CRDA Wins Eminent Domain Case

Posted on November 18, 2014 by grim

From the APP:

Judge: New Jersey can take piano tuner’s home

An Atlantic City piano tuner cannot stop the Casino Reinvestment Development Authority from taking his family home, a state judge ruled Monday.

Superior Court Judge Julio Mendez, who heard final arguments in an Atlantic City courtroom last month, ruled that the state agency can use eminent domain to seize the house in the shadow of the closed Revel Casino Hotel, citing an “appropriate public purpose” for the property.

Owner Charlie Birnbaum, 67, doesn’t live in the three-story brick house on Oriental Avenue, but he is there often. He uses the first floor of the building — bought by his parents in 1969 — for his piano-tuning business and rents the top two floors to tenants. The house is one of the few inhabited buildings on the block and overlooks a large swath of vacant land.

Robert McNamara, an attorney representing Birnbaum from the Virginia-based Institute for Justice, has argued that the CRDA doesn’t have specific plans for the land, other than take it and “think really hard about what they’re going to do with it.”

The CRDA argued that it needed the property to create a tourism district and that it is not obligated to disclose what specific stores will occupy the property, court records show. Stuart Lederman, an attorney for the CRDA, said Monday the ruling “upheld the broad powers” that the CRDA has and will allow the agency to continue revitalizing Atlantic City.

McNamara, meanwhile, said the ruling paves the way for an “appalling and outrageous scope of power for any government entity.” He said Birnbaum intends to appeal.

“It’s not an opinion we intend to let stand,” McNamara said. “The upshot of this opinion is that the CRDA can take anything it wants for any reason or no reason. If this ruling stands, there is literally no piece of property in Atlantic City that is safe from the whims of government officials.”

In his opinion, Mendez said the court recognizes Birnbaum’s connection to the property but that the CRDA provided an acceptable level of detail in its plans for the area.

“The court acknowledges and empathizes with the Birnbaums’ desire to keep this family owned property,” he wrote. “On the other hand, the court is satisfied that the CRDA is acting within the statutory framework and objectives of the New Jersey legislature.”

Posted in Politics, Shore Real Estate | 83 Comments

Living Downtown

Posted on November 17, 2014 by grim

From the Record:

Bergen County’s suburbs embrace a touch of the city 

Robert Weiner, co-owner of the Bruce the Bed King mattress and furniture store on Hackensack’s Main Street, last week took his 96-year-old father to see a first in the 60 years since his family opened its store — a 222-unit apartment building rising on State Street, a block from downtown.

That project and two others that will put an additional 700 apartments on Main Street are the result of zoning revisions that Hackensack put in place two years ago and the first signs of a policy shift that could produce the biggest transformation of North Jersey’s downtowns since the arrival of the malls pulled shoppers away from town centers in the 1960s and 1970s.

A growing number of North Jersey municipalities, like Hackensack, believe that adding rental apartments in their downtowns is the key to revitalizing their Main Streets. Not everyone, though, is convinced that downtowns and residential apartments are a perfect fit.

North Jersey, and particularly Bergen County, was an example of suburban prosperity in the latter part of the 20th century, typified by single-family homes and shopping centers along highways. But now North Jersey’s suburbs are responding to a 21st-century sensibility of millennials — those between the ages of 18 and 33 — who want to live in urban environments such as Hoboken or Brooklyn, as well as aging suburbanites who want to downsize without leaving their hometowns.

Demand for rental apartments, especially near train stations, is driving the change. “People want to live in places where they have that downtown, where they can live close to things that they’re going to eat and things that they’re going to buy, and the market is following,” said Maggie Peters, director of the Bergen County Economic Development Corp. Developers, she said, have known this already “and now municipalities are starting to react.”
…
James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy, and co-author of “New Jersey’s Postsuburban Economy,” which includes those findings, said North Jersey’s downtowns in a sense are getting back to their roots by adding residential.

“In the very early downtowns, in the early part of the 20th century, the second and third floor above the retail normally was some kind of residential,” he said “That lost favor after World War II. They were converted to offices or left vacant.”

