No housing crisis yet…

From MarketWatch:

Existing-home sales rebound 1.9% in October as low mortgage rates continue to provide a lift

Sales of previously-owned homes rose 1.9% in October — the latest housing statistic to demonstrate the upward lift low mortgage rates have provided to the U.S. real-estate market.

Existing-home sales occurred at a 5.46 million seasonally-adjusted annual pace in October, up from a 5.38 million rate in September, the National Association of Realtors said Thursday. On a year-over-year basis, overall sales were up 4.6%.

Economists polled by MarketWatch had expected the average annual rate of existing-home sales to increase slightly more to 5.47 million.

The median sales price ticked up 6.2% over the past year to $270,900, as prices increased across all parts of the country. Unsold inventory was at a 3.9-month supply, down from 4.1 months in September and 4.3 months a year ago. Nearly half (46%) of homes sold in October were on the market for less than a month.

Sales volume varied from region to region, the National Association of Realtors reported. Sales rose in the Midwest and the South, but fell in the more expensive regions of the Northeast and the West.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 77 Comments

How low can inventory go?

From HousingWire:

U.S. housing market experiences largest inventory decline since 2018

In October, America’s home sales rose by 3.9%, marking the fourth month of the past six to post a year-over-year increase in sales, according to the RE/MAX National Housing Report.

“October continued a recent win streak for home sales, and the market is positioned much better than it was a year ago,” said RE/MAX Holdings CEO Adam Contos. “Demand is strong, due in part to low-interest rates, but buyers have limited options because inventory remains such a challenge.”

RE/MAX reports that although sales increased last month, the nation’s housing inventory posted a steep decline. According to the company, housing inventory fell 9% year-over-year across the report’s 54 housing markets, representing the largest retreat since May 2018.

Furthermore, October posted a 3.1-month supply of inventory, marking the lowest October amount in the report’s 11-year history. RE/MAX indicates homes spent 49 days on the market, which is the second-lowest figure for October in report history.

Posted in Demographics, Economics, National Real Estate | 120 Comments

NJ adds jobs in Oct – unemployment up to 3.2

From InsiderNJ:

NJDOL: New Jersey Payrolls Grow in October

Hiring by New Jersey employers picked up in October while New Jersey’s unemployment rate edged higher for the month, according to estimates produced by the U.S. Bureau of Labor Statistics. Total nonfarm wage and salary employment in the state increased by 10,200 to reach a seasonally adjusted level of 4,205,800. The state’s unemployment rate edged higher by 0.1 of a percentage point to 3.2 percent for the month, remaining below the national unemployment rate of 3.6 percent. The increase was due, in part, to more New Jersey residents entering the labor force seeking employment.

Looking at the longer term, over the year, October 2018 – October 2019, employment in New Jersey was higher by 30,200 jobs. Gains were recorded in the private sector (+32,400) of the New Jersey economy but losses were recorded in the public sector (-2,100). Since February 2010 (the low point of the last recession), New Jersey’s private sector employers have added 414,100 jobs.

Based on more complete reporting from employers, the previously released total nonfarm employment estimate for September was revised lower by 1,600 to show an over-the-month (August – September) decrease of 1,800 jobs. Preliminary estimates had indicated an over-the-month decrease of 200 jobs. The state’s revised September unemployment rate was unchanged at 3.1 percent.

In October, employment increases were recorded in seven out of nine major private industry sectors. Industry sectors that gained jobs include leisure and hospitality (+5,900), education and health services (+2,300), other services (+2,000), trade, transportation, and utilities (+1,900), professional and business services (+1,100), construction (+300), and information (+200). The manufacturing sector recorded a job loss for the month (-1,400), while the financial activities sector was unchanged. Over the month, public sector employment was lower by 2,100 jobs, mainly at the local level (-1,300).

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 76 Comments

What could possibly go wrong?

From the Star Ledger:

Murphy pushes taxpayer-funded bank for N.J. No state has done that in a century. 

Gov. Phil Murphy on Wednesday took the first steps to make New Jersey the first state in a century to open a state-owned bank.

The Democratic governor signed an executive order to form a 14-member board to oversee the taxpayer-funded institution, which was a centerpiece of his campaign in 2017.

