Who can afford to live here? Wealthy and well educated

Posted on November 19, 2013 by grim

From the Star Ledger:

Areas surrounding Trenton, Newark rank among the nation’s wealthiest, well-educated

Two of the nation’s wealthiest, highly educated demographic clusters – also known as “Super Zips” – are located in New Jersey, according to a report from The Washington Post.

Areas surrounding the cities of Newark and Trenton rank among the nation’s 15 largest Super Zip collections, the report said.

The Washington Post analyzed the most recent census data to find zip codes where people rank highest in a combination of income and education. To determine the rankings, The Post combined the average median household income with how many adults with college degrees live in the area.

For example, in Livingston, a town about 15 minutes west of Newark, the median household income is $133,143 and 70 percent of residents are college graduates.

Just north of Trenton in Princeton, the median household is $122,921 and 76 percent of residents have college degrees.

Elsewhere around the Garden State, Hoboken and two areas in Jersey City were also identified as Super Zips. In Bergen County, Ridgewood was the only town to qualify.

Posted in Demographics, Economics, New Jersey Real Estate | 90 Comments

New Jersey hikes minimum wage – indexes it to inflation – good or bad?

Posted on November 18, 2013 by grim

News flow a little bit slow this morning, so I thought I’d pull a piece from the archives that went almost entirely undiscussed here. Minimum wage is always a hot topic, with supporters either vehemently for – or against, so I’m somewhat surprised it didn’t at least come up. This was seemed to just sneak by in the wake of the election reporting. So what say you? Positive or Negative? Good or Bad? More jobs or Fewer?

From the Star Ledger:

N.J. voters approve constitutional amendment raising minimum wage

New Jersey voters overwhelmingly approved a ballot question today that will raise the minimum wage from $7.25 to $8.25 an hour in January and amends the state Constitution to tie future increases to inflation.

The business community put up a tough fight to defeat the minimum wage measure, spending about $1 million to persuade the public the measure will lead to job losses and undermine their ability to move past the lingering effects of the recession. But they were outspent by unions and other supporters who raised $1.3 million to wage a very public campaign that included large rallies in cities across the state.

In the end, the amendment passed with nearly 61 percent supporting it.

“New Jersey’s voters should be thanked tonight for understanding that the state’s low-wage workers need more than $7.25 an hour to survive in this high-cost state,” said Gordon MacInnes, president of New Jersey Policy Perspective, a left-leaning think tank that advocated for passage. “Increasing New Jersey’s minimum wage will give nearly half a million working New Jerseyans a crucial leg up while pumping hundreds of millions of dollars into the state’s economy.”

MacInnes’ group has said raising the minimum wage will have a ripple effect and increase the pay for roughly 400,000 people who earn $9.25 an hour and less — a claim opponents called disingenuous.

“With the increase, New Jersey becomes the 20th state to establish a minimum wage higher than the federal minimum,” of $7.25, MacInnes added. “This will prevent the wage floor’s real value from eroding over time as it has in the past, and it will ensure that New Jersey’s low-wage workers don’t fall even further behind.”

Laurie Ehlbeck, state director of the National Federation of Independent Business, accused supporters of minimum wage question of mislead the public by not explaining how their vote will drive future wage increases for years to come.

“People don’t realize it’s not just the minimum wage,” she said. “Most people think, ‘who can live on $7.25 an hour?’”

“We honestly believe there will be a loss of jobs and opportunities,” Ehlbeck said. “They are not going to hire someone, they will give an employee fewer hours, they may reduce the benefits. They don’t want to do anything to hurt their employees, but they are working on a very small profit margin.”
…
“A higher minimum wage will actually help business owners by reducing absenteeism and worker turnover, which costs businesses way more than nickel and dime-ing on wages,” Mitch Cahn, president of Unionwear, a clothing manufacturer in Newark with 120 employees, said. “Secure workers earning a living wage are productive workers and better consumers. A higher minimum wage just makes fiscal sense.”

