The Future of America – Boarding Houses

Posted on July 24, 2017 by grim

From Quartz:

Are the empty bedrooms in baby boomer homes a solution to the millennial US housing crunch?

One American generation is struggling to find affordable housing. A second is sitting at home with a lots of empty bedrooms. Real estate site Trulia argues it’s a match made in housing-market heaven.

Sky-high rents and house prices keep squeezing American’s finances. Home-ownership rates are well below (pdf) pre-recession levels, while the share of US income spent on rent has spiked from 21% to more than 25% in the last five years. As 90% of retirement-age older Americans say they want to stay in their homes, and millennial renters are desperate for cheaper rents, Trulia thinks “boom-mates” are an answer.

To get a handle on its potential, Trulia used US Census data to calculate the number of vacant bedrooms in households headed by people born no later than 1964 (the last year of the baby boomer generation). By identifying the total number of bedrooms, then subtracting the the number of inhabitants and one additional bedroom to account for alternate uses such as a home office, Trulia says there are 3.6 million bedrooms vacant in the 100 largest US metro areas. Top markets had an average of 4.2 bedrooms per household and 2.6 household members.

The most available bedrooms were in New York (177,734), Atlanta (141,462), Washington (133,685), and Los Angeles (114,731), where about 3% to 5% of homes have spare capacity. Landlords in those cities could earn an estimated $11,000 per year by renting out rooms. In San Francisco, despite having relatively few available bedrooms (22,003), the highest returns were on offer: $21,780. On the other side of the coin, renters in Boston, New York, and the Bay Area could save the most, about $11,000 per year, by renting rooms from boomers rather than getting their own one-bedroom apartments in those cities.

Posted in Demographics, Economics, New Development | 122 Comments

Philly best local showing in the last decade

Posted on July 22, 2017 by grim

From the Philly Business Journal:

Philadelphia posts solid, post-recession gain in home values

Since the real estate bubble burst during the Great Recession of 2007-2009, housing markets across the country have struggled to regain their footing. Philadelphia and its Pennsylvania suburbs have bounced back much stronger than other markets in the area, ranking inside the top 40 markets with the top gains in average home prices across the country.

FHFA converts each market’s home sales prices to a quarterly index, which is pegged to a 1991 value of 100 points. Any rise in the index corresponds to an overall increase in local prices. Any drop indicates that values are declining.

Our sister publication Buffalo Business First calculated 10-year changes for the nation’s 100 biggest markets. The Philadelphia market gained 22.54 points from the first quarter of 2007 to the corresponding period this year, yielding a gain of 9.5 percent in the value of a typical home.

Roughly a third of the top 100 markets (37, to be precise) are still underwater, with average house prices that are lower today than before the recession.
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The nine metros with the strongest growth rates for home values are all located in rapidly expanding states in the South and West. Pittsburgh rounds out the top 10.

Other local areas haven’t bounced back nearly as well as the Philadelphia market, with the Wilmington market sliding down 11.8 percent, and the Camden market falling 21.7 percent in the same measurement period.

Posted in Economics, Housing Recovery | 28 Comments

Exurb Puff Piece? Smells like a bubble

Posted on July 21, 2017 by grim

From the NY Times:

Extreme Commuting

In 1492, after an arduous voyage aboard Columbus’s vessel the Santa María, Rodrigo de Triana, a lookout, bellowed, “Tierra!”

This is pretty much how Corey Ferrell, a commuter, sometimes feels upon docking at his Manhattan office following a heroic three-and-a-half-hour, one-way commute — by bicycle, two trains, and on foot — from Oxford, Conn.

About 180 miles to the west, in Bethlehem, Pa., Scott Ubert, a corporate chef in Manhattan, starts his extended day at 5 a.m. An hour later, coffee in hand, he drives 10 minutes to an open-air bus stop where he catches the 6:20 to the Port Authority Bus Terminal — two hours if the stars align. From there, he has a leg-stretching 20-minute walk to work.

“The ride is pretty comfortable,” Mr. Ubert said. “But just hope you don’t get one of the old clunkers.” Like nearly all “extreme commuters” — defined here as people who commute a minimum of two hours each way, five days a week — Mr. Ubert settles in, pulls out his iPhone and laptop and gets to work answering emails, texting and planning menus. He typically logs a 10- to 12-hour workday, returning home at close to midnight.

