Low inventory due to underwater owners? Not quite.

Posted on April 2, 2015 by grim

One of the best pieces I’ve seen yet on the inventory issue. Brings up a host of topics that haven never really been brought to light. Too much to paste in so click the link for the details:

Why is housing inventory so low?

There has been a great deal of discussion regarding the consistently low housing inventory levels throughout the nation. Very little, however, has been written about the reasons why inventory levels are so low, especially following the economic disruption of 2008-2011.

Understanding the why can be helpful in predicting how these factors might influence longer-term supply levels and future appreciation potential. This knowledge might also shed light on why inventory might remain constrained over the long run.
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Capital gains exclusion on primary residence
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Step up in basis
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Sustained low rate environment
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Value disruption/reset in 08/09
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Values not at peak levels across the country
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Sense that values will continue to climb
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Where would I go? Move up
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Stunted new development

Posted in Economics, Housing Recovery, National Real Estate | 136 Comments

January Case Shiller

Posted on April 1, 2015 by grim

From the Record:

North Jersey home prices rise, still less than national average

Home prices in the region ticked up 2.1 percent in the New York metropolitan area, including North Jersey, in the 12 months ended in January, the S&P/Case-Shiller home price index reported Tuesday. That was less than half the national increase of 4.5 percent.

The numbers point to a housing market that is still slowly recovering from the worst downturn since World War II. Home values are no higher than they were in 2004, both nationally and in the region. Single-family prices in the area are almost 19 percent below their peaks in mid-2006, while national values are about 17 percent below their peaks.

“Despite price gains, the housing market faces some difficulties,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices. “Home prices [nationwide] are rising roughly twice as fast as wages, putting pressure on potential homebuyers and heightening the risk that any uptick in interest rates could be a major setback. Moreover, the new home sector is weak; residential construction is still below its pre-crisis peak.”

In Bergen County, the median price of a single-family home dropped 8.6 percent in January from a year earlier, to $425,000. In Passaic County, the median dropped 1.8 percent, to $275,000. Those numbers are from the New Jersey Realtors and reflect the mix of properties sold in the month; Case-Shiller does not track prices on a county-by-county basis.

New Jersey’s housing market faces several challenges, including the state’s employment market, which has not been creating jobs as fast as the nation as a whole. In addition, the state has one of the nation’s highest rates of properties in the foreclosure pipeline, because it slowed the eviction process after questions arose about mortgage industry abuses.

Posted in Housing Recovery, National Real Estate | 148 Comments

February Pending Home Sales Beat

Posted on March 31, 2015 by grim

From CNBC:

Pending home sales rose 3.1% in February

Colder than average temperatures and heavy snow in much of the U.S. failed to keep February home buyers away. Signed contracts to buy existing homes rose 3.1 percent from January, according to the National Association of Realtors (NAR).

The Realtors’ so-called “Pending Home Sales Index” is 12 percent higher than one year ago, and is at its highest level since June, 2013.

The gains were primarily driven by sales in the West and Midwest. Pending sales jumped 11.6 percent month-to-month in the Midwest and are now 13.8 percent higher than a year ago. Sales in the Northeast fell 2.3 percent but are 4.1 percent above a year ago. Sales in the South decreased 1.4 percent sequentially, but are 10.8 percent above last February. Sales in the West climbed 6.6 percent and are now 18.3 percent above a year ago.

“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” said Lawrence Yun, chief economist for the NAR. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle—especially for first-time buyers—continues to be the depressed level of homes available for sale.”

Posted in Economics, Employment, Housing Recovery, National Real Estate | 84 Comments

Why NYC remains at the top

Posted on March 30, 2015 by grim

From the Atlantic:

The Feedback Loop That Will Make America’s Richest Cities Even Richer

This week, the Brookings Institution came out with a report on “job proximity”—that is, which cities have the largest and fastest-growing concentrations of jobs in their city centers. This is an important statistic, because people who live closer to work are more likely to be employed. It’s particularly important for poorer workers who cannot afford longer commutes.

