From the NYT:
Homeownership, the Key to Happiness?
If trying to buy an apartment in New York City has been making you miserable, consider this: actually getting that home may not make you happy.
A growing body of research suggests that spending money on real estate doesn’t necessarily mean investing in contentment. Indeed, the conventional advice to cut back on vacations, restaurant meals and other extras in order to save money for a home may actually be detrimental to felicity. Experts in happiness — an increasingly popular field focused on the scientific understanding of emotional well-being — say that people are happier when they spend money on experiences instead of material goods, whether it be a new car or a bigger apartment.
“People are making so many trade-offs in order to have that home,” said Elizabeth Dunn, an associate professor of psychology at the University of British Columbia who studies consumerism and happiness. She recently explored the impact of housing on people’s happiness while compiling studies for a new book, “Happy Money: The Science of Smarter Spending,” which she wrote with Michael Norton, who teaches at the Harvard Business School.
The recession forced many people to curb their spending habits and re-evaluate their overall lifestyles. But after saving money for years, buyers encouraged by low mortgage rates are re-entering the housing market. They find the pickings slim. In Manhattan, the number of apartments for sale for the second quarter was at a 13-year low, stoking competition and driving up prices.
Now there is research like Dr. Dunn’s, emphasizing that when it comes to your overall happiness, “there are a lot of better things you could be putting your money toward” than real estate.
This isn’t necessarily bad news in a place like New York City, where nearly 70 percent of the housing stock is rentals. And it may offer some solace to frustrated buyers facing bidding wars and all-cash offers they simply can’t top.
“People still view housing as a central component of happiness and a critical aspect of the American dream,” Dr. Dunn said. “But there is little research to support that.”
A 2011 study of about 600 women in Ohio found that homeowners weren’t any happier than renters. The study was conducted by Grace Wong Bucchianeri, then an assistant professor of real estate at the Wharton School at the University of Pennsylvania. Indeed, homeowners spent less time on leisure activities with friends and reported that they derived some pain from homeownership. What exactly caused that pain wasn’t indicated in the study, but financial experts say that people who make the leap from renting to buying can be caught off guard by the nuts and bolts.
“The reality of maintenance and repairs, and being ‘house rich but cash poor,’ can negate much of the perceived happiness people may have had about homeownership,” said Greg McBride, the senior financial analyst for Bankrate.com. Even if a low mortgage rate means you spend less each month than you did when renting, upkeep can drain a bank account faster than a leaking water heater.
Renting probably won’t make you happy either, from the Record:
North Jersey’s tight rental market gets tighter
Nicki Commer likes pretty much everything about the two-bedroom condo she’s been renting in Mahwah. But the rent — $2,100 a month for the condo, plus garage and storage space — turned out to be more than she can handle.
“I need something cheaper,” said Commer, a substitute teacher. So she is moving to an apartment that rents for $1,800 a month, giving up the garage and storage unit.
As Commer discovered, the North Jersey rental market is a tough place, with high rents and low vacancies. While that’s always been the case, the recent housing bust, which pushed many more people out of single-family homes and into leasing offices, has only made the situation more difficult.
“The numbers are really, really scary in terms of how unaffordable rental housing is in New Jersey,” said Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide. “This is an acute problem.”
“The economy has created a demand for rental housing that didn’t exist before,” said Jean Maddalon, executive director of the New Jersey Apartment Association, which represents owners, builders and managers of 170,000 rentals in the state. Rents, she said, are tied to “how close you need to be to New York City — that’s really what drives rents in New Jersey, how close you are to job markets.”
The rental vacancy rate in North Jersey was 3.6 percent in the second quarter, down 0.3 percent from a year ago, and average rents have risen 2.1 percent in that period, to $1,548, according to Reis Inc., a New York company that tracks the real estate market nationwide. Some landlords report an even lower vacancy rate. Alfred Sanzari Enterprises, which owns 538 luxury and garden apartments in Bergen County, says its vacancy rate is around 1 percent.
In Bergen and Passaic counties, one-bedroom rents start at $950 to $1,000 for older garden apartments in middle-class towns, according to a check of real estate ads. Rents start out higher in the more desirable towns, especially those close to mass transit commuter links to New York City. In newer, higher-end buildings, with extras like pools and fitness rooms, rents start at $1,600 to $1,700 for one-bedrooms.
And two- or three-bedroom rents outpace the ability of many working families to pay, according to Arnold Cohen, policy director at the Housing and Community Development Network of New Jersey, an advocacy group for affordable housing. In much of North Jersey, a rental inventory that can be afforded by families making $30,000 or $40,000 a year “doesn’t exist anymore,” he said.
Like gary always says, we’re special here. You can’t pay the freight? GTFO.
[2] scrapple,
We decided it wasn’t worth paying for all that specialness. We GTFO.
From the Press of Atlantic City:
Oracles of N.J. economy: Jobs return by 2015
Rutgers University’s leading economic analysts have taken another look at New Jersey and have found a much more reassuring picture.
James W. Hughes, dean of the university’s Bloustein School, and his professor partner, Joseph Seneca, say in their latest research paper that the state’s recovery is accelerating and employment should be back to normal by 2015 – a long way off, but two years sooner than previously expected
There is almost a tone of relief to their paper, “2013: The New Jersey Employment Expansion Gains Momentum,” which they prepared for the N.J. League of Municipalities Educational Foundation.
