From the Record:
NJ home building on track for best year since 2006
Powered by a surge in multifamily construction, home building in New Jersey is on track for its strongest year since 2006.
Builders have taken out 23,738 building permits through October, up 18 percent from the same period last year, according to data released this week from the U.S. census — and more than 60 percent of the permits have been for multi-family units. The multifamily percentage is the highest since 1964, said Patrick O’Keefe, an economist with CohnReznick, an accounting firm in New York and Roseland. As recently as the 1990s, multifamily projects accounted for about 15 percent of the home construction in the state.
O’Keefe expects builders to start more than 27,000 housing units in the state this year — coming close to the long-term averages above 30,000 a year, after dipping to lows averaging around 13,000 a year during the housing bust.
Rentals are leading the way, especially along the Hudson River. Bergen and Hudson counties have accounted for about 30 percent of the state’s home-building activity so far this year, heavily weighted toward multifamily construction.
Rentals are in demand because tight mortgage standards and flat incomes have pushed homeownership out of reach for many. In addition, many households — especially millennials and downsizing baby boomers — like the flexibility of renting. And after watching home values plummet during the housing bust, some people are “skeptical about the wisdom of using a house as your primary investment asset,” O’Keefe said.
While multifamily builders are moving forward, single-family builders are being more cautious, and not building houses they may not be able to sell, O’Keefe said.
Rentals are in demand because tight mortgage standards and flat incomes have pushed homeownership out of reach for many. In addition, many households — especially millennials and downsizing baby boomers — like the flexibility of renting. And after watching home values plummet during the housing bust, some people are “skeptical about the wisdom of using a house as your primary investment asset,” O’Keefe said.
Gee, tight lending standards? Plummeting valuations? Flat incomes pushing ownership out of reach? The new normal?
30 Year,
What resembles normal is transaction levels, availability of financing, inventory and time on market. Prices are stable.
This is not about buying real estate being a good investment or even a good decision. All this is about is calling the market what it is.
Financing has done a 180 since the scams pulled in the last decade and I have agents stating that there’s no inventory. I see the same dead, overpriced sh1t listed, over and over. I remember what normal was when I bought the first time and for the most part, the second time. This current housing market is on life support.
When did you buy?
Fast Eddie, what is not normal about this market? Look at the stats, homes are selling. If these homes are so overpriced, why are there so many market participants on a regular basis? The market is not on fire, and it’s not dead, isn’t this what you want, stability?
There is almost never inventory in the north jersey area, ever. When has there been moments of lots of inventory in the past 30 years? Biggest inventory was after the housing bust, because no one was buying or selling, hence not a normal market. In a “normal market” in north jersey, there is no inventory. That’s how the land value went up so high compared to other parts of the country. It’s always limited inventory. It’s a tight market. That drives up prices. You think Manhatten real estate went up in value because of lots of inventory?
Fast Eddie says:
November 28, 2014 at 7:26 am
30 Year,
What resembles normal is transaction levels, availability of financing, inventory and time on market. Prices are stable.
This is not about buying real estate being a good investment or even a good decision. All this is about is calling the market what it is.
Financing has done a 180 since the scams pulled in the last decade and I have agents stating that there’s no inventory. I see the same dead, overpriced sh1t listed, over and over. I remember what normal was when I bought the first time and for the most part, the second time. This current housing market is on life support.
Problem with this market is that all it will take for it to collapse (again) is a 600-pt drop in the Dow. It is random trip-wired for failure.
Sold for 446K in 2004; then 690K in 2007 (holy sh1t); currently asking 645K. But, since everyone is bleeding wealth, they can afford the hit:
http://www.trulia.com/property/3158834924-698-Ellington-Rd-Ridgewood-NJ-07450#photo-1
Let’s say you have a central bank that’s monetized a generation’s worth of unpayable debt through the “purchase” of a billion or so in worthless mortgage paper. What could possibly go wrong? What could possibly be the problem, if, say, interest rates rose a half-point?
Of course, we know that interest rates will never rise again in our lifetimes.
…too many powerful people betting against it…
That’s why the next market “dislocation” will feature pitchforks, guillotines and roving packs of marauders.
Pumpkin Head,
Wadda you think? It claims to have lotsa new stuff. It sold for 660K in 2003; asking just under a million:
http://www.trulia.com/property/3172671185-210-Manor-Rd-Ridgewood-NJ-07450#photo-1
Wasn’t this one under contract a few months ago?
http://www.trulia.com/property/3119310335-454-Stevens-Ave-Ridgewood-NJ-07450#photo-1
Sold in 2007 for $1,200,000; current asking is $949,000. Hey, what’s a $250,000 hit to the rich folks? Right? I said Right?
http://www.trulia.com/property/35845722-285-Richards-Rd-Ridgewood-NJ-07450
OMG shut the fkuk up.
