Better by 2018? Not likely.

Posted on July 7, 2017 by grim

From NJ Spotlight:

NEW JERSEY’S ECONOMIC OUTLOOK FOR 2018 IS SO-SO, ACCOUNTANTS SAY

Despite New Jersey’s solid year of job growth in 2016, a recent survey of the state’s certified public accountants suggests few of them believe economic conditions will improve much by next year.

The results of the survey, released yesterday by the New Jersey Society of Certified Public Accountants, indicated just under 25 percent of those who responded to the organization’s member poll predicted economic conditions will get better by 2018.

Instead, the overwhelming majority of the accountants who responded said they believe that conditions here will either stay the same or get worse, the survey found.
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While New Jersey hasn’t had any setbacks to annual job growth since the recession officially ended in 2009, the state has been adding about 45,000 jobs each year, a pace that has lagged both the national recovery and the rate of growth experienced during the 1990s as New Jersey rebounded from a prior recession, according to figures tracked by Rutgers’ Bloustein School of Planning and Public Policy. But last year, the state added more than 60,000 private-sector jobs, its best showing since the recession ended.
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In addition to the economic-outlook question, the accountants were also asked in the survey to list their top three recommendations for creating economic growth in New Jersey. Nearly 80 percent listed reducing property taxes among their top three. High property taxes have long been a key concern in New Jersey, and the latest data from the state Department of Community Affairs indicates the average property tax bill increased by nearly $200 in 2016 to $8,549.

Other top recommendations for stimulating growth in New Jersey revealed in the CPA survey were cutting income taxes and providing additional tax incentives to businesses.
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Thomas said he’s now hoping that legislators, candidates and the general public will take a close look at the results of the survey, and give serious consideration to the issues raised by it as upcoming policy decisions are made in Trenton.

And while the group has no plans to take political positions or endorse any candidate, it is urging policymakers to adopt a long-term view as they take on the state’s biggest problems instead of enacting just short-term Band-Aids.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 46 Comments

Price cuts move properties

Posted on July 6, 2017 by grim

From Bloomberg:

Manhattan Home Sales Surge as Cuts Bring Prices to Buyers’ Level

Manhattan homebuyers found deals they couldn’t refuse in the second quarter, driving up sales of previously owned properties by the most in more than two years.

Purchases of resale homes jumped 16 percent from a year earlier to 2,597, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Buyer interest was fueled by average price cuts of 6.1 percent across all property types. The last time the average discount was larger was the third quarter of 2012, when it was 7.2 percent.

Sellers of luxury apartments took the whittling further, cutting prices by an average of 10 percent, the most since the end of 2010 and the second-biggest discounts in more than 16 years of record-keeping.

“The sellers definitely got it,” said Diane Ramirez, chief executive officer of brokerage Halstead Real Estate, which released its own report Thursday saying there was a 28 percent jump in resales in the second quarter. “They said, ‘We’ve got buyers out there who are serious but that are not moving forward, so let’s give them a reason to move forward.’”

Manhattan home shoppers held back last year, uninspired to commit to a purchase when sellers were holding fast to their lofty asking prices, even as inventory climbed. A rising stock market since the U.S. presidential election sparked fresh interest in browsing, and sellers sensed an opportunity to offload apartments that had been lingering.
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“Our market cannot support aspirational pricing by sellers waiting for that ‘one buyer’ who will overpay for their home,” Warburg’s Peters said in his note. “Buyers are as price-conscious as I have ever seen them.”

Posted in Demographics, Economics, NYC | 31 Comments

No slow down in May

Posted on July 5, 2017 by grim

From CoreLogic:

CoreLogic US Home Price Report Shows Prices Up 6.6 Percent in May 2017

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its CoreLogic Home Price Index (HPI™) and HPI Forecast™ for May 2017 which shows home prices are up strongly both year over year and month over month. Home prices nationally increased year over year by 6.6 percent from May 2016 to May 2017, and on a month-over-month basis, home prices increased by 1.2 percent in May 2017 compared with April 2017,* according to the CoreLogic HPI.

