NJ 2015 Jobs Revision Surprise

Posted on March 15, 2016 by grim

From the Record:

NJ’s 2015 job creation was better than first reported, but state lost 14,100 jobs in January

New Jersey employers created 81,500 jobs last year, even more than the 65,200 originally reported, to make 2015’s employment gains the most robust since 1999, state labor officials reported Monday.

“The numbers show that the labor market and economy are much stronger than we had thought,” said James Hughes, a Rutgers University economist.

In contrast to that upbeat report, the state Department of Labor and Workforce Development also announced that New Jersey lost 14,100 jobs in January, led by 10,100 jobs sliced from the generally well-paid professional and business services sector.

Even with January’s job losses, the state’s unemployment rate fell to 4.5 percent for the month, down from 4.8 percent in December and below the U.S. rate of 4.9 percent. This was a sharp reversal of the pattern over the past five years, when New Jersey’s jobless rate clocked in above the national rate almost every month.

Charles Steindel, a Ramapo College economist and former chief economist in the Christie administration, called the 2015 job gains “a very encouraging number,” reflecting 2 percent job growth in a state of about 4 million workers.

“It says the state’s economy is actually growing at a reasonable clip,” he said.

“We actually outpaced the nation in 2015; New Jersey’s private-sector employment rose 2.5 percent, while the nation’s rose 2.2 percent,” said Hughes. “That’s the first time since the 1990s that New Jersey grew faster than the nation.”

Steindel said the January job losses may reflect weather patterns — especially mild weather in December that allowed more people to continue working outdoors, only to be sidelined by more wintry conditions in January, when a blizzard hit.

Hughes suggested the January job losses may be a statistical anomaly; revised January numbers are expected next week.

“We can’t take any one month to predict either a boom or a bust,” he said.

Posted in Economics, Employment, New Jersey Real Estate | 78 Comments

In 5 years, remember this one

Posted on March 14, 2016 by grim

From the NY Post (Hat tip Chi):

Obama is setting us up for another housing crash

We learned nothing from the last financial crisis. The housing market is set to collapse, again, and a key culprit, again, is artificial demand created by government policies.

For starters, mortgage-software firm Ellie Mae reports that the average FICO credit score of an approved home loan plunged to 719 in January (the latest month for which data is available) from 731 a year earlier, and well below 2011’s peak of 750.

It’s a dangerous sign lenders are loosening underwriting standards. Lower FICO scores correlate with higher risk of loan default.

The Federal Housing Administration is a big reason for falling credit scores. So are Fannie Mae and Freddie Mac. The government housing agencies have slashed credit requirements under pressure from the Obama administration — like the Clinton administration before it — to qualify more immigrants and minorities with low incomes and “less-than-perfect credit.”

Meanwhile, home lenders are approving more debt-strapped borrowers. According to Ellie Mae, applicants approved for mortgages in January had an average household debt-to-income ratio of 39%, up from 2012’s annual average of 34%. Borrower debt loads have been creeping higher each year since 2012, when Ellie Mae first started tracking such data.
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A recent report by the Office of the Comptroller of the Currency, a federal agency that regulates the nation’s banks, warns that declines in mortgage underwriting standards are mirroring pre-crisis trends.

“Underwriting standards eased at a significant number of banks for the three-year period from 2013 through 2015,” the report said. “This trend reflects broad trends similar to those experienced from 2005 through 2007, before the most recent financial crisis.”

Not since 2006, it noted, have lenders taken on so much credit risk, and it says the hazard will continue to grow this year: “Examiners expect the level of credit risk to increase over the next 12 months.”
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Today’s relaxation in mortgage-underwriting standards is largely a function of government housing-policy changes at FHA, Fannie Mae and Freddie Mac, which dominate the nation’s mortgage activity.
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All three agencies have slashed down-payment and other requirements under pressure from Obama regulators, who include, most significantly, former Congressional Black Caucus leader and Obama appointee Mel Watt, head of the new Federal Housing Finance Agency, which now controls Fannie Mae and Freddie Mac.
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Last year, Fannie Mae launched a new subprime-mortgage product called HomeReady that caters to recent immigrants with weak credit and limited income.

