The Slump

Posted on August 30, 2018 by grim

From MarketWatch:

Pending home sales stumble as housing market momentum wanes

The numbers: Pending-home sales declined 0.7% in July, the National Association of Realtors said Wednesday.

What happened: NAR’s index, which tracks real-estate transactions in which a contract has been signed but the transaction hasn’t yet closed, fell to a reading of 106.2, missing the consensus forecast of a flat reading.

It was the seventh-straight month in which the index was lower on an annual basis — by 2.3% in July. In the first eight months of 2018, the index has charted monthly increases four times and monthly decreases four times. In July, the pending home sales index in the Northeast rose 1.0%, while the index in the Midwest inched up 0.3%. Pending home sales in the South fell 1.7%, while in the West, they were down 0.9%.

Big picture: Housing has stalled out. In July, total home sales — existing and new — sank below a key psychological benchmark to the lowest in two years. What had been a seller’s market across most of the U.S. hit a tipping point this year, as buyers decided the slim pickings on the market weren’t worth it.
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What they’re saying: “It appears sales activity crested in late 2017,” said Freddie Mac Chief Economist Sam Khater earlier in August. “It is clear affordability constraints have cooled the housing market, especially in expensive coastal markets. Many metro areas desperately need more new and existing affordable inventory to break out of this slump.”

Posted in Economics, Housing Recovery, National Real Estate | 90 Comments

August Otteau Report

Posted on August 29, 2018 by grim

From Otteau Group:

MarketNEWS August 2018 Edition

The number of home purchase contracts in New Jersey increased by 4% during July compared to the same month last year. There has however been a noticeable change in the mood of the market in recent months as the pace of home sales has declined in about 1/3 of all markets on a year-to-date basis. As a result, the number of year-to-date purchase contracts (January-July) in New Jersey is up marginally by 1%, or roughly 800 contracts. While this is partially attributable to an under-supply of housing inventory, a growing affordability gap due to rising prices and interest rates is a significant factor.

While the number of year-to-date home sales has increased by 1% overall, that is not the case for all price ranges. Contract activity for homes priced under $400,000 have stagnated due to supply shortages, with unsold inventory having dropped by 9% year-to-date. Recording a 1% decline, are contract sales for homes priced between $1-Million to $2.5-Million (26 sales). This is somewhat misleading, however, given that this price range accounts for a much smaller share of sales. At the opposite end of the spectrum, contract activity for luxury priced homes over $2.5-Million has increased by an impressive 12% (208 in 2017 vs. 232 today).

Shifting to the supply side of the equation, inventory remains restricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has fallen to its lowest point since 2005, having declined by 725 (-2%) over the past year. This is also 41% less than the amount of homes (30,000 fewer) on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to just 4.1 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 4.3 months.

Currently, 95% of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Middlesex County has the strongest market conditions in the state with just 3.0 months of supply, followed by Essex, Passaic, Union, Somerset, Burlington, Hudson, Camden & Monmouth, which all have fewer than 4.0 months of supply. The counties with the largest amount of unsold inventory (6.5 months or greater) are concentrated in the southern portion of the state including Salem (6.5) and Cumberland (8.7).
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Demand for rental apartments continues to expand in NJ with statewide occupancy rates being among the highest in the US. Statewide vacancy increased somewhat from the prior quarter, rising by 20 basis points to 3.8%. The rise in vacancy is attributable to the rapid growth in pipeline supply, which has increased from 7,600 apartments in 2008 to 32,000 today. Nationally, the average vacancy rate increased by 10 basis points to 4.8%. Still, statewide and national vacancy rates remain well below their 2010 peak having fallen by 140 bp and 320 bp, respectively.

Consistent with national trends, the homeownership rate in New Jersey declined precipitously with the onset of the Great Recession. The homeownership rate in NJ has declined from a peak of 71.3% in 2005.Q1 to 66% in 2018.Q2, which is 170 basis points higher than the national rate. This equates to a 7% drop in the homeownership rate, at both the state and national level. Because of this shift, there are approximately 208,000 additional renters in New Jersey.

Posted in Economics, New Jersey Real Estate | 49 Comments

Who does this?