“Now,” Hughes said, “most planners would have no disagreement that it’s a good thing, because a lot of the retailing that takes place in those downtowns is local population oriented” — restaurants, dry cleaners and stores that draw from residents in the immediate area.

“To keep the retail happy, you grow the buying power by adding residential downtown,” Hughes said.

New Jersey towns such as New Brunswick, Rahway and Morristown have brought new residential units into their downtowns and seen stores and restaurants follow.

“There’s been a big movement toward developing downtowns and people moving back into downtowns, and it’s not something that’s happened just in North Jersey or just recently,” said Francis Reiner, Hackensack’s redevelopment consultant, and a senior urban designer at Hasbrouck Heights architectural firm DMR.
…
Since the 1970s, most North Jersey municipalities have restricted their downtowns to commercial uses. Now, municipalities as varied as Hackensack, Bergen County’s largest city, with a diverse population of 43,000 and a 39-block downtown that used to be the county’s shopping hub, to Ridgewood, a village of 25,000 with a downtown that strives to maintain a small-town feel, are rethinking their zoning.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 85 Comments

Welcome to the top!

Posted on November 15, 2014 by grim

From the Record:

NJ leads in foreclosure activity as mortgage trouble eases nationwide

New Jersey leads the nation in the rate of foreclosures started during the third quarter, the Mortgage Bankers Association said Friday.

Nationally, by contrast, the worst of the foreclosure crisis has passed, and levels of mortgage distress have returned to pre-recession levels.

More than one in six New Jersey mortgage holders is either in foreclosure or late on payments, the Washington-based mortgage group said. About 7 percent of mortgages in New Jersey were delinquent on payments at the end of the third quarter, while another 8 percent were in the foreclosure process. That’s down a bit from a year ago, but significantly higher than the national rates.

New Jersey has lagged behind the nation in resolving the foreclosure crisis because foreclosures in the state, as in about two-dozen states, go through the courts, which tends to slow down the process. In addition, the system is still catching up from a near-freeze in foreclosure activity in 2011, after questions arose about mortgage industry wrongdoing.

Nationally, the percentage of loans that were in foreclosure or seriously late on payments have returned to the levels of late 2007, just before the recession began, according to the mortgage bankers.

“We are now back to pre-crisis levels for most measures,” said Mike Fratantoni, MBA’s chief economist. “The loans that are seriously delinquent are primarily loans that were made prior to the downturn: 74 percent of them were originated in 2007 or earlier.

“Loans made in recent years continue to perform extremely well due to the improving market and tight credit conditions; loans originated in 2012 and later accounted for only 4 percent of all seriously delinquent loans,” Fratantoni added.

Posted in Foreclosures, New Jersey Real Estate | 43 Comments

Monthly foreclosures jump. End in sight? Nope.

Posted on November 14, 2014 by grim

From HousingWire:

RealtyTrac: Foreclosures increase for two months straight

Foreclosure filings, including default notices, scheduled auctions and bank repossessions, increased 15% from last month but are still down 8% from a year ago levels, RealtyTrac’s October Foreclosure Market Report said.

This is the largest month-over-month increase since U.S. foreclosure activity peaked in March 2010.

In October, a total of 59,869 properties were scheduled for foreclosure auction during the month, up 24% from the previous month and up 7% from a year ago to the highest level since May 2013.

Scheduled foreclosure auctions in judicial foreclosure states, where foreclosures are processed through the court system, increased 21% from the previous month and were up 3% from a year ago and.

Meanwhile, scheduled foreclosure auctions in non-judicial states increased 27% from the previous month and were up 14% from 2013.

But this news is not a significant surprise, Daren Blomquist, vice president at RealtyTrac, said.

“Over the past three years there has been an average 8% monthly uptick in scheduled foreclosure auctions in October as banks try to get ahead of the usual holiday foreclosure moratoriums,” said Daren Blomquist, vice president at RealtyTrac.
…
However, Blomquist added that the sheer magnitude of the increase this year demonstrates there is more than just a seasonal pattern at work.

