Helping with the mortgage

From Yahoo Finance:

Housing expert: ‘Sellers are absolutely having to negotiate’

Housing expert: ‘Sellers are absolutely having to negotiate’

It’s the same housing story across the U.S., according to real estate agents in three U.S. cities. Sellers are offering more concessions as buyer demand wanes and listings linger on the market.

“Gone are the days of, ‘hey, my next door neighbor just sold last year for $100,000 over list price.’ Sellers are absolutely having to negotiate,” Dan O’Brien, an agent at Trueblood Real Estate covering Indianapolis, told Yahoo Finance.

And that’s good news for buyers.

“Now, we actually have buyers that are being protected by contingencies, like inspection and appraisal,” O’Brien said, “where a lot of times, those were out the window during the peak craziness of the COVID market.”

“Right now, sellers are operating to help with the interest rate increase. So they are offering 2-1 buydowns,” said Kathy Casey, a Coldwell Banker residential brokerage realtor in Denver. “What that means is for the first two years, your interest rate would be lower than the market rate right now.”

Like other markets, Charlotte’s sellers are providing inducements to make deals, especially paying for closing costs and buying down the interest rate, according to Sir Ashley Harrison, a real estate broker at the Harrison Group with Fathom Realty in Charlotte. Pricing, though, isn’t moving as much.

“We’re seeing more inventory, but less new listings,” Harrison said. “And we are getting a lot more seller concessions, but pricing has remained very sticky.”

Posted in Economics, Housing Bubble, Mortgages, National Real Estate | 47 Comments

Hybrid NJ


‘Working remotely is here to stay’: NJ considering new tax break for hybrid offices

New Jersey officials say they’re contemplating a new tax break designed to lure companies interested in having their staff work from home rather than in the office full time.

Teased by Gov. Phil Murphy in his State of the State address Tuesday, the proposal is still under development and would require approval from state lawmakers. It’s an attempt to align the state’s incentive programs with a new post-pandemic reality where employees expect flexible work schedules, said Tim Sullivan, CEO of the New Jersey Economic Development Authority.

“There’s economic opportunity for New Jersey residents to get good jobs in remote or hybrid work settings, and as long as those people are paying New Jersey taxes, then there’s a framework whereby it makes sense to incentive them,” he said in an interview.

Under the broad outlines sketched by Sullivan, the state would offer tax breaks to companies willing to buy small, satellite offices in New Jersey to serve as occasional workspaces for their local employees. Currently, those employees may be classified as working in New York, Philadelphia or wherever else their main offices are located. Under Murphy’s vision, they’d be considered New Jersey workers, steering more tax revenue toward the Garden State.

Plans for a new hybrid-work incentive were first reported by Politico New Jerseyon Wednesday.

According to Sullivan, the new tax credit could be funded by unused subsidies from other programs. The incentive would accompany and not replace the much larger NJ Emerge, a 2020 program that seeks to attract large employers to the state but has so far found few takers.

“We must recognize that in the new, post-pandemic business environment, not every new job created for a New Jerseyan is going to be housed in a physical office in New Jersey,” Murphy said in his State of the State address. “For many New Jerseyans, working remotely is here to stay.

Posted in Economics, Employment, New Jersey Real Estate, Property Taxes | 57 Comments

You take the good, you take the bad, you take them both, and there you have…

From the Times Union:

Hudson Valley housing prices exploded in 2020. What happens now?

In the late summer of 2019, when the word “pandemic” was most likely to call up images of the Spanish flu or the Black Death, the average house in Greene County sold for $185,000, according to figures from Hudson Valley Pattern for Progress.

Three years later, in the late summer of 2022, the average home sold for $330,000 —  an increase of 78 percent.

But as interest rates rise, will this trajectory be sustainable? Will it plateau? Or will there be a dreaded crash?

Gary DiMauro, the executive vice president at Four Seasons Sotheby’s, which sells high-end homes throughout upstate New York, called price increases in the Hudson Valley’s housing market during the pandemic “unheard of in U.S. history.”

