Even AI wants to live in NJ

Posted on March 15, 2024 by grim

From ROINJ:

CBRE: New Jersey data centers find AI operators are dominant occupiers of space

Strong demand for data center space during the second half of 2023 resulted in a new all-time low vacancy rate for the New York tri-state region, including New Jersey, as the rate dropped to 6.5% from 9.8% in the first half of 2023, according to CBRE’s recent North America Data Center Trends report.

Much of that demand came from artificial intelligence operators, which also impacted rental rates, pushing them to $130-$150 per kilowatt for a 3-10 megawatt requirement per month.

“New Jersey continues to experience strong demand and leasing activity by cloud-based and co-location operations. During the second half of 2023, demand remained extremely high, with per-kilowatt pricing increasing 20% to 30% or more,” CBRE Senior Vice President Jon Meisel said.

“In addition to high demand and limited supply, publicly traded operators are seeking higher per-kW pricing due to rising capital costs,” CBRE’s William Hassan added. “Power procurement issues are also delaying expansion plan timelines for existing campuses by 24 to 36 months, further putting a crimp on supply.”

During the second half of the year, AI companies pre-leased over 40 MW, with further expansions currently in negotiations.

The CBRE data also said that notable activity in New Jersey during the second half of 2023 included the completion of leasing at QTS’ Piscataway facility; and the preleasing of its building in East Windsor campus to an AI company. It is under construction to accommodate at least 20 megawatts.

CBRE also added that, during the quarter, Equinix purchased a new building in Secaucus, and a databank facility in nearby Orangeburg, New York, currently under construction, was fully preleased to an AI company.

Posted in Economics, New Development, New Jersey Real Estate | 102 Comments

Transit-based redevelopment

Posted on March 14, 2024 by grim

From Newsweek:

Housing Market Solution Could Help New Jersey

New Jersey might have just found a solution to its affordable housing crisis, and it involves the undeveloped land outside of its transit system.

The Regional Plan Association found 74,000 acres of land were underutilized around the commuter rail stations within New Jersey and New York.

Today, the median rent in New Jersey is $2,500, $470 more than the national median, according to Zillow data.

Already, land has been rezoned in Metuchen for mixed-use development, and this could continue into the larger area, according to Jay Muldoon, the former director of economic development in Metuchen.

“We have great neighborhoods in Metuchen, but we now have a more vibrant, engaging and inviting downtown, where 25 years ago it was a pretty much a dead downtown,” Muldoon told NJ Spotlight News.

Around 150 transit stations in New Jersey could see rezoning and redevelopment that would bring more affordable housing to the area, but some challenges remain.
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In order for the plan to gain traction, experts say tax credits and subsidies will need to make it more financially feasible for developers to build affordable housing in these areas.

“While New Jersey’s plan shows promise, there are potential obstacles that could hinder its success,” real estate consultant and Pavel Buys Houses founder and CEO Pavel Khaykin told Newsweek. “One major challenge is the high cost of land and construction in the state, making it difficult for developers to build affordable units without significant financial support.”

Local communities might also come out against the new developments in their neighborhoods with concerns of safety or property value impact down the line.

Posted in Demographics, Housing Bubble, New Development, New Jersey Real Estate, Politics | 95 Comments

Thanks Mom and Dad!

Posted on March 12, 2024 by grim

From Coldwell Banker:

2024 Consumer Survey Key Findings – March 2024

Over a quarter (26%) of surveyed consumers have not provided or do not plan to provide financial support for their child(ren)’s first home, compared to 38% who said they would, 15% who said they have and 25% who do not have children.

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

Unexpected demand for Gold Coast rentals

Posted on March 11, 2024 by grim

From NorthJersey.com:

Short-term rental demand rose in New Jersey after Airbnb restrictions in New York City

It’s been just about six months since New York City placed major restrictions on short-term rental properties like Airbnb — and North Jersey is reaping the benefits.