The key finding of the study was that people and jobs moved to the suburbs in the 2000s, and the number of jobs near the typical resident fell by 7 percent. This is in keeping with Trulia data that has found that most moves—both within counties (two-thirds of all moves) and between counties—are toward lower density and cheaper housing.

Even in a decade when retail gasoline prices tripled, people and work didn’t move closer together. Americans are spacing out.

But another story emerges when you look at the cities with the highest job density and who is moving there. When Elizabeth Kneebone and Natalie Holmes used Census tracts to determine the places with the greatest job proximity, these cities topped the list:

(see link)

Anybody who spends their free time looking at ordinal lists of American cities will notice that this is a pretty familiar set. It’s almost exactly the list of the most populous U.S. metro areas (for methodological reasons, the Brookings study could not include Boston or any other cities in Massachusetts). It’s almost exactly the list of the large U.S. cities with the highest median incomes. And the highest density of college grads. And the highest share of foreign-born residents among young people.

And, perhaps most importantly for the immediate future, it’s almost exactly the list of cities where college grads have been moving since the recession began.
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This is a tight feedback loop. The densest cities tend to be the most educated cities, which are also the richest cities, and often the biggest cities. They’re gobbling up a disproportionate share of college grads. And, as a result, they are becoming richer, denser, and more educated.

This feedback loop goes by many impressively multisyllabic names—geographic sorting, economic agglomeration, cumulative advantage. But they’re all fancy ways to describe something simple. Even as older and less educated Americans are moving to the suburbs, young people with college degrees are moving toward density, and their migratory patterns are encouraging future young people to follow in their steps.
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But many cities that don’t already appear at the top of these degrees-and-density lists are fighting migratory currents that are pulling more of the most talented young people to the same small set of cities. “At the same time that American communities are desegregating, racially, they are becoming more segregated in terms of schooling and earnings,” Enrico Moretti wrote in his book The Geography of Jobs. In other words, today’s richest cities might not mimic the collapses suffered by the richest U.S. cities from the 1970s. “The knowledge economy has an inherent tendency toward geographical agglomeration,” he wrote. “Initial advantages matter, and the future depends heavily on the past.”

Posted in Demographics, Economics, Employment, NYC | 84 Comments

“Newark needs love, Paris doesn’t”

Posted on March 29, 2015 by grim

From Politico:

Is Newark the Next Brooklyn?

NNewark is building again. Yes, that Newark—the city in Jersey that burned after the ’67 riots, the one that helped to define “white flight,” that struggles still with almost impenetrable unemployment and homelessness and crime. That city is building.
And here it all is—its past and present and future—pouring through Irene Hall’s floor-to-ceiling windows downtown: the whites and browns of the Old First Presbyterian Church, founded in 1666; haggard red brick facades with windows sealed off by cinderblock; the neon blue lights of Hotel Indigo, which opened last year in a long-vacant, century-old building near the busiest intersection in Brick City.

“The colors are amazing,” Hall declares on this late February morning.

Though the five-year-old Courtyard Marriott, just up the block, doesn’t take Hall’s breath away, it is the first new hotel built in Newark’s downtown in 40 years.

If the story of Newark’s revitalization is all about buildings, Hall, a 60-year-old principal at a charter school here, is living inside one of its newest characters. Her eclectic, fifth-floor apartment is one of the residential units in Teachers Village, a $150 million, mixed-use project financed through a consortium of private and public investments and blessed with mammoth government tax credits. The development lives along five blocks of Halsey Street, just off of the city’s main thoroughfare and was designed to convert into residents some of the 6,000 teachers and administrators who commute to this city of 280,000 each workday.