“Distressed properties that have been in a holding pattern for years are finally being cleared for landing at the foreclosure auction,” he said.

In addition, scheduled foreclosure auctions increased from a year ago in 29 states, including Oregon (up 399%), North Carolina (up 288%), New Jersey (up 118%), New York (up 89%), Connecticut (up 60%) and Nevada (up 53%).

Posted in Foreclosures, Housing Recovery, National Real Estate | 93 Comments

BEFORE it strangles the city?

Posted on November 13, 2014 by grim

From the Record:

Paterson’s foreclosures jumped by more than 500 percent over three years

City documents say a surge in foreclosures has cost Paterson’s municipal government about $12 million in tax payments over the past three years, part of an erosion of the tax base that officials warn could take decades to overcome.

The number of foreclosures in Paterson jumped from 75 in 2011, to 207 in 2012 and to 413 in 2013, the documents say. In addition to the $12 million in taxes lost to those foreclosures, Paterson last year also had to refund $9 million for tax refunds, the documents say.

That bleak scenario was outlined in the city’s 2015 application seeking Transition Aid from the State of New Jersey. The application says the foreclosures have resulted in an increase in the number of vacant properties in Paterson.

“Hence many neighborhoods throughout the city are experiencing vacant properties that bring more crime and deepen the urban blight syndrome,” reads Paterson’s Transition Aid application.

“What this means in the long-term is that the city will find it harder, even impossible, to recover its tax asset base,” says the application. “Once this happens, the recovery is slow at best and can take decades. We need to arrest this problem before it strangles the city.”
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If Paterson received the full $27 million being requested, that would allow the city to avoid a municipal property tax increase for the current fiscal year. At present, the city’s preliminary 2015 budget would produce a 5.2 percent tax increase. But officials insist that number will be reduced no matter what.
…
Torres said he expected the ongoing property revaluation will help mitigate the foreclosure problem. Moreover, he said his neighborhood stabilization program – a plan under which the city would take control of abandoned properties and bundle them in deals with developers – would revive some struggling parts of the city.
…
Morris said the foreclosures were a symptom of bigger economic problems confronting Paterson. “I don’t think we’ll see an end to the foreclosure problem until we see an end to the unemployment problem,” Morris said.

Paterson has endured a steady succession of municipal tax increases, including a whopping 29-percent hike in 2011. Morris said the increase contributed to the rise in foreclosures, but he said “the banking industry played a bigger role.”

Posted in Demographics, Economics, Employment, Foreclosures, New Jersey Real Estate | 78 Comments

Come back in 3 years

Posted on November 12, 2014 by grim

From HousingWire:

Zillow: Housing won’t normalize for at least 3 years

While a small percentage of people said they believe the housing market either already has returned to normal, or will in the next 12 months, 40% said it would take 3-5 years, which would be close to the ten-year anniversary of the financial crisis.

According to a recent survey by Zillow (Z) that interviewed 107 panelists, shifting demographics and would-be first-time homebuyers financially ill-prepared to buy will continue to hold back the housing market over the next several years.

The survey interviewed 107 panelists, asking them to predict the path of the Zillow home value index into 2019.

When asked when they expect the U.S. housing market to normalize, 30% of panelists said they expected the market to stabilize one to two years from now, and 40% said it would take 3-5 years. Just 20% said they believe the market either already has returned to normal, or will in the next 12 months.

“We’ve reached a point in the recovery where the only real cure-all is time,” said Zillow Chief Economist Stan Humphries. “The market remains very challenging for younger, first-time homebuyers who face an uphill battle saving for a down payment, qualifying for a mortgage and finding an affordable home to buy.”
…
But Humphries noted that it is not all bad news. “The landscape is slowly changing, as incomes begin to grow, negative equity fades and new households start to form. These shifts won’t occur overnight, but they are happening. Patience will be a virtue over the next few years as we wait for these traditional fundamentals to more fully take hold in the market,” he explained.

Additionally, panelists said they expect U.S. median home values to rise 4.8% in 2014, on average, to $176,760, and another 3.7% in 2015.

