Back in the New York groove

Posted on March 16, 2015 by grim

From the WSJ:

U.S. Regained Top Spot for Real Estate Investment in 2014

We’re number one – again!

For the first time since 2009, the U.S. was the top destination for capital going into real estate markets, according to Cushman & Wakefield’s annual report, leapfrogging over China. But it came as the global market actually got smaller, not bigger.

The market-share gains in the U.S. came more because of a drop in investment in land in China, the firm said, which led to a 6.4% drop in global real-estate investments to $1.21 trillion. “This decline in activity can be solely attributed to a drop in Chinese land purchasing,” the firm wrote. The report was released at the annual real-estate conference sponsored by MIPIM.
…
New York City was the top destination, followed by L.A., San Francisco, Washington, D.C., Chicago, and Boston. Globally, New York was still number one, followed by London, Tokyo, L.A., and San Francisco. In a nod to the youngsters, the survey found that the top markets offering “the right live/work/play environment” for millennials were Nashville, Brooklyn, Portland, and Memphis.

For 2015, the firm projects the global real-estate market will rise 11%, to $1.34 trillion, with the largest gains coming in central and eastern Europe (30%), followed by western Europe (19%), and North America (15%). But the report was cautious about the current year. “While growth may be better, it will be volatile and divergent market by market.”

Posted in Demographics, Employment, National Real Estate, NYC | 143 Comments

Maybe millennials will save the market?

Posted on March 14, 2015 by grim

From HousingWire:

Is household formation set for a rebound

Despite ongoing concerns about the delay in household formation by younger buyers, demographically speaking things may be about to turn a corner.

The decline in the share of young adults living with their parents should provide a boost to household formation over the next few years, according to a client note from Capital Economics.

This is an upside risk to their forecasts for sales and housing demand and, perhaps, homebuilding, but it is unlikely to trigger a sharp rise in prices, the note says.

The subdued rate of household formation has been a drag on the housing recovery in recent years.

Most measures suggest that, since 2008, the number of new households forming each year has been unusually low – little more than half a million.

But in the latest Homeownership & Vacancy Survey, the Census Bureau estimated that household formation surged to 1.7 million in 2014, from 400,000 the previous year.

“Admittedly, the annual measures of household formation have always been volatile and it’s difficult to know how much weight to place on the latest reading,” says Ed Stansfield, chief property economist for Capital Economics. “But such a strong rebound could be a sign that housing demand is set to receive a significant boost in the coming years.”

Posted in Demographics, Economics, Housing Recovery | 21 Comments

Strong shore season in store for 2015

Posted on March 13, 2015 by grim

From the Press of Atlantic City:

Beach rentals enjoying stronger season than 2014

It may seem a bit too early to worry about your plans for July and August, but it may be too late already to rent some local beach houses in the prime weeks of those prime summer months.

Real estate agents from Cape May to Long Beach Island report that their weekly rental homes are moving faster than last year — considerably faster, in some places.

“Interest is strong,” said Frank Shoemaker, of Ocean City’s Berger Realty. “We’re running about 35 percent ahead of where we were last year. We’ve already booked 7,000 rentals for 2015. Last year, we booked over 12,000” for the whole summer, he added.

Two counties to the north, Prudential Zack Shore Properties — which has three Long Beach Island offices — is ahead of even that impressive pace. On a mid-week in late winter, AnneMarie Aresco of the Beach Haven branch ran the numbers and found that “so far, as of this moment, we’re up 37 percent from last year.”

And while no agents expect potential renters to have any trouble finding a place to enjoy a week at the shore, they say customers may have to adjust either their desired locations or desired vacation schedules —or both. Because while there are plenty of homes on the weekly market, some of those prime July and August weeks are booking up, particularly in the most desirable spots.
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Still, for all the demand they’re seeing, agents say most renters don’t have to worry about paying a lot more than they’re used to.

“We haven’t seen too much change,” says Allan Dechert, the broker and co-owner of Ferguson Dechert Real Estate, which is based in Avalon but also covers Stone Harbor. “We advise owners that unless they made substantial changes to their property, they should maintain their pricing. We’re competing against a lot of different markets, so you need to stay in line.”