The tale is by now well-known: The mad rush to escape the petri dish of New York City resulted in bidding wars for properties, often between cash buyers, that jacked up housing prices as demand lapped supply. Hudson and Kingston’s metropolitan areas (which included all of Columbia and Ulster counties, respectfully) had the biggest jump in net in-migration in the entire country, according to a New York Times analysis.

Posted in Demographics, Economics, Employment, NYC | 152 Comments

Is it really so bad?

From Fox Business:

Concerns over a ‘white collar recession’ grow as Goldman Sachs, Morgan Stanley, Amazon and others cut jobs

Concerns about a “white collar recession” grew Tuesday after Goldman Sachs began to lay off workers as part of a plan to cut 3,200 jobs in an effort to cut costs. 

Goldman Sachs is just the latest firm to reduce its size in recent months. Morgan Stanley announced that it would cut two percent of its staff in December, Amazon plans to cut over 18,000 jobs, and Salesforce announced it would cut ten percent of its workforce and close some offices last week.

While white collar workers were less affected by the COVID-19 pandemic lock-downs than their blue collar counterparts, many jobs were simply done remote instead of being cut, professionals are now bearing the brunt of the economic headwinds America faces. 

Goldman’s layoffs represent one of its biggest yet since the 2008 financial crisis.

“26,000 more layoffs announced today alone… from Amazon & Salesforce no less (they both have cash to weather this storm, but are taking the medicine) The white collar recession is very real & it will increase FB, Uber, MSFT, Google & Apple will all announce in Q1 I predict,” investor Jason Calacanis tweeted.

Posted in Demographics, Economics, Employment, National Real Estate | 107 Comments

Confidence improves … a little

From CNBC:

Consumer confidence in housing finally rises, thanks to falling home prices

Mortgage rates are still twice what they were a year ago, but home prices have been falling since June, and that’s finally making consumers feel better about what had been an overheated, highly competitive housing market.

A monthly housing sentiment index from Fannie Mae showed sentiment improving from November to December. The index is still lower than it was a year ago and just slightly off its record low set in October and November.

The share of respondents saying now is a good time to buy a home was still low, at just 21%, but it was up from 16% in October. The share saying now is a bad time decreased.

On selling, however, sentiment continued to drop. The share of respondents saying now is a good time to sell dropped to 51% from 54%, while the share saying now is a bad time to sell increased.

More consumers now believe home prices will fall in the next 12 months, and more also said they believe mortgage rates will come down.

Prices in November, the most recent measurement, were 2.5% lower than the spring 2022 peak, according to CoreLogic. They were still over 8% higher year over year, but that annual comparison is now half of what it was in June.

The average rate on the popular 30-year fixed mortgage hit a recent high of 7.37% in October but then fell back into the mid-6% range throughout November and into December. As of last Friday it had dropped to 6.2%, according to Mortgage News Daily.

“As we enter 2023, we expect affordability to remain the top challenge for potential homebuyers, as even small declines in rates and home prices — from the perspective of the buyer — may not produce sufficient purchasing power,” said Doug Duncan, Fannie Mae’s senior vice president and chief economist, in a release. “At the same time, existing homeowners may continue to wait to list their properties, since many have already locked in lower mortgage rates, creating minimal incentive to sell and buy again until rates are more favorable.”

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

Not even that hot…

From Insider:

The most honest man in real estate thinks the housing market isn’t going to crash

Miller is a polymath: he has guided Floridians through understanding how Miami could adjust and profit off of the influx of New York-based buyers in 2020; he’s predicted how a downtown Manhattan office-turned-condo building could cause a surplus of residences for sale that will push down sales prices in the area for years to come; and in the spring, he explained the impact of the ultra-luxury market on real estate in the bougie ski destination of Aspen, Colorado. 

His most relevant hot take right now isn’t even that hot: Miller opposes the idea that the US housing market will crash now the way it did during the Great Recession. Like many of his peers, he argues that there are too few properties on the market compared to those seeking homes for that to happen, and that the market varies too much locally. 

