NJ housing expert: ‘Good news, but not enough of it’
Most of the latest numbers related to the housing market in New Jersey point to solid movement in the right direction, but can conditions ever return to the way they were before last decade’s recession?
New Jersey’s real estate market in 2015 was the most robust its been since the economic downturn that began at the end of 2007. On top of that, homebuilding in New Jersey, represented by the number of authorized permits, saw its strongest start in a decade during the first quarter of 2016.
But Patrick O’Keefe, director of economic research at CohnReznick in Roseland, said while it’s possible New Jersey’s housing market will perform even better this year, there’s one significant measure that can’t be overlooked and forecasts a doubtful bounce-back to pre-recession levels.
Figures released Thursday morning, O’Keefe noted, point to a near-record low for New Jersey’s homeownership rate — the share of housing units that are owned by the occupant.
“Back in 2005, the homeownership rate peaked at 71.3 percent,” O’Keefe told New Jersey 101.5. “Today’s it’s down at about 61 percent.”
According to O’Keefe, it’s unlikely New Jersey’s rate will ever return to those record levels. And that’s not only due to economic factors. “Attitudinal shifts” have resulted in a weaker desire to own a home compared to the years prior to the housing meltdown, he said.
At the same time, an elevated inventory of distressed mortgages and a shortage of inventory of single-family homes have resulted in a constrained rebound of housing activity in the Garden State. New Jersey currently has the largest share of mortgages that are 90 or more days in arrears, or already in the foreclosure process.
“We’ve got good news in several reports, but just not enough of that good news,” O’Keefe added.
New Jersey home prices, on average, could return to a level prior to the recession, according to O’Keefe. But there still would be a sizeable number of properties – purchased between 2006 and 2008, predominantly – with market values that have not fully recovered.
From NJ Spotlight:
TRENTON ‘HOMESTEADING’ PROGRAM FINDS NO TAKERS FOR LOW-COST HOUSES
Launched with fanfare last year, Trenton’s “homesteading” program to sell very low-cost houses to first-time buyers has yet to close a single deal.
City officials plan another round of public outreach after every applicant in the initial group either dropped out or failed to meet the program’s financial requirements.
The retooling comes as the Trenton metropolitan area ran up the nation’s second-highest foreclosure rate in the first quarter of this year, trailing only Atlantic City. Data reported on the restoringtrenton.org website shows 3,556 buildings, 15 percent of the city’s total, are completely vacant.
“We do have people who are interested” in homesteading, said Diana Rogers, the city’s acting director of housing and economic development. “At this moment, they’re not able to qualify financially with our bank partner,” M&T Bank, which provided information for applicants.
The city and its partners, including nonprofit groups, will stick with the initiative, including greater focus on educating potential applicants about how to build and maintain their credit-worthiness, Rogers said.
“The goal is to help people get to a point where they are creditworthy again,” she said. “The banking industry wasn’t willing to take people below a certain credit score.”
Keeping people who do qualify also has proven “challenging,” according to Rogers. She acknowledged that some who looked into the program have been reluctant to be its first adopters. Rogers was unable to provide numbers or how many dropped out and how many were rejected, but suggested some may return as it continues.
Taylor also explained that the launch last fall, a year after the concept was broached, treated it more as “a government program” than as a collaborative process.
“Much of the publicity focused on ‘homes for $1,’ which was never going to happen,” Taylor said.
While the program’s price estimates did range from $1 to $10,000, many, and especially the lowest-priced ones, are deteriorated or derelict structures “that are going to require a great deal of rehabilitation,” she said.
While applicants might qualify to buy a property, many did not have the resources to borrow the funds necessary to rehabilitate it, she said. People need to know up front that they need to have money to invest after the purchase, she said.
Potential buyers with a better understanding of the challenges may have been deterred by the lack of information connecting the homestead program with other redevelopment efforts around town by the city, nonprofit groups, and private developers, Taylor said.
For those who are qualified, the city does point out that the program comes with strings attached, notably a requirement that the purchaser reside in the house for 10 years.
The goal is “stable neighborhoods,” Rogers said, not fueling the speculative real-estate market. “You can only buy one house” through homesteading, “and you have to actually live in it,” she said.
How one lives at home defines us in the modern age.
“Attitudinal shifts” have resulted in a weaker desire to own a home compared to the years prior to the housing meltdown, he said.
Wrong. People are f.ucked financially. The jobs are not there, outsourcing has k1lled us and a sea of “homeowners” are under water. Let’s cut the bullsh1t and tell the real story.
Prieto and Sweeney both need a math lesson.
Just a note on contract jobs, which are definitely on the increase in NJ and why people feel financially unstable and not able to or want to get a mortgage.
Not only have the hourly rates gone way down for contract jobs since 2010 (for business jobs that all earn well above $100,000 when held by actual employees), but the latest is for employers to say that they are for 7 1/2 hours per day – so under 40 hours per week.
But hah!, you know that the contract worker will have to “voluntarily” work longer hours to hold on to that job.
Ran off 530 gallons of oat bourbon wash – the most delicious whiskey we’ve ever made. Bourbon at it’s heart but with oat as the primary adjunct. Cool fermented with an English Ale yeast, it’s spicy, estery, fruity, floral, with an intense sweetness. Not even a hint of bite or burn, goes down smooth at 145 proof. Even completely immature, it’s outstanding.
We’ve have 100 or so bottles ready for the holidays, and then a larger release early next year.
Because who wants to live in a shithole like Trenton? Even Chambersburg sucks now.
“Launched with fanfare last year, Trenton’s “homesteading” program to sell very low-cost houses to first-time buyers has yet to close a single deal.”
Nothing like high-quality NJ whiskey to fuel those tense, angst-filled family holiday gatherings…
Grim, I can get your crunk juice into all the best Trenton bulletproof liquor stores.
Trenton will even take the clear stuff. Right out of the still.
This is your big chance!
Trenton prefers antifreeze. Prestone, Keystone, it’s all good.
Antifreeze works. Until it eats a hole in your brain.
Don’t talk to me about holes in the brain please. :P
Woops. Hope the little one is hanging in there…