Farther south, Justin Aftanis of Cape May Realty agreed with that assessment.

“We’ve seen some small increases, but not anything we’d put a percentage on. Call them cost-of-living increases,” Aftanis said.

Posted in Economics, Housing Recovery, Shore Real Estate | 114 Comments

Unicorns on Myspace will save the NJ housing market

Posted on March 12, 2015 by grim

From HousingWire:

4 reasons New Jersey housing is set to boom

It is obvious that the Great Recovery has impacted regions in the U.S. unevenly. One local market has had more to deal with than others: the state of New Jersey. The Great Recovery has been anything but Great or Recovery for the Garden State. With slow job growth, high taxes, and the collapse of the real estate market, New Jersey had enough to deal with without having two catastrophic storms hit consecutively: Irene (2011) and Sandy (2012).

Back in 2011, Irene came with the price tag of $1 billion in damage to 200,000 homes and buildings, making it the costliest disaster in the state’s history.

Then came Sandy the following year, which brought estimated losses to businesses of up to $30 billion in New Jersey alone.

But this spring, 2015, could present itself as a big pivot for New Jersey’s real estate market
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1. Pent-up demand turns into a buying surge?

Over the past few months, there have been a number of very credible articles citing negative metrics, including mortgage apps dropping 3.5% and extensive number of days listings remain on the market.

What the warm weather appears to be carrying with it: some unexpected, pent-up demand and some badly needed inventory, according to a few New Jersey brokers.

“From the beginning of March, our office has seen a significant jump in business and activity for our office in Toms River,” said Robert Cecchini, operating principal at Keller Williams RCI Group in Toms River, New Jersey.
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2. Technology to make New Jersey brokers better prepared

Expertise and engagement

Facebook advertisements: Facebook advertisements are clearly the new ‘must-have tool’ on the block, but social media isn’t replacing the foundational personal referral, it is simply enhancing it.

Wait, hold it, right there. I let it slip when you blamed the housing market problems on Irene and Sandy. But Facebook?

Are you kidding me?

Facebook is the fix NJ’s housing market problems? What kind of crap is this?

3. Emerging demographics: The single millennial as the new buyers

There is a new market segment of homebuyer: the pre-married millennial.

Oh for f*ck’s sake, this just gets better. The pent up demand from unwed millennials on Facebook will save the housing market (Pretty sure that unwed Millennials aren’t using Facebook anymore.)

Certainly the business calls for more intentionality in establishing one’s expertise and professionalism.

Holy Christ – WHAT DOES THIS EVEN MEAN!?!?!

4. Real-time broker/buyer instant access

A broker is no longer held to physical face-to-face meetings, but can now give access to view the home virtually via technology to the home, paving the way for the actual inspection. These virtual open house platforms include:

Myspace and AOL Instant Messenger? Who the hell wrote this? Myspace and unwed millennials on Facebook are going to save the NJ housing market… “I would have bought that house, but the broker didn’t hit me on myspace with a link to a video chat” – Said no one ever.

Posted in Humor | 82 Comments

COAH dead – but is there any alternative?

Posted on March 11, 2015 by grim

From NJ Spotlight:

COAH IS HISTORY: STATE’S TOP COURT DECLARES TROUBLED AGENCY ‘MORIBUND’

Declaring New Jersey’s affordable housing process “nonfunctioning,” the state Supreme Court on Tuesday removed from the executive branch jurisdiction over low- and moderate-income housing and sent it back to the courts, giving a clear victory to housing advocates.

This significant order comes 40 years after the court’s first decision establishing the so-called Mount Laurel doctrine, which holds that municipalities must provide their “fair share” of affordable housing, and in some ways turns back the clock to that time period, when individuals, developers, and advocates had to sue to prevent municipalities from blocking this type of housing through zoning laws.

Unless, that is, either the Council on Affordable Housing, which by law is supposed to set housing obligations and approve municipal plans for meeting those obligations, takes action or Gov. Chris Christie and the Legislature can agree to new rules. Several sources said yesterday that neither of those is likely, at least for a while.

“I wouldn’t expect the governor to act in any way that is productive,” said Sen. Raymond Lesniak (D-Union) and sponsor of a COAH reform bill that Christie vetoed in January 2011. He said he will begin working with other lawmakers on a new housing bill, using the one Christie vetoed as a template.

