Jamie says all clear on the housing front

Posted on March 29, 2012 by grim

From CNBC:

Improving Housing Market Driving Economy: Jamie Dimon

The U.S. housing market is very close to a bottom and there are already signs its improvement is giving a boost to the overall economy, JPMorgan Chase CEO Jamie Dimon told CNBC Wednesday.

“I believe we’re very close to the inflection point. People look at prices that are still coming down but all the other signs are flashing green,” Dimon said during a job fair in New York for hiring veterans.

Housing is more affordable and “the shadow inventory everyone talks about is lower today than it was 12 months ago. It will be a lot lower 12 months from now,” he said.

Distressed inventory “is actually coming down, not going up. Homes for sale are about half what they were four years ago. You could come up with a pretty bullish case. If the economy grows, housing gets better, quicker.”

He said the U.S. economy is “getting stronger all the time. It’s broad-based, companies are in great shape…Consumers are in great shape.”
…
Dimon believes the threat of a double-dip recession is behind us.

Posted in Economics, Housing Recovery, Humor | 116 Comments

Turning the corner or hanging off the edge?

Posted on March 28, 2012 by grim

From the Record:

Area’s home prices drop 2.9% in January

Despite signs of an economic recovery, home prices nationally and in the New York metropolitan area, including North Jersey, continued to slide in January, the Standard & Poor’s Case-Shiller index reported Tuesday.

Home values in the region dropped 2.9 percent from January 2011 to January 2012. Nationally, home prices dropped 3.8 percent.

“Prices collapsed between 2007 and 2009, have been mostly inching down ever since, and signs of a turnaround are nowhere in sight,” said Patrick Newport, an economist with IHS Global Insight. “Our view is that foreclosures, excess supply, and weak demand will drive home prices down at least another 5 percent.”

Home prices in the region have dropped 25 percent since the market peak in mid-2006, and are now at the levels of late 2003. Nationally, home prices have declined an average 34 percent and have returned to early 2003 levels. In four metropolitan areas — Atlanta, Cleveland, Detroit and Las Vegas — home values are now below their levels in 2000.

The report came a day after East Brunswick appraiser Jeffrey Otteau said that the New Jersey spring home-buying market will be the busiest in four years — though he also predicted that home prices will remain flat this year.
…
In Passaic County, the median price was $243,619, down 11 percent from a year earlier, while the number of sales rose 33 percent.

From Bloomberg:

Home Prices in U.S. Cities Fell at Slower Pace in January

Home prices in 20 U.S. cities dropped at a slower pace in January, pointing to stabilization in the real estate market.

The S&P/Case-Shiller index (SPX) of property values in 20 cities fell 3.8 percent from a year earlier, matching the median forecast of 32 economists surveyed by Bloomberg News, after decreasing 4.1 percent in December, a report from the group showed today in New York. Prices were little changed in January from the prior month, the best performance since July.

Property values are steadying as a strengthening labor market underpins housing demand, which may allow the industry that precipitated the recession to contribute to growth this year. Nonetheless, the recovery in sales may be restrained by foreclosures that are putting more properties onto the market.

“We are starting to see a slightly less-negative picture,” said Sean Incremona, a senior economist at 4Cast Inc. in New York, who correctly projected the decline. “We have seen some slight progress from very depressed levels, but there’s still a long, long way to go.”

From the WSJ:

S&P Case/Shiller: Home Prices Back to 2003 Levels.

Home prices continue to tumble, according to S&P’s Case-Shiller home-price indexes.

U.S. home prices dropped in January from a month earlier, with the average home price dropping back to levels last seen in 2003.

The S&P Case-Shiller index dropped 0.8% from a month earlier. Year-over-year prices fell 3.9% in the index’s 10 major markets, while the 20-city index dropped 3.8%.
…
Here are a smattering of reactions from economists and market observers:

Peter Boockvar of Miller Tabak: Bottom line, the housing numbers seen over the past week have been mostly below expectations pointing to a still tough industry but one that isn’t getting much worse with signs of stabilization in some markets. Prices will likely still fall and purchase deals will still be held up by tight lending standards and strict appraisals but generally speaking most of the damage has already been done.

Dan Greenhaus of BTIG: We have been arguing that housing as a whole bottomed in late 2010/early 2011 and, more importantly, this summer would mark the six year anniversary of the peak in home prices. Historically, housing bubbles tend to see home prices on average bottom out six years after peaking. As such, if the United States were to suffer a decidedly average housing crash, this summer would mark the point at which prices should begin turning upwards on a sustained basis.

