NJ downtown at stake?

Admittedly more commercial real estate than residential – but absolutely linked to NJ’s broader real estate market. Thoughts?

From the Star Ledger:

Liquor lobby’s on the rocks: Bill would let restaurants serve alcohol

On a recent weekday night, my friend Zeke and I were driving down Route 35 through Monmouth County.

“Look at this,” Zeke said. “There’s no one else on the road.”

He was right. Even though it was only 11 p.m., there were few other cars to be seen – other than the police cruisers lurking at every town line looking for speeders and drunks.

I suspect that explained why all the bars had empty parking lots – even that most sainted of Shore institutions, the go-go bar.

What we were witnessing was the result of an abject failure of New Jersey’s alcoholic beverage licensing system.

First the state tightly controlled the number of licenses so that the only way to make a profit was to locate the bars on major highways.

Then, after having made it impossible to reach a bar by any means other than the automobile, they decided to crack down on drunken driving.

I saw the results of that misguided policy at a hearing in Trenton last week. At issue was a bill that would finally free up the liquor-licensing system that had been turned into a monopoly in 1946 during the governorship of Wally Edge – whose name would later live in infamy when Bridgegate mastermind David Wildstein employed it as his nom de plume.

The first Wally Edge was a do-gooder. I suspect his effort to limit the issuance of new liquor licenses might have seemed like a good idea at the time, when the cities had bars on literally every corner.

The flaw in the system didn’t reveal itself until the mass migration to the suburbs began. The cities got to keep their licenses, but the booming suburbs were limited to one for every 3,000 new residents.

As a result, Hoboken has 140 licenses, or 140 per square mile. Meanwhile my old home town Toms River has a mere 45 licenses in 44 square miles, or about one per square mile. All but a few are in strip malls.

The obvious solution is home rule. Let the residents of each town decide for themselves how many licenses to issue.

Assemblyman John Burzichelli is trying to do just that. The Gloucester County Democrat’s bill that would create a new license that would permit only table service at restaurants. Shot-and-beer joints need not apply.

Why has it taken 70 years to propose such an obvious reform? Because the people who control the current licenses also control the Legislature. At the slightest hint of competition they show up en masse to inveigh against the free market.

They did so on at a committee hearing Monday on the bill, making the absurd argument that there are at present both too many and too few licenses.

The lobbyists argued that the proof there are too many licenses is that the number of bars has dropped from a one-time high of 15,000 to the current number of 7,500.

Therefore there’s no demand for new licenses.

Fair enough. But they then went on to argue that if the towns could start issuing new licenses, restaurant owners would immediately buy them up these licenses no one wants by the thousands.

That makes no sense, Rutgers Professor Morris Davis told the committee members. Davis, an economist who specializes in real estate, argues that development in New Jersey has been hamstrung by the state’s archaic liquor laws.

“If we’re going to encourage the revitalization of our communities, this seems like a key component,” said Davis. “Restaurants need liquor licenses to survive.”

The old model of locating bars in strip malls out on the highway is a proven failure, he said, not just because of DWI laws but also because strip malls themselves are failing.

Which is the free country? In Cuba you can buy a beer from a vending machine; in Jersey you can’t even buy one in a restaurant. Rick Shaftan
“We’re in a situation where we’re basically out of developable land,” he said. “The revitalization of downtowns has to be where we have growth.”

Posted in New Development, New Jersey Real Estate, Politics | 43 Comments

Ruining your Friday

From NJ Spotlight:

OP-ED: JIM HUGHES PREDICTS NJ’S POSTSUBURBAN ECONOMY, AND IT ISN’T PRETTY

New Jersey is known for many things, not all of them wonderful. Since World War II, with apologies to Bruce Springsteen and Tony Soprano, it is best known as being the most suburban state in the country.

The United States suburbanized rapidly after the war and nowhere was that more true than in New Jersey. It produced rapid development and became haven to millions of white-collar residents and their families, making New Jersey the wealthiest of the 50 states.

That’s quickly changing for the worse; and without a smart policy approach from our state that to date is missing, New Jersey’s homeowners will soon be facing a fiscal cliff. That’s why the most recent book by Jim Hughes, dean at Rutgers University Bloustein School, must be a clarion call for our next governor, the legislature, and suburban mayors.

