The New Weehawken

Posted on September 12, 2017 by grim

From the Star Ledger:

How the hottest real estate market in N.J. literally divided this tiny town

Seemingly everyone knew this tiny cliffside town — all 1.4-square miles of it — would one day become a dynamic real estate market.

Barbara Tulko, a Weehawken resident since 1974 and a realtor since 1984, remembers diverting bubbly first-time buyers in the 1980s looking to live in Hoboken up to neighboring Weehawken. It had the same key features the more well-known community had — views and easy access to Manhattan — but was less crowded and considerably less expensive.

Mary Ciuffitelli, a 37-year Weehawken resident, would advertise various properties she owned as the “extreme West side” — because it was nearly an extension of Manhattan.
…
But in 2017, Weehawken requires no diversionary tactics or aggressive sales pitches.

Because of demand from buyers who have been priced out of New York City, Hoboken and Jersey City — and who are now scooping up luxury waterfront condos — median home values in the town of under 15,000 residents increased nearly 25 percent over the last year. It’s the highest surge in the state.

Median home values are now at $757,500, compared to $488,000 in 2012, and Zillow predicts that figure will hit $809,000 by July 2018. The price continues to rise as a surge of waterfront development has taken place in the town through which the Lincoln Tunnel and it’s daily 50,000 number of drivers pass, including construction of The Estuary (589 rental units), The Avenue Collection (177 condos), and RiversEdge (236 units) and RiverParc (280 units).
…
Yet the spoils of gentrification are rarely evenly distributed — and a closer look at the boom in Weehawken reveals tensions and fault lines. In a town where 55 percent of students in their school system are on free or reduced lunch, the largest property value increases have largely been concentrated near the waterfront.

And with the cliffs of the Palisades sharply dividing longtime residents, who live at higher, inland elevations and share a western border with Union City, from new city transports down along the Hudson River, some say that the town has split into two.

“You could say you know everyone in Weehawken,” says Enrique Romero, who grew up there. “Before you go down there.”

“We created now a new city,” says Gabe Pasquale, senior vice president of marketing and sales for Landsea Homes, one of the developers of the waterfront.

Posted in Gold Coast, Housing Recovery, New Development | 256 Comments

Will rent control hinder Newark redevelopment?

Posted on September 11, 2017 by grim

From the Star Ledger:

Residents win rent control battle; landlords face steeper hurdle to raise rents

Landlords looking to raise rents on rent-controlled buildings will have to meet a higher threshold to do so under new measures passed by the city this week.

The City Council approved a resident-sponsored initiative to tighten rent control laws, last week. The measure requires a landlord spend 12 months worth of rent to rehabilitate a vacant apartment in order to raise rent by up to 10 percent.

“From the perspective of ensuring that we maintain housing affordability from every level, from low-income through moderate-income, the rent control ordinance is another extremely important piece of the puzzle to do that,” said Richard Cammarieri, a housing advocate who works at New Community Corporation.

Homes for All Newark, a coalition of housing advocates and renters, collected enough signatures to submit a ballot initiative to the city last month requesting these changes. If the council failed to approve the measure, it’d be up to the voters to decide.

The rent control measure essentially reverses changes South Ward Councilman John Sharpe James proposed early this year. In March, the council agreed to lower the amount a landlord must spent in rehabilitation costs to raise rents: Eight months worth of a unit’s rent would allow a landlord to raise rent by 20 percent. The new legislation caps increases at 10 percent.
…
Cammarieri said rent control changes were one part of making sure the city remained affordable amid new waves of development. The city is also pushing an inclusionary zoning ordinance requiring new developments to set aside low- and moderate-income units.

Posted in New Development, New Jersey Real Estate | 46 Comments

Get out your wallets

Posted on September 8, 2017 by grim

From CNBC:

Almost half of top US housing markets are ‘overvalued’

It will come as no surprise to anyone out house hunting today — buying a home is becoming ever more difficult to afford.

