It’s not a problem if you ignore it

Posted on January 12, 2017 by grim

From NJ101.5:

Will NJ’s foreclosure mess get cleared in 2017?

Looking at 2016 as a whole, New Jersey performed horribly in the area of foreclosures.

These in-limbo properties can have a drastic effect on the value of your home, and the situation could get even worse in 2017.

According to statistics released Thursday by ATTOM Data Solutions, an online real estate database, New Jersey posted the highest foreclosure rate last year at 1.86 percent. In total, 66,592 properties were in the foreclosure process, from default notices to bank repossessions. More than 27,000 began the process; 19,000 reached the final stage.

But it’s New Jersey’s other worst-in-the-nation statistic that indicates the pain isn’t ending anytime soon, according to ATTOM Senior Vice President Daren Blomquist.

“We do show the state has the biggest backlog of what we call legacy loans that are in foreclosure process that haven’t been dealt with,” Blomquist told New Jersey 101.5. “These are loans that originated back in 2004 to 2008 and are in foreclosure, but have been, for whatever reason, lingering in the foreclosure process, sometimes for years.”

Sixty-four percent of New Jersey’s loans in the foreclosure process originated in the ’04-’08 range, accounting for 32,279 filings.
Properties foreclosed in New Jersey in the fourth quarter of 2016 spent an average of nearly 1,400 days in the entire foreclosure process, according to ATTOM. That lengthy timeline is second only to Utah.

According to Blomquist, New Jersey’s top foreclosure rate is the product of a “perfect storm of poor market conditions,” including economic issues in Atlantic City and foreclosures lingering from the effects of 2012’s Superstorm Sandy.

Posted in Foreclosures, New Jersey Real Estate | 52 Comments

November foreclosure inventory down 30%

Posted on January 11, 2017 by grim

From Corelogic:

CoreLogic Reports 26,000 Completed Foreclosures in November 2016

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its November 2016 National Foreclosure Report, which shows the foreclosure inventory declined by 30 percent and completed foreclosures declined by 25.9 percent compared with November 2015. The number of completed foreclosures nationwide decreased year over year from 35,000 in November 2015 to 26,000 in November 2016, representing a decrease of 78.2 percent from the peak of 118,339 in September 2010.

The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.5 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.6 million homes lost to foreclosure.

As of November 2016, the national foreclosure inventory included approximately 325,000, or 0.8 percent, of all homes with a mortgage, compared with 465,000 homes, or 1.2 percent, in November 2015.

CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due, including loans in foreclosure or REO) declined by 22.1 percent from November 2015 to November 2016, with 1 million mortgages, or 2.5 percent, in serious delinquency, the lowest level since August 2007. The decline was geographically broad with year-over-year decreases in serious delinquency in 48 states and the District of Columbia.

“The decline in serious delinquency has been substantial, but the default rate remains high in select markets,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Serious delinquency rates were the highest in New Jersey and New York at 5.6 percent and 5 percent, respectively. In contrast, the lowest delinquency rate occurred in Colorado at 0.9 percent, where a strong job market and home-price growth have enabled more homeowners to stay current.”

“The 7 percent appreciation in home prices through November 2016 has added an average of $12,500 in home-equity wealth per homeowner across the U.S. during the last year,” said Anand Nallathambi, president and CEO of CoreLogic. “Sustained growth in home prices is clearly bolstering homeowners’ spending power and balance sheets and, as a result, spurring a continued drop in defaults.”

Posted in Foreclosures, National Real Estate | 108 Comments

As rates rise, FHA cuts premiums

Posted on January 10, 2017 by grim

From MarketWatch:

After mortgage-rate spike, FHA to cut insurance premium

The Federal Housing Administration will reduce the annual premium borrowers pay, in order to expand credit access to more Americans, the government announced Monday.

Borrowers who close on an FHA mortgage after January 27 will pay 25 basis points less for the mortgage insurance premium, the Department of Housing and Urban Development said.

