, experts said.

The tax reform plan would hit New Jerseyans hard, they said, forcing them to give up rare benefits they received for living in a high-tax state.

“That will really sting New Jersey residents,” said Anthony Nitti, a tax partner with WithumSmith+Brown.

Trump’s tax reform plan is designed to improve economic growth through a simpler system that includes fewer tax brackets and lower corporate taxes.

It’s a bid to overhaul the U.S. tax system for the first time since 1986 – a task that seems every bit as complicated as Congress’ failed attempt to repeal the Affordable Care Act, commonly known as Obamacare.

The proposal already has run into opposition, particularly in New Jersey. The state’s real estate lobby warned that eliminating the property tax deduction would cause home values to plummet as much as 10 percent.

“Right now there’s kind of a basket to what goes into the affordability (of homeownership), and unfortunately in New Jersey we have the dubious honor of (having) the highest real estate tax in the country,” said Bob Oppenheimer, president of the New Jersey Association of Realtors.

“That would certainly put ice water on homeownership versus renting, and actually give … New Jersey a clear cut edge to renting.”

How it shakes out, though, isn’t clear. Trump has yet to provide details on what incomes would fall into what tax brackets.

“They want to lower taxes for the middle class, but nobody has said what the middle class is,” said Dawn Greenberg, tax principal at Cowan Gunteski & Co. in Toms River.

With the elimination of all but two itemized deductions, though, some New Jersey taxpayers could have to carry a heavier tax burden for the nation.

Posted in New Jersey Real Estate, Politics, Property Taxes | 141 Comments

July home sales beat expectations

From CNBC:

Case-Shiller home price index rises 5.9%, beating expectations

The S&P CoreLogic Case-Shiller home price index rose 5.9 percent in July compared a year ago, better than the 5.7 percent expected by economists polled by Reuters.

The rise was also higher than June’s 5.8 percent increase.

David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said consumers were the key driver to the current economic expansion.

Blitzer said recent gains in home prices have largely come from the Pacific Northwest. Seasonally adjusted, 12 of the 20 cities in the composite reported price increases in July.

Growth in the 20-city composite groups was up 5.8 percent, compared with June’s 5.6 percent rise.

Posted in Economics, Housing Recovery, National Real Estate | 123 Comments

Good time to buy, but not gunna.

From HousingWire:

NAR: Home sales may be falling, but housing sentiment is on the rise

In four of the past five months, including the most recent report in August, showed existing home sales continue to fall, however this is not due to a lack of confidence from consumers about home buying and selling.

The third quarter brought a rebound in consumer sentiment on the housing market, according to the Housing Opportunities and Market Experience survey from the National Association of Realtors.

After dropping to just 52% of renters in the second quarter, the share of renters who believe now is a good time to buy increased to 62% in the third quarter, the survey found. This is also up from 60% of renters in the third quarter last year.

Overall, sentiment is the highest among current homeowners, households with higher incomes and those living in the affordable Midwest and South regions. The share of homeowners who said now is a good time to sell increased to 80%, a new survey high. This is up form 75% last quarter and from 67% last year.

The survey showed despite these gains in confidence, Americans continue to struggle in the competitive housing market. About two-thirds of households responded that saving for a down payment is challenging and about half of renters said they expect to pay more in rent next year.

The number of households who said the economy is improving increased to 57% in the third quarter, up from 54% last quarter and 48% last year. The positive outlook was amplified among those living in suburban areas and those with incomes above $50,000 per year.

However, once again, the reality is that most non-homeowners do not plan on buying a home anytime soon, despite their confidence that now is a good time to buy. NAR’s survey showed over half of renters believe their rent will increase within the next year.

However, they also answered that if their rent does increase, 42% will still resign their lease or move to a cheaper rental. Only 15% of renters answered that they would consider buying a home.

Posted in Demographics, Economics, National Real Estate | 165 Comments

Boomers, not millennials, are the problem.

From CNBC:

Baby Boomers resist selling homes, helping to keep prices high and inventory low: Zillow’s Gudell

If you’re looking for a reason the housing market is so tight, perhaps the Baby Boomers are to blame.

