Clear ’em out

Posted on August 3, 2016 by grim

From Dow Jones:

Foreclosures Drop in New York and New Jersey as Courts Pick Up Pace

dward Navarro, a former telephone clerk on the New York Stock Exchange, has been facing foreclosure on his attached two-family house in Woodhaven, Queens, since 2009.

On Friday, the 69-year-old had yet another day in court, his 12th in 14 months. While he was there, more than 200 people gathered in a nearby room, as court-appointed referees rapidly auctioned off 16 foreclosed properties, most of them modest homes like his.

Now there are signs of change. The number of pending foreclosures in New York City fell 5.8% in the first half of 2016, a steeper drop than in any full year since 2008, according to court-system data. In Nassau, Suffolk and Westchester counties, the number of pending cases fell 14% over the same period, the largest decline recorded in those regions.

In New Jersey, new foreclosure filings fell 28% in the first half of year compared with the same period in 2015, according to court-system data.

The drop in foreclosures has been attributed to several factors, from an improving economy, to speedier courts that are cutting down the backlog, to rising property values that prompted lenders to move more quickly with auctions.
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Then in January, Justice Lawrence Knipel, the administrative judge for civil cases in Supreme Court in Brooklyn, ordered 6,000 foreclosure cases that had been handled by more than 20 judges to be turned over to a single judge. In an interview, he said that some judges had been reluctant to move the cases forward.

“Who wants to sign foreclosures? Not many people,” he said. “Judges were taking their time.”

Meanwhile, the bubbling real-estate market is driving up home values even in lower-priced New York neighborhoods with many foreclosures, such as Jamaica. Average New York City home prices rose 10% in the second quarter from the same quarter a year ago, according to the Real Estate Board of New York, to a new high. In Queens, average home prices rose 9% over the same period, and they were up 7% in Jamaica.

A study by PropertyShark.com, which tracks foreclosures in New York City, found 673 New York City properties scheduled for auction for the first time during the second quarter, a 33% increase from the year-ago period. The biggest increase was in the Bronx, followed by Queens and Brooklyn. That upward trend continued into July: In Queens, first-time auctions were up 58% from July 2015.

Jacob Inwald, director of foreclosure prevention for Legal Services NYC, a nonprofit providing legal assistance to low-income communities, said that for years, when home values fell, lenders “had no particular incentives to foreclose,” since that would make them responsible for a property’s upkeep.

Now, he said, “there are profits to be had.”

Posted in Foreclosures, Housing Recovery, New Jersey Real Estate, NYC | 63 Comments

Housing Development Dips

Posted on August 2, 2016 by grim

From the Record:

NJ home construction running 17% below last year’s pace

After a dramatic, four-year rebound from the worst housing downturn in generations, home construction in New Jersey has fallen back this year, running about 17 percent behind 2015’s pace.

Through June, according to the U.S. census, builders got the approval to start 13,681 housing units in the Garden State, down from 16,617 in the same period in 2015. Multifamily construction continued to dominate the market, as it has for most of the housing recovery, accounting for 64 percent of the building permits in the state.

The drop in construction activity may reflect the difficulty of finding new land to develop, after several years of accelerating construction activity.

“There aren’t as many opportunities as there were three or four years ago,” said George Capodagli, owner of Capodagli Construction Co./Meridia in Linden, which is constructing a 115-unit apartment building in downtown Hackensack’s redevelopment zone. Capodagli has been involved in redevelopment projects in Linden, Bound Brook and Rahway, generally seeking walkable, urban sites with transit access to New York City.