Looking ahead, the CoreLogic HPI Forecast indicates that home prices will increase by 5.3 percent on a year-over-year basis from May 2017 to May 2018, and on a month-over-month basis home prices are expected to increase by 0.9 percent from May 2017 to June 2017. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The market remained robust with home sales and prices continuing to increase steadily in May,” said Dr. Frank Nothaft, chief economist for CoreLogic. “While the market is consistently generating home price growth, sales activity is being hindered by a lack of inventory across many markets. This tight inventory is also impacting the rental market where overall single-family rent inflation was 3.1 percent on a year-over-year basis in May of this year compared with May of last year. Rents in the affordable single-family rental segment (defined as properties with rents less than 75 percent of the regional median rent) increased 4.7 percent over the same time, well above the pace of overall inflation.”

“For current homeowners, the strong run-up in prices has boosted home equity and, in some cases, spending,” said Frank Martell, president and CEO of CoreLogic. “For renters and potential first-time homebuyers, it is not such a pretty picture. With price appreciation and rental inflation outstripping income growth, affordability is destined to become a bigger issue in most markets.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 41 Comments

So much for the summer job

Posted on July 3, 2017 by grim

From Time:

Where Did America’s Summer Jobs Go?

It’s not like the jobs aren’t there. The ice cream still needs scooping. A Tilt-a-Whirl doesn’t run itself. And that floppy, weirdly heavy rubber frog that somersaults toward the rotating lily pads? Hit or miss, someone’s got to bring it back to the catapult for the next lucky player. The work of an American summer remains, sticky and sweet as cotton candy, which doesn’t sell itself either.

But when Jenkinson’s Boardwalk went looking for seasonal employees last year, the response was not at all what the company expected. To fill some 1,200 summer vacancies, an Easter-time job fair drew just 400 people.

Applications did bounce up this year, but not nearly enough to reverse a grave trend that summer employers have noticed well beyond the Jersey Shore.

“It is getting harder to find students that will work,” says Toby Wolf, director of marketing at the boardwalk. “Each year it’s getting harder and harder. None of us has been able to pinpoint why. Is it a change in society as a whole?”

This is a question to chew over on the long road trip from Glacier National Park–where concessions could be staffed by Bulgarians on work-study visas–to Maine, which each summer struggles to fill the lifeguard chairs above its beaches. The same story holds at the water attractions at Wisconsin Dells and on Cedar Point’s roller coasters in Sandusky, Ohio. As a nation, we have lately endured the demise of comity and the fracture of factual truth. Are we now witnessing the slow death of the summer job?

The numbers are not encouraging. Forty years ago, nearly 60% of U.S. teenagers were working or looking for work during the peak summer months. Last year, just 35% were. Note the element of declaration: what the U.S. Bureau of Labor Statistics (BLS) tabulates are reports of actually desiring work during the months when most high schools and colleges are off. It is a statement of intent. Plotted on a chart, the decline is unmistakable and, since the turn of the new century, precipitous–plummeting 15 points in 15 years, to where we are now: only about every third youth working or looking for work this summer.

Posted in Economics, Employment, National Real Estate, Shore Real Estate | 55 Comments

March 2019? Yeah, right.

Posted on June 30, 2017 by grim

From the Record:

American Dream Meadowlands finalizes $2.8B in construction financing; work resumes

A complex $2.8 billion closing on construction financing for American Dream Meadowlands was completed on Thursday, locking in the funds developers say they need to finish the long-delayed project.

The financing includes a combination of private funds and a $1.1 billion bond sale.

“We’re finally at the point where we don’t have to say ‘when’ – we can say, ‘It is happening’ – and that’s why we’re celebrating,” said New Jersey Sports and Exposition Authority President Wayne Hasenbalg.

Also celebrating Thursday was East Rutherford Mayor James Cassella, whose borough received a check from project developer Triple Five for $21.5 million upon the final closing Thursday morning.
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That payment was part of a financial agreement that includes an annual payment in lieu of taxes deal for the project, which sits on state-owned land at the Meadowlands Sports Complex. It is scheduled to open in March 2019.

The bulk of the funds will go to paying off the annual debt service on a new police and court building complex that the borough built in 2010.

Cassella, who already was mayor when the project was first approved by the state in 2003, said it was a relief to see the deal close “after 14 years, three developers, nearly a dozen agreement drafts, and innumerable hours of negotiations.”

