Silk City is Hot

From the Record:

Gentrification or growth? Why Paterson is hot for real estate buyers and investors

Zaib Atyat purchased his first home in Paterson 20 years ago for $250,000. The three-family unit on the city’s south side offered a steady source of rental income and has progressively increased in value. Based on online calculators, Atyat, 47, estimates that his real estate investment is worth about $650,000 now. 

“When I moved here, there was a lot of crime. Cars were stolen at night,” the immigrant from Jordan recalled. He lived near Paterson’s former Alexander Hamilton Public Housing Project, also known as Alabama Project, before buying a home.   

From its past marred by urban blight, Paterson is emerging as a hot spot for real estate investment. Two of the city’s ZIP codes are among the fastest-appreciating areas for real estate sales in North Jersey, according to Zillow data between February 2020 and June 2021. The meteoric rise of Paterson’s two hot ZIP codes — 07501 and 07522 have seen appreciation of 32% and 26%. respectively — illustrates the shift in housing demands since the start of the COVID-19 pandemic last year.  

“You had Hoboken, Edgewater, now Paterson,” said Paterson Mayor Andre Sayegh. “We believe we are the new frontier.”

Paterson is close to New York City and near a number of highways, and it offers great diversity, Sayegh said. People are moving to Paterson because they are being priced out of New York City and other areas of North Jersey, he added.

The average rent price is $1,414 in 2021, 3% more than in 2020, according to, with the average size of the apartment being 724 square feet.

“What we know as growth we recognize as a push out,” Imani said. “Working-class people are being pushed out.”

Sayegh doesn’t view the development as a push out or gentrification. The people who are moving into the city are immigrants: Dominicans, Palestinians and Bengalis, he said. They are being priced out of other areas, such as New York. The median household income in Paterson in 2019 was $41,350. Paterson saw apopulation growth of 9%, according to the 2020 census.  

Posted in New Development, New Jersey Real Estate | 125 Comments

Sales down, prices up..

From Redfin:

Home Sales Fell 6% in August, the First Annual Decline in 15 Months

However, home prices were up 16%, and new listings posted their first year-over-year decline since February, which could signal a tightening market.

The median price of homes sold in August was $380,271, up 16% from a year earlier, the lowest growth rate since February. August marked the 13th consecutive month of double-digit price gains.

“When it comes to home prices in this market, what goes up stays up,” said Redfin Chief Economist Daryl Fairweather. “That’s especially true in the Sun Belt; home prices are up more than 20% from last year in Austin and Phoenix. Even with these steep increases, homes in these areas are still relatively affordable, so these and other hot migration destinations are going to continue to attract homebuyers from the coasts. As workers change jobs en masse and enhanced unemployment benefits come to an end, we could see even more households relocate for affordability in the coming months.”

Median sale prices increased from a year earlier in all but two of the 85 largest metro areas Redfin tracks: Milwaukee, WI (-1.6%) and Bridgeport, CT (-1.1%). It is worth noting that both of these metro areas had already seen significant price gains a year ago, with prices up 14% and 30% respectively in August of 2020, compared to a 11% gain nationally. So they may have overheated last year, and prices have moderated since, leading to a slight decline in the latest data.

The largest price increases in August 2021 were in Austin, TX (+36%), followed by Phoenix (+25%) and Salt Lake City (+24%).

Seasonally-adjusted home sales in August were down 6% from a year earlier, the first annual decline in 15 months. They were also down 1.4% from July. Compared to August 2020, home sales fell in 44 of the 85 largest metro areas Redfin tracks. The biggest sales declines were seen in New Orleans (-23%), Salt Lake City (-16%) and Warren, MI (-14%). The largest gains were in places where sales were still somewhat depressed in August 2020, including New York (+65%), Honolulu(+47%), and Nassau County, NY (+32%).

Posted in Economics, Housing Bubble, National Real Estate | 136 Comments

Never bet against NYC

From Bloomberg:

New York City Has Once Again Defied the Doomsayers. Here’s Why.

New York City is emerging as one of the world’s most resilient big cities in the wake of the pandemic. The secret to its success is more than just its size — it’s the Big Apple’s model of urbanism that offers something no other American metropolis can match.

New York was the first big city in the country to be hit hard by Covid-19. Immediately, people began predicting that the pandemic would trigger a backlash against dense urban living. A wave of murder and violence that followed the mid-2020 Black Lives Matter protests  added weight to this glum forecast — the end of America’s urban revival was at hand. 

For some cities like San Francisco, the exodus does seem real — at least for now. But Gotham defied the doomsayers in spectacular fashion. An analysisof cell phone data showed that more people moved to the New York City metropolitan area during the pandemic than moved out. Young people are especially eager to move in.