“You have to get creative to find sites where you can build multifamily, and towns that are willing to hear you out and be open-minded about multifamily buildings,” said Adam Pasternack, a senior vice president at Russo Development of Carlstadt. Russo is getting ready to start construction on a 110-unit apartment building on the site of a former lumber yard next to the Waldwick commuter train station. Since North Jersey is already largely developed, builders must usually seek out redevelopment sites.
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So far this year, northeastern New Jersey has led the way in home construction, especially in multifamily rentals along the Hudson River in Bergen and Hudson counties. Developers are betting on high demand as households are priced out of Manhattan and Brooklyn.
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Jersey City has approved the largest number of housing units of any municipality in the state, as developers transform older neighborhoods with sleek new high-rises. Fort Lee is ranked second in the state, as the redevelopment of a 16-acre parcel next to the George Washington Bridge is bringing hundreds of new apartments to town in two developments — the Modern, which consists of two apartment high-rises, and a mixed-use project called Hudson Lights.

Ocean County is also experiencing a building boom, according to the New Jersey Department of Labor, which studies home construction patterns. Unlike in the northern part of the state, single-family homes dominate in Ocean.

Posted in Housing Recovery, New Development, New Jersey Real Estate | 59 Comments

Money See Money Do

Posted on August 1, 2016 by grim

From CNBC:

Real estate buying habits linked to people’s Facebook behavior

Call it fear of missing out — on housing investments.

Our decisions about buying property are heavily influenced by our social media networks, according to new research from economists at New York University, Harvard and Facebook. They found that people whose Facebook friends experience increases in house prices are far more likely to invest in property over the following two years.

The researchers set out to study whether a person’s social media network would influence their housing investment decisions, and if those decisions could show an effect on local housing markets in aggregate. On both counts, the research suggests a significant impact. That’s taking into account aspects like income, one of the main factors of house-price dispersion.

A person who is currently renting and whose Facebook friends saw their homes appreciate 5 percent more than the market average in the past two years is 3.1 percentage points more likely to buy a home themselves in the next two years. The researchers also found that people are more likely to buy a larger house, pay more for a given house and make a larger downpayment.

“We were relatively certain that we’d see some effect,” said Johannes Stroebel, professor at NYU’s Stern School of Business. “What we didn’t know was how large that effect would be.”

Posted in Demographics, Economics, Housing Recovery | 59 Comments

Sunday Open Discussion

Posted on July 31, 2016 by grim

Down at the beach and left my laptop charger at home…

Carry on.

Posted in General | 38 Comments

Affordability and inventory weigh on pending sales

Posted on July 28, 2016 by grim

From HousingWire:

Affordability constraints hold back pending home sales

Pending home sales remained in a holding pattern in June, however they increased slightly, according to the Pending Home Sales Index from the National Association of Realtors.

Constricted supply and low affordability prevent a larger boost in home sales, even while mortgage rates linger near their all-time lows, according to the index.
National home prices increased by 5% annually in May, according to the S&P CoreLogic Case-Shiller Indices.

New home sales were up once again in June, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. In fact, they even reached an eight-year high.

“Until inventory conditions markedly improve, far too many prospective buyers are likely to run into situations of either being priced out of the market or outbid on the very few properties available for sale,” NAR Chief Economist Lawrence Yun said.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, inched 0.2% to 111 in June, up from 110.8 in May and is now 1% higher than June 2015’s 109.9. With last month’s minor improvement, the index is now at its second-highest reading over the past 12 months, but is noticeably down from this year’s peak level in April 115.

An index of 100 is equal to the average level of contract activity during 2001, the first year to be analyzed. Coincidentally, 2001 was the first of four consecutive record years for existing-home sales.

“With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cool down after a very active spring,” Yun said.

“Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6% from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth,” Yun said.

Posted in Economics, Housing Recovery | 159 Comments

Slow grind

Posted on July 27, 2016 by grim

From the Record:

Home prices edge up in New York metro area

Home values are edging up slowly in the New York metropolitan area, including North Jersey, the S&P CoreLogic Case-Shiller index reported Tuesday.

Single-family home prices in the region rose 2 percent in the 12 months ending in May, Case-Shiller said. That compares with a national increase of 5 percent.

As the nation continues to recover from the worst housing downturn in decades, home prices in the region are still stuck at the level of autumn 2004, more than a decade ago, and remain about 16 percent below their mid-2006 peaks during the housing boom. Nationally, home values are equal to their levels in December 2005, and are about 9 percent below their 2006 peaks.

