You’d be crazy to buy here

Posted on January 17, 2014 by grim

From the Star Ledger:

Top 30 N.J. towns with heaviest tax burden based on level of taxes compared to income

The top 30 most heavily taxed N.J. towns:

30. Magnolia (Camden County)
29. Washington Borough (Warren County)
28. Mount Ephraim (Camden County)
27. Pompton Lakes (Passaic County)
26. Pohatcong (Warren County)
25. Willingboro (Burlington County)
24. Irvington (Essex County)
23. Newton (Sussex County)
22. Bloomingdale (Passaic County)
21. Ridgefield Park (Bergen County)
20. Glassboro (Gloucester County)
19. Barrington (Camden County)
18. Somerdale (Camden County)
17. Stratford (Camden County)
16. North Plainfield (Somerset County)
15. Penns Grove (Salem County)
14. Prospect Park (Passaic County)
13. East Orange (Essex County)
12. Haledon (Passaic County)
11. High Bridge (Hunterdon County)
10. Lindenwold (Camden County)
9. Orange (Essex County)
8. Laurel Springs (Camden County)
7. West Orange (Essex County)
6. Lawnside (Camden County)
5. Hillside (Union County)
4. Woodbury (Gloucester County)
3. Salem City (Salem County)
2. Roselle (Union County)
1. Woodlynne (Camden County)

Posted in Demographics, New Jersey Real Estate, Property Taxes | 48 Comments

More millionaires in NJ

Posted on January 16, 2014 by grim

From the Star Ledger:

N.J. has 2nd-highest percentage of households worth $1 million or more, study says

New Jersey has the second-highest percentage of households worth at least $1 million in the country, according to a study by Phoenix Marketing International, a global marketing services firm.

With 3.3 million households, the Garden State has 242,647 whose total worth exceeded $1 million in 2013. That worked out to almost 7.5 households out of every 100 in New Jersey.

Only Maryland had a greater percentage at 7.7 percent.

New Jersey moved up from the No. 3 spot in 2012 when it had 235,292 millionaire households, or 7.27 percent, according to the study.

New Jersey held the top position in 2007 when 7.12 percent of the state’s households — 228,442 — were worth at least that much.

Since 2006, the state has floated between the top and third rankings, but the number of top-end households has grown every year.

Posted in Demographics, Economics, New Jersey Real Estate | 66 Comments

Loveshack case gets more interesting

Posted on January 15, 2014 by grim

From the Record:

Real estate agent, accused of having sex in Wayne client’s home, claims extortion in countersuit

Pay me $990,000 or have your love nest exposed and your reputation destroyed.

That’s the choice a Wayne real estate agent claims he was presented by a homeowner suing him for allegedly overpricing his home so that it wouldn’t sell while he and a female colleague met there and had sex — trysts the homeowner says were captured on videotape by a security camera.

Robert Lindsay, a former Coldwell Banker agent now working for Re/Max, filed a countersuit Tuesday in state Superior Court in Passaic County accusing his former client of attempted extortion by demanding just shy of $1 million in return for his silence and not releasing the alleged sex tapes to the media.

The lawsuit filed Dec. 6 by the homeowners, Richard and Sandra Weiner, prompted an investigation by the New Jersey Real Estate Commission that could result in Lindsay, a past president of the Passaic County Board of Realtors, and Jeannemarie Phelan losing their real estate licenses and being fined, a spokesman for the state Department of Banking and Insurance said last month.

The countersuit’s claims could make it a criminal matter, according to Lindsay’s attorney, Joseph Afflito Sr. of Wayne.
…
The shakedown, the suit states, began soon after the Weiners viewed the tapes.

“Thereafter, on numerous occasions, plaintiffs, both directly and by and through agents, made numerous demands on Coldwell Banker to be paid $990,000 in order to avoid instituting suit,” according to the countersuit.
…
In their lawsuit, the Weiners accused Lindsay of deliberately listing their home above its market value to avoid having to show it to prospective buyers and using the bedroom and other locations in the home to have sex with Phelan. Eleven sexual encounters were caught on tape by a security camera, the suit states.