Posted on August 28, 2018 by grim

From the Star Ledger:

‘My Lowe’s contractor doesn’t care, and Lowe’s doesn’t either,’ homeowner claims

When CherylAnne and Mike Amendola decided to expand and renovate the kitchen in their Lincoln Park home, they knew it would be a big job.

They decided to turn to Lowe’s.

“My family chose Lowe’s to complete our kitchen project mostly because of their safety guarantee,” CherylAnne Amendola said, noting she felt comfortable with Lowe’s taking on the responsibility of selecting the contractor for the job.

The Butler store said the kitchen, totaling $43,849 for labor and materials, should be completed in about eight weeks, documents show.

But now, more than four months later, the job remains unfinished.

The couple signed the contract on April 18. It included everything from plumbing and electrical to cabinets, flooring and appliances – the whole kitchen, soup to nuts.
…
There were delays from the start, the couple said.

A month after they entered into the contract, the couple learned from the town that the company hadn’t yet filed for permits.

The Amendolas said they asked Lowe’s for a timeline, but Lowe’s said it couldn’t get CJS to commit to a schedule, documents show.

“On May 24, CJS told our Lowe’s project manager that they had filed for the permit, but they did not, according to the town,” Amendola said. “After chasing after them for a permit, they finally filed for it on June 4, five days after they demoed our kitchen.”

On June 1, work stopped without reason, Amendola said, and no one returned to the house for more than a month – until July 6.

Frustrated and getting no answers from CJS, Gotay or Lowe’s, Amendola started posting videos on social media to document her experiences. She calls her series of videos, “My Lowe’s contractor doesn’t care, and Lowe’s doesn’t either.”

Posted in New Development, New Jersey Real Estate | 82 Comments

Someone is still investing in NJ

Posted on August 27, 2018 by grim

From ROI-NJ:

Angel investors put nearly $39M into N.J. economy in first half of 2018

The New Jersey Economic Development Authority has approved 60 Angel Investor Tax Credit program applications this year, helping to put nearly $39 million into 20 different technology and life science companies, the EDA announced late Friday.

The Angel Investor Tax Credit Program offers a 10 percent refundable tax credit against New Jersey corporation business or gross income tax for qualified investments in an emerging technology business with a physical presence in New Jersey and that conducts research, manufacturing or technology commercialization in the state. Applications must be submitted within six months of date of investment.

In the second quarter of 2018 alone, 36 investors pumped nearly $16.9 million through the program. The average investment size was $469,099.

“The fact that more people are supporting early-stage companies and the ground-breaking work they are doing reaffirms Gov. (Phil) Murphy’s vision for re-establishing New Jersey’s leadership position in the innovation economy,” EDA CEO Tim Sullivan said.

“These latest Angel Investor Tax Credit Program statistics illustrate how New Jersey’s expanding portfolio of support spurs innovation throughout the entire technology and life sciences sector.”

Sullivan noted that, in the second quarter of 2018, approvals included investments in three companies that were new to the program, totaling $2.7 million in combined private investment.

Posted in Economics, New Jersey Real Estate | 31 Comments

Taxes trump hometown

Posted on August 25, 2018 by grim

From the NY Times:

Minimizing the Pain of Trump’s Tax Law

Longtime New Yorkers Joanne and Vince Intrieri left their 3,100-square-foot three-bedroom near the United Nations earlier this year, trading it in for a sunny three-bedroom condominium in Downtown Miami.

Ms. Intrieri, who has a construction and design firm that she is moving to Miami, and Mr. Intrieri, who owns VDA Capital Management, were not ready to retire. But they decided to move to the Florida coast to escape exorbitant taxes that they knew would be exacerbated by the Trump administration’s new tax law.

“My husband and I have been in New York City for more than 20 years, but we aren’t tied to an office anymore and our kids are older,” said Ms. Intrieri, 59. “Between the state and city taxes, plus about $50,000 in property taxes, it is a lot of money going out the door. Why do it?”

