Bubble 2.0? Not likely

Posted on January 8, 2013 by grim

From HousingWire:

Clear Capital: Price recovery in most housing markets will slow down

Despite beginning the year with market lows, most home prices gained momentum toward the end up 2012, finishing the year at 4.9% year-over-year price gains. Some markets, though they are few, may also suffer a backslide in values.

According to the latest Clear Capital home data report, national home prices are expected to increase by only 2.1% this year. The 2013 yearly gains are expected to be smaller partly because homes are starting on a higher price base, but the entire explanation is more complex than that, Clear Capital notes.

Furthermore, Alex Villacorta, director of research and analytics, warns that this could change at a moment’s notice.

“The housing landscape, however, could quickly shift should the broader economy tumble back into recessionary territory,” Villacorta noted. “Whether by perception or actual decrease in buying power for the average consumer, residual effects of the fiscal cliff deal could cause housing to change course. But as it stands now, home prices have continued to show resiliency by posting their largest yearly gain in nearly two and a half years.”
…
The Northeast saw the lowest rate of annual growth at 1.5%. This year is projected to be very similar to 2012, with yearly gains expected to hit only 1.4%.
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Only eight markets are projected to see prices fall in 2013, including Denver; Louisville, Ky.; Charlotte, N.C.; Philadelphia; Atlanta; Baltimore; Chicago and St. Louis. For those eight markets, average declines should come in at just 0.9%.

“At the end of the day, there are still plenty of great deals to be had across the country, investors looking for decent return, and pent up homebuyer demand on the verge of materializing,” Villacorta added.

The report projects that 2013 will continue to grow at a healthy pace, although the chances of a robust recovery are slim as there is less ground to make up.

“While a larger economic setback could easily change the course for the worse, current rates of growth signal the market is slowly calibrating itself to pre-bubble rates and prices,” the report concluded.

Posted in Economics, Housing Bubble, National Real Estate | 99 Comments

2013 – “Breakout” year, or much of the same?

Posted on January 7, 2013 by grim

From the Record:

Housing 2013: The recovery is here, but it’s slow

After a long, deep slump, the real estate market is expected to grow stronger in 2013 as rock-bottom mortgage rates and a slowly reviving job market boost demand for housing and encourage builders to ramp up construction.

“It will be the best year for housing in the last five, with a higher rate of home sales, declining inventory and new construction beginning to occur,” said Jeffrey Otteau, an East Brunswick appraiser who tracks the real estate market statewide.

Still, the market faces serious challenges, especially in this region.

“The recovery in New Jersey is a little more sluggish relative to other parts of the country,” said Frank Nothaft, chief economist for the mortgage finance company Freddie Mac. That’s largely because the Garden State has a weak job market and a large backlog of distressed properties facing foreclosure.
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Home prices have plummeted 23 percent in the region and 30 percent nationwide since they peaked during the housing bubble in mid-2006. While this drop has made homes more affordable to buyers, it’s been a brutal correction for people who bought, or borrowed against, their homes during the housing boom. Millions of homeowners nationwide are “underwater” — that is, they owe more on the mortgage than the home is worth. This has locked many people in their homes and worsened the foreclosure situation, since homeowners couldn’t just sell their homes to pay off their mortgage when they hit a financial rough patch.

Home prices nationally showed signs of stabilizing in 2012, and most forecasters predict they’ll be flat or rise slightly in 2013.

But in North Jersey and the rest of the New York metropolitan area, home prices continued to slide during 2012, possibly because the regional market was slower to begin correcting from the excesses of the housing boom. And New Jersey’s weak job market is also weighing on home prices, because people who are out of work — or fear they might be — are not there looking to buy homes.

“The job numbers have headed in the wrong direction recently in New Jersey,” Otteau said. Still, he expects prices to rise 2 percent statewide in 2013.

While home values have lagged in the region, rents have gone up as more households, unable to buy, have turned to rentals.
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Foreclosure activity was put on ice in New Jersey for more than a year, after allegations first arose in late 2010 of “robo-signing” — mortgage industry workers signing legal documents without verifying them, in their rush to evict distressed homeowners. Now, after several legal settlements, the foreclosure machinery has cranked up again, and tens of thousands of foreclosures are likely to reach the New Jersey courts in 2013.

So, while most of the rest of the nation has put the worst of the foreclosure crisis behind it, New Jersey still has a backlog of distressed properties that will be hitting the market over the next couple of years.