Prices just keep soaring while incomes fail to keep pace. Even historically low mortgage rates are not helping enough. At the end of July, of the top 50 markets, based on housing stock, 46 percent were overvalued, according to CoreLogic.

A market is considered overvalued when home prices are at least 10 percent higher than the long-term, sustainable level. On the flip side, 16 percent of markets in the report were listed as undervalued and 38 percent came in fairly valued.

Home prices came in 6.7 percent higher in July, compared with the same month a year ago. A record-low supply of homes for sale keeps driving prices; the supply at the end of July was 9 percent lower compared with a year ago and has been shrinking steadily for nearly three years, according to the National Association of Realtors.

“Home prices in July continued to rise at a solid pace with no signs of slowing down,” said Frank Martell, president and CEO of CoreLogic. “The combination of steadily rising purchase demand along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of this year. While mortgage interest rates remain low, affordability cracks are emerging.”

Price appreciation is strongest in the Pacific Northwest and in Denver, where some of the tech industry has migrated, ironically because Northern California housing became so expensive.

“The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year,” said Frank Nothaft, chief economist at CoreLogic.

Even Las Vegas, where homes lost more than half their value during the housing crash, is now considered overvalued. Washington, D.C., Miami and Houston are also on that list, although Houston home values will surely be hit hard by Hurricane Harvey.

Posted in Demographics, Economics, National Real Estate | 101 Comments

Dynamics right for a bubble? Or is it different this time?

Posted on September 5, 2017 by grim

From the NY Post:

Are we headed for another housing collapse?

One decade after the biggest housing collapse in America’s history led to a global recession, could we be facing another crisis?

“Not happening,” says Burns, adding that the 2007 housing crash “was based on lending practices which have since been cleaned up.”

Many industry experts agree. The subprime mortgages that targeted borrowers with less-than-perfect credit and led to financial turmoil 10 years ago do not play a role in today’s real estate market.

“When you talk about a bubble, you think of people being really exhilarated and excited and prices going way up. We don’t see that now,” says Annie Cion Gruenberger, who has been a New York City broker with Warburg Reality for 28 years. “We have a very positive market, but a targeted market of smart buyers.”

So what do high price tags and low supply mean, if not economic catastrophe?”

The 2007 collapse spooked home builders so much, they didn’t want to build anything but high-end properties. That drove up house prices and made it harder for people to buy starter homes.

Meanwhile, the market was split into two halves: places such as Las Vegas, where development was overstretched and unsustainable, and which is still struggling to bounce back; and places such as Portland, Ore., and Silicon Valley, where NIMBY regulations limit how much construction can happen, meaning fewer homes available to buy. As a result, there’s a real lack of housing where the jobs are.
…
NAR’s Fears points to a number of trends: First, homeowners are staying in place longer, limiting the number of existing homes for sale. Low unemployment rates are keeping them from leaving town in search of work. High home prices are inspiring them to remodel rather than relocate within their communities, if they want a different kind of house. First-time buyers who can afford it might buy a home that can accommodate two kids instead of one, precluding a move a couple years after their purchase. Grandparents are staying put to live near their kids, rather than flying off to retirement far away.
…
In March, William Poole, a senior fellow at the Cato Institute, wrote a column for cnn.com, pointing to concerns about the country’s two biggest mortgage lenders, Fannie Mae and Freddie Mac. “In Freddie’s 2016 Annual Report, the agency says 36 percent of its obligations are ‘credit enhanced,’ meaning they carry mortgage insurance of one sort or another, which is typically used for weaker mortgages,” Poole wrote. “If these weak subprime mortgages begin to fail in large numbers, so also will the insuring companies.”

Jonathan Miller, a real estate analyst at Miller Samuel, is unmoved by such arguments. He says the average buyer today has an average credit score “well above 700. They are some of the highest average credit scores in history.” He added that any subprime failures would be offset by the quality of most American borrowers being “unusually high.”

