Come to the dark side

Posted on April 8, 2018 by grim

From CNBC:

Jersey City becomes alternative to New York, but without the ‘sticker shock’ in prices

Real estate prices in New York City have cooled but remain astronomically high, so Jennifer Tobias, a senior designer at the Studio Sofield design firm in lower Manhattan, found a nearby refuge.

Located just across the Hudson River from Manhattan’s West Side, Jersey City is being touted by some as the latest alternative to New York City’s torrid real estate market. It’s where Tobias joined a growing number of area residents who find Jersey City more affordable when compared to its more famous neighbor.

“My apartment is a 310 square foot studio in a 28-unit building,” Tobias told CNBC recently. Her unit cost $195,000 when she bought it in 2007, and she said that its current value is $312,000.

“A similar apartment in New York City would easily cost twice as much,” she added. Her residence faces Van Vorst Park, which has a farmer’s market, Shakespeare performances and outdoor movie nights. A wide range of restaurants and bars can be found within an eight-block radius, and the overall cost of living is low.

She isn’t only getting a more affordable lifestyle across the river. New York’s outer boroughs like Brooklyn and Queens, have traditionally offered lower cost housing. However, prices there have also skyrocketed in recent years, forcing residents of modest means to look elsewhere.

Enter New Jersey, which for years dwelled in the shadow of its larger-than-life counterpart across the Hudson, but has definitively come into its own. Places like Jersey City have emerged as alternatives to the Big Apple for cosmopolitan-minded residents.

Posted in Gold Coast, Housing Recovery, NYC | 11 Comments

You don’t get a house just for showing up…

Posted on April 6, 2018 by grim

From USA Today:

Home buying market so brutal, some home buyers make offer sight unseen

This spring home-buying season should be a coming-out party for Millennials, many of whom are finally ready to make a purchase after hunkering down for years in their parents’ basements or expensive apartments.

The only problem: Much of the food at the party is gone, and what’s left is priced like caviar.

Although solid job and income growth is emboldening many prospective home buyers, record low housing supplies are driving up prices and curbing sales, especially for Millennials looking to buy starter homes.

“For home buyers, this is shaping up to be one of the most difficult years in recent memory,” says Ralph McLaughlin, chief economist of Veritas Urbis Economics, which studies the housing market.

For sellers, it will be a standout spring that brings big profits, unless those sellers themselves are looking to buy a larger home in the same metro area. “It’s going to have the feel of a hot market,” marked by multiple offers and bidding wars, says Lawrence Yun, chief economist of the National Association of Realtors (NAR).

Already, house hunters are waiving inspections, making offers without even seeing homes and bidding well above asking price. Yet Yun predicts sales will be flat compared to spring 2017 because of the skimpy supplies and reduced affordability for many buyers.
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Meanwhile, existing homeowners, particularly Generation Xers, would like to move to bigger homes but fear not finding one or having to shell out much more for it, especially with average 30-year fixed mortgage rates at 4.4%, up from less than 4% last year, Melendez says. And after the sharp price run-up since 2012, many homeowners worry any new house they buy could lose value. Fifty-three percent of homeowners surveyed by ValueInsured in February think they could see another housing crash, up from 37% in early 2016.

Many Baby Boomers, meanwhile, are delaying retirement and staying in their current homes longer as well, McLaughlin says.
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Bottom line: Many existing homeowners are staying put, further limiting the supply of starter homes and pushing up their prices. Buyers of starter homes devoted an average 41.2% of their income to housing costs in the first quarter, up from 37% a year ago, Trulia says. That’s well above the 30% most experts recommend.

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 99 Comments

And you should pay even more…

Posted on April 5, 2018 by grim

From NJ101.5:

4 COUNTIES IN NJ HAVE HIGHEST PROPERTY TAXES IN THE NATION

Just in case you’ve forgotten, a new analysis from real-estate tracker ATTOM Data Solutions reminds us that New Jersey homeowners are paying the highest property taxes in the nation — both in absolute numbers and as a percentage of home value.