The New York area’s price increase was the slowest in the nation, continuing the recent pattern. Home values are rising most rapidly in the West, led by Portland, Seattle, Dallas and Denver.

Case-Shiller does not measure home values by county, but according to the New Jersey Realtors, single-family prices dipped 1.1 percent in Bergen County to a median $460,000. In Passaic, the median price rose 5.3 percent to $300,000 in May. The number of sales was up sharply in both counties over the 12 months ending in May, according to NJAR.

Home prices in this area are not rebounding as quickly because they didn’t fall as far as in other parts of the nation during the housing crash. In addition, New Jersey is still dealing with a backlog of distressed properties that piled up during the foreclosure crisis. Those properties tend to sell at a discount and put downward pressure on neighboring property values.

“Overall, housing is doing quite well,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Posted in Housing Recovery, New Jersey Real Estate | 81 Comments

Future so dark you better bring a flashlight

Posted on July 26, 2016 by grim

From Money Magazine:

The Most Pessimistic Workers Live in This State

Ah. New Jersey. The Garden State. Home to Bruce Springsteen, Gov. Chris Christie, and the most pessimistic population of workers in these United States. That is, according to a new report by PayScale, in which we surveyed over 425,000 workers to find out where the most pessimistic workers are. Let’s dig into the data and see if we can understand why New Jersey workers are feeling so down in the dumps about their employers.
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hat’s Up With the Pessimism in New Jersey?

In our survey, we asked respondents how strongly they agreed with the following statement: “I am confident my employer has a bright future.” More New Jersey workers voted “strongly disagree” than any other state. Although we don’t have any data to support exactly why NJ workers feel so down, here are some possible and completely unscientific potential explanations:

New Jersey’s Economy Has Been (and Still Is) Tanking

“…New Jersey remains a lost soul in the nation: It is one of just three states that saw more people falling into poverty than rising above it,” writes Michael L. Diamond at Asbury Park Press.

The state’s job growth rate is the second lowest in the nation, just above Alaska, Diamond notes, citing a report that found that New Jersey added just 558 jobs per month on average between August 2013 and August 2014.
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Many Long-Time New Jersey Employers Have Left the State

High corporate taxes and a relatively high cost of living mean trying economic conditions for New Jersey employers. Many have recently departed for easier environments. Some of the latest large-sized companies to make the move include Hertz and Mercedes Benz.

People Are Fleeing New Jersey Faster Than Any Other State

According to NJ.com, more than two million people left New Jersey between 2005 and 2014. In 2013, the country led the nation in outbound moves; of the total number of moves, 63.5 percent were outbound, while 36.5 percent were inbound.

Bottom Line

While we can’t say for sure why more New Jersey workers feel pessimistic about their employers’ future, the combination of slow job growth, a tough business environment, and a high cost of living can’t boost their optimism. Given the facts, it would be hard for many workers to say that they felt their employers had a bright future.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 86 Comments

Who to blame for higher home prices?

Posted on July 25, 2016 by grim

From the WSJ:

Regulatory Costs Inflate New-Home Prices, Builders Say

As the cost of construction permitting has risen over the past decade, Atlanta home builder Dennis McConnell has taken a new approach with customers.

He now itemizes the regulatory costs so buyers can see firsthand why the price tags for his houses are so high. Among recent charges he has outlined: $8,000 for a new type of storm-water capture device required for each house, $3,500 for customized architectural plans required on every lot and about $15,000 to remove a tree from the property.

With every new regulation, “the more expensive it becomes,” said Mr. McConnell, president of Healthy House of Georgia. “I don’t build affordable houses anymore.”

As home builders pick up the pace after a punishing downturn, they face a bevy of new regulations and higher fees governing everything from environmental quality and park access to regulations on the amount of brick on a home exterior. Builders say many of the new requirements are well-meaning, but added up they translate to higher costs that are passed on to prospective purchasers.