Christie spokesman Kevin Roberts, in a statement, said the governor wants to fix the process: “Today’s decision is a call to action to finally finish the job of reforming our affordable housing system so that it is no longer a costly burden to the people of New Jersey and actually encourages sound development.”

The “Supreme Court ruling stripping COAH of its power in the affordable-housing process and transferring it back to the courts is a sad, but necessary, day for New Jersey,” said Peter Reinhart, director of the Kislak Real Estate Institute at Monmouth University and a 1993-2004 COAH member. “Since 2004, the process for providing affordable-housing opportunities has been mired in the failure of COAH to abide by the constitutional requirements and the delays caused by litigation in attempting to force COAH to act properly. Today’s decision will result in more litigation, but this time the judicial decisions on a town-by-town basis will result in enforceable plans to create affordable housing.”

And if municipalities do not comply, they could be forced to allow more housing units at greater density under the “builder’s remedy“ the Supreme Court allowed under its second Mount Laurel ruling.

Posted in New Development, New Jersey Real Estate, Politics | 56 Comments

Investors have all gone

Posted on March 10, 2015 by grim

From HousingWire:

CoreLogic: Cash sales drop to 35.5% of home sales

Cash sales made up 35.5% of total home sales in December 2014, down from 38.5% in December 2013, marking the 24th consecutive month of declines, the latest report from CoreLogic (CLGX) said.

On a monthly basis, the cash sales share fell by half of a percentage point.

CoreLogic cautioned that due to seasonality in the housing market, cash sales share comparisons should be made on a year-over-year basis.

At its peak in January 2011, cash transactions made up 46.5% of total home sales. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25%. Should the cash sales share continue to fall at the same rate that it did in December 2014, the share should reach 25% in mid-2017.

Looking at cash sales share by sale type, real estate owned sales had the largest cash sales share in December 2014 at 58.4%, followed by re-sales (35.4%), short sales (32.7%) and newly constructed homes (15.6%).

While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 8.8% of all sales in December and, therefore, had a small influence on the overall cash sales share.

In January 2011, when the cash sales share was at its peak, REO sales made up 23.9% of total sales.

Posted in Economics, Housing Recovery, National Real Estate | 111 Comments

South Jersey Foreclosures

Posted on March 9, 2015 by grim

From the Press of Atlantic City:

Sheriff’s sales struggle to unload foreclosed properties

The amount of distressed real estate is expected to increase as unemployed workers who lost jobs in 2014 fall behind on mortgage payments — and as the state’s six months of unemployment benefits run out.

Employment in Atlantic County dropped 8,400 from December 2013 to 126,100 in December 2014, according to seasonally adjusted figures from the Federal Reserve Bank of Philadelphia.

Area economies in South Jersey had lost thousands of jobs before 2014.

Daren Blomquist, vice president of market research firm RealtyTrac, said what’s happening in South Jersey is happening in New Jersey as a whole, only more so.

In one year, 2014, foreclosure filings in Atlantic, Cape May, Cumberland and Ocean counties rose 94 percent, 85 percent, 97 percent and 79 percent, respectively, California-based RealtyTrac says.

This includes initial filings, notices of sale and bank repossession.

The state average increased 70 percent. Nationally it dropped 18 percent.

But Blomquist expects foreclosure activity in the area to rise from job losses last year.

“We haven’t seen the full impact of those on the foreclosure numbers yet, and, yes, unfortunately that means it’s probably going to get worse before it gets better,” he said.

Foreclosures take a long time in New Jersey, a judicial foreclosure state, where it takes more than 1,000 days, second only to Hawaii, Blomquist said.

Short sales in Atlantic County represented 11 percent of all sales from January to October 2014, Blomquist said, an increase of 2 percentage points from that period a year ago. In a short sale, the lender agrees to retire the mortgage for an amount less than the principal still owed.

Blomquist said such data may indicate banks are more willing to work with short sales in harder-hit real estate markets.

Posted in Foreclosures, Shore Real Estate, South Jersey Real Estate | 89 Comments

Maybe millennials will buy after all?