“My wife always waits up, which is nice,” Mr. Ubert said. “Our little guy goes to bed at 9 p.m., which is not so cool, but he loves the backyard and neighborhood, so it’s completely worth it.”

At first Mr. Ubert thought he would hate the commuting life, but that soon changed. “It’s really not so bad, and what we get in return is amazing.” What they get in return is a 3,100-square-foot, five-bedroom, four-bath colonial on one rustic acre, for which they paid $375,000 last year.

“It’s true, we are living the American dream, with deer running around in our yard, and bald eagles, too.”

Escaping to the distant exurbs is not new, although the frontier for the New York area seems to be expanding deeper into regions like Bucks and Pike counties in Pennsylvania — even to Philadelphia; Dutchess, Rockland and Orange in New York; Sussex and Warren in New Jersey; and New Haven and Middlesex in Connecticut. These commuters are heeding the old real estate adage: “Drive until you qualify.” This suggests that you explore farther and farther out until reaching the off ramp where houses meet your style and budget.

It would be an overstatement to say extreme commuting is a major trend. After all, how many people can withstand 200 hours a month traveling back and forth? On the other hand, given the woeful state of New York City’s transportation network this summer, a five-mile commute can feel like hitchhiking to the Catskills.

For those who can, however, the motivations are similar: the need to leave an unaffordable city, expanding families, a search for better schools, tranquil environs and more real estate bang for the buck. And as employers become more open to flexible work hours, combined with technology that makes it easier to carry the office with you, the long-distance commute is expected to grow significantly.

“Technological changes have made it more possible to redefine the workplace,” said Mitchell L. Moss, director of the Rudin Center for Transportation at N.Y.U. “Even in New York City, which has been famous for not allowing people to work at home, there is now more tolerance of flexible time.”

Posted in Employment, Housing Bubble, National Real Estate, NYC | 56 Comments

Has Asbury made it?

Posted on July 20, 2017 by grim

From the NY Post:

Jersey Shore’s Asbury Park returns to its glory days

Few towns along the Jersey Shore have enjoyed a more visible beachfront revival over the past few years than Asbury Park, the vibrant summer enclave about 60 miles south of New York City.

After decades of neglect, the working-class town that helped launch Bruce Springsteen’s career has been transformed from a gritty backwater in the shadow of more popular locations along the shore to a hip beach destination sporting surf, sand and more palatable real estate prices than its affluent neighbors. It’s been a popular retreat since the 19th century.

But as the town’s profile continues to rise, attracting throngs of sunbathers from New York, New Jersey and elsewhere, so too do its home prices.

After initially struggling to attract high-end development, Asbury Park is now awash in upscale projects ranging from soaring luxury condos along the beach to smaller single and multifamily projects dotting its gentrifying downtown. Two new posh hotels regularly attract jet-setting weekenders, while a cluster of thriving eateries and arts outposts are turning the seafront town into a bustling port for foodies and culture vultures.

“I like to joke that it took 30 years for Asbury Park to be an overnight success,” says Neal Sroka, a Douglas Elliman broker. “But now Asbury is ready for more upmarket product.”

Sroka and Elliman are spearheading sales at the Monroe, a stylish beachfront condominium with some of the highest prices — and most luxe amenities — in town. The recently completed project has already sold 31 of its 34 units, Sroka says.

The four-story timber and stone property, developed by iStar, includes private outdoor terraces with freestanding grills and fireplaces. Owners will also have the added amenity of using the facilities at the Asbury, a nearby boutique hotel with a rooftop bar and movie theater, swimming pool and Atlantic Ocean views.

Prices at the Monroe start in the $400,000s. But the property recently closed a sale for more than $1 million, a price tag unthinkable for a condo in Asbury just a few years ago, local brokers say. The three units remaining at Monroe include one priced at $715,000 and two listed at $899,000.

“These kinds of prices are relatively new to Asbury Park,” says Ken Rickel, a broker at Berkshire Hathaway HomeServices, who has been selling homes on the Jersey Shore for decades. He’s currently listing a waterfront three-bedroom home at 1301-1303 Locust Drive for $1.2 million with 2½ bathrooms, a gas fireplace and original beamed ceilings. “You still have many moderately priced homes for sale in Asbury, but they get snapped up pretty quickly in this market,” adds Rickel.
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The influx of development and new buyers pushing prices higher in Asbury Park means home values finally exceed pre-recession levels. The median price of a home reached $301,300 in June, an 18 percent rise from the same month a year ago, according to real estate Web site Zillow. Home prices are up 25 percent since June 2015, the realtor says.

