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

Shocking: Graduates with loans perform better than those without

Posted on May 14, 2015 by grim

From HousingWire:

TransUnion: Student loans do not impact housing

Despite the level of student loan debt rising to well above $1 trillion, young buyers are not being inhibited from obtaining a mortgage due to their debt, according to a new report from TransUnion.

According to the latest report from the Federal Reserve Bank of New York, student loan debt rose $32 billion in the first quarter to $1.19 trillion total, but recent reports from Capital Economics have suggested that growing amount of student debt isn’t actually preventing millennials from buying a home.

A new report from TransUnion shows that not only are younger consumers with student debt able to get a mortgage, they are also quite adept at making their payments as well.

According to the TransUnion report, consumers between the ages of 18 and 29 with a student loan in repayment are “generally able” to gain access to new loans and perform as well or better on those new loans as similarly aged consumers without student loans.

The study also showed that in only three to six years, student-loan consumers in their twenties have been observed to pass similarly aged consumers without a student loan in overall loan participation rates on mortgages, auto loans and credit cards, an act the study calls the convergence point.

“Going to school impacts young consumers’ access to credit; while in school, students may be less likely to have a job and generate the income necessary for loan approval. However, most catch up once they leave school—and their ability to catch up has not changed over the past decade,” said Steve Chaouki, executive vice president and the head of TransUnion’s financial services business unit. “Our study demonstrates that consumers in their 20s with student loans in repayment—that is, once they finish school—are in fact able to access credit at levels similar to or better than their peers who do not have student loans.”

Posted in Demographics, Economics, Employment, Mortgages | 185 Comments

41st consecutive month of foreclosure inventory declines

Posted on May 13, 2015 by grim

From DSNews:

Foreclosure Inventory, Completions Continue Decline Toward Pre-Crisis Levels

Completed foreclosures experienced another substantial year-over-year decline in March, moving even further away from their peak from nearly five years ago, according to CoreLogic’s March 2015 National Foreclosure Report released on Tuesday.

Foreclosure inventory also fell substantially year-over-year in March, declining by 25.7 percent down to about 542,000 mortgages (about 1.4 percent of all mortgages nationwide) – marking the 41st consecutive month of year-over-year declines, according to CoreLogic. In March 2014, there were about 729,000 residential homes, or 1.9 percent of mortgages nationwide, that were in some stage of foreclosure.

The number of completed foreclosures, which are an indicator of homes actually lost to foreclosure, totaled 41,000 for March 2015 – a decline of 15.5 percent from the previous March (48,000) and of about 65 percent from their peak experienced in September 2010.

The number of mortgages in serious delinquency (those 90 days or more overdue or in foreclosure or REO) fell year-over-year by 19 percent in March, down to about 1.5 million mortgages, representing 3.9 percent of all mortgages nationwide. March’s serious delinquency rate of 3.9 percent is the lowest since May 2008.

“We are seeing additional improvement in housing market conditions due to a decline in the serious delinquency rate to 3.9 percent, far below the peak of 8.6 percent in early 2010,” said Frank Nothaft, chief economist for CoreLogic. “Despite the decline in the number of loans that are 90 days or more delinquent or in foreclosure, the percent of homeowners struggling to keep up is still well above the pre-recession average of 1.5 percent.”
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The state with the highest number of completed foreclosures for the 12-month period from April 2014 to March 2015 was Florida with 110,000, followed by Michigan (50,000), Texas (34,000), and Georgia and Ohio with 28,000 each. South Dakota had the lowest number of completed foreclosures for that same period with 16, followed by the District of Columbia (87), North Dakota (326), West Virginia (462) and Wyoming (517).

The state with the highest percentage of foreclosure inventory for March was New Jersey (5.3 percent), followed by New York (3.9 percent), Florida (3.3 percent), Hawaii (2.7 percent), and the District of Columbia (2.5 percent). States with the lowest foreclosure inventory in March were Alaska (0.3 percent), Nebraska (0.4 percent), and North Dakota, Montana, and Colorado at 0.5 percent each.

Posted in Economics, Foreclosures, Housing Recovery, National Real Estate | 112 Comments

Access to credit holding back first time buyers? (Not student loans)

Posted on May 12, 2015 by grim

From HousingWire:

What’s holding back first-time homebuyers

The rising burden of student debt doesn’t explain the weakness in home sales to first-time buyers, so the question arises what is holding this segment back?

Capital Economics says that some of the cyclical factors holding back demand have eased, and despite the conventional wisdom, there is no evidence to suggest that homeownership aspirations amongst young households have diminished in recent years.

“This suggests that factors such as credit scoring and risk aversion amongst lenders may be mostly to blame for the weakness in home sales to first-time buyers,” says chief property economist Ed Stansfield.