The public bank, which would invest millions of dollars in state deposits usually kept in commercial banks back into New Jersey communities and stimulate the economy, would be owned by the state’s taxpayers, Murphy said Wednesday.

“I still believe in the ability of public banks owned by the people of New Jersey to be a force for good in helping small businesses succeed, in providing student loans at affordable rates and opening lines of credit to municipalities needing long-term infrastructure and affordable housing,” the governor said before signing the order at an event in Newark.

The announcement did generate some controversy. The board, which will be chaired by state Commissioner of Banking and Insurance Marlene Caride, is comprised of nine administrative members and four public members, including Derrick Green, who became embroiled in a financial scandal for his political work in Bermuda, which came to light last year. That appointment drew criticism from Republican lawmakers.

Posted in New Jersey Real Estate, Politics, Where's the Beef? | 116 Comments

Pay up suckers

From HousingWire:

Are homes under $250,000 nearing extinction?

A recent report by economic research consultancy Capital Economics shared a stunning statistic: The number of vacant single-family homes for sale priced under $250,000 has halved since 2012.

According to the report, at the start of the third quarter of 2019, there were only 550,000 vacant homes on the market priced under $250,000. That’s half as many as there were just seven years ago.

Capital Economics attributes part of this to lower housing inventory, in general, stating that the overall number of vacant single-family homes for sale has dropped 25% in the last seven years. 

“The homeowner vacancy rate, that is the number of vacant homes for sale (which account for just over half of all homes for sale) as a share of all owner-occupied homes did see a marginal rise to 1.45% in the third quarter,” the report stated, citing the latest U.S. CensusHousing Vacancies and Homeownership survey. 

“But that was up from a 40-year low in the second quarter,” the report continued. “Sales are therefore being held back by a lack of homes on the market, and in particular a shortage of cheaper homes.”

Capital Economics cites that in the past two years since this year’s Q3, 2.9 million new households were formed. For comparison, only about 1.9 million households were formed in the two years to the third quarter of 2017. 

Household formation could lead to more people being ready to buy a home, but the report issues a warning there as well. 

“New households will have found it increasingly hard to find an affordable home to buy,” the report states. “The share of vacant single-family homes for sale priced under $250,000 has been on a steady downward trend since 2014, and averaged just 57% in the year to Q3 2019.”

“Moreover, with credit conditions relatively tight, and getting tighter, potential homebuyers will not be able to stretch their budgets to buy a more expensive home,” the report continued. “…until homebuilders ramp up production of cheaper properties, home sales, and in particular sales to first-time buyers, will see only minimal growth.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 154 Comments

Democrats lose NJ

From the Star Ledger:

How Gov. Murphy helped Republicans win

Assemblyman Jon Bramnick, the Republican leader, says he is grateful that Gov. Phil Murphy engaged so heavily in this week’s election because it helped Republicans like him win close races.

“Did Murphy help me?” Bramnick asked. “Absolutely and without a doubt. The last thing Democrats wanted was his face on TV.”

Murphy has a lock on the progressive wing of the Democratic Party, but he is not a popular governor overall. The latest Monmouth University poll put his approval rating at 41 percent, and after two years in office, 20 percent have no opinion.

The gift he gave to Republicans in this election was to remind voters that Democrats are likely to raise taxes. That came during a talk at Rowan University when he answered a question with this gem: “If you’re a one-issue voter, and tax rate is your issue…we’re probably not your state.”

In his defense, he spoke the truth about taxes New Jersey has the highest property taxes in the country, and we rank #9 in combined state and local taxes, as a share of income.

But it was another rookie mistake by our sophomore governor, because it sounded like he was telling people to quit whining and accept punishing taxes as a fact of life. Republicans saw an opportunity and pounded it over and over, especially in the swing districts they were worried about losing, like Bramnick’s in Union County.

Murphy then helped more by purchasing $2 million in TV ads featuring his face, barnstorming in suburban districts where he’s deeply unpopular, and even claiming credit for his imaginary fix of NJ Transit’s woes.

The bottom line in this election is that Democrats missed an opportunity and lost some ground. Republicans picked up a Senate seat and at least two Assembly seats. That doesn’t challenge Democratic control, but it will make it tougher to win close fights, like the effort to legalize marijuana or extend voting rights to those on parole and probation.