‘When things are bad, I say they’re bad’

His honesty has not always been welcome. 

In the years that preceded the Great Recession, he said, he had to start requiring mortgage-broker clients working for banks to pay his company before the appraisal because so many refused to pay if they did not get the valuation they wanted. 

In order to attract and keep business, other appraisers would assess properties higher than their actual value in New York City, he said. One time, he even saw a luxury condo appraised at $15 million over its actual value. 

“We weren’t morally flexible,” he said. “And that made us a pariah for mortgage brokers.” 

So Miller Samuel had to pivot away from relying so heavily on institutional players, which had made up 75% of its business. He instead started catering to individuals who needed appraisals, like private lawyers or co-op boards, to keep the company from going under, Miller said. 

Posted in Economics, National Real Estate, NYC | 87 Comments

Jobs Day!

From the NYT:

U.S. Labor Market Expected to Slow

The Labor Department’s latest reading on nationwide employment is due at 8:30 a.m. Eastern time on Friday. Forecasters expect the report to show that payrolls grew by about 200,000 in December, down from an average of 272,000 over the previous three months.

Even with the prospect of a deceleration in job creation, the resilience of the labor market has been striking. Employers’ desire to hire remained strong going into December, the Labor Department announced this week, with only a slight decline in job openings in November and a rising share of workers voluntarily quitting their jobs.

The number of people filing initial claims for unemployment insurance reached a three-month low at the end of December, as employers remained broadly reluctant to let go of staff members despite high-profile layoff announcements from large tech firms.

That mismatch between supply and demand, particularly in the service industries where compensation drives prices, has continued to heat up wage growth faster than the Federal Reserve would like to see. The Fed’s program of interest-rate increases is meant to cool the labor market, and with it, the climb in wages.

Posted in Economics, Employment, National Real Estate | 123 Comments

NJ beats the US Avg.

From the Philly Fed:

State Coincident Indexes – November 2022

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for November 2022. Over the past three months, the indexes increased in 35 states, decreased in 11 states, and remained stable in four, for a three-month diffusion index of 48. Additionally, in the past month, the indexes increased in 30 states, decreased in 13 states, and remained stable in seven, for a one-month diffusion index of 34. For comparison purposes, the Philadelphia Fed has also developed a similar coincident index for the entire United States. The Philadelphia Fed’s U.S. index increased 0.8 percent over the past three months and 0.3 percent in November.


In the three months to November, the coincident index for Pennsylvania rose 1.2 percent. The level of payroll employment increased over the past three months but remained slightly lower than that of February 2020. The unemployment rate fell during the three-month period. However, average hours worked in manufacturing fell. Overall, Pennsylvania’s economic activity as measured by the coincident index has risen 6.5 percent over the past 12 months.

New Jersey

In the three months to November, the coincident index for New Jersey rose 1.7 percent. The level of payroll employment increased over the past three months. The unemployment rate fell significantly during the three-month period. In addition, average hours worked in manufacturing remained stable. Overall, New Jersey’s economic activity as measured by the coincident index has risen 5.5 percent over the past 12 months.

Posted in Economics, Employment, New Jersey Real Estate | 164 Comments

Manhattan prices dip

From Bloomberg:

Manhattan Home Prices Slip 5.5% in First Decline Since Mid-2020

Manhattan’s homebuying market weakened at the end of last year, but didn’t foreshadow a deep freeze heading into 2023.

Co-ops and condos traded for a median of $1.1 million in the fourth quarter, a 5.5% drop from the same period in 2021, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the first year-over-year decrease in prices since sales stalled at the beginning of the pandemic, in the second quarter of 2020.

The quarter, though, doesn’t appear to be the start of a steep tumble.

“You’re going to see a modest decline in pricing over the year, but not a correction,” said Jonathan Miller, president of Miller Samuel.

Tight inventory is “underpinning” property values and keeping them from falling more dramatically, according to Miller. As is the case across the US, Manhattan sellers are reluctant to settle for discounted prices or give up the low mortgage rates they secured before the Federal Reserve began raising interest rates in early 2022.

