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.
…
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.

Posted in Housing Recovery, New Development, New Jersey Real Estate | 36 Comments

Existing Home Sales at 8 year high

Posted on August 21, 2015 by grim

From the WSJ:

U.S. Existing-Home Sales Reach Prerecession Pace

Sales of existing homes climbed in July to their prerecession pace, but low inventory and higher prices threaten to curtail those gains heading into the fall.

Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said Thursday. Last month’s sales pace was the highest since February 2007 and 10.3% higher than a year earlier.

Despite relatively steady gains in home sales in the past year, thinning supply and high prices loom as headwinds that could slow the recovery. As well, mortgage rates could be poised to rise when the Federal Reserve raises short-term interest rates, potentially as soon as next month.

Total housing inventory fell 0.4% at the end of July to 2.24 million existing homes available for sale, 4.7% lower than a year ago. At the current pace of sales it would take 4.8 months to exhaust the supply of homes on the market, down from 5.6 months a year ago, the NAR said Thursday.
…
The median sale price for a previously owned home slipped slightly to $234,000 from June’s $236,300, but is still 5.6% higher than a year earlier. July’s prices mark the 41st straight month of year-over-year price gains.

This combination of rising prices and thin supply has left some prospective buyers on the sidelines, especially as rising rents eat up a larger portion of incomes, making it harder to save for a down payment.

Mr. Yun noted that first-time buyers declined to 28% of all buyers, the lowest share since January. Sales are being driven largely by buyers who already own homes, he said.

Posted in Economics, Housing Recovery, National Real Estate | 123 Comments

NJ labor market tanks in July

Posted on August 20, 2015 by grim

From the Record:

New Jersey’s economic picture darkened further in July as the state lost 13,600 jobs and revised figures showed that the job loss for June was even worse than previously reported.

The state lost 12,300 private sector jobs and 1,300 government jobs in July, according to the monthly employment report by the New Jersey Department of Labor and Workforce Development.

The report also revised the June figures downwards, changing the previously announced loss of 7,400 jobs to one of 12,500. The state has now lost 26,100 jobs in two months, reversing most of the gains in the early part of the year. The state has now added just 3,700 jobs in 2015.

The one bright spot was the unemployment rate, which fell from 6.1 percent to 5.9 percent, although that was largely driven by people leaving the workforce, rather than finding jobs, the figures show.

The biggest July losses came in the leisure and hospitality sector, which lost 7,400 jobs, and the professional and business services sector, which lost 5,200 jobs. The financial activities sector lost 2,700 jobs.

The biggest gain came in the trade, transportation and utilities sector, which added 4,300 jobs, and the education and health services sector, which added 300 jobs.

Posted in Demographics, Economics, Employment, National Real Estate | 29 Comments

Millennials can’t catch a break

Posted on August 19, 2015 by grim

From the Washington Post:

Are home prices rising too quickly for millennials?

Many young workers today find that home prices are rising faster than their pay, making it harder for them to set aside the cash they need for the purchase, studies show.

The typical first-time home buyer today purchases a house that costs 2.6 times his or her annual income, according to a report released by Zillow this week. In the 1970s, new home buyers found homes that cost about 1.7 times their annual pay, the study found.

The shift means that people need bigger down payments to make the transition to home ownership. At the same time, they face obstacles that make it harder for them to save, such as student loan bills, higher rent costs and more expensive child care.

People have to strive for more expensive homes today than they did in the past because home prices have appreciated over time while wages have stayed mostly flat, says Svenja Gudell, chief economist for Zillow. “We’re seeing that first-time home buyers are renting for longer,” Gudell says. “Homes are more expensive so it takes them a while to get to that stage in their life.”

Consider, the typical home purchased by first-time home buyers cost a median $140,000 between 2010 and 2013, up from an inflation adjusted $87,300 in the 1970s, the study found. Meanwhile, the median income for first-time home buyers was $54,000 in 2013, about the same as it was in the 1970s, Zillow found.

As a result, aspiring home owners now spend more time than ever renting while they save up for the big purchase. Workers rent for six years on average before buying their first home — more than double the time spent renting in the 1970s, the report found. The median age for first-time home buyers is also up to 33, from 30 in the 1970s. Home buyers are also less likely to be married today.

Posted in Demographics, Economics, Employment, Housing Bubble | 117 Comments

Shocker – Not foreclosing on delinquent homes means high delinquencies

Posted on August 18, 2015 by grim

From the Star Ledger:

N.J. has highest rate of distressed mortgages in nation, study shows

A greater share of residential mortgages in New Jersey were distressed at the end of the second quarter of this year than any other state in the nation, new data shows.

The data from the Mortgage Bankers Association’s National Delinquency Survey shows 10.2 percent of mortgages in the state are either in foreclosure or at least three months behind on payments, according to Patrick O’Keefe, director of economic research with CohnReznick. The national rate stood at 3.95 percent.

O’Keefe wrote in a memo that New Jersey’s distressed mortgage rate was the “highest among all states for the seventh consecutive quarter.”