Manhattan architect Matthew Berman first landed in Asbury Park more than a decade ago when there were very few signs of revitalization. “Back then people called us pioneers, but we were just really stupid,’” he jokes.
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Much of that all-seasons feel is fueled by a booming restaurant scene and thriving nightlife aimed at the town’s numerous second-home buyers, many from the LGBT community. A snapshot: Porta serves up wood-fired pizzas and has bocce courts; Asbury Festhalle & Biergarten pours brews; just-opened Reyla specializes in Mediterranean plates. On most weekends the beachfront pulsates with mostly young residents who pack the shops along the restored mile-long boardwalk.

Sroka says the reinvigorated seaside gives Asbury the atmosphere of its heyday in the 1920s and 1930s, when it was a fashionable resort.

“Over the past few years we’ve really seen Asbury come back to life,” Sroka adds. “But now the city has finally arrived.”

Posted in Demographics, Economics, New Development, Shore Real Estate | 56 Comments

Foreigners love American real estate

Posted on July 19, 2017 by grim

From CNBC:

Foreigners snap up record number of US homes

Foreign purchases of U.S. residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume.

Foreign buyers closed on $153 billion worth of U.S. residential properties between April 2016 and March 2017, a 49 percent jump from the period a year earlier, according to the National Association of Realtors. That surpasses the previous high, set in 2015.

The jump follows a year-earlier retreat and comes as a surprise, given the current strength of the U.S. dollar against most foreign currencies, which makes U.S. housing even more expensive. Apparently, the value of a financial safe-haven is outweighing the rising costs.

Foreign sales accounted for 10 percent of all existing home sales by dollar volume and 5 percent by number of properties. In total, foreign buyers purchased 284,455 homes, up 32 percent from the previous year.

Half of all foreign sales were in just three states: Florida, California and Texas.

Chinese buyers led the pack for the fourth straight year, followed by buyers from Canada, the United Kingdom, Mexico and India. Russian buyers made up barely 1 percent of the purchases.

But the biggest overall surge in sales in the last year came from Canadian buyers, who scooped up $19 billion worth of properties, mostly in Florida. They are also spending more, with the average price of a Canadian-bought home nearly doubling to $561,000.

Posted in Demographics, Economics, National Real Estate | 39 Comments

We can’t build anything anymore…

Posted on July 17, 2017 by grim

From Salon:

Chris Christie’s era of misrule in Jersey: The empty swamp mall and the canceled tunnel

While Gov. Chris Christie’s Bridgegate gambit rightfully helped kneecap his presidential run, it was his cancellation, in 2010, of a trans-Hudson rail tunnel that will have generational consequences not just for New Jersey but for the entire Northeast Corridor. And yet, even as he pulled the plug on the essential second Hudson tunnel, Christie was doubling down on trying to provide public support to complete a 2 million-square-foot mall in the Hackensack Meadowlands that had already lost over $1 billion in public pension funds and been pursued by three of his Democratic predecessors.

For years now, a two-million square-foot mall has been sitting in the Meadowlands and never opened, a kind of white-collar crime scene visible from space, but invisible to the locals at ground-level, because it has become just a part of the New Jersey Turnpike landscape. How it came to be built on state land is testimony to a culture of self-dealing and corruption that reaches all the way to Washington and back to the halcyon Clinton years. It involves names of prominent partisans on both sides of the aisle. Consider, it’s probably the only résumé item that Republican strategist Charlie Black, of Manafort & Stone fame, and the late Democratic governor of Texas, Ann Richards, have in common.

It is hard to imagine but the New York/New Jersey metro region hasn’t always been so dysfunctional when it came to infrastructure. In the 1920s and ‘30s, the region completed no less than four bridges linking New Jersey and New York – the Goethals, the Outerbridge Crossing, the Bayonne Bridge and the George Washington Bridge – all ahead of schedule and well below budget. Of course, that was thanks to the Port Authority of New York and New Jersey, which more recently has suffered so badly under Christie’s authoritarian reign.