For the past five years, the median new home price has been 32% to 38% higher than the median price of a resale home, according to data from the U.S. Census and the National Association of Realtors, the largest such gap since the figures started being tracked in the 1960s. Compliance costs are one of many factors affecting prices of new homes, economists said. Builders have also focused more on the move-up and premium markets throughout the economic recovery, meaning a tendency toward larger, pricier homes.

Several recent studies have documented how increased regulatory and permitting costs affect prices. A report by John Burns Real Estate Consulting in Irvine, Calif., concluded that new homes have become “permanently more expensive to build” because of increased regulations.

The study surveyed more than 100 building-industry executives, asking for examples of costs that didn’t exist a decade earlier. New regulations included a survey required in some areas of the Midwest to determine whether endangered bats are on a property, which builders said can cost $10,000 or more for each new development.

A report in May from the National Association of Home Builders found that the average cost for builders to comply with regulations has risen nearly 30% over the past five years. A study from housing-research firm Zelman & Associates calculated that local “impact fees” charged to builders and developers to pay for services such as roads, sewers and parks have climbed 45% since 2005 to an average of $21,000 per home across 37 major markets.

Posted in Economics, National Real Estate, New Development | 62 Comments

New Economik Report from Shillow

Posted on July 23, 2016 by grim

From Zillow:

It’s well known that a lack of homes for sale is limiting home buyers’ choices this home shopping season. But this inventory shortage is also contributing to another home buying hurdle – along with limited options, buyers also have increasingly limited time to make a decision on a home purchase.

The typical U.S. home sold in May (the latest month for which data is available) spent just 78 days on the market, more than a week less than the same time last year (86 days), according to the Q2 2016 Zillow Real Estate Market Report (figure 1). And not only is the time a home spends on the market currently much less than recent months, it’s also well below historic norms. Since the beginning of 2010, the long-term monthly average of the time a typical U.S. home spent on the market before selling is roughly 111 days.

Homes are selling more quickly this year than last in 27 of the nation’s 35 largest metro housing markets – in some cases, much more quickly. In Charlotte (70 days), Philadelphia (98 days) and Pittsburgh (97 days), homes are selling more than two weeks faster this spring compared to a year ago. In the eight markets where homes are taking longer (or at least as long) to sell this year than last, the phenomenon may be more attributable to the fact that realistically, homes in those areas can’t sell much more quickly. In seven of those eight markets, homes are selling more quickly than the current national average of 78 days (Miami, at 103 days, is the lone exception).

Markets in the Bay Area and Pacific Northwest epitomize this need for speed. In San Francisco and San Jose, the typical home sold in just 43 days in May, the fastest-moving large markets in the nation. In Seattle homes sold in 47 days, and in Portland homes sold in 51 days. Considering it typically takes a minimum of 30 days (and often 45 days or longer) for a home sale to close once an initial offer is accepted, the window a buyer realistically has to look at a home and decide whether to make an offer in these markets is astoundingly brief.
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When there are so few homes on the market in the first place, it makes sense that those that are available would be scooped up more quickly. But in addition to the speed of the market being a product of limited inventory, that speed may also be contributing to that scarcity of inventory too. Potential sellers might love the attention their home will get once listed – and the chance for a windfall profit if a bidding war breaks out over it. But many of those sellers also have to turn around and become buyers. They may end up in a bidding war of their own once they try to buy in this environment, if they can even find a suitable home to begin with. Instead, it’s likely that many current homeowners who don’t have to sell are choosing to stay put rather than enter the fray – which in turn only contributes to tighter inventory.

It all adds up to a very competitive market for buyers, and a fast-moving (and potentially very lucrative) market for sellers. In an environment where one may have only a few days to decide to make an offer on a home, it’s critical that buyers and sellers enter the market prepared and with clear eyes, and to resist the temptation to settle for a home that may not suit their needs in the interest of just buying a place. It’s tough going out there, but the right home will become available for those that are patient but prepared to strike fast once it comes on the market.

