Time to leave South Jersey?

Posted on October 12, 2014 by grim

From the Press of Atlantic City:

Atlantic County foreclosure rate second-highest in nation

As Atlantic City’s decline drew national attention in August, the area rose to national prominence in another metric.
One out of every 292 Atlantic County homes was in the foreclosure process in August, making the area’s foreclosure rate second-worst in the nation, according to housing information firm RealtyTrac.

But while experts say the surge is largely the result of cases finally moving through the state’s backlogged legal system, the casino closings could prove devastating down the road.

“Our data shows the average foreclosure process in New Jersey is over 1,000 days, so I would say it’s probably too early (to reflect casino closings),” said Daren Blomquist, vice president at Irvine, California-based RealtyTrac. “Unfortunately, (the loss of jobs) is probably going to mean this will add on to that trend we’ve already been seeing.”

Cumberland County fared almost as poorly as Atlantic County in August, with one in 307 homes with a foreclosure listing.

The area’s growing distressed-property market comes as the nation has seen a 7 percent increase in foreclosure filings — amounting to one in every 1,126 housing units — compared to July. Even so, filings are 9 percent lower than August a year ago.

New Jersey’s foreclosure rate rose 71 percent in August compared to the same month last year, ranking it sixth among 24 states in year-over-year rise.
…
Local real estate agent Edward Augsberger, of Weichert Realtors’ Wildwood office, said he expects the volume of foreclosures to rise as paychecks dwindle and, in many cases, disappear.

“Right now, I think you’ve got some properties with homeowners that are barely scraping by, and they just lost their job,” Augsberger said. “It’s going to get uglier.”
…
Losco said he’s recently been advising clients to make an honest appraisal of their futures. If they expect to maintain employment and would prefer to stay in the area for several years, they should weather the storm — but if the next few years are muddier, it might be time to pack up.

“I think people need to pay attention and make some realistic choices,” Losco said. “If they wait, all the figures could line up against them and decrease value. Or are they going to do the best they can now before all these issues come into play?”

Posted in Economics, Employment, Foreclosures, South Jersey Real Estate | 19 Comments

Rental prices continue to outpace purchase prices

Posted on October 10, 2014 by grim

From HousingWire:

Cost to rent rising faster than home prices

Nationally, asking prices for condos rose 7.3% year-over-year in September, according to Trulia’s (TRLA) latest rent and price monitor.

That’s more than the 6% increase for single-family homes.

Asking prices for condos rose more than 15% year-over-year in Miami, Denver, and West Palm Beach. Condo prices rose faster than single-family home prices in 18 of the nation’s 20 largest condo markets, Trulia reports.

“Although condo prices are outpacing single-family home prices, they are following similar patterns,” writes Trulia chief economist Jed Kolko. “Condo prices and single-family home prices are both rising faster in metros with stronger job growth and those that had a more severe housing bust in the past decade (a bounceback due to the “rebound effect”). In fact, metros with bigger condo price increases also tend to have bigger single-family home price increases.”
…
Growth in rents, meanwhile, also outpaced home price gains in September as well, rising 6.5% year-over-year in September.

“Like the for-sale market, the rental market is tighter for multi-unit buildings than for single family homes. Census data show that the multi-unit vacancy rate has been falling steadily, but remains elevated for single-family homes. Despite the multi-unit construction boom, the cost of living in these buildings is rising faster than in single-family homes – both for renters and buyers,” Kolko writes. “This is not necessarily a sign of a permanent shift toward city living. But it certainly reflects a reversal from the past decade’s bubble, when demand was strong for single-family homes in the suburbs and beyond.”

Posted in Demographics, Economics, Housing Recovery | 99 Comments

Come and get it!

Posted on October 9, 2014 by grim

From HousingWire:

Credit nation? HELOCs up 20.6% year-over-year

A total of 797,865 home equity lines of credit were originated nationwide, up 20.6% from a year ago and the highest level since the 12 months ending June 2009, according to RealtyTrac.

The report also shows HELOC originations accounted for 15.4% of all loan originations nationwide during the first eight months of 2014, the highest percentage since 2008.