In one instance, according to the lawsuit, Sandra Weiner was watching a live feed and called police when she didn’t recognize the two people in the house. When police arrived, they found Lindsay pulling up his pants, the suit states.

Posted in Humor, New Jersey Real Estate | 95 Comments

David Stern Disbarred

Posted on January 14, 2014 by grim

From Mother Jones:

Fallen Foreclosure King David J. Stern Disbarred

The long, legal saga of David J. Stern, the south Florida attorney who made a fortune off the wave of home foreclosures stemming from the housing crisis, has reached its end.

After years of court battles over the practices of Stern’s once-mighty, multimillion-dollar law firm, the Florida Supreme Court last week disbarred Stern. As the Palm Beach Post reports, a Palm Beach County judge who refereed Stern’s case and who recommended disbarment criticized the 53-year-old lawyer for failing to take responsibility or show “any remorse” for his firm’s actions. Mother Jones was one of the first news outlets to expose the shoddy and legally questionable work done by Stern’s army of lawyers and paralegals as it foreclosed on hundreds of thousands of Floridians, including backdating crucial documents used to foreclose on homeowners. Nancy Perez, the Palm Beach County judge, said the blame fell on Stern for that shoddy work. “The incidents were not isolated, but rather a representation of the culture of the firm, as to the low level of competence and ethics,” Perez wrote. “(Stern) is the lawyer. It was his firm. Mr. Stern is responsible.”

Stern’s firm, at its peak, was a juggernaut. In the mid and late 2000s, the government-owned enterprises Fannie Mae and Freddie Mac, as well as many of the nation’s largest banks, retained Stern’s firm to litigate an ever-growing pile of foreclosure cases in Florida, an epicenter of the housing meltdown. At one point, the Law Offices of David J. Stern handled as many as 100,000 foreclosure cases. Stern’s firm and others like it were dubbed “foreclosure mills,” employing hundreds and even thousands of lawyers and paralegals who pushed through foreclosure cases assembly-line-style.
…
The foreclosure mill model made Stern a very rich man. When I reported on him in August 2010, he lived in a $15 million, 16,000-square-foot mansion on the Atlantic Intracoastal Waterway in Fort Lauderdale. Docked on his property was Misunderstood, his 130-foot, jet-propelled Mangusta yacht—a $20 million-plus replacement for his previous 108-foot Mangusta. He also owned four Ferraris, four Porsches, two Mercedes-Benzes, a Cadillac, and a Bugatti.

Posted in Foreclosures, Mortgages, National Real Estate | 126 Comments

No housing recovery without a jobs recovery

Posted on January 13, 2014 by grim

From CNBC:

How weak job participation rips the housing recovery

The December jobs report speaks volumes about why the housing recovery is not as robust as it should be, given still historically low mortgage rates and still relatively low home prices. Specifically, the weak job participation rate, falling to the lowest level since 1978, according to the U.S. Bureau of Labor Statistics, explains why so many are barred from home ownership and why others in trouble on their mortgages are unable to save their homes.

More young adults are going back to work, with employment rising from below 75 percent earlier last year to just above it in December. Still, the number is well below where it should be. Wage growth also came in at just 1.8 percent for all of 2013, below the inflation rate, according to the BLS.

“Millennials have a long road ahead: The employment rate of 75.4 percent in December was closer to the low point during the recession, 73-74 percent, than to the pre-bubble normal, 78-80 percent,” noted Jed Kolko, chief economist at Trulia.
…
The weak job participation rate also provides an answer to what seems at face-value like a puzzling phenomenon: The number of homes in the foreclosure process that actually have positive equity has jumped dramatically in the last year, but the homes are still being lost.

At the end of 2013, 31 percent of all residential properties in foreclosure had some positive equity, according to a new report from RealtyTrac, an online foreclosure sales and data company. That is up from 24 percent just three months before. The gain is due to fast-rising home values.

Homes in foreclosure that do have equity, have on average about 27 percent equity, which is enough to qualify for a refinance that could offer a lower monthly payment. That amount of equity could also allow these borrowers to sell without any hit to their credit, such as happens during a short sale.

