When will home price growth start to slow?

Posted on April 5, 2017 by grim

From HousingWire:

CoreLogic: Home prices rose 7% in February

Home prices increased in February and will only continue that upward trend, according to the Home Price Index and HPI Forecast from CoreLogic, a global property information, analytics and data-enabled solutions provider.

Home prices increased 7% from February 2016 and increased 1% from January to February, according to the index.

“Home prices and rents have risen the most in local markets with high demand and limited supply, such as Seattle, Portland and Denver,” CoreLogic Chief Economist Frank Nothaft said. “The rise in housing costs has been largest for lower-tier-priced homes.”

“For example, from December to February in Seattle, the CoreLogic Home Price Index rose 12% and our single-family rent index rose 6% for all price tiers compared with the same period a year earlier,” Nothaft said. “However, when looking at only lower-cost homes in Seattle, the price increase was 13% and the rent increase was 7%.”

And home prices will continue going up a forecasted 4.7% on a year-over-year basis and 0.4% month-over-month, according to the HPI.
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“Home prices continue to grow at a torrid pace so far in 2017 and these gains are likely to continue well into the future,” CoreLogic President and CEO Frank Martell said. “Home prices are at peak levels in many major markets and the appreciation is being driven by a number of dynamics—high demand, stronger employment, lean supplies and affordability—that will continue to play out in the coming years.”

“The CoreLogic Home Price Index is projecting an additional 5% rise in home prices nationally over the next 12 months,” Martell said.

And these rising home prices are increasing homeowner equity, causing a new rise in home equity lines of credit lead by the Millennial generation.

Posted in Demographics, Economics, National Real Estate | 106 Comments

Going to be a good year for NJ real estate

Posted on April 2, 2017 by grim

From the Otteau Group:

NJ Home Sales Showing More Balance

In February, the number of contract purchases by home buyers exceeded the same month in the prior year for the 30th consecutive month, reflecting an 8% increase over February 2016. Considering the 26% increase (y-o-y) in February of 2016, home sales have increased by 35% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of February of the past 12 years.

While the number of home sales occurring in New Jersey continue to rise, registering an 11% increase y-t-d, the largest gain has occurred for homes between $1.0-Million – $2.5-Million, which have increased by 19%. Home sales in excess of $2.5-Million have also been increasing for the first time in more than a decade. While it is still early in the year to draw any meaningful conclusions, there seems to be a correlation to improving economic indicators and consumer sentiment.

Shifting to the supply side of the equation, the supply of homes being offered for sale remains constricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has declined by nearly 6,700 (-14%) compared to one year ago. This is also about 32,000 (-44%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.7 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 5.9 months.

Currently, nearly all of New Jersey’s 21 counties (90%) have less than 8.0 months of supply, which is a balance point for home prices. Hudson County continues to experience the strongest market conditions in the state with just 2.4 months of supply, followed by Essex, Middlesex, Morris, Union, Somerset and Monmouth Counties, which all have fewer than 4.5 months of supply. All of the counties with an unsold inventory level equivalent to a supply of 8 months or greater are concentrated in the southern portion of the state including Atlantic (9.3) and Salem (10.2), however, even these counties are beginning to experience strengthening conditions.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 78 Comments

Home prices see strong start for 2017

Posted on March 31, 2017 by grim

From CNBC:

US home prices rise 5.9 percent to 31-month high in Jan: S&P CoreLogic Case-Shiller

US home price gains reached a 31-month high in January, according to the S&P/Case-Shiller U.S. National Home Price Index.

The index, which measures all nine U.S. census divisions, found that home prices rose 5.9 percent year-over-year in the month, up from December’s 5.7 percent annual gain.

Of the nation’s 20 largest cities, three reached their all-time highs in January: Seattle, Portland, and Denver. And 12 cities reported greater price increases in the year ending January 2017 versus the year ending December 2016, the report said.

The S&P/Case Shiller 20-city composite index, which tracks the nation’s largest cities, gained 5.7 percent year-over-year in January, up from 5.5 percent the previous month.

The S&P CoreLogic Case-Shiller Indices is a monthly report published on the last Tuesday of each month, constructed to accurately track the price path of typical single-family homes located in each metropolitan area provided.

“Housing and home prices continue on a generally positive upward trend,” said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.

Posted in Economics, National Real Estate | 53 Comments

Healthy Shmealthy

Posted on March 30, 2017 by grim

From CNBC:

Here are the nation’s healthiest—and unhealthiest—housing markets

Housing remains in high demand in most of the nation, but the housing recovery looks increasingly uneven, depending on location.