Posted in Housing Bubble, Housing Recovery, National Real Estate | 132 Comments

That was fast…

Posted on September 4, 2017 by grim

From the NYT:

The Urban Revival Is Over

For all the concern about the gentrification, rising housing prices and the growing gap between the rich and poor in our leading cities, an even bigger threat lies on the horizon: The urban revival that swept across America over the past decade or two may be in danger. As it turns out, the much-ballyhooed new age of the city might be giving way to a great urban stall-out.

Starting around the turn of the millennium, young, affluent professionals began pouring into the cores of big cities, reversing generations of white flight. Unlike their parents and grandparents, these new urbanites embraced the energy and authenticity — and the ethnic, racial and sexual diversity — that are emblematic of cities. Established corporations and high-flying tech start-ups followed suit. The urban revival has been so thoroughgoing that it has even engendered a new crisis of success, whose symptoms are runaway gentrification, soaring housing prices and a widening income gap between newcomers and longtime residents.

But even as people and companies continue to pour into cities, signs that the tide has crested are emerging.

While many, if not most, large cities grew faster than their suburbs between 2000 and 2015, in the last two years the suburbs outgrew cities in two-thirds of America’s large metropolitan areas, according to a detailed analysis of the latest census data by the demographer William Frey of the Brookings Institution. Fourteen big cities lost population in 2015-16 compared with just five in 2011-12, with Chicago, the nation’s third-largest city, hemorrhaging the most people.

Over this same period, the suburbs of Sun Belt cities like Charlotte, N.C.; Orlando and Tampa, Fla.; and Denver gained population. Low-density suburban counties are once again the fastest-growing parts of the nation, according to a deep dive into America’s 3,000-plus counties by the urban economist Jed Kolko, outpacing the growth rates of dense urban counties by a large measure in 2016, when they posted their fastest growth rates since the housing crisis of 2008.

Posted in Demographics, National Real Estate, New Development | 34 Comments

That time when Vernon was cool, until it wasn’t.

Posted on September 3, 2017 by grim

From the Record:

Remembering Hugh Hefner’s Great Gorge Playboy Club

There was much excitement for miles around the North Jersey area when Hugh Hefner built and officially opened The Great Gorge Playboy Club in Vernon in 1972. Some were excited about the top entertainment and gourmet food that would be available. Others were overjoyed at the amount of local jobs that were being created.

My own favorite memories are of swimming in the luxurious Olympic-sized outdoor swimming pool. The club also had an indoor pool and Jacuzzis that also were crowd-pleasers. The buffet with its variety of food was amazing too.

Every newspaper was filled with news around the grand opening of the multi-million dollar resort complex. Descriptions were that the building was “natural” in the mood created by the décor and windows – giving a feeling of being outdoors when one was inside. Public areas included the VIP room, Playmate Bar, Sidewalk Café, a deli, the Living Room and a discotheque. A sauna and health center were available too. A wading pool was available for children who came to the resort with their parents.
…
The top entertainers of the day performed. Some of those who initially come to my mind are Frank Sinatra, Nancy Sinatra, Frankie Avalon, Pearl Bailey, Harry Belafonte, Tony Bennett, Diahann Carroll, Johnny Cash, Sammy Davis Jr. Duke Ellington, Englebert Humperdinck, Bob Hope, Dean Martin, Johnny Ray, The Supremes, Dionne Warwick – they all were there.
…
The hotel was sold to the Americana chain in 1982. Reports at the time said the resort had been losing money for years.

Later, sold again it was turned into the Seasons Hotel. Still later Seasons was sold to Metairie Corp. which turned into the Legends Resort and Country Club. The hotel has been derelict and permanently closed to public operations for many years.

In February 2017 Vernon Township began to evict low-income full -ime residents of the hotel. Township officials said the owner rented rooms out illegally and that health and safety issues had to be addressed.