In the 21st century, it seems we can’t get out of our own way, culminating in the last seven years of misrule under Christie. The physical deterioration of vital links, like the trans-Hudson rail tunnel between the two states, now haunts the public every day with chronic delays and a certain amount of personal risk every time they use the existing century-old Hudson rail tunnel.
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Why do some projects get built, while others – perhaps more essential to our security and well-being – get sidelined and languish? Our political economy is all about choices – who makes them and why. Some construction is about the public interest. Other undertakings are driven by market forces. There are projects that are a combination of both. Sorting this out is critical when we talk about setting the ground rules for “public-private partnerships,” the au courant Trump-plan approach to funding municipal infrastructure in an age of political anxiety over incurring additional public debt.

For decades, engineers have said that the region desperately needed a second trans-Hudson passenger-rail tunnel but it just couldn’t get off the ground. Meanwhile, just a couple of miles away in the Meadowlands, the state of New Jersey under Christie’s leadership continues to press ahead with a mega-mall public-private project on state land. The project has already failed twice, cost public pensions from several states nearly a billion dollars, and is expected to cost more than $5 billion.

Even now, the backers of the project have completed yet another round of bond issues worth more than $1 billion on behalf of the third private developer at the site, which they are marketing through the Public Finance Authority, based in Wisconsin. Neither the New Jersey Sports and Exposition Authority, upon whose land the project was sited, nor the local municipality where it is located, want to assume any financial liability for the performance of the “non-recourse” bonds being floated in their name to complete the project that was supposed to be open to the public a decade ago.

Posted in National Real Estate, New Development, New Jersey Real Estate, Politics | 102 Comments

Nassau hits new peak, Suffolk on the way

Posted on July 15, 2017 by grim

From Newsday:

LI home prices jump; Nassau reaches record level

It’s boom time again for the housing market in Nassau County, where prices have reached a new peak.

The median price for a closed home sale jumped to $505,000 last month in Nassau, 5.7 percent higher than a year earlier, the Multiple Listing Service of Long Island reported Thursday. The county’s previous record high of $502,500 came in 2007, at the height of the housing boom.

In Suffolk County, home prices still lagged behind their pre-recession highs. The median price for a closed home sale in Suffolk was $365,000 in June, a 7.4 percent annual gain but still below the 2007 high point of $420,000, listing service figures show.

Soaring prices in New York City are pushing more buyers to Long Island, where they get into bidding wars for a scant supply of homes, said Gary Baumann, an associate broker with Douglas Elliman in Dix Hills and Port Washington.

“The demand from the city and the boroughs is just working its way out,” Baumann said.
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Demand is strongest for homes asking up to about $500,000 in Suffolk and $750,000 in Nassau, Baumann said. The market for homes listed for more than $1 million is “a little bit softer,” he said.

The number of closed transactions fell by 3.5 percent in Suffolk and 3.3 percent in Nassau last month, compared with the same period a year ago. At that pace of sales, it would take 4.9 months in Suffolk and 4.3 months in Nassau to sell all homes listed for sale. A balanced real estate market has a six- to eight-month supply of homes, real estate brokers say.

Posted in Demographics, Economics, NYC | 44 Comments

Another bubble?

Posted on July 14, 2017 by grim

From Forbes:

Home Prices And Buyer Competition Hit New Highs in June

U.S. home prices rose 7.3 percent to a median sale price of $298,000 in June, according to Redfin, the next-generation real estate brokerage. This is the highest national median sale price Redfin has recorded since the company began keeping track in 2010.

Home sales increased 1.9 percent compared to last year, constrained by a long-standing inventory shortage. The number of homes for sale fell 10.7 percent, leaving just 2.5 months of supply—the lowest supply on record since 2010—and well below the six months that represents a market balanced between buyers and sellers.

Every record in market speed and competition that was set in May was broken again in June. The typical home that sold in June went under contract in 36 days, one day faster than in May, setting a new record-fast pace for home sales. Denver, Portland and Seattle were the fastest-moving markets, with the typical home in each market finding a buyer in just seven days. More than a quarter (26.6%) of homes sold above their list price, the highest percentage Redfin has recorded. The average sale-to-list price ratio hit a record high of 95.5 percent in June.

“This market is unlike any we’ve ever seen before,” said Redfin chief economist Nela Richardson. “Month after month, new records are set for the pace at which homes are going under contract. Demand continues to swell while supply troughs. For buyers competing in this market, it’s survival of the fittest. The strongest offers that are most likely to close quickly and smoothly rise to the top of the pile.”