Aside from the trauma to families who’ll lose their homes, this wave of foreclosures is expected to put downward pressure on home values, because properties in foreclosure are often badly maintained. And foreclosed properties tend to sell for less than market value, because the lender is eager to unload the home.

Otteau said the increase in foreclosure activity will be felt mostly in rural and urban areas, adding, “It will have very little effect in most suburban markets.” Many foreclosed homes are being bought by investors and rented out, or fixed up before being resold, which means they’re less likely to drag down nearby home values, he said.
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Existing home sales in New Jersey are not improving as quickly as in the rest of the country, according to O’Keefe, because the state’s economy is lagging the national recovery. The state’s unemployment rate is running well above 9 percent, significantly higher than the national rate.

As a result, said Otteau, “I don’t think 2013 is going to be the breakout year I had expected.”

Posted in Economics, Housing Recovery, New Jersey Real Estate | 97 Comments

Fitch: Housing Overvalued

Posted on January 5, 2013 by grim

From CNBC:

Home Price Gains May Slow in 2013

Home prices are now rising at their fastest pace since 2005. Housing bulls are running again, pointing to rising construction starts, rising home sales and falling mortgage delinquencies. Fears over the so-called “fiscal cliff” put a damper on some of that optimism briefly, but that quickly dissipated after the deal was finally struck. So why be cautious now?

“Low prevailing mortgage rates, the limited supply of existing homes for sale (either due to the few foreclosure completions or the number of underwater borrowers who cannot sell), and the anemic levels of new home construction are facilitating affordability and feeding demand,” noted analysts at Fitch Ratings. “These factors are offsetting weak fundamentals that would otherwise hinder home price growth, such as high structural unemployment and lackluster wage growth.”
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Fitch contends that home prices remain overvalued and that price growth is not being driven by fundamentals but by technical factors that could easily change. As more homes move more quickly to final foreclosure, especially in states that require a judge in the process and have seen huge delays over the past few years, supply will expand, possibly dramatically in some regions.
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Fitch analysts admit price recovery will vary widely depending on the local market conditions, but their case seems more bearish than most. Or is it?

“I personally think that a lot of the price appreciation we’re seeing in many markets right now is because the market of tradable homes is thinner than usual because of high negative equity,” said Zillow’s chief economist Stan Humphries. “This condition will change as home price gains pull homeowners out of negative equity and the market becomes more fluid.”

Posted in Economics, Housing Recovery | 58 Comments

400 square feet is the new 4000

Posted on January 4, 2013 by grim

From HousingWire:

Generation Y values amenities over square footage

Generation Y, those of us between the ages of 20 to 34, are playing a large role in the multifamily market and reshaping how it will look moving forward.

“Clearly Gen-Y is having a huge impact on the real estate community. What’s really significant is that real estate developers and the whole community are studying demographics and incorporating it in strategic plans. We didn’t have much of this in the past,” Stan Ross, Chairman of the Board of the University of Southern California’s Lusk Center for Real Estate, told HousingWire. “The key thing here is that they’re using it in an analytical way to build their plans as to where and what they develop.”

This generation graduated college and was immediately thrown in a struggling economy with very few jobs. Because of this, many in this group either were forced to move home or live with multiple roommates in order to afford their housing.

Ross says that many in Gen-Y are often surprised when they find out how much a mortgage costs and what an adequate down payment is in order to buy a home.

Analysts at the Lusk Center say that once this group does move into their own place, which is typically a rental at first, the biggest appeal are affordability, on-site amenities, nearby retail and restaurants. Greater square-footage now gives way to easy transit for this generation. “As a developer doing my strategies, I’ve got to really reevaluate the location,” Ross said.

Posted in Demographics, Economics, New Development | 94 Comments

Shadow shrinks, but still large enough to loom over Jersey

Posted on January 3, 2013 by grim

From HousingWire:

Shadow inventory contracts as investors snap up foreclosures

Current residential shadow inventory continued to fall from peak levels, CoreLogic said in a third quarter report.

Shadow inventory shrank to 2.3 million units in October, which represents a supply of seven months. This accounted for 85% of the 2.7 million properties currently seriously delinquent – in foreclosure or real estate owned. A year ago, shadow inventory stood at 2.6 million units, dropping 12.3%.

Shadow inventory is expected to continue to shrink due to investor demand, which will help absorb the already real estate-owned properties and foreclosed properties in the shadow inventory in 2013.

“We expect a gradual and progressive contraction in the shadow inventory in 2013 as investors continue to snap up foreclosed and REO properties and the broader recovery in housing market fundamentals takes hold,” said Anand Nallathambi, president and CEO of CoreLogic.