This one sold for $1,925,000 in 2006; current asking price is (drum roll please)… $1,225,000. If my math is correct, they’re currently down $700,000. Yes, this is what the new normalcy resembles. Multiply by a few thousand more souls lost in a sea of pilfered wealth. The beat goes on:
http://www.trulia.com/property/3147048232-269-Lotte-Rd-Ridgewood-NJ-07450
#5 Fast Eddie – Of course this house was a 3 bedroom, 2 bath cape when it was sold in 2004 and now it is a fully renovated colonial. Why let details get in the way of a good story.
I am not saying buy now or get priced out forever. I am not saying real estate is a good or safe investment. No predictions of what happens next week, month or year. What I am saying is, based upon days on the market, inventory and transaction levels this is a normal market for our area and prices are stable. I have been earning my living buying, selling and brokering real estate in North Jersey since 1981.
I’m shocked, shocked . . .
http://money.cnn.com/2014/11/20/news/economy/obamacare-enrollment-fudged/index.html?sr=fbmoney112114obamacare0630story
30 year,
That leap in price from 2004 to 2007 was par for the course, regardless of any renovations. Houses were multiplying in price like a bad v1rus. You’ve been selling and buying since 1981 and I’ve been a house owner since 1996. I guess that makes us both a wee bit privy to the process. ;)
Let us be thankful . . .
http://www.sbnation.com/nfl/2014/11/26/7282061/thanksgiving-buttfumble-mark-sanchez-butts-butts-butts
I think it is useful to interject here that you can have a market that is “normal” in its mechanics and functions that operates within the larger envelope of a rigged-up financial time bomb.
Introduce ZIRP to any market that depends on financialization, and you have created a distortion that trumps any set of transactional statistics.
ZIRP + financialization = malinvestment
That is all.
No surprise that it took a massive surge of cash buyers in order to turn the statistical downtrend of the housing collapse.
The days of “fog a mirror” are coming back. You can just feel it.
Fast Eddie – I am not trying to pull rank on you but there are a lot of folks who feel they are experts. Owning or living in a house does not make you an expert in real estate. For decades you have worked hard to get ahead in the technology field. You have developed skills that you are well compensated for because you have proved your expertise. I own a computer and do a great deal of my work in front of a computer. Am I an expert? Is my opinion educated and valid in your field? No fcuking way!
@conradhackett:
Minimum wage would be $25/hr if it grew like income of the top 1%
http://t.co/i9xqWdxCH3 http://t.co/BbDgdu6PR2
and Liquor Luge is correct, there are a lot of bad fundamentals to this real estate market. My prediction is that we are in for a protracted slide sideways until something changes substantially for the positive or the negative. Until then the powers that be will continue to attempt to keep the market from spinning out of control…until they can’t.
There have been an awful lot of changes to the economy in my lifetime. Those who have predicted the worst outcomes have been wrong so far. More than likely that trend will continue.
Gary if it was not for you this blog would be a waste of time.
@BillMoyersHQ:
Walmart is seeing its biggest Black Friday protests ever today. http://t.co/44XP2o0RL9 via @motherjones
First one to die on Black Friday gets a door prize.
http://m.nydailynews.com/news/national/black-friday-shoppers-brawl-chaos-surrounds-shopping-article-1.2026675
I still rest on my pillars of demographics and economic trends. It suggests that gulfs btwn desireable and undesireable will widen, price declines in the undesirable and price stability in desirable but no further gains, further southern and western migration, and a slow decline for city downtowns and inner ring suburbs.
@udaytharar: Price of Gold, 1790-2013
Real price of gold: $73.6 in 1980, $73.3 in 2012. No real returns
@bibekdebroy @AmitBhartia
[27, 28]
I want to see a Walmart protest go Ferguson. Great theater
30 Year,
ZIRP + financialization = malinvestment
That really does tell the story and it continues like a body on life support. And like you said, the powers that be are merely attempting to keep the market from becoming unhinged. So, we agree. And believe me, I’m far from a housing expert but when it comes to financials and deciphering the direction of the herd, I’ve been right more times than not.
Mike [26],
I’m simply the messenger. :)
Nay; I am the harbinger of doom.
30 year realtor says:
November 28, 2014 at 9:34 am
there are a lot of folks who feel they are experts. Owning or living in a house does not make you an expert in real estate.
