April Home Prices Heat Up

Posted on June 3, 2015 by grim

From MarketWatch:

U.S. house prices accelerate in April, CoreLogic says

U.S. house prices accelerated further in April, as low inventories and growing sales push costs higher, a leading data provider said Tuesday.

CoreLogic reported a 2.7% monthly advance to take the year-on-year gain to 6.8%.

The spring is traditionally the strongest portion of the year for housing, and data from CoreLogic and other providers suggest an upturn.

“Old-fashion supply and demand, fueled by historically low mortgage rates and improving consumer finances and confidence, continue to push home prices up,” said Anand Nallathambi, president and CEO of CoreLogic.

Dallas and Houston prices are showing few signs of let-up despite the collapse in energy prices. Dallas prices were up 10.3% in the 12 months to April, and Houston prices were up 9.5%. The Washington, D.C., area brought up the rear with just a 1.6% advance.

South Carolina was the strongest state, with an 11.4% advance, while Massachusetts saw a 1.7% drop, one of only four states to register a decline.

Posted in Economics, Housing Recovery, National Real Estate | 224 Comments

3 New North Jersey Casinos to Save AC

Posted on June 2, 2015 by grim

From the Star Ledger:

Lawmakers now want 3 casinos in northern N.J.

Several state lawmakers who want to allow casino gambling outside of Atlantic City are now seeking as many as three casinos in northern New Jersey — up from two.

The trio of state Assembly members from Essex, Bergen and Hudson Counties on Monday announced that they’ve introduced a proposed constitutional amendment — which, if passed by the Legislature, would have to be approved by voters — to allow the casinos in their three counties.

Revenue from the casinos would in part go to redeveloping Atlantic City, which has been devastated by the downturn of its gambling industry largely due to competition from neighboring states.

“We can’t sit by any longer. The history of Atlantic City is one I was part of,” Assemblyman Ralph Caputo (D-Essex), a former casino executive who is sponsoring the resolution with Assembly members Valerie Vainieri Huttle (D-Bergen) and Raj Mukherji (D-Hudson), said during a Statehouse press conference. “The business has changed. We’ve had tremendous competition from our neighboring states… If you don’t adapt, you become extinct and you become a dinosaur.”
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The number has increased to three in the newest proposal as support for expanding gaming has increased, with formerly staunch opponents like Senate President Stephen Sweeney (D-Gloucester) and Gov. Chris Christie now being open to it.

“I’ve been fighting for this for six or seven years. When I started this effort, people thought it was folly. This has become a reality,” Caputo said.
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Already, potential operators and investors are pitching casino plans for The Meadowlands and Jersey City. Essex County Executive Joseph DiVincenzo thinks Newark would be an ideal location for one.

Posted in Demographics, Economics, New Development, Politics, Property Taxes | 181 Comments

Rich not spending

Posted on June 1, 2015 by grim

From Bloomberg:

Frugality of High Earners in U.S. Shows Long Shadow of Recession

The nearly rich aren’t spending nearly enough, a trend that’s weighing on U.S. growth.

Six years after the worst recession since the 1930s, Americans who earn $100,000 to $249,999 a year still are “making very careful decisions” when it comes to discretionary purchases, said Pam Danziger, president of Unity Marketing Inc., a luxury research company based in Stevens, Pennsylvania. “That’s smart for them, but it’s certainly not good for the economy.”

These consumers — Danziger calls them HENRYs, or high earners not rich yet — are “feeling squeezed” primarily because their spending power is curbed by sluggish income gains, she said. They spent 10 percent less on luxury goods and services in the fourth quarter compared with the same period in 2013, according to figures from Unity Marketing.
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Americans who earn $250,000 or more a year also are cutting back. Their luxury spending fell 17 percent in the fourth quarter from a year earlier — though these consumers make up 2 percent of households, compared with 18 percent for HENRYs, Danziger said.
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“The caution of high-income consumers is key to the lackluster retailing environment” because the top 20 percent of households make up more than half of total spending, said Mark Zandi, chief economist of Moody’s Analytics Inc. in New York. Retail sales are flat year-to-date, following average monthly gains of 0.6 percent in the first four months of 2014, Commerce Department figures show.
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Sentiment among Americans earning more than $100,000 has fallen 15.1 points from a nearly eight-year high in mid-April, which is more than double the 7-point drop for all income groups, according to the Bloomberg Consumer Comfort Index.
Many HENRYs have a middle-class mindset, particularly if they live in urban areas, said Ron Kurtz, president of the American
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Americans who earn about $100,000-$250,000 a year saved 8.5 percent of their disposable personal income in the fourth quarter, according to Zandi’s calculations based on Fed financial accounts figures. That’s higher than the 7 percent average for all consumers, though it’s consistent with broader trends, he said.