“When we started thinking about middle income housing,” says Ron Beit, the project’s lead developer, “we thought, ‘Whoa, wait a minute. We have this crop of teachers coming into Newark every day and the energy they bring would be a great catalyst for our plan.’”
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Thirty-three transactions and $130 million later, Beit and partners had amassed 79 properties, eight of those destined to become Teachers Village. The rest lie in wait for the next phases of the plan: a hotel; more residential, retail and office space; even an aeroponic farm smack in the middle of the city.
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Beit, who was once described by Booker as the “James Brown of development,” uses words like “metaphysical” and “ecosystem” when discussing his vision for Teachers Village. Berggruen is even more elegiac. “Newark basically got abandoned, it was like a blank canvas,” he says by phone from Paris in early March.

“My feeling is every neighborhood deserves beauty and quality, not because it’s challenged. Newark needs love. Paris doesn’t.”
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But Beit and his partners sensed an opportunity. Newark’s relatively cheap land prices and its proximity to New York City—20 minutes or so by train—had attracted new investors and development to the city for the past decade. But there was still a “doughnut hole” in the center of Newark’s downtown, a circle of blight ringed by the city’s more established businesses and government institutions. What this urban abyss needed most, Beit thought, was middle-income earners willing to live and spend money there.

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

Ball and chain holds back housing

Posted on March 28, 2015 by grim

From the NYT:

Negative Equity a Drag on Home Sales

While existing home sales are up nearly 5 percent from last year, economists say activity would likely be more brisk if it weren’t for the negative equity overhang that has lately worsened in many markets.

Completed sales on existing homes rose 4.7 percent in February compared with a year ago, reaching an annual rate of 4.88 million, according to the National Association of Realtors, a 1.2 percent increase over January. But Mark Fleming, the chief economist at First American Financial Corporation, a national provider of title insurance and settlement services, says his research tells him that home sales ought to be even higher. The labor market has improved considerably. And home prices are higher, which, though it may sound counterintuitive, have historically correlated with rising home sales, he said.

“Rising prices only crimp affordability for the first-time buyer who doesn’t yet own the asset,” Mr. Fleming said. “But the vast majority of home sales are to existing homeowners. And for existing homeowners, what changes affordability is their own income and the price of money.”

Both of these factors are running in homeowners’ favor. The problem, though, is that many are still unable to participate in the housing market because of insufficient equity.
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The share of homeowners underwater has, in fact, declined dramatically from the 2011 peak of 31 percent. As of the fourth quarter of 2014, the national rate was closer to 17 percent, according to Mr. Humphries.

“A big part of that is because of robust home value appreciation in the last three-plus years,” Mr. Humphries said. But he emphasized that the decline in underwater homeowners is “now slowing as the housing cycle matures. As price gains moderate, the pace at which we work out negative equity slows down.” By the end of 2015, the share of homes with negative equity will likely still be above 15 percent, he said.

Zillow’s 2014 fourth-quarter negative equity report even shows rising negative equity levels in 21 of the top 50 housing markets, compared with the third quarter. The reason is that the bottom 10 percent of homes in these markets, where negative equity is highly concentrated, are declining in value, Mr. Humphries said.

Homeowners in the bottom one-third of housing stock by price are three times as likely to be underwater than homeowners in the top third, Mr. Humphries said. What’s more, the Zillow report found, they are also far more likely to be deeply underwater, or owing at least twice what their home is worth.
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In the New York area, 13 percent of owner-occupied homes had a mortgage in negative equity. These homeowners were underwater by an average of $125,550, compared with $67,797 nationally.

Posted in Economics, Housing Recovery, Mortgages, National Real Estate | 32 Comments

All about the wages (but did they get it right?)

Posted on March 27, 2015 by grim

From Bloomberg:

U.S. Home Prices Are Surging 13 Times Faster Than Wages

For most people, buying a home is no cheap venture. That’s especially the case when the growth in U.S. home prices is beating wage increases 13 to 1.

Wages climbed by 1.3 percent from the second quarter of 2012 to the second quarter of 2014, compared to a 17 percent increase in home prices around that time, according to a new report from RealtyTrac. The real-estate data provider used the Labor Department’s weekly earnings data to measure wage growth, while home prices were derived from sales-deed data in December 2014 and compared to December 2012 on the hypothesis that a change in average wages would take at least six months to affect home prices.