Written with his Rutgers colleague Joseph Seneca, Hughes is totally on the mark in the book titled “New Jersey’s Postsuburban Economy.” They write about how New Jersey successfully evolved from an urban manufacturing-based economy to one that made the state an economic success story based on suburbanized information and research-driven employment.

They see the future and are clear that without adapting New Jersey faces a grim future. “The baby boom will soon be yesterday’s workforce. Tomorrow’s workforce will be dominated by a new, expansive generation…such young creatives…currently do not find the car-culture suburbs in which they grew up an attractive place to live, work and play.”

They go on to write, “Suddenly, New Jersey’s greatest core advantage in the late twentieth century — a suburban-dominated, automobile dependent economy and lifestyle — is regarded as a disadvantage.”

Hughes and Seneca are challenging our next governor when they write: “New Jersey will have to adapt and reinvent itself yet again — this time to a postsuburban digital economy that is being shaped by increasingly sophisticated mobile technology and the workforce that employs it.”

So what does all this mean? Simply that the huge suburban office parks that make up millions of square feet in New Jersey are rapidly becoming white elephants that will be subsidized by homeowners in the towns these complexes are located, unless they are repurposed into uses that match the changing economy described by Hughes and Seneca.

As we know, the new generation workforce wants to live, work, and play nearby without needing a car. What’s more, space demands are smaller than they were 20 years ago, and many of New Jersey’s suburban office buildings are technologically antiquated. These office parks must be reimagined to include fine restaurants, supermarkets, shopping, and living — while also providing workspaces and educational opportunities. But with change come concerns and a desire to maintain the status quo. Unfortunately, not evolving is not an answer.

The result will be carcass office buildings whose owners will easily win tax appeals, which effectively raises taxes on all homeowners. Worse, these buildings in a sea of asphalt will become a reputational lag for the towns in which they are located. The office parks — along with our aging malls — are the grayfields of New Jersey that are going to drag our economy and already property-tax-expensive state in the wrong direction.

In their conclusion, Hughes and Seneca ask five important questions our next governor must answer. Among them are what to do with this vast inventory, what are acceptable models to maximize environmental benefits with effective reuse, and what is the best way to keep this new workforce in New Jersey to propel our economy forward?

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 149 Comments

NJ’s real estate market off to a good start in 2017

From the Otteau Group:

NJ Home Sales Remain Strong in 2017

In January, the number of contract purchases by home buyers exceeded the same month in the prior year for the 29th consecutive month, reflecting a 14% increase over January 2016. Considering the 15% increase (y-o-y) in January of 2016, home sales have increased by 31% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of January since 2005.

A closer look at the distribution of home sales in New Jersey shows continuing strength in those priced below $400,000, which recorded a 16% increase in January compared to one year ago. This price range is primarily represented by younger-age ‘Millennials’ who are beginning to transition from rentership to homeownership. Also noteworthy is a 19% increase in the number of home sales priced between $1.0-2.5-Million, which has been sluggish in recent years. While it’s still too early in the year to declare this a trend, one possible explanation is increased optimism among higher income households given the Trump administration’s plans for lowering taxes and deregulating businesses. This trend bears close watching in the months ahead.

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 nearly 5,400 (-12%) compared to one year ago. This is also about 34,000 (-47%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 5.4 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 7.0 months.

Currently, the majority (81%) 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 Essex, Union, Morris, Middlesex, Bergen and Passaic Counties, which all have fewer than 5 months of supply. All of the counties with an unsold inventory level equivalent to a supply of 8 months or greater are concentrated in the southern portion of the state including Cumberland (8.4), Cape May (8.6), Atlantic (9.7) and Salem (14.0).

Posted in Economics, New Jersey Real Estate | 246 Comments

Pending home sales starting to show cracks?

From CNBC:

Pending home sales drop unexpectedly to lowest in a year, down 2.8% in January

Higher mortgage rates and near record low supply resulted in disappointing home sales to start the year.

House hunters signed 2.8 percent fewer contracts to buy existing homes in January compared with December, although December’s read was revised slightly higher, according to the National Association of Realtors. The group’s so-called pending home sales index is now just 0.4 percent higher than January 2016, and this is the lowest reading since then. Pending home sales are an indicator of closed sales in February and March.

