FHFA: October prices continue to dip

Posted on December 23, 2011 by grim

From Bloomberg:

U.S. Home Prices Fell 2.8% in October From Prior Year, FHFA Says

U.S. home prices fell 2.8 percent in October from a year earlier, the Federal Housing Finance Agency said, as foreclosures continued to depress real estate values.

The slump was led by the regions that include Nevada and Arizona, and California and Washington, which both had a 5.5 percent decrease, the agency said today in a report from Washington. The region that includes Illinois and Ohio had the second-largest decline of 3.9 percent.
…
Home prices in October dropped 0.2 percent from the previous month on a seasonally adjusted basis, according to the FHFA. That was worse than economists’ projection of an increase of 0.2 percent, the average of 16 estimates in a Bloomberg survey.

The FHFA’s U.S. House Price Index is 19.2 percent below its April 2007 peak and about the same as the February 2004 level, according to the report.

From Bloomberg:

Decline in U.S. Home Values Smallest in Four Years, Zillow Says

U.S. home values probably will have their smallest decrease in four years in 2011 after the decline in property prices slowed, Zillow Inc. said today.
…
An increase in buyer demand is needed before property values can begin to recover, Zillow said. Low borrowing costs may be helping, with sales of existing homes rising in November to a 10-month high, according to a National Association of Realtors report yesterday.

“While homeowners suffered through another year of steep losses, the good news is that homes are losing value at a substantially slower pace as the market works its way towards the bottom,” Stan Humphries, Zillow’s chief economist, said in today’s statement.

While property values declined at a slower pace this year, an oversupply of homes for sale, low consumer confidence and an 8.6 percent unemployment rate will continue to weigh on the market and probably keep it from recovering until late next year or early 2013, Humphries said.

Posted in Employment, Housing Bubble, Housing Recovery, National Real Estate | 103 Comments

Good News – Shadow inventory down, Bad News – It’s in our back yards

Posted on December 22, 2011 by grim

From Inman News:

Shadow inventory down 16% from a year ago

Lenders had a “shadow inventory” of 1.6 million distressed properties and repossessed homes they hadn’t yet put up for sale at the end of October, down 16 percent from a year ago, loan data and analytics provider CoreLogic reported today.

Six states account for half of the shadow inventory: Florida, California, Illinois, New York, Texas and New Jersey.

Housing analysts track shadow inventory because it’s typically not included in the official metrics of unsold inventory, and represents a pending supply of homes. CoreLogic estimates that for every two homes listed for sale in a multiple listing service (MLS), lenders have another one in shadow inventory.

The current level of shadow inventory represents a five-month supply of homes, down from a seven-month supply in October 2010, when shadow inventory stood at 1.9 million units.

Shadow inventory should represent less than a one-month supply of homes in a healthy housing market, CoreLogic said. At the peak of the housing bubble, in mid-2006, shadow inventory stood at 380,000 homes.

Posted in Economics, Housing Bubble, Housing Recovery, New Jersey Real Estate | 91 Comments

The Day Realtors Rewrote History

Posted on December 21, 2011 by grim

Well here it is folks, the day that the Realtors finally tell us what really happened when the bubble burst. This isn’t a surprise, they were caught publishing all sorts of incorrect (dare I say intentionally misleading) data during the decline. Remember this oldie but goodie? VINDICATION – NJ Q1 Home Sales down 30%

From CNBC:

Home-Sales Revisions to Hurt: More Distress in Market

Now we know that the recent housing crash was about 14 percent worse than previously thought. That is the conclusion of benchmark revisions by the National Association of Realtors, after they realized that their numbers were “drifting” from other industry calculations.

That drift was caused by a big shift away from For Sale By Owner (FSBO) sales to Realtor sales (which was a big factor in their methodology), an increase in the geographic size/range of many multiple listing services (MLS), and double counting due to Realtors listing properties in several different local MLS’s.

So what does this change? I’ve already expounded on what it doesn’t change, which is really anything happening today in the economy, current home sales and prices and already-accounted-for losses from the housing crash.