Whether buyers are shopping for their own homes or for investment properties that will throw off some cash, certain markets are becoming far more lucrative than anyone might have expected just a few years ago. Still, some of the hottest markets are falling from grace.

A few of the recession’s hardest-hit housing markets have suddenly some of the healthiest. Tampa, Florida, which lost thousands of homes to foreclosure in the past decade, now takes the title of the nation’s healthiest housing market, at least according to TenX, a real-estate auction and analytics company. It rated locations based on a number of key factors, including population and job growth, unemployment rate and wage growth, as well as industry-specific indicators like inventory and construction.
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On the other end of the spectrum, Northern and central New Jersey hit rock bottom of the list. Home prices there are high, while job and population growth are lackluster. Los Angelesand San Francisco are suffering from other ills, namely affordability. Prices are so high and inventory so weak that the potential for both sales and price growth are very low.
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Healthiest housing markets

Tampa
Dallas
Columbus, Ohio
Las Vegas
Jacksonville

Unhealthiest housing markets

Northern New Jersey
Central New Jersey
Long Island, New York
San Francisco
Los Angeles

Posted in Economics, New Jersey Real Estate | 51 Comments

Why not put it on the ballot?

Posted on March 28, 2017 by grim

From the Star Ledger:

On property taxes, it’s time for a little initiative – and referendum | Mulshine

When you picked up your Star-Ledger on Monday, you no doubt noticed a front-page article by Jonathan Salant headlined “Jersey by the Numbers. ” It detailed how our state ranks nationally in various categories.

And you no doubt noticed that the very first category was property taxes.

We’re No. 1. Our average property-tax bill was 2.38 percent in 2016.

Now look at California. Their average property-tax rate is about a third of ours, a mere 0.81 percent.

Why is their rate so much lower? Because the voters there have the power of initiative and referendum. In 1978 they used that power to put on the ballot a measure called Proposition 13.

Proposition 13 set a 1 percent cap on property taxes. It also included a tax freeze for as long as a homeowner owns a home.

Let us compare that to the rate in West Orange. That’s where the co-framer of the proposition, Howard Jarvis, spoke in 1978 to a group of tax activists hoping to emulate his example.

There was a lot of energy and enthusiasm in the room that night. But it all came to naught. Without the power of initiative-and-referendum, taxpayers had to wait for the Legislature to put such a measure on the ballot.

They’ve been waiting 39 years now, particularly in West Orange.

The property-tax rate there is 3.64 percent. If you have a $500,000 house there, you will pay about $18,000 annually in property taxes. In California you’d pay about $5,000.

Like most Californians, the people of West Orange tend to be liberal Democrats. But imagine how they’d vote if there were a measure on the ballot asking them whether they’d like a $13,000 tax cut. I suspect they’d vote like most Californians did back in 1978.

So why don’t we give the voters a chance to put that and other questions on the ballot?

Posted in New Jersey Real Estate, Politics, Property Taxes | 139 Comments

NJ Unemployment falls to 4.4%

Posted on March 26, 2017 by grim

From NJ Biz:

N.J. added over 12k jobs in February, new report says

New Jersey added 12,600 total nonfarm jobs last month and saw its unemployment rate tick down slightly to 4.4 percent, according to a report released Thursday by the state Department of Labor and Workforce Development,

The report also presented revised numbers for January, increasing that month’s total nonfarm job growth by 1,300 positions, to a total of 15,900 jobs.

“The Garden State economy is steaming forward, with private-sector job growth well above 10,000 for the second month in a row,” said state Department of the Treasury chief economist James Wooster. “The unemployment rate dropped to 4.4 percent and is now well below the national rate of 4.7 percent. And, for yet another month, New Jersey’s private sector growth outpaced the national rate.”

In February, the vast majority of the added jobs came in the private sector, where industries such as manufacturing and construction saw the biggest gains.

Posted in Economics, Employment, New Jersey Real Estate | 45 Comments

Good way to kill mortgage lending in NJ

Posted on March 23, 2017 by grim

From the Observer:

Murphy Goes Anti-Wall Street With Foreclosure Proposal

The leading candidate in New Jersey’s gubernatorial race proposed having Wall Street banks pay for the conversion of foreclosed homes into affordable housing with millions of dollars in federal mortgage settlement funds Wednesday. Former Goldman Sachs executive and one-time U.S. Ambassador to Germany Phil Murphy said “Wall Street created the foreclosure crisis, they need to be held responsible for fixing it.”

The move could be an attempt to head off criticisms of his own Wall Street background, which has drawn harsh criticism from primary rival and progressive assemblyman John Wisniewski and unfavorable comparisons to former governor Jon Corzine in some New Jersey political circles.