“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” said Lawrence Yun, chief economist of the NAR. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it’s not uncommon to see a home come off the market within a month.”

“January’s accelerated price appreciation is concerning because it’s over double the pace of income growth and mortgage rates are up considerably from six months ago,” said Yun. “Especially in the most expensive markets, prospective buyers will feel this squeeze to their budget and will likely have to come up with additional savings or compromise on home size or location.”

Regionally, pending home sales in the Northeast rose 2.3 percent month to month and were 3.6 percent above a year ago. In the Midwest sales fell 5.0 percent for the month and were 3.8 percent lower than January 2016. Pending home sales in the South gained only barely, up 0.4 percent for the month and up 2 percent for the year. The biggest drop was in the West where sales plunged 9.8 percent for the month and were 0.4 percent lower compared with a year ago.

Posted in Demographics, Economics, Employment, National Real Estate | 87 Comments

Has the time come for Newark’s revival?

From Bloomberg:

In Shadow of Manhattan, a Long-Neglected City Is Having a Moment

For years, downtown Newark’s Military Park, barren and surrounded by vacant buildings, was a symbol of the despair that set in after the 1967 riots. Now it’s at the center of hope that a long-sought recovery for New Jersey’s biggest city may finally be taking hold.

Across from the park’s northern edge, the old Hahne & Co. department store debuted last month as a $174 million redevelopment with 160 apartments and a Rutgers University arts program and jazz museum currently displaying such artifacts as Miles Davis’s trumpet and a gown worn by Ella Fitzgerald. There will also be offices, a restaurant by celebrity chef Marcus Samuelsson and a Whole Foods supermarket that’s set to open March 1, bringing life to a building that had sat empty since 1987.

A reputation for crime and poverty has kept Newark, just 10 miles (16 kilometers) west of Manhattan, mostly on the sidelines of the urban revival that’s transformed swaths of blight into trendy neighborhoods across the U.S. A surge of construction, with the Hahne’s project at its heart, is a sign the city’s luck may be about to change. Developers and their backers — Prudential Financial Inc. and Goldman Sachs Group Inc. among them — are aiming to build the critical mass needed for Newark to improve its image and fill new towers with residents who prize affordability and easy access to mass transit.

The city is “probably the beneficiary of an overheated New York market, where there’s money looking to land,” said Jeff Kolodkin, a New Jersey-based managing director at brokerage Newmark Grubb Knight Frank. With a multitude of companies investing in Newark, “even if a project or two doesn’t go as well as everyone would hope, all of them are not going to go bad.”

About 2,000 residential units were approved for construction last year, adding to the 2,000 that have been built since 2014, according to the city Department of Economic and Housing Development. In that period, about $1.7 billion has been invested in residential, commercial and industrial projects.

Newark’s comeback has been predicted before — in the late 1990s with the opening of the New Jersey Performing Arts Center and a minor-league baseball stadium, and again almost a decade later with the Prudential Center hockey arena — but the hoped-for revival never fully blossomed.

“Folks have been probably overlooking Newark for a long period of time,” Mayor Ras Baraka said in a phone interview. “It just needed us to be really focused on it, market it, to push hard around development.”

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 67 Comments

Who to blame?

From National Mortgage News:

Thank Landlords for the Home Price Recovery: Attom

Small investors, not first-time homebuyers, are driving home prices to unaffordable highs, according to a new report from Attom Data Solutions and Clear Capital.

Real estate investors drove the home price recovery, but a different segment of this market is poised to continue to shape the housing markets.

At first, it was the institutional investors that took advantage of the housing downturn, buying properties as home prices hit their bottom. But as prices rose, these investors cashed out and were replaced by smaller investors.

Rather than flip these properties, many of these investors turned to the rental market for money making opportunities.

The report shows though that over time the smaller investors became the main driving force behind home price appreciation, particularly as the homeownership rate remained low and the buyer share comprising Federal Housing Administration borrowers flattened out.

“Because the driving force behind this housing recovery has been real estate investors, home prices have risen higher and more quickly than if the recovery had been driven more heavily by first time homebuyers,” Attom and Clear Capital wrote in the report.

Posted in Demographics, Economics, National Real Estate | 31 Comments

How high do rates need to be to slow home sales?

