CNBC Channels JJ – The Rich Got Cash

Posted on April 26, 2013 by grim

From CNBC:

Stocks Widen Gap Between Rich and the Rest: Study

At the early stages of the recovery, the wealthy rebounded while the rest floundered. One study found that in 2010, 93 percent of the economic gains in the United States went to the top one percent of earners.

Some chalked this up to political policy. Others blamed the Fed, or tax rates on the wealthy, or a rigged financial system.

But there’s a more simple answer: stock investments.

A new research paper from the Pew Research Center, using census data, found that from 2009 to 20911, the top 7 percent of Americans by wealth owned 63 percent of the nation’s total wealth – up from 56 percent in 2009. The mean wealth of the top 7 percent (about 8 million households) jumped to $3.17 million from $2.48 million over the two years.

In contrast, the mean wealth of the bottom 93 percent fell to $133,817 from $139,896.

The reason, according to the paper, is that stocks recovered and housing didn’t. The wealthy have their wealth concentrated in stocks, while the less affluent have their wealth concentrated in their homes.
…
Of course, housing prices have since started climbing back. The data for 2012 and 2013 could show more evenly distributed wealth gains in the U.S. and perhaps a stabilizing or slight decline in inequality.

But for now the lesson is clear: the stock-wealthy did better than the house-wealthy.

Posted in Economics, Housing Recovery, National Real Estate | 61 Comments

The New American Household?

Posted on April 25, 2013 by grim

From the FT:

Immigrants boost US housing recovery

Home ownership in the US fell to a 17-year low of 65.3 per cent in the third quarter of last year, but among immigrant households – accounting for existing families and new arrivals – it has steadily increased. Typically purchased after renting for a few years, for many upwardly mobile immigrants owning a home is a symbol of economic success.

Although they represent close to 13 per cent of the US population, immigrants accounted for nearly 36 per cent of growth in home ownership between 2000 and 2010, according to a report by the Research Institute for Housing America and the Mortgage Bankers Association. While this has been driven mainly by the Hispanic community, other minority populations have also boosted gains.
…
The number of homeowning immigrant households is projected to rise by 2.8m in the decade ending 2020, compared with a 2.4m gain in the previous 10 years. They will account for more than 50 per cent of the rise in homebuying in six gateway states, such as California and New York, the report adds.

Economists have long said immigrants provide an important and growing source of new housing demand that could bolster the US economy, which has fuelled campaigns for legislative reform.

New immigration laws being debated in Washington could potentially increase the number of homeowners in the US by 3m over the next few years. Economists say new legal status for current non-citizens could result in a potential $100bn in new mortgage loans.

Posted in Economics, Housing Recovery, National Real Estate | 119 Comments

What’s Normal?

Posted on April 24, 2013 by grim

From the WSJ:

Housing Sector 56% Back to Normal

If the housing recovery were a home, the foundation, framing, roof, windows and siding would all be in place. Now the industry has to complete the second half of its return to normal. This is where progress can slow down.

Despite some March setbacks that could be weather-related, housing construction and demand look firmly in recovery. The latest piece of news was the 1.5% rise of new-home sales in March and the continued increase in home prices through February.

These trends are just as the Federal Reserve intended when it aimed to bring long-term interest rates down. Better housing activity helps the overall economy, and consumer spending benefits from rising home prices and the ability to refinance mortgages.

According to calculations by housing website Trulia, the housing sector is 56% back to normal. Trulia compares the current levels of starts, existing-home sales, and the rate of delinquencies and foreclosures versus their worst readings of the recession and their prebubble normal levels.

Of course, “normal” is subjective. Like other sectors, housing faces a New Normal in the post-Great Recession world. But a year ago, housing was only one-third of the way back, says Trulia, “so the last year has been a significant recovery.”

But just as with any recovery, the second stage is harder. Progress will be more incremental.
…
In March, Fed governor Elizabeth Duke expressed worries that strict lending standards could limit the housing recovery.

“I expect [housing] demand to come from a pickup in new household formation, but I also recognize that these households may be the very population that faces especially tight credit conditions,” she said.

Second, future demand will depend on job and income growth picking up. But the U.S. economy is experiencing a slowdown, which may mean weaker hiring this spring as well–perhaps not as dismal as March’s 88,000-job gain, but less than 200,000 a month.