The dollar volume of shadow inventory also fell to $376 billion, down from $399 billion a year ago.
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“It’s certainly encouraging to see the shadow inventory figures decrease over the last months, and it suggests that servicers are liquidating and approving short sales at greater velocity,” managing director Luis Vergara of Mission Capital Advisors told HousingWire.
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“Almost half of the properties in the shadow are delinquent and not yet foreclosed,” Mark Fleming, chief economist for CoreLogic said.

He added, “Given the long foreclosure timelines in many states, the current shadow inventory stock represents little immediate threat to a significant swing in housing market supply.”

In October, California, Florida, Illinois, New Jersey and New York made up 45% of the 2.7 million seriously delinquent properties. Last year, these states accounted for 51.3% of all the distressed mortgages, which were at least 90-days delinquent, in foreclosure or REO.

Posted in Economics, Foreclosures, Mortgages | 96 Comments

Predictions 2013!

Posted on December 30, 2012 by grim

This is becoming a tradition around here, so here we go again! You know how this works, break out the crystal balls and prognosticate.

Ground Rules

Review the Predictions 2012! thread, and if you did make a prediction, please post it here so we know how you did (please do not skip this step). Predictions provided should either be for June 30th, 2013 or December 31st, 2013, please specify.

Provide justification for your forecast, where applicable (unless you are just making it up, if so, state that).

You may provide any caveats and/or assumptions that your forecast is based on.

You need not provide a forecast for all categories below.

Where applicable, forecasts are judged against the surveys/reports listed.

Real Estate
National
Existing Home Sales – NAR
Existing Home Price – S&P Case Shiller HPI
Existing Home Price – OFHEO HPI

New Jersey
Existing Home Sales – NAR/NJAR
Existing Home Price – S&P Case Shiller HPI
Existing Home Price – OFHEO HPI

National New Home Sales – NAHB
Median New Home Price – NAHB

Commodities
Energy (Oil, NatGas)
Metals (Gold, Silver, Copper)

Equities
United States
International Developed Markets
Emerging Markets

Mortgage Financing
30-Year Fixed – Freddie Mac PMMS
15-Year Fixed – Freddie Mac PMMS

Macroeconomic
10y Treasury
Fed Funds Rate
National Unemployment Rate
New Jersey Unemployment Rate

Oddball
Anything else you’d like to make a prediction about.

Posted in Economics, General | 242 Comments

November Pending Home Sales

Posted on December 28, 2012 by grim

From CNBC:

Pending Home Sales Rise 1.7 Percent, Beating Forecast

A measure of Americans who signed contracts to buy homes increased last month to its highest level in two and a half years, the latest sign of improvement in the once-battered housing market.

The National Association of Realtors says its seasonally adjusted pending home sales index rose 1.7 percent in November from October to 106.4. That’s the highest since April 2010, when a homebuyer tax credit caused a spike in sales. And after excluding those few months when the tax credit was available, it’s the best reading since February 2007.

The increase points to higher sales of previously occupied homes in the coming months. There’s generally a one- to two-month lag between a signed contract and a completed sale.

Economists in a Reuters survey had forecast a 1 percent rise in pending home sales.

Here is a repost of the local pending sales data (contracts) for November:

(Source GSMLS, except Bergen which is NJMLS)

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

Bergen County
November 2011 – 524
November 2012 – 535 (Up 2.1% YOY)

Essex County
November 2011 – 230
November 2012 – 265 (Up 15.2% YOY)

Hunterdon County
November 2011 – 78
November 2012 – 86 (Up 10.3% YOY)

Morris County
November 2011 – 280
November 2012 – 314 (Up 12.1% YOY)

Passaic County
November 2011 – 163
November 2012 – 199 (Up 22.1% YOY)

Somerset County
November 2011 – 173
November 2012 – 173 (Flat YOY)

Sussex County
November 2011 – 87
November 2012 – 104 (Up 19.5% YOY)

Union County
November 2011 – 240
November 2012 – 248 (Up 3.3% YOY)

Warren County
November 2011 – 64
November 2012 – 68 (Up 6.3% YOY)

Posted in Economics, Housing Recovery, National Real Estate | 138 Comments

Sandy Recovery: Significant multiplier or short-term pop?

Posted on December 27, 2012 by grim

From Bloomberg:

Sandy Recovery Spurs Hiring From Furniture to Plumbing

The first customers Michael Guarino saw after superstorm Sandy asked to cancel orders for furniture no longer needed in their damaged homes, threatening the survival of a business his family opened three generations ago.