It does however, change perception and economic prediction as we go forward. The Commerce Department will have to revise the housing component of GDP lower, and, perhaps more importantly, we have to look at comparisons and the overall health of today’s housing market differently.

From HousingWire:

NAR reduces home sales index 14.3%

The National Association of Realtors revised its existing home sales downward 14.3% in the period from 2007 to 2010, after the group said its data diverged from actual market conditions.

The trade group announced the revisions Wednesday in its monthly existing-sales report. November sales rose 4% from last month and 12.2% from a year ago. Jed Smith, the head of quantitative research at NAR said in a conference call that numbers in reference to supply and demand in the market are unchanged.

Lawrence Yun, NAR chief economist, said about half of the revisions came from a decline in for-sale-by-owner transactions. NAR said those sales dropped from 16% of the market in 2000 to 9% in 2010.

Multiple listings, geographic population shifts and house flipping also contributed to the revisions, Yun said.
…
John Burns Consulting contends that for years, the mortgage market believed NAR’s numbers to be overstated. Zillow recently added it would not be changing any of its operations as a result.

Posted in Employment, Housing Bubble, National Real Estate | 134 Comments

Who is to blame? Borrowers or Banks?

Posted on December 20, 2011 by grim

From Reuters:

Modification blunders bedevil U.S. housing recovery

Shirley Burnell, a community activist from Oakland, California, has been trying to get her subprime loan restructured since 2007.

She never missed a payment, but the adjustable rate mortgage she got in 2004 shot up to a monthly payment she could no longer afford.

First she provided documents without getting any response, then she was denied in April by her servicer, Bank of America (BAC.N), for not providing documents it never actually asked for.

As one part of the bank appealed that decision and approved her for a trial modification, another part denied her again – twice – providing two new reasons in part based on inaccurate calculations, according to documents reviewed by Reuters.

When asked about Burnell’s case, a bank spokesman said she was unable to qualify under “imminent default provisions,” a third reason that Burnell said she had never been given.

At one point, Burnell even received notice the bank would accelerate foreclosure proceedings, despite her perfect payment record and the letter itself saying the bank owed her $281.01.

“They gave you a funky loan in the first place, and now they’re refusing to work with people to get it worked out,” Burnell said. “It just keeps you upset all the time.”
…
Three years after the foreclosure crisis began, the process to apply for a loan modification remains a bureaucratic nightmare that is complicating the housing recovery and could dull the impact of any Obama administration initiatives in the works.

The administration’s biggest foreclosure-prevention effort, the Home Affordable Modification Program (HAMP), targeted to help 3 million to 4 million homeowners, has reached only about a quarter of that since its 2009 inception.

The program pushed mortgage servicers to cut interest, extend terms, or defer parts of a loan in an effort to reduce monthly payments and keep borrowers in their homes.

But servicers have dragged their feet on providing wide-scale modifications. They continue to lose documents, use inaccurate numbers to issue denials, or both approve and deny applications at the same time, according to housing advocates.

“It delays resolution of the problem of defaulting loans and it is adding uncertainty to the market,” said Susan Wachter, a housing expert at the Wharton School of the University of Pennsylvania.

Around one in every 12 mortgages in the country is delinquent, and only a fraction of them have received modifications.

“Somehow the borrower is unreachable, or the servicer hasn’t found the right way to reach the borrower, but the fact is, we see (modifications) piercing maybe 10 to 25 percent of the potential population,” said Diane Westerback, a managing director of global surveillance analytics at Standard & Poor’s.
…
“These are institutions that have taken a huge amount of bailout money. There should be a level of responsibility to communities,” said Josh Zinner, an advocate with the Neighborhood Economic Development Advocacy Project in New York. “HAMP is far from perfect, but the biggest problem is servicers not doing their job.”

Posted in Economics, Housing Recovery, Mortgages, Risky Lending | 129 Comments

Agents and Sellers “adjusted to the new pricing realities”?