Even so, there are signs spending may pick up. Average daily expenditures among Americans with household incomes of $90,000 or more rose 3.9 percent in April to $160 from a year earlier, according to Gallup Inc. in Washington. May figures are scheduled for release Monday.
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As people feel comfortable flaunting big-ticket purchases again, this could spur spending among their neighbors, Zandi said. There’s been a “general cultural shift” away from displays of conspicuous consumption, but some Americans will revert to old habits of “trying to keep up with the Joneses.”

Still, the longer a trend persists, the more likely such behavior becomes habituated, Danziger said. Consumer spending makes up about 70 percent of U.S. gross domestic product, so continued prudence among HENRYs is problematic, she said.

“We’re at a real tipping point,” Danziger said. “The affluent who have spending power are really not spending.”

Posted in Demographics, Economics, National Real Estate | 139 Comments

“The concentration in the northeast quadrant of the state is striking”

Posted on May 30, 2015 by grim

From the Record:

Homebuilding revs up in NJ, led by multifamily construction

Home construction continues to heat up in New Jersey, especially in the multifamily sector, as builders obtained the largest number of monthly permits in April since the housing-boom days of 2005.

More than 3,700 building permits were issued last month. So far this year, 9,118 permits have been issued, up 12.3 percent from the first four months of 2014, according to the U.S. census.

This year’s increase in activity has been powered by the multifamily sector, as New Jersey’s long-term patterns of suburban, single-family development shift to a denser, more urban style. So far this year, multifamily permits have accounted for almost two-thirds of building permits issued in the state, as builders respond to a higher demand for rentals.

Patrick O’Keefe, an economist with the accounting firm CohnReznick, which has offices in New York and Roseland, expects single-family starts to remain flat, in part because young adults — the so-called millennial generation — often can’t qualify for mortgages because of tight lending standards and high levels of student-loan debt. In addition, he said, millennials “have experienced a housing market where prices went down, and have a more realistic assessment of housing as an asset.”

Hudson County has led the way in home-building starts through March, followed by Ocean County, where many homes destroyed by Superstorm Sandy are being replaced, according to an analysis by the New Jersey Department of Labor and Workforce Development. Bergen County ranked third in the state. Taken together, Hudson, Bergen and Union counties accounted for 37 percent of the home-building permits issued through March.

“The concentration in the northeast quadrant of the state is striking,” O’Keefe said.

Jersey City continues to lead the state’s municipalities in homebuilding activity, as it did last year when it had 2,180 permits — more than the totals in most New Jersey counties. The city, along with the rest of Hudson County, is benefiting from spillover from New York City’s hot housing market.

Posted in Housing Recovery, New Development, New Jersey Real Estate | 44 Comments

Smooth sailing for NJ real estate?

Posted on May 29, 2015 by grim

From the Star Ledger:

N.J. home sale prices tick up as Realtors report strong housing market

New Jersey homes are selling for more than they were a year ago, new data shows, as real estate professionals in the state report a strong housing market that isn’t expected to ebb soon.

Tg Glazer, the president-elect of New Jersey Realtors and an agent at the Coldwell Banker Westfield East office, said listings are up and sales are up. That’s pushing up prices, Glazer said, but “at a reasonable rate.”

“We’re in the heart of the spring market right now,” Glazer said. “We have a few months left in that busy part of our season and we’re expecting that the trends are going to continue.”

Data released earlier this month by New Jersey Realtors put the median sales price for single-family properties, townhouses, condominiums and properties in adult communities in the state at $270,000 in April, a jump of 4.2 percent from the same time a year ago. The report also showed an increase in new listings, pending sales and closed sales.

