Wells Fargo just doing their job? Or crossing a line?

Posted on September 8, 2015 by grim

From ThinkProgress:

Why A Bank Was Allowed To Plunder Family Heirlooms That Escaped The Nazis

When Adier died at 82, he was downstairs in the Morristown, New Jersey home where he and his late wife Rita raised their two adopted children. As of his death in August of 2012, that house held the physical and emotional spoils of the Adlersteins’ elusion. Henri’s children hadn’t lived there for years, but they began the painful preparations that follow the death of a parent.

There were practical matters to tend to, and finding the energy to crack open Henri’s handwritten memories was always a task for the future.
…
The stories and recollections that book contained must have been gripping. Henri didn’t just survive the war. After Paris fell and soldiers sealed his family’s apartment, the boy helped his father – David’s grandfather, a tailor by trade – to sneak into the flat and boost sacred family heirlooms: a kiddish cup, a seder plate, and some other objects.
…
But they didn’t survive Wells Fargo. Neither did Henri’s diary.

After Henri died and Hurricane Sandy devastated David’s business, he says, financial paperwork involving the Adier family home was slow to process. Henri’s mortgage, which had been current when he died, went unpaid for two months.

Then, a lawsuit by David and Anne Adier alleges, agents under contract to Wells Fargo visited the house in Morristown, New Jersey, and decided it was abandoned. The inspectors’ finding allowed the bank’s property management subcontractor, Lender Processing Services (LPS), to ask the bank to authorize what’s called a “lockout.” The inspectors left a sticker on the Adiers’ door warning that the bank would consider it abandoned and start changing locks unless notified otherwise.

Anne Adier discovered the sticker on November 6, 2012, the Adiers say, and called the company to inform them they were mistaken, that the house was being looked after and didn’t need to be secured on Wells Fargo’s behalf. “They thanked her for calling and assured her nothing would happen to the property,” David said. (Anne declined to be interviewed.)

Three weeks later, though, David arrived to find the locks changed and the house ransacked. David called the police, but “their party line was this is a civil matter between you and the bank.” Despite Anne’s conversation with LPS, Wells Fargo’s contractors had gotten approval to go into the Adier home. They changed the locks. When David finally got back into the house weeks later, he found it ransacked.
…
Wells Fargo hadn’t initiated foreclosure proceedings, but refused to deal with David until he furnished his father’s death certificate. After he sent that over, he says the bank demanded to see court papers deeming David his father’s executor. When those documents were certified, the bank finally began negotiating with David about the property’s future.

By then it was the spring of 2013. Bank agents had visited the house repeatedly. Almost every material object had been taken, including family photos and a diary Henri kept of his wartime travails.

“It became this game of cat and mouse, until everything of value — down to the brass door knocker — had been taken,” Adier said.
…
“The way it works in most cases is the bank engages a property preservation company, which then sub-contracts with another company, who then sub-subcontracts with day laborers to save as much money as possible,” said plaintiffs’ attorney Josh Denbeaux, referring to numerous confidential contracts he has seen in other cases but cannot discuss in detail. “The day laborers get paid $10, $12, $15 bucks a pop for doing a drive-by inspection. They get $200 to $300 for a lockout.”

There is little in the way of accountability or professional training to counteract the skewing effect of those wage incentives, according to Center for American Progress housing market expert Julia Gordon. “The compensation to do the work quickly is there,” Gordon told ThinkProgress, but not the kind of compensation that would motivate people to do it correctly.
…
Wells Fargo doesn’t dispute that its sub-contracted agents conducted a lockout and a trashout on Henri Adier’s home, but believes that it had the proper legal authority to perform any actions necessary to secure a home they thought to be abandoned.

Posted in New Jersey Real Estate | 76 Comments

Can we still make things here?

Posted on September 6, 2015 by grim

From the Record:

NJ manufacturing employment gains suggests end of job losses

A surge in New Jersey’s manufacturing employment over the last year has raised the possibility that the more than 40-year decline of the sector has bottomed out.

