S&P Case Shiller home price data for April due out this morning. Consensus estimates have the 20-city composite up 10.9% year over year.
While we wait for the Case Shiller numbers, you can chew on the April home price report from LPS:
LPS’ April HPI Report: Home Prices Up 1.5 Percent from March, 8.1 Percent Year-Over-Year
US Overall – Up 8.1% YOY
NJ State – Up 3.7% YOY
NY Metro – Up 4.8% YOY
From the Record:
North Jersey housing market hot as buyers return
After 30 years in their five-bedroom Old Tappan colonial, Enid and Generoso Squitieri wanted to downsize, but they held off on a sale, waiting for the housing market to improve. As the economy and real estate market brightened this year, they put the house on the market in late March — and had an offer the next day.
“Before I knew it, I was packing,” said Enid Squitieri. She and her husband are now living with their daughter while they look for a condo in Fort Lee.
As the Squitieris discovered, the spring real estate market has been the liveliest in years in North Jersey, as the region and the nation climb out of the worst housing bust since World War II. Low mortgage rates and a growing sense of job security have drawn buyers into the market.
“It’s a breakthrough year,” said Attilio Adamo, a broker with Better Homes and Gardens Randy Realty in Harrington Park. “If homes are priced right, they’re moving.”
“The ‘buy now, pay less’ mood among home buyers is creating a sense of urgency,” Jeffrey Otteau, an East Brunswick appraiser who tracks the statewide housing market, wrote in a recent report. The pace of sales in the state is the highest in six years, and Bergen County is one of New Jersey’s strongest markets, he said. The local multiple listing services report that sales volume is up about 12.5 percent in Bergen County and 18 percent in Passaic compared with last year.
…
“I think people are tired of waiting,” said Bob Lindsay, a Re/Max agent in Wayne. In addition, according to Orly Steinberg, an agent with Coldwell Banker in Ringwood, more investors have been buying homes, often with cash.“Homes that were priced reasonably were receiving multiple offers very quickly,” said Melinda Cronk of Tarvin Realtors in Ridgewood. “If you waited until the open house to see it, you were too late.”
“The spring market has been incredible for sellers,” said Maryanne Elsaesser, a Coldwell Banker agent in Wyckoff. “Most of my listings sell within a week.”
…
Inventory is low for a couple of reasons, including a years-long plunge in home construction to levels not seen since World War II. Moreover, many homeowners — especially those who bought during the housing boom — can’t put their homes on the market because they owe more on their mortgages than the house is worth, said Otteau. Others are unwilling to accept prices that, in this region, are down about 25 percent from the market peaks in 2006.But though this supply/demand imbalance has led to bidding wars, the area’s prices haven’t risen as quickly as in the nation as a whole.
“We’re not seeing a dramatic increase in prices,” said Joe Rand of Better Homes & Gardens Rand Realty, which has offices in Bergen and Passaic counties.
From the Record:
NJ economy adds jobs, jobless rate declines
A slight dip in the unemployment rate and the addition of 14,300 jobs in May, taking the increase to 30,000 jobs since the start of the year, suggest the state’s economic recovery is gaining momentum, economists and a large business group said Thursday.
The state has now added jobs for four consecutive months, with the only losses this year in January. The unemployment rate has fallen steadily over that period, according to figures released Thursday by the New Jersey Department of Labor and Workforce Development.
Still, the May unemployment figure of 8.6 percent, the lowest since March 2009 and down from 9.5 percent at the start of the year, remains a full percentage point above the national rate of 7.6 percent in May. And the state has regained only about half of the 257,000 jobs lost in the recession.
…
Patrick O’Keefe, director of economic research at accounting firm CohnReznick, said the strongest aspect of the report was that the average monthly gain over the past three months shows the state had added a solid 9,200 jobs each month. The calculation removes the month-to-month fluctuations of regular job figures.
From HousingWire:
CoreLogic: Housing recovery is durable, but not bulletproof
The trend of rising home prices continues and is expected to carry on, but don’t expect double-digit gains as a norm, analysts say.
Home prices rose 12.1% in April, making it the 14th consecutive month of year-over-year increases, according to the latest CoreLogic Home Price Index. This is the largest annual gain since February 2006, a clear sign of a market in recovery mode.
However, double-digit gains are also cause for some concern, say experts who recall the unsustainable home price increases before the last housing downturn.