Like Fannie Mae FNMA, +0.76% and Freddie Mac FMCC, +0.00% , FHA doesn’t make loans but provides a backstop for lenders. The annual premium fees fund the FHA’s Mutual Mortgage Insurance Fund, which helps the agency protect against losses incurred if borrowers run into trouble.

Congress requires that FHA have enough reserves to cover projected losses over 30 years. In 2013, it fell short on that threshold and had to receive a cash bailout of $1.7 billion. Separately, the agency must maintain the fund’s net worth of at least 2% of its loan portfolio.

In a statement, FHA noted that the reserve ratio stood at 2.32% last year, the second year in a row to exceed the 2% threshold.

“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” HUD Secretary Julian Castro wrote.

But many analysts think it’s much more than the insurance premium that’s holding back lending.

“I’m not quite sure how much it actually does,” Laurie Goodman, codirector of the Urban Institute’s Housing Finance Policy Center, told MarketWatch.

“When you look at opening the credit box, there are other actions like figuring out how to break down the False Claims Act so lenders aren’t running scared of more risky loans. That seems to me would have been more effective in terms of access to credit.”

Many big banks have left the FHA program after being slapped with heavy fines for what they perceive as minor infractions of the rules of FHA’s program. One large lender, Quicken Loans, sued the government after being fined.

In the wake of the financial crisis, as mortgage lending became more stringent, FHA lending has boomed, in part because it allows borrowers to take out mortgages with down payments as small as 3.5%.

This is the second such cut in insurance premiums. FHA implemented a 50 basis point reduction in Jan. 2015. The agency estimates this cut will save borrowers an average of $500 per year, and projects approximately 1 million people will take out an FHA mortgage in 2017.

Posted in Mortgages, National Real Estate, Risky Lending | 74 Comments

Huh?

Posted on January 7, 2017 by grim

Oddest thing I’ve read in a long time, from StateTech (?):

Atlantic City Aims to Revitalize by Attracting Tech Talent and Startups

How do you redefine a city? It’s a daunting question, but one that Atlantic City, long viewed as a gathering place for the gambling and casino industry, faces amidst significant contraction and major casino closures in recent years.

In an attempt to rebuild itself, Atlantic County, N.J., which is home to Atlantic City, has invested in and built an initiative to drive investments in technology. The county is hoping to draw tech-focused startups from New York City down the coast to Atlantic City through an agency called the Atlantic County Improvement Authority.

“This very well could be the computer mecca of the East Coast. Absolutely,” says Max Slusher, economic development director for the authority. “We do view Atlantic City as being the perfect place where people can come and program, right on the beach, inexpensively.”

The county is hoping to attract companies from a few key industries. One is aviation, which includes drone manufacturing and testing. Atlantic county hopes to leverage the fact that it is home to the Federal Aviation Administration’s William J. Hughes Technical Center (along with a proposed new aviation technical park) as a lure for other aviation tech companies and innovators.

The other industry targeted is computer programming and software development. New York City is a current hotbed for these companies, but Atlantic City could draw those organizations out of the Big Apple by offering a better quality of life and tax credits for high-tech firms that create at least nine jobs.

“Everybody talks about quality of life, but here in Atlantic County on the East Coast, we actually have it,” says Slusher.

The focus on aviation, startups and tech are the result of an extensive economic development strategy and plan for the county that was released in 2015. The county is also interested in drawing other advanced manufacturing and life sciences companies.

“The world economy has caught up with Atlantic County and we have the opportunity to do some amazing things when it comes to technology and research,” says Slusher.

It is notable, though, that while the county sees its future outside of the gambling industry, those glitzy casinos along the boardwalk are still by far the largest economic driver.

“Atlantic City still has seven casino hotels, employs about 21,000 casino workers, and it still exists as the largest generator of employment here in Atlantic County,” says Slusher.

Posted in Demographics, Economics, New Development, South Jersey Real Estate | 101 Comments

If you are reading this you missed the van

Posted on January 5, 2017 by grim

From NJBIZ:

Are people staying in New Jersey? Study takes a look

The prevailing conventional wisdom among those in the state is that New Jersey is losing residents faster than it can keep them.