Then came a different set of clients. Two weeks after Sandy made landfall Oct. 29, Guarino, owner of Michael’s Furniture in Brick, New Jersey, began what’s turned into more than a month of 80-hour work weeks to serve residents re-stocking their houses.

“I can’t even keep up with it,” Guarino, 50, said of the post-storm demand. His business added two more delivery trucks and a warehouse. He expanded the staff to 27 from 15, with plans to hire more, even as Guarino said it’s “very difficult” to find local workers while residents are consumed with clean-up efforts.

Furniture dealers are among the businesses seeing a boom in orders as consumers in the Northeast recover from the worst Atlantic storm on record. The disaster that killed more than 100 people in 10 states, wreaked billions of dollars in damage and forced the first two-day shutdown of U.S. stock trading for weather since 1888 is also providing unexpected opportunities for companies assisting in the rebuilding and the employees they’ve hired to help.

Construction, plumbing, sand supply, tree removal, road repair and structural engineering are among services spread thin.
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Sandy has probably increased the demand for construction workers by at least an additional 30,000, said Bernard Baumohl, chief global economist at Economic Outlook Group LLC, a Princeton, New Jersey-based forecasting firm.

The economic boost of post-storm reconstruction probably will occur over the next year or two, and Baumohl said he expects “a real big, V-shaped rebound” in construction over the next six to 12 months.

“We’re going to see a significant multiplier effect with all these jobs that are going to be generating income for these workers, which are then going to spend that additional income in the economy,” Baumohl said. The rebuilding effort could add 0.4 percentage points to U.S. growth in 2013, he said.
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Recovery from a natural disaster takes years, said Michael Lahr, associate research professor at Rutgers University’s Center for Urban Policy Research in New Brunswick, New Jersey. Yet, New Jersey’s coastal companies are seasonal and probably will recover more quickly since vacationers will return, compared with New Orleans businesses, which suffered after the city lost half its population in the year after Katrina.

Posted in Economics, New Development, New Jersey Real Estate, South Jersey Real Estate | 51 Comments

October Case Shiller

Posted on December 26, 2012 by grim

The Case Shiller HPI for October is due out at 9am this morning, consensus is for the big Composite-20 to be up anywhere from 3.5% to 4.4% year over year (NSA).

From Bloomberg:

Home Prices in U.S. Rose More Than Forecast in October: Economy

Home prices climbed more than forecast in October, indicating a rebounding real-estate market will bolster the U.S. economy for the first time in seven years.

The S&P/Case-Shiller index of property values in 20 cities increased 4.3 percent from October 2011, the biggest 12-month advance since May 2010, the group said today in New York. The median forecast of 30 economists in a Bloomberg survey projected a 4 percent gain.

Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing. The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.

“The housing market is definitely starting to recover,” said Ryan Wang, an economist with HSBC Securities USA Inc. in New York, who’s the second-best forecaster of the S&P/Case- Shiller index over the past two years, according to data compiled by Bloomberg. Higher property values have “added about a trillion dollars to household wealth just since the beginning of this year.”

The boost to household net worth “will provide an important benefit for consumers and for the broader economy,” Wang said.

Posted in Economics, Housing Recovery, National Real Estate | 78 Comments

Merry Christmas, Bend Over.

Posted on December 24, 2012 by grim

From the APP:

Sandy’s gift for 2013: Tax hikes

During the first two years of Matthew Doherty’s term as the mayor of Belmar, unwelcome outcomes came up zeroes: no layoffs, no gimmicks and, most important, no tax increases. But with his beachfront tax base decimated by superstorm Sandy, the Democratic mayor is pulling that feather from his cap for 2013. The borough will lose about $140,000 in revenue, he said.

“It’s going to be a salary-and-benefits year,” he said, meaning there will not be room in the budget for new vehicles, equipment or nonessential supplies.

“So it’s going to be lean, not because our expenses are so high, but because we’re losing so much revenue,” Doherty added. “And I think that’s the same of every municipality along the coast from Sandy Hook to Cape May.”

Unless the Federal Emergency Management Agency picks up the full tab for the Oct. 29 storm, that will at least be true up and down Monmouth and Ocean counties, experts and town officials said. Budgets will be lean in some departments but expanded in others, including for overtime and cleanup related to the Oct. 29 storm, and the costs will be reflected in next year’s tax bills. With no clarity on whether FEMA would up its reimbursement rate from 75 percent to 90 or even 100 percent, as requested, public officials’ anxiety waxed as the year waned.

