When do we get our recovery?

From the NY Federal Reserve:

The Region Is Struggling to Recover from the Pandemic Recession

The pandemic struck the New York-Northern New Jersey region early and hard, and the economy is still struggling to recover nearly two years later. Indeed, employment fell by 20 percent in New York City as the pandemic took hold, a significantly sharper decline than for the nation as a whole, and the rest of the region wasn’t far behind, creating a much larger hole to dig out of than other parts of the country. While the region saw significant growth as the economy began to heal, growth has slowed noticeably, and job shortfalls—that is, the amount by which employment remains below pre-pandemic levels—are some of the largest in the nation. Among major metro areas, job shortfalls in New York City, Buffalo, and Syracuse rank among the five worst in the country. Thus, despite much progress, the region is struggling to recover from the pandemic recession. By contrast, employment has rebounded above pre-pandemic levels in Puerto Rico, reaching a five-year high.

The New York-Northern New Jersey region saw particularly sharp job losses during the pandemic recession (February to April 2020), and the region has not yet caught up to the rest of the nation during the recovery. The chart below shows employment trends through the pandemic, indexed to pre-pandemic (February 2020) levels. With New York City emerging as the epicenter of the pandemic early on, the initial job loss of more than 20 percent in the downstate New York region greatly exceeded the national decline of 15 percent. Similarly, job losses in Northern New Jersey, Fairfield County, and upstate New York were greater than for the nation, at around 17-18 percent.

Posted in Demographics, Economics, Employment, New Jersey Real Estate, NYC | 73 Comments

NJ gets back to work

From NJ101.5:

As jobless benefits end, NJ sees surge in hiring

As enhanced unemployment benefits expired and tens of thousands of New Jerseyans faced the end of jobless benefits altogether, there are signs the hiring crisis is easing.

The Garden State added back thousands of jobs to the economy in November across nearly all private sectors. The unemployment rate fell to 6.6%, down 0.4%.

New Jersey Department of Labor figures show strong hiring, with 25,800 jobs added in November and 76,000 jobs over the last three months.

The best performing segments of the recovering economy in New Jersey is the professional and business service sector, which added 8,600 jobs.

Strong growth is also seen in the leisure and hospitality sector with more than 3,000 jobs added back.

Only the construction sector saw negative growth, and that is likely due to an annual seasonal fall back as well as supply chain issues with construction materials.

Despite the strong job growth, however, many private employers continue to report issues finding workers and New Jersey still lags behind much of the nation when it comes to pandemic recovery. New Jersey’s unemployment rate remains more than two full percentage points above the national rate of 4.4%.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 247 Comments

Thanks Millennials!

From the WSJ:

Millennials Are Supercharging the Housing Market

Alex and Michelle Angert lived the last years of their 20s without a permanent address. They moved out of a small Manhattan apartment in 2018 to stay in short-term rentals around the U.S. before embarking on a yearlong honeymoon to travel the world, starting in the Philippines.

When the pandemic cut their travels short last year, Mr. Angert, 31, decided to take a job in public relations in Richmond, Va. He and Mrs. Angert, who is also 31 and works at a healthcare tech company, started house hunting this spring. After losing out on multiple offers, they raised their $400,000 budget. In July, they plunked down $635,000 on a three-bedroom ranch in a tree-filled lot near a Richmond country club.

“I would have had all of these regrets in life if I didn’t travel,” Mr. Angert said. “But it feels like the right time to settle down and put down some roots.”

For years, conventional wisdom held that millennials, born from 1981 to 1996, would become the generation that largely spurned homeownership. Instead, since 2019, when they surpassed the baby boomers to become the largest living adult generation in the U.S., they have reached a housing milestone, accounting for more than half of all home-purchase loan applications last year.

The generation’s growing appetite for homeownership is a major reason why many economists forecast home-buying demand is likely to remain strong for years to come.

Posted in Demographics, Economics, National Real Estate | 303 Comments

Realtors: Just 2.9% in 2022

From Fortune:

How much 2022 home prices are forecast to shift in each of America’s 100 largest markets

It’s official: The rate of U.S. home price growth is finally beginning to decelerate after 16 consecutive months of price acceleration. 