The national median home-price is predicted to exceed $196,400 – their 2007 peak –in February 2018.

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

Millennials the most important demographic?

Posted on November 11, 2014 by grim

From HousingWire:

Millennials still grapple with first-time homebuying

“Among primary residence homebuyers, the demographics have shifted dramatically, especially among first-time homebuyers, whose share of the market has dropped to its lowest level in decades,” said Jessica Lautz, director of member and consumer survey research for the National Association of Realtors. “We have also seen an increase in the median age and income of the average buyer, as well as in multigenerational household formations as adult children and elderly family members move back in with their families.”

Adult millennials, those aged 18 to 33, were a popular topic of discussion for the panel.

In 2014, millennials saw 60% better job growth than the U.S. overall and a drop in unemployment to 6%. This growth, along with improved economic opportunities, should encourage millennials to form households and buy homes in the coming years.

“Millennials are the largest generation of people in the U.S. and represent 60% of first-time homebuyers,” said Jonathan Smoke, chief economist for realtor.com. “They are also more likely than any other group to purchase a home in the next year.”

Tightened inventory, difficulty receiving credit and lower-than-average salaries have kept many of these buyers out of the market, but most economists see that as a temporary setback.

“It’s not that young people don’t want to purchase homes, it’s that they are delaying the purchase,” said Lisa Sturtevant, vice president of research for the National Housing Conference. “Many of the reasons millennials are not forming households or making purchases are economic, so as the economy improves, we should see this group become more of a force in the housing market.”
…
“They represented 37% of home shoppers this summer, and over the next five years this generation will make up two-thirds of household formations,” he said. “Between June and September 2014, over half of adults aged 21-34 visited real estate websites or mobile apps. And this is the cusp—get ready for the millennial wave to drive the housing market for decades.”

Posted in Demographics, Economics, Employment, Housing Recovery | 186 Comments

The meek may inherit the Earth, but the rich will buy the beach

Posted on November 10, 2014 by grim

From Bloomberg:

Springsteen Girls Priced Out as Rich Buy N.J. Shore Homes

When Hurricane Sandy roared through New Jersey two years ago, it not only tore up the shoreline. It also pushed out much of the middle class.

From Ocean City to Toms River, one-story cottages and bungalows damaged by the worst Atlantic storm on record are being replaced by multi-story homes that go for twice as much. Sales of million-dollar homes on the Jersey Shore surged to a seven-year high in the third quarter.

Sandy accelerated the turnover of existing homes to higher-priced ones, said Kevin Gillen, an economist at University of Pennsylvania’s Fels Institute of Government. Meanwhile, those relying on insurance claims and government grants are sometimes unable to rebuild as quickly as their wealthier neighbors.

“What we see right now along the water is that the people with resources, people who have a lot of money, right off the bat, they’re back in their houses enjoying it versus a lot of other people who are still struggling,” said Doug Quinn, who remains displaced from his Sandy-flooded home in Toms River, about 70 miles (113 kilometers) south of New York City.
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The outperformance of the rich on the Jersey Shore mirrors national trends since the recession ended in 2009, Gillen said. Between 2010 and 2013, median incomes fell for all Americans but the richest, a September Federal Reserve report showed.

“This overall economic recovery has been skewed to the upper half of the population,” Gillen said. “The more educated you are, the more accomplishments you have on your resume, the chances are you are better off today than you were a couple years ago in the depths of the recession.”
…
While multi-million dollar communities dot New Jersey’s Atlantic oceanfront, blue-collar workers have vacationed on its beaches and sailed along its inlets for generations. In the 1970s, New Jersey native Bruce Springsteen sang of wooing factory girls under the Asbury Park boardwalk.

Often, people inherited bungalows and other modest Shore homes dating to World War II, said Toms River Mayor Thomas Kelaher. No one’s building those anymore, he said.
…
Ninety-nine homes sold for more than $1 million in Atlantic and Cape May counties in the third quarter, the most since the same period in 2007, at the height of the housing bubble, according to Zillow (Z:US) Inc., the Seattle-based real-estate website.