The state has added 4,600 manufacturing jobs since July 2014, the largest 12-month increase in the sector since at least 1991, according to the earliest records that are readily available on the website of the New Jersey Department of Labor and Workforce Development.

The manufacturing sector has had only a few 12-month employment increases in that period, and those — including upticks in late 2013 and early 2014 — were far smaller than the current one. The largest previous increase in that stretch was in 1997, when the state added 2,900 manufacturing jobs over 12 months.

The recent uptick was about evenly divided between the two categories that make up manufacturing employment figures, with an increase of 2,100 over 12 months in the category of durable goods, those that last a long time, such as household appliances, machinery and equipment. Non-durable goods, which don’t last long, such as food and clothing, accounted for an increase of 2,500 jobs.

While the increase is modest — adding 4,600 jobs is a rise of about 2 percent in manufacturing employment — it provides a relatively strong reversal of the extended tide of factory job losses. And economists, though cautious in light of four decades of manufacturing jobs losses, said the figures suggest that the sector has hit the bottom.

“I would take that as a positive,” said Patrick O’Keefe, director of economic research at CohnReznick, a global accounting firm with an office in Roseland. “It’s bottoming out,” he said, adding that the sector’s apparent surge has come despite the fact that the strengthening dollar and the weakness of some foreign economics have made U.S. goods less attractive to foreign buyers.
…
Manufacturing employment peaked in New Jersey in 1969, and the predominant trend — until recently — has since been downward. The state has lost on average about 11,600 manufacturing jobs every 12 months since 1991.

Sector employment has fallen by more than half, from 548,000 to the current 247,300, since 1990, and now accounts for just about 6 percent of all jobs in the state, figures on the department website show.

James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said the state shed manufacturing jobs rapidly during the recession and at a slower pace as the post-recession recovery took hold, rarely adding jobs.

The current figures, with a significant increase, suggest that that dynamic may have changed, however, Hughes said.

“This would suggest that maybe we have reached a floor in the long-term steady decline,” he said. “It could be that the long-term hemorrhage in manufacturing jobs may finally be bottoming out.”

Hughes said the proportion of jobs in the state manufacturing industry peaked in the 1940s, when half of all New Jersey’s jobs were in manufacturing, and the state was a strong producer of cars, textiles, chemicals, embroidered cloth, telecommunications equipment and other products. He added that the sector accounted for about one-third of all jobs when the number of jobs peaked in 1969, with service jobs having grown dramatically to become the predominant sector.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 44 Comments

Which way is up? A new home price index.

Posted on September 4, 2015 by grim

From Bloomberg:

Almost Half of Homes in New York and D.C. Are Now Losing Value

Almost half of single-family houses in the New York and Washington metropolitan areas are losing value, a sign that buyers’ tolerance for high prices in many large U.S. cities may be reaching a limit.

The values of 45 percent of houses in both the Washington and New York areas slumped by at least 2 percent in June from a year earlier, according to a new index created by Allan Weiss, co-founder of the Case-Shiller home price indexes. In June 2014, only 15 percent of Washington residences dropped in value, while 20 percent fell in New York. Because the index is of only single-family homes, it doesn’t include Manhattan. More properties also were in decline in Los Angeles, Chicago, Phoenix and Miami.

A steady rise in U.S. home prices since the bottom of the market combined with weak income growth has made housing less affordable, especially in big cities. Credit remains tight and demand is now being driven primarily by buyers dependent on mortgages, as foreign buyers and investors pull back from the market.

“What happens in any bull asset bubble such as what we’ve seen is you run out of buyers,” said Chris Whalen, senior managing director at Kroll Bond Rating Agency Inc. and an advisor to Weiss. “It’s hard to get deals done if the bottom third can’t get a mortgage.”

Weiss, founder and chief executive officer of Weiss Residential Research LLC, based in Natick, Massachusetts, introduced his repeat-sales index last year. It provides a value for every home in the markets the firm covers based on similar homes that sold nearby.