Posted in Economics, Employment, New Jersey Real Estate | 70 Comments

Middle Class in NJ? Sorry to hear it

Posted on November 15, 2013 by grim

From the Star Ledger:

The rich get richer: Data show N.J.’s upper class growing rapidly while middle class languishes

The number of New Jersey’s wealthiest households has doubled over the last decade, and new data from the U.S. Census Bureau show that the middle class has continued to shrink following the Great Recession, widening the wealth gap in the Garden State.

The data, released Thursday, is part of the most recent 2010 to 2012 American Community Survey, a three-year sample study of U.S. residents focused on social, economic and housing issues. The new information shows that while the state’s richest residents have prospered considerably since the recession, the state’s middle class has languished.

“What it points to is that a college degree still has substantial value but people are going to have to work harder to get the better paying jobs. In the 1980s and early 1990s those jobs were there for the taking. They’re not there anymore,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “It’s not quite the hollowing out of the white-collar job industry, but it’s getting close.”
…
• The number of households with an income of more than $200,000 has increased by 112 percent since 2000, and by more than 12 percent since the height of the recession, the most of any income bracket.

• The number of households making less than $100,000 has decreased by tens of thousands since 2000. No income bracket below this level has grown during this period, which Hughes said is at least partly due to the number of people fleeing the state’s cost of living.

• Since the height of the recession, the middle class is shrinking while the state’s poorest and richest income brackets have seen, in some cases, stark increases, signaling that the gap between New Jersey’s rich and poor is widening.

“The post-recession gains have really been led by the more affluent, the people that are high up in corporations,” Hughes said. “They’ve been making gains, and when you look at pure wealth, they’re the stockholders.”

Posted in Economics | 64 Comments

No more love for bad loans

Posted on November 14, 2013 by grim

From Bloomberg:

HUD Said to Fail in Bid to Sell $450 Million of FHA Mortgages

The U.S. Department of Housing and Urban Development for the first time failed to sell some of the soured mortgages it’s auctioning off in the wake of the housing crisis, according to four people with knowledge of the results.

HUD deemed bids on about $450 million of home loans too low to accept at an Oct. 30 sale, said the people, who asked not to be named because the details are private. Since 2010, the agency has sold about 50,000 non-performing single-family loans insured by the Federal Housing Administration to investors willing to either help keep the borrowers in their homes or rehab the properties for sale.

The sales are an attempt by HUD to simultaneously stem losses at the financially troubled FHA and pursue its public mission of averting foreclosures on the underlying properties. The refusal to accept bids on some of the pools may reflect that the FHA reached its limit on the losses it was willing to realize to keep some borrowers in homes or stabilize markets.

“If you can get someone who’s willing to take these notes and fix the mortgages, or the properties and rent them out or transfer them to a nonprofit, the idea is that you’re not hurting places that have been hit hard by foreclosures,” said Andrew Jakabovics, senior director of policy development at Enterprise Community Partners and a former HUD policy adviser who helped design the note sale program. “It’s about striking that balance but also making sure that they’re not giving properties away far below what the value is.”

Posted in Economics, Foreclosures, Mortgages, Risky Lending | 106 Comments

Refi bonanza continues (or) American homeowners not so dumb

Posted on November 13, 2013 by grim

From HousingWire:

More refinancing homeowners choose shorter loan terms

Of all the borrowers refinancing Freddie Mac-linked loans in the third quarter, 37% moved into shorter loan terms, up 5% from the previous quarter and the highest level recorded since 1992, the housing enterprise claims in a report.

The takeaway from the report: two out of five borrowers managed to cut their loan terms during the refi process in 3Q.

Freddie released its third-quarter 2013 quarterly refinance update on Tuesday, which included those findings.

The study noted that interest rates remain low enough to attract borrowers looking to refinance even as rates edge up from early 2013 levels. What was telling was how many homeowners wanted shorter-loan terms – regardless of whether they took out a Home Affordable Refinancing Program mortgage or went through some other channel.

While 32% of HARP borrowers refinanced into shorter-term loans, 40% of those refinancing outside of HARP also took on mortgages with faster pay-off schedules, Freddie said.