Posted in New Development, New Jersey Real Estate | 90 Comments

Time for Newark

Posted on June 29, 2017 by grim

From the Commercial Observer:

Five Reasons to Pay Attention to Newark

Of all the commuter cities west of the Hudson River, Newark, N.J., gets the least respect from real estate professionals.

Some of the reasons for this are understandable; Newark is more of a pain in the posterior to commute to than Jersey City. It doesn’t have the stock of brownstones of Hoboken. The city was devastated by riots a half-century ago and never quite regained its footing.

But those objections look puny when you consider that major real estate players like Edison Properties and Lotus Equity Group and basketball legend Shaquille O’Neal are investing tens of millions of dollars into hundreds of thousands of square feet of real estate. And the fact that the crime rate is the lowest it’s been since 1967.

“We think the way to change the dynamic is to create critical mass,” Ben Korman, the chief executive officer and founder of Lotus, told Commercial Observer. “It can’t happen organically.” And Korman is not the only one doing his part.
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Beit started assembling lots for the project in 2005. The idea behind Teachers Village was that education and educators would be at the heart of the project. “Our goal is to get 70 percent teachers [as residents],” Beit said. They’ve marketed it directly to educators and found that the reaction has been extremely positive. “Just the fact that we have a community for them makes teachers feel supported.”

All but a handful of the apartments are leased, and Beit is gearing up for the next phase of his master plan: Four Corners, three ground-up buildings consisting of a 130-key hotel, 107 rentals and retail, which he’s aiming to have finished in the second quarter of 2019.
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Can an area gentrify without the requisite Whole Foods? Well, Newark won’t need to worry about finding out. A 30,000-square-foot Whole Foods opened earlier this year at the old Hahne & Company building, just across Military Park from the New Jersey Performing Arts Center (NJPAC).

But the Whole Foods is only one reason to get excited about that particular building; it is the anchor of the 115-year-old, 400,000-square-foot namesake department store (with another 100,000 square feet tacked on) that had been vacant since the 1980s and has been converted into a mixed-use extravaganza.

“Rutgers [University] is taking about 50,000 square feet for a collaborative arts space,” said Jonathan Cortell, the vice president of development for the building’s developer, L+M Development. “They’re one of the vital anchors of the project.” But there’s more: Chef Marcus Samuelsson of Red Rooster is opening up a 2,250-square-foot restaurant on the project’s Halsey Street border. There’s also a Petco; a Kite + Key (the Rutgers equivalent of an Apple store); and a coworking space all in the works.
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However, the stadium made for an enticing piece of real estate for Lotus’ Korman, who is taking a big swing at the property when he picked up the stadium last fall for $23.5 million.

The plan that Korman has drawn up is for a 2.3-million-square-foot mixed-use development, consisting of housing, office, retail and cultural space. (Sorry, baseball lovers; the stadium will be razed.)

“We’re doing everything we can to break ground in 2019,” Korman said. “We hope to start the permitting process later this year.”
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“Brooklyn has a lot of housing and not much office presence,” Korman noted. “It’s the opposite problem here.”

Amen to that.

The list of corporate behemoths that have chosen Newark as their home would impress the most skeptical observer: Prudential has their world headquarters in Newark. (The insurer has been in the city since the 19th century, and the city’s indoor arena that opened in 2007 and hosts the New Jersey Devils is named the Prudential Center.) There’s Audible, which has 1,000 employees and is gearing up to expand its office space dramatically. (Last month, The New York Times ran a story about how Audible was paying $2,000 a month in free rent at the Hahne Building for 20 of its lucky employees as part of a housing lottery.) Panasonic’s North American headquarters is in Newark.
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Richard Meier isn’t the only Newark son who came back to make his mark on his hometown’s skyline.

Basketball legend Shaquille O’Neal has also returned to spread some of his largesse with the under-construction One Rector, the 168-unit rental on which he is a backer along with Boraie Development.

The $75 million ground-up project adjacent to NJPAC will feature market-rate studios starting at $1,400 per month, one-bedrooms beginning at $1,700 per month and two-bedrooms starting at $2,300 monthly. “It’s an affordably priced building,” said Wasseem Boraie, the vice president of development at Boraie.