A report released Thursday morning by the Irvine, Calif.-based real estate data firm RealtyTrac also shows a year-over-year increase in median sales prices in New Jersey though it’s not as large.

The median sales price for single-family homes and condos in New Jersey clocked in at $248,000 in April, the RealtyTrac report found, which represents an increase of 1 percent over the same time last year.

The median sales prices nationwide inched up 2 percent to $171,700 over that time frame, according to the RealtyTrac report.
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While prices are ticking up overall, the market varies from place to place in New Jersey.

County-level data from New Jersey Realtors shows the median sales price of just single-family homes in Cape May County dropped by 10 percent in April compared to April 2014, while Essex County saw a 10 percent bump. The RealtyTrac data also shows swings from county to county.

As Glazer put it: “All real estate is very local.”

Richard Leonard, the broker/owner of Arcadia Realtors in Roseland, said the market is active, with some homes in towns like Glen Ridge, Caldwell and Montclair garnering multiple bids.

When asked how this spring stacks up with recent years, Leonard said, “No comparison, in my opinion. I haven’t seen this kind of situation until prior to 2008.”

Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate | 94 Comments

How to improve the NJ economy? Remove building restrictions.

Posted on May 27, 2015 by grim

From HousingWire:

Housing in places like New York, San Francisco fail more than just the locals

Significant restrictions on housing polices in three American cities significantly curtailed the economic growth of this country in the last half-century.

That’s right, if New York City, San Francisco and San Jose opened local housing restrictions and let the markets go as they may, the combined boost to the gross domestic product of this country would have increased by trillions of dollars in the last 50 years, research now shows.

According to this white paper released last month, “We estimate that holding constant land availability, but lowering regulatory constraints in New York, San Francisco, and San Jose cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%,” write Chang-Tai Hsieh, researcher from the University of Chicago, and his counterpart, Enrico Moretti, of the University of California, Berkeley.

From the mid-’60s into the new millennium, these three cities in particular experienced phenomenal growth, but only contributed a “small fraction” to the growth of the nation, the authors write.

It’s this finding last month that underpins the need for a cohesive federal housing policy that can supersede some of the directions taken by local municipalities.
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Therefore, the answer to fixing housing — and increasing GDP — is answering not how to stop people from leaving, but how to let more people in.

“Our results thus suggest that local land use regulations that restrict housing supply in dynamic labor markets have important externalities on the rest of the country,” the researchers conclude.

The conclusion to this is that housing reform needs to be far-reaching and national in scope. It’s obvious some policies are costing the nation some gains in wage growth and housing access.

Posted in Economics, New Development, New Jersey Real Estate, NYC, Politics | 165 Comments

Best April in 8 years

Posted on May 26, 2015 by grim

From the Courier News:

After strong April, is NJ real estate heating up?

Last month saw the highest number of home-sale contract signings — 9,700 — for New Jersey homes since April 2006, according to a real estate expert who tracks home sales and prices. The number of contracts in April 2006 was also close to 9,700.

Jeffrey Otteau, a Central Jersey-based appraiser, said the April 2015 sale number represented a rise of 19 percent over April 2014.

The sale numbers are a result of pent-up demand and increased confidence among home buyers, he said. The people who live, breathe and eat real estate on a daily basis — real estate brokers and managers throughout the Central Jersey market — agree that these factors are playing a role in the increasing house sales, along with rising rental rates.
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According to William O. Keleher Jr., president and chief executive officer of Berkshire Hathaway HomeServices New Jersey Properties, the market’s momentum started in March, after the last snow falls of the winter.

“It was a tough winter. We had snow from December through the end of February,” Keleher said. “Not only did people not want to go look at houses, but also sellers don’t like to show their homes in or after a storm, with people tracking snow and salt through their house.”
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Weichert Regional Vice President Dominic Prevete said the 23 offices in his region saw the best April in eight years. He thinks that the pent-up demand had two components: The people who were waiting during the winter, and the people who were waiting after the recession. He also thinks sellers who were waiting for home prices to rise are now putting their homes on the market. The movement among sellers began once the April market heated up.
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As a result, although the supply of homes is still tight, it’s not tight enough to inhibit demand. Multiple offers and bidding wars have tapered off in May, Prevete, Keleher and Tom Boniakowski agreed.