For generations, after the kids grew up and moved out, many parents put the big family house up for sale. According to one market watcher, that doesn’t appear to be happening nearly as often nowadays.

“The traditional ’empty nest’ storyline where parents would be downsizing is not happening,” Svenja Gudell, Zillow’s chief economist told CNBC’s “On the Money” in an interview. Research from the real estate data company found the inventory of homes for sale is the lowest in four years.

Gudell said a contributing factor to fewer homes on the market is more baby boomers are staying put in their “home sweet home,” rather than downsizing.

“Baby Boomers have to live somewhere, “Gudell said, “but they are having a hard time downsizing and finding that available inventory. And so it’s tough for people to move into their homes and that is causing that disruption in the normal ‘move-up’ market.”

As a result, Boomers aren’t able to find a home that’s smaller and cheaper than the one they’re in “that would entice them to move,” Gudell explained, “so for many it does not make sense to sell.”

According to U.S. Census data, there were 83.1 million millennials born between 1982 and 2000. Meanwhile, the number of baby boomers, those born between 1946 and 1964, is 75.4 million.

When it comes to housing, the two groups are on a collision course.

“What it comes down to is we have two very large generations kind of butting heads,” Gudell told CNBC. “…You have millennials that are just entering the market, that are even larger of a generation than the baby boomers, and you really just need more homes.”

“We’re currently dealing with ‘1994-level’ inventory, despite having 63 million more people in the country,” she said. “So at this point we have to build some more homes in order to accommodate all those people.”

If the demand for affordable starter homes is so high, why aren’t those homes being constructed?

“I think a lot of builders will tell you that they’re having a hard time meeting that price point right now given how expensive labor, lumber, and simply regulation costs are,” Gudell stated.

Posted in Demographics, Economics, National Real Estate, New Development | 78 Comments

Newark is a surprisingly good fit

From Yahoo Finance:

Why Newark could be perfect for Amazon’s new headquarters

New York, San Francisco and Denver have all been heralded as the best city for Amazon’s new second headquarters, HQ2.

But what about Newark?

Yes, the city in New Jersey. The state, like many others trying to land the estimated 50,000 new jobs and $5 billion in investment, plans to submit a bid by the Oct. 19 deadline. And Newark is the state’s best chance of winning. If you peruse Amazon’s eight-page request for proposals, Newark meets all the minimum criteria outlined.

New Jersey’s largest city is accessible to tech talent (it’s home to New Jersey Institute of Technology, abuts Rutgers University, is about 60 minutes away from Princeton University, and is a brief commute from New York City’s major academic institutions), has an airport and several other transit links (train lines, interstate highways and ports), and maybe most importantly, has affordable shovel-ready sites for the eventual 8 million-square-foot, $5 billion complex that would rival Amazon’s Seattle headquarters.

“Newark has a world-class port and a depth of resources,” says Andrew Sidamon-Eristoff, former New Jersey state treasurer who wrote an opinion piece earlier this week touting Newark’s worthiness. “At the same time, it does not have the kinds of pricing pressures [real estate and living costs] that would be a barrier somewhere else.”

Amazon already has a foothold in Newark. In 2008, Amazon acquired Newark-based Audible, an online seller of audiobooks, for $300 million. It has since maintained the subsidiary’s headquarters there. In fact, Audible is redeveloping a historic church in the city for its new home.

And that’s just a fraction of Amazon’s presence in New Jersey. The company has taken more space there than in neighboring states New York or Connecticut. In the past five years, Amazon has built more than 5 million square feet of warehousing/distribution space and has 13,000 full-time employees in New Jersey, according to a report by Moody’s Investors Services.

While Newark is located north of these Amazon facilities, it could be an ideal location because it is going through somewhat of a revitalization. (In the past, Newark has been plagued by crime, poverty and high unemployment.) Some $2 billion worth of real estate development, including 2,000 units of housing, is planned or underway in the city.

Among those projects is developer Lotus Equity Group’s redevelopment of the Bears & Eagles Riverfront Stadium, which will be transformed into an 8-acre mixed-use project with office and housing.