Posted in New Jersey Real Estate, Politics, Property Taxes, Unrest | 144 Comments

So Much For Reurbanization

From Forbes:

Millennials With Families Are Leaving Major Cities For The Suburbs, Transforming Them Into ‘Hipsturbia’ 

Just as their parents flocked to the suburbs, city-loving Millennials are doing the same yet transitioning some areas to “Hipsturbia,” a phrase revealed in the Urban Land Institute’s  (ULI) joint report with PwC, Emerging Trends in Real Estate® 2020. The data comes from interviews and surveys of over “2,200 real estate, development, and investment experts.” 

Millennials are transforming suburbs as they seek out walkable downtowns where they can live, work, play and raise families. Urban planners, municipalities, large employers and developers are paying attention. As Millennials face the realities of raising children and growing their families, the big cities they love are losing their shine. No surprise there. 

Listen to Anita Kramer, SVP, Center for Capital Markets and Real Estate at ULI. “It’s kind of coming from a few different directions. We know that Millennials are attracted to urban core living which is a major reason for the revitalization of suburbs into an urban walkable lifestyle and all the liveness that comes with that.”

The ULI-PwC report explains that “our interviewees and focus groups have uncovered the desire of the suburbs to create their own versions of the live/work/play district.” The key to Hipsturbia is a having a happening downtown, just as the cities these Millennials are leaving do. The report cites New Jersey communities including Maplewood and Summit as “well along the path,” to Hipsturbia. 

Does this mean hip cities will soon lose scores of Millennials waiting in line for Sunday brunch at their fave neighborhood places amid stroller gridlock? “We don’t see the cities emptying. Hipsturbia can happen best in suburbs closer in,” Kramer said.  

Take Brookline, Massachusetts, long known as a desirable close-in suburb of Boston since it borders the city on several sides. Brookline’s streets are now clogged with Audis and Range Rovers packed with young families vying for parking spaces around core areas with restaurants of all types and coffee houses. Housing prices always high because of Brookline’s prime location continue to escalate. The biggest trend there which follows the report is developers snapping up older two-family homes, tearing them down and replacing them with family living condominiums, with asking prices of up to $3.2 million each.

Posted in Demographics, Economics, Housing Recovery, National Real Estate, New Development | 67 Comments

Will they buy?

From HousingWire:

The homebuyers are coming. The homebuyers are coming

A flood of first-time homebuyers is about to hit the market over the next three years, according to newly released analysis from TransUnion

TransUnion is currently projecting that at least 8.3 million first-time homebuyers will enter the mortgage market between 2020 and 2022. 

That figure is more than any three-year period in the last decade, according to TransUnion’s report. 

On top of that, if economic growth exceeds expectations, the number of looming first-time homebuyers in the next three years could reach as high as 9.2 million. 

“While we’ve recently seen a boom in refi activity, actual homeownership rates are down. Challenges have included high home prices, sluggish wage growth and limited housing inventory,” said Joe Mellman, senior vice president and mortgage business leader at TransUnion. 

“But we may be starting to see daylight as slowing home price appreciation, low unemployment, increased wage growth and low interest rates are helping affordability,” Mellman added. “As a result, we are optimistic that first-time homebuyers will contribute more to home ownership than at any time since the start of the Great Recession.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 83 Comments

Slay the Zombies

From HousingWire:

ATTOM: Zombie foreclosures are ticking down

The amount of vacant homes in the U.S. continues to sit at a lull, slowly ticking down, according to a new data set from ATTOM Data Solutions

In the fourth quarter of 2019, there were 1,527,142 single-family homes and condos left vacant, representing 1.5% of homes in the U.S.

In Q3, 1.6% of homes were vacant in the U.S., meaning there was a small tick down in the vacant home sector in this quarter.

“While pockets of zombie foreclosures remain, neighborhoods throughout the country are confronting fewer and fewer of the empty, decaying properties that were symbolic of the fallout from the housing market crash during the recession,” Teta said.

Washington, D.C. continues to have the highest percentage of zombie foreclosures, at 10.5%. Kansas (7.9%); Oregon (7.9%); Montana (7.4%); Maine (6.7%) and New Mexico (5.8%) are all states that sit above the national average of zombie foreclosures, which is 2.9%.

New York had the highest number of zombie properties, with 2,266. Florida followed with 1,461; Illinois with 892; Ohio with 823 and New Jersey with 398. However, these numbers were all lower than they were in Q3.