Posted in Demographics, Economics, Employment, Shore Real Estate | 106 Comments

Prices decline in South Jersey

Posted on November 9, 2014 by grim

From the Press of Atlantic City:

Home-price reports show gains, declines in South Jersey

Home prices continued to increase moderately nationwide in the third quarter, the National Association of Realtors said this week, but in the South Jersey shore region, they kept declining.

The 1.7 percent decline in single-family-home prices from the same quarter a year ago in the combined Atlantic, Cape May and Cumberland counties represents an improvement from the 12-month drop of 8.2 percent in the second quarter.

The NAR survey considers the three counties one statistical area, which masks the considerable differences among the local counties.
A report by market information firm CoreLogic this week showed that in September, the home price softness was all in Atlantic County, while Cape May and Cumberland counties saw price increases.

Atlantic County home prices, including distressed sales, dropped by 3.8 percent in September compared with the same month a year ago and by 1.3 percent compared with August, CoreLogic reported.

In Cape May County, meanwhile, home prices were up 1.5 percent for the year through September, and 2.5 percent higher than in August. Cumberland County prices rose 2.3 percent for the year and 0.2 percent from the prior month.
…
The combined Atlantic, Cape May and Cumberland counties market saw a median sale price of $213,100 in the third quarter.

Posted in Demographics, Economics, Employment, Housing Recovery, South Jersey Real Estate | 27 Comments

Appreciation slowdown or just a temporary blip?

Posted on November 7, 2014 by grim

From the Wall Street Journal:

U.S. Home-Price Gains Pick Up a Bit

The National Association of Realtors said that home-price appreciation, after easing earlier this year, is starting to pick up.

However, price gains have slowed sharply in some of the cities that benefited the most from the housing rebound.

The group on Thursday said the median price of an existing single-family home was $217,300 in the third quarter, up 4.9% from a year earlier. That was faster than in the second quarter, when the median price was up 4.2%.

Prices still haven’t returned to the peak, which was $227,600 in the third quarter of 2005, according to the NAR.

The association said that prices rose in 125 of the 172 metropolitan areas that it tracks, compared to 122 of 173 metro areas in the last quarter.

In the latest quarter, prices rose the most quickly in the Midwest, where they gained 5%, while the Northeast saw the median price rise only 2.2% from the year before.

Prices rose the fastest in the metro areas including Daytona Beach, Fla., Toledo, Ohio, and Naples, Fla., according to the report, while they fell the most sharply in Cumberland, Md., New London, Conn., and Tampa, Fla.
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Jed Kolko, chief economist for real-estate information website Trulia, said that price gain slowdowns have been largely concentrated in cities that saw the biggest rebound after the housing crisis. On the other hand, in non-boom-and-bust markets, price gains have been tied more largely to economic factors, such as job and wage growth, and stayed steady, he said.

“As the recovery continues, the rebound effect becomes less important. Home price gains will increasingly reflect local fundamentals,” he said.

Posted in Demographics, Economics, Employment, National Real Estate | 133 Comments

No drop in asking prices

Posted on November 6, 2014 by grim

From MarketWatch:

Asking prices for houses accelerate in 40 metro areas

Home prices may be plateauing across the U.S., but the increase in asking prices for homes has accelerated in 40 of the nation’s largest 100 metro areas in October compared to last year.

New research suggests an improvement in slowing national house prices may be in the cards by the end of the year. The asking prices for homes rose 1% nationally in October over the previous month and increased 6.4% annually in October, which was still down from the 10.3% annual rise in October 2013, according to the latest data from real-estate website Trulia’s “Price Monitor.”

Although homes often sell for below and sometimes above asking prices, they’re an early leading indicator of house prices and lead final sales prices by around two months or more, says Jed Kolko, chief economist at Trulia, and adjust for the mix of listed homes. While price gains slowed in 60 metro areas and accelerated in 40 of them, the actual asking prices only fell in 9 metro areas.
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This is in contrast to house price data from S&P/Case-Shiller’s 20-city composite index released last month. U.S. home prices rose by just 0.2% in August 2014 over the previous month, slower than the 0.6% rise in July, the survey found. Still, house prices increased by 5.6% in August, which was the slowest pace since November 2012 and slower than annual growth of 6.7% in July 2014.