“Whether many of these homeowners want to take advantage of these options, or know that they have these options, is less clear, especially given the fact that so many have not yet done so,” added ReatyTrac’s Daren Blomquist.
…
Why? The trouble is, in order to qualify for a refinance or loan modification, the borrower needs to have a job. There are also thousands of borrowers who have not made a mortgage payment in well over a year. Just because their home suddenly has equity on paper does not mean they can make up all those missed mortgage payments.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 66 Comments

Shadow inventory continues to decline

Posted on January 10, 2014 by grim

From HousingWire:

Foreclosure pipeline drains out

he number of U.S. homes in foreclosure fell 29% in November with 46,000 completed foreclosures reported, a decrease from 64,000 in November 2012, CoreLogic’s foreclosure inventory report found this week.

On a month-over-month basis, completed foreclosures declined 8.3%, from 50,000 in October 2013.

As a whole, the national residential shadow inventory hit 1.7 million homes as of October 2013, accounting for a value of $256 billion, falling 24.6% from $348 billion a year earlier.

In addition, as of November 2013, approximately 812,000 homes in the United States were in some stage of foreclosure, compared to 1.2 million in November 2012, a year-over-year decrease of 34%.

But month-over-month, the foreclosure inventory dipped 4.6% from October to November.

The foreclosure inventory as of November 2013 represented 2.1% of all homes with a mortgage compared to 3% in November 2012.

“Nationally, loan performance continues to improve. The rate of seriously delinquent loans is at a new five-year low, down 26% relative to a year ago,” said Mark Fleming, chief economist for CoreLogic.

“The shadow inventory continues to decline as well, decreasing at an average monthly rate of 46,000 units over the last year. Healthy market levels of shadow inventory are around 650,000 units, so there is more to be done, but the trend is in the right direction,” Fleming explained.

Posted in Economics, Foreclosures, Housing Recovery, National Real Estate | 150 Comments

NY Metro – Best jobs growth since 2000

Posted on January 9, 2014 by grim

From the Record:

New York region adds 200,500 jobs in year

The New York-New Jersey area added 200,500 jobs in the 12 months to November 2013, a 2.3 percent increase that was the largest 12-month jump since December 2000, the U.S. Bureau of Labor Statistics said Wednesday.

The surge in the region, officially known as the New York-Northern New Jersey-Long Island Metropolitan Statistical Area, included a gain of 110,200 jobs in New York City – a 2.8 percent jump, according to a bureau report.

The region includes Bergen, Passaic, Hudson and Morris counties, and eight others in New Jersey, as well as one county in Pennsylvania and the remaining counties in New York state. The report does not provide job figures solely for the New Jersey counties.

A sub-sector of the metropolitan statistical area that includes Bergen, Passaic and Hudson counties as well as parts of New York City and state, increased by 2.4 percent, adding 128,500 jobs over the 12 months.

The biggest proportional increases in that sub-sector came in the leisure and hospitality sectors, which climbed 6.9 percent; education and health services, which grew by 5.1 percent; and trade transportation and utilities, which rose by 2.8 percent. A category called “other services” increased by 3.7 percent.

Posted in Economics, Employment, New Jersey Real Estate, NYC | 123 Comments

Buyers want bigger, more expensive homes

Posted on January 8, 2014 by grim

From Inman:

US single-family homes were costlier to build, priced higher and larger in 2013

The cost to build the average U.S. single-family home hit $246,453 in 2013, reaching its highest mark since 1998, according to a construction cost survey of 3,019 builders by the National Association of Home Builders.

The survey also showed that new-home prices jumped 25 percent to $399,532, the average new home was 300 square feet larger at 2,607 square feet and the size of the average lot shrunk from approximately a half-acre to one-third of an acre from the last time NAHB conducted the survey in 2011.

Though the average cost to build a home in 2013 represented a 34 percent increase from the cost $184,125 in 2011, profits jumped to 9.3 percent from their 2011 all-time low of 6.8 percent.

In 2013, interior finishes accounted for the largest percentage (29.3 percent) of the average cost to build a home in 2013, followed by framing (19.1 percent), exterior finishes (14.4 percent) and plumbing, electrical and heating, ventilation and air conditioning (13.4 percent).