“While our recent projected CoreLogic HPI indicates continued home price gains, bolstered by still-tight supply and strong demand, we expect recent double-digit gains to moderate as markets normalize,” said CoreLogic.
…
With some early post-recession investors in distressed single-family properties saying the market overheated and they’re pulling back, it appears a sudden shift is taking place in the market.
…
“Regaining equity creates options for those who might now consider selling their homes because they can close a transaction with enough cash to make a down payment on the next home,” said CoreLogic. “Higher prices also attract the interest of builders who see opportunity in increased demand. In both cases, a broader supply brings inventory more in balance with demand.”
…
The current January to April year-to-date increase in the supply of existing homes is the third highest in nearly 30 years, indicating a lessening in the inventory crunch.“The increase in the supply in context of current tight underwriting standards should deflate the risk of any bubbles,” said CoreLogic.
From the Record:
High-end homes in North Jersey await price rebound
Home sales and prices are beginning to rebound in North Jersey, but what effect that will have on the still-sluggish higher end of the market – which slumped the most in 2012 – remains to be seen.
Prices of single-family homes in Bergen County rose 5.9 percent for the first five months of this year, to a median $413,000, while prices in Passaic County rose less than 1 percent, according to multiple listing services in both counties.
That’s a marked improvement from 2012, when, according to an analysis by The Record, home prices dropped 1.3 percent in Bergen and 1.7 percent in Passaic. Prices of homes $700,000 and up in Bergen and Passaic — stung by the loss of thousands of high-paying jobs that vanished in the recession — fared much worse, dropping 6.6 percent, the analysis shows.
Although the listings services don’t break the 2013 sales down by prices, evidence that the overall market is gaining is potentially good news for sellers in towns like Demarest, Old Tappan and Saddle River, which suffered double-digit price declines last year, according to The Record’s analysis. As home values firm up in the middle of the market, more households may find they have the equity to trade up and boost values in those towns.
For now, however, “The upper end is still sluggish,” said Robert Abbott of Abbott & Caserta Realtors in Ho-Ho-Kus.
Patricia Nichols, a fashion industry executive, has seen it firsthand.
Looking to downsize after her daughter left for college, she sold her five-bedroom Upper Saddle River colonial in 2012 for $780,000 — about 22 percent less than her original asking price in 2010.
“Would I have liked to have gotten more? Of course,” said Nichols, who moved to a town house. “But it was almost a two-year process. At some point, you have to cut your losses.”
Part of the problem is fewer buyers. From 2006 to 2011, the North Jersey economy lost 10 percent of the jobs in industries where the average salary is at least $80,000, according to an analysis of jobs data by The Record. One example: The number of finance jobs in New Jersey — about 249,000 — is down by about 11.5 percent from 2005.
“The labor markets have fewer top-end salaries than they did before,” said Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide.
In addition, fewer households can trade up to luxury homes, because their current homes haven’t been gaining value.
“Demand for high-priced houses depends on appreciation and equity buildup in the middle-priced houses,” Otteau said. “That has not occurred.”
From HousingWire:
S&P expects home prices to keep rising
Surging home prices throughout the country have spurred talk of a housing bubble, as many markets are still recovering from the last bubble bursting in 2007.
But Standard & Poor’s Ratings Services states that, although double-digit gains are ultimately unsustainable, we may not have reached bubble status quite yet.
Home price appreciation can be attributed to a number of factors, including historically low rates, property purchases by investors who are renting homes out and a shortage in home inventory. In fact, recently the S&P/Case-Shiller home price index hit an 11% year-over-year increase, from 8%.
Across the U.S., home prices are back to 2003 levels, yet they remain far from their 2006 peak. Lack of available inventory coupled with high demand has played a large role in this. In April, the sales of existing homes were up 9.7% year-over-year, while existing housing inventory dropped 13.6% from a year earlier, according to the National Association of Realtors.
…
S&P states that U.S. home prices are relatively low compared to historical values. Prices remain 28% lower than their July 2006 peak.Additionally, housing remains undervalued about 8% based on the price-to-income ratio, which takes into account the median sales price of a home relative to median annual incomes. The typical median home in the U.S. costs 4 times as much as the median annual income. It’s now at 3.7 times
Overall, S&P expects that the current pace of home prices gains will not last for long; however, it’s too soon to call this a bubble. In fact, as home values are still below their pre-recession peaks, home prices could continue to rise throughout the year.