While an average home in a city may be rising, many homes within the area may be losing value instead, he said. A larger share of homes with declining values could be an early warning that the market may be in danger, he said.

“If you have a market where every house is rising and you hear the news that the housing market is up, you’re correct in applying it to your own home,” Weiss said. “However, if you are in a market where 60 percent of houses are rising, you have a 40 percent chance of misunderstanding what’s going on with your house.”

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 59 Comments

September Beige Book

Posted on September 3, 2015 by grim

From the Federal Reserve:

Beige Book – September 2, 2015 – Second District–New York

The Second District’s economy has continued to grow at a modest pace since the last report. Businesses generally report that selling prices remain stable; while input price pressures have abated somewhat, there are signs of increased wage pressures. Labor markets have tightened further in recent weeks. Consumer spending has picked up somewhat in early August but remains generally soft; tourism remains sluggish. Manufacturing activity has weakened noticeably since the last report. Housing markets continued to improve, while commercial real estate markets were mixed but generally stronger. Both commercial and multi-family residential construction remain fairly robust. Finally, banks report stronger loan demand and lower delinquency rates, especially on consumer loans.
…
Construction and Real Estate
The District’s housing markets have generally been stronger since the last report, and new multi-family residential construction remains brisk. Northern New Jersey’s housing market continues to recover gradually, with a large overhang of distressed properties continuing to weigh on the market; the multi-family segment, as well as areas near New York City, continue to outperform the market as a whole. Realtors in western New York report that the housing market has picked up steam over the past month or two; low inventories and strong demand have pushed up prices and made bidding wars common. Home sales and prices across New York State more broadly have also been increasingly robust. New York City’s co-op and condo market has continued to strengthen gradually: activity is down from elevated 2014 levels, but steady, while prices continue to climb, except at the high end of the market.

Residential rental markets have been steady to somewhat stronger. Apartment rents have been running 3-5 percent ahead of a year earlier in Brooklyn, Queens and northern New Jersey, while they have been essentially flat in Manhattan and across upstate New York. Whereas vacancy rates on rental apartments have been steady or declining across most of the District, Manhattan’s vacancy rate, though still quite low, has climbed steadily over the past year. One contact notes that there is a large supply of new (mainly luxury) rental apartments in the pipeline. Multi-family residential construction remains brisk across most of the District.
…
Other Business Activity
The labor market has gained some further momentum since mid-year. Two major New York City employment agencies report that hiring activity has picked up further, while a major agency in upstate New York notes that the job market continues to improve moderately. Job candidates are getting job offers more quickly, and there is growing upward pressure on starting salaries. The financial sector is reported to be hiring more actively, but the recent increase has been broad-based. In particular, truck drivers, IT workers, creative workers, auditors, accountants, and human resource professionals are reported to be in high demand. Temp workers are also said to be in short supply, as many are being hired permanently.

Service-sector firms broadly report that business has continued to improve moderately in recent weeks, and they remain generally optimistic about the near-term outlook. In contrast, manufacturers report that business activity has weakened noticeably, though they too express fairly widespread optimism about the near-term outlook. Unlike business in other industries, manufacturers indicate they have scaled back hiring somewhat. Both manufacturers and service firms generally report that selling prices remain flat overall. Manufacturers also report that input prices remain flat, while service-sector firms report that input price pressures, though still fairly widespread, have abated somewhat.

Posted in Economics, New Jersey Real Estate, NYC | 61 Comments

30% of the US at peak home price (but not NJ)

Posted on September 2, 2015 by grim

From HousingWire:

CoreLogic: Home prices rose 6.9% in July 2015

Home prices nationwide, including distressed sales, increased by 6.9% in July 2015 compared with July 2014, according to CoreLogic.

On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.7% in July 2015 compared with June 2015.

“Home sales continued their brisk rebound in July and home prices reflected that, up 6.9% from a year ago,” said Frank Nothaft, chief economist for CoreLogic. “Over the same period, the National Association of Realtors reported existing sales up 10% and the Census Bureau reported new home sales up 26% in July.”