“This recent rise in HELOC originations indicates that an increasing number of homeowners are gaining confidence in the strength of the housing recovery and, more importantly, have regained much of their home equity lost during the housing crisis,” said Daren Blomquist. “Nearly 10 million homeowners nationwide, representing 19% of all homeowners with a mortgage, now have at least 50% equity in their homes, according to RealtyTrac data. Meanwhile the percentage of homeowners with severe negative equity has decreased from 29% in the second quarter of 2012 to 17% in the second quarter of this year.

“The rise in HELOCs also reflects a natural evolution for a lending industry looking for products they can offer to homeowners who have already refinanced their first position loan into a low fixed rate,” Blomquist added. “A HELOC enables homeowners to leverage additional equity they may have gained since refinancing while still preserving the rock-bottom interest rate on their first position loan.”

Among the nation’s 50 largest metropolitan statistical areas with HELOC data available, 49 posted year-over-year increases in HELOC originations in the 12 months ending in June 2014. The only metro area with a decrease was Rochester, N.Y., where HELOC originations decreased 1%.

Metro areas with the biggest year-over-year increase in HELOC originations were Riverside-San Bernardino in Southern California (87.7% increase), Las Vegas (85.1% increase), Cincinnati (81.0% increase), Sacramento (65.1% increase), and Phoenix (60.1% increase).

Posted in Mortgages, Risky Lending | 72 Comments

Roll the dice

Posted on October 7, 2014 by grim

From the APP:

What superstorm? New homes on fast track on LBI

It’s looking like the good ol’ days on Long Beach Island, before there was a Great Recession and such a thing as a superstorm.

Nearly two years ago the barrier island represented some of the worst of Superstorm Sandy’s destruction: collided homes, leaking gas mains and debris-strewn streets. The October 2012 storm rang up $23.3 million in damage to 2,100 homes, according to Federal Emergency Management Agency data.

Now, the island is more than just rebuilding — it is seeing a wave of new construction. Demand for new homes is high, experts and real estate officials say, thanks in part to new elevation requirements and a federal dune replenishment project seen as a strong front line of defense in the case of another monster storm.

Towns up and down the barrier island have seen the most new construction in years, officials say. By the end of summer, more than 420 new building permits had been issued among the island’s six municipalities since 2013, according to local and state Department of Community Affairs data. Most of those — 302 — were written in Long Beach Township, the largest municipality on the 18-mile long island, according to the data. New building permits are for new homes; additions and alterations get separate permits.

Property data show the number of vacant lots on the island increased, from about 1,400 in 2012, the year of the storm, to about 1,700 this year, suggesting more opportunities to build. Those figures may include lots where a home was demolished or land was subdivided.

“We’re busy. Everybody’s busy,” Long Beach Township Clerk Lynda J. Wells said.

That includes real estate agents, who say they noticed interest pick up about six to eight months after the storm.

“It became evident that the market was on a pretty fast track and it’s remained on a pretty fast track,” said Rick Jones, a real estate agent with G. Anderson Agency.
…
“People who have always wanted to be part of the home ownership of LBI are taking the chance now; there’s properties on the market that hadn’t been on the market before,” said Maggie O’Neill, an agent for the Mary Allen Realty. “Some people have said, ‘OK, I’m done,’ and the new regime is coming in. And a lot of people say, ‘You know, it was a once-in-a-lifetime storm and we’re going to roll the dice.’”

Posted in Housing Recovery, Shore Real Estate | 108 Comments

Move over NYC

Posted on October 6, 2014 by grim

From the NY Yimby:

North Jersey Builds a Lot of Housing, and Here’s How They Do It

The pace of new residential construction is picking up in New York City, but it’s the west side of the Hudson that is undergoing the region’s most dramatic building boom.

On a per-capita basis, Hudson County and Bergen County in New Jersey have issued far more building permits than the five boroughs over the past several years, thanks to strong market demand, significantly lower construction costs, and a willingness of some New Jersey municipalities to seek out and plan for dense, transit-oriented development.

Consider that since January of 2012, nearly 15,000 new building permits were issued in Brooklyn. But if the borough had issued the same number of permits as Hudson County, on a per capita basis, there would have been almost 37,000 permits issued in Brooklyn over that time.