The new loan program, which offers “income flexibility,” allows borrowers for the first time to bundle income from roommates and relatives to meet qualifications for income. They only have to put 3% down, and can use gifts from nonprofit groups to subsidize their down payments.

“There is no limit on the number of non-borrower household members who can be present on a single transaction,” Fannie advises originators. And even then there is “documentation flexibility,” a frightening echo of last decade’s “no-doc loans.”
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Under HomeReady, you can even qualify for a “cash-out refinance” of your mortgage, a type of loan that led to over-leveraging and a wave of defaults during the mortgage crisis.
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Why would Fannie offer the same kinds of poorly underwritten loans that forced it into bankruptcy? Because HomeReady aligns “with our housing goals” set by Watt, it says in its Home­Ready literature. These are the same government affordable-housing quotas that plunged Fannie and Freddie into the subprime market under the Clinton administration.

It’s all part of a government campaign to ease access to home loans for recent Hispanic immigrants — including those living here illegally. In fact, HomeReady caters to illegal immigrants by allowing borrowers to waive Social Security documentation.
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Home-loan approvals hinge on FICO credit scores, which have a strong track record of predicting risk, says Pinto, who formerly worked as chief credit officer at Fannie Mae. They are the bedrock of the modern financial system.

But the Obama regime views FICO scoring as too strict, “unfairly locking” millions of low-income minorities and immigrants out of homes. So it’s pressuring Fannie and Freddie, which control 57% of primary-home-purchase loans and set the underwriting standards for the entire mortgage industry, to abandon reliance on FICO for a more accommodating standard for evaluating credit risk.

Posted in Economics, Mortgages, National Real Estate, Politics, Risky Lending | 95 Comments

What cap?

Posted on March 13, 2016 by grim

From the Record:

Property tax cap growing weaker across North Jersey; more towns than ever exceed 2% limit

Reforms enacted in 2011 to keep the nation’s highest property taxes in check are showing signs of weakening as a growing number of New Jersey towns fail to stay within the 2 percent cap on increases that formed the cornerstone of the effort.

Recently released tax data show that, four years after Governor Christie and the Legislature reached the landmark bipartisan deal imposing the cap, 60 percent of the state’s municipalities exceeded it in 2015, an analysis by The Record has found. The actual number — 334 of the state’s 565 municipalities — is higher than it has been at any point since the reforms were passed, as communities use exemptions in the law to surpass the limit, the analysis found.

While most tax increases across the state are nowhere near those seen in the years before the accord, last year’s count of towns surpassing the cap was up from 225 in 2012 and marked the third year in a row that the number grew, a sign of the mounting struggles localities face in containing rising costs.

Municipalities managing to stay within the limit last year included only 21 of the 70 in Bergen and four of the 16 in Passaic. Those numbers also are at or tied for their lowest points since the ceiling was imposed, according to the analysis.

To be sure, from a long-term perspective, there is little indication that towns are reverting in large numbers to the time before the cap was set, when tax levies commonly rose 5 percent or more. But the total amount of tax levied to pay for town and county services, as well as public schools, rose by at least 3 percent in a third of the municipalities across North Jersey and statewide in 2015.

Topping last year’s tax increase list in Bergen and Passaic, with hikes of more than 5 percent, were Edgewater, Englewood Cliffs, Rochelle Park, Haledon, Prospect Park, Totowa and Woodland Park. The broader trend boosted the average residential property tax above $10,000 in 49 municipalities in Bergen and Passaic counties, up from 33 in 2010.
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Among the exemptions are increases from rising employee health insurance premiums, borrowing for major construction projects, increased school enrollments and emergencies such as hurricanes or major snowstorms. A town also can exceed the cap in a given year if it stayed under the cap in the prior three years, according to the Community Affairs Department.

Representatives of local governments say the need to use the exemptions to boost taxes will continue as costs subject to the cap — mainly salaries and maintenance of public buildings — keep rising, giving officials less and less wiggle room to keep levy increases to 2 percent.

“I would say it’s likely to continue. Absent favorable events elsewhere, more towns will be forced to use the exceptions and go over the 2 percent cap,” said Jon Moran, senior legislative analyst of the New Jersey League of Municipalities. “I wouldn’t guess at a percent, but I think it will increase.”