Including distressed sales, only Colorado has more than 10% year-over-year growth. Additionally, only 10 states have experienced increased growth in the last year that matched or surpassed the nation as a whole; those states are: Colorado, Florida, Hawaii, Nevada, New York, Oregon, South Carolina, South Dakota, Texas and Washington.

Fifteen states reached new price peaks since January 1976 when the index began including Alaska, Arkansas, Colorado, Hawaii, Iowa, Kentucky, Montana, Nebraska, New York, North Carolina, North Dakota, Oklahoma, South Dakota, Tennessee and Texas.

Only two states experienced home price depreciation: Massachusetts (-2.1%) and Mississippi (-0.8%).

Posted in Housing Recovery, National Real Estate | 84 Comments

Welcome Home!

Posted on September 1, 2015 by grim

From the Real Deal:

The Chinese are about to flood the US real estate market

The chaos of the past few weeks is likely to lead to an acceleration in the rate of real-estate purchases by wealthy Chinese buyers in the US and elsewhere.

“[Chinese] Investors who were looking at investing overseas may bring forward their purchases,” James MacDonald, head of Savills Research in China, wrote in an email to Business Insider. “While some of those that may not have been considering the purchase of property in the U.S. may now look at doing so.”

The Chinese see US real estate as a relatively moderate risk, high-return investment, Svenja Gudell, the chief economist at real-estate-research site Zillow, told Business Insider. Especially if buyers anticipate further RMB devaluation and market volatility.

Wealthy Chinese are already the largest group of foreign real-estate buyers in the US, with 16% of the single homes and condominiums purchased by foreign buyers snapped up by Chinese last year, according to the US National Homebuyers Association. They were trailed by Canadians, who bought 14% of homes.

These houses are typically more expensive properties, worth an average $831,800. Domestic buyers average $345,800 on a new single-family home, according to the US Census Bureau.

Brokers in the US can see the shifting sentiment among their Chinese real-estate clients.

Emma Hao, a broker for Douglas Elliman who specializes in Chinese clients, told Business Insider she’s already felt an increase in urgency among her buyers to purchase property in the US before the yuan devalues further.

“Because they are insecure about the economy and the politics, with the RMB devaluation, the stock market got mashed, and the real estate in China is a big bubble — there is nowhere to go.”
…
Andrew Wu, a real-estate agent at Daniel Gale Sotheby’s who caters to Chinese luxury-real-estate buyers in Long Island, told Business Insider: “They’re looking for a safe haven, and the real-estate market has always been looked upon as a safe haven for Chinese buyers.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 76 Comments

The Subprime Myth

Posted on August 31, 2015 by grim

From PBS:

The U.S. foreclosure crisis was not just a subprime event

Many studies of the housing market collapse of the last decade, and the associated sharp rise in defaults and foreclosures, focus on the role of the subprime mortgage sector. Yet subprime loans comprise a relatively small share of the U.S. housing market, usually about 15 percent and never more than 21 percent. Many studies also focus on the period leading up to 2008, even though most foreclosures occurred subsequently. In A New Look at the U.S. Foreclosure Crisis: Panel Data Evidence of Prime and Subprime Borrowers from 1997 to 2012 (NBER Working Paper No. 21261), Fernando Ferreira and Joseph Gyourko provide new facts about the foreclosure crisis and investigate various explanations of why homeowners lost their homes during the housing bust. They employ microdata that track outcomes well past the beginning of the crisis and cover all types of house purchase financing — prime and subprime mortgages, Federal Housing Administration (FHA)/Veterans Administration (VA)-insured loans, loans from small or infrequent lenders, and all-cash buyers. Their data contain information on over 33 million unique ownership sequences in just over 19 million distinct owner-occupied housing units from 1997– to 2012.