Posted in Housing Recovery, National Real Estate | 232 Comments

What? You didn’t actually think lending standards were going to stay this tight? Did you?

Posted on November 5, 2014 by grim

From HousingWire:

Why GSE support of low-down payment mortgage is not bad

Not everyone in the industry is on board with the Federal Housing Finance Agency’s recent move to encourage lenders to issue mortgages with down payments as low as 3% due to concerns that it would lead to more defaults.

But based on a review of the performance of low-down-payments of Fannie Mae and Freddie Mac mortgages in recent years, the Urban Institute argues that these fears are not well founded.

Fannie Mae CEO Timothy Mayopoulos announced during the Mortgage Bankers Association’s Annual Convention & Expo that the government-sponsored enterprise will soon begin offering a 97% loan-to-value mortgage.

Freddie will likely follow suit.

“Now we can safely and responsibility do these loans…we reduced the layering of risk,” Mayopoulos said at the time.

However, the GSEs purchased similar loans before.

Prior to late 2013, Fannie guaranteed loans with down payments between 3% and 5%.
…
“Of loans that originated in 2011 with a down payment between 3-5%, only 0.4% of borrowers have defaulted. For loans with slightly larger down payments—between 5-10 percent—the default rate was exactly the same,” the Urban Institute said. “The story is similar for loans made in 2012, with 0.2% in the 3-5% down-payment group defaulting, versus 0.1% of loans in the 5-10% down-payment group.”

Instead, default rates are more likely to hinge on a borrower’s credit history.

For example, the report cited that 95-97 LTV loans with a 700-750 FICO score have a default rate of 21.3%, versus 18.2% for 90-95 LTV loans. However, the 95-97 LTV loans with a FICO score above 750 had a 13.5% default rate, much lower than the 90-95 LTV loans with a 700-750 FICO score.

“Those who have criticized low-down payment lending as excessively risky should know that if the past is a guide, only a narrow group of borrowers will receive these loans, and the overall impact on default rates is likely to be negligible,” the Urban Institute said in its report. “If executed carefully, this constitutes a small step forward in opening the credit box.”

Posted in Mortgages, Risky Lending | 149 Comments

When in doubt, rent.

Posted on November 4, 2014 by grim

From the WSJ:

First-Time Home Buyers Fade Further

First-time home buyers made up the smallest share of U.S. buyers in nearly three decades, a traditionally solid slice of the housing market whose absence is raising questions about the impact of the crash on potential homeowners.

The finding, in a report by the National Association of Realtors, said about 33% of home buyers were first-time purchasers during the 12-month period that ended in June. That is down from 38% in the year-earlier period and off from the 40% that the group said is the historical norm.

Since the financial crisis, first-time buyers have contended with a confluence of factors making a purchase more difficult. Wages and benefits have been relatively stagnant, growing only 0.5% per quarter on average since the recession, according to a Labor Department index released last week.
…
And the average down payment, typically a hurdle for new buyers, was 18% in September, only slightly lower than the 19% put down in September 2013, according to Ellie Mae, a mortgage software provider that tracks the characteristics of loans run through its platform.

“Rising rents and repaying student-loan debt makes saving for a down payment more difficult, especially for young adults who’ve experienced limited job prospects and flat wage growth since entering the workforce,” said NAR chief economist Lawrence Yun.

Beyond the issues of affordability, some renters might be putting off home purchases because of the damage they saw housing do to the last generation of buyers, said Doug Duncan, chief economist of mortgage-finance company Fannie Mae.

Mr. Duncan said that when looking at reasons for not buying, renters typically don’t put tight mortgage credit as one of the primary concerns. “Today, demand weakness trumps credit tightness,” he said.