That deceleration could be the start of a bigger cooldown. At least that’s what Realtor.com, a real estate listing site owned by News Corp., is forecasting. By the end of 2022, the site is predicting U.S. home values will climb just 2.9% as rising mortgage rates take some steam out of the market. That would represent both the smallest annual uptick since 2012 and also a big-time slowdown from the 19.5% U.S. home price jump posted in the S&P CoreLogic Case-Shiller Index from September 2020 to September 2021.

That said, buyers and sellers alike shouldn’t necessarily expect Realtor.com’s forecast of 2.9% home price growth in their local market. Separate from its national forecast figure, Realtor.com also modeled predictions for year-over-year home price changes in the nation’s 100 largest housing markets. Those projected growth rates vary from 10% in Portland, Maine, to 0.2% in Honolulu. The former represents a bullish market that would look a lot like the 2021 frenzied landscape, while the latter would be a margin of error away from seeing prices fall.

Joining Maine’s largest city in the bullish camp are markets like Providence, R.I. (forecast to jump 9.5%); Salt Lake City (8.5%); Worcester, Mass. (8.2%); Boise (7.9%); Palm Bay, Fla. (7.9%); Stockton, Calif. (7.8%); Spokane, Wash. (7.7%); Boston (7.5%); and Seattle (7.5%) rounding out the top 10. Many of these markets, like Boise and Portland, have seen an inflow of remote workers during the pandemic looking to escape high-cost markets like San Jose. That trend, Realtor.com says, is likely to continue to shake up the market in 2022.

Posted in Economics, National Real Estate | 81 Comments

Prognostication Season

From HousingWire:

Will the housing market continue its hot streak in 2022?

1. Demand will continue to be strong into 2022.

The first signal we look at to forecast the strength of the housing market is days on market – how fast are homes moving? Right now, we’re seeing a median of 49 days on market and climbing, as it normally does this time of year. A typical December would see market time at 85-100 days, so you can see from the chart that demand is staying elevated later in the year, which is a bullish sign for next year.

Due to the strong seasonal patterns, I predict days on market will hit a low of 21 days in April, tying the record-fast market times from earlier this year.

2. Low inventory will continue to be a major issue.

Unfortunately for all these eager homebuyers, inventory continues to be at record low levels. We are currently at just over 350,000 single-family homes on the market. You can see from this chart that inventory has been on a downward trajectory for years, and recent strong demand has only accelerated this trend. You can also see that it’s normal for inventory to drop at this time of year, but it’s actually declining faster than I expected even a few weeks ago, which indicates that we’ll start 2022 with record- low levels of available inventory, even less than in 2021.

At this point, it looks like we’re going to end the year at just under 300,000 single-family homes for sale. If we’re lucky, we’ll start getting greater inventory in the housing market in February, then it’ll start climbing and be at a more normal curve next year, but we’re still miles away from a normal level, with no indication that we’ll return to our usual million homes anytime soon.

3. Home prices will remain high into 2022.

With demand showing no signs of cooling and record-low inventory, I expect home prices to remain high into next year. The median home price for single family homes this week is $375,000, which is about 10% higher than last year and where we are likely to end the year.

Posted in Economics, National Real Estate | 81 Comments

Would someone please think of the $550k a year families. They are not rich.

From the Star Ledger:

96% of N.J. residents would get their full property tax break restored under this Senate plan

Efforts to restore the full federal deduction for state and local taxes have run into opposition from some Senate Democrats who want to limit the tax break to middle-class taxpayers.

One possible compromise circulating on Capitol Hill would do just that — and it would cut taxes for 96% of New Jerseyans, according to a recent study.

Under the proposal, taxpayers making up to $400,000 would be able to deduct up to $80,000 in state and local income and property taxes. The $80,000 figure is included in the House-passed 10-year, $1.75 trillion social spending bill, with no income limit.

