Finally an end to the MLS?

Posted on September 18, 2013 by grim

From Inman News:

An innovative real estate business model, or threat to the MLS?

For technology companies, multiple listing services are the holy grail of the real estate listing information that underlies many of their products. MLSs are also gatekeepers, often deciding who gets access to which types of listing data.

But the reality is that the gate is full of holes, and industry experts do not agree on what that means for the future of the industry.

“There is a gap in policy and enforcement here that is permitting businesses to enter the IDX and the MLS world without really being in the real estate business, in the business of buying and selling homes,” said Brian Boero, partner and co-founder of real estate marketing, design and consulting firm 1000watt.

“The reaction to this — or the lack of reaction to this — is going to be worth watching because it kind of gets to this core question of ‘What is a real estate brokerage in two years, in five years?’ That’s really what is at the heart of this.”

In many markets, paper brokerages seem to be flying under the industry’s radar, an Inman News investigation has found. They do so with the help of licensed real estate brokers who, in some cases, serve as the broker of record for multiple companies.

Companies that have employed the paper brokerage model, or aspects of it — including RealEstate.com operator Market Leader, and Emeryville, Calif.-based ZipRealty Inc. — say they are driving innovation by finding new ways to deliver real estate information to consumers and connect them with agents.

But Inman News has learned that many MLSs are struggling to interpret whether their rules, which typically follow policies established by the National Association of Realtors, allow them to provide listings to websites operated by companies that aren’t actually representing buyers and sellers in their market.

At the crux of the issue is deciding who qualifies as an “MLS participant,” and how to treat those who don’t meet the definition.

A NAR policy stipulating that individual brokers and real estate firms must “offer or accept cooperation and compensation to and from other participants” to be considered MLS participants is aimed at excluding brokers who don’t list or sell properties from joining the MLS.

Posted in General, National Real Estate | 40 Comments

Housing market taking a breather

Posted on September 16, 2013 by grim

From the WSJ:

Home-Sales Frenzy Eases

After a yearlong rally, the U.S. housing market is showing signs of cooling as higher prices and interest rates, a slowdown in investor purchases and shortages of homes for sale weigh on one of the economy’s brightest sectors.

While few economists and industry watchers believe the housing recovery will stall, there is growing evidence that the exuberance that prompted bidding wars and led to double-digit price gains is easing. Redfin, an online real-estate brokerage, said its agents had multiple bids on 61% of its homes in August, down from 76% in March.

“It’s clear there will be some moderation in demand,” said Lawrence Yun, chief economist for the National Association of Realtors. He noted that the use of electronic “lockboxes” used by listing agents, an indicator of foot traffic at homes on the market, showed a “measurable decline” during August.

Another measure of home-buyer traffic maintained by Credit Suisse showed traffic fell in August to its lowest level since December 2011.

Some closely watched measures of housing activity, including sales of previously owned homes, may not yet capture the full extent of any slowdown, in part because they measure sales that went under contract earlier in the summer when activity was still robust. The Realtors group is set to report Thursday on existing home sales for August, which will show completed sales of homes that went into contracts one to two months earlier.

The consensus of economists surveyed last week by Dow Jones Newswires estimates that the pace of sales fell to a 5.24 million seasonally adjusted annual rate in August, down about 3% from July but ahead of last year’s 4.84 million.
…
Some agents say the biggest problem in the market is “seller greed”—that is, sellers pricing their homes too high, said Jim Klinge, a real-estate agent in Carlsbad, Calif. Faced with rising rates, buyers aren’t going for higher prices. “They don’t realize our 12- to 18-month full-tilt boogie is over,” he said.

Posted in Economics, Housing Recovery, National Real Estate | 81 Comments

LI market showing strong gains

Posted on September 15, 2013 by grim

From Newsday:

Long Island’s supply of homes for sale is at its lowest level in at least two years, by one measure.