But, according to the 2016 Atlas Van Lines Migration Patterns study, the outbound and incoming migration in the state was balanced last year. In 2015, however, more people had moved out of the Garden State than the inverse.

A total of 11 U.S. states, along with the nation’s capital, experienced a shift in migration status in 2016. The company has conducted the study since 1993 to track the nation’s interstate moving patterns year to year, as reflected in moves handled by Atlas.

The study also found that 26 states registered as balanced, 15 as outbound and nine as inbound, in addition to Washington, D.C. It also found that moving, in general, was down from 2015.

From the Record:

N.J. still tops list of states losing residents

For the fifth consecutive year, New Jersey has the dubious distinction of ranking as the No. 1 state residents have left behind, according to a new survey.

The Garden State placed first as the “most-moved-from” state in the United Van Lines 40th Annual National Movers Study, released Tuesday. In 2016, 63 percent more residents were moving out of New Jersey than people moving in, according to that survey, which tracks customers’ state-to-state migration patterns over the past year.

With American retirees heading West and South, the Northeast had a large presence on the 2016 so-called “outbound list,” which behind New Jersey had Illinois, New York, Connecticut, Kansas, Kentucky, West Virginia, Ohio, Utah and Pennsylvania.

Of those moving out of New Jersey, about 40 percent said they were relocating for a job, 30 percent were exiting for their retirement, and 20 percent were going because they wanted a lifestyle change.

“There are a lot more people leaving New Jersey for retirement than some of the neighboring states: 30 percent seems to be a high number,” said Melissa Sullivan, director of marketing communications for United Van Lines. “New Jersey is really losing big segments of that population. And it’s not just a one-off. It’s been pretty consistent.”

Posted in Demographics, Economics, New Jersey Real Estate | 118 Comments

Lowball! Rivera Edition

Posted on January 4, 2017 by grim

From the Star Ledger:

Geraldo Rivera sells Edgewater home for half initial list price: $1.8M

Fox News personality Geraldo Rivera sold his his longtime Edgewater home for $1.8 million — less than half its original listing price of $3.75 million.

Rivera first put the home in the Edgewater Colony co-op on the market in 2015, and it underwent a number of steep price cuts before finding a buyer late in 2016.

Rivera originally designed the home around 2000 as a bachelor pad before meeting and marrying his fifth and current wife Erica Levy. They welcomed a daughter together, Solita, in 2003, and in 2015 they purchased a 4-bedroom Upper East Side home for $5.6 million — which they renovated and recently relisted for $7.2 million, according to Variety’s Real Estalker blog.

Property records available online do not show how much Rivera paid for the Edgewater compound. Built on several levels, it has walls of glass and decks overlooking the Hudson River, a kitchen designed to resemble a ship’s interior, a koi pond, and one of the few private docks on this stretch of Hudson, just south of George Washington Bridge. There are three bedrooms, including a master with waterfront views.

The price was last cut in August, from $2.75 million to $2.3 million. Two other properties owned by Rivera nearby have also been sold off in recent months, according to Lisa Poggi, the real estate agent who represented the property.

Posted in Lowball, New Jersey Real Estate | 48 Comments

November Prices Push Higher

Posted on January 3, 2017 by grim

From CoreLogic:

CoreLogic US Home Price Report Shows Prices Up 7.1 Percent in November 2016

Home prices nationwide, including distressed sales, increased year over year by 7.1 percent in November 2016 compared with November 2015 and increased month over month by 1.1 percent in November 2016 compared with October 2016,* according to the CoreLogic HPI.

The CoreLogic HPI Forecast indicates that home prices will increase by 4.7 percent on a year- over-year basis from November 2016 to November 2017, and on a month-over-month basis home prices are expected to increase by 0.1 percent from November 2016 to December 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Last summer’s very low mortgage rates sparked demand, and with for-sale inventories low, the result has been a pickup in home-price growth,” said Dr. Frank Nothaft, chief economist for CoreLogic. “With mortgage rates higher today and expected to rise even further in 2017, our national Home Price Index is expected to slow to 4.7 percent year over year by November 2017.”

