New bailout plan has Treasury subsidizing refis

Posted on December 17, 2012 by grim

From Bloomberg:

Treasury Plan Would Cut Rates on Some Mortgages in Bonds

Some struggling homeowners left out of current U.S. government mortgage-aid programs because their home loans have been packaged into private securities could see their interest rates cut through a subsidy being considered by the Treasury Department.

Under the plan, the government would pay the difference between the new and original interest rates to the owners of the loans for five years in an effort to overcome investors’ objections to mortgage modifications, according to a person familiar with plan who asked not to be identified because the initiative is not final or public. Details on the cost of the program and how it would be paid for were not available.

The proposal is among efforts by the Obama administration to aid homeowners who remain under stress even as the housing market begins to recover. Borrowers who owe more than their homes are worth and who have mortgages that have been packaged into bonds issued by private securitizers have been unable to take advantage of existing government aid programs.

“It’s certainly beneficial to think about ways to help underwater borrowers,” said Tom Deutsch, executive director of the American Securitization Forum. “I’m just not sure anybody’s found the right solution yet.”
…
Borrowers who are current on their mortgage payments and who owe at least 25 percent more than the value of their properties would be eligible for the program, which would reset their loans to the average fixed rate as determined by a weekly survey by Freddie Mac.

About 930,000 homeowners with loans in so-called private- label securities are both underwater and current on their payments, according to data from JP Morgan Securities LLC.

The person familiar with the plan said the Obama administration would move forward with it only if officials become convinced that Congress won’t act first to expand aid for troubled borrowers. The rate-modification proposal is one of a number of concepts the administration is considering if legislative solutions aren’t available, said the person, who asked not to be named because the plans are not final and have not been made public.
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Meanwhile, efforts are continuing in Congress to expand borrower aid.

Senator Dianne Feinstein, a California Democrat, has introduced a bill that would allow borrowers with loans in private-label securities to refinance into mortgages backed by the Federal Housing Administration. Democrat Jeff Merkley of Oregon wrote a measure requiring Fannie Mae and Freddie Mac to pay closing costs when borrowers refinance into a loan with a term of 20 years or less, allowing homeowners to rebuild equity more quickly.
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Democrats Barbara Boxer of California and Robert Menendez of New Jersey are co-sponsoring a bill that would expand the government’s Home Affordable Refinancing Program for borrowers whose loans are backed by Fannie Mae and Freddie Mac. The government-sponsored enterprises have refinanced 1.7 million loans through HARP since it began in 2009.

Posted in Economics, Foreclosures, Mortgages, National Real Estate | 155 Comments

Battle lines are drawn

Posted on December 16, 2012 by grim

From the Star Ledger:

Jersey Shore revolution begins, as FEMA releases new flood maps

A revolution is likely coming to the New Jersey Shore, and the federal government just fired the first shot.

The Federal Emergency Management Agency released advisory flood maps yesterday, which they hope will serve as a guideline for how nearly 200 communities should rebuild stronger after Hurricane Sandy’s devastation. The maps (see below) are the first change to New Jersey’s federal flood maps in more than two decades, and show a coastline far more vulnerable to flooding than previously thought — as Sandy proved in the worst way.

FEMA’s message is clear: If you’re going to rebuild, build higher and stronger.

“These are decisions communities are going to have to make together,” said Bill McDonnell, a representative for FEMA’s Office of External Affairs in Trenton. “All we’re trying to do is provide them with the best data available, and we certainly hope townships use this information to enhance their existing ordinances and rebuild smarter.”

If towns along New Jersey’s barrier islands and the Raritan Bay shore adopt the guidance, it will mean a vastly different looking coastline, but one that will be better protected from future storms. An analysis of FEMA and Sandy storm surge data shows in places like Ortley Beach and Union Beach, many homes would need to be raised more than four feet to avoid serious damage from an identical storm. In some locations closest to the water, it could mean raising homes a full-story.

“If you look at the new elevations, it should be raising alarm bells,” said Jeff Tittel, executive director of the New Jersey Sierra Club. “When we rebuild, we have to make sure we’re not putting people in harm’s way. This should really be the foundation for that.”
…
The map will have no immediate implications on flood insurance policies or rates, FEMA said. Maps that will determine what residents will be required to buy federal flood insurance will be rolled out in the next six to nine months.

But it does give an indication of where the federal agency is heading. A much wider swath of the state is included in the highest risk zones for coastal flooding on the map, which FEMA officials say shows how woefully inadequate the current maps are.