Posted on March 8, 2015 by grim

From the NYT:

Millennials on the Homeownership Path

Besieged by the recession and buried in student loan debt, the so-called millennials, born from the early ’80s through the late ’90s, have largely lacked the financial wherewithal to buy their own homes. Even 30-year-olds were as likely to be stuck in their childhood bedrooms as they were to own their own place as of 2013, according to a recent report from the Federal Reserve Bank of New York.

But there are reasons to be optimistic. While college debt continues to dog this generation, several indicators suggest a widening path to homeownership in the next few years.
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A BRIGHTER EMPLOYMENT OUTLOOK. The job market was particularly unkind to young adults during the recession. Between 2007 and 2010, the unemployment rate within this group soared to 14 percent from 7.8 percent, compared with 9.6 percent for the population as a whole, according to Alan MacEachin, the corporate economist for the Navy Federal Credit Union, in Vienna, Va., who used Labor Department data. But at a Feb. 25 financial forum on millennials and money in Washington, he noted that the outlook was improving. As of January, he said, the millennial unemployment rate was down to 9.3 percent. Mr. MacEachin predicted that young adults would enjoy rising wages over the next couple of years, especially given that, according to the Census Bureau, about a quarter of them have at least a bachelor’s degree.

MORE ARE MOVING OUT. Researchers at the University of Southern California Lusk Center for Real Estate in Los Angeles say that even though job levels haven’t fully recovered, new household formation — which cratered during the recession — is back up to pre-recession levels. Gary Painter, the center’s director of research, and Jung Hyun Choi, a doctoral candidate, looked at data from 1975 to 2011 and found that household formation rates typically take three years to recover after a major drop in employment. The Commerce Department put year-over-year growth in household formation at more than 1.6 million in the fourth quarter of 2014; during the recession, the annual average was closer to 500,000.
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HOMEOWNERSHIP IS ON THE RADAR. One looming question is whether the housing market crash will cause young adults to shy away from homeownership and stick with renting. While it’s too early to say, a good share of young adults are at least thinking about owning. In a Bank of America/USA Today survey of millennials released in November, 32 percent said they were saving for a house. (On the down side, 22 percent said they were not saving at all.)

And last month, Redfin, a real estate brokerage, reported that 38 percent of millennials said they either would or have put off a wedding or honeymoon in order to save for a down payment on a home.

Posted in Demographics, Economics, Employment, Housing Recovery | 3 Comments

It ain’t fair

Posted on March 6, 2015 by grim

I don’t know who Lawrence Uniglicht is, but he nailed it this morning. Posted in full, from the Daily Record’s Letters section:

Feds owe New Jersey more than they’re paying

Why is New Jersey jumping through hoops to balance its budget as required by law? Why is our governor attempting to break a contractual obligation to contribute sufficient funds to public employee pensions, an unconstitutional act per a state judge? Why do New Jersey homeowners pay much higher real estate taxes than homeowners in most other states?

We should note New Jersey sends way more tax payments to Washington than it receives in reciprocal government spending from our nation’s capital. Our taxpayers in effect subsidize a host of other states, many in the South, that receive more from Washington than they pay out.

For example, New Jersey receives 61 cents per dollar sent, while Mississippi receives $2.02, Louisiana receives $1.78, Alabama receives $1.66, Arkansas receives $1.41, and South Carolina receives $1.35.

Indeed, many states subsidized by short changed states like New Jersey attract residents by offering real estate at relatively low prices taxed at a much lower rate than our fair state. Could it be New Jersey residents are getting the shaft while those other states are getting the gold mine?

Maybe that is why we have difficulty balancing our state budget, can’t meet our pension obligations. Maybe Washington ought to throw us a well-deserved bone, send back enough money to pay our current obligations. Through the years, we have been fleeced by much of the rest of the country for literally hundreds of billions of dollars in lost revenue.

Frankly, I’m tired of subsidizing all those anti-Washington southern Republican-leaning states, continually biting the hand that feeds them with harsh rhetoric, still fighting “The War of Northern Aggression” while indirectly taking New Jersey’s money.