“Making Wall Street pay with the billions they gave up for causing the housing crash would not only ensure fairness for New Jersey’s families, but be a measure of justice for their role in creating this crisis that has left our state pockmarked with empty homes,” Murphy said, adding that he is “mystified that Governor Christie had failed to fight for New Jersey’s share of the funds.”

Posted in Foreclosures, New Jersey Real Estate, Politics | 82 Comments

NJ’s Losers

Posted on March 22, 2017 by grim

From the Star Ledger:

The 20 fastest-shrinking towns in New Jersey

New Jersey is in the midst of a dramatic population shift, the inverse of the outward sprawl that has dominated the state for the last several decades.

The large population swings mean parts of the state are seeing decline not seen in more than 20 years. Today, we take a look at what towns are seeing the starkest losses.
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With each passing year since the Great Recession, the population trend in New Jersey becomes more clear. During the last decade, counties like Sussex and Warren — once the fastest growing in New Jersey — are now shrinking. Conversely, the suburbs surrounding New York City are booming.
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Top 10 by People Lost

10. Vernon
9. Margate City
8. Camden
7. Irvington
6. Brick
5. Brigantine
4. Ocean City
3. Willingboro
2. Washington (Gloucester)
1. Toms River
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Top 10 by Percentage Lost
10. Alpine
9. Lavalette
8. Ocean City
7. Margate City
6. Brigantine
5. Surf City
4. Ship Bottom
3. Hampton
2. Sea Isle City
1. Beach Haven

Posted in Demographics, New Jersey Real Estate | 81 Comments

The year of the ‘burbs?

Posted on March 18, 2017 by grim

From the NYT:

Home Sales Brisk in New York City’s Suburbs

Real estate market temperatures in the commuter suburbs around New York City range from warm to sizzling, having never really cooled down for the winter.

As 2016 ended, prices remained stable, but most markets showed rising sales volume and a dwindling supply of homes for sale. Now, on the cusp of spring, any slack left over from the financial crisis is largely gone, with the exception of an oversupply of luxury homes at the very top.

In Westchester and Fairfield Counties, “I wouldn’t characterize anywhere as dead or nonactive,” said Jim Gricar, the general sales manager for Houlihan Lawrence. “Two years ago, I couldn’t have said that. But today, I feel confident saying it.”

On Long Island, in both Suffolk and Nassau Counties, the housing markets are moving at a “blistering pace,” and prices are accelerating, according to a fourth-quarter market report from Douglas Elliman Real Estate.

And in the inner-ring New Jersey suburbs closest to Manhattan, the markets are so brisk that many have less than three months’ worth of inventory, according to Jeffrey Otteau, the president of the Otteau Group, an appraisal and advisory firm. By way of comparison, in 2012, most of those markets had a four-to-eight-month supply, a more typical range.

The dynamics driving demand vary from suburb to suburb, but industry experts cited several overall reasons for the busy winter. First, many buyers had been holding off on making a purchase until after the presidential election, largely because of uncertainty about the outcome. That pent-up demand was unleashed after Nov. 8, and has been helped along by a mild winter.

“Anecdotally, the brokerage community said literally the day after the election there was a pop — activity jumped,” said Jonathan Miller, the president of the appraisal firm Miller Samuel, which prepares the Douglas Elliman market reports. “We saw the same thing after the 2012 election. When the numbers come in for the first quarter, I think we will see an uptick over a year ago.”
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In New Jersey, price growth has been very modest across the state as a whole, even as sales volume grew by 12 percent last year. But appreciation is much more robust in the economically strong commuter suburbs closest to the city, such as Jersey City, Hoboken, Glen Ridge and Ridgewood, according to Mr. Otteau.

He noted that January brought an unusual statewide spike in sales of homes priced between $1 million and $2.5 million, a market segment that had slowed in recent years. While the 19 percent year-over-year surge might be an anomaly, Mr. Otteau said, it could also be a sign that high-income buyers are feeling extra confident, possibly because of the Trump administration’s talk of financial deregulation and tax reform.

“It’s completely opposite to what we’d been seeing previously,” he said.

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

Are suburbs the smart move?

Posted on March 16, 2017 by grim

From Inman:

Are the suburbs a better deal for millennials?

Much has been made of the millennial desire to live in cities; however, a couple of recent studies show that for families with kids, the suburbs might be the place to be.

The National Association of Realtors 2017 Home Buyer and Seller Generational Trends study found that more millennials are moving to the suburbs with their kids.