In September, New York City enacted the Short-Term Rental Registration Law. The policy requires short-term rental hosts to register their property to the Mayor’s Office of Special Enforcement and prohibits booking service platforms from facilitating transactions for unregistered short-term rentals. Additionally, hosts on platforms like Airbnb cannot rent out an entire apartment or home for bookings of less than 30 days, and instead can only rent out a room in a space that permanent residents are living in.

Because of this, there are now fewer than 5,000 short-term rentals on Airbnb in New York City, according to Inside Airbnb, a housing advocacy group that compiles data from Airbnb’s website. In contrast, there are more than 34,000 rentals available for stays of 30 days or more — which do not require registration for short-term rental licenses.

While there has not be an increase in short-term rental listings in New Jersey, these restrictions have created a higher demand for short-term rentals here as visitors consider other options for places to stay nearby.

In fact, areas like Jersey City, Hoboken, Weehawken and Union City have seen a dramatic increase in demand for short-term rentals because of their proximity to New York City and their ability to offer quick access to Manhattan. According to AirDNA — a short-term rental intelligence firm — demands for short-term rentals rose by 84% in Jersey City, 59% in Weehawken, 40% in Union City and 35% in Hoboken in February 2024 compared to this time last year.

Posted in Economics, Gold Coast, New Jersey Real Estate | 88 Comments

Say YES! to $56k in property taxes

Posted on March 10, 2024 by grim

From the Record:

Daybreak, an updated 100-year-old brick mansion in Montclair, hits market for $7.5M

Posted in New Jersey Real Estate, Property Taxes | 26 Comments

Jobs Day!

Posted on March 8, 2024 by grim

From the WSJ:

Jobs Report Today: What to Watch

Investors’ eyes are on the jobs report today.

February’s jobs data are due at 8:30 a.m. ET. Economists expect that hiring cooled from January. A softer labor market could translate into less spending power for consumers, and lower inflation, making the case for interest-rate cuts.

Investors got a shot of optimism Thursday after Federal Reserve Chair Jerome Powell said the central bank wasn’t far from being able to cut interest rates. Across the Atlantic, the European Central Bank’s fresh inflation forecasts signaled the possibility of earlier rate cuts, although no earlier than June.

February’s job report is expected to show the U.S. economy added 198,000 jobs and that the unemployment rate held at 3.7%. Last month, job creation came in hotter-than-expected, forcing investors to rethink their expectations for rate cuts this year.

Posted in Demographics, Economics, Housing Bubble | 144 Comments

This is the top 20?

Posted on March 7, 2024 by grim

From NJ1015:

The top 10 hottest towns in New Jersey to buy a home

Posted in Economics, Housing Bubble, New Jersey Real Estate, Where's the Beef? | 33 Comments

Spring has sprung

Posted on March 6, 2024 by grim

From NorthJersey.com:

Real estate update: Is North Jersey finally seeing more housing inventory?

In February, 19 of New Jersey’s 21 counties saw an increase in new listings over January. Additionally, 12 New Jersey counties saw more new listings this year than they did in February 2023.

In North Jersey, Morris and Passaic counties saw the highest increases in new inventory, at 378 and 246 new listings, respectively. These are increases of 48.82% and 36.67% from January, and 4.42% and 4.24% increases from February 2023.

Sussex County had 184 new listings in February — 19.48% more than January and 5.75% more than February 2023. Bergen and Hudson counties had 608 and 374 new listings, respectively, in February. While this is 13.43% and 6.25% more than in January, it is 7.03% and 11.37% less than in February 2023.

Essex County was the only North Jersey county to see a decrease in new listings compared with January. With 362 new listings, Essex County had slip of a 3.72% and an 8.59% decline from February 2023.

All 21 counties saw home listings stay on the market for a shorter period than that in January.

In Sussex County, listings typically stayed on the market for 45 days before being sold — the most time in North Jersey. In contrast, listings typically stayed on the market for 27 days in Morris County — the least time in North Jersey.