Stansfield and his analysts re-examined the issue, and in a client note explain how they took it back to basics.

“One possibility is that young people nowadays simply have less desire to own a home. This could reflect the increasing geographical mobility required in modern careers, the fact that they have lived through the biggest housing crash on record, or because renting is seen as more affordable. Our calculations suggest housing is now slightly overvalued compared to rents,” he says. “Nonetheless, there doesn’t appear to have been a fundamental shift in homeownership aspirations. The most recent survey data suggest that nine out of ten people still see homeownership as a key part of the American dream.”

Furthermore, they found, there is no evidence to suggest that young households should have particular difficulty in affording a home.
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“…[I]t seems more likely that potential first-time buyers are being especially constrained by continued difficulties in obtaining credit,” he writes. “(They) are generally reliant on mortgage financing, but many will have little or no credit history and the means to make only small down payments on a home.”

Posted in Housing Recovery, Mortgages, National Real Estate | 187 Comments

“Location, location…” – Looks like the truth?

Posted on May 10, 2015 by grim

From the Record:

Price gap hinders housing recovery across North Jersey

Andrea and Joe Buccino bought their first home, a Cape Cod in Wallington, for $385,000 in 2005. A decade later, they put it on the market for $299,000 — one of many examples of how home values in North Jersey, like much of the nation, have struggled to recover since being slashed in the Great Recession.

An analysis of 2014 property sales data by The Record found that prices across most of Bergen and Passaic counties saw virtually no change last year. Overall in Bergen County, the median price of $405,000 remains 14.7 percent below the 2006 median peak of $475,000; Passaic County’s median is still off 25 percent, at $285,000. (Nationally, prices are about 16 percent below their peaks.)

And the slow recovery is most dramatic in the region’s lower-income, lower-priced housing markets.

At the top end of the market, in towns where the median value was at least $700,000 in 2006, prices are about 11 percent below their peaks. Homes in the middle range of values are about 17 percent off their peaks.

But at the lower end — in towns like Hackensack, Wallington, Garfield and Paterson — values held down by a greater concentration of foreclosures and distressed sales have barely recovered. They continue to languish 30 percent below their peaks — 26 percent if you take out Paterson and Passaic, where housing distress has been especially acute.

In actual dollars and cents, the housing troubles translate into median prices that are down in Paterson from $340,000 in 2006, to $185,000 in 2014; from $330,000, to $205,000 in Hackensack; $410,000, to $281,000 in Garfield; $380,000, to $250,000 in the city of Passaic; $423,000, to $260,000 in Wallington; and $410,000, to $300,000 in Elmwood Park.

At the high end of the market, the numbers tell a much different story. The median price in Ridgewood, for example, has climbed back to $685,000, near the 2006 peak of $710,000. In Ho-Ho-Kus, the median price in 2014 was $725,000, compared with $750,000 in 2006. While in Englewood Cliffs, the 2014 median of $1.1 million surpassed the $1.09 million median in 2006. Saddle River’s 2014 median of $1.5 million is approaching 2006’s $1.71 million. And agents in those towns describe the market as hot.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 86 Comments

Overpaying millennials driving up rents?

Posted on May 9, 2015 by grim

From HousingWire:

Rents rise as millennials keep forking over the cash

Rent.com conducted a survey of 1,000 millennial renters to find out how they are planning their next move, finding more than half (57%) rank affordability as the most important factor when choosing an apartment. Yet when asked, 55% said they are willing to spend up to $150 more per month in order to stay in an apartment they love. Nearly one in four respondents (24%) are willing to shell out an additional $400 a month, just to keep their pad.

And looking at industry trends, they might have to pay that extra money soon.

Real Property Management and RentRange’s latest data report found that through the first quarter 2015, the average monthly rent for single-family homes was $1,286, representing a 5.4% year-over-year increase. The rental market data was limited to three-bedroom single-family homes in the U.S.

“Rental rates are up throughout the country and we expect that trend to continue in the near future,” said Don Lawby, President of Property Management Business Solutions, the franchisor of Real Property Management. “There are a lot of economic indicators supporting that viewpoint, not the least of which is America’s continual shift toward renting.”
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But can millennials actually afford to be spending as much money?

Going back the rent.com, it seems that the millennial heart and head are at odds.

Despite their desire for affordable apartments above all else, 22% of millennials are spending up to 40% of their annual income on rent.

In order to afford living, more than one in three millennial renters (39%) reported getting some financial help, with 24% turning to their parents for additional support, 9% receiving financial support from the government and 6% depending on the kindness of others.

Posted in Demographics, Economics, National Real Estate | 24 Comments