Our two Democratic senators ought to sponsor federal legislation to grant proportional rebates to highly taxed states suffering a net loss in revenue to our nation’s capital. New Jersey, for one, getting an anemic bang for its buck, losing almost 40 cents per federal tax dollar, would likely secure enough revenue to balance its budget, pay its public pension obligations, and send enough money to municipalities to substantially reduce real estate taxes.

New Jersey taxpayers paid about $90 billion in federal taxes last year. Our net loss to Washington was therefore about $36 billion. A 50 percent rebate of $18 billion would cover a $2.25 billion pension payment that is due; help balance the state’s budget, leaving $15.75 billion to be disbursed among the state’s municipalities earmarked to reduce real estate taxes.

It’s only fair.

Lawrence Uniglicht

Posted in Economics, Politics, Property Taxes, Unrest | 98 Comments

Housing recovery for the top?

Posted on March 5, 2015 by grim

From Bloomberg View:

Income Inequality Hits the Housing Market

There’s been plenty of talk recently about signs of recovery in the housing market. Rather than think about housing as a single market, it might be helpful to look at housing as many markets based on everything from geography to price to new versus existing.

What I find intriguing is how things are shaping up based on price. It’s pretty clear that the fastest growth in new housing is at the high end, where sales are increasing the most. This might be a sign of economic recovery, but more likely it suggests that those in higher income brackets are doing better than average.

One of the features of today’s mortgage market is that, in spite of low rates, credit can be hard to obtain because of tough underwriting standards. That doesn’t affect high-end buyers as much as others because they tend to rely less on financing and have more cash as a result of gains from their financial-market investments.

According to the U.S. Census, the biggest gain in sales of new homes last year was for properties costing $500,000 and up, with a 17.3 percent increase, while sales of the least expensive houses tumbled 11.4 percent.
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Perhaps this is like some law of physics in which what goes down a lot must have an opposite reaction. True, back in the dark days of the financial crisis in 2008, sales of houses in all price categories plunged. The high end was hurt much harder, though, perhaps because the crash in financial markets inflicted so much pain on the investments of the well-off.
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What remains to be seen is whether sales of more expensive houses will continue outpacing the broader market. It seems as though all builders are trying to cash in on the same part of the market at the same time. This is keeping new lower-priced housing in short supply. We can only hope that better economic conditions will boost employment, raise incomes and ease credit conditions so that more moderate-priced housing is built and bought.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 88 Comments

It’s a privilege to pay NJ taxes

Posted on March 4, 2015 by grim

From the Record:

Bergen’s property taxes among nation’s highest

Bergen County homeowners had the fifth-highest average property tax bill in the nation, at $11,159, last year, according to a new survey by RealtyTrac, a California real estate information company. Passaic County’s single-family tax bill averaged $8,904, according to RealtyTrac.

The survey also confirms what Garden State homeowners have found out the hard way: New Jersey’s property taxes are among the highest in the nation, averaging more than 2 percent of a single-family home’s value each year. Passaic actually had a higher tax rate (2.98 percent) than Bergen (2.07 percent), apparently reflecting Passaic County’s lower property values.

Nationally, property tax rates average 1.3 percent of the property value, according to RealtyTrac.

“New Jersey has been in this unenviable position for a long time,” said Joseph Seneca, a Rutgers economist. “Property taxes are driven primarily by the costs of local government and public education, and the steady rise over the years in these costs.” In addition, local governments in New Jersey rely almost exclusively on property taxes, while in other states, local governments are funded in part by sales and income taxes, according to Henry Coleman, a Rutgers professor who studies public finance.

“New Jersey is a rich state, and rich states enjoy lots of high-quality public services, starting with education,” Coleman said.

The rate of growth in New Jersey property taxes has slowed since 2010, when a state law limited increases to 2 percent a year. In 2014, the average property tax bill in New Jersey actually grew by 2.16 percent, in part because of increased municipal spending to deal with last winter’s storms. Local governments are allowed to exceed the cap in certain cases, including response to disasters.

By contrast, the rate of growth from 2004 to 2005 was over 7 percent.

Posted in New Jersey Real Estate, Property Taxes, Unrest | 91 Comments

Say it ain’t so!