“Home prices continue to march higher, with home prices in 27 states above their pre-crisis peak levels,” said Anand Nallathambi, president and CEO of CoreLogic. “Nationally, the CoreLogic Home Price Index remains 4 percent below its April 2006 peak, but should surpass that peak by the end of 2017.”

Posted in Economics, National Real Estate | 63 Comments

A little bit easier to live (and die) in NJ

Posted on January 2, 2017 by grim

From Newsworks:

New Jersey deploys tax changes for elderly and veterans in 2017

The legislation that raised New Jersey’s gas tax 23 cents in November also includes some tax cuts that have taken effect with the ringing in of 2017.

The amount of retirement income excluded from New Jersey’s income tax has doubled to $40,000, with an increase to $100,000 by 2020.

That will make a difference for many people, said Bernard Kiely, a certified financial planner and public accountant in Morristown.

“For most people who are retired, they’re living on Social Security, which New Jersey does not tax, and they’re living on either pensions or IRA distributions,” he said. “So, a whole lot of retirees will no longer pay New Jersey income tax.”

The exemption from the state’s estate tax increases to $2 million and will be completely eliminated in 2018.

And the 7 percent state sales tax rate decreases to 6.875 percent.

Most people probably won’t notice that, Kiely said, adding that the phase-out of the estate tax and the retirement income exclusion change are a big deal.

“It means people will no longer have an incentive to leave the state of New Jersey when they retire,” he said.
…
The legislation also gives an income tax break to veterans and increases a tax credit for low-income workers.

Posted in Demographics, Economics, New Jersey Real Estate, Politics | 36 Comments

Yeah, this again.

Posted on December 30, 2016 by grim

From the WSJ:

House Flipping Makes a Comeback as Home Prices Rise

House flipping, a potent symbol of the real-estate market’s excess in the run-up to the financial crisis, is once again becoming hot, fueled by a combination of skyrocketing home prices, venture-backed startups and Wall Street cash.

After nearly being felled by real-estate forays almost a decade ago, a number of banks are now arranging financing vehicles for house flippers, who aim to make a profit by buying and selling homes in a matter of months. The sector is small—participants say roughly several hundred million dollars in financing deals have been made in recent months—but is expected to keep growing.

In recent months, big banks, including Wells Fargo & Co., Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have started extending credit lines to companies that specialize in lending to home flippers. Earlier this month, J.P. Morgan agreed to lend an estimated $60 million to 5 Arch Funding, an Irvine, Calif., company that offers financing to flippers, according to people familiar with the deal.

“The floodgates have opened,” says Eduardo Axtle, a 35-year-old former telecom entrepreneur in Oakland, Calif., who has taken out about 50 home loans over the past five years. These days, he is bombarded by unsolicited emails from brokers offering him access to financing.

The number of investors who flipped a house in the first nine months of 2016 reached the highest level since 2007. About a third of the deals in the third quarter were financed with debt, a percentage not seen in eight years.
…
The market for house-flipping loans in the U.S. is expected to reach about $48 billion in total sales volume this year, the highest since 2006, according to ATTOM.

That’s in part because home prices across the country are rising, reaching levels not seen since before the 2008 financial crisis. Housing also is in relatively short supply. Meanwhile, low interest rates and a surge in demand for homes from institutional buyers have also benefited house flippers.

Posted in Housing Bubble, Mortgages, Risky Lending | 82 Comments

So much for the bump

Posted on December 29, 2016 by grim

From Reuters:

Pending home sales drop to 10-month low in November

Contracts to buy previously owned U.S. homes fell in November to their lowest level in nearly a year, a sign rising interest rates could be weighing on the housing market, the National Association of Realtors said on Wednesday.

The group said its pending home sales index, based on contracts signed in November, dropped 2.5 percent to 107.3.

“The brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers,” the NAR said in a statement accompanying the figures.