Boniakowski’s Green Brook-based offices are seeing a lot of first-time buyers, and he says many of those buyers are in the market because rents have become so high. Mortgage money is easier to get now, and it’s not unusual for these buyers to be able to buy a home with 10 percent down payments or less.

Stuart Davis, broker of record for Davis Realty in East Brunswick and Ocean Township, agrees that first-time buyers are key players in this market. He also said it’s because rentals have become so expensive that with today’s low interest rates, it’s less expensive to buy than to rent.
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Boniakowski sees the market continuing to do well, although not necessarily as hot as April. With fewer multiple bids in May, he still calls the market “healthy.” He expects that eventually, interest rates will go up, but not just yet.

“I’ve been doing comps (comparable sales analysis)” he said. “Homes are selling 3 to 5 percent higher, depending on the location.”

Prevete also is optimistic. He says homes in popular price ranges are selling well, and people are buying homes further out than they used to . In his market, that means Sparta, Chester and the Long Valley section of Washington Township are doing better than they have in years.

Posted in Housing Recovery, New Jersey Real Estate | 97 Comments

NJ REO Up 375% Year-Over-Year

Posted on May 23, 2015 by grim

From the Star Ledger:

The news about foreclosures in N.J. isn’t getting much better

The number of homes entering the foreclosure process in New Jersey dipped in April as the pace of bank repossessions spiked, a new report shows, following a national trend that a housing expert said represents a “continuation of the clean-up phase of the last housing crisis.”

Nearly 1,680 foreclosures were completed in New Jersey in April, a 375 percent increase over a year ago and a nearly 108 percent jump from March, the RealtyTrac report found. Foreclosure starts in the state fell roughly 20 percent from a year ago to more than 2,650 in April and dropped nearly 38 percent from March.

Nationally, bank repossessions increased 50 percent in April from a year ago and 25 percent from March and foreclosure starts dropped 5 percent from a year ago and 3 percent from March, according to the report from the Irvine, Calif.-based firm.

Daren Blomquist, vice president at RealtyTrac, said the increase in bank repossessions in April was foreshadowed by a 23-month high in scheduled foreclosure auctions last October.

“Many of those scheduled auctions are now taking place, and properties are going back to the foreclosing lender,” Blomquist said in a statement. “Meanwhile we continue to see foreclosure starts decrease, and foreclosure starts nationwide are now running consistently below pre-crisis levels — indicating that the overall increase in foreclosure activity in April is a continuation of the clean-up phase of the last housing crisis, not the start of a new crisis.”
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New Jersey’s foreclosure rate still ranked among the top in the nation, the report also found, with a filing on one in every 594 housing units.
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The Atlantic City region also posted the highest foreclosure rate in the nation among metropolitan areas with a population of at least 200,000. One in every 297 properties in the area had a foreclosure filing, according to the report.

Posted in Foreclosures, New Jersey Real Estate | 17 Comments

NJ gains 4,300 jobs in April, Unemployment unch. 6.5%

Posted on May 22, 2015 by grim

From the Record:

NJ added 4,300 jobs, mainly government, in April

New Jersey had its 10th consecutive month of job growth in April, with the addition of 4,300 jobs and a revision of the March figures.

The state added 300 private-sector jobs and 4,000 government jobs last month, according to the monthly employment report by the New Jersey Department of Labor and Workforce Development.

The jobless rate remained at 6.5 percent, above the national rate of 5.4 percent and the highest figure since July 2014.

The report also revised the March figures, changing the initially reported loss of 6,400 jobs to a gain of 1,900.

“There is improvement here,” said Patrick O’Keefe, an economist with New York accounting firm CohnReznick, which has an office in Roseland. “The state is inching forward, and that is certainly better than slipping backward, but when all is said and done the jobs recovery in New Jersey remains inadequate.”