It would take just under five-and-a-half months to sell all 6,988 homes listed in Nassau County at the current pace of sales, according to a Newsday analysis of data supplied by the Multiple Listing Service of Long Island. In Suffolk County, it would take almost eight months to sell all 10,271 homes at the current pace of sales.

By contrast, a year ago there was an almost eight-month supply in Nassau and a nearly 11-month supply in Suffolk County.
…
The median sales price rose by 8.7 percent in Suffolk County, to $347,750, and in Nassau County the median sales price rose by 2.3 percent, to $445,000, the listing service reported Friday. The number of home sales rose by 16 percent last month compared to August 2012.

August marked the sixth straight month of year-over-year home sales and price increases in Suffolk County. Nassau County has seen five straight months of annual home sales gains, and three months of upticks in prices.

Posted in Economics, Housing Bubble, National Real Estate | 25 Comments

“All else equal, higher mortgage rates do depress housing demand.”

Posted on September 13, 2013 by grim

From Forbes:

When Will Rising Mortgage Rates Hurt The Housing Market?

The Longer-Term Impact of Sustained Rate Increases

Even if the immediate impact of mortgage rate spikes is small – aside from the huge effect on refinancing – shouldn’t sustained rate increases should depress housing activity? Again, recent history tells a more complicated story. Since 1999, mortgage purchase applications and all measures of sales activity – NAR pending home sales, NAR existing home sales, and Census new home sales – have actually been higher when mortgage rates were higher. Sales prices were also the same level or higher (depending on the sales price index) when mortgage rates were higher compared to periods of lower rates. Of all the measures of housing activity, only refinancing applications were lower during periods of higher mortgage rates.

Here’s the missing piece of the puzzle: over the past decade and a half, mortgage rates have been higher when the economy was doing better. Since 1999, the correlation between the monthly unemployment rate – a good, if imperfect, measure of how the economy is doing overall – and the 30-year fixed rate was -0.8, making it a very strong relationship.

Furthermore, every measure of housing activity (except refinancing activity) improved when the overall economy did better. That means that a stronger economy is associated with BOTH higher mortgage rates AND more sales, higher home prices, and more home-purchase mortgage applications. That’s why these measures of housing activity go up when mortgage rates are higher.

If we statistically remove the effect of changes in the overall economy (by including the unemployment rate as a control in a simple statistical regression), then we see exactly what we’d expect: mortgage applications, sales, and home prices are all lower when mortgage rates are higher. In other words: all else equal, higher mortgage rates do depress housing demand.

Posted in Economics, Housing Recovery, Mortgages | 101 Comments

Foreclosure crisis over?

Posted on September 12, 2013 by grim

From CNN/Money:

Foreclosure crisis is drawing to a close

Our long national foreclosure nightmare may be over.

The number of new foreclosure filings in August hit its lowest level in nearly eight years, according to RealtyTrac, an online marketer of foreclosed properties.

Soaring home prices and a big decline in underwater borrowers — those who owe more on their mortgage loans than their homes are worth — have helped drive the trend.

August’s initial foreclosure filings fell 44% to 55,575, just below the 56,063 that were recorded in October 2005. The foreclosure crunch began in summer 2006, at about the same time that housing prices hit their peak.

“This is a strong indicator that the crisis is over,” said Daren Blomquist, vice president at RealtyTrac. “The foreclosure floodwaters have receded in most parts of the country, although lenders and communities continue to clean up the damage left behind,” he added.

The mopping-up process continues, however. In August, for example, the number of homes repossessed by lenders rose 6%, compared with July, to 39,277. But that still represents a drop of 25% year-over-year, and is more than 60% below the peak of repossessions in September, 2010.

Posted in Foreclosures, Housing Recovery, National Real Estate | 95 Comments

Bye Bye Saarinen, Hello Starbucks

Posted on September 11, 2013 by grim

From the NY Times:

Future Takes Shape for Bell Labs Site

Decades before the first smartphone, researchers at Bell Labs in central New Jersey developed the technology that ushered in the digital age.