Joshua Shapiro of MFR: The enormous supply overhang of existing homes (factoring in all those in foreclosure or soon to be) promises to keep pressure on prices for some time. From a longer-term perspective, it is important to keep in mind that in the seven years leading up to the peak in July 2006, the non-seasonally adjusted national 20 city home price index jumped by 155% (126 index points) to a high of 206.52 (January 2000=100). So far, this index has dropped by 34% (71 index points) since its peak. We look for further declines to be registered in the quarters ahead, although in all likelihood the rate of deterioration will be nowhere near as steep as that recorded earlier in the cycle.

TD Securities: On the whole, the dramatic moderation in the pace of home price depreciation in January is very encouraging, especially as it may be an indication that home prices may finally be stabilizing. And with home sales beginning to show signs of improvement and labor market activity also providing a favorable backdrop for the housing sector, we may now be witnessing the bottom in home prices.

Posted in Economics, Housing Recovery, National Real Estate | 164 Comments

Otteau: “We are at a turning point in the housing market and the economy”

Posted on March 26, 2012 by grim

From the Record:

N.J. housing market recovering, appraiser says

New Jersey’s housing market is recovering, and this spring’s home-selling season will be the liveliest in four years, appraiser Jeffrey Otteau said Monday.

“We are at a turning point in the housing market and the economy,” said Otteau, who tracks the statewide market from his office in East Brunswick and whose forecasts are widely followed. “The bounce in home sales [in January and February] is nothing short of astounding.” He said sales are up about 30 percent in the first two months of the year, compared with last year.

But that doesn’t mean sellers can hike their asking prices, Otteau said. With incomes flat and banks cautious about lending, buyers will be unwilling or unable to pay inflated prices, he said.

“Homes that are overpriced will not sell,” he said.

Otteau predicts that home prices will be flat this year, after falling almost 5 percent statewide last year, and will not return to their 2006 peaks until 2020.
…
Otteau said that Garden State home buying will be fueled this year by an energized job market, as well as more affordable home prices and mortgage rates below 4 percent. Average New Jersey home prices have fallen 26 percent from the market peak in 2006, and are back to 2003 levels, he said.

There’s pent-up demand among potential buyers, who have waited four or five years because they were insecure about their jobs or worried that home prices would fall further, Otteau said. And rising rents mean that many households will soon decide it’s better to buy than rent.

But he warned: “This improvement is not a return to the market frenzy we saw back in 2005.”

And more than 16 percent of New Jersey homeowners are either in foreclosure or late on their mortgage payments, according to the Mortgage Bankers Association. That represents “a deep, dark hole” for the housing market, especially in rural and inner-city areas, Otteau said.
…
Foreclosures tend to sell at a steep discount – 20 percent to 30 percent less than similar properties, according to research. That tends to pull down values of neighboring properties.

“Areas with large concentrations of foreclosures will see prices decline,” Otteau warned.

Posted in Economics, Foreclosures, Housing Recovery, New Jersey Real Estate | 139 Comments

Appeal 2012!

Posted on March 26, 2012 by grim

From the Record:

North Jersey homeowners seek lower tax assessments (Hat tip Gary)

Watching their property taxes rise as the value of their 82-year-old house dropped, Nora and Pat Sfarra of Teaneck decided to appeal their tax assessment last year. With the help of a tax-appeal company, they were able to get their home’s assessed value reduced from $351,000, to $310,000, knocking about $1,000 off an $8,000-plus annual tax bill.

“I’m satisfied that I got something off,” said Nora Sfarra.

The Sfarras are among the thousands of North Jersey homeowners who have challenged their tax assessments as home values eroded over the past several years. And with the April 2 deadline for filing this year’s tax appeals approaching fast, many homeowners are rushing to get their paperwork in.

The wave of appeals is having an impact on town budgets.

“It’s creating a major problem for communities up and down the state,” said William Dressel, executive director of the state League of Municipalities, which represents towns. “It’s reducing the amount of property taxes going into municipal coffers, which has a direct impact on the towns’ ability to be able to provide adequate services.” The result could be either service cuts or a higher tax rate, he said.

A number of towns have responded to the rise in appeals by conducting town-wide reassessments or revaluations, with the aim of getting valuations in line with actual market values, which makes it harder for homeowners to question their assessments.