The new work follows a series of similar and much grimmer papers in the League’s Friends of Local Government Series that together chart the worst economic downturn in our lifetimes, including: “From Wall Street to Main Street, 2009: Unprecedented Economic Challenges” … “2010: A Stabilizing Economy but Uncertainty Remains” … “2011: Economic Growth, but Slowdowns Persist” … and “2012: New Jersey Employment Upswing? Or Will It Succumb to the National Slowdown?”
The qualifiers remain in the latest report but are more subdued, and the news on jobs has gotten solid.
“Recent job growth by far surpasses that of the expansion years of the 2000s, and is starting to resemble that of the expansion years of the 1990s,” the report says. “But, there is still a ways to go before full employment recovery is achieved.”
Hughes and Seneca outline just how deep a hole the state is escaping, to explain why cumulative private-sector employment losses since the recession remain quite substantial.
By the end of the severe U.S. recession in June 2009, the state had lost 207,900 jobs in just 18 months.
When the job destruction finally bottomed in February 2010, New Jersey had suffered a net loss of 240,600 jobs. “At that point, New Jersey was seemingly stuck in an economic death valley,” they say.
Since then, the state has had 39 months of increasing employment, much of it disappointingly feeble and less than that seen by the nation as a whole.
So while the U.S. has recovered 79 percent of its lost jobs, New Jersey has gotten back only 60 percent of them.
Hughes and Seneca point out two factors among those responsible for the disparity: New Jersey didn’t benefit much from the massive federal rescue of the automobile industry, because our last car plants closed several years ago; and the state’s slow population growth hasn’t contributed as much to job creation.
But now, the report says, “the magnitude of the job recovery has started to gain critical mass.” Each of the past four years has seen more private-sector employment growth than the one before it, and the same is highly likely this year.
“The reality of maintenance and repairs, and being ‘house rich but cash poor,’ can negate much of the perceived happiness people may have had about homeownership,” said Greg McBride, the senior financial analyst for Bankrate.com. Even if a low mortgage rate means you spend less each month than you did when renting, upkeep can drain a bank account faster than a leaking water heater.
Nonsense! Go and get that house in Upper Haughtville, you deserve it. Remember, it’s different here… we’re prestigious!
The study polled 600 homeowners in Ohio. Perhaps that’s why they were unhappy, they didn’t buy in Bergen County.
[5] grim,
I would be unhappy too if I lived in Ohio.
As long as you have money ,, better places to live than Bergen County or NJ
http://www.gallup.com/poll/152912/Hawaii-No-Wellbeing-West-Virginia-Stuck-Last.aspx
Ohio ranks pretty low on the well being poll, fifth from the bottom. NJ came in at 32.
I’d rather be dead in Washington Square Park than alive in Ohio.
Columbus is a nice place to live, they have a TGI Fridays and an Olive Garden.
I’d rather be dead in a booth at John’s pizza than alive in an Olive Garden.
Columbus has Hoppin Frog beer. Can’t be all bad.
Hoppin Frog stouts are on my desert island beer list.
Florida is 3rd from the bottom on that list which doesn’t surprise me. The place is a miserable swamp loaded with transients and meth junkies. Florida was invented to catch a break in January and February and visit Mickey Mouse. Otherwise, the place is nothing but a training ground for the Seal Six team.
Maintenance? Like when your blower motor fries on a Sunday during a heat wave? No AC.
9
I can arrange either. Pick one and quit crying.
12
Great Lakes makes some good beers too.
The special folks in North Jersey can’t get them though. Got to go to PA or south Jersey.
Ohio is closer to the meth belt than Florida is, I suppose it’s got that going for it.
Wow, there’s an acute shortage in rentals AND “for-sale” inventory. What a dream come true for the housing market. People will have to live on the streets or pony up 2K/month for a studio in Clifton. Apparently, this is what the media wants people to believe. Hurry now..buy a house.
[14] Gary
Gotta agree. Unless you are wealthy with a place in the Keys, I cannot see the attraction of Florida. I’d rather retire here.
Looks like the NAR retooled and toned down the castrated husband commercial.
Just grinning from here with paid for places in key west and ft lauderdale. So Clifton has a Costco and a polluted river. Nice quality of life you got there. LOL
[19] grim
The castrated husband commercials seem to be getting shot down with regularity.
Hmmm… Ft. Lauderdale or Manhattan… tough choice. ;)
15
I can arrange either. Pick one and quit crying.
What can you arrange? What are you really saying?
#1 grim
There must be more to that story. Subs make $75/day which does not fund a $2100 apartment. So there must be a room mate or hubby in the mix. So what we have is that someone is b1tching that they have to give up the concierge service and pool and downsize to a more realistic apartment. Even at 1800 they are paying top dollar. $1500 would get them into the center of Ridgewood. Would that me such a step down? I suspect it may add 10 mins to hubbys commute to get to the 287 corridor.
“The numbers are really, really scary in terms of how unaffordable
rentalhousing is in New Jersey,” said Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide. “This is an acute problem.”rep (15)-
Great Lakes beers just came to N. Jersey. I have them.
I think of buying housing right now as an arse-r@pe of both spouses.
Ohio has Skyline Chili.
Lib [28];
But we’ve got Hot Dog Johnny’s…
Skyline Chili sucks.
“Housing probably wont make you happy | New Jersey Real Estate Report” definitely makes me personally imagine a small amount further.
I really cherished each and every individual part of this blog post.
Thanks -Nickolas