What buyers?

Posted on October 24, 2024 by grim

From Reuters:

US existing home sales slide to 14-year low; prices stay elevated

U.S. existing home sales dropped to a 14-year low in September, weighed down by higher mortgage rates and house prices.

The second straight monthly decline in home resales reinforced economists’ views that the slump in residential investment, which includes homebuilding, deepened in the third quarter. The housing market has struggled to rebound after being knocked down by a resurgence in mortgage rates in the spring.

Though supply has improved, entry-level homes remain scarce in most regions of the country, keeping home prices at levels that are unaffordable for most first-time buyers.

“It will take more rate cuts and more options to bring buyers back,” said Jennifer Lee, a senior economist at BMO Capital Markets.

Home sales fell 1.0% last month to a seasonally adjusted annual rate of 3.84 million units, the lowest level since October 2010, the National Association of Realtors said on Wednesday. Economists polled by Reuters had forecast home resales would be unchanged at a rate of 3.86 million units.

Sales likely reflected contracts signed a month or two ago, when mortgage rates were quite high. Mortgage rates initially dropped after the Federal Reserve began cutting interest rates last month, but they have risen over the past three weeks as solid economic data, including retail sales and annual revisions to national accounts, forced traders to abandon expectations for another 50-basis-point rate cut next month.

The rate on the popular 30-year fixed mortgage averaged 6.44% last week compared to 6.08% at the end of September, data from mortgage finance agency Freddie Mac showed.

“We expect housing market activity to remain subdued well into 2025,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

Tombs noted that the average interest rate on existing mortgages was about 4% compared to the current 6.5% rate for new mortgages.

“As a result, interest payments for most existing homeowners will jump if they move home, creating a huge incentive to stay put,” he said. “Only large Fed policy easing will meaningfully change this calculus.”

Home resales, which account for a large portion of U.S. housing sales, decreased 3.5% on a year-on-year basis in September. Sales fell 1.7% in the South, with some of the decline attributed to weakness in Florida following the devastation caused by Hurricane Helene.

Sales in the state could remain depressed after it was slammed by Hurricane Milton weeks later.

The Northeast and Midwest also experienced a decrease in sales, but activity increased in the West.

Posted in Economics, Housing Bubble, National Real Estate | 49 Comments

150,000 new housing units coming

Posted on October 23, 2024 by grim

From JD Supra:

New Jersey Releases Fourth Round Affordable Housing Calculations; Identifies Present and Future Need for 150,000 New Units Throughout State

The Department of Community Affairs (DCA) has released its “fourth round” affordable housing calculations for the coming decade, 2025 to 2035.

The DCA has identified the need for approximately 150,000 new low- and moderate-income housing units to accommodate both current and projected affordable housing needs throughout the state.

Property owners or developers interested in residential development should consider this the optimal time to evaluate whether the fourth round of affordable housing compliance can provide opportunities to obtain the necessary local entitlements.

The DCA’s calculations identify a current deficit of 65,410 low- and moderate-income units and project the need for an additional 84,410 low- and moderate-income units during the ten-year period comprising the fourth round. Because of the need to subsidize affordable housing units through the construction of market-rate housing, most of these units will need to be developed as “inclusionary units” of an overall mixed-income development wherein roughly 80-90% of the units will not be restricted as affordable housing units. After allowing for various bonus credits permissible under the law, if all remaining units identified by the DCA end up being developed, this would likely result in the development of hundreds of thousands of new dwelling units.

Under the affordable housing law, all New Jersey municipalities are now required to adopt a resolution determining present and prospective housing needs by no later than January 31, 2025. Municipalities must then publish a copy of this resolution on their website within 48 hours of adoption. Given the calculations performed by the DCA, deviating from those calculations could make a municipality susceptible to challenge. Challenges to a municipality’s determination must be filed to the newly created Dispute Resolution Program by February 28, 2025.