Posted in New Development, New Jersey Real Estate, Shore Real Estate | 80 Comments

Not rebuilding is not an option

Posted on December 14, 2012 by grim

From the Star Ledger:

Building boom won’t help N.J. economy if Shore doesn’t bounce back, committee says

New Jersey will experience a post-Sandy building boom, but it won’t help the overall state economy if the Shore doesn’t do well, an economist told a state legislative committee Thursday.

Hurricane Sandy caused at least $8.25 billion in damages to homes in New Jersey, creating job opportunities for the construction industry and related businesses, economist Jeff Otteau told the Assembly Commerce and Economic Development Committee.

“That will create jobs. That will put people to work,” he said during his mostly gloomy testimony.

That damage estimate, from insurance companies, does not take into account homes that were not insured, Otteau said, noting more than half the damaged homes in the state were insured.

The Jersey Shore’s economy makes up 6 percent of the overall state economy, “a big deal,” Otteau told the committee. If the Shore’s economy shrinks more than 14 percent, there would almost certainly be a decline in the state economy, a scenario that most likely will come to fruition because recovery will take years, Otteau said.

“My hope is that your committee will find ways to accelerate the recovery process,” he said.
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AJ Sabath, a spokesman for the New Jersey Building and Construction Trades Council, said a boom would help the building trades, which was in the throes of a 30 percent to 50 percent unemployment rate before Sandy hit.

Dave Fisher, treasurer of the New Jersey Builders Association, said the state should come up with ways to reduce regulatory burdens and costs, streamline the permitting and inspection processes and regionalize the disaster planning and permitting processes. He also urged committee members to consider supporting a sales tax holiday for building materials and supplies or at least reduce the sales tax on those items.
…
Committee Chairman Albert Coutinho (D-Essex) said he couldn’t promise any immediate solutions to her problems or the challenges to other business owners but said the committee is gathering information to help towns and businesses the get the assistance they need.

“I get it loud and clear,” he said. “Time is of the essence.”

Posted in Housing Recovery, New Development, Shore Real Estate | 129 Comments

Fewer properties entering the foreclosure pipeline

Posted on December 13, 2012 by grim

From MarketWatch:

Foreclosure starts lowest since 2006

The number of homes entering the foreclosure process in November was at its lowest level since December 2006, according to data released on Thursday by RealtyTrac.

Foreclosure starts fell by 13% last month, compared with October. Starts were down 28%, compared with a year ago.

Overall foreclosure activity dropped 3% last month, compared with October. Activity, which includes default notices, scheduled auctions and bank repossessions, was also down 19% compared with November 2011.

“The drop in overall foreclosure activity in November was caused largely by a 71-month low in foreclosure starts for the month, more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble bursting six years ago,” said Daren Blomquist, vice president at RealtyTrac, in a news release.

But, he added, lenders are still adjusting to new foreclosure ground rules resulting from the National Mortgage Settlement as well as state laws and court rulings — which indicate that “we’re likely not completely out of the woods when it comes to foreclosure starts.”

Bank repossessions increased 11% over the month, and were up 5% compared with a year ago. They’re now at a nine-month high.

Despite the decrease in foreclosure filings nationally, activity increased in 23 states and the District of Columbia. In fact, nine states, including Florida, New Jersey, New York, Ohio and South Carolina, had 12-month highs in foreclosure activity in November.

Posted in Economics, Foreclosures, Housing Recovery, National Real Estate | 106 Comments

Recovery = Unaffordable?

Posted on December 12, 2012 by grim

From CNBC:

Housing Affordability Begins to Slide

It is a double edged sword, no doubt. Rising home prices are necessary for the overall housing market to recover and for more borrowers to get back above water on their mortgages. Rising home prices, however, cut into the historic affordability that was bringing more buyers back to the market in the first place.

After rising steadily since 2006 (with a slight blip from the home buyer tax credit in 2010), housing affordability is now dropping on an index from the National Association of Realtors. Asking prices for homes also began rising faster than rents for the first time in November, according to Trulia.

“The era of increasing homeownership affordability in big cities is ending,” researchers from Trulia wrote in a recent report. While the price recovery is choppy market-to-market, strong rental markets like Denver, Seattle and San Francisco are seeing home prices leap ahead of rents.

“The price recovery is strongest in the largest metros, and price gains have now surpassed rent gains in the largest 25 rental markets. However, price gains are starting to waver in smaller markets,” notes Trulia’s Jed Kolko.

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

Cheap mortgages here to stay?