Of course, O’Neal has been “involved with a lot of things in Newark,” Boraie said. “We developed a movie theater, CityPlex 12, with him.” This replaced a six-screen Loews multiplex a few years ago. As for One Rector, the project is expected to be completed next year.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 50 Comments

Say it ain’t so

Posted on June 28, 2017 by grim

From the Washington Post:

The McMansion, ultimate symbol of the pre-recession boom, is back

If there’s anything that typifies the boom times before the Great Recession, it is the McMansion. These sprawling houses proliferated around the country in the 2000s, as banks shelled out easy credit to fuel a housing bacchanalia they thought would never die.

McMansions became the ultimate symbol of living beyond one’s means. Unlike your standard mansion, McMansions aren’t just large – they are tackily so. Looming over too-small lots, these cookie-cutter houses are often decked out with ersatz details, like chandeliers and foam-filled columns. While their features mean they can command a decent price, many of these houses are shoddily built.

During the recession, their construction ground to a halt. Today, McMansions are not exactly cool, especially compared with the exposed-brick urban lofts young people today will pay exorbitant prices for. But with the recent recovery of the housing market, they are coming back anyway.

As Americans have started building and flipping houses again, they are once again buying McMansions. Since 2009, construction of these homes has steadily trended upward, data from Zillow, a real estate website, shows. The median home value of McMansions is also rising, at a pace that eclipses the value of the median American home.
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Many casual onlookers have forecast the death of the suburbs in recent years, especially as younger renters and buyers turn an eye to city centers. Skylar Olsen, a senior economist at Zillow, says that young people today have far more interest in living in urban environments. “That’s where jobs had been growing fastest over the course of this economic recovery over the past five years,” says Olsen.

Yet younger people who are starting families are still moving to the suburbs for more room, she says. About half of all millennials that purchased a home last year did so in the suburbs, according to Zillow data.

Their decision is also supported by cheap energy costs, which make it affordable to commute. in mid-June, the nationwide average price of regular gasoline was $2.32 a gallon. Like the McMansion and the pickup in the housing market, it’s another source of deja vu. After remaining elevated for years, oil prices are now roughly the same as they were June 2000, when adjusted for inflation.

Kate Wagner, an architecture critic, wishes America would have learned its lesson about McMansions the first time around. She spends her free time tearing apart their architectural anachronisms on her blog, McMansion Hell.

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

May Otteau MarketNEWS

Posted on June 27, 2017 by grim

From Otteau Group:

NJ Purchase Contracts Bounce Back in May

After recording a 7% decline in April, home purchase contracts in New Jersey increased by 11% compared to the same month last year. Given the 9% increase during May of 2016, home sales have increased by 21% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of May of the past 12 years, signaling high demand. Overall, home sales have increased in New Jersey by 6% ytd.

While the number of home sales has increased across all price ranges this year, the largest gain has occurred for homes priced between $1.0-Million – $2.5-Million, which have increased by 12%. Home sales in excess of $2.5-Million have also been increasing for the first time in more than a decade. The gains for more expensive homes is attributable to the greater number of homes for sale in these price ranges compared to the tight inventory situation for less expensive homes which is putting constraints on sales volume.

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 7,400 (-14%) compared to one year ago. This is also about 28,100 (-38%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 3.8 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 4.8 months.

Currently, all of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson County continues to experience the strongest market conditions in the state with just 2.4 months of supply, followed by Essex, Middlesex, Union, Passaic, Monmouth, Bergen, Morris, Burlington, Mercer, Somerset and Camden 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 Cumberland (6.0), Cape May (6.5), Salem (7.4) and Atlantic (7.4), however, these counties are also beginning to exhibit strengthening conditions.

Demand for rental apartments remains strong in NJ with statewide occupancy rates being among the highest in the US. While Central NJ continues to have the lowest vacancy rate in the state (2.3%), it increased by 10 basis points from the prior quarter. The Philadelphia/Southern NJ region now has the highest vacancy in the state (3.8%), up by 20 basis points from the prior quarter, while vacancy in Northern NJ declined by 20 basis points to 3.6%. Nationally, the average vacancy rate increased by 10 basis points from the prior quarter and now stands at 4.3%.