The researchers find that the crisis was not solely, or even primarily, a subprime sector event. It began that way, but quickly expanded into a much broader phenomenon dominated by prime borrowers’ loss of homes. There were only seven quarters, all concentrated at the beginning of the housing market bust, when more homes were lost by subprime than by prime borrowers. In this period 39,094 more subprime than prime borrowers lost their homes. This small difference was reversed by the beginning of 2009. Between 2009 and 2012, 656,003 more prime than subprime borrowers lost their homes. Twice as many prime borrowers as subprime borrowers lost their homes over the full sample period.
…
The authors’ key empirical finding is that negative equity conditions can explain virtually all of the difference in foreclosure and short sale outcomes of prime borrowers compared to all cash owners. Negative equity also accounts for approximately two-thirds of the variation in subprime borrower distress. Both are true on average, over time, and across metropolitan areas.
…
The authors’ findings imply that large numbers of prime borrowers who did not start out with extremely high LTVs still lost their homes to foreclosure. They conclude that the economic cycle was more important than initial buyer, housing and mortgage conditions in explaining the foreclosure crisis. These findings suggest that effective regulation is not just a matter of restricting certain exotic subprime contracts associated with extremely high default rates.

Posted in Economics, Housing Bubble, Risky Lending | 65 Comments

Will higher rates tank the market?

Posted on August 29, 2015 by grim

From Reuters:

U.S. housing market seen strong enough to handle Fed rate hikes: Reuters poll

The U.S. housing market is probably strong enough to stand up against an interest rate hike by the Federal Reserve this year, with stabilizing home prices supporting sales, a Reuters poll of top economists showed on Wednesday.

Of 22 economists surveyed, all but two said the market could withstand the Fed’s expected rate hikes. They pointed to job creation and growing demand for houses from millennials as factors contributing to the market’s resilience.

“Rates are very reasonable now, and the signal the Fed will give when they begin raising their key lending rate will push more people into the market,” said Rajeev Dhawan, director of the economic forecasting center at Georgia State University.
…
Economists say home price increases of about 5 percent are just strong enough to raise equity for homeowners to encourage some to put their properties on the market and help address a persistent shortage of houses available for sale.

The increase is also not big enough to price out first-time home buyers, economists say.

But the economists were evenly divided over whether the home ownership rate, which dropped to a 35-year low in the second quarter, would decline further before rising again.
…
“The recent strength of housing activity suggests the market is well placed to cope with a gradual rise in interest rates,” said Capital Economics economist Matthew Pointon. “Rising rates will also be accompanied by an improving labor market and gradually loosening of credit conditions.”

Some said potential buyers would try to lock in low rates, but others said staggering student debt would continue to prevent young people from buying homes.

“There are no bargains in the market now,” said FAO Economics economist Robert Brusca. “Maybe high rents will drive people to buy. But it seems the opposite is true. High house prices make high rents look cheaper.”

Posted in Economics, Housing Recovery, Mortgages | 44 Comments

Pending Home Sales Up in July

Posted on August 28, 2015 by grim

From CNBC:

Pending home sales rose just 0.5% in July

U.S. home buyer demand remained steady in July, although consumers did not react significantly to easing mortgage rates. An index of so-called pending home sales from the National Association of Realtors, which represents signed contracts, not closings, was basically flat, rising 0.5 percent from an upwardly revised June reading.

The index is now up 7.4 percent from one year ago. Pending sales slipped in June but had otherwise been rising for five months.

“Contract activity in most of the country held steady last month, which bodes well for existing-sales to maintain their recent elevated pace to close out the summer,” said Lawrence Yun, chief economist for the NAR in a release. “While demand and sales continue to be stronger than earlier this year, Realtors have reported since the spring that available listings in affordable price ranges remain elusive for some buyers trying to reach the market and are likely holding back sales from being more robust.”
…
Pending home sales in the Northeast increased 4 percent July from June and in the Midwest were unchanged. In the South, sales increased 0.6 percent. The West was the only region to see weakness, with pending home sales down 1.4 percent for the month.