Posted in Crisis, Demographics, New Development, New Jersey Real Estate | 55 Comments

Bring on the units

Posted on October 22, 2024 by grim

From Gothamist:

After years of delay, former Toys ‘R’ Us headquarters in NJ will be turned into housing

Seven years after Toys “R” Us declared bankruptcy, a deal to put a substantial amount of housing on the site of the company’s former New Jersey headquarters is finally moving forward.

Town officials in Wayne Township this week passed an ordinance to rezone the property for residential use. That clears the way for the developer who purchased it from Toys “R” Us in 2019 to redevelop a substantial chunk of the 191 acres of land into 1,360 apartments, more than 200 of which will be affordably priced for low- and middle-income people. The town has a duty to develop about 500 affordable homes under a state mandate, but Wayne officials have waged a protracted battle with the state over how to fulfill this obligation.

The news comes after five years of negotiation between Wayne and the new owner of the land, Point View Wayne Properties, which has been trying to develop the area for years. The real estate development company met resistance from the township officials over its plan to build residential units, and negotiations were only able to move forward after Point View threatened to sue over Wayne’s alleged “intransigent behavior.”

A Passaic County Supreme Court judge on Oct. 1 ordered the township to rezone the property within 30 days so that construction could move forward. Following the 5-2 vote on Tuesday night, Wayne Town Council President Jason DeStefano told Gothamist that adopting the rezoning was the “right thing to do.”
…
Wayne taking five years just to take the initial step of rezoning what’s been a mostly dormant corporate site since the Toys “R” Us bankruptcy shows how some New Jersey towns are scrambling over their state obligation to provide affordable housing.

New Jersey next summer will begin the fourth round of its state-mandated affordable housing development under the Mount Laurel Doctrine, a 40-year-old state Supreme Court decision that says more than 500 towns across the state must contribute their fair share of low-priced housing in a series of time periods known as “rounds.”

To prepare for the next round, which is scheduled to last 10 years, the state is providing towns this month with target numbers for how many affordable units it wants each municipality to develop. Towns like Wayne, one of the largest geographically in the state, could be asked to develop hundreds — or up to 1,000 — more affordable housing units over the next 10 years.

DeStefano confirmed to Gothamist that the hundreds of affordable homes earmarked for the former Toys “R” Us headquarters site would go toward satisfying units the town still owes for the prior Mount Laurel round.

Posted in Demographics, Economics, Housing Bubble, New Development, New Jersey Real Estate | 30 Comments

Just how many jobs do you need?

Posted on October 20, 2024 by grim

Great chart from Visual Capitalist:

Mapped: Home Price-to-Income Ratio of Large U.S. Cities

Posted in Demographics, Economics, Employment, National Real Estate | 69 Comments

NJ ponzi scheme lawyer steals $1m

Posted on October 18, 2024 by grim

From NJ.com:

Disbarred N.J. lawyer admits stealing more than $1M from clients

A former New Jersey real estate attorney admitted on Tuesday to stealing $1.18 million from clients, the Monmouth County Prosecutor’s Office announced.

Steven Salami, 49, of Hazlet, pleaded guilty to second-degree financial facilitation of criminal activity before Superior Court Judge Christie Bevacqua, authorities said.

Salami, who was based in Hazlet in Monmouth County, took money from his clients for “various real estate transactions” and never did the work he was expected to do, authorities stated in a news release.

The funds, which he was supposed to hold in escrow for the deals, were never returned to his victims, resulting in missed closing dates and nullified real estate transactions, the prosecutor’s office said.

An investigation uncovered dozens of victims, leading to a 63-count indictment against Salami being returned by a Monmouth County Grand Jury in July 2021.
…
During grand jury testimony, a Monmouth County detective presented evidence that Salami was using newer clients’ trust money to satisfy existing clients deals, essentially running a Ponzi scheme with his law practice.

Posted in New Jersey Real Estate | 99 Comments

The Lock In – Illustrated

Posted on October 17, 2024 by grim

From Axios:

Low home turnover rate, charted

Only a small sliver of U.S. homes changed hands through August this year, according to Redfin.