The Tax Cuts and Jobs Act, as the legislation is known, was passed last year and will be applied to 2018 returns, which are due in April 2019. The law limits the deductions taxpayers can take on property taxes and state and local taxes (known as SALT deductions) up to $10,000 — a cap that many New Yorkers easily exceed. For the highest earners, New York state’s income tax rate is 8.82 percent and New York City’s rate is 3.876 percent. Nearly half of Manhattan’s taxpayers have taken SALT deductions in the past, and the average deduction has been over $60,000 a year.

Posted in Demographics | 15 Comments

Plenty of room to run?

Posted on August 24, 2018 by grim

From CNBC:

The housing recovery isn’t over, it just feels like it is

A slew of negative housing numbers for July are piling up on top of a slew of negative housing numbers from the last several months.

Sales of new and existing homes are falling, construction of single-family homes is basically flat for the year, mortgage rates are rising and affordability is weakening. It certainly feels like the housing recovery that really took off in the last four years has come to a grinding halt, but it hasn’t.

Is the ultra-hot and competitive housing market cooling off? Absolutely. Home prices rose too far, too fast, and the market is now hitting a price wall. We know that because the price gains are finally starting to shrink, according to a report this week from the National Association of Realtors. Anecdotally, real estate agents across the country are saying that their sellers are beginning to come back down to earth.

“I don’t think the recovery is over,” said Sam Khater, chief economist at Freddie Mac. “Economic growth is still very strong and essentially running at capacity. However, the consistent decline in housing affordability means there are fewer consumers who can afford to purchase a home.”

The reason the housing recovery isn’t over is because demand is very solid, and the price gains are starting to ease. As with all things real estate, however, location is key in this recovery.

“While the decline in home sales and deceleration in home price growth has been broad-based, the slowdown is more intense in the hot coastal markets — which is a natural reaction to rapidly escalating home prices and higher rates versus a year ago,” added Khater.
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Foreclosure starts hit a 17-year low in June, according to Black Knight Inc., and mortgage delinquencies are at their lowest level in more than a decade. That includes a slight bump in troubled loans from states hit hard by last year’s hurricanes.

The vast majority of homeowners are paying their mortgages on time, and an increasing number of homeowners are putting a lot of money into their houses, raising the value and adding to the remodeling economy of materials and retailers.
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The housing shortage has been the one glaring villain holding back a more robust housing recovery. Demand is strong, thanks to basic demographics, an improving economy and a stronger labor market. The trouble is that most of that demand is on the low end of the market, where supply is leanest.

“Builders need to manage rising construction costs to keep their homes competitively priced for the newcomers to the housing market,” said Danushka Nanayakkara-Skillington, senior economist at the National Association of Home Builders. “While affordability conditions remain positive and the labor market sees low unemployment, prospective homebuyers face increased uncertainties as interest rates trend higher and trade war concerns grow.”
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The housing recovery may have peaked, but it isn’t over. As more supply hits the market, sales will grow again. Consumer credit scores are still strengthening, a huge generation is aging into its homebuying years, and another huge generation is downsizing into active adult communities and urban condominium developments. While there is a new affinity for renting, that demand can fuel home construction and the overall housing economy as well.

Posted in Demographics, Economics, Employment, Foreclosures, Housing Recovery, National Real Estate | 50 Comments

Good month for jobs in NJ

Posted on August 22, 2018 by grim

From the APP:

NJ job market surges in July; here are 3 places hiring

It’s a good time to go job hunting in the Garden State.

The New Jersey economy added thousands of jobs in July, and the state’s unemployment rate dipped to its lowest level in more than a decade, the state Department of Labor and Workforce Development said Thursday.

The results should give workers latitude to search for a new job or ask for a raise. And they are a sign that life is more difficult for employers who need top-notch help.

“We’re doing the best we can with what we’ve got,” said Angela Blasi, the fresh food manager at Dean’s Natural Food Market in Shrewsbury, which is hiring after two of its juice bar workers left their summer jobs and returned to college.

The monthly unemployment report is made up of a survey of employers to measure the number of jobs and a survey of households to measure the unemployment rate.

It provides a preliminary snapshot of the New Jersey economy and will be revised next month. But for July, at least, it showed a state that performed far better than the nation.

The state gained 13,000 jobs last month. (The U.S. added 157,000 jobs last month. New Jersey’s fair share would have been about 4,700).