Now, the building that is as magnificent in its design as the discoveries that were made here will have another chapter in its storied life.

Late last month, Somerset Development bought the mirrored glass building, completed in 1962, and its pastoral grounds from Alcatel-Lucent for $27 million after the Township of Holmdel approved an ambitious redevelopment proposal that includes plans for a health care center, residences, a hotel and retail space.

While the sale ends a protracted debate over the fate of the vacant structure, set on 473 acres in a wealthy rural community, filling 1.9 million square feet of space may prove difficult. New Jersey is saturated with aging office parks like this one, where geese roam an empty ring road and old signs still eerily point to vacant parking lots overgrown with weeds.
…
The work once done in Bell Labs helped to foster this new era. James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers, pointed to the advancements that have allowed employees to work remotely. “When the iPhone came out and then the iPad, workers became untethered,” Mr. Hughes said. “They don’t need the office workplace umbilical cord anymore.”

Somerset has enlisted an architect, Alexander Gorlin, to help overcome that hurdle by lining the building’s striking five-story, quarter-mile-long atrium with urban amenities, so that an office worker on an upper floor can walk downstairs to a coffee shop, restaurant or bank. But the building needs a critical mass of commercial tenants to support that retail presence.

“It’s a very difficult building for adaptive reuse,” said Suzanne Macnow, a broker for CBRE. “It’s set up with this gigantic center area, like the Mall of America in Minneapolis. It doesn’t make sense to me.”

The building was designed by the Finnish-American architect Eero Saarinen, who also designed the Gateway Arch in St. Louis and the T.W.A. building at Kennedy Airport.
…
Signs of decay at the mammoth building are quite visible — plastic buckets catch water leaking from the glass roof under which scientists developed satellite communications. In 2007, Preservation New Jersey listed the building as one of the state’s top 10 most endangered historical properties.

“Personally, I find it difficult to drive by it and see it abandoned. I worked there. My friends worked there,” said Janet Jackel, a physicist who worked at Bell Labs. “You see it as representing the American forward-looking attitudes of the last century, and that’s all been abandoned.”

The redevelopment plan, which would cost well over $100 million, could transform the former Bell Labs building into a commercial center for Holmdel, a community of about 17,000 people. With no downtown, most of the town’s retail properties now sit along busy Route 35.

Posted in Economics, New Development, New Jersey Real Estate | 109 Comments

Few think it’s a good time to sell a house

Posted on September 10, 2013 by grim

From the WSJ:

Fannie Mae: Consumer Confidence in Housing Slackens a Bit

Consumer confidence in the housing recovery has leveled off, likely connected to concerns that the Federal Reserve will cut back on asset purchases, according to new data from mortgage-finance company Fannie Mae (FNMA).

Americans, already pessimistic regarding their personal finances and the economy, demonstrated declining optimism in August across key housing-market measures. Those saying it would be a good time to sell a house declined four percentage points to 36% from July, and those saying it’s a good time to buy a house decreased three percentage points to 71%.

According to the survey, the share of consumers who believe home prices will go up in the next year rose two percentage points to 55%.

“The spike in mortgage rates associated with the possibility that the Fed will begin to wind down its asset purchase program later this month has dampened the improving trend in consumer sentiment regarding housing witnessed in our survey since the start of this year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

The average 12-month home price change expectation decreased slightly to 3.5%, Fannie Mae said. The percentage of respondents who think mortgage rates will go up decreased two percentage points to 60% from last month’s survey high.

The average 12-month rental price expectation fell slightly to 4.1%.

The share of respondents who said they would buy if they were going to move increased slightly to 65%, while the share who said the economy is on the right track fell three percentage points from July to 37%.

The percentage of respondents who expect their personal financial situation to get better over the next year edged up one percentage point to 44%. The number of respondents who said their household income is significantly higher than it was a year ago fell three percentage points to 23%.