Posted in Demographics, Economics, New Development | 132 Comments

North Jersey Contracts – December 2013

Posted on January 7, 2014 by grim

Here it is! The first look at pending home sales (contracts) for Northern NJ.

(Source GSMLS, except Bergen- NJMLS)

December Pending Home Sales (Contracts)
——————————-

Bergen County
December 2011 – 489
December 2012 – 505
December 2013 – 510 (Up 0.1% YOY, Up 4.3% Two Year)

Essex County
December 2011 – 222
December 2012 – 223
December 2013 – 252 (Up 13.0% YOY, Up 13.5% Two Year)

Hunterdon County
December 2011 – 67
December 2012 – 78
December 2013 – 62 (Down 20.5% YOY, Down 7.5% Two Year)

Morris County
December 2011 – 207
December 2012 – 241
December 2013 – 275 (Up 14.1% YOY, Up 32.9% Two Year)

Passaic County
December 2011 – 146
December 2012 – 170
December 2013 – 192 (Up 12.9% YOY, Up 31.5% Two Year)

Somerset County
December 2011 – 167
December 2012 – 194
December 2013 – 185 (Down 4.6% YOY, Up 10.8% Two Year)

Sussex County
December 2011 – 82
December 2012 – 83
December 2013 – 109 (Up 31.3% YOY, Up 32.9% Two Year)

Union County
December 2011 – 199
December 2012 – 209
December 2013 – 213 (Up 1.9% YOY, Up 7.0% Two Year)

Warren County
December 2011 – 63
December 2012 – 49
December 2013 – 71 (Up 44.9% YOY, Up 12.7% Two Year)

Posted in Employment, Housing Recovery, North Jersey Real Estate | 70 Comments

Not so easy to be a renter

Posted on January 6, 2014 by grim

From the APP:

Demand for rentals pushing up cost, squeezing N.J. residents

In the years since the Great Recession tumbled housing prices and eviscerated personal incomes, a growing number of Americans have given up their homes and turned to renting.

But as rent increases have outpaced income growth in the U.S., according to a recent Harvard University study, millions of Americans are feeling the financial squeeze.

The pressure is even more pronounced around the Jersey Shore, where a Superstorm Sandy-damaged housing market forced many flooded homeowners to rent inland apartments. The surge in competition for rental properties has driven up prices and left many middle- and lower-income families struggling to afford housing.
…
In 2013, 43 million Americans rented their homes, according to Harvard University’s Joint Center for Housing Studies. Rentals increased from 31 percent of the nation’s housing stock in 2004 to 35 percent in 2012, researchers found.

As demand rose, the number of rental homes on the market increased by 3.4 million between 2007 and 2011. Most of those — 3 million — were the result of single-family, owner-occupied houses being converted to rentals, according to the Joint Center for Housing Studies. At the same time, vacancy rates for rentals dropped from 10.6 percent in 2009 to 8.5 percent in 2013, and net operating income rose between 2010 and 2013, researchers found.

While landlords benefited, renters paid the price.

In 1960, less than 25 percent of renters spent 30 percent or more of their income on rent. But in 2010, 50 percent of renters in the United States paid more than 30 percent of their income in rent, the Joint Center for Housing Studies found. Of those, 27 percent spent 50 percent of their pay on housing, researchers found.

In 2013, an estimated 67 percent of renters living in Ocean County and 64 percent living in Monmouth County could not afford to rent an average two-bedroom apartment, according to the Housing and Community Development Network of New Jersey. Average costs for two-bedroom apartments in both counties were about $1,410 per month, meaning a family would have to earn $56,400 to make the apartment affordable, according to the network’s figures.

“We’ve had a problem for a long time. After Sandy, the problem just got a lot worse,” said Nina Arce, media coordinator for the Housing and Community Development Network of New Jersey. “We have a very imbalanced housing market. You can find a McMansion no problem, but not many of us can afford those.”