Posted in Economics, New Development, New Jersey Real Estate | 119 Comments

Choking the market

From MarketWatch:

Existing-home sales fall in August for the fourth time in five months

Existing-home sales in August dropped for the fourth time in five months as real-estate agents continue to blame a lack of available homes to buy.

The National Association of Realtors said existing-home sales fell 1.7% to a seasonally adjusted rate of 5.35 million, the worst level in 12 months.

Economists polled by MarketWatch expected a 5.44 million pace.

Total housing inventory at the end of August declined 2.1% to 1.88 million existing homes available for sale, and is now 6.5% lower than a year ago.

That limited inventory has helped stoke prices — the median existing-home price in August was $253,500, up 5.6%.

Posted in Housing Bubble, Housing Recovery, National Real Estate | 141 Comments

Does anyone really want Amazon?

From the Philly Inquirer:

Beware, Philadelphia: Amazon could drive up housing prices

When Amazon announced its search for a second North American headquarters, government officials, developers, and residents in cities nationwide embraced the prospect as decidedly good news.

Including many in Seattle.

While cities began immediately plotting ways to reel in the online retail giant, Seattle, for the first time in years, was catching its breath. After years of skyrocketing real estate prices, unprecedented development, and a record-breaking number of cranes in the sky as a result of Seattle’s tech boom, Amazon’s plan to expand elsewhere offered the city, finally, a reprieve.

Granted, Amazon’s presence has been extraordinary for Seattle. Since the company began building its campus there a decade ago, Amazon has provided jobs, investment, and a reputation that Seattle never could have imagined. Today, 40,000 well-paid employees bustle around the company’s urban campus. Amazon has built and rented 8.1 million square feet of downtown office space. At least $3.7 billion has been invested in the local economy. And Amazon’s presence has persuaded other tech companies — Uber, Airbnb, and Zillow — to locate in the city.

But with prosperity have come profound costs. By some measures, Seattle has become the fifth-most-expensive U.S. city and the ninth-priciest worldwide. The median price of a single-family home or condo in Seattle was $522,000 in August, according to real estate company Redfin, a 67 percent spike from April 2010, when Amazon opened its headquarters. Last month, the median rent for a one-bedroom jumped to $1,380, according to Apartment List. And a Seattle Times analysis found that Amazon occupies 19 percent of Seattle’s office space — putting more pressure on office rental prices, some argue.

Yet Amazon’s impact on Seattle’s housing market is undeniable, raising the question: Could Amazon create the same affordability crisis in its next location?

“Every city will be confronted with this if Amazon chooses it,” said Nela Richardson, Redfin’s chief economist. But, “it gives cities the opportunity to define it. … To talk [in their proposals] about how the city could manage this growth.”

Posted in Demographics, Economics, Employment, New Jersey Real Estate, Philly | 68 Comments

Best places to live in America

From Money via the Star Ledger:

These 4 N.J. towns are ‘the best places to live in America’ (or so Money magazine says)

MONEY magazine’s annual “Best Places to Live in America” list features four towns in New Jersey this year.

Each year, the magazine’s editors determine the rankings by weighing data like crime risk, median household income and ethnic diversity. The list was limited to no more than four places per state, no more than two per county, and one place per state in the top 15.

#8 – North Arlington – Besides its location about 15 miles from Wall Street, North Arlington’s proximity to the Meadowlands Sports Complex and MetLife Stadium was a factor in the decision to place it on the list.

Riverside County Park’s attractions also were weighted into the highest rating for a New Jersey town on the list.

#24 – Saddle Brook – Saddle Brook, with a population just higher than 13,000, is one of the smaller locales in the North Jersey region featured in the list.

It’s even closer to New York City, with an average commute time listed as 23 minutes.

#33 – Parsippany Troy Hills – Parsippany-Troy Hills is back on the list after being ranked last year. It was also ranked in 2014. With multiple corporations including Jackson Hewitt and Wyndham Hotels & Resorts being headquartered here, the township ranked well economically.