He noted that the employment increase was in large part driven by government jobs. Economists focus mostly on private-sector job creation because those jobs generate revenue for the state; government jobs spend it.

O’Keefe said that while the nation has about 3 percent more jobs now than before the recession, New Jersey has only about 1.8 percent more.

The state has now added 20,400 jobs since the start of the year, an average of just over 5,000 a month, which would put New Jersey on track to add a healthy 60,000 jobs this year. The state’s post-recession recovery still lags, however, getting back only 65 percent of the 260,000 jobs lost as a result of the recession, while the nation recovered them all by last summer.

Posted in Economics, Employment, New Jersey Real Estate | 99 Comments

Foreclosure REOs jump in April

Posted on May 21, 2015 by grim

From Reuters:

Rising bank repossessions push up U.S. foreclosure activity in April

A surge in bank repossessions of properties last month pushed overall foreclosure activity across the United States to an 18-month high, according to a report by industry firm RealtyTrac released on Thursday.

Overall, 125,875 homes across the country were at some point in the foreclosure process in April, a 3 percent jump from March. The increase drove foreclosure activity up 9 percent from year-ago levels, RealtyTrac said.

April’s jump in foreclosure activity, which includes foreclosure notices, scheduled auctions and bank repossessions was mainly driven by a 25 percent rise in repossessions.

A total of 45,168 homes were reclaimed by banks in April, up 50 percent from a year ago, bringing bank repossessions to their highest levels in 27 months.

RealtyTrac said the spike in repossessions was the aftermath of a surge in foreclosure starts that happened in October and that properties are going back to the foreclosing lender.

“In this particular market, an influx of distressed inventory could actually help stimulate sales during the spring and summer buying season as new listings become available, often in the middle to lower ranges of the market,” said Daren Blomquist, RealtyTrac’s vice president.

The U.S. housing market has been steadily recovering, but is still plagued with a shortage of inventory that is driving prices up.

April was the second consecutive month in which banks reclaimed an increasing number of properties, but repossessions remain far below the peak in September 2013 when 102,134 properties were reclaimed.

Posted in Foreclosures, National Real Estate | 114 Comments

Expensive to buy here, expensive to rent here – but it’s cheaper than NYC!

Posted on May 20, 2015 by grim

From the Star Ledger:

N.J. is one of the most expensive places to rent in the country, new study says

The roughly one-third of New Jersey households comprised of tenants face rents that rank among the most costly in the nation, according to a new report, which shows only California, the District of Columbia, Hawaii and New York are less affordable than the Garden State.

A renter in New Jersey must earn $25.17 an hour — or $52,347 a year — to afford the average fair-market rate of $1,309 for a two-bedroom rental, according to the annual report from the National Low Income Housing Coalition.

The report, which defines affordability as a tenant not spending more than 30 percent of their income on rent and utilities, has ranked New Jersey among the top five most expensive places to rent in the country for years.

Arnold Cohen, senior policy coordinator for the Housing and Community Development Network of New Jersey, said many in the state fall under the income threshold needed to afford a two-bedroom apartment.

“People that are taking care of our children, people that are taking care of our elderly, people that are taking care of us as we go shopping in stores on a daily basis, folks who we depend upon for our very livelihood, cannot afford a place to live here,” he said.

The average hourly wage of renters in New Jersey is less than $17, the “Out of Reach” report found, meaning they would have to work 59 hours a week to afford a two-bedroom rental at a fair-market rate.

A renter earning the state’s minimum wage — $8.38 an hour — would have to work three full-time jobs to afford the rent for a two-bedroom place, according to the report.

Affordability varies for renters throughout the state, with Hunterdon, Middlesex and Somerset counties posting the highest rate for two-bedroom rentals in the state at $1,495.

Though rents are less expensive in Sussex, Cape May and Gloucester counties, according to the report, tenants in those three counties make an average hourly wage of less than $10.

Posted in Housing Recovery, New Jersey Real Estate, NYC | 147 Comments

Price inelasticity of rentals

Posted on May 19, 2015 by grim

From HousingWire:

Freddie Mac: Rising rents aren’t pushing residents to homeownership

Conventional wisdom holds that rising rents drive people to homeownership, but new research from Freddie Mac suggests the conventional wisdom is all wrong.