Posted in Economics, Housing Recovery, National Real Estate | 77 Comments

First time buyers coming back?

Posted on July 22, 2016 by grim

From HousingWire:

Existing home sales increase 4 months in a row

It’s no shock that existing home sales increased again this month, marking the fourth consecutive month of increases, according to the National Association of Realtors.

What is new, however, is that these home sales were boosted by a flood of first-time homebuyers entering the market, the largest quantity in four years, in fact.

The Northeast was the only outlier, with a decline in closings in June as sales fell to their lowest overall share since July 2009.

“Sales of existing homes were unexpectedly strong in June, edging up for the fourth consecutive month to a nine-year high and defying expectations for a modest monthly decline,” Zillow Chief Economist Svenja Dudell said. “The gain is even more surprising given a continued shortage of homes available for sale, with inventory down almost 6% compared to the same time a year ago.”

The total existing home sales, completed transactions that include single-family homes, town homes, condominiums and co-ops, increased by 1.1% to a seasonally adjusted annual rate of 5.57 million in June, up from May’s downwardly revised 5.51 million.

Sales are now up 3% from June 2015, and remain at their highest annual pace since February 2007, when sales were at 5.79 million.

“Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” NAR Chief Economist Lawrence Yun said. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.”

On the other hand, there is a question about whether this pace can continue in the coming months.

“Looking ahead, it’s unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing,” Yun said.

The median existing home price in June hit $247,000, an increase of 4.8% annually, according to the report. June’s increase marks the 52nd month of annual increases, and even surpassed May’s peak median sales price of $238,900.

“Existing home sales edged out a small gain in June, helped by a rise in first-time buyer numbers,” Capital Economics Property Economist Matthew Pointon said. “But the months’ supply of homes for sale has fallen to its joint-lowest level for 11 years, and the recent drop in mortgage rates following the Brexit result has not given mortgage applications for home purchase a boost.”

“Therefore, it seems unlikely that existing home sales will continue to rise,” Pointon concluded.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 81 Comments

The office building is dead, long live industrial and warehouse

Posted on July 20, 2016 by grim

From the Record:

N.J. industrial vacancy rate hits record lows

As consumers increasingly shop online, the stuff they buy is filling up New Jersey warehouses, pushing industrial vacancy rates to historic lows, Cushman & Wakefield reported Monday.

The vacancy rate for northern and central New Jersey fell to 5 percent in the second quarter, and asking rents reached their highest levels since 2000, Cushman & Wakefield reported. The average asking rate for warehouse space was $6.55 a square foot, up more than 26 percent over the past three years.

Rental activity was most robust in the Meadowlands and at Exit 8A of the New Jersey Turnpike, according to Jason Price, Cushman & Wakefield’s research director for the tri-state suburbs.
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Online sales are the main engine driving the demand for warehouse space.

“As quality industrial space in northern and central New Jersey dissipates, demand is anticipated to remain robust through the second half of the year,” said Andrew Judd, Cushman & Wakefield’s New Jersey market leader.

Areas around Port Newark/Elizabeth command the highest asking rents for warehouse space. The largest amount of space leased during the quarter was at Exit 8A, with 2.8 million square feet of leases. The Meadowlands recorded 1.5 million square feet of leases.

Bergen County posted a 6.6 percent vacancy rate and average rent of $7.19 for warehouse space. Passaic had a 5.4 percent industrial vacancy rate and average warehouse rent of $6.35.

Posted in Economics, New Development, New Jersey Real Estate | 171 Comments

East Orange the next big thing?

Posted on July 19, 2016 by grim

From the Star Ledger:

Is $12M real estate sale sign that East Orange could become millennial hot spot?

When millennials searching for walkable, transit-oriented communities are priced out of high rises in Hoboken and Jersey City, will they head to East Orange?

A recent $12 million land sale seems to suggest it might be.