“Many communities in New Jersey that do have access to transit have been very pro-active about zoning for mixed use, higher density, transit-village appropriate development,” said Courtenay Mercer of the Regional Plan Association. “A lot of them recognize this as a great way to promote economic development.”

Brian Stolar of the Pinnacle Companies, a developer active in northern New Jersey, says that many cities want to take advantage of market trends favoring urban living.

“Some of the municipalities are recognizing that one, it’s a trend you don’t want to get in the way of, and secondly it is good for their own proceeds as a source of revenue.”

While a lot of new development is planned for Jersey City and the “Gold Coast,” there is also a lot of recent activity in cities and towns further inland, like Secaucus, Lyndhurst, the City of Orange, Harrison and Newark. Developers are reacting to strong market demand and are also attracted by lower construction costs than what they would pay in the five boroughs.

“This is a widespread phenomenon outside of the Gold Coast,” said Tim Evans of New Jersey Future, a non-profit group that advocates for transit-oriented development in the state. “It’s a real thing. It’s not just the cities – it’s the older towns.”
…
But even the market-rate housing in many New Jersey communities is affordable by New York standards. New condos in Jersey City and Hoboken can be found for between $500 and $700 a square foot. Comparable condos in Long Island City and downtown Brooklyn, on the other hand, are asking between $900 and $1,000 per square foot.

This value is attracting migrants from New York City, though a large number of New Jersey residents are also moving to the five boroughs. About 7,700 New York City residents moved to Hudson County in 2012, according to Census data, while 5,500 people from Hudson County moved to New York. In the case of Bergen County, more people moved to New York City than made the reverse migration.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 71 Comments

Everyone but Americans want a piece

Posted on October 4, 2014 by grim

From the NY Times:

Indians Join the Wave of Investors in Condos and Homes in the U.S.

Arun Kumar owns three apartments in New Delhi, where he has carved out a comfortable life as part of India’s rapidly expanding middle class. Not long ago, he also became a global landlord, picking up an inexpensive three-bedroom house and a duplex nearly 8,000 miles away, in St. Louis.

For Mr. Kumar and other affluent Indians, American real estate is a security blanket. Faced with what some have considered a bubble in real estate prices in major Indian cities and a sometimes jittery Bombay Stock Exchange, they are joining a wave of buyers from other countries who see the recovering United States housing market as one of the best places to put their money these days.

The wealthy elite from China, Latin America and elsewhere have bought pieds-à-terre in glassy towers in Manhattan, luxury condos in Miami and homes along the West Coast. Law enforcement investigations have found that some foreign investors are using American real estate holdings, at least in part, to hide cash and other assets from authorities in their home country.

But many less-than-superrich foreign investors just want a safe place to put extra savings, and their investments tend to be much less grandiose than the trophy properties that have drawn most of the attention. And for Indians in particular, who long trusted in gold to protect their wealth, American real estate offers a “very, very attractive destination,” said Subir Gokarn, director of research at Brookings India in New Delhi.

Jed Kolko, chief economist at Trulia, an online marketplace for residential real estate, said the most popular property searches for people from India were in and around Silicon Valley, where technology firms heavily recruit from India; in the Boston and Philadelphia areas near universities that have numerous students from India; and in suburban areas of New Jersey and in Queens, where there are established Indian-American communities.
…
At the same time, the riverfront Newport area of Jersey City has emerged as popular with Indian buyers.

On a recent evening, commuters returning home from Manhattan wove between the high rises, passing advertisements for Jhalak Dikhhla Jaa, an Indian reality dance TV show, and Raaz Specialty Indian Cuisine. A poster in the nearby train station for an Indian news website featured a riff about pani puri, a popular Indian street snack.
…
Irene Barnaby, a broker with Weichert Realtors in Jersey City, said her Indian clients generally spent about $600,000 to $800,000 on condos. Some buyers pay cash because traditional banks won’t give them mortgages without a credit history in the United States. But she has also created relationships with smaller banks that will lend money to her clientele.

“They can get exactly what they want in this area,” Ms. Barnaby said.

Posted in Demographics, Economics, New Jersey Real Estate | 67 Comments

Seismic shift? Really?