In New Jersey, that proposal would give 91% of the benefits to those making $400,000 or less and the remainder to those making between $400,000 and $475,000. Under the House-passed provision, 44% of the benefits would go to those making $400,000 or less, 8% to those making between $400,000 and $475,000, and the remaining 48% to those making more than $475,000.

Menendez, for example, has suggested setting the income limit for increasing the deduction for state and local taxes at $550,000 rather than $400,000.

“I’m pretty much where I’m going to be,” he said. “If you’re in New Jersey and you’re making 550, you’re not rich. Those families should be taken care of.”

Posted in Economics, Employment, New Jersey Real Estate, Property Taxes | 224 Comments

Zillow predicts the future

From Zillow (not that they are ever right on anything):

Zillow’s Hot Housing Takes for 2022

2022 will fall just short of record-breaking

Sellers keep the upper hand

Large rentals will be in high demand

The ‘Sun Belt surge’ will extend to secondary markets

More Gen Zers and millennials will buy a ‘second home’ before a primary residence

No end in sight for the renovation boom

Work will play a key role in moving decisions

New construction gains will only be a drop in the bucket, despite best efforts of builders

Posted in Demographics, Economics, National Real Estate | 178 Comments

Are they really?

From NJB:

Despite Labor Issues, Companies are Still Eyeing NJ, Panelists Say

According to the U.S. Bureau of Labor Statistics, October marked the tenth consecutive month of nonfarm job gains in New Jersey. The state’s private sector employers added more than 38,000 jobs during the past two months, and overall, New Jersey has now recovered 512,900 jobs, or about 72%, of the number of jobs lost in March and April 2020 due to the impact of the COVID-19 pandemic.

Despite these gains, there does remain a disconnect when it comes to the state’s unemployment rate, which currently sits at 7%, well above the national average of  4.6%, and the number of job openings in the state, of which there are approximately 300,000.

There are a host of reasons as to why people aren’t going back to work, including child care concerns and now-expired unemployment benefits, but the overall feeling among panelists at the New Jersey Business & Industry Association’s (NJBIA) 2022 Public Policy Forum is that over time, more people will end up reentering the workforce as the state continues to recover from the effects of the pandemic.

“There is still a level of optimism,” said Choose NJ President and CEO Jose Lozano, during a panel discussion at NJBIA’s Public Policy Forum, held at the Delta Hotels by Marriott Woodbridge. “We still have a significant number of companies coming to New Jersey, and still hiring and adding more jobs.”

He said that New Jersey’s well-documented benefits such as its desirable location and highly educated workforce remain attractive to companies despite the state’s current unemployment rate, and, more importantly, its high taxes.

“This region is still the choice region for international companies looking to expand into the US,” Lozano said. “Companies are looking to build the workforce of tomorrow, and the workforce of tomorrow really values some of the things that we in New Jersey take for granted, such as being a great place to raise a family and great school systems.”

Posted in Economics, Employment, New Jersey Real Estate | 252 Comments

$931,698 – What the average NJ resident will pay in taxes over their life

From NJ101.5:

New Jersey residents pay the most taxes over a lifetime

The governor downplays it and the media, the PR arm of the Democrat Party, seem to ignore it. Taxes are and have been the biggest concerns of most informed adults in New Jersey for generations. So, when a recent poll came out that points out the fact that taxes are the biggest problem facing the state, most of us without our heads up our asses, said “duh!

In New Jersey, we have a giant, well-funded bureaucracy. Government is just too big in this state. The problem with reducing it now, is that most families have at least someone who is connected to it. So many people want to keep the gravy train going for their mom, dad, son, or daughter and vote for the party of big government, Democrats.

They have a majority in both the assembly and senate that will probably never be overcome. Now we are in a period that we will even elect Democrat governors who promise to raise taxes and thumb their noses at the constituents who complain about it. The big tax that hurts the most and drives so many people out of the state is property taxes. The biggest chunk of that tax goes to pay for public schools, about 70-75%.