Posted in Economics, Foreclosures, Housing Recovery, National Real Estate | 95 Comments

August Case Shiller

From CNBC:

Home price gains heat up in August but slow in major markets, S&P Case-Shiller index says

Home prices are heating up again on a national level, but some of the largest cities are lagging. That may be due to already overheated prices in those cities as well as new tax laws that limit the amount of deductions homeowners can take.

Prices rose 3.2% in August, up from the 3.1% gain in July, according to the S&P CoreLogic Case-Shiller National Home Price Index. Prices in the nation’s 10 major cities rose 1.5%, down from the 1.6% gain in July. On the index’s 20-city composite, prices were 2% higher, unchanged from July’s gain.

Seven of the top 20 cities reported greater price increases in the year that ended in August versus the year that ended in July.

“A shift in regional leadership may be underway beneath the headline national index,” said Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices. “Phoenix saw an increase in its YOY price change to 6.3% and retained its leading position.”

Las Vegas, however, dropped from number two to number eight among the cities of the 20-city composite, falling from a 4.7% annual gain in July to just 3.3% in August.

“When you look at how gradually home prices have been going up lately, the rate of appreciation is more like what we considered to be normal for many years. In past decades, when prices went up by 3 to 5% per year, we thought that was pretty good appreciation,” said Janet Carpenter, president of the Greater Las Vegas Association of Realtors. “With demand staying strong and our local housing supply remaining tight, I wouldn’t be surprised to see this trend continue into the foreseeable future.”

Posted in Demographics, Economics, Housing Bubble, Housing Recovery, National Real Estate | 65 Comments

High end not so dead?

From Forbes:

Hamptons Home Prices On The Rise Again After Two Years Of Declines 

Home prices in the Hamptons, the summer playground of Wall Street titans and Hollywood celebrities, are on the rise again after almost two years of declines. 

The median price of a home on the eastern tip of New York’s Long Island rose 5.5% to $857,000 in the third quarter from a year earlier, the first year-over-year gain in seven quarters, according to a report from Miller Samuel and Douglas Elliman Real Estate. 

It was the one bright data point for a market that continues to struggle with weakened demand stemming from the revamped federal tax code capping the deductibility of state and local property taxes, known as SALT. Low mortgage rates helped to offset some of that impact, leading to the price gains that gave the most help to the lower end of the market, Douglas Elliman said in a statement accompanying the report.

“In the Hamptons, reduced affordability continues to be a challenge resulting from SALT, slowing down sales and causing a steady increase in inventory,” Douglas Elliman said. “However, this negative effect was partially offset by the sharp drop in mortgage rates, as well as sellers’ expanded willingness to negotiate.” 

The number of Hamptons sales fell 15% to the lowest third-quarter level in eight years, according to the report. The new tax bill that went into effect last year capped SALT deductions at $10,000, making it more expensive to own property in states like New York and California where home prices and property taxes are high.

Posted in Economics, National Real Estate | 24 Comments

Great market! Everywhere but here.

From Forbes:

Home Prices Jump In 95% Of Cities, Reaching Record High 

Home prices have hit a new high. According to stats from ATTOM Data Solutions, median home prices jumped 2.9% over the third quarter of 2019 and 8.2% since last year. Clocking in at $270,000, it’s now the highest median sale price on record, according to ATTOM.

Though home price growth had been slowing for some time, Todd Teta, ATTOM’s chief product officer, says Q3 bucked this trend.

“The seven-year U.S. housing boom is back in high gear,” Teta said. “After a series of relatively small price increase quarters, home prices saw quite the uptick, seller profits rose, and the problem of distressed sales continued to fade, helping to make the third quarter the strongest in four years.”

All in all, home prices jumped in 95% of U.S. markets. The only major metros to see a drop in prices were Kansas City, Missouri (down 9.4%); San Jose, California (-3.3%); and Hartford, Conn. (-0.3%). 

Home prices are now above pre-recession peaks in four out of every five major metro markets.

Posted in Economics, Housing Recovery, National Real Estate, New Jersey Real Estate | 26 Comments

September Existing Home Sales

From Reuters:

U.S. existing home sales drop more than expected in September

U.S. home sales fell more than expected in September as the market continues to struggle with a dearth of properties for sale, especially for cheaper homes.