It added 7,500 jobs in June, more than what was first reported. And its unemployment rate ticked from 4.3 percent to 4.2 percent, its lowest level since July 2007.

“The numbers on the surface look like the economy is going gangbusters,” Rutgers University economist James W. Hughes said. With total employment, “it’s probably going to be the best year since before the Great Recession.”

Posted in Economics, Employment, New Jersey Real Estate | 115 Comments

Urbanization, but only at the right price

Posted on August 21, 2018 by grim

From USA Today:

Home prices: Even midsize cities are getting pricey, leading some buyers to smaller markets

A couple of years ago, freshly-minted college graduates Jon and Samantha Reidy crisscrossed North Carolina in search of a place to settle and buy a house.

After hitting seven cities – including bustling millennial enclaves such as Charlotte, Durham and Raleigh – they decided that nearly all of those housing markets had gotten too expensive. So they picked under-the-radar Winston-Salem.

Last year, they bought a house there for $106,000, including repairs, and plan to stay in the area for decades. Jon is even hoping to convince his parents to move down from Agawam, Mass.

“We have no intention of leaving,” says the 24-year-old athletic trainer. Besides its mix of urban amenities and laid-back pace, “Winston was a place we could afford.”

The 50 percent runup in U.S. home prices since 2011 is reshuffling the pecking order of hot housing markets. While many midsize metro areas that had been affordable, up-and-coming alternatives – such as Kansas City, Missouri; Nashville, Tennessee; Raleigh; and Salt Lake City – are still coveted by buyers, their sales are declining or increasing more slowly amid sharply rising prices and shrinking supplies.

Meanwhile, many smaller, more affordable markets – such as Boise, Idaho; Dayton, Ohio; Greenville, South Carolina; and Winston-Salem – are benefiting from an influx of new residents and home sales that continue to climb.

“Even the second-tier markets are getting a little too pricey for a lot of residents,” economist Adam Kamins of Moody’s Analytics says. “Home prices are not rising as rapidly in the (third-tier) markets … and if you can get a good job there you may find a better quality of life.”
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By contrast, many smaller cities have a healthier balance of supply and demand, as well as lower prices. In third-tier markets, ranked 51 to 100 by population, prices rose 6.4 percent to $246,000 in the first quarter from a year earlier – below the U.S. median of $264,000 – and sales were up about 1 percent, in line with the national average.
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Now, however, some third-tier metro areas are getting pricier as they draw more residents. In Boise, a tech hub that has fast become a hip, more affordable alternative to larger cities such as Seattle and Portland, Oregon, the median house price was up 18.4 percent early this year at $255,000. In Aida County, which includes, Boise, the median was $324,000.

Yet home sales were up 23 percent in 2017 and 2 percent the first half of this year despite historically low supplies, according to Moodys and Boise Regional Realtors.

Posted in Demographics, Economics, National Real Estate | 45 Comments

Rise of Gen Z

Posted on August 20, 2018 by grim

From Bloomberg:

Gen Z Is Set to Outnumber Millennials Within a Year

Millennials are about to be surpassed by Generation Z.

Gen Z will comprise 32 percent of the global population of 7.7 billion in 2019, nudging ahead of millennials, who will account for a 31.5 percent share, based on Bloomberg analysis of United Nations data, and using 2000/2001 as the generational split.

People born in 2001 will turn 18 next year, meaning many will enter university, be eligible to vote and, depending on their citizenship, smoke or drink alcohol without breaking the law. Gen Zers have never known a non-digital world and have grown up amid events such as the “war on terror” and Global Recession.

“The key factor that differentiated these two groups, other than their age, was an element of self-awareness versus self-centeredness,” according to “Rise of Gen Z: New Challenge for Retailers,” a report by Marcie Merriman, an executive director at Ernst & Young LLP. Millennials were “more focused on what was in it for them. They also looked to others, such as the companies they did business with, for solutions, whereas the younger people naturally sought to create their own solutions.”
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The demographic handover is good news for delivery services, gadget makers and the so-called gig economy. Meanwhile, it presents new challenges to educators, event planners, luxury brands and even golfers — a game where the average age of U.S. participants now exceeds 50.