And the first thing homeowners need to know is that you can’t appeal your tax bill, just your property’s assessment.

“A lot of people think if they pay too much in taxes, they have an appeal,” said Hackensack lawyer Martin Sharit, who has filed many tax appeals. “But we all pay too much in taxes.”
…
Teaneck, for example, has a tax ratio of 104 percent — meaning that the town already knows that the properties’ assessments are greater than their actual value. By that formula, a property assessed at $350,000 may really be valued by the town at only about $336,500.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 82 Comments

The New (Jersey) Suburbia?

Posted on March 24, 2012 by grim

From the NY Times:

High Marks for Transit Hubs

WANT to know which New Jersey train stations have the most plentiful supply of parking spaces relative to town population? There’s a list for that. Or what about stations in the areas with the greatest number of jobs? There’s a list for that. Or transportation hubs with the densest populations? There’s a list for that as well.
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The timing of the study — which maps income, car ownership, employment, housing, commuter activity, downtown amenities and more — is propitious, given the many indicators that the population will continue to consolidate in urban and commuter town centers.

“It’s funny; the timing is working out so well,” said B. Timothy Evans, the research director at NJ Future, a nonprofit research organization that focuses on smart growth. After three years spent “putting this thing together,” he added, it is a stroke of luck that “the interest is exactly in this sector.”

The interest he cited is being evinced first and foremost by home shoppers. Real estate sales are consistently strongest in towns along New Jersey’s main commuter corridors; the economic downturn has not altered that. The latest survey on home prices conducted by the Otteau Valuation Group found that towns along the rail lines with New York City commutes of less than 50 minutes saw real estate values increase by 3.6 percent from 2010 to 2011, as compared with rural New Jersey, the weakest sector, which saw an 8.7 percent drop in home values.

The future, too, looks bright for the commuter corridor, according to another Otteau survey, which found that building permits in rail towns reached 49 percent of the total permits issued from 2009 to 2010, having grown from 24 percent in the 1990s.

Developers seeking to capitalize on this interest in transit hubs have for the last several years seen their enthusiasm and ambitious plans well rewarded by the state. Public financing for transit-oriented developments, once largely directed at municipalities, is today going directly to developers, in the form of tax credits.

New Jersey’s Transit Hub Tax Credit Program has provided nearly $1 billion in tax credits over the last three years to developers and business owners who have initiated sizable projects in nine cities deemed “distressed” and in need of investment.

Bestowed by the state’s Economic Development Authority, the tax credits are available to companies investing more than $50 million in projects within half a mile of one of the designated cities’ transit stations, and generating more than 250 full-time jobs. Commercial enterprises can receive up to 100 percent tax credit on their capital investment, paid out over 10 years, while residential projects can receive up to 35 percent tax credit on the investment, up from the former cap of 20 percent.

Posted in Economics, New Development, New Jersey Real Estate | 36 Comments

Good start for employment in 2012, but quite a distance to go

Posted on March 23, 2012 by grim

From the Star Ledger:

New Jersey job figures show slow but steady growth, economists say

During the first two months of 2012 alone, New Jersey created more than half the number of jobs it did during all of last year, according to new data released yesterday from the state Department of Labor and Workforce Development.

In January and February, employers in the state added a net total of 17,500 non-farm jobs. Last year’s tally came to 33,400 new jobs in the private sector.

The two-month total accounts for the state revising down January’s reported jobs gains to 8,800, as preliminary estimates of 13,300 proved too high. Preliminary estimates peg February’s net job growth at 8,700, all due to private sector gains. That marks the sixth straight month of job growth, to a seasonally adjusted amount of just over 3.89 million jobs, the department said.

“New Jersey employment is now moving up at a well-sustained rate. With over 74,000 new private sector jobs added since 2010…the number of private sector jobs in the state has reached a three-year high,” Charles Steindel, chief economist for the state’s Department of Treasury, said in a statement.

Economists who study the Garden State said the gains are a positive sign that New Jersey, along with the rest of the country, will keep up a steady crawl out of the great recessession.

“The state economy will continue this tortoise-like improvement,” said Joel Naroff of Naroff Economic Advisors, giving his outlook for 2012.

But despite the last month’s boost in payrolls, New Jersey’s jobless rate remained unchanged at 9 percent. That eclipses the national rate for February of 8.3 percent.