There was a murder at the site in 2008. A 36-year-old Oklahoma man who was living at Legends Resort while working on the pipeline project was found dead on a sidewalk outside the resort at 3 a.m. There were arrests and two brothers from Port Jervis, N.Y., were charged with first-degree murder.

Those who remember the elegant, classy Playboy Club of the 1970s would not recognize it today. Its present condition is a sad site for those of us who remember the club in its prime years. We will continue to treasure those memories and still visualize the original Playboy Club and Hotel of Vernon as it was. How lucky we were to have experienced it!

Posted in New Jersey Real Estate, North Jersey Real Estate | 10 Comments

Pending sales now down 4 out of 5 months

Posted on September 1, 2017 by grim

From HousingWire:

Pending home sales decrease slightly in July

Pending home sales dropped slightly in July, marking the fourth decrease in the past five months, according to the latest Pending Home Sales Index report from the National Association of Realtors.

The index, a forward-looking indicator based on contract signings, decreased 0.8% to 109.1 in July. This is down from a downwardly revised 110 in June, and down 1.3% from last year. This marks the third annual decrease in the past four months.

“With the exception of a minimal gain in the West, pending sales were weaker in most areas in July as house hunters saw limited options for sale and highly competitive market conditions,” NAR Chief Economist Lawrence Yun said.

“The housing market remains stuck in a holding pattern with little signs of breaking through,” Yun said. “The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace.”

Yun explained the national median home sales price rose 38% over the past five years, however hourly wages increased just 12%. This trend continues to place pressure on affordability in some markets. But NAR’s report showed the slowdown in existing sales since spring is the result of a supply problem and not one of diminished demand.

“Buyer traffic continues to be higher than a year ago, the typical listing has gone under contract within a month since April, and inventory at the end of July was 9% lower than last July,” Yun said.

“The reality, therefore, is that sales in coming months will not break out unless supply miraculously improves,” he said. “This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell.”

Posted in Housing Recovery, National Real Estate | 56 Comments

So it wasn’t subprime?

Posted on August 31, 2017 by grim

From Quartz:

House flippers triggered the US housing market crash, not poor subprime borrowers

The grim tale of America’s “subprime mortgage crisis” delivers one of those stinging moral slaps that Americans seem to favor in their histories. Poor people were reckless and stupid, banks got greedy. Layer in some Wall Street dark arts, and there you have it: a global financial crisis.

Dark arts notwithstanding, that’s not what really happened, though.

Mounting evidence suggests that the notion that the 2007 crash happened because people with shoddy credit borrowed to buy houses they couldn’t afford is just plain wrong. The latest comes in a new NBER working paper arguing that it was wealthy or middle-class house-flipping speculators who blew up the bubble to cataclysmic proportions, and then wrecked local housing markets when they defaulted en masse.

Analyzing a huge dataset of anonymous credit scores from Equifax, a credit reporting bureau, the economists—Stefania Albanesi of the University of Pittsburgh, the University of Geneva’s Giacomo De Giorgi, and Jaromir Nosal of Boston College—found that the biggest growth of mortgage debt during the housing boom came from those with credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults.

As for those with low credit scores—the “subprime” borrowers who supposedly caused the crisis—their borrowing stayed virtually constant throughout the boom. And while it’s true that these types of borrowers usually default at relatively higher rates, they didn’t after the 2007 housing collapse. The lowest quartile in the credit score distribution accounted for 70% of foreclosures during the boom years, falling to just 35% during the crisis.

So why were relatively wealthier folks borrowing so much?

Recall that back then the mantra was that housing prices would keep rising forever. Since owning a home is one of the best ways to build wealth in America, most of those with sterling credit already did. Low rates encouraged some of them to parlay their credit pedigree and growing existing home value into mortgages for additional homes. Some of these were long-term purchases (e.g. vacation homes, homes held for rental income). But as a Federal Reserve Bank of New York report from 2011 reveals (pdf, p.26), an increasing share bought with the aim to “flip” the home a few months or years later for a tidy profit.
…
Come 2007, investors accounted for 43% of the total mortgage balance for the top credit-score quartile. For the middle two quartiles, speculators were responsible for around 35% in 2007.