There were 6,523 homes on the market at the end of the fourth quarter. While that’s up  5.1% from a year earlier, it’s down 16% from the previous three months, and still a low level for Manhattan.

Even as short-term comparisons might suggest that Manhattan is struggling, the fourth-quarter data show a market that’s stronger than just before the pandemic. While prices have retreated from their highs, they’re still 10% above the $999,000 median at the end of 2019, and closings totaled nearly 6% than three years ago.

“The overall narrative is more negative than it actually is,” Miller said. 

Posted in Housing Bubble, NYC | 130 Comments

Canada blocks foreigner home purchases

From CNN:

Canada is banning some foreigners from buying property after home prices surged

Canada in 2023 is closing its doors to foreign investors who want to purchase homes.

new Canadian law took effect January 1 that essentially bans foreign buyers from buying residential properties as investments for two years. The law was passed because of a spike in Canadian home prices since the start of the pandemic – and some politicians’ beliefs that foreign buyers were responsible by snapping up supply of homes as investments.

“The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors,” said the campaign website of Prime Minister Justin Trudeau’s party this past year. “This is leading to a real problem of underused and vacant housing, rampant speculation, and skyrocketing prices. Homes are for people, not investors.”

The law provides exceptions for home purchases by immigrants and permanent residents of Canada who are not citizens. 

But the steep rise in home prices in 2020 and 2021 was already reversed in 2022, well before the law took effect. Average home prices in Canada peaked just above $800,000 Canadian in February and have fallen steadily since then, dropping about 13% from that peak, according to the Canadian Real Estate Association

The Bank of Canada has been raising interest rates, resulting in higher mortgage rates in the country – just like in the United States and other countries that have been hiking rates.

CREA also expressed concern that the ban could prompt retaliation by the United States and Mexico to prohibit purchases in those countries by Canadians, especially retirees looking for winter homes away from the Canadian winter.

“Canadians purchase vacation and residential properties in many countries, but particularly in the United States,” said the group.

CREA said Canadians are the largest foreign purchasers of American properties, with more than half of the properties purchased by Canadians in Florida and Arizona. 

“These provide Canadians with a place to spend the winter months and are a form of savings for Canadian retirees,” said the group. “If Canada places a ban on Americans owning property in Canada, we should expect them to respond in kind.”

Posted in Politics | 62 Comments

Predictions 2023!

Break out your crystal ball and let’s hear ’em!

Recession / Economic

Real Estate




Posted in General | 66 Comments

Home price gains continue to slow

From the WSJ:

Home Prices Fell in October for Fourth Straight Month’

Home prices declined in October from the previous month as higher mortgage interest rates continued to weigh on home-buying demand.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, fell 0.5% in October compared with September, the fourth straight month-over-month decline.

On a year-over-year basis, the index rose 9.2% in October, down from a 10.7% annual rate the prior month.

A surge in mortgage rates this year brought an end to a pandemic-driven housing boomthat drove up sales prices and pushed many buyers out of the market. Existing-home sales fell for 10 straight months through November.

Many economists expect prices to continue to slide from their spring peaks, with some calling for year-over-year price declines in 2023. So far this year, prices are down 3% from their June highs, according to the Case-Shiller index. Prices are declining fastest in West Coast markets, such as Phoenix and Las Vegas, where from September to October they fell 1.6% and 1.8%, respectively.

“As the Federal Reserve continues to move interest rates higher, mortgage financing continues to be a headwind for home prices,” said Craig Lazzara, managing director at S&P Dow Jones Indices. “Given the continuing prospects for a challenging macroeconomic environment, prices may well continue to weaken.”

The Case-Shiller 10-city index gained 8% over the year ended in October, compared with a 9.6% increase in September. The 20-city index rose 8.6%, after an annual gain of 10.4% in September. Price growth decelerated in all of the 20 cities.