The challenges do not look strong enough to derail housing. But the journey to the New Normal will not be smooth nor quick.

Posted in Economics, Housing Recovery, National Real Estate | 88 Comments

Housing Investor Claims Investors Aren’t Driving Housing

Posted on April 23, 2013 by grim

Bullshit? From Bloomberg:

Investors Aren’t Driving the Housing Recovery, Chang Says

The U.S. housing recovery is being driven more by buyers seeking a place to live than by investors, said Oliver Chang, a former Morgan Stanley analyst and proponent of bringing institutional capital to rental housing.

Purchases by owner-occupants seeking to take advantage of mortgage rates that are close to a record low have been the biggest factor in rising home prices and sales following the worst housing crash since the Great Depression, according to Chang, who left Morgan Stanley last year to co-found Sylvan Road Capital LLC, an Atlanta-based single-family home rental investment fund.
…
“It’s possible that investors are less in the driver’s seat and more along for the ride,” Chang wrote in a note before the Information Management Network conference on single-family rentals that starts today in Miami. “The housing recovery appears to be broad-based and here to stay, although not because of the entrance of institutional investors into the space.”

Private-equity funds, real estate investment trusts and high-net-worth investors have raised more than $10 billion to buy homes to rent, seeking to take advantage of prices 29 percent below the 2006 peak and rising demand for rentals from Americans blocked out of homeownership. Blackstone Group LP (BX), the world’s largest private-equity firm, has spent more than $4 billion to buy 24,000 rental homes in the past year.
…
While large investors have been credited with being leaders of the recovery, they “represent a minuscule portion of the total housing market,” Chang said in his report. “It’s a good thing that owner-occupied buyers are driving sales and price increases — it means that there is some level of increasing fundamental demand.”

Posted in Economics, Housing Recovery, National Real Estate | 58 Comments

March Existing Home Sales

Posted on April 22, 2013 by grim

From Bloomberg:

Sales of U.S. Existing Homes Probably Climbed for Third Month

Sales of previously owned U.S. homes probably rose in March for a third month to reach the highest level since late 2009, further evidence of an improving real-estate market, economists said before a report today.

Purchases climbed 0.4 percent last month to a 5 million annualized rate, according to the median forecast of 66 economists surveyed by Bloomberg before data from the National Association of Realtors in Washington. The last time sales exceeded a 5 million pace was November 2009, when first-time homebuyers rushed to take advantage of a temporary tax credit.

Historically low mortgage rates, rising property values and job growth are helping repair the housing market, giving the world’s largest economy a boost. At the same time, lean inventories of available properties may be limiting the pace of progress in the industry.

“Housing is a very bright spot in this recovery, and it’s one of the reasons why the recovery will stay on track,” said Eric Green, global head of rates and FX research at TD Securities Inc. in New York. “With people seeing broader healing in demand and gaining confidence because they don’t expect prices to fall anymore, they’re actually beginning to act.”

The Realtors’ sales data will be released at 10 a.m. in Washington. Estimates in the Bloomberg survey ranged from rates of 4.9 million to 5.2 million.

Posted in Economics, Housing Recovery, National Real Estate | 54 Comments

Good deals in Newark?

Posted on April 20, 2013 by grim

From the Star Ledger:

Newark sells off dozens of foreclosed properties in city auction

The sing-songy voice of the auctioneer echoed across the Terrace Ballroom at Newark Symphony Hall as hopeful property owners clutched their catalogs and filed in and out of the room.
Newark put nearly 80 abandoned and foreclosed properties on the auction block today, trying to derive some value from a foreclosure crisis that has ravaged the city’s already fragile tax base.

Michael Meyer, the city’s housing director said by mid-morning things were going at a good clip and properties were going for more than he had hoped, but the business of auctioning is not as straightforward as it may appear.

“We want to make sure we put property out there without flooding the market,” he said.

Roughly 100 people were at Symphony Hall, many were professional investors while others were hopeful home buyers.
…
Ed Watson, a contractor from Monmouth County picked up what would charitably be called a “fixer-upper.”

