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

Housing market addicted to heroin?

Posted on August 11, 2015 by grim

From HousingWire:

Can this sickly housing recovery survive without artificially low interest rates?

Other metrics in housing may be showing worrying signs of a slowdown, but one thing is evident and that’s housing demand is continuing to strengthen.

That’s a mixed bag.

Granted, people may not have the incomes to keep pace with the outsized (though slowing) pace of home price growth. And credit restrictions are either too tight or too loose, depending on which assumptions you start with.

But demand is strong, and that’s a critical component of the whole supply, demand and price thing that often gets put on the backburner.

Let’s break it down. Total home sales increased to nearly 6 million annualized in June. This was the fastest pace of sales since before the financial crisis and is a clear sign that the housing market is gradually normalizing.

The dark cloud to that silver lining is that the decline in pending sales suggests that existing sales, which make up around 90% of the market, may drop back in the coming months.
…
One big variable is the issue of a pending Federal Reserve interest rate hike. Affordability is still there even with a rate hike, but there’s the problem that the recovery in mortgage lending has stalled.

The latest housing affordability reading for May showed the index dropping back to the low end of the post-crisis range, due primarily to the steady rise in home prices. Further declines in affordability seem likely in June and July, as home prices rose further and mortgage rates moved higher.

In the area of price, the CoreLogic index appears to be falling back into line with other measures, which point to annual price growth of roughly 5%.

That’s still not low enough to accommodate the lousy level of job and wage growth that the economy has eked out under the current administration and the hobbling effects of Dodd-Frank, but it does cool concerns that prices were ridiculously out of whack with income. (Now they’re just badly out of whack.)

If you can believe the last two quarters’ GDP — and I can give you a dozen reasons to have doubts (cough, cooking the books) there was modest growth so far in 2015, but tepid is too kind a word. Especially when you look at the quality and types of jobs employers were able to add — part-time, low-wage jobs, with record-low workforce participation.
…
The question becomes can this sickly economy and housing recovery survive without the life-support of artificially low interest rates?

That’s the trillion-dollar question, which, considering the level of debt and deficit, is an even more expensive proposition.

Posted in Housing Recovery, Mortgages, National Real Estate | 69 Comments

Good time to stay put?

Posted on August 10, 2015 by grim

From HousingWire:

Consumers don’t think it’s the right time to buy

The percentage of consumers who believe it is a good time to buy dropped to 61%, an all-time survey low­, right as summer is about to come to a close.

According to the July Housing Survey from Fannie Mae, consumer attitudes toward the home-buying environment stumbled last month despite positive home-price change expectations.

And the share of consumers who believe now is a good time to sell a home didn’t fare too much better, dropping 7 percentage points to 45%.

“Deteriorating consumer assessments of income growth over the past year as well as increased caution around the direction of the economy and personal financial expectations may be contributing to the pullback in sentiment,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

“Still, it is premature to read too much into this month’s results as the survey was taken around the time of increased global turmoil, including Greece’s potential default and China’s stock market plunge, which has receded somewhat. Most of our key indicators are as strong or stronger than they were at this time last year, which is indicative of an improving housing market this year,” he explained.

Posted in Economics, Housing Recovery, National Real Estate | 58 Comments

Big ticket back in BC?

Posted on August 8, 2015 by grim

From the Record:

Two houses in Alpine sell for more than $10 million

Two large Alpine homes have sold for more than $10 million this summer — the priciest deals in Bergen County in more than a year, though the properties sold at much lower prices than the owners once sought.

A 22-room brick manor at 44 Rio Vista Drive was sold by Yoram and Yacobina Koby for $13.9 million. The buyer bought it through a trust to remain private, according to the listing agent.

And a 21-room stone chateau at 5 Buckingham Drive was sold for $11 million by Marc Saperstein, a personal injury lawyer who practices in Teaneck, and his wife, Shelly. The buyer, according to public records, is Frank D. Zhang.

Both transactions were cash deals.

Like other homeowners affected by the housing crash, the owners of these luxury properties accepted lower prices than they once expected. Both homes had been on the market, off and on, for years, at significantly higher prices. The Rio Vista Drive property was first listed in 2006 for $24.9 million — $11 million more than its recent sale price.

The Buckingham Drive home was first listed in 2009, for $16.5 million.

Even with the lowered sale prices, the two sales were still the only deals above $10 million in Bergen County since 2013.

Last year, the highest-priced sale in the county was for $7 million, also in Alpine, according to the New Jersey Multiple Listing Service. In 2013, there was a $10.5 million sale in Englewood and a $13.4 million sale in Alpine.

Posted in Housing Recovery, New Jersey Real Estate | 40 Comments

Jobs Day

Posted on August 7, 2015 by grim

From MarketWatch:

Here’s what to watch in the July jobs report

Another round of solid hiring gains in July won’t guarantee that the Federal Reserve will raise interest rates next month — but a good number could set the oven to preheat.

Even if job creation falls short in July and wages don’t budge, however, the Fed is unlikely to take a chill pill unless the economy takes a dramatic turn for the worse. So far there’s no sign of that.
…
The U.S. is expected to show 220,000 new nonfarm jobs in July when the government on Friday issues the employment report, according to economists polled by MarketWatch. That would fall below June’s preliminary 223,000 reading, but be slightly above the 208,000 average in the first six months of the year.
…
The midyear jobs report is one of the hardest to adjust for season hiring patterns because of large shifts in employment in the auto industry and education, among other things. Reported job creation in July is the second weakest of any month since the recovery began more than six years ago. And employment growth during the month has undershot the annual average since 2010.
…
The unemployment rate seems very low at just 5.3% and economists expect it to remain there. But the official rate leaves out nearly 17 million people who’ve either gotten too discouraged to look for work or who can only find part-time jobs.

In June, for example, the broader U6 jobless rate that includes “involuntary” part-timers and discouraged workers stood at 10.5%. While it’s been falling steadily, the rate is sharply higher compared to the 8.4% average that prevailed shortly before the Great Recession.

The Fed said it wants to see “some further improvement” in the labor market before raising a key short-term interest rate, now near zero, for the first time since 2006. A U6 rate tumbling toward 10% or below would be one such sign.

Posted in Economics, Housing Recovery | 49 Comments

Tax breaks working to bring new jobs?

Posted on August 6, 2015 by grim

From the Star Ledger:

JP Morgan moving 2,150 jobs to Jersey City, report says

JP Morgan Chase has formally decided to relocate 2,150 jobs from Manhattan to an office building here, according to reporting by The Wall Street Journal Wednesday.

Last month, state officials agreed to tax breaks of $188 million over 10 years to persuade the financial firm to expand its existing operations in Jersey City, which will now bring the total number of Morgan employees to about 7,000. The firm had been considering locations in Delaware and Ohio, NJ Advance Media reported in July.

The tax breaks were a significant factor in the bank’s decision to bring the jobs to New Jersey instead of the other states, where JP Morgan also has facilities.
…
The new employees would have a median salary of $164,000, according to the EDA analysis. The move is expected to generate more than $665 million for the state over 20 years, the report also said.

Posted in Economics, Employment, New Jersey Real Estate, NYC | 66 Comments