From the Philly Inquirer:
Are there enough first-time buyers to sustain housing recovery?
hiladelphians Luis Valenti, 25, and Eleonora Barbieri, 26, are getting married July 14.
If planning a wedding doesn’t seem stressful enough, the couple are settling July 10 on their first house, a duplex in the 2200 block of West Thompson Street listed at $155,000.
Two major events in the lives of anyone, and just four days apart.
“With the housing recovery and interest rates going up, we thought the time was right,” said Valenti, who works in the financial industry.
They also wanted to lock into an FHA loan by June 1, before the rules changed, Barbieri said.
Since then, all loans with less than 10 percent down require that mortgage insurance be paid for the life of the loan. In addition, mortgage insurance will no longer be canceled when the loan balance is 78 percent of the original amount.
They beat the deadline.
First-time buyers like Valenti and Barbieri are key to the health of residential real estate. So there is concern, at least on the national level, that there might not be enough of them to sustain the housing recovery.
This buyer segment is so important, in fact, that the National Association of Realtors surveys 3,000 members monthly for the latest percentages.
The April survey, said spokesman Walt Molony, put first-time buyers at 29 percent, “weaker than the historic norm” of 40 percent.
Other research organizations report similar findings. Tight credit, competition with investors for lower-end properties, and limited inventory typically are cited as reasons.
Economist Kevin Gillen, of the University of Pennsylvania’s Fels Institute, maintains that since the housing bubble burst in 2007, “many lower-income home buyers have been effectively cut out of the market.”
“Whether they’re unemployed, underemployed, can’t assemble a sufficient down payment, or can’t get credit, these are problems,” he said, “that disproportionately affect young, first-time home buyers.
“We’ve been left with a housing market composed of relatively wealthier households trading relatively high-priced homes with each other.”
That may be changing. In many parts of the region, the numbers of first-timers are increasing. Owing to the shortage of inventory, many of them are not having an easy time, however.
From the NYT:
The next generation of potential home buyers prefer to live in developments with an array of housing types close to shops and mass transit, a recent survey shows. Is this bad news for the baby boomers who will eventually be looking to sell their big suburban houses?
It’s too soon to tell, analysts say, because the generation that is now roughly 18 to 34 is still moving into its child-raising years. As Jed Kolko, the chief economist of Trulia, noted, “It’s very hard to imagine before you have kids what you will want when you have kids.”
But it’s likely that this generation, who are known as millennials or Generation Y, will force some type of shift in the housing market; it is more racially and ethnically diverse than previous generations, as well as more deeply affected by the recession than older adults.
“I do think their preferences are going to result in sustained change,” said Lynn Ross, the executive director of the Urban Land Institute’s Terwilliger Center for Housing. “This group is so different from previous generations.”
The institute recently released the results of a survey showing the generation’s penchant for urban-style living. About 60 percent say they prefer a mix of housing choices, along with proximity to shops, dining, offices and transit. Seventy-five percent said they valued walkability — a preference that jibes with this generation’s declining number of licensed drivers, according to a report by U.S. Pirg, a nonprofit consumer advocacy group.
Of the 63 percent who said they planned to move within the next five years, nearly 40 percent expect to live in some type of multifamily housing.
Ms. Ross said the findings didn’t necessarily mean this generation would move en masse to city locations. These young buyers may also be drawn to compact development in downtown suburban locations.
…
Mr. Kolko noted that although people surveyed by Trulia often say they want walkability and proximity to mass transit, property searches on Trulia.com are more often conducted by city people looking in the suburbs than vice versa. “Gen Y may turn out to have unrealistic expectations about what they can afford,” he said, “but that doesn’t mean they want something radically different. It’s too soon to tell whether there is a permanent shift.”
From the Bridgeton News:
Large areas of N.J. Shore to be removed from high-risk flood zone
Declaring the controversial federal flood zone maps issued in the wake of Hurricane Sandy “fundamentally flawed,” U.S. Sen. Robert Menendez (D-N.J.) said today revised maps will be released next week removing large areas from the worst at-risk zones.
Menendez said earlier versions of the maps, which aren’t yet final, “incorrectly included far too many homes” in areas at risk of major waves — sections called “V” zones.
“For residents in many of the areas affected by Superstorm Sandy, the release of these updated flood maps could be the deciding factor in whether they are able to stay in their homes or are forced to relocate,” Menendez said.
The new maps, to be released Monday, will cover Monmouth, Ocean, Hudson and Atlantic counties.