Posted in Economics, Housing Recovery, National Real Estate | 51 Comments

As goes our infrastructure, so goes our economy

Posted on August 27, 2015 by grim

From Bloomberg:

N.J.’s Creaky Mass Transit Endangers Boom for Wall Street West

Jersey City, one of the few bright stars in New Jersey’s employment recovery, is in danger of being strangled by the state’s transportation crisis.

The city on the Hudson River waterfront accounted for 10 percent of the state’s job growth in the past year. It has lured residential development and companies like JPMorgan Chase & Co. and Fidelity Investments, and outpaced the state and nation in reducing joblessness. Mayor Steven Fulop expects Jersey City to surpass Newark as the state’s most populous municipality in 2016.

He’s not so sure, though, that New Jersey’s rails and roads can handle the influx. A new commuter-rail tunnel into Manhattan is at least a decade away. The existing ones are vexed by repairs and delays. Governor Chris Christie’s calls for fiscal restraint are threatening the growth of cities like Fulop’s that are dependent on public transportation.

“Jersey City’s success has largely been correlated to investment in mass transit,” said Fulop, a Democrat. “Trenton’s lack of a plan has really had and could potentially have a devastating impact.”

His 14-square-mile (36 kilometer) community of 257,300, one train stop from Manhattan, has lured financial firms in the past decade, earning the nickname Wall Street West. Fulop, 38, who worked at Citigroup Inc. and Goldman Sachs Group Inc., quit Sanford C. Bernstein & Co.’s trading desk to run for mayor and took office in 2013.

Millions of dollars in tax incentives have persuaded companies to move to Jersey City. New York Life Insurance Inc. received $33.9 million over 10 years from the New Jersey Economic Development Authority to bring 625 jobs to Goldman Sachs Group Inc.’s waterfront building, itself the recipient of a 20-year tax break. JPMorgan secured about $188 million in tax benefits over 10 years, according to filings with the development authority.

Posted in Economics, Employment, New Development, New Jersey Real Estate, NYC | 72 Comments

The Buyers Are Back In Town

Posted on August 26, 2015 by grim

Guess who just got back today
Them wild-eyed boys that had been away
Haven’t changed that much to say
But man, I still think them cats are crazy

They were askin’ if you were around
How you was, where you could be found
Told ’em you were livin’ downtown
Drivin’ all the old men crazy

From the Wall Street Journal:

Home Buyers to Make Comeback in Next Decade, Mortgage Bankers Say

Over the next decade, Americans will emerge from their childhood bedrooms or rental apartments and start becoming homeowners again, a new report says.

Homeownership has plunged to its lowest level in half a century. But over the next decade the country will see a surge in new household formation, with many of those families choosing to own rather than rent.

By 2024, the U.S. will create between 14 million and 16 million new households, according to the report to be released Tuesday by the Mortgage Bankers Association. Of those, as many as 13 million will be owners and as few as three million will be renters, the bankers say.

The report says that as many as 1.3 million additional owner households will be created each year. That is a significant pickup from the recession, when the number of owner households has been basically flat.

“It’s a huge amount of housing demand any which way you cut this,” said Lynn Fisher, MBA’s vice president of research and economics.

The homeownership rate rose from less than 64% in the late 1980s to more than 69% in the mid-2000s before dropping to below 64% again in 2015.

If current homeownership rates by age and race persist, the report’s authors expect the homeownership rate to grow modestly to 64.8%. If those rates of homeownership by group revert to higher long-term trends, they expect the homeownership rate to rebound to 66.5%.

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

Housing data to set the stage

Posted on August 25, 2015 by grim

From CNBC:

Home prices rise 5% in June vs. expectations for 5.1% gain: S&P/Case-Shiller

U.S. home prices continued to rise in June, according to the S&P/Case-Shiller Home Price Index, but the increase fell short of analyst estimates.

The 20-city index rose 5 percent year-over-year in June. Analysts polled by Thomson Reuters had expected the index to increase to 5.1 percent. In May, the index increased 4.4 percent. The National Price index rose 4.5 percent in June.