Posted in Economics, Housing Recovery, National Real Estate | 103 Comments

Struggling to get by in Jersey

Posted on September 9, 2013 by grim

From the Record:

Report: 25 percent of N.J. families are poor

Poverty levels in New Jersey are bad and getting worse, as a quarter of the state’s households now struggle to afford housing, food, medical care and other necessities, according to a new report by a leading poverty research group.

The study, released today by the Legal Services of New Jersey Poverty Research Institute, says that in one of the nation’s wealthiest states, 2.1 million people live in households that have a hard time meeting their basic needs. That number grew by about 359,000 during and after the Great Recession and now comprises 24.7 percent of New Jersey residents.

Hardest hit is Passaic County, where 37 percent of the residents are poor, followed by Cumberland, Essex and Hudson counties, while Bergen County’s rate stands at 18 percent. Even in Morris, Hunterdon and Somerset and other wealthy counties in northern New Jersey, 10 to 14 percent of the residents are poor, according to the report, which is based largely on 2011 data from the U.S. Census Bureau.

The number of households having a hard time staying afloat financially highlights the underside of a state where the median household income ranked third in the country in 2011.

“The numbers are very troubling,” said Melville Miller, president of the legal services agency. “It’s very bleak. That awfulness needs the attention of society, writ large.”

The institute defined poverty as living on incomes less than twice the official poverty line. The 173-page report, the seventh annual study by the institute, goes into great detail about how the official poverty rate masks actual financial woes in New Jersey because it fails to account for the higher cost of living in a state where median home prices are twice the national average and rents are 30 percent higher.

Officially, a family of four with an income below $23,550 is considered to be in poverty, with the same figure applying throughout the country. But the report contends that New Jersey households remain poor until their incomes are at least double the official levels.

The poverty rate by the official measure stands at 10.4 percent, less than half the rate as defined by the institute.

While more people struggle to get by, the report cites major obstacles to reversing the trend, including continued high unemployment, wages that fail to keep up with inflation, a loss of middle-class jobs, a lack of low-priced housing and inadequate government aid for the poor. It notes that Superstorm Sandy made things worse by disproportionately damaging housing where lower-income households lived.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 92 Comments

New Jersey Contracts – August 2013

Posted on September 7, 2013 by grim

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

(Source GSMLS, except Bergen- NJMLS)

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

Bergen County
August 2011 – 589
August 2012 – 715
August 2013 – 806 (Up 12.9% YOY, Up 36.8% Two Year)

Essex County
August 2011 – 255
August 2012 – 296
August 2013 – 413 (Up 39.5% YOY, Up 62% Two Year)

Hunterdon County
August 2011 – 92
August 2012 – 133
August 2013 – 154 (Up 15.8% YOY, Up 67.4% Two Year)

Morris County
August 2011 – 333
August 2012 – 442
August 2013 – 463 (Up 4.8% YOY, Up 39% Two Year)

Passaic County
August 2011 – 143
August 2012 – 213
August 2013 – 303 (Up 42.3% YOY, Up 112% Two Year)

Somerset County
August 2011 – 220
August 2012 – 321
August 2013 – 354 (Up 10.3% YOY, Up 61% Two Year)

Sussex County
August 2011 – 105
August 2012 – 139
August 2013 – 170 (Up 22.3% YOY, Up 62% Two Year)

Union County
August 2011 – 241
August 2012 – 258
August 2013 – 373 (Up 44.6% YOY, Up 54.8% Two Year)

Warren County
August 2011 – 80
August 2012 – 95
August 2013 – 130 (Up 36.8% YOY, Up 62.5% Two Year)

Posted in Economics, Housing Recovery, North Jersey Real Estate | 30 Comments

Mortgage rates could hit 5% today

Posted on September 6, 2013 by grim

From Mortgage News Daily:

Mortgage Rates at New 2-Yr Highs Ahead of Important Jobs Report

Mortgage rates leaped to new 2-Yr highs today, after strong economic data increased the chances that tomorrow’s all-important jobs report would be similarly strong. The rate with the most efficient combination of upfront cost and monthly payment for ideal scenarios (best-execution) moved up to 4.875% for Conventional 30yr Fixed loans on average–roughly an entire eighth of a point in a single day. While some some lenders remain at 4.75%, others are closer to 5.0%–a rate that will be more prevalent if tomorrow’s data is strong.