The company’s analysis of single-family homes in 2017 recorded an average property tax of $8,696 in the Garden State, compared to a nationwide average of $3,399. Connecticut posted the second-highest average at $7,105.

Mirroring the country, average property taxes in New Jersey jumped 3 percent from 2016.

At 2.28 percent, New Jersey posted the highest effective property tax rate. That’s close to double the national average of 1.17 percent.

The analysis spotted nine counties nationwide with average property taxes above $10,000. Four of them can be found in New Jersey — Essex, Bergen, Union and Morris.

Every New Jersey county recorded an average property tax rate higher than the national average.

Posted in New Jersey Real Estate, Property Taxes | 83 Comments

Get in line with the rest of us

Posted on April 4, 2018 by grim

From NJBIZ:

Survey: Millennials want more jobs, cheaper housing

Millennials in New Jersey want lower taxes, increased job opportunities, affordable housing and improved, cheaper mass transit in order to stay in the state.

According to a survey of 975 state residents by the New Jersey Society of CPAs, 34 percent of respondents said high property taxes as the biggest reason millennials are leaving the state, while 16 percent said bringing more businesses into the state to create a higher-paying job market was also key. Some 14 percent said that building more affordable housing would be go a long way in getting them to stay.

Posted in Demographics, Economics, New Jersey Real Estate | 104 Comments

Uh Oh

Posted on April 3, 2018 by grim

From Bloomberg:

Manhattan Home Sales Tumble Most Since 2009 as Buyers Push Back

Home sales in Manhattan plunged by the most since the recession as buyers at all price levels drove hard bargains and were in no rush to close deals.

Sales of all condos and co-ops fell 25 percent in the first quarter from a year earlier to 2,180, according to a report Tuesday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest annual decline since the second quarter of 2009, when Manhattan’s property market froze in the wake of Lehman Brothers Holdings Inc.’s bankruptcy filing and the global financial crisis that followed.

The drop in sales spanned from the highest reaches of the luxury market to workaday studios and one-bedrooms. Buyers, who have noticed that home prices are no longer climbing as sharply as they have been, are realizing they can afford to be picky. Rising borrowing costs and new federal limits on tax deductions for mortgage interest and state and local levies also are making homeownership more expensive, giving shoppers even more reasons to push back on a listing’s price — or walk away.

While just a few years ago, bidding wars were the norm, “there’s nothing out there today that points to prices going up, and in many buyers’ minds, they point to being flat,” said Pamela Liebman, chief executive officer of brokerage Corcoran Group. “They’re now aggressive in the opposite way: putting in very low offers and seeing what concessions they can get from the sellers.”

Corcoran Group released its own Manhattan market report Tuesday, showing an 11 percent decrease in completed purchases and a 10 percent drop in sales that are pending.

Posted in Economics, Housing Recovery, New Development, NYC | 135 Comments

Hot summer at the Jersey Shore?

Posted on April 2, 2018 by grim

From the Press of Atlantic City:

Demand for South Jersey summer rentals increases

Atlantic and Cape May counties generally finish first and second, respectively, in terms of tourism dollars spent, hotels and homes rented, and other spending indicators measured each year.

And based on early reports from South Jersey Realtors, business indicators point to another strong year for the state’s shore economy.

“The average lease percentage is higher, and I think the length of stay is longer this year. We are writing a lot more two-week leases,” said Diane Bauer, a sales and rental agent for Jersey Cape Realty in Cape May. “I think people are actually feeling positive about the economy.”

A weeklong rental in Cape May can range from $700 to $14,000, depending on the number of bedrooms, the house’s location, the amenities and the time of year, Bauer said. The most popular weeks to rent summer homes are the last two weeks of July and the first two weeks of August.

The demand for summer rentals in Avalon and Stone Harbor has increased year after year, and this year is no exception, said Holly Rennie, a sales associate for Ferguson Dechert Real Estate who has been involved in the summer rental business for 26 years.

More commitments are being made to book summer vacation homes earlier in the year, Rennie said.