While layoffs in the pharmaceuticals sector and casino and gaming industry have added to New Jersey’s joblessness rate, a number of other factors also will keep the unemployment rate higher than the national average. For one, cutbacks in the public sector continue to partially offset employment gains in the private workforce, Naroff said. For example, government payrolls last month dropped by 1,000 while private sector employers added 9,700 workers, the Labor Department reported yesterday.

Secondly, the unemployment rate reflects New Jersey residents’ ability to find jobs not just in state, but also elsewhere such as neighboring Pennsylvania and New York.

Thirdly, the unemployment rate is a reflection of the number of people actively looking for work, economists note. Paradoxically, the rate can go down if large numbers of people simply give up on finding a job.

Chances are, the rate will continue to lag behind the national average this year. Naroff said a very good outcome would be if New Jersey’s unemployment rate sank to 8.5 percent by year-end.

In terms of numbers of private sector jobs the state may add this year, gains could exceed 50,000, said James Hughes, dean of Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

“However, the other big picture we still have is a deep employment-deficit hole to climb out of,” he said. Between December 2007, when the recession officially began, and February 2010, when New Jersey and the U.S. hit the bottom in terms of job losses, the state lost 248,200 private sector jobs. Since then, it has added back 74,500.

“We still have to add 173,700 private-sector jobs to get back to where we were before the recession started,” Hughes said.

Posted in Economics, Employment, Housing Recovery, New Jersey Real Estate | 107 Comments

“Housing bottoming is going to surprise a lot of people”

Posted on March 22, 2012 by grim

From the WSJ:

Housing Shows Signs of Life

The U.S. housing market, a notable soft spot in the nation’s weak economy for the past four years, is becoming less of a drag on the recovery.

Real-estate markets are showing signs of life as falling prices spur buyer demand, lifting home sales and new construction from the depressed levels of the past three years. The spring selling season, traditionally the busiest period of the year, appears to be off to its best start in five years. Sales of existing homes in January and February were at their highest level since 2007, according to data out Wednesday, though sales in February edged down by 0.9% from January on a seasonally adjusted basis. The decline in real-estate prices has slowed its pace, making Americans less cautious about spending and potentially more disposed to buy a home.

For the first time since 2005, investment in residential real-estate, including home building and renovation, has contributed to U.S. economic output for the past three quarters.

Granted, the housing market continues to struggle. Home prices have yet to hit bottom, and credit standards remain tight. Nearly 11 million homeowners owe more than their properties are worth, while a glut of potential foreclosures still threatens markets. With housing a much smaller part of the U.S. economy after the financial crisis, ripple effects from improvements may pack less punch.
…
“Housing bottoming is going to surprise a lot of people,” said Kenneth Rosen, a housing economist at the University of California, Berkeley. “Housing was pulling us down consistently, quarter after quarter, for years. That was really over in 2011.”

A housing stabilization could put the recovery on more solid footing. Growth in manufacturing outpaced expansion in the broader economy when the recovery began in the second half of 2009, and the job market has picked up recently, instilling confidence in consumers and businesses and giving landlords room to raise rents.

Real-estate agents and home builders from Florida to the Midwest and California are reporting more activity as buyers take advantage of prices that are down by one-third from their peak as well as low interest rates that have made housing more affordable than at any time in the last decade.

“People are looking around saying ‘It’s costing me more to rent than to buy,’ ” says Ronald Peltier, chief executive of HomeServices of America Inc., which owns real-estate brokerages in 21 states. Home-purchase contracts in January and February are up about 20% from a year earlier for HomeServices, a subsidiary of Berkshire Hathaway Inc., and Mr. Peltier said the firm now expects sales growth of around 10% this year, upgrading its forecast last fall for flat sales levels in 2012.

Posted in Economics, Housing Recovery, National Real Estate | 193 Comments

High expectations for February used house sales

Posted on March 21, 2012 by grim

From Bloomberg:

Previously Owned U.S. Home Sales Probably Climbed

Sales of previously owned U.S. homes probably rose in February to an almost two-year high, adding to signs of stabilization in the real-estate market, economists said before a report today.

Purchases climbed 0.9 percent to a 4.61 million annual rate, the fastest since May 2010, from a 4.57 million pace in January, according to the median forecast of 77 economists surveyed by Bloomberg News. An advance would be the fourth in five months.