According to commercial real estate broker Gebroe-Hammer Associates, a developer has purchased four apartment buildings in the Essex County city. East Orange has been working in recent years to change its reputation from a high-crime neighbor of Newark to a bustling transit-oriented community and “an example of urban excellence.”

The four buildings – at 24 South Grove Street, 25 North Harrison Street, 235 South Harrison Street, and 107 New Street – are all near the Brick Church Train Station, about a half an hour ride to NYC.

“East Orange’s greatest assets are its mass transit links, which have drawn copious private investment that is the on-going stimulus for revitalization initiatives as well as the introduction of millennials into the tenant-base demographic,” said Gebroe-Hammer Managing Director David Oropeza.

“East Orange’s population renting percentage continues to climb and exceed the state average.”

According to city officials, ProudLiving Companies, a Montclair-based developer, purchased the buildings. Company representatives did not return calls seeking comment on the purchase.
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The sale comes after several city initiatives to make East Orange a viable option for young professionals, including a clean-up of vacant properties, crime crack-down, and designation as a transit village.

City officials called the purchase “urban excellence at its best.”

“(It’s) a continuation of our partnership with property owners, developers and real estate firms to purchase and rehab older housing stock for our existing residents and to attract potential newcomers,” said Valerie Jackson, East Orange’s Director of Policy, Planning and Development.

“Modernizing these residential buildings will further enhance our efforts to develop around our train stations and increase the walkability of our community.”

It is unclear when renovations will begin.

Posted in Housing Recovery, New Development, New Jersey Real Estate | 119 Comments

Zombie Go!

Posted on July 18, 2016 by grim

From the Record:

‘Zombie’ houses in foreclosure can sit vacant and haunt neighbors for years

On Wilson Avenue in Wayne, a shady street of well-kept homes, the wood contemporary at No. 96 stands out. It’s been empty for years, thick moss grows on the roof and, neighbors say, water from a broken pipe flooded the interior and poured down the street several years ago.

On Berdan Avenue in Fair Lawn, a piece of black tarp hangs off the roof of a brick Cape Cod, and two dead evergreens stand sentinel at the front steps. Get close to the house and you’ll catch a whiff of mold.

On Cumberland Avenue in Teaneck, weeds grow through the patio behind a vacant brick ranch; inside, paint is peeling off the walls in sheets.

Neighbors call these homes eyesores. Real estate experts have another name: “Zombie” houses — homes in foreclosure that stay empty and neglected for years.

A decade after the housing market began its slide into the worst downturn in generations, New Jersey still has about 4,000 homes left empty because of foreclosures, according to RealtyTrac, which follows the foreclosure market nationwide. That’s about 6.2 percent of the total number in foreclosure in the state, higher than the national rate of 4.7 percent.

These abandoned homes are a headache for towns and neighbors. Under New Jersey law, the properties have to be maintained by the mortgage lender while they’re in the foreclosure process, but neighbors say the maintenance usually doesn’t go beyond mowing the lawn and making sure the doors are locked.

Visits to 10 vacant homes in middle-income North Jersey neighborhoods recently turned up places with cracked windows, fallen tree limbs, weeds growing through cracks in driveways, ragged shrubs and usually a notice glued to the front door — often from the property maintenance company hired by the lender. Many smell of mildew, signaling water damage inside. (However, most of the lawns had obviously been mowed.)

The number of zombie houses in New Jersey is higher than the national average because the state is still working through a backlog of distressed properties heading into foreclosure. According to the Mortgage Bankers Association, in the first quarter of this year, New Jersey led the nation in foreclosure starts as it continued to deal with the fallout of the housing crash. About 11.5 percent of New Jersey mortgages were either in foreclosure or late on payments in the quarter, compared with 6.5 percent nationwide.

New Jersey has been slower than the rest of the nation to get through the foreclosure crisis because here, as in about half of states, foreclosures go through the courts, which slows the process. New Jersey’s pipeline was further slowed about five years ago when state courts required the mortgage industry to answer accusations of trampling homeowners’ rights in the rush to evict.