In fact, recent data shows that the appeal of New York has been vastly understated over the past few years. Mid-decade U.S. Census estimates during the 2010s had shown the city’s population peaking and beginning to fall, but when the official 2020 Census numbers came in, it turned out that New York had actually been gaining population. So much for that mass exodus. 

How did New York City remain such a popular destination despite all its formidable challenges, and despite the fact that it isn’t in the booming Sun Belt? Economists’ go-to explanations are called agglomeration and industrial clustering effects:  basically, big cities tend to stay big, and rich cities tend to stay rich. New York is the home of many high-value industries, among them finance and publishing. Those industries keep a large, well-educated population of knowledge workers in the area, which draws in other companies — most recently, tech firms.

Posted in General | 216 Comments

Impact or not?

From the Philly Voice:

U.S. housing market faces ‘shock’ from end of mortgage forbearance — but no bubble, experts say

Pandemic policies have undoubtedly shaped the way the U.S. housing market has functioned throughout the health crisis, which has had countless ripple effects across different industries and walks of life.

In the housing market, the most obvious headlines of the pandemic have been the soaring sale prices, bitter competition, vacation home boom and limited inventory of starter homes.

Less often discussed is the impact of the federal government’s mortgage forbearance program, which has allowed homeowners to pause payments during the crisis. At its peak, more than 7.2 million homeowners were in the program, but the nation’s economic recovery helped give most of them the breathing room to organize a plan, whether it meant modifying a loan, selling to take advantage of the market or waiting out the storm for as long as possible.

At the beginning of October, the Biden administration has signaled strongly that it will let the program lapse after several extensions were made. And that’s a big deal for the roughly 1.7 million borrowers who remain enrolled.

Many of these homeowners, depending on their circumstances, may ultimately be forced or opt to sell their property while they still believe they can get an above-market deal. If short supply is one of the main drivers of the 17.2% increase in median home prices over the last year, then this influx of homes could have a noticeable impact, even if only modest, according to Fortune.

During the recent summer months, U.S. housing inventory already has climbed in small increments and a mild cooling effect has been seen across the market. Those who have been holding out for more normalcy and who aren’t willing to pay a premium for a home right now may be aided by an anticipated increase in homes that become available due to the end of mortgage forbearance.

Posted in Economics, Mortgages, Politics, Risky Lending | 112 Comments

Boom or bubble

From CNBC:

Here’s why experts believe the U.S. is in a housing boom and not a bubble

The U.S. housing market has been an unlikely beneficiary from the Covid-19 pandemic.

During the pandemic, home prices have climbed at a record pace. The median price for an existing home reached over $363,000 in June 2021, a 23.4% year-over-year increase.

“You can see in just basically the last 15 months or so, we’ve seen a dramatic acceleration in home price growth to levels we haven’t seen in decades,” CoreLogic chief economist Frank Nothaft said.

However, according to most experts, the market is shaping up to look more like a boom rather than a bubble.

“We say bubble because we can’t believe how much prices have gone up,” CNBC real estate correspondent Diana Olick said. “A bubble tends to be something that’s inflated that could burst at any minute and change and that’s not really the case here.”

Posted in Housing Bubble, National Real Estate, New Development | 381 Comments


From Thomas Franklin at the Bergen Record:

Posted in General | 82 Comments

Clear to close? Think again.

From Inman:

Ida flooding could jeopardize 47,000 home sales in NY and NJ

Devastating flash floods in New York and New Jersey in the aftermath of Hurricane Ida could delay or derail as many as 47,000 pending real estate transactions valued at more than $19.4 billion in those states alone, according to an analysis by ClosingCorp.

ClosingCorp.’s analysis looked at mortgage applications currently being processed by more than 200 lenders in 35 counties in New York and New Jersey that had been expected to close by the end of year.

New Jersey was hit harder than New York, with 30,462 transactions worth $10.7 billion in jeopardy. There were 17,019 transactions worth $8.7 billion at risk in New York, ClosingCorp said.

At the county level, Suffolk County, New York has the most transactions at risk, totalling $1.4 billion, followed by Kings County (Brooklyn), ($1.3 billion) and Bergen County, New Jersey ($1.3 billion).

In federal disaster areas, lenders will typically hold off on funding loans until appraisal re-inspections have been performed. If storm damage reduces a home’s valuation, that can prevent a sale from closing at the agreed upon price.

Posted in Mortgages, New Jersey Real Estate, Risky Lending | 196 Comments

Maybe some gentrification isn’t so bad?

Interesting piece from VOX:

What we talk about when we talk about gentrification

In his 2019 paper “Hoboken Is Burning: Yuppies, Arson, and Displacement in the Postindustrial City,” Princeton historian Dylan Gottlieb documented the violent displacement Puerto Rican residents faced between 1978 and 1983 as the city of Hoboken, New Jersey, gentrified. As thousands of young professionals flooded into Hoboken, the potential sale or rent price for converted units rose precipitously, and “property owners faced powerful incentives to displace low-income tenants.” 