Posted on December 19, 2011 by grim

From the Record:

Bergen, Passaic home prices continue to slide

North Jersey home values dropped 3 percent in the first half of this year, bringing Bergen County’s median single-family home price below $400,000 for the first time since the housing meltdown began five years ago, an analysis by The Record has found.

The analysis also found that prices did not move in lock step across Bergen and Passaic counties; values fell furthest in lower-priced communities hard-hit by rising foreclosures and the troubled economy. More affluent housing markets held their value better. Some even rose.

Rick Del Guercio, a Glen Rock appraiser, said his experience bears out The Record’s findings.
Hard hit at the bottom

Prices generally dropped most at the low end of the North Jersey housing market, but held their own at the high end.

The analysis for this article and accompanying graphics used tra­ditional “arms-length” sales that reflect market values as well as sales of properties at various stages of a foreclosure or estate liq­uidation process. Sales of distressed properties were included be­cause they represent a significant part of the housing market and reflect the true value of homes in many communities, according to real estate experts.

“You see a greater drop in some of these lower-end towns than in some of the higher-end towns,” he said. “The lower end is being flooded by foreclosures, which is obviously dropping the price for everyone.”

“Locations where the distressed property percentage is high are having huge problems, while other areas are stabilizing,” said Barbara Weismann, a real estate agent with Weichert Realtors in Tenafly.

The Record’s analysis also found that the number of home sales in the two counties plummeted 25 percent from the first half of 2010 to the first half of 2011, though that probably reflected the fact that sales were artificially inflated in early 2010 by the $8,000 federal tax credit for buyers.

The number of homes sold decreased from about 3,600 to 2,800 in Bergen and from 1,450 to 1,000 in Passaic. The latest numbers are down by about two-thirds from the highest levels seen during the housing boom.
…
As painful as it is to see housing wealth disappear, “most sellers at this point have adjusted to the new pricing realities,” said Beth Freed of Prominent Properties Sotheby’s International Realty in Ridgewood.

But rather than accept lower prices for their homes, many are simply delaying plans to sell, if they can.

“I think most of the people who are selling right now are doing so because they have to, either because of job loss or divorce,” said Jaime Bolnick, a Re/Max agent in Franklin Lakes.
…
“Buyers are seeing incredible savings in comparison to just a couple of years ago,” said John Reilly of Century 21 Van Der Wende Associates in Little Falls, who says prices have returned to 2003 levels in many towns.
…
“A lot of buyers are hesitant to commit even if it’s priced fair or below market,” said David Hsu, an agent with Abbott and Caserta Realtors in Ho-Ho-Kus.

That smaller pool of buyers translates into lower demand, which in turn, means lower prices.

Carmelo “Mel” Oliveri of Property Hub Realtors in Paramus predicts that prices will continue to drop because of the large number of foreclosures and short sales expected to come on the market over the next couple of years.

Sheldon Neal, a Re/Max agent in Oradell, agreed.

“The ones who benefit will be first-time buyers,” Neal said.

But, Hsu warned, they should resist the temptation to treat a home as “an investment vehicle.”

“Those days are over for a while,” he said.

Posted in Economics, Housing Bubble, Housing Recovery, New Jersey Real Estate, Price Reduced | 107 Comments

“With only one month to go New Jersey is sure to record the largest annual gain in private sector employment in more than a decade”

Posted on December 15, 2011 by grim

From the AP:

New Jersey added 10,400 private sector jobs in November

Holiday hiring helped drive a gain of 10,400 private sector jobs as New Jersey’s unemployment rate remained unchanged at 9.1 percent in November.

The state Labor Department says preliminary estimates indicate total nonfarm wage and salary employment grew to 3,881,000.

The trade, transportation and utilities sector led the growth in five of the ten industry sectors that saw gains in November, with an increase of 9,900 jobs. Most of that reflects a gain of 7,800 in the retail trade component as merchants increased staff for the holiday shopping season.

Officials also revised October’s employment numbers up by 2,000 jobs.

From the Star Ledger:

NJ added 10,300 jobs in November

New Jersey’s employment rose for the second month in a row in November, providing a shot of economic optimism with the addition of 10,300 jobs, although the unemployment rate remained steady, according to figures released Thursday.