Using localized earnings data, RealtyTrac also found that 76 percent of housing markets posted increases in home prices that exceeded the wage growth there during that time frame, led by the regions of Merced, California; Memphis, Tennessee; Santa Cruz, California; and Augusta, Georgia. Others include the Detroit, Houston and Miami regions. (To be fair, some of these areas are still considered affordable and experienced massive price drops during the housing bust and recession.)
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For demand from traditional buyers to improve, “either wages are going to need to go up or prices are going to need to at least flatten out and wait for wages to catch up,” he said. “You might say the third alternative is interest rates go down so you give people more buying power with their wages, but interest rates are about as low as they can go.”

The trend illustrates the limited impact of the Federal Reserve’s decision to include mortgage-backed securities in its unprecedented asset-buying program. The Fed bought more than $1 trillion of those securities to prop up the housing market after it collapsed and helped trigger the worst recession in the post-World War II era.

With the economy improving and home prices climbing, central bankers seem to have achieved at least part of their goal. However, investors have reaped much of the benefits of rising prices, while meaningful wage growth — and with it the ability of many Americans to buy homes — has yet to materialize. That’s been one reason housing has posted such inconsistent progress over the past two years, even with mortgage rates near historical lows.

The 24 percent of markets where wage growth outpaced home price appreciation from 2012 to 2014 include Tulsa, Oklahoma; Raleigh, North Carolina; Virginia Beach, Virginia; and New York, according to the RealtyTrac data. However in some places, such as the Baltimore region, it’s only because home prices fell during that time period.
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In such regions, there may be “a lot of distress those places are working through,” Blomquist said. Though for someone who’s looking for a more “emerging market” where prices have more room to run, “maybe that’s a good opportunity,” he said.

Posted in Demographics, Economics, Employment, Housing Recovery | 61 Comments

Otteau’s forecast for 2015

Posted on March 25, 2015 by grim

From the Record:

After tepid 2014, home prices forecast to rise 3.5% this year

After treading water in 2014, New Jersey home prices will get a boost from low mortgage rates and an improving job market this year, appraiser Jeffrey Otteau predicted Tuesday.

Otteau, an East Brunswick appraiser whose forecasts are widely followed in the real estate industry, expects home values to rise about 3.5 percent this year, compared with an anemic 1.4 percent in 2014. He also expects this year’s spring market – traditionally the busiest time to buy and sell – to be active.

“If we continue to see strong job creation in the state, it will translate into home purchase demand,” Otteau told more than 130 real estate agents at a seminar in East Hanover.

In January, New Jersey employers added 12,400 jobs – a bright start to the year, although Otteau and other analysts have cautioned that the state’s employers may not be able to keep up that pace. New Jersey added a total of 35,500 jobs for all of 2014 and, unlike the nation as a whole, still has not recovered all the jobs lost as a result of the 2007-2009 recession.

The housing market has been slowly recovering since prices and sales volume cratered several years ago. But New Jersey values are still well below the peaks reached in the housing bubble, and won’t return to 2005 levels until about 2025, Otteau said.

“Prices went up too fast, and we’re still paying the price,” he said. In addition, incomes have been flat.

“More people are working, but they’re not earning enough to be able to afford homeownership,” Otteau said. “We are not able to generate the same level of economic opportunity we once could in the U.S. and New Jersey.”

The best-performing housing markets in the state are those closest to New York City jobs, and other employment opportunities, Otteau said. “Where there are jobs, everything is better,” he said. And towns along commuter rail lines, including Glen Rock and Ridgewood, have experienced strong demand, he said.
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Although foreclosures remain an issue in the state, Otteau said that the problem is mostly confined to urban and rural areas, as well as some shore towns hurt by superstorm Sandy.

“Suburban towns have very little foreclosure inventory, and will not be affected,” he said.