A driving force for the apartment market sector is that the percentage of New Jersey households with children living at home has steadily declined to 35% today, with continued declines likely in the future.This trend, which is rooted in New Jersey’s economic conditions, is anticipated to drive future housing demand increasingly toward smaller homes including multi-family housing in more urban locations. At the present time, 65% of households within the state of New Jersey have no children under the age of 18 living at home.

Posted in Demographics, Economics, New Jersey Real Estate | 41 Comments

King of the hill, top of the heap.

Posted on June 26, 2017 by grim

From the Star Ledger:

Recent college grads are leaving N.J. in record numbers. Here’s why.

The bed is on an elevated bunk. Below the bed is a desk, dressed with items from college: clothes, books and accessories. The floor is barely visible beneath a slew of still-stuffed bags of clothes.

In 2016, Dina Bardakh, 23, uprooted her life from Hunter College, along with the degree in political science she received, and plopped down inside the 273-square-foot room of her mother’s two-bedroom modest apartment alongside the Hudson River.
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“I never unpacked,” Bardakh explains. “I never imagined myself back here for as long as I have been. So, what do you do then?”

Bardakh is not the only one asking that question. As another college graduation season comes to an end, and a whole new set of millennials enter the job market, the prospect of recent graduates simply moving out of their parents’ homes is dimmer than ever. According to Census data, 47 percent of 18-to-34-year-olds in New Jersey were still living with their parents in 2015, the highest rate in the country.

The situation shows little sign of improving, either: Data released earlier this month by the National Low Income Housing Coalition says tenants need to make $27.31 an hour, the seventh highest in the country, to afford the average two-bedroom apartment in New Jersey. That makes it virtually impossible for someone making an entry-level salary to afford his or her own place, at least not without teaming up with multiple roommates and/or forgoing other necessities.

Meanwhile, higher education funding has dropped nationwide, including 23 percent in New Jersey from 2008 to 2015. The resulting increased student debt is also keeping many recent grads stuck in their parents’ places.

“It is sort of unprecedented, we would have to go back generations, to come to this situation where grown children live at home to the extent that they are today,” said Dr. James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

In recent years, many frustrated college graduates are giving up the promise of adult life in the New York-New Jersey area altogether. According to the 2007-2014 American Community Survey, 111,674 people age 18-34 moved out of New Jersey, the highest number for an age group in the state.

“I was really hopeful when I started going to college,” Bardakh said. “It was New York City, the capital of the world. I thought there was going to be so many opportunities.”
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According to Hughes, the downward trajectory began with the financial crisis of 2008, the repercussions of which are still being felt by young people.

“That set back many millennials in their economic progression or career trajectory,” he said. “They may have been unemployed for awhile, under employed or coming out of college. They lost several years of earning growth power during that time period.”

This also means young people just getting out of college find themselves this spring now competing for entry-level jobs with people who graduated years earlier.

McKoy said the Garden State is facing an even harsher burden than most states.

“This is definitely a nationwide issue, but New Jersey is a little bit more drastic because it is a very, very expensive place to live, and this is happening at a time where wages are pretty much stagnant and most people in that age range, especially on the lower half, would be working around minimum wage jobs,” he said.

And, says Hughes, “when you have such a powerful trend such as this, there are no silver bullets to change it. At best, some policies could deflect it slightly.”

Posted in Demographics, Economics, New Jersey Real Estate, NYC | 52 Comments

Do so at your own peril

Posted on June 23, 2017 by grim

From the Record:

Millennial generation shunning the suburbs for city life

They want the bustle. They want the convenience. They want the diversity.

In short, they want the city and not the suburbs – even after their children start school.

In a trend that is starting to chip away at the bedrock of suburban North Jersey, a surge of families with young children is gravitating toward New York City, reversing a path worn by generations before them.

Recently released demographic data shows the number of married couples with school-age children rose 10 to 20 percent across middle- and upper-income neighborhoods of New York City just in the first half of this decade, accelerating a trend that began in the mid-2000s. Similar increases were found in urban areas of Hudson County in New Jersey.

At the same time, the number of such families continued to dip across much of Bergen, Passaic, Morris and other suburban counties in New Jersey and New York, according to an analysis of the data by The Record and NorthJersey.com.