“It’s basically a shell. I don’t even know if has plumbing,” Watson said after picking up one of a dozen properties that the city was selling with the stipulation the owner live there for five years.

Watson, who does “total renovations,” said he was looking forward to tackling the project.

“You beautify the neighborhood and at the same time have a cheap place to live,” he said. As for Newark’s real estate market he was cautiously optimistic.

“I don’t think it’s all of a sudden going to be Hoboken, but there’s a market,” he said.

Posted in Economics, Foreclosures | 35 Comments

NJ adds 8,100 jobs, Unemployment falls to 9%

Posted on April 18, 2013 by grim

From the Record:

New Jersey added 8,100 jobs in March

New Jersey added 8,100 jobs in March, and the jobless rate declined to 9 percent, the monthly jobs report released today shows.

The state added 10,400 private jobs, and lost 2,300 government jobs, according to the New Jersey Department of Labor and Workforce Development.

The jobless rate, falling to 9 percent from 9.3 percent in February, remained well above the national rate of 7.6 percent.

The leisure and hospitality sector gained the most jobs, adding 5,500, followed by education and health services, which rose 4,000, and manufacturing, which added 2,900.

The information sector shed 2,000 jobs, and the professional and business services sector lost 1,100.

The report also reduced by 3,500 the previously reported gain of 12,900 jobs in February, to 9,400 jobs.

From Bloomberg:

NJ unemployment rate drops to 9 percent

New Jersey’s unemployment rate fell .3 percent for March to 9 percent, still higher than the national figure but the lowest it’s been in a year.

Private sector employment was up by 10,400 jobs over February, according to the data released Thursday by the state’s Labor Department and based on a survey by the U.S. Bureau of Labor Statistic. The hospitality industry led the way, adding more than 6,000 jobs in March.

But the main reason the unemployment rate dropped was that fewer who don’t have jobs were looking for them.

According to seasonally adjusted numbers, there were 4.6 million New Jersey residents who either had jobs or were seeking them in March, down by about 20,000 from the month before.
…
The state’s unemployment rate remains nearly 1.5 points higher than the national rate of 7.6 percent for March.

But it’s the lowest the rate has been in New Jersey since the first three months of 2012. The rate has not been below the 9 percent mark since May 2009.

Posted in Economics, New Jersey Real Estate | 132 Comments

April Beige Book

Posted on April 17, 2013 by grim

From the Fed:

Beige Book – April 17, 2013 Second District–New York

Construction and Real Estate

Residential real estate markets in the District have shown increasingly widespread signs of improvement in recent weeks. New York City apartment rents, which had flattened out in the final months of 2012, have accelerated in early 2013 and are reported to be up 6-7 percent from a year ago in Manhattan and by somewhat more in Brooklyn. With respect to the city’s co-op and condo market, a major appraisal firm reports that sales volume has strengthened, while the inventory of apartments for sale is down sharply to one of the lowest levels on record. Most of the new development is at the upper end of the market, while low inventories across the rest of the spectrum have begun to drive up selling prices across New York City, as well as in Westchester County and Long Island. Multiple offers (bidding wars), though hardly the norm, are becoming more frequent across the region. Prime areas of Brooklyn, where market conditions are particularly strong, are reported to be seeing a good deal of commercial-to-residential conversion. Similarly, an expert on northern New Jersey’s housing market reports continued improvement in market conditions: the volume of distressed properties there has been shrinking, with noticeably fewer homes moving into delinquency or foreclosure recently. Still, prices have moved up only modestly, held back by a slow foreclosure process. Buffalo-area Realtors also report strong market fundamentals–declining inventories and fairly rapid price appreciation.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 71 Comments

Regrets, I’ve had a few. But then again, too few to mention.

Posted on April 17, 2013 by grim

From US News:

Spring Housing Market: Eager Buyers, Patient Sellers

More than half of Americans have at least one regret when it comes to buying or renting a home, according to real estate information site Trulia, which surveyed more than 2000 adults about their housing choices.

The top regret among current homeowners was not purchasing a large enough home, with 34 percent of those surveyed wishing they would have opted for more square footage over other perks such as location or decor updates, the survey showed. Another 27 percent wished they had put more sweat equity into their homes by remodeling and updating key rooms, and almost a quarter of homeowners surveyed said they wished they had more information about their future abode before they signed the deed.