The town’s bustling art scene and 25 parks were also favored in the selection. It also features Craftsman Farms, shown above, a school for the arts & crafts movement and now a museum.

#36 – Clifton – The Sopranos was shot here, the top-ranked hot dog in New Jersey is sold here, and besides the attractions and reputation, Clifton offers “a winning mix of affordability and access,” the MONEY rankings say.

Posted in New Jersey Real Estate | 200 Comments

Noticing some extra room these days?

From the Star Ledger:

Worry as Census says N.J.’s population shrank for the first time in years

New Jersey may have lost population for the first time in a decade, new data shows, potentially imperiling economic growth and the number of Congressional seats it holds in the coming years.

New estimates from the American Community Survey suggest New Jersey lost about 13,000 people from 2015 to 2016, which would reverse several years of slow growth since the state was decimated by the housing crisis in the mid-to-late-2000s.

Experts were wary of making too much of the figure, noting that it was an estimate and only a slight decrease, but said it points to a broader trend — New Jersey isn’t growing.

“When you have strong population growth, like in Texas for example, those new people need places to live, places to shop. All of that benefits jobs, benefits the economy,” said James Hughes, a professor at the Bloustein School of Planning and Public Policy at Rutgers University. “If you don’t have that, you’re certainly going to have limited economic growth.”

Analysis by NJ Advance Media shows about 226,000 people moved out of the state between 2015 and 2016, about 30,000 less than the total who moved to the Garden States from within the country and abroad.

With a historically low birth rate, New Jersey’s growth has hinged upon immigration for several years. But the number of people leaving keeps growing, stagnating the state’s population on the cusp of nine million.

“My gut says that much of the stagnation we continue to see is driven by a combination of factors,” said Jon Whiten, Vice President of New Jersey Policy Perspective. “Among them would certainly be the broad trend away from sprawl and unchecked suburban development, which was New Jersey’s stock in trade for some time.”

Data shows that trend continued in 2016, while Atlantic County and rural counties in South Jersey also struggled with population retention.

“For a long time, we had a lot of automobile-centric growth. Rail now determines ecomic opportunity. That’s a fundamental change,” Hughes said.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 63 Comments

Will flat fee take off? (probably not)

From CNBC:

No more 6% commission – these brokers will sell your house for a flat fee

In an increasingly crowded and competitive real estate market, brokers are messing with traditional models, and that could mean big savings for sellers and buyers.

For decades, the 6 percent commission for real estate agents has been pretty standard, but then came 2 percent and 1 percent offers from new brokerages, and now, just a flat fee.

London-based Purplebricks, which is barely 3 years old, launched its new U.S. business in Los Angeles on Friday, after raising $60 million in special stock offering.

It offers the full services of a regular real estate brokerage for just $3,200. That includes professional photography, 3-D virtual tours, help with staging, home tours and listings on all the major online platforms.

Buyers who choose Purplebricks as their agent will receive a $1,000 rebate on closing. The model has been successful in the U.K., and the company expanded into Australia in 2016.

“I think what’s great about our model is it’s new in the U.S., but it has been proven in the U.K. within three years,” said Eric Eckardt, Purplebricks’ U.S. CEO. “When they launched in the U.K., they weren’t the first flat-fee model, but the way they approached the market, with a full hybrid offering, with the customer service from listing to closing, with a local real estate professional to provide all the services associated with that — it has really been a competitive differentiator.”

Purplebricks is not the first flat-fee model in America. Reali recently launched in San Francisco with much the same offering but a higher flat-fee of $4,950, likely because of San Francisco’s higher median home price. It is now expanding to Sacramento, California.

“The differentiation we make is not just our agents or fees,” said Reali CEO Amit Haller. “We created significant technology and a strong efficiency of our agents. That’s what allows us to reduce costs so significantly at the consumer level.”

Haller said that as his company reaches other, lower-priced markets, the flat fee may decrease.

Both Reali and Purplebricks focus heavily on technology, which is taking over the real estate business in general. Haller started in tech and then moved to real estate.

“In general, the real estate market is being disrupted by many people, and I think that many of us, as a company, we expect a lot. We are going after the same war,” Haller said. “We want to change things for the consumer.”