“That’s the Grinch that stole Christmas,” said William G. Dressel Jr., executive director of the New Jersey State League of Municipalities. “Hopefully it won’t be a Grinch. Hopefully we’ll all receive pleasant news under our Christmas trees and the average taxpayer won’t be saddled with these costs.”

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 47 Comments

Zandi: Housing has got legs

Posted on December 22, 2012 by grim

From CNBC:

Housing Recovery Has Legs for 2-4 Years: Zandi

In November, existing home sales rose 5.9% to an annualized rate of 5 million, beating Wall Street expectations. Last month was the 17th consecutive month of growth in the housing market and the highest level of sales since November 2009. The national price for an existing home also rose 10.1% to $180,600 in November.

“I think housing is going to continue to improve,” says Mark Zandi, chief economist at Moody’s Analytics. “So for the next 3 or 4 years we will see better home sales, more housing construction and higher house prices. All of which is good news for the economic recovery.”

Even though there are roughly 3 million homes in foreclosure, Zandi is very optimistic about housing demand.

Here are the key points of his housing outlook for next year and beyond:

The recovery has legs for the next 2-4 years.
Expect a rise in sales, construction and prices, which could positively impact GDP. “Housing is a small share of GDP but can be a big part of GDP growth,” he says.
Investor demand for foreclosed properties will be high.
An increasing rate of household formation will lead to greater demand.
New home construction will pick up.
Home prices will rise by mid-to-high single digits in 2014 and 2015.

Posted in Economics, Housing Recovery, National Real Estate | 40 Comments

A quick look over the river

Posted on December 21, 2012 by grim

From the Philly Inquirer:

November saw bumps in home sales and prices

The National Association of Realtors reported Thursday that sales of previously owned houses rose 5.9 percent last month from October’s levels and were 14.5 percent higher than those of a year ago.
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In the eight-county Philadelphia region, sales were up 11 percent from October and 30.4 percent from November 2011, according to Prudential Fox & Roach’s HomExpert Market Report.

Median prices rose 6.4 percent, from $195,000 a year ago to $207,500. In October, the region’s median price – half the houses sold for more, half for less – was $200,000.

“November and December have been like a spring market,” said Noelle Barbone, office manager at Weichert Realtors in Media. Sales in November are running 21 percent above last year, with “first-time buyers and quite a few investors in the mix.”

Barbone noted that there had been an increase in cash sales, “with parents helping their children buy.”

Mary Kate McKinlay, a 2009 Cabrini College graduate who works for an Audubon, Montgomery County, company that manages clinical trials, closed on her first house Nov. 2 in Clifton Heights, Delaware County.

Lured by low interest rates and hoping to spend less than $140,000, she said, she looked at five or six houses in September before signing an agreement for a rehabbed rowhouse, which she purchased for $123,000.
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“I’m surprised how quickly it happened,” said McKinlay, who was living with her parents in nearby Springfield Township and had hoped to buy by year’s end.

“This was the first house I’d looked at,” she said, adding that she found the home-buying process “comfortable,” while acknowledging that others might not have the same experience.

Posted in Economics, Housing Recovery, National Real Estate | 174 Comments

Confirmation that the bottom has held?

Posted on December 20, 2012 by grim

From Bloomberg:

U.S. Housing Values Rose 6% in 2012 for First Gain in Six Years

Homes values gained an estimated 6 percent in the U.S. this year, the first increase since 2006, as the housing market began to recover from its worst slump since the 1930s, Zillow Inc. (Z) said today.

Values have climbed more than $1.3 trillion to $23.7 trillion since the end of last year and probably will continue to rise in 2013, the Seattle-based home-listing service said in a statement. Residential values had declined each year since 2007, with the biggest drop in 2008, when homes lost more than $3.2 trillion in value, Zillow said.

Low interest rates, improving employment and prices that remain almost 30 percent below their July 2006 peak have drawn buyers back into the market. A limited inventory of homes for sale has helped push up prices.

“The housing market really turned a corner in 2012, as historic affordability and sustained investor interest helped keep demand at a boil,” Stan Humphries, Zillow’s chief economist, said in the statement. “As home values rise, and more homeowners are freed from negative equity, we can expect a continued slow transition to a more normal housing environment.”