Freddie Mac commissioned Harris Poll to survey more than 2,000 U.S. adults online in March 2015 to get their perceptions about renting.

“We’ve found that rising rents do not appear to be playing a significant role in motivating renters to buy a home,” said David Brickman, EVP of Freddie Mac Multifamily. “This contradicts what some in the housing market think as they expect more renters ought to be actively looking to purchase a home. We believe rising rents are primarily a sign of increased demand rather than a signal that home purchases will be increasing.”
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Rents rose 3.6% in 2014 and are expected to rise 3.4% above inflation this year. More than one-third of U.S. households now rent their homes, and renters account for all net new household growth over the last several years, according to the U.S. Census Bureau.
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“From a purely affordability standpoint, renters who have saved enough to make a 10% down payment are better off buying in the majority of markets across the country,” said Daren Blomquist, vice president at RealtyTrac. “But factors other than affordability are keeping many renters from becoming buyers, a reality that means real estate investors buying residential properties as rentals still have the opportunity to make strong returns in many markets across the country.
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A third of renters are very satisfied with their rental experience and another 30% indicate they are moderately satisfied.

In addition, the top favorable factors for renting remained the same since the previous survey in August, with the strength of these favorable views rising slightly. The top favorable factors about renting are freedom from home maintenance, more flexibility over where you live and protection against declines in home prices.

Moreover, the results show some shared positive views across generations with no significant differences between Millennial, Generation X or Baby Boomer renters in their views that renting provides flexibility over where you live and protection against home price decline.

Despite increases to their rent, 53% say they are making no changes to their spending plans and 46% say they like where they live and will stay in their current place.

If renters are making adjustments due to increases in their rent, 61% indicate they are spending less on essentials or nonessentials, 28% are contemplating getting a roommate or moving into a smaller rental property (28%). Three in ten (31%) renters whose rent increased in the past two years agreed that they like where they live, but can no longer afford the rent.

Posted in Housing Recovery, National Real Estate | 179 Comments

Who has recovered, and who hasn’t (or won’t?)

Posted on May 18, 2015 by grim

From the Washington Post:

Are you not feeling the economic recovery? This could be why.

William Gibson’s observation about the future was a reference to the idea that people have different access to new technology based on wealth and location. That visionary quote kept coming to mind as I have been traveling around the United States to meet with clients this past year. My itinerary gave me a good perspective on the U.S. economic recovery.

Like the future, it, too, is not evenly distributed.

Why is that? The economy is, in a word, “lumpy.” It is strong in some regions, anemic in others. Strength by economic sector varies widely. There are myriad reasons for this: Some parts of the country were much harder hit by the real estate collapse; some sectors naturally rebound more quickly; some innovations lend themselves to more rapid growth.

The kind of recovery that you personally are experiencing is highly dependent upon many factors, but today I want to focus on three: education, market sector and geography. The data suggest these elements matter a great deal. Look closely, and you can see how your personal economic recovery is doing — and why.

Let’s take a closer look at what matters most:

• Education: If there is a single lesson you need to learn from this crash and recovery, it is that education matters a lot. The data from the Bureau of Labor Statistics makes clear the direct correlation between increased education and lower unemployment rates and higher wages.

We have a full year’s worth of data for 2014. Across all workers (over age 25 and working full time), the unemployment rate was 5 percent. For workers who had a high school degree or some college, the unemployment rate was a little higher than average (6 percent); with an associate’s degree, it was a little lower (4.5 percent). Schooling is where we really see a difference: Workers without a high school diploma had an unemployment rate of last year of 9 percent, double the average of workers with an associate’s degree.

Have a bachelor’s degree? Great, your peer group had an unemployment rate of only 3.5 percent. Master’s degree holders saw that fall to 2.8 percent, while doctoral graduates were at only 2.1 percent unemployment. Professional degree holders’ unemployment rate was the lowest at 1.9 percent.

Anyone who believes school doesn’t matter should recognize that enormous unemployment range of 1.9 to 9.0 percent.