Posted on March 3, 2015 by grim

From Quartz:

Why you shouldn’t buy the worst house in the best neighborhood

Some proverbs offer sage counsel. A bird in the hand is worth two in the bush. Cleanliness is next to godliness. Even a broken watch is right twice a day. Luck is what happens when preparation meets opportunity. These are wise words to live by. But one saying that needs to have its proverbial status revoked is the well-known real estate adage, “Buy the worst house in the best neighborhood.”

Proponents of this strategy contend that buying a bad house in a good neighborhood is a surefire investment. The higher value of the surrounding homes, the argument goes, will elevate even the worst home’s value. A great neighborhood is like a rising tide: It will lift the price of all the houses in it.

This advice has been offered, exaggerated, and accepted for decades.

As far back as the late 1970s, newspapers have profiled investors who cite their worst-house-in-the-best-neighborhood strategy as the guiding principle of the real estate game. In 1987, a Chicago Tribune article, entitled “Buy the Worst House on the Street,” asked readers, “Would you spend $1 to make $2?”
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Even British artist David Hockney shared his opinion on the matter: “Always live in the ugliest house on the street—then you don’t have to look at it.”
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But are they right? Is buying the worst house in the best neighborhood a wise investment or is this strategy a real estate myth?
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If the adage were true, the bottom 10% of houses would need to perform better than the more expensive homes in their neighborhood. Faster appreciation would indicate that buying the cheapest house in the best neighborhood is a strategy that really does pays off.

But—alas—it doesn’t.

Instead, we found that only rarely does the bottom 10% outperform the top 90% of houses in a ZIP code. On average, these bottom-tier homes do neither better nor worse than the others.

Looking at those numbers, we might have concluded that buying a neighborhood’s worst home is therefore a neutral investment strategy—a myth, but not a harmful one. It doesn’t maximize returns. But it doesn’t cost buyers either.

Then, however, we dug a little deeper—and we saw that buying the worst house in the best neighborhood can actually backfire. That’s because the more affluent a neighborhood is, relative to its greater metropolitan area, the worse the homes in its bottom 10% tend to perform.

In short, the nicer the neighborhood, the bigger the myth!

Posted in National Real Estate | 52 Comments

Will the snow hold down sales?

Posted on March 2, 2015 by grim

From the Record:

Winter weather puts a chill on home sales

Avi and Leah Greengart want to sell their four-bedroom Teaneck house, but this winter’s frigid, icy weather hasn’t done them any favors.

“There has not been a warm day since we put it on the market” in early February, says Avi, a technical analyst. “Our thought process was that at this time in the market, there won’t be much competition from other houses.”

But as he’s found himself frantically shoveling snow before open houses, he occasionally wonders: “Why didn’t we just wait?”
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There’s a reason home sales tend to ramp up in the spring. Buying and selling in the winter can be a challenge — especially with the kind of winters we’ve seen the past two years. Average temperatures through most of February ran more than 10 degrees below normal in North Jersey.

Icy walkways, single-digit temperatures and snow-covered decks and yards can lead sellers to hold off on listing their properties and cause buyers to spend Sunday on the couch instead of touring homes.

“The cold, snowy, icy weather doesn’t make for a pleasant showing experience,” said George Rosko, an agent with Coccia Realty in Lyndhurst. “There is no place to park when you get to the house, and you can’t see what the front or rear yards really look like because they are snow-covered.”

The challenges start even before a buyer comes in the front door. Many sellers are otherwise ready to list their homes but don’t want to worry about clearing ice and snow off the driveway and front walks to make way for buyers.

“It’s difficult enough to keep dishes out of the sink and beds made in case of a showing, but the added outdoor cleanup is too much,” said Janine Fraser of Coldwell Banker in Saddle River. “Homeowners are also concerned about the liability if someone slips and falls on ice.”
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“I have three clients who are waiting for this weather to subside before they list their homes, and I agree with their decision,” said Kate Conover, a Re/Max agent in Saddle River. “Buying a home is an emotional purchase, so making the process as pleasant as possible is important. If you’re slipping and sliding up the walkway, and skidding across the tiled foyer, it just changes your reaction to the home.”