As millennials age, more of them have children. This year’s survey found that 49 percent of millennial buyers had at least one child.

Affordability is sending millennials to the suburbs. The survey showed that just 15 percent of millennial buyers bought in an urban area, down from 17 percent last year and 21 percent two years ago.
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It’s not just housing affordability that is a factor in where millennials chose to settle. The Zillow and Care.com Cost of Living Report measured how much families could expect to spend on housing and child care in urban and suburban locations around the country and found that overall families spend $9,000 more a year to live in the city versus the suburbs.
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Although the difference between city versus suburbs varies from city to city, it is most stark in New York, Chicago and Dallas.

In New York, a family would pay an additional $71,237 a year in order to live in the city.

Suburban living doesn’t always win out. In Philadelphia, a family would spend an additional $13,859 to live in the city as compared to the suburbs.

In most cities, high property taxes and rising home prices are usually the reasons why city living is more expensive; however, in some cities, the cost of child care is the issue.
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Zillow’s 2016 Report on Consumer Housing Trends also found that millennials, the largest group of homebuyers, are making their way into the suburbs.

The Zillow data says that almost 50 percent of millennial homeowners live in the suburbs, while 33 percent live in an urban neighborhood and just 20 percent live in a rural area.

Of the millennial buyers who moved in the past year, 64 percent stayed in the same city and just 7 percent of them moved to a different state. Millennials pay a median price of $217,000 for a home that is about 1,800 square feet, similar in size to what older generations buy.

Like older generations, they prize shared community amenities and are considering townhouses at higher rates than other generations.

Because of the size of the generation, millennials, like baby boomers, create change with each new life stage they move into. Now that they are buying, and moving into suburbs, they are changing the way we consider what a suburb looks like.

Posted in Demographics, Economics, National Real Estate | 74 Comments

10 years after the foreclosure crisis

Posted on March 15, 2017 by grim

From DS News:

The Foreclosure Crisis: A Retrospective

On Tuesday, CoreLogic released a report titled “United States Residential Foreclosure Crisis: Ten Years Later” to examine how the country has handled and recovered from the foreclosure crisis in the years since. The report also gives background from the early 2000s leading into the crisis.

The foreclosure crisis began in 2007, and peaked in September 2010. In that month alone, approximately 120,000 homes entered foreclosure. Economists tend to mark the bankruptcy of two Bear Stearns subprime funds in June 2007 as the beginning of the crisis, followed by a worsening crisis when Lehman Brothers declared bankruptcy in September 2008. In 2009, unemployment peaked as well, adding to the crisis.

“The country experienced a wild ride in the mortgage market between 2008 and 2012, with the foreclosure peak occurring in 2010,” said Dr. Frank Nothaft, Chief Economist for CoreLogic. “As we look back over 10 years of the foreclosure crisis, we cannot ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership.”

Over 1 million foreclosures occurred in in 2010 when the crisis peaked. Following this peak, foreclosures began to steadily decline year by year, dropping by 100,000 per year through 2016. By state, Florida experienced the highest number of foreclosures during the crisis, with 12.5 percent of homes in the foreclosure process in June 2011.

In addition to foreclosures, CoreLogic reported the number of mortgages in serious delinquency, or more than 30 days past due, during the housing crisis. At the end of 2016, 1 million mortgages, 2.6 percent of homes with a mortgage, were in serious delinquency. Serious delinquency had previously peaked in January 2010 at 3.7 million, 8.6 percent, of homes with a mortgage in delinquency.

Currently, 385,748 completed foreclosures are in effect, below the 2010 peak of 1,178,234, and the number is expected to continue to fall. In 2013, as the market began its repair, then CEO and President of CoreLogic Anand Nallathambi stated, “The housing market is clearly on the mend, but we expect the ultimate conclusion of the present housing cycle to be another several years away . . .”

Posted in Foreclosures, National Real Estate | 61 Comments

NJ Comeback?

Posted on March 14, 2017 by grim

From the Record:

N.J. job growth last year best since 2000

New Jersey added nearly 61,000 jobs last year, the best year for private-sector growth since 2000, according to the U.S. Bureau of Labor Statistics.

The gains continued into the new year, with 12,600 jobs added in January, bringing the unemployment rate to 4.6 percent, the state Department of Labor and Workforce Development said.

But the monthly jobs report relies on surveys and is considered preliminary. The annual employment data comes from the labor bureau’s benchmarking process examining records, making it the authoritative source.