All of the borrowers who refinanced in the third-quarter will end up saving $6 billion in total interest over the next year, with the average interest rate reduction hitting 1.8 percentage points, or roughly 30% in savings.

This equates to a borrower saving $3,500 in interest payments over the next year on a $200,000 loan, according to Freddie. On the other hand, borrowers who went through HARP are likely to save a bit more, with Freddie estimating an interest savings of $3,850 during the first 12 months of the refi – or $320 per month.

Posted in Economics, Housing Recovery, Mortgages | 73 Comments

All hail king of the flippers

Posted on November 12, 2013 by grim

From the Record:

Price of luxury living falls: Alpine home can be yours for $49 million

It’s not the $68 million he was once asking, but what real estate investor Richard Kurtz is now seeking for the 30,000-square-foot mansion he built in Alpine — $49 million — would apparently still be a record for a residential real estate deal in New Jersey.

Eight years after spending $58 million on 60 acres in Alpine and Demarest — during the housing market’s frothiest days — Kurtz is still trying to sell the mansion and another luxury home on the property, as well as several building lots.

In the years between, he has faced a housing crash, a financial crisis and the deepest recession since the Depression. But he remains confident that as the economy and the housing market recover, he’ll find buyers for the two homes.

“We’ll sell them; I’m not concerned at all,” said Kurtz, 73, who owns 14,000 garden apartments through his company, Kamson Corp. in Englewood Cliffs.

“When we bought the property, it was a great purchase,” he said. “Then the world fell in financially, and it wasn’t such a good purchase. But I felt eventually the economy would straighten out.”
…
While many homes aspire to be mansions, and many people aspire to build them, what Kurtz calls the Stone Mansion truly fits the bill — 30,000 square feet on 6 acres, originally offered for sale in mid-2010 for $68 million. It’s been on and off the market since then, and is about to be offered again with an asking price of $49 million — still an ambitious target for Bergen County, where the record sale was for $32 million, at the peak of the housing market.

And the Frick family’s original home nearby has also been on the market off and on; Kurtz said he is talking to an interested buyer and hopes to sell it soon.
…
Down the hill from the Stone Mansion, Kovalchuk is building a giant home on a 2-acre property he bought in 2010 for $4.5 million. Counting the Kovalchuk sale, Kurtz has made more than $13 million on the sale of five building lots, according to public records. (Kurtz said a sixth sale is in contract.)

But Kurtz’s carrying costs on the remaining properties are also enormous — property taxes alone come to more than $650,000 a year, and he is also paying on several multimillion-dollar mortgages. He said his apartment business helps pay the bills.

Over the years, as the housing market deteriorated, Kurtz has had some concerns about finding a buyer for the Stone Mansion. Nonetheless, he doesn’t regret building it.

“Just the timing,” Kurtz said. “Things got very difficult. We had an environment that was the worst since the Depression. How could I have anticipated that?”

Posted in New Development, New Jersey Real Estate | 73 Comments

Strong jobs report not so positive for housing

Posted on November 11, 2013 by grim

From CNBC:

Stellar jobs report is downer for housing

Employment is good for housing. No question. But it is just not as simple as that when it comes to today’s unique housing recovery. This recovery needs more construction, more jobs for younger Americans, and more credit. Friday’s October jobs report provided none of that.

Employment among 25- to 34-year-olds, considered the prime age for housing demand, fell from 75 percent in September to 74.6 percent in October, according to the Bureau of Labor Statistics. It is still well below pre-recession levels.

First-time home buyers, usually younger Americans, have been largely left out of this recovery, buying at far lower rates than normal. Not only are they un- or underemployed, they are saddled with student loan debt and lacking the credit to qualify for today’s lowest mortgage rates.

Construction didn’t do so well either. Residential construction jobs increased by 4,800 in October, month-to-month, and are up by 14,000 from three months ago. Still that three-month gain is the smallest increase in 12 months, and residential construction employment remains low by historical standards.