Why it matters: This is one more stunning stat that shows just how stagnant the real estate market has been.

The big picture: High home prices, mortgage rates and lack of inventory have made homebuying near impossible. Conditions aren’t appealing to sellers, sitting on sub-6% mortgage rates, either.

Zoom out: U.S. metro areas are on track to permit fewer new housing units than last year, thanks to high borrowing costs, Axios’ Sami Sparber and Kavya Beheraj report.

What we’re watching: Those golden handcuffs may start to fall off if rates drop closer to 5%, experts predict.

Posted in Economics, Housing Bubble, National Real Estate | 78 Comments

Step it up NJ, don’t be cheap

Posted on October 16, 2024 by grim

From the Record:

These six NJ towns were named among nation’s 100 most expensive ZIP codes for homebuying

Some know New Jersey for its vast amount of greenery, scenic seasonal destinations and thriving arts scene. But others, especially those who call it home, know New Jersey for its high property taxes and rising cost of living, making it one of the country’s most expensive states to live.

In fact, New Jersey had six ZIP codes — with five of them having median sale prices of more than $2 million — named among the nation’s 100 most expensive for homebuying in 2024 in PropertyShark’s annual report. The Garden State had the third-highest number on the list, behind No. 1 California and No. 2 New York.

Experts at PropertyShark compiled this list by looking at residential transactions — including condo, co-op, single-family and two-family home sales — closed between Jan. 1 and Sept. 30. Only ZIP codes with a minimum of five residential transactions during that period were considered.
…
The ever-pricey ZIP code of 07620 in Alpine was named the most expensive ZIP code in New Jersey and the 24th most expensive ZIP code on PropertyShark’s list. This Bergen County community has a record-high median sale price of about $3.32 million in 2024, marking the first time a New Jersey ZIP code surpassed the $3 million mark.

Deal’s 07723 came in second in New Jersey and 32nd overall, with a median sale price of $2.95 million. This Monmouth County town has consistently competed with Alpine for the state’s priciest ZIP code.

The other New Jersey ZIP codes that made the list include Avalon’s 08202 ($2.75 million); Mantoloking’s 08738 ($2.4 million); Stone Harbor’s 08247 ($2.2 million) and Short Hills’ 07078 ($1.95 million).
…
The most expensive ZIP codes in the nation, according to PropertyShark, are Atherton, California (94027); Sagaponack, New York (11962); Water Mill, New York (11976); Miami Beach, Florida (33109); and Santa Barbara, California (93108).

Posted in New Jersey Real Estate, Where's the Beef? | 103 Comments

Flemington?

Posted on October 14, 2024 by grim

From NJ1015:

The new ‘up-and-coming’ town in NJ is one you’d never think of

When the pandemic hit, it sent a wave of New Yorkers into New Jersey. People flocked to commuter towns, and it felt like everyone was on the move.

That whole period seems like a lifetime ago, but it definitely changed how people saw certain towns—probably because they didn’t have a choice.

If you’re curious about what New Jersey’s hottest town is right now, I think you’re gonna be pretty surprised. Enter Flemington, Hunterdon County’s cozy, historic, and growing bedroom community.

Flemington is a great mix of small-town charm, including historic buildings and tree-lined streets. Speaking of historic, 65% of their historic buildings are on the national historic register.

It’s a great place for farm-to-table dining, great boutiques and a really strong wellness culture. It’s turning into a hub for festivals and cultural events, all wrapped in that country-town vibe.
…
Of course, with all this attention, housing prices are rising. The average home value in Flemington has jumped 11% in the last year, now sitting at $615,405.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 70 Comments

NJ Makes!

Posted on October 10, 2024 by grim

From the APP:

NJ manufacturing doing better than you think, making these things you’d never imagine

Each month, Unex Manufacturing Inc. executives get a phone call or email from an economic development group in another state — Florida, Texas, South Carolina, Michigan, Indiana, Ohio — asking if they are ready to move out of New Jersey to a cheaper location.