This set up a dangerous dynamic. The mortgages these prime borrowers were able to secure were much bigger than those taken out by poor homebuyers. Worse, speculators have less incentive to hold onto their extra homes than those who only own one home. So when the housing market started tumbling and the economy soon followed, they were much more willing to default and foreclose, as you can see in the chart below.

This would explain why, as the researchers put it, “the rise in mortgage delinquencies is virtually exclusively accounted for by real estate investors.” The share of single-mortgage borrowers who couldn’t keep up on their loan payments barely budged between 2005 and 2008.

Recent research—particularly that by Antoinette Schoar, a finance professor at MIT Sloan—has been helping rewrite the received wisdom of the “subprime crisis” that has blamed the crisis on poor, reckless borrowers for the better part of a decade. Schoar’s work reveals that borrowing and defaults had risen proportionally across income levels and credit score, but that those with sounder credit ratings drove the rise in delinquencies. This new paper’s investigation into the habits of middle- and upper-income real estate speculators in the run-up to the crisis marks yet another chapter of the history books in desperate need of revision.

Posted in Foreclosures, Housing Bubble, National Real Estate, Risky Lending | 88 Comments

Case Shiller Day!

Posted on August 29, 2017 by grim

From Marketwatch:

Home price gains were hot in June as Seattle sizzled, Case-Shiller says

U.S. home price growth picked up steam in June as strong demand continued to buoy the market.

The S&P/Case-Shiller 20-city index rose a seasonally adjusted 5.7% in the three-month period ending in June compared to a year ago, the same rate of change as in May. The national index rose 5.8% compared to a year ago, up from a 5.7% annual increase in May.

Nine cities had stronger annual price growth in June than in May, and western metros remained on top, with annual price gains ranging from 13.4% in Seattle to 7.7% in Dallas. Seattle prices are rising so fast that they leave No. 2 Portland in the dust, S&P Dow Jones Indices noted in a release.

The national price index reclaimed its 2006 peak last fall, but the closely-watched 20-city index is still about 2.9% shy of that bubble-era high.

Posted in Economics, National Real Estate | 81 Comments

Hoboken as expensive as Manhattan?

Posted on August 28, 2017 by grim

From HousingWire:

New York vs New Jersey — we did the math on where it’s cheapest for commuters to live

New York City is the most expensive and the most populated city in America.

About 3 million people work in Manhattan each day, according to a 2013 U.S. Census estimate. More than half are commuters who take public transit into the city from their homes in outer boroughs and surrounding suburbs.

The daily round-trip commute on New York and New Jersey’s packed trains and subways is notoriously brutal at times — even posing potential risks to riders’ long-term health.

So, why don’t more people live in the city where they work? All things considered, Manhattan is just too expensive. For many people, it seems, the cost of commuting — both in dollars and patience — is dwarfed by the sheer savings of living in a nearby city, particularly for homeowners.

Business Insider compared monthly fixed expenses for residents of Manhattan and six popular commuting hubs that are accessible by underground train: the Bronx, Brooklyn,Queens, Hoboken, Jersey City, and Newark. The commute into Manhattan from each of these places clocks in under 40 minutes.

To find the total monthly cost for each place, we gathered median home prices and annual property taxes from Sperling’s Best Places. We calculated the monthly mortgage payment for each assuming a 20% down payment and 4% interest on a 30-year fixed rate mortgage.

We added these costs together, plus the cost of either a monthly subway pass or PATH train pass (depending on whether you’re in New York or New Jersey), to get the total monthly cost for a homeowner who commutes to Manhattan for work. Check out the map below for the final numbers.