“Each generation comes with a unique set of behaviors and presents a unique set of challenges for those looking to reach them,” according to a report by research firm Nielsen Holdings Plc. “Gen Z are bombarded with messages and are a generation that can quickly detect whether or not something is relevant to them.”
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Millennials will continue to represent the bigger proportion in the world’s four largest economies: U.S., China, Japan and Germany. The combined population just shy of 2 billion in those four countries will have a ratio of 100 millennials for every 73 in Gen Z next year.

Posted in Demographics, Economics, National Real Estate | 65 Comments

Price Reduced!

Posted on August 18, 2018 by grim

From HousingWire:

Is housing becoming a buyer’s market?

Home sellers have begun cutting back their listing price, especially at the high end of the housing market, leaving open the possibility that it is now beginning to shift to a buyer’s market.

About 14.2% of all homes listed for sale on Zillow saw a price cut in June, up from a recent low of 11.7% at the end of 2016, according to new data released by the company. This is also up from 13.4% in June 2017.

From the beginning of this year, the share of listings with a price cut increased by 1.2 percentage points, the greatest January-to-June increase ever reported and more than double the increase from the same period last year, according to the report.

And in some markets, the numbers were even higher. For example, in San Diego, 20% of listings had a price cut in June, up from 12% last year.

Seattle also saw an increase in its number of homes with a price cut to 12% of total listings in June. This represents the city’s greatest share since October 2014.

While home prices continue to rise across the U.S., that growth is beginning to slow. Zillow’s data shows home values rose 8.3% over the past year to $217,300, but the company forecasts that growth will slow to about 6.6% over the next year.

But this increase is coming from the top end of the market, rather than starter homes, where real relief is needed. The data shows that for homes priced in the top one-third of all homes listed for sale, those with a price cut increased 0.9% to 16.2% annually in June.

But over that same time, the share homes with a price cut in the bottom one-third of all those listed for sale actually fell 0.1 percentage points annually to 11.2% in June.
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“The housing market has tilted sharply in favor of sellers over the past two years, but there are very early signs that the winds may be starting to shift ever-so-slightly,” Zillow said in its report. “It’s far too soon to call this a buyer’s market, but these data indicate the frenetic pace of the housing market over the past few years may be starting to return toward a more normal trend.”

What’s more, it seems housing inventory is finally starting to bring some relief to homebuyers at the lower end of the market, providing more affordable housing inventory for first-time buyers.

Posted in Economics, National Real Estate, Price Reduced | 44 Comments

The new “rate lock”

Posted on August 17, 2018 by grim

From HousingWire:

Goodbye refi: Rising interest rates all but erase refinance demand

While mortgage interest rates dipped ever so slightly in the last week, they’ve been trending up for the majority of this year. In fact, the interest rate on a 30-year, fixed-rate mortgage is now more than half a percentage point higher than it was back in January.

And it appears that the consistent rise in interest rates this year has all but dried up refinance demand.

Is it time to say goodbye to refis for a while? It certainly looks that way.

A new report from Ellie Mae shows that purchase loans are now approaching 75% of all mortgages, with refis hovering around historic lows.

Ellie Mae’s latest Origination Insight Report shows that the 71% of all loans closed in July were purchase loans, while only 29% of the closed loans were refinances.

That’s the second month in a row that refis have been that low (and purchases that high).

Those figures also represent the lowest percentage of refis (or highest percentage of purchases, depending on how you look at it) since Ellie Mae began tracking this data in 2011.

To put it another way, refis haven’t been this small of a percentage of overall originations in seven years.

And the trend doesn’t appear to be going away anytime soon.
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There was a little bit of good news on the refi front in this week’s Mortgage Bankers Association’s Weekly Mortgage Applications Survey, which showed that the refinance share of mortgage application activity increased from last week’s 36.6% to 37.6%.

But that may just be a blip on the radar as interest rates are expected to continue climbing this year.

And while today’s interest rates are still low by historic standards, they’re still higher than many younger homeowners have seen in their adult lives. Those borrowers aren’t going to refi their 3.95% mortgage into a 4.75% right now, and they certainly won’t do it if rates keep going up, no matter how much their home is worth now.