“Even though home prices have rebounded strongly and are now close to ‘normal’ levels, construction still lags. New home starts and construction employment are still way below their pre-bubble norm and face a long, slow climb,” said Jed Kolko, chief economist for Trulia.

The jobs numbers also do not bode well for mortgage rates. A stronger employment picture makes the case for the Federal Reserve to slow its purchases of mortgage-backed bonds. Fear of the so-called “taper” was allayed during the government shutdown and debt crisis deadlock, but quickly reared again after Friday’s strong employment report.

“Bond markets tanked immediately following this morning’s jobs data. Today’s rates will be at least an eighth of a point higher than yesterday, and as much as a quarter of a point for some borrowers,” said Matthew Graham of Mortgage News Daily.

Average quoted rates for those with pristine credit and large down payments will now be 4.375 to 4.5 percent, compared with 4.25 percent Thursday, a substantial one-day move.

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

Quite possibly the best deal you’ll ever see on a shore house

Posted on November 10, 2013 by grim

From the NYT:

For Rent: Fixer-Uppers in a National Park

The National Park Service put out an unusual for-rent sign last month: 35 historic buildings, including the genteel quarters of lieutenants and captains, at a wind-swept former Army base overlooking Sandy Hook Bay. The only catch: the structures are serious fixer-uppers.

The one-time military base, Fort Hancock, sits at the northern end of Sandy Hook, N.J., a peninsula that is part of the park service’s Gateway National Recreation Area and is better known for its miles of ocean beaches.

But when the federal government took over Sandy Hook in the early 1970s, it inherited dozens of yellow-brick buildings — not just officers’ homes, but also mess halls, barracks, a post office, a commissary and even an old stable for mules — that have mostly sat vacant and have slowly deteriorated.

In the past, proposals for what to do with the buildings varied with the tides, but the park service is now actively looking for tenants to invest in them and save them. During a tour of the properties on Friday, a wooden porch outside a former lieutenant’s home, built in 1899, listed perilously and, inside, chunks of ceiling plaster carpeted the floors.

“This is our last shot at keeping these buildings,” Pete McCarthy, coordinator of the park service’s Sandy Hook unit, said. “We’ve stabilized them as best we can, but if we don’t do something soon we’ll lose them.”

Under the park service’s plan, instead of paying a set rent, tenants would pay for repairs to the buildings and be given long-term use of them in exchange. The repairs generally include new electrical and heating systems; in many cases, tenants would have to fix or replace roofs, windows and porches as well.
…
Depending on the repair cost, a tenant who commits to footing the renovation bill might not have to pay rent for decades, park service officials said.

While several nonprofit groups currently occupy some buildings at Fort Hancock, the recent “request for expressions of interest” that the park service issued extends the invitation to government agencies, companies and even private citizens. A person could sign up to a 60-year lease and, in effect, have a waterfront home inside a national park.

Posted in New Development, Shore Real Estate | 15 Comments

NJ’s best quarter since the bust

Posted on November 9, 2013 by grim

From Jeff Otteau:

NJ Home Prices Have Largest Quarterly Price Increase Since the Recovery Began

The combined effects of increased home purchase demand and tight inventory levels is causing continuing home price increases in New Jersey. Median home prices in the state rose by 6.4% in Q3 compared to one year ago. This marks the largest rise since the housing recovery began and is the 4th consecutive quarterly increase. The median home price in New Jersey increased to $315,693 in Q3 up from $296,679 one year earlier. At the same time, the available supply of homes being offered for sale remains low with a decline of 5,000 homes (-9%) over the past year and 16,000 (-31%) over the past 2 years.

The higher home prices coupled with a rise in mortgage interest rates over the past 6 months has reduced the affordability of home ownership for the 3rd consecutive quarter. The affordability index in New Jersey declined to 114% in Q3, its lowest level since Q2 2011. This means that a home buyer today earning the state’s median income of $66,692 is able to afford a home that is priced 14% higher than the state’s median home value of $315,693. Another effect of the higher level of home buying is that the homeownership rate in New Jersey increased slightly to 65.2% in Q3.

