Good Riddance to the Hamilton Projects

Posted on August 8, 2016 by grim

From the Record:

Rebirth of an urban neighborhood in Paterson

Growing up in Paterson, Sandra Drysdale had lots of friends living in the Alexander Hamilton housing complex. But what she heard about crime and drug-dealing there made her afraid to visit.

Now, she lives with her husband and sons on the site of the old complex, in a rented town house — which she describes as “gorgeous” — at a new subsidized development called Heritage at Alexander Hamilton.

“I love this place,” Drysdale, 56, said recently. “It’s so quiet, and everybody watches out for each other. … It’s a community.”

The foreboding old brick buildings — built in the 1950s and known informally as the Alabama projects, for nearby Alabama Avenue — were torn down in 2010 and replaced by the new development, a collection of 205 town houses and semi-detached homes. The new development, which includes a community center and space for a preschool, recently won a Smart Growth award from New Jersey Future.

The development’s 180 rentals are filled, and about half a dozen of the planned 25 for-sale units are sold, with more under contract. The development is almost complete, except for the construction of the preschool and about nine homes.

Heritage at Alexander Hamilton, which is just north of Route 80 near Paterson’s Market Street exit, reflects a shift in thinking about affordable housing. After large urban public-housing complexes around the nation became magnets for drugs and crime, a number of them were demolished to make way for a less dense style of development. The idea was to dilute the concentration of poverty as a way to reduce social problems.

Those problems were rampant at the old Alexander Hamilton housing complex, which consisted of 498 units in five high-rises and nine low-rises. Because it was so close to Route 80, drug dealers could easily sell to users who drove in from the suburbs. Gunfire was common.

“With the high-rises, we had a lot of indefensible space that was not owned or monitored by anyone,” said Wilfredo “Fred” Vazquez, director of modernization and development for the Paterson Housing Authority.

In these spaces – such as stairwells, courtyards and entry halls – trouble had a way of muscling in. The goal of the new development was to have “eyes on the street,” Vazquez said.

“Every house has windows where you can see what’s going on,” he said. Jerry Speziale, Paterson’s police director, estimates that with the redevelopment, crime in the complex has dropped by as much as 90 percent. “It’s become a very quiet community,” Speziale said.

Posted in Housing Recovery, New Development, North Jersey Real Estate | 95 Comments

Dirt gets more expensive

Posted on August 6, 2016 by grim

From the WSJ:

Low Supply Lifts Housing Lot Prices To a Record

The prices home builders pay for single-family lots hit a record high in the U.S. last year, a sign that a scarce supply of developed land is pushing up the cost of new homes.

Median single-family lot prices were $45,000 last year, surpassing the previous peak of $43,000 at the height of the housing boom in 2006, according to an analysis of the most recent census data by the National Association of Home Builders.

The dynamics of this expansion, however, are far different from a decade ago.

Prices for developed lots in 2006 were driven up by record levels of demand: Buyers had easy access to credit and builders rushed to deliver as many new homes as possible.

This time, there is more caution. Builders last year began construction on 714,500 single-family homes, less than half as many as in 2006. That suggests lot prices today are being pushed up by low inventories of developed land.

Builders responding to a national housing-market survey in May reported the lowest supply of lots since the survey started in 1997.
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Prices have hit record highs even as the typical lot has been shrinking. Median lot sizes for single-family homes last year dropped to 8,589 square feet, the lowest since the Census started consistently tracking the data in the early 1990s.

Some of that reflects changing preferences of both home buyers and builders, who so far in the recovery have tended to cluster more in core urban and suburban markets where land is less plentiful.
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Because of the higher price tag for the land, Mr. Donnelly said he has to think smaller to keep home prices in check for potential buyers.

“Really the only way to stay affordable is to increase the density and reduce the size of the houses,” he said.

Posted in Economics, Housing Recovery, National Real Estate | 67 Comments

Should we even bother saving AC?

Posted on August 5, 2016 by grim

From the APP:

Icahn: Union got Taj Mahal workers to kill own jobs

Billionaire investor Carl Icahn wrote a letter Thursday to the soon-to-be unemployed workers of the Trump Taj Mahal casino, accusing their union of inciting them to destroy their own jobs by participating in the longest strike by Atlantic City’s main casino workers union.

Icahn told the workers that officials of Local 54 of the UNITE HERE union knew that the company had made its final offer, but rejected it anyway, knowing a strike would result.

The union has been on strike since July 1. The central issue has been restoration of health insurance and pension benefits that the previous owners got a bankruptcy court judge to terminate in October 2014.

Icahn said the company’s final offer to restore health care, albeit at a lower level than what workers at Atlantic City’s other seven casinos, was negotiated with union President Bob McDevitt.

“Why have they incited you, the union workers at the Taj, to destroy your jobs and your livelihood rather than accept the prior offer that we made at McDevitt’s suggestion?” Icahn wrote in the letter that was posted on his website.

Icahn told The Associated Press on Wednesday that he has lost nearly $100 million on the Taj Mahal over the past 18 months.

“It is one thing to fund losses when a path to profitability exists,” he wrote in Thursday’s letter. “But to burn tens of millions of dollars when there is no hope is just foolish. The strike has been the latest and final nail.”

McDevitt said Icahn helped bleed the casino dry as its main lender before and during its most recent stay in bankruptcy.
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Icahn announced the casino will shut down after Labor Day, but an exact date has not been set.

Nearly 3,000 workers will lose their jobs in what will become the fifth Atlantic City casino closure in two years.

On the Boardwalk outside the oceanfront casino Thursday, a small group of picketers chanted, “One day longer, one day stronger!” Inside the casino, the gambling floor was virtually deserted and nearly silent, except for piped-in music overhead.

Chuck Baker, a cook at the casino since the day it opened in 1990, said he and his co-workers will continue to protest outside the casino until it closes.

“It didn’t come as that great a surprise; they’re not making any money,” he said. “But nobody is ready to give in. We will be out here till the last day.”

Posted in Shore Real Estate, Unrest | 43 Comments

Maybe real estate just always sucks?

Posted on August 4, 2016 by grim

From MarketWatch:

It’s a seller’s real-estate market, but who’s selling?

Even though the U.S. has seen more than three years of a booming seller’s market for housing, there are plenty of Americans who are reluctant to sell their homes for a very simple reason: Where are they going to live?

The supply of U.S. homes for sale, known as inventory, has dropped to some of the lowest levels since before the Great Recession. In June, the National Association of Realtors said that inventory dropped nearly 1% from May to about 2.14 million homes, a supply of about 4.6 months, compared with a typical supply of 6 months in a healthy market. (That means that it would take just 4.6 months at the current sales rate to deplete the entire inventory of homes for sale in the U.S.)

Not only does the low housing inventory mean a bidding war for buyers, but sellers who may want to move to a smaller home and stay in the same market are quite often stuck — because of the rise in prices for smaller homes that are being fought over by both first-time buyers and downsizing empty-nesters.

“A key part of the inventory problem is that in expensive markets it’s difficult for existing homeowners to find another home afterwards if they do sell,” said Ralph McLaughlin, an economist with San Francisco-based Trulia.com, a real-estate research firm. “It’s a double-edged sword.”

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 52 Comments

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.
…
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