Homes typically stayed on the market for 31 days in Essex County, 33 days in Bergen County, 34 days in Passaic County and 41 days in Hudson County.

While median home listing prices have decreased slightly in some counties from January, every New Jersey county saw an increase in median listing prices compared with February 2023.

Passaic and Sussex counties had the highest increases in North Jersey, at 11.47% and 11.19%, with median listing prices of $478,750 and $402,500, respectively. In Bergen County, prices increased by 10.57%, with a median listing price of $779,495. This is the third-highest median listing price in the New Jersey, behind Cape May and Monmouth counties.

In Hudson and Morris counties, there was an increase of 8.5% and 7.57%, with median listing prices of $649,925 and $675,000, respectively.

Posted in Demographics, Economics, Housing Bubble, New Jersey Real Estate | 141 Comments

Boomers back on top

Posted on March 5, 2024 by grim

From Philadelphia Magazine:

Boomers Are Downsizing — and Dominating Philly’s Real Estate Market

Take a walk through the Laurel, the recently completed luxury condo tower at Rittenhouse Square’s northwest corner, and you might mistake it for a retirement community.

When you consider how many aging baby boomers call it home, that makes sense.

As of the end of January, 60 percent of the Laurel’s 65 condos had been sold. And 65 percent of those buyers were baby boomers.

The baby-boom generation has been the pig in the demographic python ever since World War II GIs and their wives made like rabbits the moment the warriors returned home. And as that cohort has aged, it has shaped and reshaped the way Americans live. From mass-produced suburbs like Levittown aimed at their parents to more upscale suburbs targeted at them as they rose through the workforce, the boomers have had their needs, desires, tastes and preferences determine what our communities look like.

That’s certainly been the case locally. And though the boomers are done raising families and are exiting the workforce, they’re still reshaping the way we live. Or, at least, reshaping the way they live.
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The boomers are no longer the largest generation; millennials surpassed them in 2019, and Generation Z is nipping at their heels, if it hasn’t outgrown them already. But according to the National Association of Realtors, boomers last year overtook millennials as the single largest segment of the home-buying population — a designation those millennials had held since 2014.

Several trends contribute to this rise in boomer buying.

The older half of the generation (the youngest members of this half turn 69 this year) is largely out of the workforce. And while medical advances allow aging boomers to live longer, healthier lives, no one has yet found a way to halt aging entirely. These older boomers, then, are looking at the day when they may need help performing everyday tasks — and looking for communities where they can get it.

The younger half includes many who, like me, remain in the workforce and have no plans to retire anytime soon. (I was born in the second-highest year for births in the baby boom, 1958, and celebrated my 65th birthday in October.) Most of this group needs space for working from home, since the pandemic drove so many of us to work where we live at least part of the time. But our kids have also flown the coop, so we’re looking to jettison the extra bedrooms we needed for them.

And some of us want to get rid of the yards around our houses as well. We’re finding it harder to climb stairs, fueling a demand for main-floor bedrooms. New-construction houses increasingly have those, but for boomers who don’t want to buy a new house (and another yard), that usually means buying a condo, like those at the Laurel.

Posted in Demographics, Economics, Employment, Housing Bubble, National Real Estate | 83 Comments

NJ rents only up 2.3%?

Posted on March 4, 2024 by grim

From the Bergen Record:

Here’s what rent prices look like in NJ, and the US, at the start of 2024

As home prices have continued to soar and mortgage rates remain high, many would-be first-time buyers are opting to stay in the rental market longer.

This might be the more doable financial option for many — with median rent prices continuing to decline across the nation for the sixth month in a row −— but those living in the Northeast have experienced consistent price increases in comparison, according to Realtor.com’s January 2024 Rental Report.
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Compared to big Western rental markets like Phoenix, Riverside and Las Vegas — which all saw rent prices decline for eight months before seeing their first year-over-year price growth in January 2024 — the New York metropolitan area has experienced faster rent growth.