As a result, “nearly five hundred fires ripped through tenements and rooming houses in the square-mile city,” Gottlieb writes. “Most [displaced residents] never returned to Hoboken. Nearly every fire, investigators determined, had been the result of arson.” In sum, 55 people died and over 8,000 were made homeless. 

Today, this sort of violent displacement is not what most people mean when they talk about gentrification. But what, exactly, they’re talking about is less clear, and the muddled debate often produces muddled policy goals.

Posted in Demographics, Economics, National Real Estate, New Development | 197 Comments

Nothing in between

From NPR:

The Housing Shortage Is Significant. It’s Acute For Small, Entry-Level Homes

America’s roaring real estate boom is leaving millions of would-be homebuyers out in the cold. The problem is most severe in that corner of the market that once propelled the American dream: the small entry level home. 

“I would like to a have a space with a yard, like 900 square feet,” says Mat Pergens, 39, who repairs and installs garage doors in and around Reno, Nevada. “Simple cabinets, simple countertops, Shag carpeting. I don’t care. I just want four walls and a roof that I can afford.”

But his aspiration for a modest starter home is completely out of reach. The country is nearly 4 million homes short of demand, according to the mortgage giant Freddie Mac.

Pergens and his wife Amanda have a six-year-old daughter and another child due this month. She stopped working as a pastry chef during the pandemic. They rent a small two-bedroom apartment. “We build all these fancy homes,” Pergens says. “Fancy, fancy houses…and low income apartments. And there’s absolutely nothing in between.” 

That no-frills entry level home that Pergens describes is just about vanishing in America. Once it was the stepping stone on a path to upward mobility for a huge swath of younger Americans. In 1982, 40% of the country’s newly constructed houses were entry level homes. By 2019, the annual share had fallen to around 7%. 

With a few brief exceptions, the decline has been as steady as a metronome, says Sam Khater, Freddie Mac’s chief economist. “It’s a huge problem if you think about the fact that home equity accounts for the bulk of wealth for the overwhelming majority of Americans.”

Posted in Economics, National Real Estate, New Development | 60 Comments


From CNBC:

Soaring home prices shattered another record in June, S&P Case-Shiller says

Home prices rose 18.6% annually in June, up from the 16.8% increase in May, according to the S&P CoreLogic Case-Shiller national home price index.

That is the largest annual gain in the history of the index dating back to 1987. Prices nationally are now 41% higher than their last peak during the housing boom in 2006.

Unlike other median price surveys, which can be skewed by the type of homes selling, this measures repeat sales of similar homes over time.

The 10-City composite rose 18.5%, up from 16.6% in the previous month. The 20-City composite was up 19.1%, up from 17.1% in the previous month.

Phoenix, San Diego, and Seattle reported the strongest price increases of the 20 cities. Prices in Phoenix increased 29.3% year-over-year. In San Diego they rose 27.1%, and in Seattle they were up 25.0%. All 20 cities reported higher price increases in the year ending June 2021 versus the year ending May 2021.

“The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI. “In June, all 20 cities rose, and all 20 gained more in the 12 months ended in June than they had gained in the 12 months ended in May.”

Prices in just about every city in the 20-city index, except for Chicago, are at all-time highs, he said, as are the national composition and the 10- and 20-city indices.

Posted in Housing Bubble, National Real Estate | 265 Comments

Pending home sales dip

From MarketWatch:

Pending home sales slide for second month in a row — even though economists predicted an increase

Fewer Americans signed on the dotted line in July to purchase a home — but it’s likely too early to say whether that’s a signal of a cooling market.

Pending home sales fell 1.8% in July compared with June, the National Association of Realtors reported Monday. Economists polled by MarketWatch had projected a 0.5% increase for pending home sales in July.

Compared to last year, there was an even more significant decline in pending home sales, with an 8.5% drop.

On a regional basis, only the West saw an improvement in contract signings, with a 1.9% monthly increase. The Northeast experienced the largest monthly decline of any region, with a 6.6% drop from June. Every region saw pending home sales decrease on an annual basis.

“The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers,” Lawrence Yun, chief economist for the National Association of Realtors, said in the report. “That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months.”

Posted in Economics, National Real Estate | 54 Comments

Lowball! is Back!

From the NY Post:

Here’s why a bonkers $39M NJ mansion just sold for a measly $4.6M

You thought those friends who snagged a Catskills farmhouse just before all hell broke loose in March 2020 were getting a deal?

Well, in Englewood, New Jersey, the resplendent “Gloria Crest” mansion — once one of the Garden’s State’s most expensive listings at $39 million in 2013 — just closed for a mere $4.6 million, a staggering 88% reduction from its original asking price. 