“People are recognizing that the ability to find the property that they want has become more and more challenging because our available rental properties are decreasing,” said Rennie, who has about 800 properties for rent in Avalon and Stone Harbor.

Summer rental bookings in Ocean City are up over the same time last year with relatively steady prices as the family-friendly resort continues to be a popular destination for people who live in Philadelphia, said Frank Shoemaker, general manager at Berger Realty in Ocean City.

“The prime weeks are going to fill up. … I’m not saying they are going to fill up tomorrow, or next week, but as we get closer to summer, they will be really, really sparse,” Shoemaker said. “If you want to come in an off week, we will have plenty of properties.”

Posted in Economics, Shore Real Estate | 67 Comments

Otteau March MarketNEWS

Posted on March 31, 2018 by grim

From the Otteau Group:

March MarketNEWS

The number of home sales in New Jersey over the first 2 months of 2018 totaled more than 16,000, setting an all-time record. Still, the 2% year-to-date increase over the same period last year was the smallest recently. This is due largely to misinformation about tax reform, which will actually result in a majority of NJ households paying less in federal income taxes, as lower rates more than offset the reduced mortgage interest deductions (MID) and State and Local Tax (SALT) limits.

While the number of home sales has increased for nearly all price ranges this year, the largest gain has occurred for luxury homes priced over $2.5-Million, rising by 32%. This impressive gain is somewhat misleading, however, given the smaller sample size of sales within this price point. Also noteworthy is that the improvement has been primarily concentrated in towns with direct rail service to Manhattan. Contracts for homes priced under $400,000 remain unchanged due largely to the shortage of supply within this range, while homes within the $400,000-$2.5-Million price ranges have seen modest increases.

Shifting to the supply side of the equation, inventory remains constricted, 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 4,500 (-11%) over the past year. This is also about half the amount of homes (37,000 fewer) on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.1 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 4.7 months.

Currently, 20 out of New Jersey’s 21 counties (95%) 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 2.8 months of supply, followed by Essex, Hudson, Monmouth, Union, Somerset and Morris Counties, which all have 3.5 months of supply or less. The counties with the largest amount of unsold inventory (6 months or greater) are concentrated in the southern portion of the state including Cumberland (6.4), Cape May (6.7), Atlantic (6.8) and Salem (8.0), however, these counties have shown significant improvement and are beginning to exhibit strengthening conditions.
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Demand for rental apartments remains strong in NJ with statewide occupancy rates being among the highest in the US. The Central NJ region has the lowest vacancy rate in the state at 2.5%, up 10 basis points (bp) from the prior quarter. Vacancy in the Philadelphia/Southern NJ region remained unchanged for the 3rd consecutive quarter, standing at 3.9%. Although vacancy in Northern NJ declined by 20 bp to 4.0%, this region continues to have the highest vacancy rate statewide due to the staggering pace of new construction deliveries in key markets like Hudson County and other towns offering convenient accessibility to Manhattan. Nationally, the average vacancy rate stands at 4.5% for the second consecutive quarter.

A driving force for the apartment market sector is that the percentage of New Jersey households with children living at home has steadily declined to 35% today, with continued declines likely in the future.This trend, which is rooted in New Jersey’s economic conditions, is anticipated to drive future housing demand increasingly toward smaller homes including multi-family housing in more urban locations. At the present time, 65% of households within the state have no children under the age of 18 living at home.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 31 Comments

It’ll sit empty for decades…

Posted on March 30, 2018 by grim

From the Record:

Toys R Us collapse creates large corporate office vacancy in Wayne

The collapse of Toys R Us has placed a big question mark on a large tract of forested woodland in the heart of Wayne.

Toys R Us is preparing to leave its corporate headquarters, which sits in the middle of nearly 200 acres of largely open space in a triangle bordered by Berdan Avenue, Hamburg Turnpike, and the Point View Reservoir.

The land has been a secluded corporate office campus since the 1960s, first as the headquarters of chemical conglomerate American Cyanamid. It has been the home of America’s iconic toy retailer since 2003. The road leading into the compound is Geoffrey Way, named after the giraffe mascot of Toys R Us.