These forlorn houses stand out among the neighboring homes, which are usually carefully maintained. Neighbors find them disheartening.

Posted in Foreclosures, New Jersey Real Estate | 111 Comments

AC – Foreclosure Capital of the US

Posted on July 16, 2016 by grim

From Philly.com:

New Jersey and Atlantic City area top U.S. foreclosures: report

New Jersey and two of its distressed cities had the highest rates of U.S. foreclosure activity in the first half of 2016, according to RealtyTrac data released on Thursday.

New Jersey’s foreclosure rate was 0.98 percent of housing units, or one in every 102 homes, the data showed. That was more than any other state and more than double the national rate of 0.40 percent, or one in 249 homes.

Atlantic County, home to New Jersey’s cash-strapped gambling hub Atlantic City, again had the highest foreclosure rate of any major U.S. metropolitan area at 1.8 percent.

Four of Atlantic City’s casinos closed in 2014 and remain shuttered, mostly because of gambling competition in neighboring states, though one, the Showboat, reopened this month as a hotel only.

Atlantic City has topped the national list of metro area foreclosures for at least a year.

Trenton, the state capital, was second with 1.31 percent during the first half of 2016.

Still, New Jersey was mostly in line with the national downward trend, which saw a 20 percent drop in foreclosure filings compared with the prior six months and an 11 percent decline over the first half of 2015 overall.

There were outliers, with 19 states posting year-over-year increases in the first half, including Massachusetts, Connecticut and Virginia.

Five big cities, all in the East, also had higher rates: Boston, Philadelphia, New York, Washington and Baltimore.

“Although there are some local outliers, the downward foreclosure trend continued in the first half of 2016 in most markets nationwide,” Daren Blomquist, RealtyTrac senior vice president, said in a statement.

Posted in Foreclosures, Shore Real Estate | 59 Comments

Is the problem supply or demand?

Posted on July 15, 2016 by grim

From Bloomberg (Hat tip Hoodafa):

Millennials Need a New Housing Bubble

Every year since 2009 we’ve been running a housing deficit: More housing for sale has been absorbed than built. With a glut of housing left over from the housing bubble and the great recession, it’s logical that construction of new supply was subdued for a few years. But vacant inventory for sale normalized in 2012, and currently stands at a 12-year low. So why aren’t builders building more? The pace of construction remains far below the rate of household creation.

Part of the blame is caused by a shortage of construction workers. After the housing bust, many construction workers left for other industries, such as the then-booming energy sector, or retired. They’ve been slow to return, and current immigration policy makes it difficult to bring in new workers from other countries. As a result, the unemployment rate for construction workers is at its lowest level since 2000. If current trends continue, by next summer the construction labor shortage may be approaching the severity seen immediately after World War II.

In response to a nearly generational low in housing inventory and construction worker shortage, one might expect that there would be booming wage growth for construction workers, drawing labor away from other industries. Yet we don’t have conclusive signs of that. Year-over-year wage growth for construction workers is currently 2.7 percent, nearly a full point lower than it was at the same time in the year 2000.

The lack of growth in new construction jobs is sobering. Despite a need for more housing, and despite the labor shortage and the wage growth, construction industry employment fell 6,000 in April and 16,000 in May and showed no growth in June. This is the first time in more than five years that construction employment has shown no growth for three months.

This is all the more perplexing because the cyclical conditions for real estate have rarely been better. In addition to the low level of inventory and rising secular demand as millennials are ready to buy homes, the economy has rising wage growth and historically low levels of interest rates, as I wrote about last week.

While the signals from the economic data are very strong, the market signals have been more muted. What’s clear is that 2-3 percent construction wage growth and 5-6 percent house price appreciation isn’t anywhere close to creating strong enough price signals to encourage the market to build all the housing we’re going to need over the next decade.

Posted in Demographics, Economics, National Real Estate | 71 Comments