The association’s survey also shows the percentage of mortgages in New Jersey in the foreclosure process remained top in the nation despite a drop in the state’s foreclosure inventory.

“As has been the case since the fourth quarter of 2012, New Jersey, New York, and Florida had the highest percentage of loans in foreclosure in the nation,” Marina Walsh, the Mortgage Bankers Association’s vice president of industry analysis, said in a statement.

New Jersey’s foreclosure inventory rate was 7.31 percent, according to the report, while New York had the second highest rate at 5.31 percent. The report also noted that both states have a judicial foreclosure process.

“New Jersey’s relatively slow pace in reducing it distressed mortgage inventory is partially attributable to its status as a ‘judicial foreclosure’ state,” O’Keefe wrote. “Court supervised foreclosures entail procedures that are more rigorous – and time consuming – than administrative actions.”

Posted in Foreclosures, Politics, Risky Lending | 64 Comments

Mortgage delinquencies down 20% since last year

Posted on August 17, 2015 by grim

From HousingWire:

TransUnion: Mortgage delinquency rates continue rapid decline

The mortgage delinquency rate — the rate of borrowers 60 days or more delinquent on their mortgages — continued its rapid decline, falling to 2.72% in Q2 2015, according to TransUnion.

The delinquency rate dropped 20% in the last year (3.42% in Q2 2014) and has contracted by half in just the last three years (5.39% in Q2 2012). Millennials led the overall decline in mortgage delinquencies as those consumers under the age of 30 experienced a yearly drop of 26.9% from 2.32% in Q2 2014 to 1.70% in Q2 2015.

Forty-eight states and all of the top 10 largest major metropolitan statistical areas (MSAs) saw double-digit year-over-year declines in seriously delinquent balances. Miami (down 40% from 8.87% in Q2 2014 to 5.31% in Q2 2015) and Los Angeles (down 29.1% from 2.62% in Q2 2014 to 2.07% in Q2, 2015) experienced the largest percentage declines.

“This is the lowest mortgage delinquency level we’ve seen in several years – down from a peak of nearly 7% in early 2010,” said Joe Mellman, vice president and head of TransUnion’s mortgage group. “This is largely due to foreclosures and other seriously delinquent accounts continuing to work their way through the foreclosure process, as well as a reflection of the high credit quality of recent originations.“

Posted in Foreclosures, Mortgages, Risky Lending | 69 Comments

The rent squeeze continues

Posted on August 16, 2015 by grim

From the WSJ:

Renters Spent a Record-High Share of Income on Rent This Spring

The rental squeeze is getting worse, according to a new report by Zillow, as people are paying the highest-ever percentage of their income on rent.

Renters can expect to pay 30.2% of their income on rent, according to a Zillow analysis of rental and mortgage affordability in the second quarter released Thursday. That is the highest percentage ever, said Zillow, which has data going back to 1979.

The number is significant in part because it shows rental burdens creeping past 30%, which economists consider an affordable proportion of income for people to pay on rent.
Between 1995 and 2000, renters on average spent just over 24% of their incomes on rents.

“Our research found that unaffordable rents are making it hard for people to save for a down payment and retirement, and that people whose rent is unaffordable are more likely to skip out on their own health care,” said Svenja Gudell, Zillow’s chief economist.

Rental affordability worsened in 28 of the 35 metro areas covered by Zillow. It remained especially poor in the New York area and pricey West Coast cities. Los Angeles renters could expect to pay 49% of their incomes in rent. San Francisco wasn’t far behind, with renters paying 47% of their incomes on rent.

Even in New York and northern New Jersey–long considered a pricey place to rent–affordability has worsened significantly. Renters in the city historically paid about 25% of their incomes on rent and now pay 41%.

In Miami, a city that was long considered affordable but has been dramatically transformed by luxury condos, renters now pay 44.5% of their incomes on rent.

Renters have been becoming increasingly burdened thanks to a combination of rents rising due to increased demand and limited supply and income levels remaining relatively flat. That has put a squeeze even on working, middle-class households.

Posted in Economics, Housing Recovery, National Real Estate | 9 Comments

Bergen County real estate won’t be the same

Posted on August 15, 2015 by grim

Bob Aman was a teacher to many, and for a very fortunate few, someone we could call a mentor. Bob, you’ll be truly missed.

Robert “Bob” Santry, Sr., 87, of Ho-Ho-Kus, passed away Sunday, August 9th. Beloved husband of 61 years to Maryanne (nee Neil). Loving father of Rosemary “Roz” Kenny and husband Steven, Robert Santry Aman, Jr. and wife Julianne and Thomas Aman. Cherished grandfather of Ashley Nickl (Chris), Marielle Kenny, Holly, Peter (Hannah), Josh, Elizabeth and Caleb Aman and Oliver, Bridget and Tess Aman. Devoted great-grandfather of Elizabeth Kenny. Caring brother of John Aman, Marilyn Little and the late William Aman. Born and raised in Congress Lake, OH, Bob graduated from Mt. Union University in Alliance, OH. He served as an Officer in the US Air Force and Air Force Reserve and continued his education at Baylor University in Texas and University of Michigan. Bob worked in automobile manufacturing for both Chrysler Corp. and Ford for many years. He was then an instructor, auctioneer and real estate broker, owning two firms in Ridgewood, D.R.I. Real Estate Company and Discount Realty, Inc. A dedicated daily Mass parishioner of St. Luke’s R.C. Church in Ho-Ho-Kus, Bob passionately taught real estate and truly enjoyed spending time with his family.