The industry that struggled to pick up for most of the economic expansion is stirring as job and income gains, cheaper homes and mortgage rates near the lowest on record keep affordability at an all-time high. At the same time, distressed properties and the threat of more foreclosures may limit the speed at which prices and the residential real-estate market rebound.

“Seeing sales edge up very gradually means things are turning around,” said David Semmens, a U.S. economist at Standard Chartered Bank in London. “People are seeing the homes they want becoming more affordable. But mortgage approvals are very low. It’s still not easy for people to buy homes in general.”

The National Association of Realtors’ data are due at 10 a.m. in Washington. Economists’ estimates ranged from 4.44 million to 4.8 million.

Existing-home sales, tabulated when a contract closes, climbed to 4.26 million last year from 4.19 million in 2010. Demand peaked at 7.08 million in 2005 during the housing boom. In 2008, sales totaled 4.1 million, the least since 1995.

Posted in Economics, Housing Recovery, National Real Estate | 129 Comments

Signs of recovery? Or just a shift due to the weather?

Posted on March 20, 2012 by grim

From CNBC:

Did Warm Winter Steal Spring Housing?

As if we really needed a reminder that today’s housing market is still very fragile, the first installment in a slew of housing data to be released this week came in below expectations.

Home builder sentiment, as measured by the National Association of Home Builders’ monthly sentiment survey, was unchanged in March, and February’s reading was revised down.

This after five straight months of gains in builder confidence.

“Many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets, said NAHB chief economist David Crowe in a release.
…
With temperatures in most of the country hitting near record highs in January and February, it begs the question, did much of the Spring market start early, and did it steal from the historically strong months of March and April?

“We think it has pulled forward a useful amount,” says analyst Stephen East of ISI Group. “It definitely helps breaking ground and has been a big help on the jobs front.”

In fact ISI studied weather in all four regions and reported that while favorable economic trends and specifically job growth are the primary driver of renewed housing activity, “We believe some demand was pulled forward from the later Spring months, implying the first quarter could be above investor expectations, while the second quarter could be below expectations.”

Weather cannot be discounted in home sales, especially sales of new construction, since builders can offer potentially faster turnarounds for new orders if they’re not hampered by frozen earth. February saw a big spike in the “current sales” component of the home builder sentiment index. Buyer traffic in March was unchanged.

Posted in Economics, Housing Recovery, National Real Estate | 302 Comments

Fast tracking abandoned homes

Posted on March 19, 2012 by grim

From the Star Ledger:

Housing, banking advocates hail measure to speed foreclosures of abandoned homes

A piece of state legislation that looks to turn foreclosed homes into affordable housing also contains a little-noted provision that banking and housing experts say would provide an important step to unclogging the bottleneck holding back the state’s housing recovery.

A bill introduced last month by Sens. Raymond Lesniak (D-Union) and Barbara Buono (D-Middlesex), along with a parallel measure in the Assembly, would create a legal mechanism to move abandoned properties more quickly through New Jersey’s enormously bogged-down foreclosure pipeline.

This process would allow mortgage lenders such as banks to petition Superior Court to expedite a foreclosure on properties they have reason to believe are abandoned and vacant. If the court agrees, it would then direct a sheriff, county agency or trustee to sell the property within 45 days.

While this expedited process would be used ostensibly to create a pool of homes that municipalities and community groups can purchase for affordable housing, supporters say its purpose goes beyond that mandate, in that the abandoned properties could be resold at market rates, too.

On top of that, shunting a segment of properties out of the state’s judicial foreclosure process would help alleviate some of the backlog weighing down the state.

“What’s happening right now is not the best way,” said Michael Affuso, director of government relations for the New Jersey Bankers Association.

As of the end of 2011, it took the courts on average 964 days to complete a home foreclosure in the state, the second-longest in the country, according to RealtyTrac. More than 30,000 homes in the state were in the process of being foreclosed upon at the end of last month, the real estate data firm found. But all told, there are 118,000 foreclosure filings in the state, according to data cited by the bankers association and Housing & Community Development Network of New Jersey.
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At the current rate, it would take the courts 49 years to work through the current backlog of foreclosures, the bankers association has found.

Posted in Economics, Foreclosures, Housing Recovery, Politics | 156 Comments

Tough Decisions

Posted on March 18, 2012 by grim

From the APP:

Some NJ homeowners left under water as market prices fall

Cynthia Spratt, a single mother of two, recently considered putting her Toms River home on the market and moving inland so that she could avoid the expense of flood insurance and save thousands of dollars.