Analysts polled by Reuters had forecast a 0.5 percent increase last month.

The November index was at its lowest level since January and 0.4 percent lower than in November 2015, the NAR said.

Across the nation’s four regions, contracts rose 0.6 percent in the Northeast in November, but fell 2.5 percent in the Midwest and 6.7 percent in the West. They fell 1.2 percent in the South.

Posted in Demographics, Economics, National Real Estate | 32 Comments

New Record – New Bubble?

Posted on December 28, 2016 by grim

From the WSJ:

U.S. Home Prices Climbed Sharply in October

Home prices went up sharply in October, as the market showed no signs of slowing after setting a record a month earlier.

The S&P CoreLogic Case-Shiller Indices, which covers the entire nation, rose 5.6% in the 12 months ended in October, up from the 5.4% increase reported in September.

The 10-city index gained 4.3%, up from 4.2% in September. The 20-city index gained 5.1% year over year, up slightly from a 5% increase in September.

The hottest markets in the country remain concentrated in the Northwest, as many buyers priced out of the Silicon Valley area flee to secondary tech hubs. Seattle reported a 10.7% increase, Portland reported a 10.3% year-over-year gain, and Denver had an 8.3% increase in home prices.
…
Month-over-month the U.S. Index rose 0.2% in October before seasonal adjustment. The 10-city remained unchanged, and the 20-city index increased 0.1% in October from September.

After seasonal adjustment, the national index rose 0.9% month over month. The 10-city index and the 20-city index each rose 0.6%.

After seasonal adjustment, all 20 cities saw prices rise in October.

Posted in Housing Bubble, National Real Estate | 14 Comments

Millennial FTB? Buy a 2 family.

Posted on December 27, 2016 by grim

From MarketWatch:

Buying your first home? Consider a duplex…

The best first home may be a multi-unit home, because having tenants pays off.

Duplexes — a single building with separate units and entrances — are among the least popular homes to buy in the U.S. Only 2% of first-time homebuyers purchased a duplex in 2016, according to the National Association of Realtors, an industry group, compared to 82% of those who bought a detached single-family home. Other options included condos in five-plus unit buildings and townhouses.

Purchasing a home with multiple units, where you live in one and others live next door, upstairs or downstairs, has its perks: mainly, their rent is contributing to your mortgage, you don’t get to share a bathroom and kitchen with your tenant and you’re close by if anything goes wrong. Depending on the number of units or the cost of rent you’re charging, you could also end up making a profit. “If you look at the size and cost of the units, they dovetail with what a first-time homebuyer can afford,” said Dennis Cisterna, chief revenue officer of Westminster, Colo.-based real estate investment site Investability.

Being a first-time homebuyer and landlord goes well together, especially if they live on the same property as their tenants. New homeowners are likely more flexible about their living arrangements, without too many other heavy responsibilities such as children and more attune to the maintenance needed for the property, said Jeremy Gulish, a real estate agent in Morristown, N.J. Meanwhile, they’re able to prepare for the next property they get and have the opportunity to keep the first property as supplemental income, he added.

Using your tenant’s rent as additional income can allow you to qualify for a pricier home. In some cases, you can put down only 5% and get a mortgage from a private lender versus a bank, said Ray Rodriguez, a regional mortgage sales manager at TD Bank in New York. “While they will increase the amount you will write [on the check], it allows them to get into a home,” he said. A third of potential first-time homebuyers did not put down 20% or more, according to a TD Bank survey of 1,000 participants.
…
Still, it’s not impossible. When Gulish was buying his first home with his wife, they opted for a two-family. At the time, they were in their mid-20s and qualified for a large property at the top of their budget but with a tenant who paid more than half of their mortgage. “Sometimes it’s a leap of faith,” he said.

The most important thing to do, Gulish said, is find the right tenant. Also, ensure you have enough in your emergency funds to take on unexpected scenarios, even if you’re handy at home, said Ash Exantus, a financial empowerment coach a BankMobile, a New York-based banking app. Prepare to have serious conversations, such as rent hikes, Scepanovic said, and know the rules in your area, such as mandated heat requirements. Also be ready to show the home and place its availability on sites renters search as soon as you learn your tenant is moving out, Cisterna added.