Posted in Demographics, Economics, New Jersey Real Estate, Shore Real Estate | 94 Comments

Barron’s: Home prices to increase over next 3 years

Posted on January 4, 2014 by grim

From Barrons:

Betting on the House

It’s no secret that U.S. home prices have enjoyed a healthy rebound in 2013 after the nightmarish 33% drop over the previous five years that triggered an orgy of mortgage defaults and wealth destruction. These days, monthly home-price reports regularly show double-digit percentage jumps over the year-earlier period, whether it’s the 13.3% annual increase for September of the S&P/Case-Shiller 20-City Composite Home Price Index or the 12.2% annual rise for October logged by CoreLogic’s home-price index.

Yet, at least some observers question how much longer the home-price recovery can continue. A jump in mortgage rates along with the torrid increases in home prices have hurt transaction volume some. The market has been overly dependent on all-cash buyers such as vulture funds, which earlier this year accounted for about a third of all sales. What will happen when they have eaten their fill? Increasingly, the home-price growth will depend on conventional buyers, who must borrow from a mortgage-lending industry that is still imposing stringent lending standards on new mortgages.

Still, after talking to various industry experts and analyzing disparate data, Barron’s thinks that home-price appreciation should continue for the next three years, albeit at a slower pace than the double-digit increases seen this year.

We claim some bragging rights on the subject: In two cover stories last year — “Home Prices Ready to Rebound” in the March 19 issue and “Happy at Last” in the Sept. 10 issue — we not only called the imminent recovery but hit the timing of it right on the screws.

TO BE SURE, forecasting markets is an unforgiving and somewhat foolhardy task. And experts’ three-year projections for home prices vary all over the lot. Ingo Winzer of Local Market Monitor, which tracks more than 300 U.S. metro markets, is looking for price growth of about 7% over each of the next three years, while CoreLogic, the real-estate statistical firm, expects price increases of 4.7% in 2014, 4% in 2015, and 1.9% in 2016.

For the sake of conservatism, we’re hewing to the middle range, looking for home-price jumps of 5% in each of the first two years and, perhaps, just 3% in 2016, as new construction picks up to bolster supply and more empty-nest baby boomers put their houses on the market to unlock trapped home equity. These projections somewhat mirror those of Moody’s Analytics. “The U.S. is clearly in a home-price up-cycle that has a lot of room to run,” says Mark Zandi, chief economist for Moody’s Analytics.

Posted in Economics, Housing Recovery, National Real Estate | 31 Comments

NYC buyers rush in as rates increase

Posted on January 3, 2014 by grim

From Bloomberg:

Manhattan Home Sales Rise to Year-End Record in Buyer Deal Rush

Manhattan apartment sales surged in the fourth quarter, setting a record for year-end transactions, as the prospect of rising interest rates and prices pushed buyers to make deals before purchases became costlier.

Sales of condominiums and co-ops jumped 27 percent from a year earlier to 3,297, the highest fourth-quarter total in 25 years of record-keeping, according to a report today from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The previous record was set in 2012, when sellers sought to finish deals before an expected jump in capital-gains taxes.

Buyers are rushing into Manhattan’s market after a jump in mortgage rates since May, heightening competition for properties at a time when supply is dwindling. The inventory of homes for sale at the end of December fell 12 percent from a year earlier to 4,164, the lowest since Miller Samuel began tracking that data 14 years ago. Demand is pushing values higher, with the median price for a condo reaching a record.

“There’s a concern that homeownership will be more expensive and therefore the time to act apparently is now,” Jonathan Miller, president of New York-based Miller Samuel, said in an interview. “It’s a combination of rising mortgage rates and concern that prices are going to rise.”
…
The median price of Manhattan transactions that closed in the fourth quarter climbed 2.1 percent to $855,000, Miller Samuel and Douglas Elliman said. Buyers agreed to pay the asking price or more in 43 percent of all sales, compared with 12 percent a year ago.

Condo prices rose 14 percent to a record $1.32 million in the quarter. The surge was propelled by a 27 percent increase in the price of apartments in newly constructed developments, to $1.73 million. Properties built and completed since the recession tend to have larger units and are tailored to luxury buyers, which accounts for some of the price jump, Miller said.
…
He expects that inventory could decline further in 2014 while prices continue to rise. Homeowners are hesitant to list their apartments for fear they will have nothing to buy once they sell, while limited new development activity is focused on high-net-worth buyers, he said.