Posted on October 3, 2014 by grim

From NJ.com:

See how N.J.’s population is undergoing a seismic shift

New Jersey’s population has started to contract back toward its urban core for the first time since the end of the second World War, new research shows, in what could mark a death knell for suburban sprawl and foretell significant changes to the fabric of the Garden State.

A new study published by the Bloustein School of Planning and Public Policy at Rutgers University reveals that between 2010 and 2013, population in 12 of the 27 counties that constitute the New York metropolitan area experienced population losses following more than a half-century of gains.

In New Jersey, Sussex, Warren, Hunterdon and Monmouth Counties all suffered losses during this period.

These counties all have one thing in common – they all exist on the far periphery of the metropolitan area – which researchers say is a signal that after decades of outward expansion, people are gravitating back toward cities.

“The era of moving ever outward is probably now in the past,” said James Hughes, dean of the Bloustein School, and a co-author of the study. “You always have to be cautious about forecasting, but it would appear we may be at the beginning of a major change, the crest of a wave.”

During the same period, New Jersey’s urban counties have been growing at a far faster rate, a pattern mimicked in New York City and the counties of New York state and Connecticut that border it.

It marks a reversal of how population grew in the region from 1950 through 2000, when urban counties suffered dramatic losses and New Jersey’s suburban communities experienced a period of unparalleled growth.
…
Hudson County, for example, has grown by nearly 25,000 people since 2010 after losing more than 90,000 from its population from 1950 to 1980. By contrast, Sussex County lost more than 3,200 people in recent years after posting gains of more than 80,000 from 1950 to 1980.

“It’s a potential threshold change,” said Joseph Seneca, a co-author of the study and professor at the Bloustein School. “And it carries a great deal of implications.”

Seneca said the shifts are being driven by lifestyle changes within America’s younger generations, who are rising to dominate the workforce as Baby Boomers continue to age toward retirement.

Should the trend continue, it could have major impacts on the state’s economy, infrastructure and real estate markets, he said.
…
“The suburbs weren’t heavily congested from 1950 to 1980. It was still a new fresh frontier and the suburbs all looked fresh and clean,” Hughes said. “Now a lot of suburbs are over-congested and over-developed. It’s not that magic environment of old.”

Posted in Demographics, Economics, Housing Recovery, New Jersey Real Estate | 93 Comments

“I can get a lot of house there without spending a lot of money.”

Posted on October 2, 2014 by grim

From HousingWire:

Chinese investors remain an X Factor for the US housing market

his year, for the first time, the Chinese surpassed Canadians as the top investors in American residential real estate. According to the National Association of Realtors, during the 12-month period that ended in March, investors from China (Mainland China, Taiwan and Hong Kong combined) invested $22 billion in the U.S. housing market. Canadians, the perennial leader in foreign investment, spent about $13.8 billion.

While this upsurge was difficult to predict, the Chinese have good reason to invest in U.S. real estate, and the impact is being felt in the California, Washington and New York markets, where more than half of China’s investment dollars have gone.
…
While it may come as a surprise to many in the American housing market, Chinese investors consider the U.S. market and even the coastal cities of California to be relatively inexpensive.

Compared with incomes, housing is expensive throughout China, and in the cities of Guangzhou, Beijing, Shanghai and Hong Kong/Shenzhen– where the combined official population of 75 million is equivalent to roughly 25% of the U.S. population – is far more expensive than desirable California markets like Los Angeles, San Francisco and San Diego.

In fact, a wealthy buyer from China can look at even the most expensive California markets like San Marino and think, “I can get a lot of house there without spending a lot of money.”
…
So what does this mean for homeowners and buyers?

In markets like Indianapolis, Columbus and Kansas City, the impact is negligible.

Most Chinese buyers are shopping with cash and doing so almost exclusively in California, New York and Washington, while Brazilians and other wealthy South Americans tend to buy in Florida. In those states, they are having an impact.

Cash buyers from other countries might be seen as a threat to domestic homebuyers in these states. These buyers must apply for a mortgage at a time when lending standards are tightened and approvals are slow.

While $22 billion in Chinese investment in U.S. housing sounds likes a large number, it is actually rather small: in a typical year, the total value of residential real estate transactions in the U.S. is around $1 trillion. But foreign buyers do have a large impact on specific markets, pricing some domestic buyers out of the market, but also bringing welcome relief to coastal California homeowners stuck in upside-down mortgages.