The state added 10,400 private sector jobs and lost 100 government jobs, according to the monthly employment report by the New Jersey Department of Labor and Workforce Development.

The unemployment rate of 9.1 percent was unchanged from October, and remains higher than the national rate of 8.6 percent.

The report also revised upwards the October jobs figures, from the previously announced figure of 2,500 jobs created, to 4,500 created.

“New Jersey labor markets are closing the year with a bang,” said Joseph Seneca, a Rutgers University economist.

He said the figures show “acceleration,” and noted that the state has added 41,800 private sector jobs in 2011.

“With only one month to go New Jersey is sure to record the largest annual gain in private sector employment in more than a decade,” he said.

Posted in Economics, New Jersey Real Estate | 164 Comments

Mansions – Check, Mercedes – Check, Food Stamps … Check

Posted on December 15, 2011 by grim

From Bloomberg:

New Jersey’s Richest County Leads Rise in Food Stamp Recipients

New Jersey’s Hunterdon County, the hilly region of horse farms and weekend retreats where last year’s median household income was almost $100,000, is a surprising new face of federal food aid.

The percentage of U.S. households using food stamps has more than doubled in six of the 10 wealthiest counties in the nation as more residents find themselves out of work and unable to sell their homes. The increase among counties with more than 65,000 people was greatest in Hunterdon County, according to Census Bureau data compiled by Bloomberg.

Hunterdon, whose 2010 median household income of $97,874 was the highest in New Jersey and fourth-highest in the U.S, saw food-stamp usage surge 513 percent between 2007 and 2010, although the overall numbers are small.

“Sometimes people will come in a Mercedes,” said Gina Davio, 41, program director of social services at Fisherman’s Mark, a non-profit social-services center in Lambertville, a city of 3,900 on the Delaware River. “Sometimes they come in nothing but Ralph Lauren, but you never know: That may be all they have left.”

Nationwide, requests for emergency food assistance increased over the past year in 25 of 29 cities surveyed by the U.S. Conference of Mayors. Unemployment led the list of reasons for requesting the aid, followed by poverty, low-wage jobs and high housing costs, according to the survey released today. Eighty-eight percent of the cities reported an increase in the number of persons requesting food assistance for the first time.
…
In Hunterdon County, the number of households enrolled in the Supplemental Nutrition Assistance Program, or SNAP, the $75 billion federal system still widely known as food stamps even after a title change in 2008, increased to 1,424 in 2010 from 232 in 2007.

Neighboring Somerset County, where the late Jacqueline Kennedy Onassis hunted foxes on horseback and the Far Hills steeplechase is a highlight of the social season, increased its caseload almost threefold, to 3,777, from 1,237. That county, a 45-minute drive from the Lincoln Tunnel to midtown Manhattan, has the eighth-highest household income, at $94,270. Morris County, 10th in the national income rank and home to Governor Chris Christie, more than doubled its food-stamp enrollment to 4,076 cases from 1,680.
…
Hunger in New Jersey’s wealthier areas is apparent at the Food Bank Network of Somerset County in Bridgewater, which is serving about 3,500 individuals this year, a 35 percent increase from 2010.

“So many people out there are coming from the hills — Bernardsville and Basking Ridge, a lot of Bedminster people,” Marie Scannell, the bank’s executive director, said in a phone interview.

Posted in Economics, New Jersey Real Estate | 163 Comments

Jersey’s got the highest down payments in the nation

Posted on December 13, 2011 by grim

From New Jersey Newsroom:

N.J. tops housing market with highest average mortgage down payment

Out of all 50 states, New Jersey has the highest average down payment on real estate purchases, according to a new report published by LendingTree.com, an online resource for personal financial management.

For residential real estate transactions, New Jersey boasts an average 13.76 percent down payment, roughly 1.5 percent higher than the national average. Conversely, North Dakota has the lowest average with 11.37 percent.