Gov. Chris Christie, who has come under criticism for his fiscal stewardship of the state’s economy, celebrated the jobs figures Monday during a visit to LG Electronics in Englewood Cliffs. During his seven years as governor the state has added 313,100 private-sector jobs as it recovered from the Great Recession, he said. Christie pointed to the employment figures as validation of his conservative policies of rejecting tax increases while offering generous business tax breaks.

“What you’re seeing here is the effect of seven years of policies now going into effect,” Christie said.

The job growth, coupled with a high labor participation rate, means New Jersey is “winning on both sides,” he said.

Christie took office in 2010, a year after the recession technically ended, and inherited a 9.8 percent unemployment rate. The current rate of 4.6 percent is just below the national average of 4.7 percent. That, along with New Jersey’s job growth last year, should put an end to reporting that the state has lagged in the economic recovery, Christie said.

“I think we should stop the continuing drumbeat that somehow New Jersey has underperformed from a jobs perspective,” he said. “New Jersey is outperforming the nation in 2016 in job growth and outperforming the nation in terms of unemployment rate as well.”

Posted in Economics, New Jersey Real Estate | 29 Comments

Rent or Buy – Too Simple?

Posted on March 11, 2017 by grim

From NJ101.5:

Should you buy or rent? A county-by-county list for NJ

To make that decision a bit easier, real estate database ATTOM Data Solutions has released a report that breaks down the math in New Jersey’s housing markets and determines whether it’s more affordable to rent a three-bedroom home or buy one in each of them.

The report analyzed nearly all of New Jersey’s counties — all but Salem — using 2017 fair market rent data from the U.S. Department of Housing and Urban Development, wage data from the Bureau of Labor Statistics and 2016 public record sales deed data.

Based on monthly payments alone, ATTOM found it’s more affordable to rent than buy in 55 percent of New Jersey’s markets, or 11 counties: Bergen, Essex, Hudson, Monmouth, Union, Morris, Burlington, Somerset, Hunterdon, Warren and Cape May.

Monthly rent in Union County was calculated at about $1,700, for example, compared to a mortgage payment of more than $2,300, including property taxes and interest.

In the other nine counties, mortgage payments were found to be cheaper than monthly rent. In Cumberland County, owning a home was calculated at just $870 per month, compared to $1,570 monthly to rent.

Posted in Economics, New Jersey Real Estate | 49 Comments

7.4% of NJ households are millionaires

Posted on March 10, 2017 by grim

From the Star Ledger:

The number of N.J. millionaires growing, study finds

New Jersey leaped over Hawaii last year to become the U.S. state with the third-highest number of millionaires.

The Garden State’s wealth and incomes are among the highest in the country. And last year, nearly 7.4 percent of households here had assets that classify them as millionaires, according to Phoenix Marketing International’s Wealth & Affluent Monitor report.

The study found that nationwide there are nearly 6.8 million households with at least $1 million in investable assets, such as retirement accounts, stocks, bonds, mutual funds, ETFs, cash accounts and annuities. That’s about 5.5 percent of all households.
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Despite New Jersey’s new top three ranking, the broader population continues to suffer from stagnant economic growth.

While the household median income in 2015 increased by 5.2 percent nationally, the household median income in New Jersey went from $71,994 in 2014 to $72,222 in 2015.

That 0.3 percent change in New Jersey was dead last among U.S. states. In fact, the New Jersey median income hasn’t increased or decreased in a statistically significant way since 2011.

Posted in Economics, New Jersey Real Estate | 26 Comments

Millennials happy about housing

Posted on March 9, 2017 by grim

From CNBC:

Millennials drive housing confidence higher, despite red-hot prices

Both buyers and sellers alike are feeling very good about the housing market this spring, even as home values hit new highs and mortgage rates move up.

A monthly sentiment index from Fannie Mae rose to the highest level since 2011, when the survey began, thanks to a surprising surge from millennials.

“Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

Millennials are moving out of their parents’ basements and forming new households at a faster rate, according to Fannie Mae research, but they are still overwhelmingly forced to rent.

“Continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in many markets,” Duncan added.

The leading edge of the millennial generation is, however, entering the housing market in larger numbers today, with some venturing out of their desired urban cores to more affordable suburbs. Millennials delayed both marriage and parenthood, but that is now changing.

Nearly half of millennial buyers had at least one child, according to the 2017 Home Buyer and Seller Generational report just released by the National Association of Realtors. That is up from 45 percent last year and 43 percent two years ago. Children are the primary driver of homeownership, which is now sitting near a record low. Just 15 percent of millennial buyers chose an urban area, which is down from 17 percent last year and 21 percent two years ago.

Posted in Demographics, National Real Estate | 76 Comments