From HousingWire:

FHFA: June 2015 house prices rose 5.6% from June 2014

he Federal Housing Finance Agency house price index rose 0.2% in June, below the low-end forecast for 0.3% but still a respectable gain.

Annualized price growth was 5.6%, while prices in the second quarter rose 5.4% compared to the second quarter of 2014.

Sales rates are tracking at roughly double the pace of price growth, a mismatch that points ahead to price acceleration given how thin inventories are right now in the housing sector.

From CNBC:

US new home sales rebound in July, supply improves

New U.S. single-family home sales rose a bit less than expected in July, but the trend pointed to housing market strength that should underpin economic growth for the rest of the year.

The Commerce Department said on Tuesday sales increased 5.4 percent to a seasonally adjusted annual rate of 507,000 units. June’s sales pace was revised slightly down to 481,000 units from the previously reported 482,000 units.

Economists polled by Reuters had forecast new home sales, which account for 8.3 percent of the market, rising to a 510,000 unit-rate. Sales were up 25.8 percent compared to July of last year.

The housing market is gaining stream, with data last week showing home resales jumped to a near 8-1/2-year high in July and groundbreaking on new home building climbing to its highest level since October 2007.

From MarketWatch:

The Conference Board Consumer Confidence Index® Rebounds

The Conference Board Consumer Confidence Index®, which had declined in July, rebounded in August. The Index now stands at 101.5 (1985=100), up from 91.0 in July. The Present Situation Index increased from 104.0 last month to 115.1 in August, while the Expectations Index improved to 92.5 from 82.3 in July.

Rally – ?

Posted in Economics, Housing Recovery, National Real Estate | 59 Comments

One third of U.S. metros hit new home price peaks

Posted on August 24, 2015 by grim

From HousingWire:

Black Knight: June home prices rose 0.9% from May

Home prices rose 0.9% in June from May and 5.1% since June 2014, according to the new home price report from Black Knight Financial Services.

The Black Knight HPI combines the company’s extensive property and loan-level databases to produce a repeat sales analysis of home prices as of their transaction dates every month for each of more than 18,500 U.S. ZIP codes.

This puts national home prices up 4.9% since the start of the year and up over 26% since the bottom of the market at the start of 2012.

At $252,000, the national level HPI is now just 5.8% off its June 2006 peak of $268,000.
…
Of the nation’s 40 largest metros, 13 hit new peaks in June:

Austin, TX ($282K)
Boston, MA ($406K)
Columbus, OH ($185K)
Dallas, TX ($215K)
Denver, CO ($323K)
Houston, TX ($218K)
Kansas City, MO ($173K)
Nashville, TN ($217K)
Pittsburgh, PA ($187K)
Portland OR ($310K)
San Antonio, TX ($193K)
San Francisco, CA ($715K)
San Jose, CA ($862K)

Posted in Housing Bubble, National Real Estate | 106 Comments

Philly metro sees best spring market in years

Posted on August 23, 2015 by grim

From the Philly Inquirer:

Region – especially Phila. – had a good spring for home sales

Spring’s real estate market was the Philadelphia area’s best since the housing bubble burst in mid-2007, with significant increases in prices and sales volume in almost every county.

Between April 1 and June 30, the region’s median price for a single-family home rose to $217,000, from $212,000 in the same period last year, according to an analysis of second-quarter sales for Berkshire Hathaway Home Services by Kevin Gillen, chief economist for Meyers Research and senior research fellow at Drexel University’s Lindy Institute for Urban Innovation.

Sales volume rose 15 percent, to 18,325 from 15,961 in second quarter 2014, Gillen said, and the average time a house spent on the market dropped to 69 days from 95 days regionwide in the same period last year.

“People were back in the market, that’s for sure,” said S. Clark Kendus, of D. Patrick Welsh Real Estate in Swarthmore, Delaware County.