If that does not convince, then look at compensation. Weekly wages are very similar in their distribution to unemployment: the average was $839 per week for all workers, but only $488 for those without a high school diploma. Those who held a professional degree averaged more than triple that amount at $1,639 per week. Bachelor’s degree holders averaged more than double at $1,101 per week.
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New York: Following a huge collapse, there is nothing like a trillion-dollar bailout to jump-start your economic recovery. In the face of an AWOL Congress whose fiscal stimulus was marginal by historical crisis standards, the Federal Reserve became the only game in town. Between TARP, ZIRP and QE, the Big Apple has been the recipient of much taxpayer largesse. Even Fed money that was destined for the rest of the country still passed through NYC. That worked to the advantage of the owner of the corner deli and the Porsche dealer alike.

The actions of the Fed not only cushioned the blow from the collapse but set the stage for the next round of expansion. In particular, finance and real estate sectors have been on fire in New York. Note that this is a theme in every city experiencing a boom. There always seem to be at least two hot sectors: (1) real estate and (2) something else. One drives the other.

Posted in Demographics, Economics, Employment, Housing Recovery, National Real Estate | 134 Comments

Buying your way in

Posted on May 16, 2015 by grim

From the NYT:

Want a Green Card? Invest in Real Estate

Like many of her fellow classmates at New York University, Yanchu Zhao has a busy schedule. A college junior, she has a double major in economics and journalism, and juggles classes, an internship and life with roommates in a rental near Herald Square.

But unlike many of her fellow classmates, Ms. Zhao came to the United States on a student visa. “A lot of students talked about how hard it was to get a job in New York and in the United States,” she said. “My parents heard that if I can get a green card, it would be easier for me to succeed.”

So two years ago, Ms. Zhao’s parents invested $500,000 in a hotel project on Bryant Park, knowing that their investment could be parlayed into green cards for the family. Three months ago, their paperwork came through and the Zhaos became permanent residents of the United States.

While Ms. Zhao’s father has remained in Beijing, her mother joined her in the United States and is now renting a studio on Roosevelt Island and studying English. Investing in real estate projects in exchange for legal immigration status has become big business in New York City. Through a federal visa program known as EB-5, foreigners, more than 80 percent of them from China, are investing billions of dollars in hotels, condominiums, office towers and public/private works in the hope it will result in green cards. Twelve-hundred foreigners have poured $600 million into projects at Hudson Yards; 1,154 have invested $577 million in Pacific Park Brooklyn, the development formerly known as Atlantic Yards; and 500 have put $250 million into the Four Seasons hotel and condominium in the financial district. The list of projects involving EB-5 investments also includes the International Gem Tower on West 47th Street and the New York Wheel on Staten Island.

Under the federal program, a foreigner who invests $500,000 — and in some instances, $1 million — in a project that will create at least 10 jobs can apply for a green card. It generally takes from 22 to 26 months to obtain legal residency through the program, as opposed to several years for other visa programs.

Posted in Demographics, Economics, Housing Recovery, NYC | 26 Comments

Not submitting cover letters? Maybe you should.

Posted on May 15, 2015 by grim

From HousingWire:

Here’s a sample cover letter to help secure your client’s dream home

Cover letters are one example of how to put buyer offers above the competition, and looking at how tight inventory is in today’s market, buyers could use any extra help they can get.

According to a recent Redfin report, the number one way buyers are standing out against the competition is through cover letters, with 43% of winning offers using them in March, up 35% from last year.
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In his third point, he went in depth on what a letter should look like.

Letter to the seller:

A letter to the seller does help, but it has to be done a certain way. The point of the letter to the seller is to make your clients come alive. You want your buyers to be more than just a number on a paper. When touring a property, find certain things that your buyer and the seller have common, such as water skiing, camping, local sports teams etc. When writing the letter to the seller, include that in there. People do business with other people that are just like them, so it’s important to build that rapport with the seller. Another important thing to do is to talk about just how amazing their home is. Never ever bad mouth or try to negotiate in a letter to the seller. The main point in the letter to the seller is to make your buyers come alive, tell the seller how beautiful their home is and how you are putting your best foot forward to buy the home.

Posted in National Real Estate, New Jersey Real Estate | 152 Comments