Comrade Nom Deplume, at Peace With The Trolls says:
November 28, 2014 at 10:09 am
I still rest on my pillars of demographics and economic trends. It suggests that gulfs btwn desireable and undesireable will widen, price declines in the undesirable and price stability in desirable but no further gains, further southern and western migration, and a slow decline for city downtowns and inner ring suburbs.
30 year (25)-
When ZIRP and monetization of debt fail (and, they will), TPTB will have no more tricks left to employ in the game of pretend-and-extend. The cadaver of our long-dead necronomy will finally begin to stink, and payment will be exacted at the point of a pitchfork or gun.
In the matter of predicting “game over”, I only have to be right once.
“There have been an awful lot of changes to the economy in my lifetime. Those who have predicted the worst outcomes have been wrong so far.”
You can’t have ZIRP and expect muppets to save up enough to buy a house. What are they earning? It’s a catch 22. Catch my drift? F.ucked from the buying and selling side.
When in Rome – Taylor ham and three cheese sandwich for breakfast. Cheddar, Swiss, and Havarti with three slices of Taylor Ham on English.
[29] Nom – I take it for city you mean the likes of Bloomfield, Nutley, Montclair, not New York, Boston, San Fran, right?
and a slow decline for city downtowns and inner ring suburbs.
Speaking of Ridgewood, my SIL has a deal on her house after 1 day open house. They have no backyard and the trains run behind the house…
http://www.realtor.com/realestateandhomes-detail/275-Hillcrest-Rd_Ridgewood_NJ_07450_M52658-82753?row=1
Condo [40];
They have no backyard and the trains run behind the house…
In Realtorese: “Low Maintenance! Close to transportation!”
Grim might ask if any plot of dirt that size in Ridgewood isn’t worth at least half that much. Congrats on the sale all the same. If anyone’s looking my friend is sell in tawny Morris county — more house, more land for considerably less.
Re: Title post;
So lots of high-density multi-family for people who should be wealthy but can’t afford to buy. Are we talking about NNJ or Manhattan?
# 29 sounds like a definition of White Flight
House flipping is back http://finance.yahoo.com/news/this-man-wants-to-teach-you-how-to-flip-homes%E2%80%94for-a–34-000-fee-150349468.html
Check out the oil patch getting bitch slapped…….
[35] anon
“Owning or living in a house does not make you an expert in real estate.”
I’ll start posting copies of tweets. That makes one a expert on anything.
#45…yes, I believe that was called an election day ploy by someone on the board….
Oil taking a beating!
The Great Pumpkin says:
November 27, 2014 at 10:27 am
OPEC doesn’t cut production. Get your money invested this bull is only starting.
Should be some fireworks when the day comes that most oil contracts aren’t settled in USD.
Sure sign of the apocalypse:
http://deadspin.com/62-year-old-mickey-rourke-wins-boxing-match-by-knock-1664359280?utm_campaign=socialflow_deadspin_facebook&utm_source=deadspin_facebook&utm_medium=socialflow
I’d like to see Mickey Rourke vs. Putin. Prolly a good fight.
[5] Eddie,
645K and no garage. Next.
Humm Opec wants to put the screws to the US and as long as oil stays below 75 it will make half of the shale plays in the US become losers, those drillers and their workers will be going bye bye.
My relatives in Midland TX just closed up and sold off their home at peak. Great call for them, and guys like this one will be going broke soon.
http://www.forbes.com/sites/christopherhelman/2014/10/15/the-oil-patch-prince/
Just recently learned that a good deal of junk market debt was loaned to high risk oil plays in TX & ND. In the same way you are seeing the stocks of these companes getting trashed, there are going to be some bankruptcies too at the corporate level, and then following the personal level. Not a major systemic issue, but definitely keep an eye on this one…..I was in the process of pairing back some of the riskier debt I monitored; I am going to accelerate the culling of this exposure…….I hope I am wrong about this one, but in the grand scheme, I’d rather see Russia, Iran and ISIS take it in the family jewels……
Juice Box says:
November 28, 2014 at 3:07 pm
Humm Opec wants to put the screws to the US and as long as oil stays below 75 it will make half of the shale plays in the US become losers, those drillers and their workers will be going bye bye.
My relatives in Midland TX just closed up and sold off their home at peak. Great call for them, and guys like this one will be going broke soon.
So who really benefits most from the oil debacle ……JAPAN …that’s who the powers to be are really bailing out ,Japan and themselves
@joemccann: @BrendanEich
$50 before Canada feels real pain, IMO. Middle East and Russia will stir up conflict but that is a temp pricing solution.