Sales of existing homes increased in November to an annual pace of 4.9 million, up 2.3 percent from October and 11 percent from a year earlier, according to the average of 82 estimates in a Bloomberg survey. Permits to build new homes, a proxy for future construction, rose to a four-year high last month, the Commerce Department reported yesterday.
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Rising demand is expected to fuel a “virtuous circle” that will drive economic growth, housing construction and price increases, Michael Widner, an analyst with Stifel Nicolaus & Co., wrote in a note to investors yesterday.

Posted in Economics, Housing Recovery, National Real Estate | 91 Comments

Who cares about the banks, buyers need to be cautious about potential flood zone changes

Posted on December 19, 2012 by grim

From the Record:

Lenders gearing up to enforce changing flood insurance requirements

With flood map revisions under way, many North Jersey homeowners in 2014 may be deemed by the government for the first time to be living in areas with a high risk of flooding, defined by the Federal Emergency Management Agency as having a 26 percent chance of being flooded during the term of a 30-year mortgage.

And their lenders will demand that they get flood insurance, the price of which is on the rise.

“It will be required in places where it hasn’t been before, and unfortunately the cost of insurance is going to go up dramatically,” said Lydia Bashwiner, general counsel and claims manager for Otterstedt Insurance Agency in Englewood Cliffs.

In addition, some homeowners who now live in a Special Flood Hazard Area may find their risk level has increased and their premium may also rise.

Homeowners are not required to take flood insurance, unless they have a mortgage on the property. Then they have no choice. Mortgage lenders and their loan servicing providers are the enforcers of National Flood Insurance Program requirements, and of recent changes in the program under the Biggert-Waters Flood Insurance Reform Act, which are expected to double the cost of coverage over the next several years.

If a homeowner has a mortgage from a bank, credit union, a government agency such as the Federal Housing Administration or Veterans Administration, or if the mortgage has been purchased by a government-sponsored enterprise such as Freddie Mac or Fannie Mae, and if they live in a community that participates in the National Flood Insurance Program, the lender or its loan servicer must notify the borrower of the need to buy flood insurance. According to FEMA, a policy costs about $625 per year on average. But it can cost more than $3,000 a year for maximum coverage in the highest-risk areas.
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When the official maps are out in 2014, lenders will be identifying loans they hold that are collateralized by homes in the revised flood zones and they will be sending notices to homeowners if flood insurance is required. Once notified by the lender, borrowers have 45 days to buy the insurance and avoid a costly forced placement.
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In areas newly designated as flood-hazard areas, new policies issued will begin at subsidized rates and the premiums will increase by 20 percent a year for five years.

Posted in New Jersey Real Estate, Shore Real Estate | 112 Comments

Jersey’s relief package up for debate

Posted on December 18, 2012 by grim

From the Record:

Republicans cite “questionable” spending as Senate begins debate on $60B Sandy relief package

The debate over a $60.4 billion federal Sandy relief package began in earnest on Monday with Senate Republican leaders arguing that the bill includes “questionable” spending and officials from the hardest-hit states urging quick action.

Pointing to photos of destruction in Moonachie and at the Jersey Shore set atop an easel on the Senate floor, Sen. Robert Menendez, D-N.J., said residents and businesses need a full commitment from the federal government before they begin the long process of rebuilding.

“You need the money in place to rebuild entire projects and entire areas to ensure that families and businesses devastated by the storm can recover,” he said.

“You can’t hire a contractor to rebuild half a house or restore half a community,” he added.

Debate is expected to continue Tuesday. Proponents have said that failing to pass the bill by year’s end, when a new Congress takes over, would delay the process by months and jeopardize the summer season at the shore.

In a statement Monday, Sens. John McCain, R-Ariz., and Tom Coburn, R-Okla., listed eight areas of the bill that need to be addressed because of “questionable spending.” Those include $12.9 billion proposed for preventing future storm damage and $5.3 billion for the Army Corps of Engineers. The senators said it was unclear where the money for damage prevention would come from and that there were not enough details on how the money destined for the Army Corps money would be spent.

The Club for Growth, a fiscally conservative advocacy group, said the money should be released in installments to make sure it is spent wisely.

“When a natural disaster occurs, there is a textbook response by Congress — they cobble together an overpriced bill that isn’t paid for, there’s no accountability or oversight, and it’s filled with pork,” the group said in a statement. “This proposal is no different.”

Governor Christie, a Republican, and New York Gov. Andrew Cuomo, a Democrat, have estimated that the two states suffered nearly $79 billion in damages.

Posted in Economics, New Development, Politics, Shore Real Estate | 92 Comments