“Although the recession, tight credit, and foreclosures lowered homeownership in America, people would still buy – and buy big – if they could,” Jed Kolko, Trulia’s chief economist, said in a release. “Even after the housing crisis, Americans’ main housing regrets are that they didn’t invest more in their homes.”

Financial regrets also figured into homeowners’ hindsight towards their purchase. Almost 20 percent wished they’d saved up more for a larger down payment, and 16 percent said they wish they would have been more financially secure before making such a large purchase.

While homeowners have a fair share of regrets when it comes to their home purchases, buyers’ overall remorse is abating. About 55 percent of those who bought a home between 2010 and 2013 have regrets, compared to 63 percent who bought between 2003 to 2009. Record affordability, low mortgage rates, and conservative bank lending could have played a role in helping consumers steer clear of less-than-ideal investments, but that could change given the real estate landscape becoming ultra-competitive in recent months.

“People want to buy and rental vacancies are very low,” says Kolko. “That means they’ll be in a rush and could make mistakes they’ll later regret.”

Posted in National Real Estate | 86 Comments

What’s behind NJ’s foreclosure backlog?

Posted on April 16, 2013 by grim

From Fortune:

Behind the foreclosure surge in New York, New Jersey

Just as most of us believe we’ve seen the worst of the housing market’s collapse, two unlikely states are only now getting hit with a wave of foreclosures: New York and New Jersey.

The region was largely spared when home prices disastrously tumbled in 2007. New York and New Jersey, with some of the nation’s priciest homes and highest property tax rates, saw nowhere near as many foreclosures during the Great Recession as most of the rest of the country. But that has changed.

Next to Florida, New York and New Jersey have the highest share of homes undergoing foreclosure relative to all homes with mortgages, according to a report by CoreLogic. In February, Florida had the highest share at 9.9%, followed by New Jersey at 7.2%, and New York at 5%.

This might come as a surprise, given that household finances in the two states have generally fared better than the rest of the country in recent years. But while there are fewer mortgages in New York and New Jersey entering foreclosure every month than nationally, more of them have been getting stuck in the process. That’s because the two states use a judicial foreclosure process, which generally requires that foreclosures go through a state court.

Between 2010 and 2012, the share of mortgages entering foreclosure each month was 0.24% in upstate New York, 0.36% in downstate New York and 0.40% in northern New Jersey — all lower than the national average of 0.42%, according to a recent report by the Federal Reserve of New York. This is a good thing, but since foreclosures take longer to process, it also slows down the region’s housing recovery. On average, it takes 503 days to complete a foreclosure in New York and 481 days in New Jersey, markedly higher than 318 days nationwide, according to the Fed.

This says less about the strength of the recovery than the unintended consequences of New York and New Jersey’s foreclosure laws. While the regulations certainly protect homeowners, they also hamper the housing market’s healing process.

From the NY Fed:

Foreclosures Loom Large in the Region

Households in the New York-northern New Jersey region were spared the worst of the housing bust and have generally experienced less financial stress than average over the past several years. However, as the housing market has begun to recover both regionally and nationally, the region is faring far worse than the nation in one important respect—a growing backlog of foreclosures is resulting in a foreclosure rate that is now well above the national average. In this blog post, we describe this outsized increase in the region’s foreclosure rate and explain why it has occurred. We then discuss why the large build-up in foreclosures could cause a headwind for home-price gains in the region.

While the foreclosure rate has been edging down in the nation recently, the opposite is true in New York and northern New Jersey. The chart below shows the foreclosure rate as measured by the share of all active mortgages in foreclosure in a given month. After rising sharply during the housing bust, the U.S. foreclosure rate plateaued at about 4 percent in 2011, and has since fallen. Unlike the national rate, the foreclosure rate in our region has steadily climbed over the past several years. The rate in northern New Jersey and downstate New York now hovers at around 8 percent, double the national average. Even in upstate New York, where housing conditions have remained relatively stable, the foreclosure rate has recently edged above the national rate. Indeed, according to a recent report, New Jersey and New York now have the second- and third-highest foreclosure rates in the United States, behind only Florida.