Posted in Demographics, Economics, New Jersey Real Estate, NYC | 48 Comments

Existing Home Sales Tank

Posted on August 25, 2017 by grim

From CNBC:

US existing home sales unexpectedly fall in July

U.S. home resales unexpectedly fell in July to their lowest monthly level of the year due to a lack of properties for sale, which also continued to push up prices.

The National Association of Realtors said on Thursday existing home sales fell 1.3 percent to a seasonally adjusted annual rate of 5.44 million units last month. June’s sales pace was revised slightly lower to 5.51 million units.

Economists polled by Reuters had forecast sales rising 0.9 percent to a rate of 5.57 million units. Sales were up 2.1 percent from July 2016.

Supply was down 9.0 percent from a year ago. Housing inventory has declined for 26 consecutive months on a year-on-year basis.

A dearth of properties on the market has crimped the housing recovery and forced price appreciation to significantly outstrip wage gains.

The median house price was $258,300, a 6.2 percent rise from one year ago, reflecting the paucity of properties.

“Demand remains strong but inventory shortage is the choke point,” NAR chief economist Lawrence Yun said.

At the current sales rate, it would take 4.2 months to clear inventory, down from 4.8 months one year ago. Economists view a 6-month supply as a healthy balance between supply and demand.

The median number of days homes were on the market in July was 30, compared to 36 days one year ago.

Across the regions, the Northeast saw a decline of 14.5 percent and in the Midwest sales were down 5.3 percent. They jumped in the West by 5.0 percent while sales increased 2.2 percent in the South.

Posted in Economics, National Real Estate | 113 Comments

This makes my head hurt

Posted on August 24, 2017 by grim

From the Real Deal:

This is the salary you need to earn to buy a home right now in New York, Miami and LA

Using the National Association of Realtors’ data on housing affordability, Business Insider gathered a list of the US metro areas where the minimum salary required to qualify for a mortgage, after a 20 percent down payment, is highest. What they found was that the salary needed to qualify in the top-five metro areas — four of which are located in California — exceeds $100,000.

Here’s what it you need to be earning to buy in New York, Miami and Los Angeles.

The New York-Newark-Jersey City, New York/New Jersey/Pennsylvania metro areas ranked 13th overall in BI’s list. With a population of 20,182,305 and a median home cost of $414,000, the salary you need to buy is $76,613.

From the Star Ledger:

Here’s how much you can earn and still qualify as low-income in N.J.

As rent and home prices keep rising in New Jersey, the number it takes to be considered low-income by the Department of Housing and Urban Development continues to be surprisingly high in New Jersey.

In 2017, a family of four in New Jersey earning $68,000 a year or less is considered low-income, according to HUD.

Posted in Demographics, Economics, New Jersey Real Estate, Where's the Beef? | 70 Comments

Livin’ large

Posted on August 23, 2017 by grim

From Bloomberg:

Millennial Americans Are Moving to the ‘Burbs, Buying Big SUVs

Millennials are finally starting their own baby boom and heading for the suburbs in big sport utility vehicles, much like their parents did.

Americans aged about 18 to 34 have become the largest group of homebuyers, and almost half live in the suburbs, according to Zillow Group data. As they shop for bigger homes to accommodate growing families, they’re upsizing their vehicles to match. U.S. industry sales of large SUVs have jumped 11 percent in the first half of the year, Ford Motor Co. estimates, compared with increases of 9 percent for midsize and 4 percent for small SUVs.

“We do see that demographic group driving larger sport utility sales as they acquire homes, create families and gain some wealth,” said Michelle Krebs, an analyst at car-shopping website Autotrader. “They started with compact sport utilities and now, with families, they’re moving up.”

The shift to suburbia may surprise those who’ve chided millennials for being more interested in pricey avocado toast than in saving for a home. Much of the generation delayed marriage, childbearing and home ownership after graduating with heaping student-loan debt and entering a weak job market. As more millennials overcome this, many want the life of their baby-boomer parents — the kids, the house in the ’burbs and the beefy SUV.