The National Association of Realtors said on Tuesday that existing home sales fell 2.2% to a seasonally adjusted annual rate of 5.38 million units last month, reversing two straight months of gains. August’s sales pace was upwardly revised to 5.50 million units. 

Economists polled by Reuters had forecast existing home sales declining 0.7% to 5.45 million units. 

The U.S. Federal Reserve has cut interest rates twice this year, which has bolstered the housing market by lowering mortgage rates. Investors expect another interest rate cut when policymakers meet next week. 

The 30-year fixed mortgage rate has dropped more than 125 basis points since last November’s peak to an average of 3.69%, according to data from mortgage finance agency Freddie Mac.

But home sales have seesawed for much of this year as a chronic lack of properties on the market has inflated prices, keeping them unaffordable for many would-be homeowners. Land and labor shortages have also crimped supply. 

There were 1.83 million homes in the market last month, a decline of 2.7% compared to a year ago. It was the fourth consecutive month of year-on-year inventory declines.

Existing home sales rose 3.9% from one year ago, the NAR said. Sales fell across the nation’s four regions last month. They dropped 3.1% in the Midwest and 2.8% in the Northeast. They declined 2.1% in the South and edged 0.9% lower in the West. 

Posted in Demographics, Economics, National Real Estate | 37 Comments

Get with the times NJ

From CNBC:

Backyard bungalows are becoming big business for homeowners and builders

They’re not just she-sheds or he-sheds or granny pods or tiny homes. The latest housing trend in the backyard is now front and center for a new breed of homebuilder and landlord.

Second homes, formally called auxiliary dwelling units (ADUs), are cropping up in back and side yards across America, acting as either rental units or additional space for aging parents and still-nested adult children.

Growth in the sector has been fueled by changes to local and state zoning rules. Some municipalities are struggling with a lack of affordable housing and see these additional units as one remedy.

In 2010 Portland, Oregon, waived impact fees for ADUs, making them significantly less expensive. As a result, the number of ADU permits jumped from 86 in 2010 to 660 in 2018, according to a count by

In California, when a 2017 state law forced cities to relax ADU regulations, permits jumped even more dramatically.

And that all translates into big growth for ADU builders, like Prefab ADU, based in the California Bay Area. It built and installed about 100 ADUs this year but expects to expand that to at least 1,500 next year.

Posted in Demographics, Economics, National Real Estate, New Development | 89 Comments

The Trump Effect

From CNBC:

Robert Shiller: Recession likely years away due to bullish Trump effect

Nobel-prize winning economist Robert Shiller believes a recession may be years away due to a bullish Trump effect in the market.

According to the Yale University professor, President Donald Trump is creating an environment that’s conducive to strong consumer spending, and it’s a major force that should hold off a recession.

“Consumers are hanging in there. You might wonder why that would be at this time so late into the cycle. This is the longest expansion ever. Now, you can say the expansion was partly [President Barack] Obama,” he told CNBC’s “Trading Nation” on Friday. “But lingering on this long needs an explanation.”

Shiller, a behavioral finance expert who’s out with the new book “Narrative Economics,” believes Americans are still opening their wallets wide based on what President Trump exemplifies: Consumption.

“I think that [strong spending] has to do with the inspiration for many people provided by our motivational speaker president who models luxurious living,” said Shiller.

Despite Shiller’s optimistic stance, he cautions not everything is rosy in the economy. His Shiller PE Ratio, also known as CAPE, tracks the price-to-earnings ratio based on average inflation-adjusted earnings over the last 10 years. He cautions it’s still at a concerning level.

“I’m not saying that I’m so bullish because I have a CAPE ratio that is bearish,” said Shiller, who predicted on “Trading Nation” last March there was a 50% chance the economy would tip into a recession within 18 months.

Yet, he’s sticking with the idea that the economy and markets should have a lot of runway left for gains if President Trump remains in office due to his pro-spending, pro-business narrative.

Shiller contends the next recession may not hit for another three years, and it could be mild.

“Let’s not make the mistake of assuming it’s right around the corner,” Shiller said. “If the economy is strong, which is what he built is case on, ‘make America great again,’ he has a good chance of getting re-elected.”

Posted in Economics, Employment, National Real Estate, Politics | 15 Comments