Posted in General | 9 Comments

Always knew there was something strange about you

Posted on August 14, 2015 by grim

From NJ 101.5:

Whoa, N.J.: You sure are naked a lot

Real Estate company Trulia partnered with Whisper — an online community in which participants share their thoughts anonymously — and found New Jerseyans are more likely to parade around in the nude at home than people in any other state.

It may not have been the world’s most (ahem) rigorous study, but it sure caught our attention.
“New Jersey came in No. 1 for the most likely to be nude at home, they are an astonishing 142 percent more likely to be nude at home than their counterparts in Louisiana, which comes in second,” said Laura Emery, a Trulia representative.
…
“We have a few exact quotes from people,” Emery said. “One is ‘sometimes when I’m home alone I choreograph naked dances throughout my house.’ Others are ‘when I’m home alone I love to run naked and in my house and pretend I’m a horse,’ and ‘I’m naked so much at home that when my dog sees me put on clothes, she gets excited because she knows we’re going somewhere.’”
The survey was part of a Trulia “Truly Home” campaign.

“The idea was to unveil the most bizarre unapologetic things that people do at home, focusing on how people feel comfortable and do a little bit of zany stuff when they feel truly at home and comfortable,” said Emery.

After New Jersey and Louisiana, the states with the highest percentage of people who marched around naked at home were Mississippi, South Carolina, Rhode Island and Connecticut.

So why do people in Jersey like to run around naked in their own homes? No one seems to be sure.

“I can’t say,” said Emery. “I think it’s probably just because there are some awesome people there.”

Posted in Humor, New Jersey Real Estate | 69 Comments

The Shift To Urban Core Continues

Posted on August 13, 2015 by grim

From HousingWire:

Fitch: U.S. housing demand pendulum swinging back to city centers

Amid stabilizing U.S. home price growth lies a demographic shift that is underway across much of the country, according to Fitch Ratings in its latest quarterly U.S. RMBS Sustainable Home Price Report.

Significant demand is returning to city centers following decades of suburban and exurban growth. Since 2000, home prices have grown 50% faster in urban centers than in the broader MSA areas, with population growth trends beginning to favor city centers as well.

‘This demand shift implies that city centers will continue to see growth even where regional prices have been stagnant, such as Atlanta or Chicago,” said Fitch Director Stefan Hilts.
…
This trend is clear in nearly every city analyzed, but seems to be particularly strong amongst growing mid-sized markets, including Nashville, Denver, Portland, and Cincinnati. With increased preference for urban living, one implication going forward is ‘the likelihood for home ownership rates to remain persistently low and declining as more potential buyers opt to live in cities where rentals dominate,’ said Hilts.

With continued upward economic pressure and the pace of price growth slowing in many cities, Fitch’s model shows declines in overvaluation for a number of cities across the country.

Posted in Demographics, Housing Recovery, National Real Estate, New Development | 78 Comments

Schumer’s Tunnel?

Posted on August 12, 2015 by grim

From REW:

Hudson River tunnel project back on, says Schumer

The Gateway Project, a plan to build a high-speed railway corridor under the Hudson River between New Jersey and New York, is back on.

A day after Amtrak president Steven Gardner testified before the New Jersey Senate Legislative Oversight Committee about the railway’s outdated equipment and much-needed repairs, Senator Chuck Schumer proposed an updated tunnel as a solution.

The Gateway Project was originally proposed in 2011 at a cost of $14 billion, after New Jersey Governor Chris Christie thwarted a similar plan called Access to the Region’s Core (ARC) in 2010 over cost concerns.

Amtrak’s only problem with the Gateway Plan was how to finance it.

But on Monday, Schumer told an audience at New York University’s Rudin Center for Transportation Policy & Management that the project should be partially funded by creating a development group called Gateway Development Corporation.

“The scale of the project is so large that we need to leverage the resources of all transportation and state agencies we have to achieve progress,” Schumer said. “I’m going to try to get the federal government to pay for as much of this as possible.

“We are fast approaching a regional transportation Armageddon: the busiest rail line in the country stranded without a way in New York.”
…
Though the original tunnel plan was priced at $14 billion, Schumer said that two new tunnels should be build and, with repairs to exisiting tunnels, the price could top $25 billion — a number that will continue to grow the longer the project takes to complete.
…
A planned right-of-way would run parallel to the current one between Newark Penn Station and New York Penn Station in Midtown.

The project would construct new rail bridges in the New Jersey Meadowlands, create new tunnels under the Hudson Palisades and the Hudson River, convert parts of the James Farley Post Office into a rail station, and add a terminal annex to NY Penn Station.

Posted in New Development, North Jersey Real Estate, NYC | 84 Comments