From HousingWire:

FHFA: Rising interest rates not slowing down home prices…yet

Home prices increased during the fourth quarter and, despite rising interest rates, showed no sign of a slowdown, according to the Federal Housing Finance Agency’s House Price Index.

Home prices increased 1.5% from the third quarter and 6.2% from the fourth quarter of 2015, the report showed. FHFA’s seasonally adjusted monthly index increased 0.4% from November to December.

The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. Because of this, the selection excludes high-end homes bought with jumbo loans or cash sales.

“Although interest rates rose sharply during the fourth quarter, our data show no signs of a home price slowdown,” FHFA Deputy Chief Economist Andrew Leventis said.

“Although it will certainly take more time for the full effects of the elevated interest rates to be felt, there is no evidence of a normalization in the unusually low inventories of homes available for sale, which has been the primary force behind the extraordinary price gains,” Leventis said.

Posted in Economics, Mortgages, National Real Estate | 92 Comments

Should I stay or should I go?

From HousingWire:

Here’s the inventory crisis smothering Millennial homebuying

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

Somebody believes in AC

From the AP:

Showboat Owner Blatstein Buys Land Nearby in Atlantic City

Bart Blatstein, the Philadelphia developer who’s been buying up distressed Atlantic City properties and re-opening them, has added three more Boardwalk parcels for about $6 million.

Blatstein, who last year reopened the former Showboat casino as a non-gambling hotel, has added land nearby as part of the future development of the site.

He bought the Garden Pier across from the shuttered Revel casino, which is also near the Showboat, along with a volleyball court between Revel and the Showboat. Blatstein also bought land in the Inlet district next to a new $40 million Boardwalk repair project.

“It shows my continuing confidence in the renaissance of Atlantic City,” he said. “It’s a great opportunity to expand the holding.”

Blatstein said the parcels near the Showboat will increase outdoor uses for the site. He said the Inlet land is prime property in a redeveloping area.

“It affords even more of an outdoor element for the Showboat, and the land near the Inlet is wonderful land abutting a new $40 million Boardwalk,” he said. “It’s beautiful real estate.”

The deals closed Friday.

Blatstein has taken a contrarian stance regarding Atlantic City, rushing in while many are running out. He bought the former Pier Shops at Caesars and reopened it in 2015 as The Playground. Last year, he reopened the former Showboat as a non-gambling hotel two years after Caesars Entertainment shut down the still-profitable casino.

Blatstein said he’s still working on an overall concept for the Showboat, adding he’s not close to being ready to reveal it.

But expanding the reach of the Showboat would go a long way toward revitalizing the northernmost part of Atlantic City’s Boardwalk, which has drawn little foot traffic since the 2014 closure of the Showboat and Revel, two of the four casinos that went belly-up that year.

Posted in New Development, New Jersey Real Estate, Shore Real Estate | 115 Comments

The other South Jersey market

From the Press of Atlantic City:

South Jersey beach construction booming

John Van Duyne heads into a house he recently finished building, a few doors off the beach in Ventnor.

He points out the quartz shower seats and countertops in the downstairs bathrooms. In the living room, a giant TV is recessed into the wall, and rows of speakers are built into the ceiling.

The master bedroom includes a bar and refrigerator hidden under a sink. And when Van Duyne approaches a separate room that houses the toilet, the lid lifts automatically as soon as he reaches the door.

This could be a dream beach house to almost anyone. Van Duyne figures that on the grand scale of today’s luxury homes, this one is maybe a 4 out of 10.

Construction is still busy on the islands that stretch along the South Jersey coastline. And builders say much of their market now is for high-end homes with elevators and pools and luxury gadgetry built right in, from automatic vacuum systems to automatic irrigation systems for the plants that decorate the decks.

News about South Jersey real estate often includes fair amounts of gloom and doom. Atlantic County is still the national leader in mortgage foreclosures. And sales figures from New Jersey Realtors, the trade group, show the median value of a single-family home in Cape May County dropping last year by 5.8 percent to $290,000.

For those reasons and more, a local home-building industry that boomed for decades along with Atlantic City’s casino business has slowed almost to a halt in much of the region. But building hasn’t stopped entirely. It just moved to the beach.

“The focus is always on the water, whether it’s beachfront or bayfront,” says Van Duyne, a Ventnor native who builds on Absecon Island.