Posted on December 11, 2012 by grim

From the WSJ:

Freddie Mac: Mortgage Rates to Stay Low, Property Values to Rise in 2013

Mortgage rates are likely to remain near record lows for the first half of 2013, while property values are expected to strengthen, said mortgage-finance company Freddie Mac.

The company expects long-term mortgage rates to rise gradually in the second half of 2013, but to remain below 4%, according to its U.S. Economic and Housing Market Outlook.

Freddie Mac sees house prices continuing to rise next year, with most U.S. house price indexes increasing by 2% to 3%. The company expects household formation to increase households by 1.2 million to 1.25 million in 2013, with housing starts reaching an annualized pace of roughly one million by the fourth quarter.

From HousingWire:

Fannie Mae predicts record-low mortgage rates entering 2013

Mortgage rates are anticipated to remain at an all-time low for the first half of 2013, then slowly rise during the second half of the year, although they will remain below 4%, reported Freddie Mac.

On the same day that Fannie Mae released its National Housing Survey, showing increased consumer confidence in the housing industry, Freddie Mac revealed its U.S. Economic and Housing Market Outlook for December.

The housing outlook predicts what some of the market features are expected to look like in 2013.

“The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive,” said Frank Nothaft, vice president and chief economist of Freddie Mac.

Property values are expected to gain strength with most house price indexes increasing as much as 3% next year.

Housing starts are expected to jump to a net 1.20 to 1.25 million household increase in 2013, with starts up around the 1 million annualized pace by the fourth quarter.
…
“This has been a big change from a year ago, when some analysts worried that the looming ‘shadow inventory’ would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery,” said Nothaft.

Posted in Economics, Housing Recovery, Mortgages, National Real Estate | 96 Comments

The “ratio of earnings to home prices seems different now than when we were starting out.”

Posted on December 10, 2012 by grim

From the Record:

Baby boomers in need of buyers

Empty-nesters Dan and Christa Mondoro put their five-bedroom Franklin Lakes house on the market last summer. Since their two adult daughters have moved out, Christa Mondoro said, “it just didn’t seem to make sense for the two of us to stay there, as much as we love the neighborhood.”

It’s a decision a lot of baby boomers are making.

“They’ve have had the kids, they’ve had the back yard. The kids are gone, and now this big house they’ve had for so long — it’s time for them to move to something that’s more cost-effective and energy-efficient,” said Gina Palumbo, an agent with Abbott & Caserta in Wyckoff.

As members of this giant generation — 77 million people born between 1946 and 1964 — downsize or move to sunnier and lower-tax areas, some analysts wonder if there will be enough younger buyers who will want and can afford the supply of large, suburban family homes the boomers are leaving behind. If demand slackens, prices are likely to drop.

The problem is simple, said Dowell Myers, a professor of demography at the University of Southern California: “There are too many baby boomers.”
…
“There’s very little evidence that the large suburban homes that baby boomers may be looking to sell will actually sit there vacant and unused,” said Paul Bishop, vice president of research at NAR. “At some price, people will be willing to buy large houses in suburbia. They may be worth less than the sellers hope to get. … It’s a very dynamic market.”
…
The Mondoros expected their house — on the market for just under $1 million — to be snapped up quickly, probably by a family with young children, people like the Mondoros when they bought the house almost 20 years ago. So far, that hasn’t happened.

“I don’t think our kids are as fortunate as we were, given the job market,” said Christa Mondoro, 55. “I don’t think kids have the same resources we had. A lot of them have student loans. And the ratio of earnings to home prices seems different now than when we were starting out.”
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It’s by no means certain how the aging of the baby boomers will affect the housing market. A number of factors are at work. For example, the many baby boomers plan to work past the normal retirement age — whether by choice or necessity — which means they’re not moving to Florida as soon as they might have.

And George Masnick, a fellow of Harvard’s Joint Center for Housing Studies, argues that younger generations are larger than their initial birthrates would suggest, since immigration added to their numbers as they grew up. Masnick says that both the “baby bust” generation and the millennials now number more than 80 million, thanks in part to immigration. That widens the pool of potential buyers.

Palumbo, for one, thinks immigrants could be potential buyers for baby boomers’ big homes, especially immigrants who need space for elderly parents. And Bishop said that surveys show that immigrants and their children are just as interested in becoming homeowners as non-immigrants.
…
Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide, believes that location will be become even more crucial when a large number of boomer houses hit the market. Homes in the most sought-after towns, with excellent schools and easy commutes to good jobs, will still sell. But there’s likely to be less demand for larger homes in exurban towns that require long commutes, he said.