Posted in Housing Recovery, New Jersey Real Estate | 77 Comments

Most expensive towns to buy a 4br home

Posted on November 8, 2013 by grim

From the Star Ledger:

Where are the most expensive four-bedroom homes in N.J.?

Looking for the most expensive four-bedroom homes in New Jersey? They’re in Stone Harbor.

A survey by Madison-based Coldwell Banker Real Estate of more than 1,900 markets across the country found the average price of a four-bedroom, two-bath home in the Cape May County Shore town listed at $1.3 million. It was the sixth most-expensive location in the country, trailing five markets in California – Malibu, Newport Beach, Saratoga, Los Gatos and San Francisco.

California placed 13 in the top 25 spots for most expensive homes.

In New Jersey, other towns at the high end included Chatham Twp. ($813,000), Bernards Twp. ($758,000), Wyckoff ($757,000) and Ocean City ($745,000).

The most affordable four-bedroom homes in the Garden State are in Irvington, where the average listing price is $134,000, followed by Roselle ($144,360), Newark ($175,000), Paterson ($180,000) and Blackwood in Gloucester Twp. ($203,000).

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

NJ home prices just barely up from the bottom

Posted on November 7, 2013 by grim

From the Star Ledger:

New Jersey home prices slowly returning to 2006 levels, study finds

Home prices in New Jersey hit their peak in June 2006. More than seven years later, they still haven’t returned, but the gap is narrowing.

A home price index report by CoreLogic found home prices in the Garden State are still 22.5 percent below where they were in 2006, but have increased 4.7 percent from September 2012 to this past September. Single-family homes fared better at 19.75 percent below peak, and up 4.9 percent year-over-year.

A quarterly market analysis by the Otteau Valuation Group in East Brunswick found median home prices in New Jersey rose 6.4 percent in the third quarter over last year. It marks the largest rise since the housing recovery began and is the fourth consecutive quarterly increase.

According to Otteau, the median home price in New Jersey increased to $315,693 in the third quarter, up from $296,679 one year earlier.

Nationwide, the cost to buy a home increased 12 percent on a year-over-year basis, according to CoreLogic.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 121 Comments

As if anyone needed a reason to be (or stay) here

Posted on November 6, 2013 by grim

From Movoto:

28 Reasons You Need To Move To New Jersey

1. Diners Are the Only Restaurants You Ever Need

2. Taylor Ham, Egg, and Cheese, Salt, Pepper, Ketchup on a Roll

3. You Know in Your Heart North Jersey Is Way Better than South Jersey.

4. The Bagels

5. No Pizza Compares to NJ Pizza

6. It’s Called the Garden State for a Reason

7. You Went to the Shore Every Summer as Much as Humanly Possible

8. You Know the Cast of Jersey Shore Is from Freakin Staten Island

9. You Let People Judge NJ by the Turnpike and Parkway Near New York City & Newark

10. You Know the Giants and Jets Are Actually New Jersey Teams

(click the link for the rest)

Posted in Humor | 117 Comments

Renters get new options

Posted on November 5, 2013 by grim

From the WSJ:

New Homes Get Built With Renters in Mind

More single-family homes across the nation are being built for renters, a shift that mirrors a steady decline in homeownership in the years since the housing bust.

Until recently, real-estate investors had focused primarily on scooping up tens of thousands of foreclosed homes, at a sharp discount, and converting them into rental properties. Now that the pool of these properties has declined and prices have risen, these investors are snapping up newly finished single-family homes to be used as rentals, or even developing vacant lots from the ground up.