In thinking about how much rates have moved so far this week, it’s important to note that the most widely used metric for changes in rates–Freddie Mac’s Primary Mortgage Market Survey–relies on data collected from Monday through Wednesday of any given week. Lenders who participate in the survey are emailed Monday and asked to respond by Wednesday. This can result in a delayed response in Freddie’s data vs reality.
…
Unfortunately, rates are very capable of going even higher–something we warned about in no unspecific terms yesterday. At this point in the day, there’s little that can be done to lock in a rate before tomorrow’s excessively important jobs data arrives. In that sense, it “is what it is,” but for the sake of mental preparation, rates can still go higher if the data is strong, and the movement can still be big. If we happen to be benefiting from weaker-than-expected data tomorrow, we’ll cross that bridge if we come to it.

Posted in Economics, Housing Recovery, Mortgages, National Real Estate | 60 Comments

Newark-Union leads the state in home price gains

Posted on September 5, 2013 by grim

From the Star Ledger:

Home prices in New Jersey continue to rise

The price to buy a home in New Jersey Home continued to climb in July, according to CoreLogic, rising by 4.1 percent over last year. The increase includes homes in which homeowners were behind in mortgage payments or in default.

Nationwide, the average home price rose 12.4 percent between July 2012 and July 2013, the monthly report said. Arizona and California led the way, with jumps of 27 percent and 23.2 percent respectively. It marked the 17th consecutive monthly year-over-year increase.

New Jersey’s increase was the 33rd highest in the country.

“Home prices continued to surge in July,” Mark Fleming, chief economist for CoreLogic, said in an e-mail. “Looking ahead to the second half of the year, price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand.”
…
The Newark-Union area outperformed the state as a whole, with a 5.9 percent increase in July 2013 compared to July 2012. On a month-over-month basis, home prices increased by 3.5 percent between June and July.
..
It noted the median price of home in the Newark-Union metropolitan area was $398,000, up 3.2 percent in the quarter. In the area surrounding Edison, the median price was $299,800, up 0.8 percent.

Posted in Housing Recovery, New Jersey Real Estate | 95 Comments

Home prices continue to show strong gains, but moderation expected

Posted on September 4, 2013 by grim

From HousingWire:

Home price appreciation flame begins to weaken

Home data reports from both CoreLogic and Clear Capital released Tuesday project continued home price growth, despite the recent increase in mortgage rates.

According to the CoreLogic report, home prices throughout the country rose 12.4% year-over-year in July, marking the 17th consecutive month of annual growth in home prices. Clear Capital’s report posted a 10.2% increase in home prices year-over-year; however, this report was for August, not July.

Nonetheless, both reports point toward strong home price appreciation. According to Clear Capital, the last time double-digit yearly price growth was reported was mid-2006, the height of the bubble.

On a monthly basis, home prices, including distressed sales, increased by 1.8% in July, CoreLogic reported. In its home price index, CoreLogic analysts predict that home prices will rise by 12.3% year-over-year in August, with a 0.4% monthly increase — implying a slowing in price gains.

“Home prices continued to surge in July,” said Mark Fleming, chief economist for CoreLogic. “Looking ahead to the second half of the year, price growth is expected to slow as seasonal demand wanes and higher mortgage rates have a marginal impact on home purchase demand.”

Posted in Economics, Housing Recovery, National Real Estate | 43 Comments

Is New Jersey getting richer or poorer?