The Mondoros, who are moving to a town house in Rockland County, say they’ve had a lot of lookers at their Franklin Lakes home. But so far they’ve received only one offer, for less than they were willing to accept.

“I thought it would sell quickly,” said Dan Mondoro, co-owner of a business that installs high-end audio and video systems. “It’s in great shape.”

Posted in Economics, New Jersey Real Estate | 108 Comments

Christie signs bill to expedite foreclosures

Posted on December 8, 2012 by grim

From NJBIZ:

Experts react to N.J. bill to expedite foreclosure of vacant homes

State lawmakers have scored a partial victory in their bid to tackle New Jersey’s foreclosure crisis, after Gov. Chris Christie signed a bill that would expedite the process for vacant and abandoned homes.

The law, which Christie signed Thursday, allows judges to enter foreclosure judgments for homes that they find are deserted, easing a costly and time-consuming process for banks. To help judges make their determination, the homes must meet at least two of 15 conditions identified in the legislation, such as overgrown or neglected vegetation and disconnected utility service.

The bill is one of two that the Legislature has passed with the hope of helping the state’s housing market. The other, which would give funding to turn foreclosed houses into affordable housing, has been sent to Christie’s desk but has not been signed.

The fate of the companion bill was still unclear today after Christie vetoed an earlier version of the bill in June. But the enactment of the first bill was a victory for a broad contingent that includes groups like bankers, builders, real estate agents and housing advocates.

Posted in Foreclosures, New Jersey Real Estate | 60 Comments

Taxes on debt forgiveness impact loan mods too (expect it to be extended)

Posted on December 7, 2012 by grim

From CNBC:

Housing Recovery Depends on Slashing Mortgage Debt

Rising home prices are the foundation of today’s housing recovery. They are drawing much-needed buyers back to the market. Prices would not be rising if the number of foreclosures wasn’t falling. They also wouldn’t be rising without underwater borrowers getting a break from their banks. Both of those are happening because banks are slashing the balances of thousands of mortgages and letting homeowners sell for less than the value of their loans rather than going to foreclosure.

That debt forgiveness is currently not taxable, thanks to a law passed five years ago which expires at the end of this year. There is bipartisan support to extend that law, but so far any action has been mired in stickier negotiations surrounding the so-called “fiscal cliff.”

“The prospect of being taxed on potentially tens or hundreds of thousands of dollars in additional income may motivate more distressed homeowners to forgo a short sale and allow the home to be foreclosed,” said RealtyTrac’s Daren Blomquist in a release. “Additionally, if the mortgage interest deduction is eliminated due to the fiscal cliff quagmire, it would give many underwater and otherwise distressed homeowners one less reason to hang on to their homes.”

Banks completed 13,351 principal reduction loan modifications in November alone, according to a monthly report from Amherst Securities Group. That’s a 62 percent jump from September. Much of it is thanks to the $25 billion mortgage servicing settlement signed by the nation’s five largest banks early this year over so-called “robo-signing” foreclosure practices.

Banks have already given borrowers $6.3 billion in mortgage principal relief under the settlement, according to a report from its monitor, Joseph A. Smith, released last month. Bank of America recently ramped-up its relief, reporting 30,000 customers were approved or had completed first-lien modifications through September 30 providing $4.75 billion in principal reduction. Borrowers received an average $150,000 slash in loan balances.
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Principal reduction loan modifications help to stabilize home prices because they bring underwater borrowers into or closer to a positive equity position, drastically reducing the probability of a loan default and ultimate foreclosure. Principal reduction loan modifications have a far lower re-default rate than modifications that just extend the term of the loan or lower the interest rate.

During a Senate Banking Committee hearing Thursday, Secretary of Housing and Urban Development Shaun Donovan told the panel that extending tax relief on debt forgiveness is “a high priority,” but could make no promises.

Posted in Economics, Employment, Housing Recovery, Politics | 70 Comments

Foreclosure (and short sale) machine still grinding

Posted on December 6, 2012 by grim

From Reuters:

US Foreclosure Sales Pick Up in Third Quarter

More U.S. homes in foreclosure were sold in the third quarter as lenders dealt with distressed properties at an earlier stage of the process, data from RealtyTrac showed on Thursday.

A total of 193,059 homes in some stage of foreclosure were sold in the third quarter, up 21 percent from the previous quarter. That was down 3 percent from a year ago.