The relatively large stock of foreclosures in our region may come as a surprise given that the housing bust was far less severe here, and household finances have been generally under less stress than nationally in recent years. As the chart below shows, the share of mortgages entering foreclosure each month in the region during the 2010 to 2012 period was at or below the national average, with the rate especially low in upstate New York. Yet while fewer mortgages are entering foreclosure on a monthly basis than nationally, more of them have been getting stuck there. Indeed, the chart shows that it takes far longer for homes to complete the foreclosure process in New York and New Jersey compared with the national average.

Posted in Economics, Foreclosures, Housing Recovery, New Jersey Real Estate | 63 Comments

Shiller’s take on home price dynamics

Posted on April 15, 2013 by grim

From the NYT:

Why Home Prices Change (or Don’t)

WHAT prices will today’s home buyers get if they sell a decade from now?

Most people live in their home for many years. They don’t need to view it as an investment at all, but if they do, they surely need a long forecasting horizon.

The problem is that modern economics has a poor understanding of past movements in home prices. And that makes the task of predicting the state of the market in 2023 challenging, at the very least. Still, we can learn something by analyzing the factors that affect home prices in general.

There has been some good news lately: home prices have risen over the last year, and with those gains there has been a renewed sense of optimism. But do these price increases mean that homes are now good investments for the long haul?

Unfortunately, no. We do know one thing from economic research: one-year home price increases, after correcting for inflation, have had almost no statistical relationship to increases 10 years down the road. Thus, the upturn last year is irrelevant to long-run forecasting. Booms are typically followed by busts, usually in far less than 10 years. In a decade, an entire housing boom, if there is one in inflation-corrected terms, is likely to have been reversed and completely washed away.

Inflation has a major impact on long-term home prices. So do the costs of construction. We’ll examine these factors now, and turn to other important influences like speculative pressures and cultural and demographic trends in subsequent columns.

Home prices look remarkably stable when corrected for inflation. Over the 100 years ending in 1990 — before the recent housing boom — real home prices rose only 0.2 percent a year, on average. The smallness of that increase seems best explained by rising productivity in construction, which offset increasing costs of land and labor.

Of course, home prices are likely to be much higher in 2023 when measured in nominal dollars — those that aren’t inflation-adjusted. Inflation is the deliberate policy of the Federal Reserve, with a target rate now of 2 percent a year as measured by the personal consumption expenditure deflator, or about 2.4 percent on the Consumer Price Index. At those rates, nominal prices will be roughly 25 percent higher, over all, in a decade.

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 108 Comments

Zandi goes all in

Posted on April 13, 2013 by grim

From the Washington Post:

To boost housing market, policymakers need to get credit to the creditworthy

But it would be premature to declare housing healthy again. Policymakers can make this happen. During the Great Recession, residential construction plunged to a post-World War II low of 500,000 units per year. The pace has since risen to 900,000 homes, and is set to double to 1.8 million in the next few years. Even this will be only enough to meet demand in an average year in which 1.25 million households are formed, 350,000 houses are irreparably damaged or demolished, and another 200,000 are built for use as vacation or second homes. Some progress has been made in getting more loans to more creditworthy families. The Home Affordable Refinance Program gives underwater homeowners a chance to refinance at lower rates. HARP requires Fannie Mae and Freddie Mac — the largest providers of mortgage credit, and part of the federal government since they were put into conservatorship in 2008 — to make refinancing easier and cheaper. An estimated 2.5 million homeowners have done so. But Fannie and Freddie still are not promoting refinancing as aggressively as they should. With a few reasonable tweaks to the program, several million more homeowners could participate in HARP. Legislation languishing in Congress — the Responsible Homeowner Refinancing Act — would break down the biggest roadblocks to HARP refinancing. Policymakers should make similar efforts to promote home-purchase loans, which have been stymied by similar barriers that have impeded refinancing. To further increase the flow of credit and improve the health of housing, Washington needs to attract more private lenders back into the mortgage business. Fannie, Freddie, the Federal Housing Administration and the Department of Veterans Affairs make nine out of every 10 new home loans. The remaining few are made by the nation’s biggest banks, which are reluctant to make more. For mortgage credit to flow sufficiently to support a strong housing market, much more private lending is needed. This additional private lending, in turn, requires a revived mortgage securities market. In other words, Wall Street must participate. This does not mean a return to the bad old bubble days, when exotic mortgage securities fed subprime lending and set the stage for the financial panic. Wall Street can do securitization safely, as long as regulators provide proper guidance. … These steps may seem small compared with the huge questions Washington faces over how to wind down Fannie Mae and Freddie Mac. Their limbo status makes little sense, and uncertainty about their ultimate fate discourages lending. But resolving their situation will be much easier if housing and the economy are in full swing. Policymakers can make this happen quickly by taking these doable steps and eliminating the remaining impediments to getting more creditworthy families into homes.