It was a good idea — except that she bought her home in 2007 near the peak of the housing market. The value of the house and the equity she put in it have dwindled.

“There’s no way I could turn around and sell my house,” said Spratt, 37. “I would walk away from this house with almost nothing to put down on the next house.”

Spratt is one of thousands of New Jersey homeowners who have watched as what was supposed to be their most valuable assets — their homes — lose so much ground that it is virtually worthless to them.

Purchasing a home once was thought to be a cornerstone to building wealth. But now buyers who did just that at the peak of the real estate bubble have little flexibility. They would have a hard time moving if they found a new job out of state. They couldn’t tap into their homes’ equity in case they need a new roof.
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Before the housing bubble, a house was “forced savings,” said Jordan Celkupa, a financial planner with Robert J. Oberst Sr. & Associates in Red Bank.

“You borrowed a chunk of money. You paid the mortgage off. And then, magically, you owned this big asset,” Celkupa said.

Now? If you bought a house near the peak, “you’re going to have to make some tough decisions,” he said.
…
The problem could last for as long as a decade, experts said. Median home prices in New Jersey more than doubled from 2000 to 2007, fueled not by rising income — that grew just 25 percent during that time — but by increasingly exotic mortgages, according to Patrick J. O’Keefe, director of economic research for the Roseland-based accounting firm J.H. Cohn.

Some homeowners began to default. Foreclosures rose. Workers lost their jobs. Lending standards tightened. And the supply of homes for sale far outpaced demand from qualified buyers. Home values have declined 34 percent nationwide and 20 percent in New Jersey from their peak in 2006, O’Keefe said.

One result: Some 310,000 homeowners in New Jersey, or 16 percent of the state’s homeowners, are “underwater,” owing the bank more than their homes are worth, said Jeffrey Otteau, president of Otteau Valuation Group, a real estate appraisal and consulting firm in East Brunswick.

Posted in Economics, Housing Bubble | 14 Comments

Been a while since the last … Weekend Open Discussion

Posted on March 16, 2012 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labeled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 134 Comments

Re/Max: Spring looking good (but can we believe them?)

Posted on March 14, 2012 by grim

From Re/Max (Cheerleader warning, this is from a press release):

Home Prices Start to Rise, Sales Trend Higher: Housing Recovery Underway

For the first time in 18 months, home prices in February rose higher. With a median price of $171,881, prices in the 53 cities surveyed by the RE/MAX National Housing Report rose by 1.1% over February 2011. Home sales were even higher, up 8.7% from one year ago. With a positive sales trend of 8 straight months above the previous year, it’s looking like 2012 will witness a very strong home-selling season. As a result of reduced foreclosure activity, inventory continued a downward trend for the 20th straight month, 22.4% lower than the housing inventory in February 2011. Consumer sentiment appears to be rising, and record low mortgage rates coupled with favorable home prices are attracting homebuyers and investors who don’t want to miss a historic opportunity.

“All the data is pointing to a very active spring and summer selling season this year, which is great news for a recovering housing market,” said Margaret Kelly, CEO of RE/MAX, LLC. “As sales numbers have trended higher for several months, we have been anticipating a turnaround in home prices, and it looks like it’s finally starting.”
…
Home Sales in February were 8.7% higher than sales in February 2011. This was the 8th straight month year-to-year sales have risen. February home sales were also 8.1% higher than sales in January. Of the 53 metro areas included in the survey, 45 saw increases over February last year and an impressive 26 metro areas saw double-digit jumps, including: Albuquerque, NM +46.6%, Providence, RI +36.7%, Raleigh, NC +33.8%, Boston, MA +30.5% and Chicago, IL +27.5%.
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The Median Sales Price of homes sold in February was $171,881. This price represents a 1.4% increase from January, and a 1.1% rise from the median price seen in February 2011. February is the first time in 18 months that the year-to-year home price has increased. Of the 53 metro areas included in the February survey, 24 experienced price increases from February 2011, including: Miami, FL +20.5%, Orlando, FL +15.8%, Phoenix, AZ +12.5%, Tampa, FL +11.1%, St. Louis, MO +9.8% and Detroit, MI +8.9%.
…
In the month of February, the average inventory of homes-for-sale in the 53 surveyed metro areas dropped 0.8% from January and also dropped 22.4% from February 2011. Month-to month inventories have now fallen for 20 consecutive months. Given the current rate of sales, and the size of the active inventory, the resulting Months Supply is 6.6 months, a drop from the 7.3 month supply seen in January, and significantly lower than the 9.3 month supply reported in February 2011. Months Supply is the number of months it would take to clear a market’s active inventory at the current rate of sales. A six-month supply is considered a balanced market between buyers and sellers.