Posted in Demographics, Economics, Employment, Foreclosures, Housing Recovery | 161 Comments

NAR calls rent and price growth “unhealthy”

Posted on March 24, 2015 by grim

From the WSJ:

Home Sales Edge Up, but Rising Prices and Tight Supply Loom as Headwind

Sales of previously owned homes ticked up last month, but buyers are facing a dynamic of rising home prices and shrinking inventory that make homes less affordable.

Existing-home sales increased 1.2% last month from January to a seasonally adjusted annual rate of 4.88 million, the National Association of Realtors said Monday. Sales in February were up 4.7% from the same month a year earlier.

The median sale price for a previously owned home was up 7.5% from a year earlier to $202,600 in February.

Existing-home sales remain lackluster more than five years after the recession, and the latest price growth is at an “unhealthy” pace at this stage of the recovery, NAR chief economist Lawrence Yun said.

The price increase “is certainly good news for homeowners but it is negatively impacting affordability for people who want to buy a home,” Mr. Yun said Monday.

Existing home sales fell slightly in 2014, despite a modest uptick in the second half of the year as the labor market strengthened and mortgage rates remained at historic lows. Still, sales of existing homes, which account for roughly 90% of all purchases in the U.S., have yet to approach prerecession levels.

Meanwhile, fewer homes were available for sale in February compared with a year earlier, a factor Mr. Yun said may be driving up prices.

At the current sales pace, it would take 4.6 months to exhaust the supply of homes on the market. Total housing inventory at the end of February increased 1.6% from a month earlier, to 1.89 million existing homes available for sale. But the increase was small compared with the typical rise in inventory from January to February, which has averaged about 5.6% since 2000, Mr. Yun said.

“It’s all about inventory,” Mr. Yun said. “The only way to truly get that inventory is for the home builders to bring those new homes onto the market. “When that happens some of the existing homeowners buy those new homes and thereby release their existing homes on the market.”

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

Housing recovery for the high end?

Posted on March 23, 2015 by grim

From the NY Times:

Mortgage Amounts Rising More Quickly Than Home Prices

Mortgage amounts are rising more quickly than home prices, an unusual phenomenon that seems to confirm continued weakness at the lower end of the housing market, according to the Mortgage Bankers Association.

The trade association reports that the average size of purchase loans began to outpace the recovery in home prices in September 2011. By December 2014, according to the group’s weekly mortgage application survey, the average purchase loan amount had risen by nearly 32 percent. The average for the week ending March 6 was $294,900, a record high. In other words, the average purchase loan now exceeds levels reached before the recession when home prices soared to unsustainable heights.

By comparison, the association noted, a Federal Housing Finance Agency index that measures home purchase prices shows a considerably more gradual rise of 18.5 percent since 2011. Why this unusual parting of the two trend lines? Lynn M. Fisher, the association’s vice president for research and economics, said one possible explanation is that home prices are rising more quickly for larger homes, skewing the loan average upward. But more likely, she said, is that the bulk of the properties being sold are at the high end of the price range. “The mix of people buying is changing,” Dr. Fisher said. “More of the bigger stuff is transacting.”

That opinion jibes with the business trend at Mortgage Master of Walpole, Mass., which merged with loanDepot in January to become one of the country’s largest nonbank lenders, funding $2.1 billion in February.

“What our mortgage applications reflect is that we see a lot more activity at the higher end in general,” said Paul Anastos, the president of Mortgage Master. He noted that jumbo loans (which exceed conventional conforming loan limits) account for about 25 percent of the combined companies’ business. The brisker activity among jumbo borrowers — those who take out loans greater than $417,000 — is partly because, while there has lately been some loosening of credit for borrowers at the lower end, “for the most part, the easing of guidelines has been a bit more on the jumbo end,” Mr. Anastos said.