Adding further to the fiscal pressure are changes in the way annual health-insurance premium increases — which often top 5 percent — are shared between local governments and their employees. After a period in which higher employee contributions were phased in, upcoming increases are likely to be borne more by towns, counties and school systems.

Posted in New Jersey Real Estate, Politics, Property Taxes, Unrest | 7 Comments

Underwater borrowers continue to decline

Posted on March 11, 2016 by grim

From Corelogic:

From MarketWatch:

Another 1 million homes regained positive equity in 2015, CoreLogic says

An additional million homeowners regained equity in 2015, bringing the number of mortgaged properties with equity to 91.5% or 46.3 million, CoreLogic said.

There were still 4.3 million properties with negative equity in the fourth quarter, representing an increase of 2.9% compared to the third quarter. But that was 19.1% lower than in the fourth quarter of 2014.

The 8.5% share of underwater mortgages at the end of 2015 compares to a peak of 26% in the fourth quarter of 2009.

The five states with the highest percentage of negative equity properties accounted for 30.8% of the negative equity across the county, but only 16.5% of outstanding mortgages.

Borrower equity rose by $682 billion in the fourth quarter compared to the final quarter of 2014, about an 11.5% increase. That was the 13th-straight quarter of double-digit equity growth, CoreLogic said.

The increase in equity reflects rising home prices, but also “continued deleveraging,” CoreLogic said. Homeowners are paying more toward their mortgages and taking out less equity than they have in the past.

Posted in Economics, Housing Recovery, National Real Estate | 64 Comments

This? Again? 4th time is a charm.

Posted on March 10, 2016 by grim

From the NY Post:

Get your summer on in this new Jersey Shore condo

On the hunt for a nifty summer pad? Perhaps head south — to the Jersey Shore, that is.

Asbury Park — an edgy-cool seaside town about 60 miles from midtown Manhattan — is in the midst of an urban renewal led by artists and real estate development.

And in the latest chapter of the enclave’s renaissance, the 34-unit Monroe condominium — a luxe four-story structure located minutes from the boardwalk, as well as the city’s downtown — launches sales on Friday, March 11, The Post has exclusively learned.

The property, which will be completed in September, will house one- through three-bedroom apartments, whose interior measurements span 700 to 1,600 square feet. Prices will range from $445,000 to $1.2 million, and each pad will come with private outdoor space, open floorplans and laundry machines.

“I think it’s clearly a value play when you consider the area against almost everything in the marketplace,” says Douglas Elliman’s Neal Sroka, whose team is handling Monroe’s sales and marketing, of Asbury Park’s pricey surroundings (think: Deal, N.J., a ritzy neighboring town).

Monroe will make its launch at an event in Miami, and there’s a special nod to buyers in the market for their second or third homes. Why not invest in an up-and-coming area?

“Real estate in New York City has gotten very expensive, real estate in Long Island is incredibly expensive, and I think people see the Jersey Shore as an alternative because … their money can go further,” says architect Chad Oppenheim, who not only handled the building’s design but also grew up 25 minutes from Asbury Park.

Posted in New Development, Shore Real Estate | 62 Comments

Homeowners again think their home is worth more than it is … shocker

Posted on March 9, 2016 by grim

From HousingWire:

Homeowner expectations and appraisal values divided as gap widens

The gap between appraisal and owner estimates widened for first time in six months, Quicken Loans said in its latest monthly Home Price Perception Index and Home Value Index for February.

However, the rise is still small, and the HPPI is still at a healthy level.

“While it is always disappointing for homeowners to learn they don’t have quite the home equity they expected, the national HPPI is still within a normal range,” said Quicken Loans Chief Economist Bob Walters. “In an ever-changing real estate market, home values fluctuate and these changes are most quickly realized by appraisers who are evaluating local sales every single day.”

Homeowners’ estimates of their homes’ value exceeded appraiser estimates by an average of 1.99% in February, according the national HPPI.
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“Home prices continue their long march back from the big price drops experienced in the financial crash. As more and more Americans gain equity, this increases the number of homeowners who are financially able to sell their home and buy another one. We’re seeing the benefits of this virtuous cycle in rising home prices, which is also being greatly aided by historically low mortgage rates,” he added.