Posted in National Real Estate | 62 Comments

NJ Income Jumps to #3 Nationwide

From the Star Ledger:

N.J. shoots up the state income rankings, reverses depressing trend

New Jersey households made $76,126 last year, a 4 percent growth over 2015, according to recently released Census data.

The growth shot New Jersey from the fifth-ranked state in the nation to third, behind only Maryland and Alaska. The state far outperformed the national median of $57,617.

Its income growth between 2015 and 2016 was sixth in the nation, which marked a drastic shift. New Jersey was dead last in income growth between 2014 and 2015.

The increase in median income last year was “nothing to sneeze at,” said Jon Whiten, vice president of think tank New Jersey Policy Perspective.

“But we’re not out of the woods — it’s still lower than it was in the pre-recession peak,” he said.

The average household income in 2008, adjusted for inflation, was $78,992.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 145 Comments

The biggest barrier to starter homes – zoning laws and NIMBY

From HousingWire:

Trulia: Housing market fails to produce what buyers really want

The gap between the homes consumers want and the homes available for sale continues to grow in many markets across the U.S., according to the latest Mismatched Markets report from Trulia.

In order to examine the widening gap, Trulia compared home searches with for-sale inventory on Trulia between April and June of 2017, and compared it with that same period last year.

The data showed potential homebuyers continue to struggle when looking for starter and trade-up homes, but expensive luxury homes are flooding into the market. Trulia’s national mix-match score for all homes increased from 92 last year to 14.7.

The total share of starter and trade-up homes dropped to 45.8% this year, down from last year’s 46.5%, even as the share of searches for these homes increased from 55.6% to 60.5% during the same time period.

As starter and trade-up homebuyers see falling number of homes available, with shortfalls of 8 and 6.7 percentage points respectively, luxury homes saw a surplus of 14.7 percentage points nationally.

Posted in Demographics, Economics, National Real Estate, New Development | 79 Comments

The New Weehawken

From the Star Ledger:

How the hottest real estate market in N.J. literally divided this tiny town

Seemingly everyone knew this tiny cliffside town — all 1.4-square miles of it — would one day become a dynamic real estate market.

Barbara Tulko, a Weehawken resident since 1974 and a realtor since 1984, remembers diverting bubbly first-time buyers in the 1980s looking to live in Hoboken up to neighboring Weehawken. It had the same key features the more well-known community had — views and easy access to Manhattan — but was less crowded and considerably less expensive.

Mary Ciuffitelli, a 37-year Weehawken resident, would advertise various properties she owned as the “extreme West side” — because it was nearly an extension of Manhattan.

But in 2017, Weehawken requires no diversionary tactics or aggressive sales pitches.

Because of demand from buyers who have been priced out of New York City, Hoboken and Jersey City — and who are now scooping up luxury waterfront condos — median home values in the town of under 15,000 residents increased nearly 25 percent over the last year. It’s the highest surge in the state.

Median home values are now at $757,500, compared to $488,000 in 2012, and Zillow predicts that figure will hit $809,000 by July 2018. The price continues to rise as a surge of waterfront development has taken place in the town through which the Lincoln Tunnel and it’s daily 50,000 number of drivers pass, including construction of The Estuary (589 rental units), The Avenue Collection (177 condos), and RiversEdge (236 units) and RiverParc (280 units).

Yet the spoils of gentrification are rarely evenly distributed — and a closer look at the boom in Weehawken reveals tensions and fault lines. In a town where 55 percent of students in their school system are on free or reduced lunch, the largest property value increases have largely been concentrated near the waterfront.

And with the cliffs of the Palisades sharply dividing longtime residents, who live at higher, inland elevations and share a western border with Union City, from new city transports down along the Hudson River, some say that the town has split into two.

“You could say you know everyone in Weehawken,” says Enrique Romero, who grew up there. “Before you go down there.”

“We created now a new city,” says Gabe Pasquale, senior vice president of marketing and sales for Landsea Homes, one of the developers of the waterfront.

Posted in Gold Coast, Housing Recovery, New Development | 254 Comments