Posted in Economics, Housing Bubble, National Real Estate | 40 Comments

Prices up in Westchester and the Lower Hudson Valley

Posted on July 13, 2017 by grim

From LoHud:

Home prices in region rise as inventory drops, report finds

Prices of single-family homes rose throughout the Lower Hudson Valley region in the second quarter, with the number of homes available for sale continuing to dwindle, according to the real estate sales report released Monday by the Hudson Gateway Association of Realtors.

Dorothy Botsoe, president of HGAR and the owner of Dorothy Jensen Realty in White Plains, said the market condition is frustrating some prospective buyers, particularly those people who are trying to enter the housing market for the first time.

“Buyers are trying, but they can’t even get their foot in the door because when they see the property and before they can make a reasonable offer, there are multiple bids,” Botsoe said.
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The median sale price for single-family homes in Westchester was $670,000 in the second quarter, up by 3.1 percent from the same period last year, when the figure was $650,000.

In Rockland, the median price rose to $441,387, up by 2.6 percent from a year ago when the figure was $430,000. And in Putnam, the median rose by 9.9 percent, from $314,000 last year to $345,000 this year.

The pace of the price increase over the past five years in Rockland is noteworthy. The 2017 second-quarter median for single family homes, $441,387, was 13.2 percent higher, or $51,387 more, compared to the 2013 figure, $390,000.

The price hike is driven by the ever-shrinking housing supply, experts agreed.

The HGAR report stated that prospective home buyers are “operating in a market that has seen tremendous reductions in the supply of for-sale housing over the past four years.”

Posted in Demographics, Economics, Housing Recovery | 62 Comments

50 years later

Posted on July 12, 2017 by grim

From the Star Ledger:

Race, riots and reputation: Has N.J.’s largest city recovered?

To this day, you look at so many of the abandoned buildings, the light manufacturing, the old jewelry business, you walk around downtown, you still see the old, faded, painted signs on the buildings — and it harkens back to a different time.[1]

But it definitely seems to me to be a very different kind of attitude right now about Newark. [2]

As the image of Newark as “riot city” recedes into the background, people are beginning to see that there’s some assets here that they can take advantage of. [3]

The question is, how does Newark brand itself? How does it portray itself in terms of remaking its image?[4]

To some extent, it depends on whom we are talking to. If you are talking to some suburbanites who have very little contact with Newark, Newark is still this crime-ridden, disease-ridden place.

People who have some contact with Newark have a more nuanced view. They see pockets where Newark has come back. They do see some neighborhoods that are, in fact, stable. [5] Perception is often more important than reality, people’s perceptions was what happened in 1967. [1]

This taxi cab driver being brutalized by the police — people just decided to revolt. [6] And then eventually it broke out into something much bigger: A full fledged riot.

People out of control and setting fire to everything they could. [7] The stores, the windows, the glasses being kind of shattered or broken. Debris all over, stores looted out, emptied. [4]

There were three police forces here, we had the local police, the National Guard and we had the state police. [3] Cops back and forth. Firefighters. Chaotic, chaotic. And hearing gunfire, that was the thing that sticks with you most, is hearing “pop, pop, pop.” You know it’s not firecrackers, those are shots. And then you saw your city, the city that you love, going up in flames. [8]

Everybody knew where Newark was because of the riots. [9] Part of the stigma attached to Newark comes from that, from wanting to see the riot as the cause of all of the urban decline when in fact, you had these issues before. [5]

Posted in Demographics, Economics, New Jersey Real Estate, Unrest | 75 Comments

Hide the Zombies?

Posted on July 11, 2017 by grim

From the South Jersey Times:

Don’t give N.J. zombie homes the upper hand

Owing to its ongoing high rate of residential foreclosures, New Jersey has become known the Land of the Zombie Houses. If a just-filed lawsuit succeeds, the zombie fighters — our towns and counties — will find it much tougher to fend off the attack.

And it’s a horrible idea to let the zombie enablers win.

Those enablers include investors who snap up vacant housing stock at tax and mortgage default sales, hoping to make a killing by flipping the properties. Of course, that’s a perfectly legitimate, even desirable, way, to get the homes occupied and paying property taxes on time.