In New Jersey we have two sets of people. The people who work to pay taxes to feed the machine, and people who make up the giant machine that can’t be satisfied unless taxes go higher and higher. The tax burden is more than just property taxes. We here in New Jersey will pay more taxes than any other state over a lifetime. Some people benefit greatly from those taxes and most of us just suffer through it because we love this state.

Posted in Economics, New Jersey Real Estate, Property Taxes | 86 Comments

You load 16 tons, what do you get?

From the Star Ledger:

Hudson River rail tunnel gets green light from the feds to start building it

A major and final bureaucratic hurdle has been cleared by the Gateway Tunnel project after the U.S. Army Corps Of Engineers issued a permit to allow construction of the tunnel and tracks through the Meadowlands and under the Hudson River.

The permit was announced Wednesday morning that allows construction of the $12.3 billion project to build two new tunnels and rehabilitate the exiting 111-year old tunnels to start in summer 2023, once funding is secured.

The tunnel increases capacity allowing more trains to be sent to and from Penn Station, opening up access to NJ Transit lines that don’t go to New York. The tunnels are a key part of Amtrak’s high speed rail and Northeast Corridor upgrades. It would end delays due to infrastructure problems with the old tunnels built in 1910.

Gov. Kathy Hochul said the tunnel was important for the economic vitality of New York, which produces 20% of the nation’s gross domestic product.

“The Gateway project will help support the economic prosperity of New York and the rest of the country for years to come, which is why we need to get this project right and get it moving,” she said in a statement.

Construction of new tunnels and rehabilitation of the existing tunnels is estimated to be completed in 2035, GDC officials said in November.

Posted in Demographics, Economics, Employment, New Jersey Real Estate, NYC | 259 Comments

Paying taxes in the Sunshine State

From the Star Ledger:

With no SALT deduction, should I move to Florida?

There’s no question that taxes across the board are high in New Jersey when compared with other states, and that most taxes in Florida are lower.

To begin with, Florida has no state income tax, while New Jersey imposes a gross income tax that ranges from 1.4% to as high as 10.7% on taxable income over $1 million, said Gene McGovern, a certified financial planner with McGovern Financial Advisors in Westfield.

New Jersey also has some of the highest property taxes in the nation, he said.

Florida, however, while less expensive, still ranks 18th out of 50 states in property taxes as a percentage of median income, he said.

McGovern said New Jersey’s sales tax is actually slightly less than in Florida.

“Florida imposes an average combined state and local sales tax rate of about 7% compared with New Jersey’s 6.625%. Note also that Florida taxes clothing purchases while New Jersey doesn’t,” he said.

Then, gasoline taxes in Florida are about 7 cents a gallon less than in New Jersey.

“So, to paraphrase Governor Murphy, if taxes are your only consideration, maybe New Jersey isn’t the state for you,” McGovern said.

But let’s take a moment to look at the other side of the New Jersey tax coin before turning to your question.

To begin with, New Jersey doesn’t tax Social Security benefits at all. They’re tax-free here, he said.

Moreover, New Jersey recently expanded its tax exclusion for pension and retirement income, effective for the 2021 tax year. Under the new rules, if you’re 62 or older and your total income is $150,000 or less, you can exclude all or part of your pension, annuity, and IRA withdrawals from being taxed, based on your income.

Many New Jersey retirees, then, are eligible to pay little or no state income tax, he said.

In terms of property tax relief, New Jerseyans who are 65 or older and have total income that doesn’t exceed $92,969, as of 2020, are eligible for the Senior Freeze, which reimburses eligible senior citizens and disabled persons for increases in the property tax on their principal residence, he said. The income limit is adjusted upward each year.

Finally, New Jersey abolished its estate tax as of 2018 and has no gift taxes.

Posted in Demographics, Economics, New Jersey Real Estate, Property Taxes | 166 Comments

Even when they are down they are up

From CNBC:

Home price gains slow down for the first time since May 2020

Home prices are still considerably higher than they were a year ago, when the pandemic caused a massive run on housing, but the gains are finally starting to ease up.