The debate over which homes fall in the dreaded “V” zone has been one of the most contentious issues for homeowners along the shore since the hurricane struck last October.
Property owners have been anxiously awaiting revised maps from the Federal Emergency Management Agency because they will dictate how many — and how high — homes or businesses have to be raised to protect from flooding. That ultimately affects flood insurance rates as well and whether homeowners will even be able to afford to rebuild.
Removing large numbers of homes from the “V” zone would be good news for those property owners who have not yet rebuilt.
…
“This is great news for the hundreds, if not thousands, of people who were incorrectly included in high-risk, high-cost ‘V’ zones,” George Kasimos, founder of Stop FEMA Now, a property-owners advocacy group, said in a statement.
…
In Brick, about 4,000 homes were slated to move to “V” zones. Mayor Stephen Acropolis said he expects 3,500 homes will move back to “A” zones when the new maps come out.Still, there will likely be an additional 10,000 to 12,000 Ocean County residents who must now obtain flood insurance, he said.
From Bloomberg:
Foreclosures Jump as Banks Bet on Rising U.S. Home Prices
Home repossessions in the U.S. jumped 11 percent in May after declining for the previous five months as rising prices and limited inventory for sale across the country spurred banks to complete foreclosures.
Lenders took back 38,946 homes, up from 34,997 in April, according to Irvine, California-based data firm RealtyTrac, which tracks notices of default, auction and seizures. Thirty-three states had increases in the number of homes repossessed, RealtyTrac said in a report today.
Banks are more willing to move to the final stage of foreclosure because there is sufficient demand and prices are improving, said Eric Workman of Tinley Park, Illinois-based Mack Cos., which aggregates single-family rental homes and resells them to individuals and institutional investors. U.S. home prices advanced almost 11 percent in the year through March, the biggest 12-month gain since April 2006, according to the S&P/Case-Shiller index of values in 20 cities.
“For a very long period of time, the market in general and specifically banks were unsure of what these assets were valued at,” Workman, vice president of sales and marketing at Mack, said in a telephone interview. “With increasing stability of the economy and housing prices throughout the U.S., these banks and sellers are getting much more comfortable with the value of their properties.”
…
“Given the shortage of inventory and rising home prices, banks have little motivation to hold back on any foreclosures, so homeowners who have not been making payments for several months or even years without a foreclosure notice should expect to see that notice coming,” Craig King, an agent at the Reno, Nevada-based Chase International brokerage, said in RealtyTrac’s report.
…
The current pace of home seizures would result in more than a half million repossessions by the end of the year, compared with 671,251 in 2012, RealtyTrac said.“However, the numbers for 2013 could be higher if the increase in May continues and lenders have a good market to unload distressed inventory,” Blomquist said.
From Bloomberg:
Homeowners With Negative Equity Fall Below 20% of U.S. Borrowers
The share of U.S. borrowers who owe more than their homes are worth fell to less than 20 percent in the first quarter as prices surged in hard-hit markets, according to CoreLogic Inc.
About 850,000 residential properties gained positive equity during the quarter, leaving the number of underwater homes at 9.7 million, or 19.8 percent of all U.S. homes with mortgages. That’s down from 21.7 percent at the end of last year, the Irvine, California-based real estate data provider said today in a report.
…
“The negative-equity burden continues to recede across the country thanks largely to rising home prices,” Anand Nallathambi, president and chief executive officer of CoreLogic, said in a statement today. “We are still far below peak home-price levels, but tight supplies in many areas coupled with continued demand for single-family homes should help us close the gap.”The aggregate value of negative equity in the U.S. fell to $580 billion in the first quarter from $631 billion at the end of last year.
The majority of home equity is concentrated at the high end of the market, according to CoreLogic. For mortgaged homes valued at more than $200,000, 88 percent are above water, compared with 73 percent for properties worth less than that, the firm said.
From Forbes:
Housing Boom Is The Best Chance For A Recovery For The Rest Of Us
Our tepid economic recovery has been profoundly undemocratic in nature. Between the “too big to fail” banks and Ben Bernanke’s policy of dropping free money from helicopters on the investor class, there have been two recoveries, one for the rich, and another less rewarding one for the middle class.
Viewed in this light, the recent run-up in home prices, the biggest in seven years, offers some relief from this dreary picture. Home equity accounts for almost two-thirds of a “typical” family’s wealth (those in the middle fifth of U.S. wealth distribution); there is no other investment by which middle-class families can so easily grow their nest eggs.