Following New Jersey in the top five are Washington, D.C., New York, Hawaii and California. Rounding out the bottom with North Dakota are Wyoming, Oklahoma, Utah and Tennessee.
…
The study comes on the heels of a federal proposal that would require homebuyers to pay at least 20 percent of the down payment when purchasing a house. The measure was met with much controversy and public outcry earlier in 2011; its fate has yet to be determined.

“If federal regulators were to adopt the proposed 20 percent down payment requirement, a majority of borrowers wouldn’t be able to meet the standard given the findings in this report,” stated Doug Lebda, founder and CEO of LendingTree, in an official press release. “While this rule has yet to be put into effect, borrowers should be aware of the possibility and plan for future home loan needs.”

Posted in Economics, New Jersey Real Estate | 168 Comments

The land where unicorns roam

Posted on December 10, 2011 by grim

From the NY Times:

Demand for ‘Estate’-Like Condos

REAL ESTATE optimists have been picking up blips on the radar in Bergen County lately, most recently this one: 24 of 68 “attached manor” condominiums with prices starting at $1.25 million sold in a single weekend — before they went up, and before a sales office had time to open.

The preview sales event for the gated development Saddle River Grand, for which ground was broken in Saddle River in September, was held last month at a gated complex in Montvale built by the same developer, Woodmont Properties.

The Enclave at Montvale is smaller — 34 “villa estates” — but 18 months after opening, it has only three units left, said Woodmont’s president, Lewis Zlotnick.
…
Gabe Pasquale, a longtime marketing consultant in Bergen County as well as in Rockland County, N. Y., said there was pent-up demand for opulence — particularly among “very affluent empty nesters.”

“These are retired or semiretired captains of industry, older couples that are very ingratiated in their communities, with strong ties to Manhattan,” Mr. Pasquale said. “They do not want to leave the towns in which they already live in Bergen County, or the conveniences or the luxuries. But they do want more of a seamless lifestyle — no maintenance, no hiring groundskeepers and pool maintenance companies.”

The developments are not age-restricted, but they were specifically designed to appeal to an “affluent baby boomer niche,” Mr. Zlotnick said.

Certainly, this notion is not new in Bergen County, or the rest of northern New Jersey.

The Bellaire, a 34-unit gated town-house community, overlooking the Alpine Country Club Golf Course, went on the market five years ago with prices starting at $1.6 million and rising to $3 million. But the finished product — in all its 24-foot domed-ceiling, mahogany-paneled glory — arrived at the same time as crises began detonating on Wall Street.

Units sold very slowly, and only a handful of contracts were signed in 2009, the year of the national real estate crash. Now, two units are listed as resales, one at $1.95 million and the other at $3.398 million, according to the broker, Michele Kolsky-Assatly of Coldwell Banker.

High-end sales have been on the upswing in Bergen County in 2011.

Seven percent of total sales in Bergen involved houses sold for $1 million to $1.25 million, according to Jeffrey Otteau, the president of the Otteau Valuation Group of New Brunswick, which analyzes sales data for the industry. That is the highest percentage of sales in that category of any county, Mr. Otteau said; Morris and Hudson counties each had only 3.3 percent of total sales in that niche.

In the few towns where sales price averages about $1 million — Saddle River, for instance — values have increased by 2.5 percent this year while prices continued to decline statewide, the analyst said.

Affluent towns also have few foreclosures in process, and prices won’t be affected when the state’s big backlog of foreclosed properties eventually hits the market, Mr. Otteau noted.

Still, he suggested, a niche is just a niche: “The phenomenon of ultraluxury, 4,000-to-5,000-square-foot ‘downsizers’ selling well is particular to only a very few communities in northern New Jersey.”

Mr. Pasquale, who worked with several large development firms before starting his own consulting business, said he thought the wealthiest buyers were leading the pack on the way to overall market recovery.

“Many of these buyers are savvy entrepreneurs with strong connections to the financial markets,” he said. “I think they are leaders in buyer sentiment.”