Posted in Economics, Housing Recovery, National Real Estate | 97 Comments

Pessimistic in NJ

Posted on March 8, 2016 by grim

From the Press of Atlantic City:

Few in NJ upbeat on state’s economy, Stockton researchers find

The vast majority of New Jersey residents believe that they’re either falling behind economically or barely keeping up, a Stockton University study reported Monday.

Fifty-five percent of people in the state told researchers from Stockton’s William J. Hughes Center for Public Policy that they believe their income is “falling behind the cost of living.” Another 37 percent said their income is “just keeping pace” with increasing costs.

Only 14 percent now see the New Jersey economy as good and 6 percent rate the state’s economy “excellent,” says Kelly Sloane, a Hughes Center public policy researcher who released the study, “Views on Economic Inequality in the State of New Jersey.”

About 70 percent told Stockton pollsters that they believe the U.S. economy is still in a recession.

While most of the 802 respondents were personally pessimistic in the polling, large majorities also said that neither they nor anyone in their households had any major economic misfortunes over the previous year.
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Still, when asked about their own status, about 55 percent of New Jersey residents said they think they’re personally doing better economically than other Americans, and 27 percent said they’re doing about the same as others in the country. Just 15 percent said they believe they’re personally worse off than the rest of the country.

Posted in Demographics, Economics, New Jersey Real Estate | 68 Comments

NJ foreclosures facing statute of limitations

Posted on March 7, 2016 by grim

From DS News:

Delinquent Loans May Still Face Foreclosure After Exceeding Statutes of Limitations

High-end estimates of loan-level delinquency timelines show that approximately 98,000 seriously delinquent mortgage loans may be facing some degree of exposure to foreclosure statutes of limitations in Florida, New Jersey, and New York—three of the states that were hit hardest by the foreclosure crisis, according to Black Knight Financial Services’ January 2016 Mortgage Monitor released Monday.

The courts are currently deliberating in those three states discussing the specifics of how the statues of limitations laws apply to foreclosures. In Florida, the foreclosure statute of limitations applies to mortgages that are five years or more overdue, while in New York and New Jersey, it applies to mortgages that are six or more years past due.

According to Black Knight, Florida has the largest volume of loans facing possible exposure to statutes of limitations with roughly 40,000, despite experiencing a 38 percent reduction over the past 12 months. For New York and New Jersey, the number of such loans is currently 35,000 and 22,000, respectively, after both experienced increases over the previous 12 months due to “limited resolution in severely delinquent loan populations” in both states, Black Knight reported.

“Without taking into account additional carrying costs and/or fees incurred by mortgage servicers, Black Knight estimates the current potential unpaid principal balance (UPB) risk exposure in these three states at approximately $30 billion, concentrated primarily in private-label securities,” Black Knight stated in the report. “As it stands today, roughly $1 out of every $10 of principal in private-label securitizations in these three states is tied to a mortgage that is more than five years delinquent in Florida or more than six years delinquent in New York and New Jersey.”

According to Black Knight, 37 percent of the loans that are more than five years delinquent in Florida are not actively involved in foreclosure, which depending on court rulings, potentially presents additional risk. For New York and New Jersey, the share of loans more than six year delinquent but not actively in foreclosure are 22 percent and 21 percent, respectively.

Posted in Foreclosures, New Jersey Real Estate | 89 Comments

LA cracks down on tiny houses illegal housing

Posted on March 5, 2016 by grim

From NPR:

LA Officials Bring The Hammer Down On Tiny Houses For Homeless

Elvis Summers is not part of any nonprofit or government agency. He’s just a 38-year-old guy with a Mohawk and tattooed arms who started a GoFundMe campaign last spring so he could build tiny houses for homeless people to live in. He got the idea after befriending a homeless woman in his neighborhood.

“It just got to me, you know, I’m just like, you know, everybody in this neighborhood knows you, they like you,” he says. “Why does nobody give a crap that you’re sleeping in the dirt? Literally.”

So far Summer has given out 37 tiny 6- by 8-foot houses, which cost $1,200 each to build. They resemble sheds, painted in bright, solid colors, with solar panels on the roof, wheels to make them mobile and a portable camping toilet.

But recently, city sanitation workers confiscated three of the houses from a sidewalk in South Los Angeles and tagged others for removal.