A move would no doubt help Unex lower its taxes and labor costs and keep up with its competitors. But after 60 years in New Jersey, the executives have stood their ground. They are staying.

“We have a good group of people here,” said Howard McIlvanie, vice president of operations and one of the company’s owners. “If we picked up and moved, we might lose a majority of them, and I don’t think we’d want to do that.”

New Jersey’s manufacturing industry, written off not long ago as a relic, is staging a modest comeback. New companies, aided by advances in technology, are starting from their homes. Policymakers are devoting more resources to manufacturers and training programs. And companies in the state have more job openings than they can fill.

A return to the state’s manufacturing heyday seems unlikely. New Jersey remains expensive and has recently lost high-profile manufacturers.

But New Jersey government and industry officials aren’t conceding defeat, noting that the state’s biggest economic development selling points — an educated work force and location in the heart of the Northeast — are coming in handy for “advanced” manufacturing firms that require high-tech skills.

New Jersey’s manufacturing sector has increased from 241,300 jobs in December 2013 to 255,000 jobs in December 2023, stemming what was a decades-long decline.

“Not declaring victory, but we’d characterize that as a good start,” Tim Sullivan, chief executive officer of the New Jersey Economic Development Authority (EDA), said last week at a Freehold Township conference sponsored by New Jersey Manufacturing Extension Program, an industry trade group.

Posted in Economics, Employment, New Jersey Real Estate | 150 Comments

Inventory ticking up, but NJ market absorbs it

Posted on October 8, 2024 by grim

From NorthJersey.com:

How North Jersey’s real estate market performed in September as interest rates decline

How much has North Jersey’s housing inventory changed?

Eighteen of New Jersey’s 21 counties had an increase in new listings compared with September 2023, and 14 counties saw more listings compared with August.

In North Jersey, Sussex was the only county to see a decrease in new listings from this time last year. With 192 new listings, the county saw a 11.11% decrease from September 2023. Otherwise, all other North Jersey counties saw new listings increase from last year:

  • Bergen: 866 (37.03%).
  • Passaic: 278 (0.72%).
  • Morris: 496 (10.71%).
  • Essex: 522 (29.21%).
  • Hudson: 482 (10.55%).

How long are North Jersey homes staying on the market?

Compared with September 2023, 11 counties had active listings stay on the market for a longer period. Similarly, active listings stayed on the market longer in 11 counties when compared with August 2024.

The North Jersey counties of Morris, Sussex and Hudson had homes stay on the market for more days in September than this time last year, while Bergen, Passaic and Essex had homes stay on the market for fewer days.

  • Bergen: 33 days (-18.13%).
  • Passaic: 34 days (-8.11%).
  • Morris: 37 days (10.61%).
  • Essex: 33 days (-8.33%).
  • Sussex: 42 days (5.06%).
  • Hudson: 43 days (8.97%).

What about North Jersey median home prices?

Of New Jersey’s 21 counties, 18 had an increase in median listing prices from September 2023. And when compared with August 2024, 12 counties had an increase in median listing prices and one county stayed the same.

In North Jersey, Bergen was the only county to see a decrease in median listing prices compared with this time last year. Bergen County had a 0.97% decrease, with a median listing price of $780,749. Otherwise, all other North Jersey counties saw prices increase.

  • Passaic: $540,000 (12.73%).
  • Morris: $724,424 (3.93%).
  • Essex: $577,500 (12.57%).
  • Sussex: $432,500 (12.34%).
  • Hudson: $665,000 (7.53%).
Posted in Housing Bubble, New Jersey Real Estate, North Jersey Real Estate | 115 Comments

Shut up and be happy

Posted on October 5, 2024 by grim

From WalletHub:

Happiest States in America (2024)

Happiness comes from a combination of internal and external factors. We can influence it somewhat by approaching situations positively or choosing to spend time with people we love, doing activities we enjoy. However, other things out of our control, like the cost-of-living crisis or the stress of being in an election year – and they have taken a toll, with only 47% of Americans saying they are “very satisfied” with their lives.