…
Perhaps even more important, the growth of housing sales also revives something many have written off as obsolete: “the American dream” of owning a home. Since the great recession, some economists have argued that the future of America will be a “rentership” society.Others such as Richard Florida have argued forcibly that home ownership is “over-rated,” maintaining that America’s fixation on it has fostered “countless forms of over-consumption that have a horribly distorting affect on the economy.” Workers, he argues, are better off as renters since this allows them to change jobs more nimbly. If anything, he suggests, the government would be better off encouraging “renting, not buying.”
…
Perhaps this is true for some, but overall the desire to own a home is far from dead. A 2012 study by the Woodrow Wilson Center found that over 80% of Americans associated homeownership with the American dream. A 2012 study by the Joint Center for Housing Studies at Harvard, found “little evidence to suggest that individuals‘ preferences for owning versus renting a home have been fundamentally altered by their exposure to house price declines and loan delinquency rates, or by knowing others in their neighborhood who have defaulted on their mortgages.”Some predict that changing demographics — and attitudes — will erode such sentiments. Yet homeownership seems to be embraced by two groups who will dominate our future: the emerging millennial generation and immigrants . Between 2000 and 2011, there has been a net increase of 9.3 million in the foreign-born (immigrant) population, largely from Asia and Latin America. These newcomers have accounted for roughly two out of every five new homeowners.
…
But, still, the housing recovery is the best news to hit the American middle class in at least half a decade. Some investors seem to be realizing there are limits to rental income and might be persuaded to start selling homes to individuals. Already in Phoenix, a hotbed of investor interest, the percentage of homes sold to investors dropped to about 25% in March from a high of 36% last summer.If this trend takes hold, investors, rather than undermining the market, could be seen as having played a critical role in maintaining housing during a very hard time. If they start an orderly withdrawal, or start selling their homes to families, the speculators, not always a lovable group, could end up being among the unlikely saviors of the American dream, particularly for the next generation.
From the WSJ:
Housing’s Up, but Is Foundation Sound?
The housing-market recovery is here but there’s a growing debate among bulls and bears over how long it will last and how strong it will become, with both groups pointing to the same data to make their case: U.S. demographics.
The bull case says the housing market is in the early stages of a rebound that should last several years because the U.S. hasn’t built enough housing to support the country’s growth. The recession and the foreclosure crisis led to a sharp slump in new-home construction and in household formation. But the population didn’t stop growing. Instead, households simply doubled up or moved in with family.
The bears argue that the recent gains in housing will be short lived, pointing to changes in access to credit, elevated consumer-debt levels, and an over-reliance on investors. They don’t believe housing will crash again, and they concede that it should provide some contribution to economic growth. But they see little evidence that the price or sales momentum is durable or that housing will provide the big boost to the economy that the bulls are expecting.
For anyone considering whether to buy a home to live in, the decision should focus primarily on whether they can afford the payments and other costs of ownership, regardless of where home prices go.
The slump’s impact set up today’s dynamics. The country added around 1.3 million new households every year for the 10-year period ending in 2007, after which household formation fell to more than half that level. New-home construction ground to a halt in 2008 as home builders were sidelined by rising volumes of foreclosures and other distressed sales.
Housing bulls see the slow economic recovery releasing pent-up demand, first for rental housing and then for home purchases. More young adults—many of them among the 65 million “echo” boomers born to baby boomers between 1981 and 1995—are moving out of their parents’ homes and into apartments. Others that had delayed home purchases during the bubble are ready to buy.
Rising prices in many parts of the country today show what happens when demand outstrips supply. To be sure, some homes are being held off the market by owners who can’t sell because they owe more than their homes or worth. Others are reluctant to sell at prices that leave them with little money to make a down payment on their next home.
Meanwhile, bulls still see too few homes being built, even after accounting for that “shadow” inventory. Population growth will require 14 million additional housing units this decade, around three-quarters of them single-family homes, according to Zelman & Associates, a research and advisory firm. Analysts at Zelman estimate that only 5.7 million of those units will be built by 2015, meaning the U.S. would need to add two million homes a year over the last four years of the decade—spurring a big boost of construction that would ripple through the economy.
“There’s just not enough shelter,” says Ivy Zelman, the firm’s chief executive.
…
The bear case, the outlines of which are laid out in a forthcoming paper by Joshua Rosner, managing director of Graham Fisher & Co., draws attention to several forces that had helped housing—and the economy—expand over the past few decades but whose end will now hinder growth.