Jill Moylan, a broker and owner of Home Advantage Realty in Columbia, S.C., said that she thinks many recent college and professional graduates have had less confidence in finding and keeping jobs, leading them to choose to rent rather than buy immediately. She said that as a result, some move-up buyers, who would typically sell their starter home to move to a larger one, are instead keeping the property and renting it out.

“Confidence in the economy is really what we need,” Ms. Moylan said.

Posted in Demographics, Economics, Employment, Housing Recovery | 123 Comments

“Half of New Jerseyans would like to retire elsewhere”

Posted on November 2, 2014 by grim

From the APP:

Find out why retirees are leaving NJ

Charles Joseph would like to stay in New Jersey, but he might be priced out of the state.

The 67-year-old Clinton Township resident said all he hears is that people his age can’t afford to stay in New Jersey on a fixed income.

“I would like to stay here, but its becoming more expensive, especially real estate taxes,” he said. “I would rather not move, but I don’t know what the financial situation is going to be.”

Half of New Jerseyans would like to retire elsewhere, according to a Monmouth University/Asbury Park Press poll, which surveyed 802 adult residents from Sept. 17 to 21. More than a quarter of those surveyed consider it very likely that they will actually move. Cost of living and taxes remain the driving factors for those wanting to flee upon retirement, with more than a third of participants concerned about their savings.

“If I can afford to stay here I would,” said Joseph Kuspiel, of the Sewaren section of Woodbridge. “I’m content here. I have no problems here as long as the taxes don’t go crazy. I have no real problems.”

If large amounts of people of retirement age leave the state, New Jersey will gradually experience a difficult time making economic ends meet. An exodus of retirees would mean the loss of income taxes from their pensions and sales taxes from their spending at businesses within the Garden State. Combined, those factors paint a grim picture for those left behind.

“That means less state revenues for other programs that may be valuable to New Jersey citizens,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University in New Brunswick.

But New Jersey’s options to fix the situation remain scarce. The Garden State’s budget fell short by $800 million last year. The state only balanced its budget this year after Gov. Chris Christie slashed the Garden State’s contribution to a pension fund for public workers.

“We don’t have a lot of wiggle room to adjust our tax system as it is since we’re short of revenues,” Hughes said. New Jersey’s “not going to change that destiny very much. We are going to lose some affluent seniors, middle-income seniors and the like.”

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 112 Comments

Homeownership lowest since 1995 … Rental vacancies lowest since 1995

Posted on October 31, 2014 by grim

From Bloomberg:

U.S. Homeownership Rate Falls to Lowest Since Early 1995

The homeownership rate in the U.S. fell to the lowest in more than 19 years as the market shifted toward renting and tight credit blocked some potential buyers.

The share of Americans who own their homes was 64.4 percent in the third quarter, down from 64.7 percent in the previous three months, the Census Bureau said in a report today. The rate was at the lowest level since the first quarter of 1995.

Entry-level buyers have been held back by stringent mortgage standards and slow wage growth. The share of first-time buyers was 29 percent in September for the third straight month, compared with about 40 percent historically, according to the National Association of Realtors said.

“The homeownership rate hasn’t bottomed yet,” Paul Diggle, U.S. property economist for Capital Economics Ltd. in London, said in a telephone interview. “Something like 64 percent seems like a reasonable floor. But that floor is now in sight.”

The homeownership rate peaked at 69.2 percent in June 2004 and is close to the average of 64.5 percent from 1965 to 1999, data compiled by Bloomberg show.

The market since the latest recession has shifted toward rentals as millions of homeowners lost properties to foreclosure and potential buyers couldn’t afford to own a home or had trouble qualifying for loans. Demand for rentals sent leasing costs to records in some cities, spurred an apartment-construction boom and created a new industry of single-family landlords.
…
The vacancy rate for rental homes was 7.4 percent in the three months through September, the lowest level since the first quarter of 1995, the Census Bureau reported today. The rate was down from 8.3 percent a year earlier and 7.5 percent in the second quarter.

Posted in Economics, Employment, Housing Recovery, Mortgages | 144 Comments