Posted on September 3, 2013 by grim

From the Record:

New Jerseyans who moved out of state took $15.7 billion in income from 2000 to 2010

New Jerseyans who moved to other states took a net total of $15.7 billion in income with them from 2000 to 2010, according to a new tax map from the non-partisan Tax Foundation.

That meant they weren’t spending that money, or paying taxes on it, in the Garden State.

But the loss in population and income was more than offset by births and the influx of immigrants to New Jersey, which has historically been an immigration gateway. And its household incomes remain among the highest in the nation.

For decades, more people have moved out of New Jersey to other states than the reverse. Starting in the 1970s, “the nation’s population and job growth increasingly shifted to the Sun Belt states of the South and West,” according to Rutgers economists James Hughes and Joseph Seneca, who have studied the issue. In a 2007 Rutgers report, the economists wrote that in 1970, the mid-Atlantic states of New Jersey, New York and Pennsylvania accounted for 18.3 percent of the nation’s population; by 2006, they accounted for 13.5 percent.

One big reason has been retirement to Florida and other warm-weather states. Other factors are the state’s high cost of living, especially high housing costs and property taxes; and faster job growth in other states, which was “a magnet for young people,” Hughes said last week.

New Jerseyans’ moves across state lines slowed dramatically during and after the 2007-09 recession, as mobility nationwide declined. There were two main reasons: plummeting home values made it hard for people to sell their homes, and high unemployment around the nation made it unlikely that job hunters would find better prospects in other states.

Households have started moving out of New Jersey again, however, as the economy and housing market continue their recovery, Hughes said. Many have found more job opportunities elsewhere; while the Garden State has recovered only 60 out of every 100 jobs it lost during the recession, Texas, for example, has recovered two jobs for every one it lost.

According to the Tax Foundation, from 2000 to 2010, the top states for New Jerseyans to move to were Florida, New York, Pennsylvania and California. The biggest source of people moving into New Jersey was New York.

Posted in Demographics, Economics, New Jersey Real Estate | 87 Comments

Home purchases post another strong month

Posted on August 31, 2013 by grim

From the Otteau Group:

July Purchase Activity Shifts Back in to High Gear

Home purchase demand in New Jersey shifted back in to high gear with another double digit-increase. In July, signed purchase-contracts rose by 21% compared to one year ago. This follows a smaller increase in June as rising home prices and mortgage interest rates caused a pause in buying activity.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 29 Comments

Negative equity falls, still a long way to go

Posted on August 30, 2013 by grim

From CNBC:

Home values rise, but millions still drown in debt

More than three million U.S. borrowers have risen above water on their mortgages so far this year, thanks to swift home price appreciation, according to a new report from online real estate company Zillow.

The negative home equity rate fell in the second quarter of this year, the fifth straight quarterly drop, but it is still alarmingly high and continues to hamper the housing recovery.

Currently, 23.8 percent of homeowners with a mortgage, or approximately 12.2 million, owe more than their homes are worth, down from 15.3 million one year ago, according to the report. Some, however, are still so far underwater that even with fast-rising prices, it will take years for them to see any home equity.

“Widespread rising home values during the past year have helped chip away at negative equity nationwide, helping many homeowners who were only modestly underwater to come up for air. For those homeowners who are deeply underwater, though, there is still a long row to hoe,” said Zillow Chief Economist Dr. Stan Humphries in a release.

Nationwide, more than half of all underwater borrowers are in in the red by 20 percent or more, and roughly one in seven owes more than twice what their home is worth.

The numbers seem incredible, given that home prices are up about 12 percent year-over-year, according to the latest S&P/Case-Shiller home price index for June, but that same index shows prices nationally are still off 23 percent from their peak in 2006. In some of the hardest hit housing markets, home values are still down around 30 percent from their recent peaks.

“Negative equity will be a factor in these markets for years to come, constraining the supply of homes for sale and keeping people out of the market who might otherwise get involved,” said Humphries.

Posted in Economics, Foreclosures, Housing Recovery, Mortgages, National Real Estate | 67 Comments