While towns closer to the city — and with shorter commutes — have largely escaped the trend, some of the region’s more upscale communities, especially those with longer commutes to jobs in Manhattan, have been hit the hardest.

Across the river, families are putting down roots from Riverdale in the Bronx to the Upper West Side of Manhattan to Park Slope in Brooklyn, where baby carriages have become as common as taxis.

“It’s totally different from where I grew up,” said Malya Levin, who spent her teen years in the city of Passaic and now squeezes into a two-room Park Slope apartment with her husband and toddler. “It’s really night and day, in terms of the diversity of people, the things to do, the lifestyle, the culture, everything.”
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But as newly minted urban dwellers settle in, their decisions are starting to pose challenges for suburban communities in the form of declining school enrollments, stagnant home values and elevated office vacancies that experts say are connected to the trend.

“The suburbs are at a serious crossroads,” said New York University sociologist Mitchell Moss, former director of the school’s Urban Research Center. “The family of the future is not the same as the family of the past and young people are no longer living conventional lifestyles. Kids that grew up in the suburbs want to experience a different life and that has made cities attractive again. This is a major, major challenge for the suburbs.”

Communities that adapt will thrive, while those that ignore it “do so at their own peril,” said Rutgers University demographer James Hughes. “This is not a trend likely to go away any time soon.”

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 77 Comments

May EHS exceeds expectations

Posted on June 22, 2017 by grim

From CNBC:

Existing home sales hit 5.62 million units in May, vs. expectations of 5.57 million

U.S. home resales unexpectedly rose in May to the third highest monthly level in a decade and a chronic inventory shortage pushed the median home price to an all-time high.

The National Association of Realtors said on Wednesday existing home sales increased 1.1 percent to a seasonally adjusted rate of 5.62 million units last month.

Economists polled by Reuters had forecast sales declining 0.5 percent to a rate of 5.55 million units. Sales were up 2.7 percent from May 2016.

The number of homes on the market rose 2.1 percent, but supply was down 8.4 percent from a year ago. Housing inventory has dropped for 24 straight months on a year-on-year basis.

The median house price increased to an all-time high of $252,800, a 5.8 percent jump from one year ago, reflecting the dearth of properties on the market.

“We have a housing shortage, we may even use the term housing crisis in some markets,” NAR chief economist Lawrence Yun said.

House price gains have also been helped by an unemployment rate that is at a 16-year low. Mortgage rates also remain favorable by historical standards.

At the current sales rate, it would take 4.2 months to clear inventory, down from 4.7 months one year ago. The median number of days homes were on the market in May was 27, the shortest time frame since NAR began tracking data in 2011.

Posted in Economics, Housing Recovery, National Real Estate | 75 Comments

Gentrification of the shore almost complete?

Posted on June 20, 2017 by grim

From the NYT:

Memories of a Jersey Shore Town, Before a Boom

On a hot August afternoon in the late 1990s, I waited at Donnelly’s Deli in Avalon, N.J., for our family’s sandwich order. This was a rare treat. We were a bologna-and-cheese-on-white-bread kind of family, loading up the car with beach chairs and boogie boards and a basket of towels for the drive to the Avalon beach from our trailer at a campground a few miles away.

But on that day, near the end of the summer, when my mother was tired of fixing our family of six a summer’s worth of beach sandwiches, we went to this one-story, brick-front deli that smelled like chips, sweat, pickles and meat, to let someone else do it for us.

In 2005, Donnelly’s closed, and the building was torn down — along with the rest of the block. In its place now is a three-story retail and residential building whose first floor features a Lululemon and a Lilly Pulitzer, both open for the summer only.

Like many beach communities, Avalon was transformed as real estate prices shot through the stratosphere. When I was a teenager in the 1990s, my parents thought the $110,000 price tag on a home there was just too much, which is why we spent our summer in a trailer.

Last year, the average home sale price in Avalon was $1.27 million. That’s down from a prerecession high of $1.75 million, in 2006, but still a lot of money. Beach cottages have been razed for mansions. Luxury cars and golf carts roll through the streets. Even the Princeton, a hole-in-the-wall bar where you went to meet someone whose name you couldn’t hear over the music, now has a raw bar.

This has, at least financially, been a good thing for Avalon.