Posted in Demographics, Economics, National Real Estate | 115 Comments

July home prices continue cooling trend, still up strongly from last year

Posted on October 1, 2014 by grim

From the WSJ:

U.S. Home Price Growth Slows Again in July, Says S&P/Case-Shiller

The yearly growth in home prices across the U.S. slowed more than expected in the middle of summer, according to a home price report released Tuesday.

The home-price index covering the entire nation increased 5.6% in the 12 months ended in July, said the S&P/Case-Shiller Home Price Index report. That is down from 6.3% in June. U.S. home prices were rising at double-digit yearly rates as recently as February 2014.

The home-price index covering 10 major U.S. cities increased just 6.7% in the year ended in July. The 20-city price index was also up 6.7%, less than the 7.3% expected by economists surveyed by The Wall Street Journal.

On an unadjusted basis, the national index increased 0.5% in July over June, while the 10-city index and the 20-city composite each increased 0.6%. Seasonally adjusted, the U.S. index increased 0.2% in July, the 10-city gauge and the 20-city composite each fell 0.5%.

“While the year-over-year figures are trending downward, home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.

“The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales,” he said. “The rise in August new home sales–which are not covered by the S&P/Case-Shiller indices–is a welcome exception to recent trends.”

Regionally, cities in the south and west that saw the largest price cuts during the recession, are seeing some of the strongest price increases now. But even in areas like Las Vegas and Miami, the yearly gains have slowed.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 94 Comments

August Pending Home Sales

Posted on September 30, 2014 by grim

From HousingWire:

Pending home sales slowed in August

Despite slowing in August, pending home sales are still running at the second-highest level in the past 12 months, according to the National Association of Realtors.

Declines were evident in every region except for the West, which saw its fourth consecutive quarter of gains.

NAR’s pending homes sales index is a based on contract signings.

The index dropped 1% to 104.7 in August from 105.8 in July, and is now 2.2% below the reading in August 2013.

The index is above 100 – considered an average level of contract activity – for the fourth consecutive month and is at the second-highest level since last August.

Lawrence Yun, NAR chief economist, says contract signings are holding steady and fewer distressed sales and less investor activity are driving the decline.

“Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” he said. “With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.”
…
The index in the West rose for the fourth consecutive month, up 2.6% in August to 102.1, but still remains 2.6% below August 2013.

The Northeast saw the index slide 3% to 86.5 in August, but is still 1.6% above a year ago. In the Midwest the index fell 2.1% to 102.4 in August, and is 7.6% below August 2013.

Pending home sales in the South decreased 1.4% to an index of 117.0 in August, unchanged from a year ago. Existing-home sales are expected to be stronger in the second half of the year behind improved inventory conditions, continuously low interest rates and slower price growth.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 53 Comments

Funny way of defining “success”

Posted on September 29, 2014 by grim

From the South Jersey Times:

Real estate markets aren’t known for consistency, but as South Jersey inches toward pre-recession normalcy, one old adage appears to remain true — it’s all about location.

Specifically on the county level, data from recent reports on median home prices show Gloucester leading the pack, with Salem and Cumberland counties still struggling.

A recent report showed Gloucester’s median home prices increasing 3 percent year-over-year when looking at second-quarter numbers, a standout in the Greater Philadelphia region where many counties saw the same figure either stay flat or take a small dip.

It’s fair to say it’s something to be happy about, said Daren Blomquist, vice president of RealtyTrac, a website that reports and analyzes market trends and foreclosure rates.

“That’s been happening now for five consecutive months, home prices have been up from a year ago,” said Blomquist. “That’s another good sign it’s not just market fluctuations.”

But not a great sign for Cumberland and Salem counties, which had the same figure come in at a steep decline of 16 percent, something Blomquist said was “pretty extreme” but likely skewed by foreclosure rates.

“It’s a pretty big drop, and digging into some of the other data we have, I think the reason we can point to behind it is there’s a bigger share of distressed sales in those two counties,” said Blomquist. “In fact it’s increasing, and particularly in Cumberland County.”