Buyers on the lower end — looking for homes priced at $250,000 and below — “are generally of moderate credit and are having trouble or being intimidated from applying for mortgages,” said Lawrence Yun, the chief economist and senior vice president for research at the National Association of Realtors. “While on the upper end,” he continued, “given the stock market bull run of the past six years, they have done very well financially. The stock market expansion has given a comfort level at the top tier of families to go ahead and apply.”

Posted in Demographics, Economics, Employment, Housing Recovery, National Real Estate | 46 Comments

Bubble buyers capitulating?

Posted on March 22, 2015 by grim

From the Record:

Homeowners who’ve decided it’s (finally) time to sell

Henry and Rachel Kirk bought their two-bedroom Mahwah town house in 2005, not long before the housing bubble began to deflate. As their family expanded to include three children, they thought of trading up but couldn’t face the loss as housing values plummeted.

“We could never have put the place on the market back then,” Henry Kirk says.

A lot of homeowners felt the same way, choking off much of the supply of houses on the market in recent years. But that’s starting to change as home values have begun to recover. Prices are now about 19 percent below their 2006 peaks in the New York metro area, an improvement over the 27 percent drop they hit in the depths of the housing bust. That’s led more homeowners, including the Kirks, to put their properties up for sale.

According to Fannie Mae’s Monthly National Housing Survey, 40 percent of those polled in February said it’s a good time to sell, up from 34 percent a year earlier. And the New Jersey Realtors recently reported that while inventories remain tight, new single-family listings in February jumped 16.4 percent in Bergen County and 17.9 percent in Passaic.

With these signs that homeowners are more willing to sell as the spring buying season gets under way, The Record talked to three sellers who recently listed their homes.
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Sam Horowitz and Kelly McCormick bought their home, a Westwood colonial, in 2005. They loved the house and neighborhood, an easy walk to a playground, school and Westwood’s lively shopping district.

But they recently put it on the market so they could move to Morris County because both their jobs — he’s a commercial real estate broker, she’s a project manager for an engineering company — have relocated there.

Recognizing the reality of the market, they set a listing price of $389,000, even though they paid $455,000.

“Anytime you’re not getting out what you put in, you’re disappointed,” says Horowitz, who’s in his late thirties. “But we’ve lived in the house for almost a full decade, and the house was terrific for us that entire time. I also understand that every financial situation is not going to work out ideally.”
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Nancy and Steven Brillo of Wayne sold their house gradually — then all at once.

They had bought the Cape Cod for $315,000 in 2002, after falling in love with the Packanack Lake neighborhood.

“I cannot tell you how much we love living here. Packanack is a great community,” says Nancy Brillo, who works in education, testing children with special needs.

But once the couple had two sons — now 8 and 10 — the house began feeling too small.

“There’s one bathroom for the four of us,” Brillo, 39, says. “We couldn’t take it anymore.”

They began looking for a bigger place about two years ago, but their choices were limited because they were determined to stay in Packanack Lake. They put their house on the market several times over the past two years, and got three offers. But those deals fell apart because the Brillos couldn’t find the right house nearby.

To flush out sellers, they put letters in mailboxes around the neighborhood — and hit pay dirt with a ranch house around the block. The owners weren’t ready to sell yet, but said they would be in a year or two.

“My husband and I knew this was the house,” Brillo says. “We were in love with this house.”

Posted in Economics, Housing Recovery, New Jersey Real Estate | 27 Comments

Wish we were over-heated, I’m done with the winter.

Posted on March 21, 2015 by grim

From the WSJ:

Report Says “False Equity is on the Rise” in Housing Market

Home prices in some U.S. markets are rising much faster than rental incomes or what it would cost to build new houses in those markets, according to a new study by a real estate valuation firm.

The growing gap between sales prices, on one hand, and rents and so-called “replacement cost” on the other is evidence of markets that are over-heating, said the report by Jacksonville, Fla.-based Smithfield & Wainwright. “The build-up of false equity is on the rise again,” the report states.

Using inflation-adjusted data, the firm concluded that recent sales prices of single-family homes in 13 states and the District of Columbia are 10% more on average than what the homes would have been appraised for using two other methods.