But a group of lien buyers want to overturn vacant-property registry ordinances enacted by towns fed up with owner-unoccupied homes for which no one seems to be responsible. Gloucester County set up a novel countywide program to help its towns to establish these registries in 2015. The county should be applauded for helping towns know who is responsible for maintenance and security while these properties sit idle in foreclosure limbo. Instead, four of the towns — Deptford, Glassboro, Monroe and Paulsboro — are targeted by the litigation.
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We’ll concede that we don’t know enough about New Jersey foreclosure and tax-sale law to say that the investors who filed the litigation don’t have a valid point or two. They claim in Superior Court, Gloucester County, that the fees are excessive and conflict with existing law that supposedly outlines all charges connected with buying tax lien certificates. Many zombie homes, though, are still owned by banks and mortgage lenders, who are not subject to the certificate redemption fees.

What’s most alarming is the suit’s claim that registration programs are themselves unconstitutional because the state Legislature has not enacted strict parameters for them. The programs involve mainly information that is public — that is, property ownership records — but this information often changes too fast for public databases to keep up.

Any mayor with a boarded-up housing problem can tell you that it can take just a few summertime weeks for insect-harboring weeds to grow to alarming heights or for illness-generating mold to overtake walls. A couple of cold winter nights could entice squatters into empty, inadequately secured homes.
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The New Jersey State League of Municipalities maintains that towns have the constitutional right to create vacant property registration ordinances. The league should take the lead in defending the towns. Meanwhile, the Gloucester County municipalities that were sued can bolster their case with real-world examples showing that the programs work — and have enabled a rapid defense against eyesores, rodent infestations, fires, drug dens and general neighborhood blight.

Posted in Foreclosures, New Jersey Real Estate, South Jersey Real Estate | 80 Comments

The negative equity gap

Posted on July 10, 2017 by grim

From DSNews:

Does Home Price or Location Impact Underwater Mortgages?

In total, 1.8 million American homeowners currently owe more on their home loans than their property is worth. Though this is the first time the number has dropped below 2 million since 2006, it’s still much higher than pre-crisis levels. At the end of 2005, just 750,000 borrowers owed more than their home was worth.
According to Ben Graboske, EVP of Data & Analytics at Black Knight, rising home prices are continuing to improve homeowners’ equity stakes.

“This is plainly visible in the number of borrowers who are underwater on their mortgages, owing more than their homes are worth,” Graboske said. “Over the past year, we’ve seen a 35 percent decline in the total underwater population, with a 16 percent decline in that population over the first three months of 2017 alone. Home prices rose 2.3 percent in the first quarter, as compared to 1.8 percent over the same period last year, helping an additional 350,000 borrowers regain equity in their homes.”

The report also showed that almost half of all borrowers with negative equity own homes in the lower 20 percent of the market, price wise. In fact, homeowners in this price tier are twice as likely to be underwater as those one tier up and a whopping 6.5 times more likely than Americans who own homes in the top 20 percent price range. That’s the highest differential in negative equity since Black Knight launched its Mortgage Monitor in 2005, Graboske said.

“What stands out is the disparity we see in this improvement,” Graboske said. “As has been the case for some time now, negative equity has become more and more a localized phenomenon. But it’s also becoming concentrated among a particular class of homeowner. Nearly half of all borrowers who remain underwater own homes in the lowest 20 percent of prices in their respective markets. While the nation as a whole now has a negative equity rate of just 3.6 percent, among owners in that lowest price tier, it’s over 8 percent.”

Underwater borrowers also tend to be more concentrated in geographic areas, according to the report, which shows that Detroit, Cleveland, and Memphis, Tennessee, account for more than 25 percent of all underwater borrowers in the lowest price tier. Detroit borrowers with a home in the bottom price tier are also 50 times more like to be underwater than those whose homes are in the top 20 percent.

Posted in Demographics, Economics, National Real Estate | 93 Comments

NJ’s Non-gentrified Urban Future

Posted on July 9, 2017 by grim

A glimpse into what NJ’s urban future will look like. Ever increasing property taxes will create a situation where the urban poor can no longer afford to even pay their property taxes, leading to property tax foreclosures in massive numbers.

NJ’s rapid increase in property taxes over the last 15 years has barely even been mentioned as a factor in driving foreclosures during the crisis, but it’s absolutely the fact. Rapidly rising tax payments create an identical situation to resetting adjustable rate mortgages and unexpected increases in monthly payments … without corresponding increases in wages.