“Unfortunately, these structures are a safety hazard,” says Connie Llanos, a spokeswoman for LA Mayor Eric Garcetti. “These structures, some of the materials that were found in some of them, just the thought of folks having some of these things in a space so small, so confined, without the proper insulation, it really does put their lives in danger.”

Llanos says they’d be better off taking advantage of official resources like shelters or housing vouchers.

According to the latest count, 44,000 people live on the streets in and around LA. The city’s sweep put some people back on the sidewalks and since then Summers has been handing out tents instead.

Posted in Economics, Politics, Unrest | 41 Comments

Is flipping a good or bad sign?

Posted on March 4, 2016 by grim

From the Record:

Home flippers ramped up activity in 2015

One in 25 home sales in New Jersey last year were investors’ flips — in which properties are bought, renovated and quickly resold — according to a company that tracks real estate deals.

Nationally, about one in 20 home sales were flips, according to RealtyTrac, a California-based real estate information company. A total of about 180,000 homes were flipped in 2015 nationwide, including about 3,800 in the Garden State.

Home-flipping activity rose slightly in 2015, but remains well below the levels seen during the housing boom about a decade ago, said RealtyTrac, which counts sales as flips if a home is sold twice within a 12-month period.

Last year, about 5.5 percent of sales were flips, up from 5.3 percent the previous year, but significantly below the peak of 8.2 percent in 2005, as the housing bubble inflated.

Last year, about 110,000 investors completed at least one home flip, the highest number since 2007, but less than half the 259,000 who flipped properties in 2005.

Home flippers made a gross profit averaging $89,000 in New Jersey and $55,000 nationwide, according to RealtyTrac. The gross profit doesn’t include the cost of renovations and transaction expenses, which can be substantial.

Posted in Housing Recovery, New Jersey Real Estate | 89 Comments

March Beige Book

Posted on March 3, 2016 by grim

From the Federal Reserve:

Beige Book – March 2, 2016 – Second District–New York

Economic activity in the Second District has remained generally flat since the last report, while labor markets continue to tighten. Selling prices were little changed, while service-sector firms report continued upward pressure on wages and other input prices. Manufacturers report further weakening in activity, and service-sector firms also note some recent contraction. Consumer spending has been steady to up slightly in early 2016, while tourism activity has remained sluggish. Residential real estate markets showed scattered signs of softening, while commercial real estate markets were little changed. Multi-family residential construction has held steady at a high level, while commercial construction has weakened. Finally, banks report a pickup in loan demand from the commercial sector but further weakening in household loan demand, and little change in delinquency rates.
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Construction and Real Estate

The District’s housing markets were stable to slightly softer in early 2016. In western New York, housing activity has reportedly slowed somewhat, in line with normal seasonal patterns, while contacts are optimistic about the outlook for the upcoming spring season. Statewide, sales activity was steady at an elevated level, while selling prices remained flat and little changed from a year earlier. Similarly, home resale prices are reported to be essentially flat in northern New Jersey, while both sales activity and inventory levels are characterized as low. One building industry contact notes that home renovation activity has been increasing, and that sub-contracting business seems to be robust.

New York City’s co-op and condo sales market has slowed somewhat since the beginning of the year, with both prices and activity down modestly from late-2015 levels. The city’s residential rental markets have also been somewhat softer. Rents on Manhattan apartments have been steady to somewhat lower so far this year, while rents in Brooklyn and Queens have increased at a slower pace than in 2015. A major New York City appraisal firms also notes that the high end of both the purchase and rental markets has been particularly sluggish, reflecting excess supply; a similar pattern prevails for high-end rental markets across the District more broadly.

Office markets have been stable across the District, with both availability rates and asking rents little changed since the beginning of the year. New office construction has weakened further; a good deal of new office space is under construction in Manhattan but little is in the works across the rest of the District. Single-family construction has generally remained sluggish, while multi-family development has been robust. In northern New Jersey, most of the recent apartment construction has been rental buildings, whereas in New York City, it has been largely condos.

Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate, NYC | 110 Comments

Pending home sales flatten YOY

Posted on March 2, 2016 by grim

From the WSJ:

U.S. Pending Home Sales Tumbled 2.5% in January

The number of existing homes tentatively sold across the U.S. fell in January, as swiftly rising prices and lower inventory muted buyer demand after the strongest year in nearly a decade.

An index measuring pending home sales—a gauge of purchases before they become final—fell 2.5% to a seasonally adjusted reading of 106.0 in January, the National Association of Realtors said Monday. An index of 100 is equal to the average level of contract activity during 2001, which the NAR considers a “normal,” or balanced, market for the current U.S. population. In 2015, the index averaged 108.9, a rise of 8.0% over 2014 and its highest level since 2006.

The drop surprised analysts. Economists surveyed by The Wall Street Journal had predicted a 0.5% increase in January’s sales. December’s reading was revised up to 108.7 from an initial reading of 106.8.

“While pending home sales have been weak lately, some other housing indicators—including the mortgage purchase application data reported through most of February—have looked strong, giving us hope that the housing market is continuing to recover,” Daniel Silver, an economist at J.P. Morgan Chase, wrote in an analyst note.
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Pending home sales rose 1.4% in January from a year earlier, the 17th straight month the index has increased year over year, but that was its second-smallest annual gain over that period.

Several economists noted January’s blizzard may have dampened activity in the Northeast, but the index fell most in the Midwest and Northwest, declining by 4.9% and 4.5% respectively.

“It’s possible that the drop in the stock market beginning at the start of the year persuaded would-be home buyers to wait a while, but we have no way of knowing for sure,” said Ian Shepherdson, an economist at Pantheon Macroeconomics, in a note to clients. “Alternatively, the severe blizzard in late January might have depressed activity in the northeast, but sales reportedly fell even further in the West, so it’s hard to find a consistent story.”

Posted in Demographics, Economics, Employment, Housing Recovery, National Real Estate | 110 Comments

NJ eliminating a tax? Impossible

Posted on March 1, 2016 by grim

From the APP:

No more NJ estate tax? Bill passes first hurdle

A state Senate committee Monday approved a bill that would phase out New Jersey’s estate tax over five years.

The vote by the Senate Budget and Appropriations Committee was a win for business groups that have argued the tax drives Garden State residents out of state.

“The only individuals who are now paying the estate tax are those who due mostly to family or business reasons choose not to leave the state,” said Michele Siekerka, president of the New Jersey Business and Industry Association, a business lobby group. “Those who can leave New Jersey do.”

New Jersey taxes estates – cash, real estate, retirement accounts, life insurance benefits and other assets – worth more than $675,000. It is one of 14 states with an estate tax. And it has the nation’s lowest threshold. By comparison, the federal government for 2015 taxes estates worth more than $5.43 million.

New Jersey also taxes beneficiaries who receive inheritances, but grandparents, spouses, parents and children are exempt.

The bill was debated as lawmakers face pressure from two sides. They are searching for ways to lower the state’s notoriously high cost of living. And they are trying to generate enough revenue to pay for a checklist ranging from health benefits for state workers to transportation improvement projects.

The bill sponsored by Sen. Paul Sarlo, D-Bergen and Passaic, and Sen. Steven Oroho, R-Sussex, Warren, and Morris, would increase the threshold each year to $5 million in 2020 before eliminating it in 2021.

Posted in New Jersey Real Estate, Politics | 99 Comments

NJ Open For Business?

Posted on February 29, 2016 by grim

From the Record:

More New York businesses making move to North Jersey

Gross Printing had been doing business in a Sunset Park, Brooklyn, industrial park for several years when co-owner Samson Gross noticed that the company’s landlord was bringing in hipper tenants — breweries, artists and gourmet food companies.

Then, Gross said, the landlord told him his lease would not be renewed. The landlord wanted tenants that could pay $35 a square foot; Gross was paying about $7. So the company began looking for new space, finding its way last year to Clifton, where Gross Printing now leases a 32,000-square-foot building on Brighton Road. The place costs a little more than Gross Printing’s old quarters at the Industry City complex in Brooklyn, but much less than the company would have paid if it had stayed in the city. And Gross, who prints brochures, magazines and packaging, is happier with the location.