This region — which includes the North Jersey counties of Hudson, Bergen, Passaic, Morris, Essex and Sussex — has median rents of $2,844. This is 2.3% more than median rent prices seen in our area this time last year.

The report credits the steady increase in rent prices in our area to expensive home prices and high mortgage rates are keeping buyers in the rental market, boosting demand and putting pressure on rents in popular areas.

A strong labor market and the slowing growth of new multi-family homes is also said to play a role in increasing prices.

“Consequently, the stronger labor market in the Northeast is likely contributing to an increased demand for rentals, rendering it more competitive compared to the rental market in the West,” according to the report.

“Although both regions saw record-high new multi-family starts in 2022, we expect a significant portion of 2022 starts in the Northeast to be completed in 2024,” the report reads.

Posted in Demographics, Economics, Employment, Housing Bubble, New Jersey Real Estate | 66 Comments

Huh?

Posted on March 3, 2024 by grim

From the LA Times:

Forget California exodus. New Jersey residents lead an influx back into the Golden State 

After a half decade of Californians moving to places like Texas and Florida, an unlikely state has been supplying California with new residents.

New Jersey, a similarly expensive and densely populated state, saw more residents move to California than the other way around in 2022 — a rarity amid the state’s population exodus. It was one of only eight states to be part of a reverse exodus phenomenon, and the state with the largest net number of transplants to California.
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In recent years, California has experienced a net exodus to most other states, with experts attributing the population shift primarily to California’s high housing costs. But a handful of states have bucked that trend, sending transplants into the Golden State at a time when more people are moving out. New Jersey, one of the nation’s most densely populated states, has recently recorded the biggest net exodus of residents moving to California. 

In 2022, the so-called California exodus resulted in 818,000 Californians leaving for other states, while 476,000 moved in, resulting in a total domestic loss of 342,000 in the Golden State. 

The exodus was highlighted by the droves who left for Texas. The five states that saw the most net arrivals from California — Texas, Arizona, Nevada, Florida and Idaho — each had between 20,000 and 60,000 more people arrive than leave for the Golden State.

By contrast, the eight states that were net contributors to California’s population added to a net contribution under 15,000 people. In other words, the size of the net exodus to each state has been much larger than the number of transplants moving into California.

More than 13,000 New Jerseyans moved to California in 2022, and fewer than 7,000 Californians moved to New Jersey. The net migration into California — nearly 7,000 people — was the highest of any state. Illinois was second, with net in-migration to California of around 4,000 people.

Nebraska, with 2,000 more leaving for California than arriving, was the third highest. 

In total, 41 of 49 states saw more Californian arrivals than departures for the Golden State.

Posted in Demographics, Economics, National Real Estate, New Jersey Real Estate, Where's the Beef? | 16 Comments

$4.9m record breaker in Weehawken

Posted on March 2, 2024 by grim

From Patch:

Christie’s International Real Estate Group announces the sale of 12 Henley Place – an iconic and record-breaking sale that set a historic benchmark at Henley on the Hudson, with its remarkable sale price of $4.9 million. Jessica Williams, Realtor-Associate® and distinguished luxury real estate specialist, represented both the seller and buyer of this exquisite and resplendent home. The sale of 12 Henley Place resulted in the top residential sale along the developing Weehawken Waterfront. “The seamless execution of this sale underscores our commitment to delivering unparalleled service and showcasing exceptional properties along the Gold Coast. At Christie’s, we take pride in elevating the real estate 

Posted in General, Gold Coast, Housing Bubble, New Development, New Jersey Real Estate | 40 Comments

All your wages are belong to us

Posted on March 1, 2024 by grim

Hat tip to ChiFi, not for this, but for everything he contributes. Hats off to you my friend.

From the Visual Capitalist:

Charted: U.S. Median House Prices vs. Income

Posted in Housing Bubble, National Real Estate | 115 Comments

All Hail Prince and Princess Snowflake

Posted on February 29, 2024 by grim

From the Guardian:

Millennials on course to become ‘richest generation in history’

Millennials may have been portrayed as frivolous spenders squandering their income on overpriced coffees and online barre classes in the face of pitiful long-term finances – but they are on course to become the “richest generation in history”, a study has shown.