Just 1.4 percent of home sales in the county last July were considered distressed, and that figure jumped to 4.7 percent this year.

While there wasn’t enough data to parse out the distressed sale rate in Salem County, Gloucester’s showed a higher percentage than Cumberland’s at 8.1 percent, but that represents a decrease from last year when 12.3 percent of the county’s sales were distressed.

Gloucester’s good news is likely the calm before the storm, said Blomquist, who anticipates distressed sale rates may rise again as a backlog in New Jersey’s court system delayed the finalization of many foreclosure proceedings.
…
While most of those are leftover from the last housing bust, the recent closure of major employers in South Jersey, particularly in Atlantic City’s crumbling casino market, may end up impacting the housing market as well.

“That additional job loss we’re seeing could certainly cause even more distress to hit the market,” said Blomquist.

Posted in Demographics, Employment, South Jersey Real Estate | 48 Comments

The Gold Coast River Bank?

Posted on September 27, 2014 by grim

From the WSJ:

Comeback for Harrison, N.J.

The town of Harrison, N.J., has long offered its residents a friendly, diverse and safe community; easy access to Newark, Jersey City and Manhattan; and relatively affordable wood-frame houses on quiet streets.

“I just like the general feeling of being able to walk around the streets, talk to people,” says the mayor, James Fife, who moved in 1966 to Harrison, a Hudson County town of about 14,000 people situated across the Passaic River from Newark. “You know your neighbors. It’s a nice little town.”

But the little town is growing. The once-industrial community is in the midst of a major redevelopment, with about 700 new residences as well as hotels and retail establishments opening downtown and construction of a new, $256-million PATH station. The Red Bull Arena, home to a Major League Soccer team, opened in 2010. More housing and retail construction is under way.
…
Town leaders and developers are optimistic that the changes will revitalize Harrison. Once known as “the beehive of industry,” the town’s population of 14,000 ballooned to 90,000 each workday in the mid-20th century. But after its large manufacturers relocated to other states, the town suffered from decades of neglect, with rising taxes and shrinking services.

“We were left with big, hulking buildings and not too much revenue,” says Mr. Fife, who took over stewardship of the redevelopment projects from his predecessor, Raymond McDonough, who died earlier this year.

The plans have been more than a decade in the making, but were slowed by the Sept. 11, 2001, attacks and the economic recession. “It’s taken a while, but now we seem to be moving in a positive direction,” Mr. Fife says.
…
Developers say they are drawn by the town’s location along the PATH line, offering residents a quick commute to job hubs in Newark, Jersey City, Hoboken and Manhattan, as well as the existing urban infrastructure.

Posted in Demographics, Economics, Housing Recovery, New Development | 41 Comments

Price growth being driven by mix shift?

Posted on September 25, 2014 by grim

From HousingWire:

Home-price growth in August slows in 18 of 20 largest housing markets

Home-price growth is slowing even as the sales of homes under $200,000 slip and the share of home sales above the $500,000 price point grow, according to the August home report from RealtyTrac.

Residential properties, including single-family homes, condominiums and townhomes, sold at an estimated annual pace of 4,508,559 in August, down one-half% from the previous month and down 16% from a year ago — the fourth consecutive month where annualized sales volume has decreased on a year-over-year basis.

The median price of U.S. residential properties sold in August — including both distressed and non-distressed sales — was $195,000, up 3% from the previous month, and up 15% from a year ago to the highest level since August 2008, a six-year high.

“Higher-end properties are taking up a bigger share of a smaller home sales pie, boosting the median home price nationwide higher even as home price appreciation slows to single digits in many of last year’s red-hot local housing markets,” said Daren Blomquist, vice president at RealtyTrac. “On the other hand, markets where large institutional investors and other buyers have not picked clean lower-priced inventory are continuing to see strong, double-digit increases in median home prices.”

The share of sales in the $200,000-and-below price range was down 9% from a year ago, while the share of sales in the above-$200,000 price range increased 10% from a year ago.
…
Among 197 metropolitan statistical areas with a population of 200,000 or more and with sufficient sales data, 124 (63%) saw lower annual home price appreciation in August 2014 compared to August 2013.