So-called pre-foreclosure sales outstripped sales of homes already seized by lenders. Known as short sales,pre-foreclosure transactions occur when the homeowner is in default but the property has not yet been taken back by the bank.
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Pre-foreclosure sales rose 22 percent to 98,125. At the same time, bank-owned home sales rose 19 percent to 94,934.

Short sales will likely exceed sales of bank-owned properties for the whole year as well, said Daren Blomquist, vice president of RealtyTrac.

“It fits with the mood of the market right now,” Blomquist said. “When we talk to real estate agents, they want more inventory.”

All foreclosure-related sales accounted for 19 percent of home sales, down from 20 percent in the previous quarter and the same level as a year ago.

Posted in Economics, Foreclosures | 129 Comments

Home Price Headwinds

Posted on December 5, 2012 by grim

From CNN/Money:

There’s a home price recovery… but it’s really, really slow

Just about everybody agrees that the housing market is finally recovering — but don’t expect big price gains.

Nearly two-thirds of the nation’s housing markets will see price declines for the year through next June, according to analytics firm Fiserv. Overall, the gains will be just 0.3%.

One big factor that could weigh on prices: The fiscal cliff.

If Congress can’t agree on a deal to halt a series of tax increases and spending cuts, a recession is likely, and that would hit the housing recovery hard.

In addition, if the Bush-era tax cut on capital gains is allowed to expire — allowing the rate to increase to 20% from 15% on Jan. 1 — it would take a significant bite out of the profits high-end sellers would realize and give them less to spend on buying a new home, said Celia Chen, an economist and housing market analyst for Moody’s Analytics.

“Even people who do have the resources to buy homes will be more nervous,” she said.
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But even if we avoid the fiscal cliff, there are other factors weighing on home prices.

In order to raise more tax revenue, Congress is considering putting a cap on the mortgage interest tax deduction, a key tax break aimed at encouraging homeownership — mainly among the upper-middle class.

Most of the benefit of this deduction goes to wealthier households. Mortgage borrowers with incomes of $250,000 or more realize an average annual tax savings of $5,460, according to the Tax Policy Center. Meanwhile, those making less than $40,000 a year, save just $91.

Capping the deduction would discourage buyers from buying bigger, more expensive homes, said Chen.
But it’s not just the high-end of the market that could get squeezed.

With Congress distracted by the fiscal cliff, there is a real chance that the Mortgage Debt Forgiveness Act of 2007 could expire come January 1. If the act were to lapse, struggling homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.
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Fiserv expects home prices to start heating up again next fall. Between June 2013 and 2014, it expects prices to climb 3.4% and to continue to grow at an annual rate of about 3.3% over the five years through June 2017.

Posted in Economics, Housing Recovery, National Real Estate | 114 Comments

North Jersey Contracts – November 2012

Posted on December 4, 2012 by grim

(Source GSMLS, except Bergen which is based off 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, New Jersey Real Estate | 105 Comments

The Big Short Goes Long

Posted on December 3, 2012 by grim

From Bloomberg:

Goldman Pushes Subprime ABX Index as Housing Rebounds: Mortgages

Goldman Sachs (GS) Group Inc., which survived the U.S. real estate collapse five years ago with the help of derivative bets against subprime mortgages, is promoting the opposite trade to clients as housing recovers.

The firm, which teamed with four other dealers to create the ABX indexes, benchmark contracts that offered investors a way to protect against the risks of a crash, said in a Nov. 28 report on its top 10 market themes for 2013 that clients should buy some of the derivatives.
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Home prices are recovering from a six-year slump, helped by Federal Reserve efforts to push mortgage rates to record lows and buyers competing for a shrinking supply of properties. The bank’s analysts said after “the positive surprise” from housing this year, versions of the ABX that have already rallied are still attractive compared with real estate investments such as homebuilder shares, which have almost doubled over the past 12 months.

“You’re going to get a further lift because of the steady improvement in the indexes’ underlying assets and the housing market,” said Adrian Miller, a fixed-income strategist at GMP Securities LLC in New York. “Yes, there’s room to go, but how much juice is left in the trade is another question.”
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The credit-default swaps enabled speculators to bet against housing, and helped meet demand from investors for the high yields of loans to homeowners with poor credit. As the credit crisis grew, investors followed the price of the contracts as a gauge of losses at banks and hedge funds.

Goldman Sachs has taken a more bullish view on housing since at least March, when it was raising money for a new fund to buy home-loan bonds to benefit from an improving real-estate market.
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The group sold their stockpile of subprime bonds and collateralized debt obligations, and bought credit-default swaps protecting against losses, according to the panel.