“Homes are flying off the market in days, especially if the price is right and everything that needs to be done has been done to the listing,” said Frank Dolski, an agent with Coldwell Banker Hearthside Real Estate in Lahaska, Bucks County.
…
Year over year, price appreciation or value – which compares a home’s recent sale price with its previous sale – also favored the city over the suburbs, as measured by Gillen. Overall, the region saw a 2.1 percent bump. Price appreciation in Philadelphia was 5.2 percent; it was 1 percent in the other 10 counties. (Nationwide, price appreciation was 4.8 percent year over year.)
…
Meanwhile, South Jersey – though still struggling with more than its share of distressed housing (bank repossessions, foreclosures, and short sales), also showed some strength.

Mike Lentz, of Keller Williams Real Estate in Sicklerville, said June median prices for Gloucester County dropped 23 percent between 2007 and 2013 – from $240,000 to $185,000. But the June 2015 median was $203,000, a 9.7 percent increase from the bottom in 2013, he said.

“We did see an extremely strong first and second quarter,” said Val Nunnenkamp, of Berkshire Hathaway Home Services Fox & Roach in Marlton, with an uptick in prices of about 2 percent to 3 percent overall, and with higher-end homes in Haddonfield and Moorestown up 3 percent to 5 percent.
…
Robert Acuff of Re/Max Services in Blue Bell, a director of Trend MLS, said that overall “the market has been gaining strength. While prices are stable, volume has increased noticeably.”

The consensus, Acuff said, is that prices will drift up in the 2 percent-to-3 percent range through the balance of the year – a healthy rate.

Noted Weichert Realtors regional vice president John Bilek: “We’re seeing the market follow the cyclical 17-year pattern that we’ve seen over the past 80 years. We are two years into an eight- to 10-year run-up.”

Posted in Housing Recovery, South Jersey Real Estate | 10 Comments

Salvage cat is out of the bag

Posted on August 22, 2015 by grim

From the NYT:

Recycled Kitchens, Salvaged Splendor

When Jonathan and Barbara Pessolano began renovating an 1850s three-family house on Staten Island earlier this year, they didn’t intend to make it a model of recycling. But a search for a deal on a Miele dishwasher led them in an unexpected direction.

After admiring a high-end dishwasher at a Manhattan appliance store, and being shocked by the price tag of about $1,300, Mr. Pessolano turned to the Internet in search of savings. He soon stumbled upon the website of Green Demolitions, a store in Fairfield, N.J., that sells used luxury kitchens and other fixtures collected by the nonprofit donation program Renovation Angel.

Browsing the store’s inventory online, Mr. Pessolano, a hospital administrator, and Ms. Pessolano, a teacher, saw complete kitchens, including cabinets, countertops and appliances, priced for a fraction of what they would cost new.

“We couldn’t believe it,” Mr. Pessolano said. “We thought, ‘Really, you buy the whole kitchen?’ It seemed impossible, or incongruous.”

But after visiting the store, they bought an enormous used kitchen from a house in Upper Saddle River, N.J., this past April for $11,100. Green Demolitions estimated the kitchen would have set them back about $60,000 new.

“The appliances alone would have cost a fortune,” said Mr. Pessolano, noting that the kitchen came with two Miele dishwashers, a 42-inch-wide GE Monogram refrigerator, a six-burner Viking range top, two Viking wall ovens and a Viking warming drawer. It also included seven lengths of granite countertop, under-cabinet lighting and more cabinets than they know what to do with. (Some leftovers may wind up in the laundry room.) “It was an unbelievable deal,” he said.

Inspired, they searched for more recycled building components, and soon discovered other stores with a similar mission to capture and divert construction materials that might otherwise end up in a landfill. At the Paterson Habitat for Humanity ReStore in Wayne, N.J., they came across two new surplus windows for $100 apiece. “It cost me more to rent the U-Haul than to buy the windows,” Mr. Pessolano said proudly.
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Construction is ongoing, but Mr. Pessolano said that using so much salvage is allowing them to do far more than they expected with their renovation budget of $100,000. “It has enabled us to achieve a certain look and style that we would not have normally been able to afford,” he said.

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