Posted in National Real Estate, Politics, Risky Lending | 55 Comments

Otteau: NJ market “will swallow these foreclosures whole without even chewing on them.”

Posted on April 12, 2013 by grim

From the Star Ledger:

Foreclosures in New Jersey still up, but correcting course

Foreclosures continue to climb in New Jersey from last year, but at a slower pace than other states that saw an increase, according to data from RealtyTrac. Nationwide, foreclosure activity fell nearly 23 percent from last year.

States such as New York and Maryland saw a surge in foreclosure notices between February and March – as much as 200 percent and 193 percent respectively. In New Jersey, the year-to-year number rose 42 percent over last year.

East Brunswick-based Otteau Valuations Group tracked similar numbers, recording a 49 percent increase from the first quarter of last year, but also noted a 10 percent drop from February to March this year.

Jeff Otteau, president of the group, said the monthly figure might be a sign of loan forbearance that was enacted after Hurricane Sandy by banks and foreclosures were not allowed to go forward.
Otteau sees the overall picture improving. Property values were up by nearly four percent in New Jersey over last year, and nearly 10 percent in parts of Northern New Jersey and demand for housing has increased as well.

“The housing market is so strong right now that it’s starved for inventory,” he said, “so it will swallow these foreclosures whole without even chewing on them.”

Homes in foreclosure are selling for about 5 percent below market value, Otteau said, and are not distressing the market.
…

“We ended with more of a backlog,” said Otteau, “but not as a result of the bad economy. Now these homes are coming on the market at a time when we need the inventory, and not at a very deep discount.”
There were 6,904 homes in foreclosure in New Jersey in the first quarter of 2013, according to Otteau, up from 4,646 from the same time period last year.

A dozen counties saw the number of foreclosure starts drop in the first quarter, led by Atlantic (30 percent) and Cape May (27 percent) Counties. Among the nine counties with an increase, Warren and Mercer led the pack at 23 percent and 21 percent respectively.

Posted in Foreclosures, New Jersey Real Estate | 85 Comments

Think you escaped Sandy? Think again.

Posted on April 11, 2013 by grim

From Reuters:

In New Jersey, spared by Sandy but paying the price in taxes

Philip Checchia’s home in Barnegat, New Jersey, escaped undamaged from Hurricane Sandy in October, but the 67-year-old is bracing for a different kind of storm damage – higher property taxes.

New Jersey home owners already pay the highest taxes in the country, with the revenues going to fund schools, police, firefighters, roads, and building projects. When the value of taxable property drops in one area, the burden often shifts to others to make up the difference.

At the epicenter of the problem is Ocean County, where Checchia lives, and where miles of long, fragile barrier islands bore the brunt of the storm’s beating. The storm carved $7 billion out of the total value of the county’s taxable property.

“You and I are going to pick up for people that chose to buy houses on the water,” Checchia said, sitting on the couch in the small two-story home he shares with his wife and grandson in a tidy, tightly packed middle-class neighborhood. His annual tax bill is already about $4,700 on a house valued at about $170,000 – roughly half what it was worth before the housing market collapsed, he said.

Ocean County saw its tax base – the combined value of all real estate subject to property taxes – dwindle to about $90 billion from $100 billion in 2012, said John C. Bartlett, a local elected official who heads the county finance department.

About $7 billion of that is due to Sandy damage, with the remaining $3 billion stemming from ongoing reassessments after the housing market declined, Bartlett said.