Posted in Economics, Housing Recovery, NYC | 83 Comments

Strong finish to 2013?

Posted on January 2, 2014 by grim

From the Star Ledger:

Homes sales increased 17 percent in 2013 while prices held steady at year’s end

Home sales are up in New Jersey, but the number of properties on the market continues to fall. Meanwhile, prices have leveled off.

According to the Otteau Valuation Group, home sales last month rose 23 percent over the previous November, marking 26 consecutive months of sales increases. Overall, home sales in 2013 rose more than 17 percent. Over the past two years, home purchases are up 24 percent.

At the same time, however, the availability of homes for sale has fallen. The number of “for sale” signs is at its lowest since 2006, according to Otteau, dropping by 5 percent over the past year and 25 percent since 2011. In terms of inventory, New Jersey had a 13.3 month supply of homes for sale in 2011, as compared to 8.1 months now.

From the Record:

Home values up 4.9% in region, 13.6% nationwide

Values of single-family homes rose 4.9 percent in the New York metropolitan area, which includes North Jersey, in the 12 months ended in October. That compares with a rise of 13.6 percent nationwide – the biggest year-over-year jump since 2006, when the housing market was booming.

Even with these increases, home prices are only at the levels of almost a decade ago, mid-2004, and remain about 20 percent below their peaks in mid-2006, both nationally and in the area.

Case-Shiller does not break out prices by county, but according to the New Jersey Association of Realtors, Bergen County single-family prices rose 3.6 percent, to a median $430,000, and Passaic County prices rose 8.8 percent, to a median $310,000, in the 12 months ended in October.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 153 Comments

LPS October Home Prices

Posted on December 31, 2013 by grim

From LPS:

LPS Home Price Index Report: October 2013 Transactions

Posted in Housing Recovery, National Real Estate, New Jersey Real Estate | 98 Comments

Optimistic on home prices?

Posted on December 30, 2013 by grim

From Barrons:

Betting on the House

It’s no secret that U.S. home prices have enjoyed a healthy rebound in 2013 after the nightmarish 33% drop over the previous five years that triggered an orgy of mortgage defaults and wealth destruction. These days, monthly home-price reports regularly show double-digit percentage jumps over the year-earlier period, whether it’s the 13.3% annual increase for September of the S&P/Case-Shiller 20-City Composite Home Price Index or the 12.2% annual rise for October logged by CoreLogic’s home-price index.

Yet, at least some observers question how much longer the home-price recovery can continue. A jump in mortgage rates along with the torrid increases in home prices have hurt transaction volume some. The market has been overly dependent on all-cash buyers such as vulture funds, which earlier this year accounted for about a third of all sales. What will happen when they have eaten their fill? Increasingly, the home-price growth will depend on conventional buyers, who must borrow from a mortgage-lending industry that is still imposing stringent lending standards on new mortgages.

Still, after talking to various industry experts and analyzing disparate data, Barron’s thinks that home-price appreciation should continue for the next three years, albeit at a slower pace than the double-digit increases seen this year.
…
TO BE SURE, forecasting markets is an unforgiving and somewhat foolhardy task. And experts’ three-year projections for home prices vary all over the lot. Ingo Winzer of Local Market Monitor, which tracks more than 300 U.S. metro markets, is looking for price growth of about 7% over each of the next three years, while CoreLogic, the real-estate statistical firm, expects price increases of 4.7% in 2014, 4% in 2015, and 1.9% in 2016.

For the sake of conservatism, we’re hewing to the middle range, looking for home-price jumps of 5% in each of the first two years and, perhaps, just 3% in 2016, as new construction picks up to bolster supply and more empty-nest baby boomers put their houses on the market to unlock trapped home equity. These projections somewhat mirror those of Moody’s Analytics. “The U.S. is clearly in a home-price up-cycle that has a lot of room to run,” says Mark Zandi, chief economist for Moody’s Analytics.

A constellation of factors revolves around our relatively upbeat forecast on home prices. Upswings in home prices, like the one that has just begun, tend to run in five-to-10-year cycles, due to market inefficiency arising from the inertia of home buyers’ expectations.

Posted in Economics, Housing Recovery, National Real Estate | 141 Comments