Posted in Economics, Housing Recovery, North Jersey Real Estate | 106 Comments

Home prices to lag inflation (that means home prices are still falling)

Posted on December 9, 2011 by grim

From the WSJ:

Inflation Rate Seen Outpacing Home Prices for Years

The ailing housing market is unlikely to return to health before 2016 and is weighing on the two-year-old U.S. recovery, which finally is showing signs of picking up steam.

That’s according to economists in the latest Wall Street Journal survey, who expect home prices will begin to increase in 2012 but—by an 8-to-1 margin—don’t see prices outpacing inflation over the next three years. That means that the value of the largest investment for most consumers—their home—would fail to keep pace with increases in the cost of other items, such as food, clothing and gasoline.

The economists expect home prices as measured by the Federal Housing Finance Administration will be down 2.7% in 2011, but up slightly next year. They forecast that inflation will remain below 2.5% through at least 2014 after hitting 3.3% at the end of this year.

During previous recoveries, home values held down by recession climbed back. In the 1980s, home prices were outpacing inflation by the first full year of recovery, while in the 1990s that took three years. If the economists’ forecasts prove true, the pace of growth in home prices would still be below that of inflation after at least five years of a recovery that began in 2009.

Historically, housing has been a driver of recoveries. But the bursting of the real-estate bubble of the 2000s has turned the sector into a drag on growth. An excess supply of homes has held back construction and price declines have weighed on consumer sentiment.

“Expectations for continued home-price appreciation, built upon the experiences of the post-World War II period, set the tone for the strategy to buy a home today in anticipation of capital gains down the road. This ended with the Great Recession,” said economists at Wells Fargo.

Posted in Employment, Housing Recovery, National Real Estate | 68 Comments

Et tu Pru?

Posted on December 8, 2011 by grim

From the Star Ledger:

Prudential sells residential real estate division to Toronto-based company

Prudential Financial is ending a more than two decade foray into the residential real estate business with yesterday’s sale of its realty brokerage and relocation services unit to a Toronto-based company.

The proceeds from the sale of Prudential Real Estate and Relocation Services to Brookfield Residential Property Services, before transaction-related expenses, were approximately $110 million, according to the SEC filing. BRPS is a division of Brookfield Asset Management, and the sale marks its third since coming to the U.S. market in 2008, the company said.

“This transaction creates a global employee relocation services and real estate franchising leader,” said Graham Badun, CEO of Brookfield Residential Property Services. “We have now increased the breadth and depth of our service offering, keeping pace with the evolving needs of our clients around the world.”

The acquisition makes Brookfield the second largest global relocation services provider and third largest residential real estate brokerage in North America, Badun said. Together, the relocation services divisions of Brookfield and Prudential work with more than one-third of Fortune 100 companies, and Brookfield is now the largest provider of relocation services to government, with long term relationships with the United States and Canada.

The Prudential name will stay with the franchise for the time being, but ultimately Brookfield will develop a new branding strategy, Badun said. Employees won’t notice any changes and it will be business as usual, he added.

Posted in Economics, New Jersey Real Estate | 92 Comments

CoreLogic – Northern NJ/NY Metro home prices up 2.6% YOY in October

Posted on December 7, 2011 by grim

From CoreLogic (no link):

Home Prices Down 3.9 Percent Year-Over-Year

Home prices in the U.S. decreased 1.3 percent on a month-over-month basis, the third consecutive monthly decline. According to the CoreLogic HPI, national home prices, including distressed sales, also declined by 3.9 percent on a year-over-year basis in October 2011 compared to October 2010. This follows a decline of 3.8 percent* in September 2011 compared to September 2010. Excluding distressed sales, year-over-year prices declined by 0.5 percent in October 2011 compared to October 2010 and by 2.1* percent in September 2011 compared to September 2010. Distressed sales include short sales and real estate owned (REO) transactions.