“They’re basically two separate markets now, with outsiders buying up the islands,” says Richard Perniciaro, a veteran Atlantic Cape Community College economist. “The two housing markets — mainland and island — are very separate and influenced by different housing trends.”

“The investors, or second-home owners or retirees from outside the area, are making housing decisions based on the value of their homes in (Philadelphia), North Jersey or Cherry Hill,” he says.

Those markets have largely recovered from the housing debacle that fed the national recession, he said.

With home values growing in those areas, Perniciaro said, “The shore is a bargain to them.”

Posted in New Development, Shore Real Estate | 51 Comments

Montclair pretty much the most unequal place in NJ

Haven’t gotten a chance to post this one, but it needs to be posted. From the Star Ledger:

How every town in N.J. rates on income inequality

Despite what Montclair wants you to believe, outside of the typical wealth enclaves like Saddle River, Far Hills, Deal and the like, Montclair ranks as pretty much the most unequal large town in New Jersey. There are few towns in NJ that show such a blatantly obvious amount of geographic segregation as Montclair, less than 1 mile separates some of the wealthiest residents of NJ from some of it’s poorest.

So what’s more important, creating an image of being inclusive and equal, or actually being it? Turns out, there are large swaths of Essex, Passaic, Bergen, and Hudson counties that are more diverse, and more equal, than Montclair.

So what gives? How did Montclair manage to create an image of itself that is almost entirely undeserving? The inclusive educational system? The town’s wealthiest residents have no problem packing Montclair Kimberly full, despite the fact that the yearly tuition is $30,000, making it one of the most expensive private schools in NJ. Sending 3 kids to MKA will cost you north of a million dollars, by the way. Good number of 4th Ward residents probably don’t even make $30,000 a year, let alone pay that for school.

Seems like a load of bullshit to me, especially when neighboring Clifton is more diverse and integrated. Are there towns that are less diverse and wealthier than Montclair? Absolutely, but they aren’t hell bent on creating an image that really appears to be completely manufactured marketing, and not reality. Having just come back from Brazil, I’ve got to say, the wealth gaps are pretty similar.

Seems like a great place to live if you are rich and want to feel good about yourself.

Posted in New Jersey Real Estate | 69 Comments

So Close!

NY State on the verge of taking the #1 foreclosure spot:

Posted in Foreclosures, New Jersey Real Estate | 173 Comments

Christie kicks the can

From the Star Ledger:

Christie signs bill to give Sandy victims some protection against foreclosure

New Jersey homeowners facing foreclosure while they’re still trying to rebuild from Hurricane Sandy now can be protected from losing their homes.

A bill signed Friday by Gov. Chris Christie gives certain homeowners affected by Sandy the potential to ward off foreclosures for up to three years while they try to recover financially from the storm.

In his signing statement, Christie indicated he wasn’t completely happy with the bill (S-2300, A-333), which he said was too broadly written to include foreclosures not precipitated by Sandy.

But the signing was welcome news to members of the New Jersey Organizing Project, a grass-roots group of Sandy victims and other housing advocates who have been waiting two years for the governor to take action.

Last fall, Christie incurred the wrath of Sandy victims at an appearance in Seaside Heights where they complained many were still not home and faced financial ruin because of the state’s slow process in disbursing federal Sandy aid to rebuild.

At that time, Christie said he would take another look at the foreclosure bill, but many, including Mangino, said they were skeptical Christie would sign it.

“For all the families struggling to keep their heads above water, there’s hope,” said Staci Berger, president and chief executive officer of the Housing and Community Development Network of New Jersey. “Our families, friends, and neighbors deserve better than what they’ve been forced to endure over the last four years. Because of the hard work and dedication of our legislative leaders, Sandy survivors, and advocates, there will finally be some relief and the chance to rebuild.”

The law creates a forbearance period for up to three years for Sandy victims who have either been approved for help through the Reconstruction, Rehabilitation, Elevation and Mitigation Program or the Low-to-Moderate Income Program or those who have received rental assistance through the Federal Emergency Management Agency for damage to their primary residence.

Those approved would receive a certificate of eligibility for mortgage forbearance from the state Department of Community Affairs, allowing them to tack onto the end of their mortgage the months they missed paying during their Sandy recovery.

They would still be responsible for paying their taxes and insurance.