One of those appraisal methods is simply what it would cost to replace the homes. The other method values homes by applying a multiplier to what those houses would yield in rental income.

Since home prices bottomed out in the second quarter of 2011, the firm says, sales prices increased 13.2% on average through the third quarter of last year nationwide. Meanwhile, rent and reconstruction costs have increased by only 1.9% and 3.3% on average, respectively, the report said.

During the last housing boom, inflated appraisals helped contribute to the run-up in home prices. In December, The Wall Street Journal reported that appraisers are increasingly being pressured to inflate home valuations.

In the story, the Office of the Comptroller of the Currency expressed concern that some of the mortgages banks are giving out are based on inflated values. Freddie Mac said it had launched fraud investigations to determine whether lenders had approved mortgages backed by inflated home appraisals.

In its report, Smithfield & Wainwright compared home sales data from the Federal Housing Finance Agency with how much income homes can produce if rented out (based on data from the Department of Housing and Urban Development) and how much it costs to rebuild homes if they are destroyed (based on data from building-cost data provider Marshall & Swift.)

The gap between prices and the other two variables increased greatly during the last boom. Nationwide, Smithfield & Wainwright’s data show that home prices on average increased 36% between the end of 2000 and the end of 2006 after adjusting for inflation while rent and reconstruction costs increased 5% and 16%, respectively.

The 13 states Smithfield & Wainwright identified as the most over-heated currently are Arizona, Colorado, Idaho, Louisiana, Massachusetts, Montana, New Jersey, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming as well as the District of Columbia.

Posted in Housing Bubble, New Development, New Jersey Real Estate | 17 Comments

You know it’s bad when Detroit replaces Atlantic City in Monopoly

Posted on March 20, 2015 by grim

Perhaps we should accept AC sliding further into the pit of irrelevance. Are those bulldozers I hear in the background? Sad reflection on the Atlantic City leadership and the State of NJ. Shame shame.

From the APP:

Atlantic City rejected by voters on new Monopoly games

Atlantic City is where the Monopoly board game began, but voters in a global contest to pick cities for new editions of the 80-year-old game have turned their attention elsewhere.

Hasbro Inc. let voters choose which cities would appear in the two new versions it is putting out, including one that will feature world cities. According to results released Thursday — the 80th birthday of Monopoly — Atlantic City, whose streets provided the names for the game’s squares when it was created in 1935, did not make the cut.

The winners in the Monopoly Here & Now U.S. edition are Pierre, South Dakota; Minneapolis; New York; Virginia Beach; Los Angeles; Chicago; Indianapolis; Charleston, South Carolina; Detroit; Boston; Milwaukee; Cleveland; Asheville, North Carolina; Denver; Atlanta; Little Rock, Arkansas; Seattle; Portsmouth, New Hampshire; Charlotte, North Carolina; Dallas; Waconia, Minnesota; and Chesapeake, Virginia.
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The Press of Atlantic City, in an editorial published this month when preliminary results showed Atlantic City lagging far behind, had this to say:

“Atlantic City made Monopoly. Atlantic City catches people’s attention. People are interested in the city. It’s special. Trust us, a game based on the city of Toledo — or Pawtucket, Rhode Island, for that matter, Hasbro Inc.’s hometown — would not have lasted for 80 years.”

Posted in Shore Real Estate | 83 Comments

National foreclosures nearing 10 year low

Posted on March 19, 2015 by grim

From Marketwatch:

U.S. Foreclosure Activity Down 4 Percent in February to Lowest Level Since July 2006 Despite 9 Percent Rise in REOs

Realtytrac today released its U.S. Foreclosure Market Report(TM) for February 2015, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 101,938 U.S. properties in February, a decrease of 4 percent from revised January numbers and down 9 percent from a year ago to the lowest level since July 2006. The report also shows a U.S. foreclosure rate of one in every 1,295 housing units with a foreclosure filing in February.