Highlights as of October 2011

* Including distressed sales, the five states with the highest appreciation were: West Virginia (+4.8 percent), South Dakota (+3.1 percent), New York (+3.0 percent), District of Columbia (+2.4 percent) and Alaska (+2.1 percent).
* Including distressed sales, the five states with the greatest depreciation were: Nevada (-12.1 percent), Illinois (-9.4 percent), Arizona (-8.1 percent), Minnesota (-7.9 percent) and Georgia (- 7.3 percent).
* Excluding distressed sales, the five states with the highest appreciation were: South Carolina (+4.6 percent), Maine (+3.1 percent), New York (+3.1 percent), Alaska (+2.9 percent) and Kansas (+2.8 percent).
* Excluding distressed sales, the five states with the greatest depreciation were: Nevada (-8.8 percent), Arizona (-7.0 percent), Minnesota (-5.7 percent), Delaware (-3.9 percent) and Georgia (- 3.6 percent).
* Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to October 2011) was -32.0 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -22.4 percent.
…
October 2011 12-Month HPI

MSA/% Change/% Change Excluding Distressed
Chicago-Joliet-Naperville IL -9.9% -1.3%
Atlanta-Sandy Springs-Marietta, GA -7.9% -3.9%
Phoenix-Mesa-Glendale, AZ -6.7% -6.3%
Los Angeles-Long Beach-Glendale, CA -5.8% 0.8%
Riverside-San Bernardino-Ontario, CA -5.7% -3.5%
Houston-Sugar Land-Baytown, TX -4.0% 0.4%
Dallas-Plano-Irving, TX -0.2% 3.4%
Philadelphia PA 0.7% 1.6%
Washington-Arlington-Alexandria, DC-VA-MD-WV 1.3% 2.9%
New York-White Plains-Wayne, NY-NJ 2.6% 3.6%

Posted in Housing Recovery, New Jersey Real Estate | 89 Comments

US Bank vs Guillaume – Serious legal issue or nitpicking over a irrelevant detail?

Posted on December 6, 2011 by grim

From HousingWire:

New Jersey foreclosures wait in the wings as court deliberates key case

Hundreds of New Jersey foreclosure cases are waiting in the wings for the state’s Supreme Court to issue what will be a landmark decision in the Garden State.

Legal scholars suggest lenders are waiting to see what the court will do with the U.S. Bank National Association v. Guillaume case before moving forward with thousands of pending foreclosures.

The issue in the case causing lenders to pause is the question of whether a foreclosure notice is made invalid because the lender filed a notice of intent to foreclose with the servicer listed on the notice instead of the lender.

In the original complaint, the Guillaume’s argue the lender, U.S. Bank NA, violated the Fair Foreclosure Act by not including the lender’s information in a spot that ended up containing contact information for the servicer.

Linda Fisher, a professor at Seton Hall Law School who has been following the case, said the foreclosure process is “kicked off by filing the notice of intent to foreclose.” Fisher filed an friend-of-the-court brief with the New Jersey Supreme Court in support of the Gillaumes’ claim.

Fisher says the intent to foreclose form has 24 data points, including the name of the lender and contact information for the lender.

The Guillaumes, who challenged the foreclosure on several fronts, initially claimed the lender “violated the FFA because although the notice of intent to foreclose listed plaintiff as the holder of the note, it did not list plaintiff’s address, but rather, listed the address and telephone number” of the servicer.

An appellate court ruled for the lender and against the plaintiffs saying “directing the Guillaumes to contact ASC (or the servicer) fulfilled the purpose of the notice provision under the FFA — making the debtor aware of the situation, and how and who to contact to either cure the default or raise potential disputes.”

But the case now awaits the New Jersey Supreme Court decision, causing some lenders to pause before launching foreclosures.

Fisher said the initial notice of intent to foreclose claimed the servicer was the lender and the holder of the obligation. Later in the case, the issue became the fact that the lender’s name was listed but with the servicer’s address.

“The banks are contending it is OK to enter only the name of the servicer,” Fisher said. “The Guillaumes are saying the servicer is not a substitute for the lender because the statute is quite clear, and it specifically mentions inclusion of the name of the lender.”

Posted in Foreclosures, National Real Estate, New Jersey Real Estate | 79 Comments

No recession in the Hudson rental market

Posted on December 5, 2011 by grim

From the Jersey Journal:

Hudson County’s rents shoot up an average of 7.2 percent in 2011

The average asking rent for an available apartment in Hudson County has shot up 7.2 percent over the past year, with some luxury buildings seeing increases closer to 16 percent, according to a market report by the commercial real estate firm Cushman & Wakefield.