They “quickly shot past ‘home,’” leading to their first large net short position in February 2007, the report said. By June, the net short position reached a peak of about $13.9 billion, including $9 billion in ABX bets against top-rated bonds that Goldman Sachs had earlier acquired as “disaster protection,” in case the subprime market as a whole lost value, the subcommittee calculated.

The resulting position was referred to by Viniar as the “big short,” a term later used as the title of a Michael Lewis book about the financial crisis.

As the worst housing slump since the 1930s deepened and millions of Americans failed to meet mortgage payments, the ABX index linked to the 2006 mortgages fell to as low as 23.3. While banks, including Bear Stearns Cos., struggled, Goldman Sachs posted record earnings in 2007.

Posted in Housing Recovery, National Real Estate | 133 Comments

The New American Household

Posted on December 1, 2012 by grim

From the NYT:

Under One Roof, Building for Extended Families

Tom and Kristin Moser’s new house — nearly 3,000 square feet in a development outside Tucson — has all the modern amenities, including solar panels and an open kitchen. But their house also has a feature that the builders are betting will be a hit, like the dog showers and craft rooms that beckoned during the boom. Tucked inside is a one-bedroom apartment with its own garage and a discrete entrance around the side.

The Mosers wanted the built-in apartment not to bring in a renter to help pay the mortgage, but rather as a home for Mr. Moser’s 82-year-old widowed father.

“More than weekly visits and phone calls, he really needs to be around family,” Mr. Moser, an investment manager, said of his father, Lee. “It’s the way he was raised. I think as a society it’s a way we have to step back into.”
…
In fact, architectural historians, statisticians and builders themselves are pointing out that the new household — and the house that can hold it — is much like the old household, the one that was cast aside after World War II by the building boom that focused on small, tidy dwellings for mom, dad and their two children.

Population statistics help tell the tale. A Pew study reports that 41 percent of adults between 25 and 29 are now living, or have lived recently, with their parents. Over all, more than 50 million Americans are in multigenerational households, a 10 percent increase from 2007. It is a back-to-the-future moment.

“You have to go back to the 1940s to see those kinds of numbers,” said Stephen Melman, director of economic services at the National Association of Home Builders. “What the recession has done has really hit household formation hard, so instead of forming households we are having some contractions: the college student moving back in or someone’s brother-in-law loses a job. It’s an opportunity for the builders.”
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Wid Chapman, an architect and co-author of “Unassisted Living: Ageless Homes for Later Life,” said the 2010 census showed that the shift to the “nonlinear family” is part of an evolution that will be accelerated now that mainstream builders are responding to it.

“These so-called atypical households will be deliberately created and marketed in geographic locations that might have been the epicenter of the suburban classic nuclear family in the past,” he said.

Posted in Housing Recovery, New Development | 69 Comments

It’s clear, nobody has any idea what Sandy means for NJ real estate

Posted on November 30, 2012 by grim

From the Record:

Housing market expected to recover quickly from Sandy

While superstorm Sandy damaged or destroyed about 70,000 homes in New Jersey, the housing market is not likely to suffer long-term effects from the storm, economists from the Federal Reserve Bank of New York said Thursday.

Typically after storms, housing markets experience a temporary dip in prices and activity, followed by a rebound fairly quickly, the economists said in a regional economic briefing.

“In neighboring communities, demand could go up for housing,” said Jaison Abel, a Fed economist. Those who lost their homes along the Jersey shore or coastal areas in Queens and Long Island “have to find housing somewhere,” he said.

And while individual homeowners have been hurt by storm damage to their homes, the number of affected homes comes to only about 2 percent of the state’s housing stock. About 300,000 homes were damaged or destroyed in New York, about 4 percent of the state’s housing stock, the Fed said.

Repairing storm damage is expected to give a boost to the troubled construction industry, Fed economists said. In fact, much of the economic activity lost during and after the storm will be offset by “rebuilding, repairing and replacing,” said Jason Bram, a Fed economist, who predicted that the region’s economy will bounce back from the storm within a matter of months.

While the economists said the regional housing market is likely to recover from Sandy, there are longer-term questions about the areas that were severely flooded. The cost of living at the shore could go up, because of higher insurance costs and stricter construction standards, the economists said. That could lower the demand for coastal properties, especially if people also conclude that large storms are becoming more common.

Posted in Economics, Housing Recovery, New Development, New Jersey Real Estate | 141 Comments