…
In 2001, Mr. Rosner was among the first to prophesy how rising debt levels would fuel a housing bubble and later, in early 2007, he warned how the bursting of that debt bubble would trigger a severe financial crash. Now, he sees major drags not only from the potential echo-boom buyers but also from the aging baby boomers, who sustained huge losses in the housing-market downturn, leaving them less prepared for retirement and putting greater strains on the social safety net.Skeptics also haven’t taken comfort in the housing rebound because they see it as too dependent on investors. “We shouldn’t look at it as a fundamentally recovered housing market,” says Mr. Rosner. Sooner or later, he says, there needs to be “a handoff from the investor purchase to the primary-resident purchase.”
How that handoff unfolds will go a long way toward deciding whether the bulls or the bears have the last laugh.
From the Economist:
UST seven years after the biggest housing bubble in American history began to deflate, could another be inflating? Prices in a 20-city index compiled by CoreLogic Case-Shiller rose by 11% in the year to the end of March, and by more than 20% in Phoenix and Las Vegas, both cities at the centre of the housing collapse. Inventory is down: homes are selling in days, and often for more than the asking price. In Phoenix, bidding wars have broken out between would-be homeowners and investors paying cash. Americans once more see property as a winning asset.
But to qualify as a bubble, an asset must not simply appreciate; it must decouple from its intrinsic value. For houses, The Economist each quarter compares the ratio of prices to household income and rents against their long-run average in 20 countries. We have now done the same for the 20 metropolitan areas in the Case-Shiller index. The verdict: in most markets houses are at or near their long-run values, but none looks bubbly.
For America as a whole and in most cities, price-to-rent and price-to-income ratios are at or near their 25-year average. (To be sure, the bubble era dragged that average up; valuations are still higher than in the 1990s.) How they got there varies, however. Cities in Arizona, California, Nevada and Florida experienced the biggest bubbles, and in the subsequent bust values fell well below long-term averages. Price rises in Phoenix, Tampa and Miami have restored values only to their long-run averages.
In New York prices never gave up much of their bubble-era rise, and have since recovered more slowly than in the country as a whole. Relative to rents and incomes, valuations have been flat or down slightly. Homes around Washington, DC sell for roughly double their level of the late 1990s, but that seems justified by strong gains in rents and incomes. A brisk rental market also explains the strong run-up in prices in San Francisco.
…
In Denver house prices have regained their peaks, and valuations are above their long-run average. This is the only city that, by our methodology, counts as expensive. But by the standards of recent history the over-valuation is trivial. Many things could trip up the housing recovery, from stalling job growth to higher mortgage rates. But at the moment a bursting bubble is not one of them.
From the Fed:
June Beige Book – Second District – New York
Economic activity in the Second District has continued to expand at a moderate pace since the last report. Price pressures have abated somewhat among manufacturers, though they remain more widespread in the service sector; contacts continue to report that selling prices are steady to up modestly. Labor market conditions continue to improve, and businesses increasingly report difficulty finding well-qualified workers. Retailers report that sales were tepid in April but picked up in early May, and new automobile sales have remained strong. Tourism activity has been mixed but generally robust. Commercial and residential real estate markets have strengthened further since the last report. Finally, credit conditions improved across the board, with bankers reporting increased loan demand, widespread narrowing in loan spreads, and declining delinquency rates across all loan categories.
…
Construction and Real EstateResidential real estate markets in the District have strengthened further since the last report. New York City’s home sales and rental markets have shown further signs of tightening–on both the sales and rental sides. Both apartment sales prices and transaction volume continue to run well ahead of a year ago in Manhattan and especially in prime areas of Brooklyn, reflecting a low inventory of available units. The rental market also remains tight: rents continue to rise at a roughly 6-7 percent annual rate in Manhattan and at a somewhat faster pace in Brooklyn; the Queens rental market is also seeing a pickup. Long Island, where the housing market had been generally flat until recently, has seen a recent sharp pickup in pending home sales and a drop in the inventory of homes for sale. Northern New Jersey continues to see modest, steady improvement in its housing market. With a relatively low inventory of new homes, prices are rising gradually; however, a sizable overhang of distressed properties is reported to be restraining price appreciation. A real estate contact in western New York reports increasingly strong market conditions: inventories have fallen, bidding wars have become increasingly common, and home prices have been rising.