It is a throwback to an era when corporations sought secluded, park-like suburban settings for their office complexes. It is going on the market at a time when demand for office campuses with a single corporate tenant has all but vanished. As a result, Wayne public officials and residents could see big changes proposed for Geoffrey Way.
…
Real estate experts and developers say this could be rare chance for Wayne to make decisions that could bring valuable benefits to the township.

But to do that, they say, the community may have to accept another use for the land.

“It’s an opportunity to create something that could be iconically transformational,” for Wayne, said Kenneth Pasternak, a founder and executive chairman of The KABR Group, a private equity real estate firm based in Ridgefield Park. “The challenge for Wayne is to be open-minded about that,” he said.
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Possible uses for the site, according to local commercial real estate experts, could include apartments that would allow young professionals to move to Wayne, and allow retirees to remain in the township after selling their homes. Assisted living housing or a corporate office park with space for multiple tenants are other possibilities. Non-office uses, however, would require a zoning change.

Posted in Economics, New Development, New Jersey Real Estate, Politics | 100 Comments

NJ Pension on Track! … to be fixed in 30 years.

Posted on March 29, 2018 by grim

From the Star Ledger:

Have New Jersey’s pension woes finally bottomed out?

ould it be true? Is New Jersey’s pension fund for public workers — among the worst-funded in the nation — really on the road to recovery?

That’s what a consultant’s analysis of the state’s investment strategy suggests.

The report to the State Investment Council on Wednesday said the pension fund for nearly 800,000 public and retired workers may have some more trouble in the short term but will come up smelling like roses decades from now.

Of course, it’s based on a couple of pretty big assumptions: that investments won’t tank, and that the state makes good on its commitment to increase its yearly contributions to the fund and resists the decades-old habit of skimping when times are bad.

If all that happens, the pension fund could be could be 93 percent funded within three decades.

The consultant, Aon Hewitt, calls this its “median expectation.”

Aon Hewitt’s simulation, which it warns is “highly dependent upon assumptions regarding investment returns and funding policy,” presents a more optimistic future than actuarial estimates showing some of the individual funds running out of money well before then.

Posted in Demographics, Economics, Humor, New Jersey Real Estate, Politics | 121 Comments

Onslaught

Posted on March 28, 2018 by grim

From HousingWire:

Experts: Homebuyers should prepare for onslaught of competition this spring season

The latest Case-Shiller report showed home prices are continuing to rise, but now experts say not only are those high prices here to stay, but homebuyers could be pummeled this spring by an increase in competition.

One expert explained that homebuyers will face not only the typical spring competition, but also the pent-up demand from would-be buyers looking for, but unable to find, a home over the past several months.

“The spring home shopping season will soon be in full swing, and with it we can expect the usual seasonal bump of would-be home buyers to come out of the woodwork to compete over a shrinking pool of homes to choose from,” Zillow Senior Economist Aaron Terrazas said. “But in a twist, this year’s buyers may be competing against some of those buyers who have been unsuccessful during the past few months.”

“Increasingly, the traditional seasonal boundaries around home shopping season – which generally heats up in early spring and cools off by late summer in time for back-to-school season – are becoming less pronounced,” Terrazas said. “Limited supply, fierce competition and rising prices are forcing many buyers to stay on the market longer in hopes of finding the right home at the right price. More inventory is really the only cure for those pressures right now, especially for those at the entry-level end of the market, but it has proven frustratingly slow in coming.”

And one expert explained this increased competition is also increasing home prices, which means high home prices are here to stay.

“Our first glimpse into Case-Shiller home price data in 2018 confirms high prices are here to stay,” realtor.com Chief Economist Danielle Hale said. “In fact, if we continue to see a steady stream of buyers and owners remain largely uninterested in selling, we can expect prices to continue to rise.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 146 Comments

Oh boy…

Posted on March 27, 2018 by grim

From the Star Ledger:

Will Phil Murphy veto giving police and fire unions control of their pensions?