“Some people are going to wait [to list their homes] until the snow has melted,” said John Pordon of Century 21 in Totowa. “You try to tell people to list the house now, because with the inventory low, you put yourself at an advantage. But a lot of sellers don’t want people tracking salt and snow through the house.”
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“There are a lot of unknowns for the buyer,” said Gary Silberstein of Keller Williams Valley Realty in Woodcliff Lake. “I just did a home inspection in Mahwah last week, and the home inspector was only able to inspect what he was able to visually see. The deck, foundation, walkways, and part of the roof were covered with snow. The attorney put a clause in the contract that the buyer can go back and re-inspect after the snow melts.”

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

The Other New Jersey

Posted on March 1, 2015 by grim

From the Press of Atlantic City:

Still dropping: Home prices struggle to recover from recession

Robert Szostak is worried about how cheaply he must price his four-bedroom home in Middle Township before it sells.

A few prospective buyers toured the home — with its big yard and year-round sunroom nestled in Pine Forest Court — during its six months on the market, but there were no offers.

The asking price was cut by $30,000 to $289,900, and the 60-year-old Cape May Court House resident may reduce it more as he looks to retire and move out of state.

“I don’t think I’ll sell this unless I put it down to $225,000. … People can’t afford anything,” he said.

What’s happening with Szostak’s home is an example of home-price trends in South Jersey, particularly in year-round areas not greatly influenced by vacation homes.

An analysis of state data by The Press of Atlantic City shows nearly half of the municipalities in the region saw home sale prices drop in 2014 from the year before.

And in five years, only about a dozen towns with significant sales volumes in Atlantic, Cape May, Cumberland and southern Ocean counties saw a rise in average home sale prices, according to the analysis of New Jersey Division of Taxation data.
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These factors are playing out as Szostak tries to sell his home in Middle Township, where the average sale price rose 2 percent in the past year but is still 21 percent lower than in 2009 — a difference of nearly $76,000.

“Middle-class homes are gone. Anything that’s about $200,000 to $300,000, nobody wants anymore,” Szostak said. “It seems to be they want anything under $200,000 or the half-a-million dollar properties.”
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In Atlantic City and elsewhere in the county, the weight of steep property-tax increases, foreclosures and job losses tied to casino closings last year are weighing on prices, said Charlie Miltenberger, owner of Jersey Atlantic Realty in Atlantic City.

Short sales — which sell for less than the property’s mortgage — further dampen the market, he said.

“There was a lot of short-sale activity from 2008 onward, but it snowballed after the taxes went up in Atlantic City and the casino layoffs,” Miltenberger said. “They have to become very realistic, and they have to go by comparable sales, which reflect a depressed marketplace. … There are investors and home buyers out there, but they’re looking for bargains and realistically priced properties. It seems anything under $150,000 is moving. Once you increase the price, it slows down.”

The average price in Atlantic City dropped 12 percent last year from 2013; in Egg Harbor City, it fell 25 percent in a year, state figures show.

Posted in Demographics, Economics, Employment, Housing Recovery, South Jersey Real Estate | 42 Comments

January pending sales hit 18 month high

Posted on February 28, 2015 by grim

From the WSJ:

Pending Home Sales Rose 1.7% in January

A forward-looking gauge of U.S. home purchases rose in January to its highest level in nearly a year and a half, a sign of firming demand in the housing market.

The National Association of Realtors said Friday that its pending home sales index, which is based on contract signings for purchases of existing homes, increased 1.7% to a seasonally adjusted level of 104.2 in January from an upwardly revised reading of 102.5 in December.

Economists surveyed by The Wall Street Journal had expected pending home sales would rise 2% last month after dipping in December. Home sales typically close within a couple months after signing.

“Through the volatility, the trend in home sales is up probably up modestly at least,” High Frequency Economics chief U.S. economist Jim O’Sullivan said in a note to clients.

The index rose 8.4% in January from a year earlier and reached its highest level since August 2013, when home sales were tumbling after a jump in mortgage rates.
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According to Friday’s report, pending sales of existing homes rose 3.2% in the South last month from December, and climbed 2.2% in the West. Pending sales ticked up 0.1% in the Northeast and fell 0.7% in the Midwest.

Posted in Housing Recovery, National Real Estate | 35 Comments