“It’s just a nicer place,” said Gross, who owns the company with his wife, Hindy. “The infrastructure in this part of New Jersey is by far better for my type of business than anything available in New York City. New York City is impossible. Customers can’t park their cars for a minute without getting a ticket. To drive five blocks can take half an hour. Frankly, I don’t know how I did it for so long.”

The path of corporate exodus from New York City to New Jersey is well-worn, but real estate brokers and others say that the pace has quickened recently. Companies that need industrial or warehouse space are getting priced out of New York City and its boroughs — especially Brooklyn — as developers scoop up industrial space for new uses.

“Buildings there are being redeveloped and repositioned, whether it’s for residential or retail,” said Tom Vetter, a broker specializing in the Meadowlands with NAI Hanson in Hackensack.

And the trendier Brooklyn and the other boroughs get, the harder it is for industrial users to afford to stay there.
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“Companies aren’t just coming over here because of cost. You’ve got some other reasons: proximity to the port, proximity to New York City, transportation networks, real estate expenses,” said Blake Chroman, senior vice president of Sitex, which owns more than 2 million square feet of warehouse space in North Jersey.
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The migration from New York has helped push New Jersey’s industrial vacancy rates to their lowest point in 15 years, according to Cushman & Wakefield. The real estate firm said the industrial vacancy rate was 6.4 percent statewide in the fourth quarter of last year, down from 8.2 percent a year earlier. In Bergen County, the vacancy rate was 7.5 percent, and in Passaic, 5.7 percent. By comparison, the office vacancy rare has long hovered in the 20 percent range.

Among the companies that have moved operations to New Jersey from the five boroughs are Goffa International of East Rutherford, a stuffed-animal importer formerly located in Brooklyn, and M&J Innovation of Norwood, a company that provides installation and other services for trade shows. M&J Innovation was previously in the Bronx.

In addition, the food company Blue Apron recently moved its distribution center from Williamsburg, Brooklyn, to Jersey City. And Streit’s Matzoh sold its 90-year-old building on the Lower East Side in Manhattan and moved some operations to a site it already owned in Moonachie last year. However, Streit’s plans to consolidate operations in the Rockland County, N.Y., town of Orangeburg, according to Alan Adler, director of operations.

Moving across the Hudson River carries some risks. Clients don’t always follow. And workers who are used to commuting by public transportation sometimes decide they can’t face the trip to a suburban workplace.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 55 Comments

Real estate porn goes conservative

Posted on February 28, 2016 by grim

From Bloomberg:

Home buyers in pricey markets are now scared to dream

Rising home prices in hot housing markets are robbing buyers of a favorite pleasure: looking at pictures of homes they can’t afford. Or at least, that’s one way to read a blog post published by real estate brokerage Redfin.

Traditionally, buyers browsing online listings have looked at homes that cost more than they are planning to spend, said Redfin. That dynamic has held true in such cities as Philadelphia and Chicago, where prices have remained stable in recent years. But in cities such as San Francisco and Boston, where inventory is scarce and prices have increased sharply, buyers are starting their searches at lower price points.

Denver is another good example. In 2014, the median price for listings viewed on Redfin was $359,000. That was 26 percent higher than the $285,000 median listing price for the city. So far this year, the difference between viewed listing prices ($379,000) and median listing prices ($337,000) is 13 percent.

There are a couple reasons buyers may start their search by aiming high. We all like to look at stainless steel appliances and killer views, whether or not we can afford them. More practically, it’s smart pricing strategy. If you want to spend $300,000 on a house, you might shop for homes that list for $330,000 and make a lower offer. The research looked at nine large U.S. cities to see whether real estate searchers were using that logic.

Why would buyers target their search below the local median listing price? Eric Scharnhorst, the Redfin data scientist who compiled the numbers, thinks it’s more likely that buyers are adapting their pricing strategies to hot markets where bidding contests have become the norm. “In a city where you need to compete, you start looking at homes for $280,000 with the exception that you’ll wind up spending $20,000 more,” he said. A simpler theory: In these markets, more people want to buy relatively cheap homes, even though few are available. Whatever the reason, homebuyers in the most competitive markets seem to be abandoning the urge even to peek at the high ceilings, Italian appliances and outdoor kitchens of their fantasies.

Posted in Demographics, Economics, Humor, National Real Estate | 14 Comments