It took a rotating cast of brokers and years of price drops — $25 million in 2014, $24 million in 2015, $12 million in 2018 and even $9.99 million in 2019 — to close the deal.

So what gives?

Built in 1926 for Stefan Poniatowski, a man who said he was Polish royalty, 83 N Woodland St. is a sprawling eight-bedroom estate with some 24,000 square feet in which to frolic like you’re Gatsby.

The handsome pile of private lakefront architecture — with a marble foyer, a jaw-dropping staircase, home theater, gym, an infinity pool and chef’s kitchen — was purchased by Edward Turen, CEO of Control Equity Group, for $4.8 million in 2000.

“The estate is stunning and grandiose, but it’s definitely not for the faint of heart. My favorite thing about it is the history,” said Pais. “When you first step in, you feel like your time traveling into a different era.”

Posted in Lowball | 46 Comments

Great time to be a landlord in NJ

From the Record:

Tangled relationship: Renters stop paying amid pandemic, forcing small landlords into bind

Elena Walczyk had a buyer lined up to purchase the mobile home in Cape May County that she and her husband had rented out for years. But when Walczyk, 59, gave her tenant notice to terminate their lease about four months ago, the tenant stopped paying her $350 monthly rent and water bills, Walczyk said, estimating the renter now owes more than $2,100. 

As a result, Walczyk had to borrow approximately $1,000 from her 86-year-old mother to make her property tax payments, utilities and insurance on time, something she said is “unacceptable.”

Since March 2020, New Jersey banned evictions in order to keep families safe and housed even if they weren’t able to make rent payments, especially as Garden State businesses experienced mass layoffs in the wake of government-mandated business closures. Walczyk’s renter said she lost her retail job after the pandemic started.

But these protections left many small landlords without income and struggling to cover costs due. Towns didn’t give landlords a property tax holiday: If they didn’t make their scheduled payments, homeowners risked penalties or liens on their properties.

New Jersey is relying on distributing rental assistance to landlords to make them whole, but the process has been slow: Since the end of July, agencies passed out less than 25% of the more than $1 billion allocated by the federal government.

And to receive rental assistance, landlords need tenants to cooperate and sign off on the application, something several landlords told their tenants refused to do.

Posted in New Jersey Real Estate, Politics, Property Taxes | 147 Comments

What now for NJ unemployed?

From the Star Ledger:

Murphy won’t say if N.J. will extend pandemic unemployment benefits, affecting 500K residents

With approximately 500,000 New Jerseyans set to lose pandemic unemployment benefits after the first week of September, Gov. Phil Murphy won’t say if he will extend the federal payments.

At his Monday coronavirus briefing, Murphy said he had “no news” about the prospect of extending benefits.

President Joe Biden last week said states with unemployment rates that are higher than the national average — 5.4% — could use COVID relief funds to extend benefits beyond the Sept. 4 expiration date.

New Jersey’s unemployment rate is 7.3% and it received $6.2 billion in federal funds from the $1.9 trillion American Rescue Plan.

Without an extension, three federal programs will end.

About 250,000 New Jerseyans are currently receiving Pandemic Unemployment Assistance (PUA), the Labor Department said. The program gives benefits to people who wouldn’t normally qualify for traditional unemployment, including gig workers and the self-employed.

Another 190,000 people receive Pandemic Unemployment Emergency Compensation (PUEC), which adds 13 weeks of benefits for people who exhaust their regular payments. But of those, about 100,000 people will be moved onto a different extended benefit program, the Labor Department said.

In all, about 500,000 people have been receiving an additional $300 per week supplemental payment, but that will also end on Sept. 4.

Posted in Economics, Employment, New Jersey Real Estate | 216 Comments

Cool? Or prelude to Crash?

From CNN:

The US housing market is starting to cool off — a bit

The housing market is showing signs of cooling off.Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — were up 2% in July from the month before, marking two consecutive months of increases, according to a report from the National Association of Realtors. 

The number of available homes for sale also rose a bit in July, relieving some of the pressure on buyers. And while home prices still climbed year-over-year, they did not top recent record levels, the report found.

“There has been a turn in the market from super heated to still very strong,” said Lawrence Yun, NAR’s chief economist.

A consistently tight supply of inventory has pushed home prices higher over the past year, but that picture is improving slightly, said Yun. The inventory of unsold homes increased 7.3% from June to July, but it was still down 12% from a year ago, NAR reported. Unsold inventory is at a 2.6-month supply at the current sales pace. A balanced market is about a 6-month supply of homes.

“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Yun. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”

The median price for an existing home in July was $359,900, up 17.8% from a year ago and marked 113 straight months of year-over-year gains. But the price jump for July is down from increases of 20% or more that were occurring in the market over the past year.

Posted in Housing Bubble, National Real Estate | 47 Comments