Welcome to the new normal.

Posted in Housing Recovery, Mortgages, National Real Estate | 53 Comments

City of the Future?

Posted on August 16, 2018 by grim

First time Outdoor magazine made it to the front page, great great piece:

Affordable Housing Is the Key to a Thriving City

Almost as long as there have been cities, there have been efforts to revamp their downtowns. But philosophies about how to do that are constantly evolving. In this era of gentrification, income inequality, and climate change, some of the most innovative ideas are coming from a surprising place—Newark, New Jersey—with help from a 45-year-old real estate developer named Ron Beit. His flagship projects—the smartly designed Teachers Village, which provides middle-income housing and curated retail for a community of educators in the city center, and Makers Village, home to AeroFarms, the largest indoor aeroponic farm in the world—embody his belief that development should celebrate diversity and high-quality design while being affordable. We talked with Beit about where the fight to reinvent America’s cities has been, and where he sees it going.

“Real estate developer” really undersells what you and your company do. Perhaps you should come up with something cooler, like developer-activist or urbanization guru.

We are sort of an oddball. There are affordable-housing developers, and there are traditional real estate developers that know how to put private capital together. But there’s a middle ground, where you need to combine both skills. When someone asks me what I do, I describe my work as community-oriented, social-impact development.

Is this the future of development in downtown cores?

One hundred percent. Not only is your end user going to demand that kind of social impact, but it’s good for business. Real estate developers are tripping over themselves for assets right now. The only way they are going to make money is to go into tougher and tougher communities and actually help rebuild them in a way where both the community and the investors benefit.
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What lessons can other cities take from your successes?

In this country, we build a lot of expensive luxury housing, and we build affordable housing. But middle-income housing stock has been sorely lacking for decades. Providing housing for teachers, for instance, leads to the vibrancy of a city. Not to mention it helps recruit the best teachers to a com­munity. We are currently constructing a second Teachers Village in Hartford, Connecticut. Our third one will break ground by the end of the year in Chicago, and we’re looking at Miami, Atlanta, Kansas City, and Oakland, California.
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Are cities planning for growth the right way these days? What could they be doing better?

Philadelphia and Portland, Ore­gon, are doing great with housing across the board, but other cities need to implement strategies similar to the affordable-housing tax credit to promote middle-income development. We also need to promote small business more. In order to truly make yourself a destination, you have to curate a unique retail experience.
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Describe the downtown of the future—and don’t feel constrained by existing technology.

Lots of small businesses, vibrant walkable streets. No parking lots and garages—we won’t need them anymore, because we’ll have superaccessible mass transit. In the next few decades, green construction will be so efficient that buildings will actually clean the environment.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 57 Comments

Owners staying put is causing the inventory crunch

Posted on August 15, 2018 by grim

From HousingWire:

First-time homebuyers dominate mortgage market

First-time homebuyers may be facing rising affordability issues, but they are still outpacing the share of repeat buyers in the housing market, according to the latest report from the Urban Institute.

This is nothing new, as first-time homebuyers have dominated the mortgage market for the past 10 years, but the latest data shows that gap actually continues to grow, according to the report.
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The rising share of first-time homebuyers can be attributed to the lack of repeat buyers in the housing market, according to the report. From 2001 to 2007, repeat buyers purchased from 1.4 to 1.8 million homes per year, but that dropped to just over 1 million today.

The Urban Institute explained that falling home prices after the recession prevented many homeowners from accumulating equity in their homes. But even as home prices continue to rise and homeowners are seeing a rebound in equity, the report shows repeat buyers will still not return to their historic levels.

While homeowners may have more equity, they are not likely to want to give up their low mortgage rates they locked in during the recession.
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And now, the Urban Institute explained that homeowners hanging on to their homes and not moving up, combined with the lack of new home construction, will cause inventory to continue to tighten and home prices to increase for starter homes.

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 28 Comments

Hottest markets?