Home prices rose 19.5% in September year over year, down from a 19.8% annual gain in August, according to the S&P CoreLogic Case-Shiller National Home Price Index. That is the first decrease in the annual gain since May 2020.

The 10-city composite rose 17.8% from a year ago, down from an 18.6% gain in August. The 20-city composite gained 19.1% year over year, down from 19.6% in the previous month.

Cities with the highest price increases were Phoenix, Tampa, Florida, and Miami. Phoenix prices were up 33.1% year over year, Tampa up 27.7% and Miami up 25.2%. Six of the 20 cities reported higher price increases in the year ended in September 2021 versus the year ended in August 2021.

Chicago, Minneapolis and Washington, D.C., saw the smallest annual price gains, but the increases were all still more than 10%.

Posted in National Real Estate | 150 Comments

Hiring Stalemate in NJ

From NJBIZ:

NJBIA survey: 3 in 4 NJ employers faced hiring shortages this year

Despite waning fears about the COVID-19 pandemic, three out of every four employers said they’ve struggled to find workers this past year, and many said they’re pessimistic about the year ahead, according to the New Jersey Business and Industry Association’s 63rd annual Business Outlook Survey.

The organization also found that 28% of respondents said they plan to sell their business or cease operations due to the pandemic restrictions and cuts to both revenue and staffing. Some were more optimistic: 37% said they did not plan to make any changes and another 31% has adopted a wait-and-see attitude.

“[T]here is no question that the continued challenges are wearing down some business owners,” despite “incredible resolve” many have shown since the pandemic started, NJBIA President and CEO Michele Siekerka said in a Nov. 29 statement.

The survey found that 73% of the 601 business owners interviewed faced problems finding new workers. Many prospective workers – 57% – simply did not show up for their interviews, while 49% opted to stay unemployed and 46% canceled their interviews.

Of those three out of four businesses, 57% reported higher burn-out among current staff, 51% noted a loss in revenue and 50% said they reluctantly had to raise wages to lure in workers.

Seventy-two percent of New Jersey businesses raised wages this year and 73% expected to do so in 2022. Just 24% of employers did not offer a raise this year and 25% did not expect to do so next year.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 127 Comments

NJ is the state for them!

From Patch:

Every NJ Town’s Average Property Tax Bill In New 2021 List

Tavistock Borough, Camden $30,328

Millburn Township, Essex $24,370

Mountain Lakes Borough, Morris $21,625

Tenafly Borough, Bergen $21,552

Demarest Borough, Bergen $21,377

Glen Ridge Borough, Essex $21,214

Rumson Borough, Monmouth $21,153

Alpine Borough, Bergen $21,042

Essex Fells Borough, Essex $20,413

Princeton, Mercer $20,352

Montclair Township, Essex $19,963

Mendham Township, Morris $19,794

Mantoloking Borough, Ocean $19,304

South Orange Village Township, Essex $19,147

Deal Borough, Monmouth $19,117

Upper Saddle River Borough, Bergen $18,886

Ridgewood Village, Bergen $18,506

Summit City, Union $18,314

Haworth Borough, Bergen $18,270

Saddle River Borough, Bergen $18,210

Posted in Economics, New Jersey Real Estate, Property Taxes | 101 Comments

Thankful for profit$

From Forbes:

Home Prices Hit Record High, Giving Sellers Much To Be Thankful For

Home prices hit an all-time high of $359,975 in the four-week period ending November 21, according to a new report from Redfin, a technology-powered real estate brokerage. This was up 14% year over year, the largest increase since early September.

Prices have risen in the past month nearly four times faster than they did at the same time last year. The unseasonable surge in home prices appears to be drawing in more sellers, as the number of homes listed for sale was down less than 3% from 2020 and up 11% from 2019.

“Rising rents and rising prices on everything from gas to groceries may be motivating more people to buy homes now,” said Redfin chief economist Daryl Fairweather. “Buying a home is a type of hedge against inflation, especially with mortgage rates still near historic lows. If high inflation persists, a large home mortgage could seem a lot less expensive in just a few years.”

Posted in Economics, National Real Estate | 83 Comments