The new numbers bring much of the market back to levels last seen in 2008, says the report, which predicts new housing will be on the way to meet demand.

According to Robert Antonicello, executive director of the Jersey City Redevelopment Agency, the rental market is reacting to pent-up demand. Many would-be buyers are currently renters due to economic conditions and an under-supply of condos. Antonicello agrees that more residences will be built to meet the demand. “People originally come to Jersey City because they like the convenience of the city. They discover the city, and they love the city once they live in it,” said Antonicello.

Some Hudson renters are getting squeezed out of more popular locations such as Hoboken and the Jersey City waterfront.

“With average rental rates on the rise, most college students and recent grads are now forced into surrounding communities (in Hudson County) , while Hoboken is attracting families, athletes, and entrepreneurs,” said Kristin Ehrgott, luxury residential specialist for Prudential Castle Point Realty.

“There’s an increased demand for three-bedroom residences and single-family homes (in Hoboken). While demand is high, inventory is low, causing values to rise exponentially,” Ehrgott said.

According to the report, three-bedroom residences make up only 5.5 percent of the Hudson County market, with an average size of 1,487 square feet. The increased demand has pushed asking rents of three-bedroom units to roughly $3,848 per month, nearly $1,200 more than the rest of Northern New Jersey.

Posted in Economics, New Jersey Real Estate | 94 Comments

Farmland assessment must be fixed

Posted on December 2, 2011 by grim

The fix is simple, adjust the $500 minimum requirement (in 1964 dollars) for inflation, and ensure it adjusts for inflation every year going forward. $500 was a significant sum … in 1964 when the original law was passed. Had the original law adjusted for inflation, which it should have, the limit would be around $3,500 today. Since it didn’t, it is no longer a limit, it’s now a simple loophole. This new limit will have absolutely no impact on any real farmers.

From the Record:

‘Fake farmers’ get property tax break

Some New Jersey corporations, developers — and even a few politicians — get a tax break for growing as little as $500 worth of crops such as Christmas trees, using a law that critics say means higher property taxes for everyone else.

So-called “fake farmers” were faulted for taking advantage of a farmland tax break at a Senate Environment and Energy Committee hearing Thursday where lawmakers discussed doubling the minimum sales needed to qualify for the state’s farmland assessment.

“Time and again, we hear stories of this program being abused by owners of large, valuable residential properties to avoid paying their full property tax bill,” said Sen. Jennifer Beck, R-Monmouth.
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The farmland assessment dates back to the 1960s, and was designed to help struggling farmers while also discouraging the development of open space in a state known for its high real estate prices.

But opponents now see the tax break as outdated, and something many wealthy landowners are abusing to avoid paying their full property tax bills. The average property tax bill in New Jersey averaged a record-high $7,576 last year, but bills easily top $25,000 on larger properties.

Beck is sponsoring legislation that would double to $1,000 the minimum gross sales required to qualify for the farmland assessment, which sharply reduces how much property taxes are due on the part of a property that is used for agriculture.

The bill would also compel landowners who claim their property as farmland to submit clear evidence of agricultural sales or income to the state Division of Taxation. And local tax assessors would have to receive training on farmland assessments.
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Jeff Tittel, executive director of the New Jersey Sierra Club, cited an example of a 5-acre lot — the minimum allowed to qualify for the assessment — with an expensive home that uses only a fraction of the property to cultivate enough Christmas trees to qualify for the tax break.
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No votes were taken on Beck’s bill Thursday, and it may not make it out of the Legislature before the current lame duck session ends early next year. But Beck, who’s been pressing the issue since she took office in 2008, pledged to keep pushing.

“It is time to close this ‘fake farmer’ loophole and ensure that only true farmers who produce substantial agricultural output be eligible for the program,” she said.

Posted in New Jersey Real Estate, Politics, Property Taxes | 203 Comments