Posted in Economics, Housing Recovery, National Real Estate | 132 Comments

Sell? Sell to … oh nevermind.

Posted on March 13, 2012 by grim

From CNBC:

More Boomers Selling Homes, but Who Will Buy Them?

Baby Boomers putting their house up for sale could flood the market in coming years, while the younger generations may not be interested in buying, a new report says.

“It’s already happening in some states like Michigan,” says Rolf Pendall of the Urban Institute and a co-author of the report by the Bipartisan Policy Center.

“Seniors there are already putting their homes on the market and the absorption of housing is less and creating more inventory,” Pendall explains. “There’s hesitancy on the buyer’s part.”

As boomers downsize because of retirement, finances, health or death, they’re expected to release some 26 million homes onto the market by 2030, according to the Policy Center paper.

The problem is that echo-boomers, or Generation Y—those born between 1982 and 1995—may not be buying up the inventory, says Pendall, whose retired mother is trying to sell a home and downsize.

“Whether it’s jobs, confidence, tight credit or a slowdown in immigration, there could be a real slowdown in buying from the younger generation,” Pendall explains.

The Bipartisan Policy Center’s report states that young adults are struggling with higher levels of credit card and student loan debt than their elders—some of which could take decades to pay off.
…
Couple that with the current housing struggles and the report concludes that young people are just not in the buying mood—now or anytime soon.

“Certain areas of the country are better off than others,” Pendall says. “But if we look at the Northeast and Midwest, seniors are going to be putting homes on the market and moving to warmer climates. That means more inventory to sell. Housing will depend on the echo-boomers, and it’s not known what they will do.”

But some analysts don’t see the explosion of seniors selling homes as a hit on housing.

“It’s not that big because when you look at the market, it’s pretty good right now and getting better,” says Walter Maloney of the National Association of Realtors (NAR).

“Besides, seniors have been selling homes for years, and overall inventories are going down. We believe there is pent-up demand,” Maloney adds.

Some experts say a final verdict on any kind of senior housing glut is too hard to make right now.

“The extent to which baby boomers unload their homes is a projection at this point,” says Greg McBride, senior analyst at Bankrate.com.

Posted in Economics, National Real Estate | 168 Comments

Property taxes cuts too expensive to afford

Posted on March 12, 2012 by grim

From the Star Ledger:

N.J. can’t afford tax cuts proposed by either party

It’s party time in Trenton, where we now have a menu of tax-cut plans to choose from — one from Gov. Chris Christie, one from the Senate and a third from the Assembly.

The proposals are different in big ways. Christie’s plan is tilted heavily in favor of the rich. The Assembly plan is the most progressive, but is politically a nonstarter. And the Senate plan, as usual, tells us where this is all going to land in the end.

But they have this in common: All of them would blow a $1.4 billion hole in the annual budget once they are phased in.

In other words, all these plans would force much deeper spending cuts than we have already seen, cuts that will sink deeply into the muscle and bone of what our state and local governments do.
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Hard realities like this do not sell on the campaign trail. To say we can’t afford a tax cut is like snapping on the lights at the drunken frat party. It’s no way to win friends. But this failure of leadership is striking and threatens to derail the modest progress that’s been made in the past few years.

The political blame belongs mostly to the governor, who started this arms race with his plan to cut income taxes by 10 percent. As state Senate President Stephen Sweeney (D-Gloucester) puts it: “We have the governor running around saying, ‘I want to cut your taxes and they want to spend your money.’ So there is some political realities on this.”

If you have to chose among the plans, the Assembly version is preferable. It offers a credit to cover 20 percent of property tax payments, financed partly by a tax increase on incomes greater than $1 million. The governor’s plan is the worst, because it reserves most benefits for the rich.

The Senate version, with a 10 percent cut and no tax hike, is the likely end point. But don’t celebrate this one. It will come back to haunt us.

Posted in New Jersey Real Estate, Politics, Property Taxes | 251 Comments