The state Legislature passed legislation Monday handing control of the pension fund for New Jersey’s police and firefighters over to its members.

But it’s uncertain whether the governor will sign the bill as is.

Gov. Phil Murphy, a Democrat, has concerns over the Democrat-backed bill that would spin off police and firefighter pensions from the broader pension fund for state and local government workers, acting state Treasurer Elizabeth Muoio said following the votes.

The legislation is pushed by police and fire labor leaders who say state management has jeopardized their members’ retirement security by making insufficient financial contributions and choosing costly investment strategies. Over the past two decades, the fund has dwindled from fully funded to 65 percent funded.

Unions say their members can do better.

“We don’t feel that the state did a good job,” said Pat Colligan, president of the New Jersey State Policemen’s Benevolent Association. “We want to control our own destiny. It’s our pensions.”

State Senate President Stephen Sweeney, D-Gloucester, a sponsor of the bill, has said that labor-run funds elsewhere have successfully outperformed public boards.
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Christie, a Republican, vetoed similar legislation last spring, saying it lacked adequate safeguards for taxpayers. While the state would be relinquishing management of the fund, state and local taxpayers would still have to pick up the tab if it goes south.

Christie called it a “blank check for public workers.”

The state Senate passed the bill 34-2, while the state Assembly voted 67-2 with seven abstentions, sending it to the governor’s desk, where its prospects are uncertain.

Muoio said Monday that Murphy “has been supportive of the basic premise of this bill for a long time,” but that there are concerns. Specifically, she said, all of the pension funds could incur penalties if forced to prematurely liquidate its hedge fund holdings.

Posted in Economics, New Jersey Real Estate, Politics | 61 Comments

Did your town make the list?

Posted on March 26, 2018 by grim

From the Star Ledger:

Property taxes actually went down in these N.J. towns. Was yours one of the lucky ones?

New Jerseyans are accustomed to high property taxes, and they’re accustomed to those tax bills getting bigger year after year.

The state’s average residential property tax bill climbed from $8,549 in 2016 to $8,690 in 2017.
But not everyone saw a tax hike last year.

In fact, 67 of New Jersey’s 565 townships, villages, boroughs and cities, and 67 actually posted a smaller average residential property tax bill in 2017.

There are probably 67 different reasons for why property taxes were lower in these 67 municipalities. We explain the ones with biggest cuts.

The reductions ranged from a few pennies to thousands of dollars.

Eleven of these towns saw reductions of more than $500.

Posted in New Jersey Real Estate, Property Taxes | 31 Comments

Clifton For The Win

Posted on March 24, 2018 by grim

From the NY Times:

Clifton, N.J.: Where a Lot of Little Worlds Commingle

Clifton, in southern Passaic County, is an unpretentious, predominantly middle-class city of 85,000, crisscrossed by highways, two of which — the Garden State Parkway and Route 46 — intersect twice within its 11½ square miles. Framed on the west by a wooded mountain and on the east by the Passaic River, the city has pockets of both industry and agriculture (three tiny farms that survived the postwar development boom).

The population is as varied as the landscape. The personal finance website WalletHub this year ranked Clifton the 25th most culturally diverse city in the United States and No. 3 in linguistic diversity. The latter distinction jibes with local officials’ finding that more than 70 languages are spoken in the homes of public school students.

“There are a lot of little worlds, religiously, ethnically and locational-ly, that thrive in Clifton, yet they’re all happy to be part of the total picture,” said Ernest J. Scheidemann, a local real estate and insurance agent and lifelong resident. The spirit of acceptance was famously demonstrated three years ago when the Clifton High School senior class selected a Muslim student who wore a hijab as its best-dressed female student.

For residents, the ethnic diversity is a selling point, even if some were initially unaware of it. Jason Chuon, who bought a $380,000 expanded Cape Cod after being uprooted from Staten Island by Hurricane Sandy, said he was worried that his Asian-American family might stand out. That was not the case in a town with vibrant Hispanic, Middle Eastern, Asian and Eastern European communities.