Posted on August 14, 2018 by grim

God, I feel that the Ledger should just give up on the stupid “top 10 list” format, I feel like I’m getting sucked into a social media marketing promotion by taking the clickbait. I’ll be the sucker and save you some time:

These 15 N.J. real estate markets are sizzling hot right now, summer edition

After many years of lagging home prices, New Jersey’s real estate market is getting much stronger.

The median home value in June was $318,300, the first time it has hit that mark since January 2005, according to Zillow, the real estate website.

Home prices have increased 8.7 percent in New Jersey in the past year, compared with the 8.3 percent nationally. With home prices rising and housing stock declining, the state’s decidedly a seller’s market.
Just ask anyone trying to buy a home right now.
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15. Glen Ridge, Essex County
Median house value: $662,100
Change: 5.41 percent

14. Madison, Morris County
Median house value: $710,700
Change: 5.6 percent

13. New Providence, Union County
Median house value: $633,700
Change: 6.15 percent

12. Cranbury, Middlesex County
Median house value: $717,200
Change: 6.65 percent

11. Berlin Borough, Camden County
Median house value: $222,500
Change: 7.23 percent

10. Edgewater, Bergen County
Median house value: $548,700
Change: 7.91 percent

9. Cresskill, Bergen County
Median house value: $637,800
Change: 9.12 percent

8. Bradley Beach, Monmouth County
Median house value: $571,300
Change: 9.15 percent

7. Lambertville, Hunterdon County
Median house value: $388,800
Change: 9.21 percent

6. Deal, Monmouth County
Median house value: $2,173,100
Change: 10.39 percent

5. Fair Haven, Monmouth County
Median house value: $765,300
Change: 10.58 percent

4. Haddon, Camden County
Median house value: $264,700
Change: 13.9 percent

3. Jersey City, Hudson County
Median house value: $463,900
Change: 22.76 percent

2. Weehawken, Hudson County
Median house value: $740,700
Change: 24.45 percent

1. Asbury Park, Monmouth County
Median house value: $337,900
Change: 31.84 percent

Posted in Economics, Housing Bubble, Housing Recovery, New Jersey Real Estate | 40 Comments

Are PILOTs good or bad?

Posted on August 13, 2018 by grim

From ROI-NJ:

Is fixing PILOT regulations a way to fix school funding?

Marc Pfeiffer, assistant director at Rutgers University’s Bloustein Local Government Research Center, said the last time payments in lieu of taxes were addressed in the state was 1992.

The timing for another look couldn’t be better.

Pfeiffer was part of the Legislature’s Economic and Fiscal Policy Review Committee, which released a series of recommendations to improve the New Jersey economy Thursday in Trenton.

Pfeiffer said reworking PILOTs to make sure they support local funding, could have big impact on spurring economic development.

Pfeiffer had some recommendations regarding how to handle PILOT revenues:

Have a more transparent process in municipalities to understand add-ons to the levy cap to justify expenses of PILOTs and new assessments;

Share some of the revenue from PILOTs with school districts, which currently receive funding only from the land tax; meanwhile, the county and local governments share the PILOT revenue in a 5-95 percent split, respectively.

PILOTs have been a hot topic because residents often feel they are being cheated out of the economic benefit of a new commercial ratable on the scene, and school districts feel they are being cheated out of more revenue that municipalities are benefiting from.

This split increasingly has become a point of contention in places such as Edison, which has seen an ongoing presence of school board members and municipal meetings demanding a portion of the PILOT revenues.

Pfeiffer said it’s time to start the discussion.

“In today’s redevelopment environment, with all the other incentives that we now provide to businesses, and new incentives to come — more specifically on that is the federal Opportunity Zones, which we think are going to be a game-changer down the road — what is the place for payment in lieu of taxes as part of a new redevelopment?” he said.
…
Michael Bruno, and attorney with Giordano, Halleran & Ciesla, said at the July event that the political leanings of the municipality often determine where the greatest pushback comes from.

“It depends on the political bend of the municipality,” he said. “Financially, it almost always comes out that it’s a better deal for the municipality. You can almost always negotiate a deal where they are going to end up with more money than they would under conventional terms. That’s why municipalities like it so much.”

Posted in New Development, New Jersey Real Estate, Politics, Property Taxes | 37 Comments