So take a good look NJ, because you are looking at the future of NJ’s cities.

From the Detroit Metro Times:

Here is a horrifying map that shows every Detroit tax foreclosure since 2002

We all know tax foreclosures are a problem in Detroit, but this map from Loveland Technologies really puts the horror of the situation into perspective. Shown are all of the properties that have been foreclosed and sold at auction in the city over the past 15 years.

Michigan law allows for the foreclosure and seizure of properties with three or more years of back taxes. The properties then get sold at auction to try to recoup some money lost. People then get displaced. The houses they lived in then sometimes go vacant. Vacancy leads to blight. Blight leads to depressed property values. You see the problem.

Wayne County has foreclosed on more than 160,00 properties since 2002, with the bulk of them in Detroit.

Posted in Demographics, Economics, Foreclosures, New Jersey Real Estate, Property Taxes | 25 Comments

Better by 2018? Not likely.

Posted on July 7, 2017 by grim

From NJ Spotlight:

NEW JERSEY’S ECONOMIC OUTLOOK FOR 2018 IS SO-SO, ACCOUNTANTS SAY

Despite New Jersey’s solid year of job growth in 2016, a recent survey of the state’s certified public accountants suggests few of them believe economic conditions will improve much by next year.

The results of the survey, released yesterday by the New Jersey Society of Certified Public Accountants, indicated just under 25 percent of those who responded to the organization’s member poll predicted economic conditions will get better by 2018.

Instead, the overwhelming majority of the accountants who responded said they believe that conditions here will either stay the same or get worse, the survey found.
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While New Jersey hasn’t had any setbacks to annual job growth since the recession officially ended in 2009, the state has been adding about 45,000 jobs each year, a pace that has lagged both the national recovery and the rate of growth experienced during the 1990s as New Jersey rebounded from a prior recession, according to figures tracked by Rutgers’ Bloustein School of Planning and Public Policy. But last year, the state added more than 60,000 private-sector jobs, its best showing since the recession ended.
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In addition to the economic-outlook question, the accountants were also asked in the survey to list their top three recommendations for creating economic growth in New Jersey. Nearly 80 percent listed reducing property taxes among their top three. High property taxes have long been a key concern in New Jersey, and the latest data from the state Department of Community Affairs indicates the average property tax bill increased by nearly $200 in 2016 to $8,549.

Other top recommendations for stimulating growth in New Jersey revealed in the CPA survey were cutting income taxes and providing additional tax incentives to businesses.
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Thomas said he’s now hoping that legislators, candidates and the general public will take a close look at the results of the survey, and give serious consideration to the issues raised by it as upcoming policy decisions are made in Trenton.

And while the group has no plans to take political positions or endorse any candidate, it is urging policymakers to adopt a long-term view as they take on the state’s biggest problems instead of enacting just short-term Band-Aids.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 46 Comments

Price cuts move properties

Posted on July 6, 2017 by grim

From Bloomberg:

Manhattan Home Sales Surge as Cuts Bring Prices to Buyers’ Level

Manhattan homebuyers found deals they couldn’t refuse in the second quarter, driving up sales of previously owned properties by the most in more than two years.

Purchases of resale homes jumped 16 percent from a year earlier to 2,597, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Buyer interest was fueled by average price cuts of 6.1 percent across all property types. The last time the average discount was larger was the third quarter of 2012, when it was 7.2 percent.

Sellers of luxury apartments took the whittling further, cutting prices by an average of 10 percent, the most since the end of 2010 and the second-biggest discounts in more than 16 years of record-keeping.

“The sellers definitely got it,” said Diane Ramirez, chief executive officer of brokerage Halstead Real Estate, which released its own report Thursday saying there was a 28 percent jump in resales in the second quarter. “They said, ‘We’ve got buyers out there who are serious but that are not moving forward, so let’s give them a reason to move forward.’”

Manhattan home shoppers held back last year, uninspired to commit to a purchase when sellers were holding fast to their lofty asking prices, even as inventory climbed. A rising stock market since the U.S. presidential election sparked fresh interest in browsing, and sellers sensed an opportunity to offload apartments that had been lingering.
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“Our market cannot support aspirational pricing by sellers waiting for that ‘one buyer’ who will overpay for their home,” Warburg’s Peters said in his note. “Buyers are as price-conscious as I have ever seen them.”

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