“No central bank should hold any gold reserves, in our view,” he said in a research note released on Thursday. Buiter urges caution, saying that a central bank holding 20 percent of its balance sheet in any single commodity is “highly unorthodox” and a “risky investment strategy.”
“Investing a vast amount of money in something whose value is based on nothing more than a set of self-confirming beliefs will make for an exciting ride. Whether that is enough to impose it as a requirement on one’s central bank is another matter,” he added.”
@CNBC: Chief economist at Citi says gold is in a 6,000-year bubble
No way…….Canada is MUCH worse off…..tar sands process has higher breakeven that shale oil….
anon (the good one) says:
November 28, 2014 at 4:25 pm
@joemccann: @BrendanEich
$50 before Canada feels real pain, IMO. Middle East and Russia will stir up conflict but that is a temp pricing solution.
re # 59 – Chi – How about stocks of regional banks that have a high percentage of their loan portfolios in the Fracking industry?
http://www.businessweek.com/articles/2014-10-30/will-wall-street-love-fracking-as-oil-prices-fall
anon (58)-
You prolly have no idea who Buiter is, or who his masters are. Idiot.
Of course, anything a Citi drone says through the mouthpiece of CNBC should be taken as fact.
juice…great article…..here is the doomsday scenario…
The banks and investment pool take a bath on emerging energy play borrowing and then the creidt spigot gets shut off for the tech start-ups and biotech. Not that there is a need to pare back against those areas, but instead, portfolio risk mitigation demands that credit tightens and it bleeds into everything…..rates themselves in investment grade profile remain tight, in fact you may even find BBB’s tightening. That said, a blow-up could suck the life out of global debt that is anything other than the top shelf……this one is as meaty a systemic risk as I have seen in awhile, but it may not amount to anything other than the singeing of enterprises who have overextended themselves.
An eye-poke to the Russians and Iranians, and we get the bonus, unintended consequence of triggering a planet-wide credit meltdown. And everybody laughs at me whenever I mention deflationary credit collapse/death spiral.
Great good fun.
chi, there is no way to mitigate risk anymore. We’re all swimming blind, hoping to be the first one out of the pool when some bogeyman throws in a bucketful of electric eels.
And, some in the pool are swimming with no bathing suits.
Not From the Onion: Man Arrested for Pointing Banana at the Police
by Alex Tabarrok on November 28, 2014 at 6:47 pm in Current Affairs, Film, Food and Drink | Permalink
A Colorado man, from Fruitvale (I am not making this up), was arrested for pointing a banana at the police. What makes this actually scary is the language of the police report:
The officers wrote in the police report they feared for their safety despite observing the supposed weapon was yellow.
“I immediately ducked in my patrol car and accelerated continuing northbound, fearing that it was a weapon,” Officer Joshua Bunch wrote in the report, according to the newspaper. “Based on training and experience, I have seen handguns in many shapes and colors and perceived this to be a handgun.”
The man was fortunate that he was only arrested. Had he been wielding a pointed stick he would surely have been shot.
– See more at: http://marginalrevolution.com/#sthash.tYkN5FjQ.dpuf
re: 64 – re: “here is the doomsday scenario…”Yah think? How about new wells go to zero this week?
Got a teen in your life? Coast Guard sound fun..
.here is the doomsday scenario… die die die…
clot: I thought this movie would be a good recommend…not really, but the backstory is right up your alley……you would have enjoyed this film if it were condensed into 15 minutes…..but 98 is too much….
http://www.youtube.com/watch?v=ChM2icbWo9w
“Anarchy is loosed”. I like that.
Yes, I stand by this. Energy sector has been killing it for years. They are giving back some of that profit to help jump start this economy. I was calling for an injection into the economy through a min wage hike, but this drop in oil is much better. Every sector besides energy gets a raise when energy goes down. This will def start creating some extra muscle in the demand part of the equation.
joyce says:
November 28, 2014 at 1:34 pm
The Great Pumpkin says:
November 27, 2014 at 10:27 am
OPEC doesn’t cut production. Get your money invested this bull is only starting.
72- Best part, this timing could not have been better……it’s the holidays, time to spend
Doomsday?
600 drop in the DOW..yeah..couple of months ago…
Half point raise in rates..check 30yr mtg over last year…
Go back to bed gramps
This money option not only provides you fast
monetary help but also saves you from paying raised rate of interest and
varied other charges that are leviable on other kind of loans.
In reality, this tiny 3 digit number can determine how much money you have to pay in interest,
your location and what sort of car you drive.
Before you take out the loan, you need to consider to be
able to make the scheduled payments.