Those born between 1981 and 2000 are in line for a “seismic” windfall over the next 20 years, according to research by real estate agent Knight Frank, thanks to the property assets accumulated by the generations before them.

While the distribution of wealth may be shifting between world regions, an even bigger shift is happening between generations. The switch will see $90tn (£71tn) of assets move between generations in the US alone, “making affluent millennials the richest generation in history”, Knight Frank said in its 18th annual wealth report.

The research found that 75% of millennials expect their wealth to increase in 2024, against 53% in the baby boomer generation (those born between 1946 and 1964), 56% in gen X (1965 to 1980) and 69% in the younger gen Z.

While they wait for their inheritances, many millennials are still reeling from a series of economic shocks, with the 2008 crash followed by a series of financial headwinds brought about by the pandemic, Brexit and war in Ukraine.

As a result of rising rents, they have spent much of their income on housing costs and faced significant challenges to afford their own homes or build up a pension pot. The conditions have fuelled an image that millennials – shorn of the target of saving their income to acquire property – have frittered their money away on pricey pastimes and avocado on toast.

In reality, their future financial firepower is likely to be a divisive lottery, predominantly determined by inheritance from previous generations, including property.

Posted in Demographics, Economics, National Real Estate | 58 Comments

Taxes Up!

Posted on February 28, 2024 by grim

From News12:

Gov. Murphy seek $55.9B New Jersey budget, increasing education aid, boosting biz taxes to fund transit

Gov. Phil Murphy on Tuesday unveiled a $55.9 billion budget, up about 5% over his previous year’s proposal, calling for nearly $1 billion more in K-12 school funding as well as about $1 billion in new taxes on high-earning businesses to fund transit.

Murphy, a two-term Democrat, cast the budget as the fulfillment of campaign pledges to identify a recurring source of funding for New Jersey Transit and to fully finance a state formula for schools that’s never before been fully implemented.

“Our budget will ensure New Jersey retains its proud reputation as the best place anywhere to raise a family,” he said.

The governor’s seventh budget comes amid declining revenues in the current fiscal year, something Murphy attributes to a hangover from 2022. The budget proposes drawing down the state’s surplus of about $8 billion to more than $6 billion to help close the gap.

Murphy campaigned in 2017 on fully funding a school aid formula, which the state supreme court ratified in 2009 and that never was fully implemented. The proposal calls for increasing aid from nearly $10.8 billion to $11.7 billion, but Murphy also stressed the incremental increase of school funding since he took office. Aid had been largely flat at $8 billion annually throughout much of Republican Chris Christie’s two terms.
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The budget also takes aim at another campaign promise Murphy had made: setting up a funding source for the state’s often beleaguered transit system. The system has regularly had to use capital funds just to keep up operations, limiting resources for system-wide improvements. To help close the gap Murphy is proposing a 2.5% tax on business profits of companies that netting more than $10 million annually.

The proposal comes after a temporary business tax increase ended at the end of last year. That surcharge affected some 3,100 businesses, according to the administration, while the new proposal would levy taxes from about 600 firms. Murphy said small and medium sized businesses would not be impacted.

Business leaders decried the increase, arguing the governor essentially went back on a commitment to keep the corporate tax rate down.
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The state’s budget has grown significantly since Christie left office after signing a $34.7 billion spending plan. The state takes in income, sales and business taxes to fund a mix of programs and services, including state government itself but also education and health care funding.
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Murphy is also proposing to continue a property tax relief plan first initiated in 2022 that doled out up to $1,500 in tax rebates to families that make up to $150,000, as well as aid for renters. As initially envisioned the program helped under a million households. The new budget would increase the benefit to 1.3 million households, Murphy said, though it’s not clear exactly how.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 97 Comments