Posted in Demographics, Economics, New Jersey Real Estate | 41 Comments

Cost of regulation holding back new home sales/construction?

Posted on December 26, 2016 by grim

From Seeking Alpha:

Trumponomics In The Housing Market

With the market soaring high on Trumponomics (the belief that Trump’s business experience will fix the country), we should take a look at some of the “unnecessary regulation” that might seem ripe for elimination. Before getting into this, it is important to stress that this is not a political article. This article is going to focus strictly on the impacts regulation has on housing prices and the impact housing prices have on the economy.

Posted in National Real Estate, New Development, Politics | 17 Comments

Time to lube the mortgage market

Posted on December 23, 2016 by grim

From Business Insider:

It hasn’t been this hard to buy a house in America since the financial crisis

Housing affordability in the US is at an eight-year low, according to Attom Data Solutions.

The parent company of RealtyTrac released its fourth-quarter affordability index on Thursday, which dropped to the lowest level since the same period in 2008.
…
And now mortgage rates are rising again. According to Freddie Mac, the average rate for a 30-year fixed mortgage hit a two-year high of 4.3% this week. That was up from 4.16% last week, when the Federal Reserve raised its benchmark interest rate and signaled that it expected to hike in the new year more times than it previously thought.

Mortgage rates are still near historic lows, so the housing market is not seeing much of an effect yet. Some prospective buyers could rush to lock in the lowest rates possible in the next few months, according to the National Association of Realtors.

“The prospect of further interest rate hikes in 2017 will likely cause further deterioration of home affordability next year,” Daren Blomquist, senior vice president at Attom, said in a statement. “Absent a strong resurgence in wage growth, that will put downward pressure on home price appreciation in many local markets.”
…
Two other reports on Thursday showed that housing affordability could become an even bigger issue in 2017. The Home Price Index from the Federal Housing Finance Agency showed that year-over-year, home prices rose by 6.2% in the third quarter, a record high. And home values rose 6.5% in the year through November, the fastest pace since 2006, according to Zillow.

As with the prior housing crisis, strong buyer demand is fueling this price rally. This time, however, a shortage of inventory is also pumping up values.

Posted in Mortgages, National Real Estate, Risky Lending | 102 Comments

Home sales strong in November

Posted on December 22, 2016 by grim

From HousingWire:

Existing home sales continue to climb at highest pace since 2007

Existing home sales increased for the third consecutive month in November to the highest pace in almost 10 years, according to the most recent report from the National Association of Realtors.

Existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.7% to a seasonally adjusted rate of 5.61 million in November. This is up from a downwardly revised 5.57 million in October, up 15.4% from last year’s 4.86 million and the highest since February 2007.

The median existing-home price rose once again in November to $234,900, up 6.8% from last year’s $220,000. This marks the 57th consecutive month of year-over-year gains.

Inventory, on the other hand, dropped 8% from October to 1.85 million existing homes available for sale. This is now 9.3% below last year’s 2.04 million, and the 18th consecutive month of annual decreases.

“Existing housing supply at the beginning of the year was inadequate and is now even worse heading into 2017,” Yun said. “Rental units are also seeing this shortage. As a result, both home prices and rents continue to far outstrip incomes in much of the country.”

However, home builders reported a significant boost in confidence after President-elect Donald Trump won the election, according to the National Association of Home Builders/Wells Fargo Housing Market Index, leading some to believe that it could push new home builds up in 2017.

Properties are now staying on the market slightly longer than before at 43 days, up from 41 days in October, but down significantly from last year’s 54 days. Short sales were on the market the longest at a median of 110 days in November, while foreclosures sold in 55 days and non-distressed homes took 41 days. Overall, 42% of homes sold in November were on the market for less than a month.

Posted in Demographics, Economics, National Real Estate | 52 Comments