Expensive waterfront houses, some of them vacation homes for retirees, generated a large amount of the revenue that funds local schools and towns. “Thirty percent of our tax base was along the coast,” Bartlett said.
…
New Jersey collected $2,819 of state and local property taxes per capita in 2010, the highest rate of any U.S. state, according to the Tax Foundation, a conservative Washington think tank.

Tax bills that take the new home values into account won’t be sent out until August. Many local communities and school districts – which stand to lose significant revenues because of the property damage – haven’t yet set their budgets.

It could be years before the full financial impact plays out. Many towns still aren’t certain how much they could get from federal recovery reimbursements and loans, and homeowners who feel their properties were overvalued after Sandy can appeal.

“The byzantine nature of our property tax system in New Jersey makes it really hard to calculate what the effect is going to be and how soon it will be felt,” said Kenneth Pringle, managing partner of the law firm Pringle Quinn Anzano. Pringle served for 20 years as mayor of the Jersey shore town Belmar, in Monmouth County, until 2010.
…
But even Republican Governor Chris Christie, who tried last year to cut the state’s income tax rate by 10 percent, has conceded that higher taxes might be inevitable after Sandy.

Christie campaigned on a pledge to limit property taxes, and the state legislature passed a 2 percent cap on annual property tax increases in 2010. In November, Christie warned that, by law, towns could exceed the cap if there is a natural disaster.

For residents like Checchia, the question is: How much?

Posted in New Jersey Real Estate, Politics, Property Taxes | 65 Comments

Condo boom continues on the Gold Coast

Posted on April 10, 2013 by grim

From the NYT:

New Jersey Condo Market Heats Up as Demand Surges

After years of stagnating sales, the New Jersey condominium market is finally warming up, with developers building again and potential owners buying from floor plans.

A handful of developers have revived projects and are releasing a few units in prime locations to willing buyers. In Weehawken, buyers have signed contracts for riverfront apartments sight unseen. Construction will not be completed for another month, yet all but one of the 36 units at one building are already under contract. A few miles north, in Palisades Park, developers converted a handful of rentals in a luxury development to condos. And in Long Branch, on the Jersey Shore, developers are getting ready to release 44 new units later this month.

Unlike New York City, where condo sales bounced back quickly after the recession hit, New Jersey has had a slower recovery. After the housing crisis, banks were unwilling to finance new condo construction and buyers were unable to get mortgages, so developers shelved condo projects and retreated to the rental market. But now a few developers see the low inventory of new condos for sale and the thriving New York market as signs that New Jersey is ready to sell again.

“The market is strong now, but it’s going to get stronger,” said Craig Klingensmith, division president of Lennar Urban, which developed Henley-on-the-Hudson in Weehawken with the Roseland Properties Company. “If you have very good properties and they’re well situated, there are people looking to place their money.”
…
Despite local curiosity, 60 percent of the buyers are from overseas, many from China, Korea and Russia. “If the international market wasn’t in the area, the market wouldn’t be as strong,” said Mr. Klingensmith.

The international buyers that have shown interest in Henley-on-the-Hudson are not investors looking for a pied-à-terre. Rather, they are generally younger buyers looking for a primary residence or a second home with easy access to Manhattan, and have been priced out of the New York City market.
…
Sales over all have improved in northern New Jersey from a year ago. Median condo prices in Hudson County are up 17.6 percent from the same time last year, to $344,400, according to data provided by Zillow. In Bergen County, they’re up 7.3 percent from a year ago, to $301,700. But prices still have a far way to climb to return to their March 2006 peak, when the median price for a condo in Hudson County, $384,000, was 10 percent higher than it is today. In Bergen County, it was 24 percent higher at $395,200. Compared to New York City, where the median condo price exceeds $1 million, sales have been relatively tame along New Jersey’s Gold Coast, which runs along the Hudson River from Jersey City to Englewood Cliffs.

“It’s not New York,” said Jordan Roth, Senior Branch Manager at GFI Mortgage Bankers. “The New Jersey market allows people a path of entry to homeownership where they get much more space than they would if they bought in New York.”

Ultimately, most New Jersey buyers see a condo purchase as a pathway to buying a single-family home in the suburbs, which make up the majority of the New Jersey housing stock.

Posted in Economics, Housing Recovery, New Development, New Jersey Real Estate | 81 Comments