For long-timers who lived there or had small second homes they rented out most of the summer to pay the mortgage, this change secured their retirement. But it also emptied the town. Avalon’s year-round population dropped 37.8 percent from 2000 to 2010, according to the Census Bureau.

Posted in Demographics, Economics, Shore Real Estate | 176 Comments

What Jersey Thinks

Posted on June 19, 2017 by grim

From the Star Ledger:

Christie says N.J. economy is better. Here’s what voters think.

Gov. Chris Christie has declared in recent months that New Jersey’s economy has vastly improved — but a new poll shows most voters aren’t feeling good about the state of their state these days.

The Quinnipiac University survey released Thursday found only 1 percent of New Jersey voters say the Garden State’s economy is “excellent,” while 35 percent say it’s “good.”

A larger number have a negative view, with 41 percent saying the economy is “not so good” and 20 percent saying it’s “poor.”

Ten percent of voters say the state’s economy is getting better, 29 percent say it’s getting worse, and 60 percent say it’s staying about the same.
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But 16 percent of voters in Thursday’s poll say the state is a “very good” place to live and 61 percent say “fairly good.” Only 16 percent say it’s a “fairly bad” place to live and 7 percent say it’s “very bad.”
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The survey also found 11 percent of voters say their own financial situation is “excellent,” 60 say it’s good, 22 percent say it’s “not so good,” and 6 percent say it’s “poor.”

Posted in Economics, New Jersey Real Estate | 84 Comments

No New Homes

Posted on June 18, 2017 by grim

From HousingWire:

Economists: Housing inventory could soon turn into an emergency

The latest report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau showed housing starts sank to an eight-month low.

Now, economists are saying that drop could intensify in the months ahead as building permits also saw a drop in May.

“Housing shortages look to intensify and may well turn into a housing emergency if the discrepancy between housing demand and housing supply widens further,” said Lawrence Yun, National Association of Realtors chief economist. “The falling housing starts and housing permits in May are befuddling given the lack of homes for sale and the quick pace of selling a newly-constructed homes.”

“Meanwhile, job creations of a consistent 2 million a year will push up housing demand further,” Yun said. “One thing that’s moving up is the housing costs for consumers: higher home prices and higher rents.”

And NAR wasn’t the only one alarmed by the survey’s results – another expert explained the importance of watching the market to see if the decrease is a new trend.

“We will need to watch carefully if this is a one-time anomaly or a multi-month trend,” said Scott Volling, PwC U.S. Engineering and Construction advisory director. “The industry is already facing an inventory shortage, which is driving up prices, so these results indicate the demand-supply gap could get worse and further impact affordability for certain segments and markets.”

One economist, who served as chief economist at Fannie Mae for more than 20 years, said the drop was surprising, and that the industry expected a modest increase of about 1.2 million units.

“The decline in starts is all the more surprising given high levels of homebuilder confidence and increases in new home sales, although there was a sharp drop in April,” Nationwide Chief Economist David Berson said. “Additionally, mortgage rates remain very low and mortgage credit availability, while much tighter than in last decade’s housing boom, has eased considerably in recent years.”

Posted in Economics, National Real Estate, New Development | 25 Comments

Poof go the jobs?

Posted on June 16, 2017 by grim

From the Star Ledger:

New Jersey lost 13,000 jobs in May

New Jersey lost employers cut 14,000 private-sector jobs in May as the unemployment rate held steady at 4.1 percent.

The state Department of Labor and Workforce Development reported a loss of about 13,000 jobs for the month. While private sector jobs went down by about 14,000, the state added 900 public-sector jobs.

The labor department boasted of steady, long-term job growth and record-low unemployment rates. At the end of May, Gov. Chris Christie defended his economic record, saying “The economy has gotten better every way you measure it. More people are working. Less people are unemployed.”

New Jersey’s jobless rate remains below the federal rate of 4.3 percent in May.

Employers in professional and business services slashed 9,000 jobs; trade, transportation and utilities cut 2,400; financial activities lost 1,400; education and health services lost 800; information lost 500; and leisure and hospitality lost 400.

Two industries added jobs, including 500 in manufacturing and 100 in construction.

Posted in Employment, New Jersey Real Estate | 61 Comments