“As more people move out of their parents’ basement — and there’s still quite a few living there — we expect to see continued healthy demand for homes,” said Svenja Gudell, chief economist for Zillow, which found millennials made up 42 percent of homebuyers last year. “Millennials delayed home ownership, just like they delayed getting married and having kids, but now they’re making very similar decisions to their parents.”

Posted in Demographics, Economics, National Real Estate | 51 Comments

But, can you afford NJ on these jobs?

Posted on August 21, 2017 by grim

From the APP:

NJ becoming the warehouse state, and that means more jobs

School supplies, shoes, clothing and home decor – Freehold Township resident Blythe Aguayo buys everything online these days.

“I get home from work and my kids will say to me, ‘We need so and so for school on Thursday’ and it’s Monday afternoon,” said Aguayo, a mother of four. “I don’t have time to head to Target and Walmart and the mall to get what I need when I can just find it online, pay for overnight delivery and have exactly what I want, what I need, right away at my door.”

After she clicks buy, a team of machines and workers at warehouses across the nation go into action to fulfill her order, pulling the item off of racks, dropping it in a box and shipping it out. More and more, e-commerce companies are locating those workers here in New Jersey.

The Garden State is on its way to becoming the Warehouse State.

While it’s not secret that the internet has changed the way we shop, it’s changing where we work. It’s transforming New Jersey’s workforce.

Companies, such as retail giant Amazon, are employing thousands of workers, in some cases 24 hours a day, to process and send all those e-commerce orders. One of the biggest warehouses is off Interstate 195 near Allentown. Hundreds of people recently lined up to try to get a job there. Watch the video at the top of this story to learn about the job fair.
…
More than 450,000 people work in New Jersey’s transportation, logistics and distribution industries, including e-commerce fulfillment centers, estimated Anne Strauss-Wieder, director of freight planning for the North Jersey Transportation Planning Authority.
…
For instance, Amazon has more than 13,000 full-time employees in New Jersey, putting it on a path to become one of the state’s largest employers, said Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association. More than 4,000 work in Robbinsville now and Amazon is opening warehouses this fall in Edison, Logan and Cranbury, and in Teterboro in 2018.

Posted in Demographics, Economics, New Jersey Real Estate | 93 Comments

New homes were never cheap

Posted on August 18, 2017 by grim

From CNBC:

As housing affordability weakens, more buyers are left out in the cold

The cost of housing is rising at a fast clip, and nowhere is it more apparent than in the market for newly built homes.

Sales there are rising, but only on the higher end, and that is leaving the majority of entry-level buyers out of luck and out of homeownership because there are so few cheaper, existing homes for sale. While homebuilders claim they are trying to target the high demand from entry-level buyers, the numbers simply don’t show that.

More affordable homes, those priced under $200,000, made up 44 percent of the market in 2010. Today, they are just 16 percent of new, for-sale construction, according to research by California-based John Burns Real Estate Consulting.

During the same period, the share of newly built homes priced between $200,000 and $400,000 has grown to 55 percent from 43 percent. Going even further up the price scale, the share of new homes priced above $400,000 has more than doubled to 29 percent of the market from 13 percent.

While sales of newly built homes currently stand about 9 percent higher than they were a year ago, according to the U.S. Census, they remain well below historical norms, as does new construction of single-family homes.
…
Big builders like D.R. Horton, LGI Homes and Lennar do offer low-priced products, but the vast majority of builders are still concentrating on the move-up market. While they might like to offer cheaper homes, they say the current market conditions don’t allow for that.

“Rising material prices, particularly lumber, along with chronic shortages of buildable lots and skilled labor are putting upward pressure on home prices and impeding a more robust housing recovery,” said Granger MacDonald, chairman of the National Association of Home Builders and a developer from Kerrville, Texas.

Posted in Demographics, Economics, National Real Estate, New Development | 89 Comments