New Jersey

New Jersey is the third-happiest state, with the lowest share of people reporting traumatic events during their childhood and the second-highest life satisfaction rate. The state also has the second-lowest depression rate and the second-highest share of people who have supportive relationships and love in their lives. All these factors come together to create the conditions for good mental health.

Residents of New Jersey also demonstrate their happiness in their marriages. The Garden State has the third-lowest separation and divorce rate in the country, at around 17%.

Finally, when it comes to finances, New Jersey has the third-highest share of households earning over $75,000 per year. It also has the sixth-lowest food insecurity rate, which shows that the state is making progress when it comes to addressing poverty. Plus, New Jersey has the ninth-lowest share of people who get anxious when thinking about their personal finances.

Posted in Crisis, Humor, Where's the Beef? | 153 Comments

Jobs Day!

Posted on October 4, 2024 by grim

From CNBC:

Here’s everything to expect when the September jobs report is released Friday

September’s jobs picture is expected to look a lot like August’s — a gradual slowdown in hiring from earlier this year, a modest increase in wages and a labor market that is looking a lot like many policymakers had hoped it would.

Nonfarm payrolls are projected to show growth of 150,000, from 142,000 the month before, with a steady unemployment rate of 4.2%, according to the Dow Jones consensus. On the wage side, the forecast is for a 0.3% monthly gain and a 3.8% increase from a year ago — the annual rate being the same as August.

Should the numbers come in as expected, they would hit close to a sweet spot allowing the Federal Reserve to continue to lower interest rates without a sense of urgency that it could be behind the curve and at risk of causing a recession.

“The jobs market is slowing down and becoming less tight,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “The balance of power has shifted back to employers and away from employees, and that certainly will alleviate the wage pressure, which has been a key component of inflation. We’ve been team soft-landing for a while, and this is exactly what a soft landing looks like.”

Of course, there’s always the possibility of a substantial upside or downside surprise to the numbers. 
…
The Bureau of Labor Statistics will release the report at 8:30 a.m. While there will still be one more nonfarm payrolls count before the presidential vote next month, the October report is expected to be distorted by the dock workers’ strike as well as Hurricane Helene — making September the last “clean” report before Election Day.

Posted in Demographics, Economics, Employment, National Real Estate | 89 Comments

NJ’s warehouse craze over?

Posted on October 3, 2024 by grim

From NJ Spotlight News:

Warehouse vacancies rise, fueling claims of an overbuilt market

Warehouse vacancies in New Jersey are on the rise, as supply outpaces demand and community groups continue to fight the explosive growth in new construction.

The vacancy rate for warehouses and other kinds of industrial real estate in northern and central New Jersey rose to 5.3% in the second quarter of 2024 from 4.8% in the first quarter and 2.5% in the second quarter of 2022, according to data from Newmark, a real estate company that monitors the market.

Those numbers are more than twice as high as they were two years ago, leaving more than 36 million square feet of industrial space available in north and central Jersey. The figure rises to almost 53 million vacant square feet when the survey adds space that is available for sublease by tenants who are looking to downsize or reduce the amount of space they occupy.

Newmark called the increased vacancy rate a “substantial shift,” and attributed it to a slowdown in leasing activity and an increase in the delivery of available properties in 2023. Despite the higher vacancy rate, asking rents rose to a record-high $17.01 per square foot, an increase of 9.5% over the previous year, reflecting an increase in the construction of top-class industrial space.

One example of the warehouse construction boom is seen in Hamilton Township, Mercer County, where at least nine industrial spaces totaling more than 850,000 square feet were available for lease on Sept.20, according to commercialsearch.com, a website for commercial real estate. At least three of the properties were built in 2023 or later.
…
The new data fuels claims that the warehouse market is overbuilt, and that developers are continuing to construct the giant buildings, some of which are built before tenants have committed to occupation, regardless of market demand, and despite strong opposition in some communities.