Thousands of homeowners would be eligible for help under this law, Mangino said.

That includes Sandy victims who were facing foreclosure before the storm hit or whose mortgage default problems were unrelated to storm damage. Christie said he didn’t want it as part of the law because he said it would cause “mountains of damage” to “our federal funding flow and our state housing market.”

“I am very concerned these new requirements may adversely impact the state’s recovery efforts, jeopardize federal Sandy funding, increase borrowing costs and ultimately delay Sandy-impacted residents’ return to their homes,” he wrote.

Calling the bill “sloppily written” and “ill conceived,” Christie accused its Democratic sponsors of “politically pandering” to Sandy victims during to get re-elected.

Posted in Foreclosures, New Jersey Real Estate | 408 Comments

Think warm thoughts – shore rentals already up 33% YOY.

From the Philly Inquirer:

The rush is already on for rentals at the Jersey Shore

From the second-story deck of his aunt’s rental property near 20th and Central, real estate agent Bill Godfrey points out the ocean view a block away and the surrounding Gold Coast neighborhood as just two of the unit’s special amenities.

But what potential summer renters really want to know about the place is how the flatware looks and what kind of wine glasses are in the cupboard, Godfrey said.

“Oh, and how new the mattresses are,” Godfrey notes as among the nitty-gritty details that customers want to know before they are willing to plunk down as much as $4,000 for a week’s stay in this unit during the summer’s “high season.”

And getting precisely what they want when they walk through the door may be what is driving those renters to sign on the dotted line seemingly earlier and earlier each year. Rentals in Ocean City’s prime “high season” — from mid-July to mid-August — start at around $1,500 a week for a one-bedroom condo and go as high as $18,000 a week for a seven-bedroom house on the beach.

Marr Agency, where Godfrey works, and other real estate agencies in this Cape May County barrier island resort — and in towns from Long Beach Island south to Cape May — report that the number of signed contracts and deposits on summer rentals by the beginning of February were up by as much as 33 percent over the same time last year.

And while the bottom line on rental profits may ultimately stay mostly stagnant year to year because there are only so many units and so many weeks in the summer, an early rush on rentals may signal a strong 2017 Shore summer season with regard to tourism spending in other sectors, like restaurants, amusements, retail, and activities, according to experts.

Tourism is big business in New Jersey. The state’s second-largest industry attracted 95 million people to the Garden State, raked in a whopping $43.4 billion, and accounted for 318,000 jobs in 2015. And those numbers have been on a steady increase over the last decade.

Posted in Economics, New Jersey Real Estate, Shore Real Estate | 54 Comments

How low can inventory go?

From HousingWire:

Realtors: Majority of metros hit peak levels in 2016

The fourth quarter of 2016 saw the best quarterly sales pace of the year, but also pushed housing inventory to record lows, and many markets to home prices with record highs, according to the latest quarterly report from the National Association of Realtors.

Actually, home prices in over half of measured markets either hit or surpassed their previous peak level, according to the report. The median existing single-family home price increased in 89% of measured markets. While 158 of metro areas saw gains from the fourth quarter of 2015, the remaining 20 metros recorded lower home prices than the year before.

“Buyer interest stayed elevated in most areas thanks to mortgage rates under 4% for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment,” NAR Chief Economist Lawrence Yun said. “At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market.”

This is more than the third quarter, when 87% of metros reported annual price increases. Also, of the metros that saw price gains, 17% of them were in the double digits, compared to 14% in the third quarter.

“Depressed new and existing inventory conditions led to several of the largest metro areas seeing near or above double-digit appreciation, which has pushed home values to record highs in a slight majority of markets,” Yun said. “The exception for the most part is in the Northeast, where price growth is flatter because of healthier supply conditions.”

The national median existing single-family home price in the fourth quarter was $235,000, which is up 5.7% from the fourth quarter of 2015’s $222,300.

While home prices were reaching new highs, housing inventory was reaching new lows. At the end of the fourth quarter there were 1.65 million existing homes available for sale, a decrease of 6.3% from the 1.76 million homes a year before to the lowest level since NAR began tracking home supply in 1999. The average supply during the fourth quarter was 3.9 months, down from 4.6 months the year before.

Posted in Demographics, Economics, National Real Estate | 103 Comments