Home price appreciation slowed in 36 of the nation’s 50 largest markets (72%) and in 18 of the nation’s 20 largest markets (90%).
…
“We continue to see the traditional housing cycle this year with most of the price appreciation happening in the spring and early summer months,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market. “Inventory in the Southern California coastal markets has become far more balanced, giving buyers a good level of choice and a moderate amount of negotiating room.”

Posted in Economics, Housing Recovery, National Real Estate | 69 Comments

August home sales disappoint

Posted on September 23, 2014 by grim

From the WSJ:

U.S. Home Sales Falter as Investors Pull Back

U.S. home sales slumped in August as investors continued to pull away, raising doubts about the market’s underlying strength.

Sales of previously owned homes fell 1.8% from July to an annual rate of 5.05 million, the National Association of Realtors said. That ended four months of gains and pushed sales down 5.3% from a year earlier.

The decline reflected fewer purchases by investors, who helped fuel the housing-market rebound. The share of overall sales that went to investors fell to 12% last month, the lowest level since late 2009. Investors accounted for as much as 23% of sales in early 2012 as they bought up properties, many in foreclosure, at bargain prices.

Lawrence Yun, the NAR’s chief economist, said investors may be getting skittish about the prospect of higher interest rates as the Federal Reserve winds down a bond-buying program that was designed to pump up the economy. There are also fewer “distressed” properties for investors to quickly snap up.

The pullback means that the market will increasingly rely on demand from traditional home buyers who typically need a mortgage, including first-time buyers, Mr. Yun said. But lenders are still imposing tight credit underwriting standards, preventing many families from obtaining a home loan, he said.
…
Monday’s report suggested tight inventory may be weighing on sales. The number of for-sale homes has risen 4.5% over the past year to 2.31 million in August, but the level is still low by historical standards. Economists say many prospective buyers want to see more options than the market currently offers before they sign a contract.

At the current pace, it would take 51/2 months to exhaust the supply of homes for sale.

Home prices continue to rise, but at a more moderate pace compared with earlier in the housing recovery. The median sale price for a home last month was $219,000, up 4.8% from a year earlier.

Posted in Demographics, Economics, Housing Recovery | 213 Comments

The New Gold Coast

Posted on September 22, 2014 by grim

From the WSJ:

Jersey City’s Housing Boom Expands

Jersey City’s residential construction boom is spreading beyond its waterfront area to neighborhoods farther inland where planners and developers have long dreamed about building with little to show for it until now.

In August, for example, Kushner Real Estate Group and National Realty Advisors broke ground on the first of three planned towers at a giant development in Journal Square, known as Journal Squared, which will have a total of 1,840 units and 36,000 square feet of retail. Builders are currently excavating and underpinning the project’s foundation.

“We really believe in the market,” said Jonathan Kushner, president of Kushner Real Estate Group, citing Jersey City’s transit options and growing night life.

Also in the Journal Square area, renters will soon start moving into Kennedy Lofts, a converted office building. There is already a waiting list forming for the units—which run from $1,500 a month for a studio to $2,100 for a two-bedroom, says Heriberto Camacho, with Keller Williams City Life Realty.

Other Journal Square projects are close to moving forward. A venture of developer Kenneth Pasternak and Kushner Cos.—a different branch of the Kushner family—are planning to convert the building that used to house the Jersey Journal, into a mixed-use project including rental apartments.

That same group also is purchasing a huge site across the street from the Journal building. It is approved for a tower that could soar 60 stories.

“We see some of the same dynamics of Brooklyn here at half the price point,” said Mr. Pasternak, whose real-estate company is named KABR Group.

Overall, Jersey City is seeing a record level of new apartments being built. There are 5,609 units this year under construction in the Journal Square and downtown areas compared with 3,009 last year and 5,122 in 2008, which had been the peak year until now, according to statistics provided by the mayor’s office.

Jersey City is being bolstered by its proximity and convenient transit options into Manhattan, including the ferry and PATH train. Also, like many other urban areas throughout the country, Jersey City is attracting young people as more rural parts of the state have shed jobs and lost population, said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

“Millennials don’t want to work in suburban office campuses,” said Mr. Hughes. “They want edgier environments.”

Posted in Demographics, Economics, Housing Recovery, New Development | 71 Comments