“We have friends here who are Muslim, Hispanic, you name it,” said Mr. Chuon, a 38-year-old online marketer. “There’s a Colombian guy on one side of me, a Polish lady on the other. Everyone’s trying to just make a living and better themselves. I tell my friends and family in New York, ‘You’ve got to check out this place.’”
…
“At the low-end, you can pick up a small one-family house in the $250,000 to $300,000 range in areas bordering Paterson and Passaic, and at the high end, you might find a million-dollar home in Montclair Heights,” said Nicholas Tselepis, broker-owner of the Nicholas Real Estate Agency in Clifton. Mr. Tselepis noted that Clifton’s accessibility and relative affordability appeal to buyers from New York City.

Posted in New Jersey Real Estate | 45 Comments

Never an easy year for a first time buyer

Posted on March 23, 2018 by grim

From the NYT:

2018: A Tough Year for First-Time Buyers

Dr. Davis and brokers will likely tell you that what your decision should come down to is not so much whether you will make money off your home, or how much of a tax break you will or won’t get, but where you want to be — and for how long.

“A first-time home buyer is taking a bet on a metro area, and the first thing I’d ask the first-time home buyer is: Are you willing to commit to this metro area and this school district for the next 10 years,” Dr. Davis said, assuming you have or plan to have children. If the answer is yes, he added, “they shouldn’t really worry about whether prices are three percent higher than they should be.”

That is what pushed Cornelius Graubner and Lucian Leung-Graubner, who rent in Williamsburg, to start looking at homes in areas within an hour’s commute of New York City. “Thinking about long term, we want a place that we can really stretch and grow,” said Ms. Leung-Graubner, 32, a program manager at a community-based organization in adult education. She means that in a very real sense of the word: She wants a “garden in my backyard beyond growing little herbs.”

Mr. Graubner grew up in rural Germany; Ms. Leung-Graubner in Jackson Heights. While they are factoring property taxes and potentially higher interest rates into their decision — Mr. Graubner, 39, a product manager for a risk analytics company, has it all modeled on a spreadsheet — their goal to have more space, in a more permanent spot, in a community they like is more important.

“We’ve always said we wouldn’t mind waking up in the morning and not seeing the neighbor first thing,” Mr. Graubner said.

Posted in Demographics, Economics, National Real Estate | 221 Comments

Rates go up now?

Posted on March 22, 2018 by grim

From the Chicago Tribune:

As Fed raises rates, look for higher costs on credit cards, car loans and home mortgages

Americans are taking on more debt, and they’re soon going to be paying more for it.

The Federal Reserve on Wednesday raised its benchmark interest rate, citing an improving economy, low unemployment and rising wages. The move will affect millions of Americans by making it more expensive to borrow money, whether that’s in the form of credit card balances, car loans or some home mortgages.

This may mean the time is ripe to make a big purchase before interest rates go higher. The Fed already has promised two additional rate hikes this year and more in 2019 as its benchmark federal funds rate climbs from historic lows during the Great Recession.

But there’s also a silver lining for savers: Because interest rates have been low for years, it’s been tough to gain much extra ground in the form of interest when stashing away cash in savings accounts. The Fed’s move will make it easier to accrue interest on a nest egg or rainy day fund.
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You’ll probably see the first sign of rising interest rates on your credit card bill within a few weeks, said Tendayi Kapfidze, chief economist for loan comparison site LendingTree. That’s because credit card companies generally offer variable interest rates that are adjusted in real time according to the prime rate, or the interest rate charged by most major banks to their corporate customers. The federal funds rate and the prime rate are tightly linked, and as one goes, so the other tends to go.
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Home equity loans and auto loans with adjustable rates — most likely those made with a lender outside of the automaker — will begin to see higher rates next, Kapfidze said. Personal loan providers will soon catch up as well. That’s why this is a a critical time to shop around for the best interest rate on any debt you can, he said, especially with rates set to go even higher later this year.

Posted in Economics, Mortgages, National Real Estate | 155 Comments