Tim Brill of the New Jersey Conservation Foundation, a critic of the rising presence of warehouses in the state, said the apparent oversupply is primarily driven by too many warehouses being built speculatively, but that supply keeps being added even though some new buildings remain empty.

“This is a way overbuilt market,” he said.

Posted in Economics, New Development, New Jersey Real Estate | 74 Comments

So much for NJ’s economy

Posted on September 30, 2024 by grim

From Reuters:

US East Coast port strike looms Tuesday with no talks scheduled

U.S. East and Gulf Coast port workers are set to go on strike at midnight on Monday with no talks currently scheduled to head off a stoppage threatening to halt container traffic from Maine to Texas and cost the economy as much as $5 billion a day.

The labor contract between the International Longshoremen’s Association (ILA) union representing 45,000 port workers and the United States Maritime Alliance (USMX) employer group expires late Monday, with negotiations at an impasse over pay.

A port strike will go ahead starting Tuesday at 12:01 a.m. ET, the ILA said on Sunday. The USMX “refuses to address a half-century of wage subjugation,” the union said in a statement on Sunday.

If union members do walk off the job, it would be the first coast-wide ILA strike since 1977, affecting ports that handle about half of the nation’s ocean shipping.

No negotiations are taking place and none are planned before the Monday deadline, a person familiar with the matter said on condition of anonymity as the matter is a sensitive one.

But a strike could stop the flow of everything from food to automobiles at major ports, potentially jeopardizing jobs and stoking inflation weeks ahead of the U.S. presidential election.

Business Roundtable, which represents major U.S. business leaders, said it was “deeply concerned about the potential strike at the East Coast and Gulf Coast ports.”

The group warned a labor stoppage could cost the economy billions of dollars daily, hurting businesses, workers and consumers across the country. “We urge both sides to come to an agreement before Monday night’s deadline.”

A short strike could have a limited economic impact given many companies have imported extra goods ahead of a possible work stoppage or shifted more shipments to West Coast ports. But a strike that continues for weeks could have serious economic impacts.

“These people today don’t know what a strike is,” Harold Daggett, the ILA’s fiery leader, said in a recent video post. “I’ll cripple you. I will cripple you.”

Posted in Crisis, Economics, New Jersey Real Estate, Politics, Unrest | 195 Comments

Northeast takes a dip

Posted on September 28, 2024 by grim

From the NAR:

Pending Home Sales Edged Up 0.6% in August

Pending home sales in August rose 0.6%, according to the National Association of REALTORS®. The Midwest, South and West posted monthly gains in transactions, while the Northeast recorded a loss. Year-over-year, the West registered growth, but the Northeast, Midwest and South declined.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – increased to 70.6 in August. Year over year, pending transactions were down 3.0%. An index of 100 is equal to the level of contract activity in 2001.

“A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August,” said NAR Chief Economist Lawrence Yun. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”

The Northeast PHSI diminished 4.6% from last month to 61.6, a drop of 2.2% from August 2023. The Midwest index intensified 3.2% to 70.0 in August, down 3.6% from one year ago.

The South PHSI grew 0.1% to 83.6 in August, receding 5.3% from the prior year. The West index increased 3.2% in August to 58.0, up 2.7% from August 2023.

“In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months,” Yun said. “Contract signings rose in both the most affordable and most expensive regions – the Midwest and West, respectively – because mortgage rates have fallen nationally. Housing affordability will continue to see notable improvements.” 
“The Federal Reserve does not directly control mortgage rates, but the anticipation of more short-term interest rate cuts has pushed long-term mortgage rates down to near 6% in late September,” added Yun. “On a typical $300,000 mortgage, that translates to approximately $300 per month in mortgage payment savings compared to a few months ago.”

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 62 Comments