Posted in Economics, Housing Bubble, Mortgages, National Real Estate | 208 Comments

Evictions keep piling up

From the Star Ledger:

NJ continues to see backlog in eviction cases, but there are improvements

If a landlord filed to evict a tenant in Essex County this year, there’s a good chance the court hasn’t yet turned to the case.

Essex consistently records the most eviction filings in the state, the bulk coming from landlords in Newark. And after the Garden State paused most landlord-tenant proceedings for nearly two years during an eviction moratorium to keep people safely housed during the COVID-19 pandemic, and with a shortage of judges statewide, Essex now leads the state with the largest backlog of cases to sift through, at more than 15,500. 

That’s over a third of the 42,500 cases languishing statewide for more than two months, according to court data through the end of November. Hudson, Passaic and Camden counties are also slogging through a combined pileup of 14,000 cases. 

In some filings from 2020, “you need an accounting degree to figure out the amount really due and owing,” said Jose Ortiz, deputy director of Essex Newark Legal Services. Other cases involve landlords who received rental assistance, or tenants who had already moved out, and have yet to be dismissed, said Allison Nolan, senior staff attorney for Volunteer Lawyers for Justice.

And as judges trudge through the years-long backlog, the eviction filings are picking up, though not quite at pre-pandemic levels. The monthly average of 8,200 cases this year is not as high as the 12,600 that courts saw each month in 2019, but higher than 2021’s 4,000 monthly cases. Filings refer to the number of cases that landlords take to court, not the number of people removed from their homes or the number of families who move outside of the official legal process.

Posted in Economics, National Real Estate | 31 Comments

Enough slacking, get back to work

From NJ1015:

Looking for work? New Jersey is the 4th best state to get a job

There are so many people out of work across the country, it’s good to know that you can get a job in New Jersey much easier than in most other states.

With the labor force participation rate at 62.1%, one of the lowest rates in decades, WalletHub today released updated data on 2022’s States Where Employers Are Struggling the Most. If you scroll down, and farther down, and even farther down than that you’ll see that New Jersey comes in at 48 making us the 4th best state to get a job in.

The three places that came in lower than New Jersey were Connecticut, Washington, D.C., and New York.

You would figure it easier to get a job in New Jersey since we have so much diversity of offer in the workforce. No matter what you want to do or which career you’ve chosen, you can pretty much find it here.

Posted in Economics, Employment, New Jersey Real Estate | 11 Comments

Sales Plunge in November

From Reuters:

U.S. existing home sales fall for 10th straight month in November

U.S. existing home sales slumped to a 2-1/2 year low in November as the housing market continued to be squeezed by higher mortgage rates.

Existing home sales plunged 7.7% to a seasonally adjusted annual rate of 4.09 million units last month, the lowest level since May 2020, the National Association of Realtors said on Wednesday. Outside the plunge during the first wave of the COVID-19 pandemic in the spring of 2020, this was the lowest level since November 2010.

Sales have now declined for 10 straight months, the longest such stretch since 1999. They dropped in all four regions in November. Economists polled by Reuters had forecast home sales would drop to a rate of 4.20 million units.

House resales, which account for a big chunk of U.S. home sales, tumbled 35.4% on a year-on-year basis in November.

The Federal Reserve’s fastest interest rate-hiking cycle since the 1980s has had the most impact on housing. The U.S. central bank is seeking to slow unacceptably high inflation by bringing down demand for everything from housing to labor.

Reports this week showed confidence among homebuilders dropping for a record 12th straight month in December, while single-family homebuilding and permits tumbled to a 2-1/2-year low in November.

The median existing house price increased 3.5% from a year earlier to $370,700 in November. It was still the highest house price for any November and prices remain about 37% above their pre-pandemic level.

There were 1.14 million previously owned homes on the market, up 2.7% from a year ago. At November’s sales pace, it would take 3.3 months to exhaust the current inventory of existing homes, up from 2.1 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand.

Posted in Demographics, Economics, Employment, Housing Bubble, National Real Estate | 120 Comments