“Given that August 2006 was the peak of the housing bubble, this eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year — and is possibly even headed below historic norms given the skinny-jeans-tight lending standards over the past five years,” said Daren Blomquist, vice president at RealtyTrac. “In markets where foreclosures were processed more efficiently we are seeing foreclosure numbers now below pre-crisis levels in some cases. Conversely, the cleanup of deferred distress is continuing in markets where a logjam of in-limbo foreclosures is still lingering from the housing crisis — as evidenced by rebounding foreclosure activity in those markets.”

Despite the national decrease from a year ago, 24 states posted a year-over-year increase in overall foreclosure activity, including Massachusetts (up 53 percent; fifth consecutive month with an increase) and New York (up 19 percent; sixth consecutive month with an increase).
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Despite the national decrease in foreclosure starts, 23 states posted year-over-year increases in foreclosure starts, including Nevada (up 153 percent; fourth consecutive month with an increase), Massachusetts (up 116 percent; 11th consecutive month with an increase), and Texas (up 5 percent; five out of last six months with increase).

25 states post annual increase in scheduled foreclosure auctions

Nationwide, 45,880 properties were scheduled for a future foreclosure auction in February, down 13 percent from revised January numbers and down 4 percent from a year ago to the lowest level since July 2006.

Despite the national decrease in scheduled foreclosure auctions — which can act as the foreclosure start in some states — 25 states posted a year-over-year increase in scheduled foreclosure auctions, including New York (up 146 percent; ninth consecutive month with an increase), Massachusetts (up 88 percent; third consecutive month with an increase), New Jersey (up 38 percent; 15th consecutive month with an increase), and Washington (up 17 percent; five out of last seven months with an increase).
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Maryland, Nevada, Florida post highest state foreclosure rates
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Other states with foreclosure rates among the top 10 highest nationwide in February were Indiana (one in every 871 housing units with a foreclosure filing), Idaho (one in every 877 housing units), New Jersey (one in every 895 housing units), Illinois (one in every 906 housing units), Delaware (one in every 957 housing units), Ohio (one in every 1,000 housing units), and North Carolina (one in every 1,088 housing units).

Posted in Foreclosures, Housing Recovery, National Real Estate | 73 Comments

Jersey gains jobs

Posted on March 18, 2015 by grim

From the Record:

NJ added 12,400 jobs in January; unemployment rate at 6.3%

New Jersey got a double portion of positive employment news Tuesday: Not only did the state add 12,400 jobs in January, but it turns out that it added more jobs than first estimated in both 2013 and 2014.

Even so, the state has lagged the nationwide pace of job creation, and still has replaced only about 65 percent of the jobs that vanished during and after the recession.

The U.S. Bureau of Labor Statistics, which annually revises state jobs data, reported that New Jersey added 35,500 jobs last year, up from earlier estimates of 29,000. The revision for 2013 was more dramatic: Instead of the 18,800 added jobs originally reported, the BLS said the state actually added more than twice that many – 39,300.

The revised numbers indicate “a much more robust job performance in the state” than earlier numbers suggested, said Joseph Seneca, a Rutgers economist.

In January, the addition of 12,400 jobs left the unemployment rate at 6.3 percent, unchanged from December but down from 7.1 percent in January 2014.
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But even with the more positive job-creation numbers, the state’s unemployment rate in January was higher than the 5.7 percent national rate; the state rate has been consistently higher than the national level since 2011. Thirty-five states had lower unemployment rates than New Jersey in January.

And while the U.S. has more than recovered all the jobs lost during and after the 2007-2009 recession, the Garden State has now recovered just about 60 percent to 65 percent of its vanished jobs, according to James Hughes, a Rutgers economist.

“We’re moving forward, but we’re a long way behind the national growth rate,” Hughes said.

Patrick O’Keefe, an economist with CohnReznick, an accounting firm in New York and Roseland, said with the revised numbers, the state’s job market has gone “from a snail’s pace to a tortoise’s pace.”

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 109 Comments