Last year 5.8% of the 535,000 single-family homes started were being built as rentals, up from 4.8% in 2011 and the highest share since at least 1974, according to an analysis of census data by the National Association of Homebuilders. From 1974 to the home-price peak in 2006, only about 2% of single-family homes were built for rentals.’
…
For investors, the interest in new homes reflects their belief that the rental market will continue to see strong demand and rising rents. While there is little data for the level of single-family home rents, apartment rents have shot up 11.3% since 2009, according to Reis Inc. Overall, about 15 million of the nation’s single-family homes were rentals last year, up from 10.8 million in 2005, according to Zelman & Associates, a research firm.
…
Landsmith bought about 1,800 existing single-family homes over the past two years but has recently turned to buying new homes. The company has developed or bought about 600 new single-family rentals in Houston, Indianapolis and Charlotte, N.C.

“So you could buy a house from 1990 and get a 12% return. Now you can buy a brand-new house and get a 10% net return, so the spread isn’t that dramatic given the uptick in quality you’re getting,” says Chang Kim, a vice president at Landsmith. “We’re in a unique period where brand-new houses can be built for a low enough cost that single family rentals can work.”

Posted in Economics, Housing Recovery, National Real Estate, New Development | 264 Comments

New Jersey Contracts – October 2013

Posted on November 3, 2013 by grim

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

(Source GSMLS, except Bergen- NJMLS)

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

Bergen County
October 2011 – 549
October 2012 – 648
October 2013 – 735 (Up 13.4% YOY, Up 33.9% Two Year)

Essex County
October 2011 – 262
October 2012 – 275
October 2013 – 445 (Up 61.8% YOY, Up 69.9% Two Year)

Hunterdon County
October 2011 – 89
October 2012 – 102
October 2013 – 128 (Up 25.5% YOY, Up 43.8% Two Year)

Morris County
October 2011 – 296
October 2012 – 386
October 2013 – 483 (Up 25.1% YOY, Up 63.2% Two Year)

Passaic County
October 2011 – 201
October 2012 – 204
October 2013 – 254 (Up 24.5% YOY, Up 26.4% Two Year)

Somerset County
October 2011 – 224
October 2012 – 259
October 2013 – 361 (Up 39.4% YOY, Up 61.2% Two Year)

Sussex County
October 2011 – 93
October 2012 – 117
October 2013 – 169 (Up 44.4% YOY, Up 81.7% Two Year)

Union County
October 2011 – 224
October 2012 – 261
October 2013 – 373 (Up 42.9% YOY, Up 66.5% Two Year)

Warren County
October 2011 – 61
October 2012 – 77
October 2013 – 104 (Up 35.1% YOY, Up 70.5% Two Year)

Posted in Economics, Housing Recovery, New Jersey Real Estate | 86 Comments

People who can’t afford homes want homes

Posted on November 1, 2013 by grim

From HousingWire:

A nation of renters? Not so, delinquent borrowers say.

Report after report suggests that Americans have become wary of homeownership and prefer the lack of commitment that often accompanies renting.

These reports leave readers with the distinct impression that the future of America is one where citizens embrace the nomad lifestyle, with uncertain urban dwellers moving from apartment-to-apartment with backpacks filled with Ramen noodles in tow. (Okay, so the economy did revive many of these fears).

But one group who should be rather wary of homeownership says this just isn’t the case.

Fannie Mae’s recent survey of delinquent borrowers – a group who should be rather pessimistic about homeownership right now – finds that individuals in this group are still committed to the idea of homeownership despite recent difficulties.

The report put together by Steve Deggendorf, director of business strategy and economic and strategic research at Fannie Mae, found that in the past year delinquent borrowers have become much more positive about housing.

As they watch home prices rise, they begin to believe that what they’re fighting for is a long-term investment.

Although there have been plenty of reports doubting whether homeownership is a highly profitable investment tool in the long run (like this one from the Reason Foundation), the American Dream remains, the Fannie Mae report suggests. Back in 2011, a report from Pew Research still showed homeownership as a solid investment choice.

The study says most delinquent borrowers surveyed still believe in the financial and lifestyle benefits of homeownership.

The reality is delinquent borrowers do still feel somewhat less strongly on the ideals of owning a home when comparing their scores to the general population of borrowers, but they remain confident regardless.

Posted in Economics, Employment, Housing Recovery, Risky Lending | 135 Comments