NJ/NY Metro prices down 3.4% in August

Posted on October 26, 2011 by grim

From the Record:

Home prices dropped 3.4 percent in August

What’s new: Home prices in the New York metropolitan area, which includes North Jersey, dropped 3.4 percent in August, compared with August 2010, the Standard & Poor’s/Case-Shiller index reported on Tuesday.

Nationally, home prices declined 3.8 percent year over year. However, prices were up slightly from July to August, both nationally and in the region.

What it means: Prices in the area have returned to the levels of spring 2004, and are down almost 22 percent from the market peak in mid-2006. Nationally, prices are back to mid-2003 levels, and about 31 percent below peak levels.

Home prices have been under pressure because of elevated unemployment, which makes it more difficult for potential buyers to afford homes, as well as tighter mortgage standards and a continuing high percentage of short sales and foreclosures on the market. These distressed properties tend to sell at a discount.

What’s happening locally: Single-family home prices slid 4.5 percent, to a median price of $480,000, in Bergen County from August 2010 to August 2011, while the number of sales rose 13 percent. Prices dropped 8 percent, to a median $259,169, in Passaic County, while the number of sales declined 10 percent.
…
What they’re saying: “Whether prices have established a bottom depends on future foreclosure activity, which is likely to increase as servicers address the legal/administrative issues that have cropped up over the past three years.”

Posted in Housing Bubble, Housing Recovery, New Jersey Real Estate | 150 Comments

Relationship between taxes, services, and debt too complex for Jersey taxpayers to grasp

Posted on October 25, 2011 by grim

Fallacy: The taxes we pay this year, pay for the services we use this year.

Taxes will continue to rise because we need to pay for services consumed in earlier years. The amount of taxes paid in a single year does not pay for the services consumed in that year, because municipal and state governments can borrow money beyond your ability to pay it back. Now, to balance the spending, we need to both consume fewer services than in those previous years, while simultaneously paying higher taxes to cover the previously borrowed debt. When you are paying higher taxes for reduced services this year, thank the old guy down the street, and the politicians he voted for, because they didn’t pay their fair share. What you don’t understand Mr. Mintz, is that it’s you who are the problem.

Rant off.

From the Daily Journal:

Christie’s Cuts – Higher property taxes, fewer cops, rising crime rates in some areas

First, the good news: Property tax increases have slowed in many New Jersey towns.

But the bad news is that many residents have seen municipal services cut as their taxes continue to climb.

Cities and suburbs all over New Jersey have laid off police officers and other public employees in the past 12 months as a drop in state aid and lingering economic doldrums have put the squeeze on municipal finances.

While many towns were able to keep property tax increases at or below a newly imposed 2 percent cap, municipal officials have been forced to cut jobs and slash services to keep from raising taxes even more.

The average property tax bill in New Jersey rose $167 this year, to $7,754, according to a New Jersey Press Media analysis of certified property tax rates in 545 of the state’s 566 municipalities. (The 21 other municipalities, including some of the state’s largest cities, have not yet set their rates.) New Jersey has been home to the highest average property tax in the nation for a number of years.

From 2010 to 2011, the average property tax bill rose 2.2 percent, slightly more than half of the 4.1 percent increase seen a year earlier.

The smaller increase is little consolation to people like Ocean County resident Barry Mintz. Property taxes on his home in Brick Township are now $8,500, up from about $5,000 when he moved in just 12 years ago. As taxes rose, municipal services declined, he said.

“We used to have twice-a-week garbage collection and now it’s down to once a week,” Mintz, 71, said. “When you downsize the public works department and cut services, what am I paying for?”
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New Jersey government payrolls, including local, school, county and state workers, dropped by 29,000 at the end of last year, down to 622,000 jobs, according to the federal Bureau of Labor Statistics.
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Gov. Chris Christie pledged to shrink the size of government during his 2009 campaign.

His spokesman Michael Drewniak last week said New Jersey has experienced “a remarkable turnaround, when you look at the skyward trajectory of state and local spending and resulting property tax hikes year after year in the decade before this administration arrived in Trenton.”
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In Camden, the average property tax bill rose 10 percent, to $1,363.

In Newark, it rose 5.9 percent, to $6,063.

In Paterson, where 125 police officers were laid off, property tax bills jumped 17.4 percent, to an average of $8,833.

“Anyone who is honest and realistic with themselves knows that New Jersey and its municipalities were living beyond their means for way too long,” Drewniak said.

Posted in New Jersey Real Estate, Property Taxes | 103 Comments

August Case Shiller Predictions

Posted on October 24, 2011 by grim

Where do you think home prices went in August?

From HousingWire:

Zillow: Case-Shiller likely fell 3.8% in August

Two key indices of home prices likely fell in August, suggesting large numbers of foreclosures and continued high joblessness are acting as a drag on the market, according to a new forecast.

The Case-Shiller 20-city composite home price index, scheduled to be released on Tuesday, likely fell 3.8% in August from a year earlier and 0.3% from July on a seasonally adjusted basis, said a forecast from Zillow Inc. chief economist Stan Humphries. The downward trend will continue through the end of the year, he predicts.

“We expect to see continued home value depreciation as unemployment and negative equity remain high,” said Humphries. “The large foreclosure pipeline will produce relatively low priced REOs in the market, putting downward pressure on prices going forward, and we do expect the pace at which homes exit this pipeline to pick up in the near-term.”

The Case-Shiller 10-City composite index is expected to register a seasonally adjusted decline of 3.5% in August from the previous year, and 0.2% compared to July.

“After showing monthly appreciation earlier this year and building some momentum, recent weak economic data is starting to be reflected in home values,” Humphries said. “Existing home sales have been disappointing, with September sales down 3% from August.”

Humphries is bearish on the overall housing market for at least the next year.

A survey of more than 100 economists by Pulsenomics shows the median expectation for that group is a decline in the Case-Shiller 20-city index of 2.8% in the fourth quarter from the final three months of 2010. Zillow, on the other hand, is projected a 4.5% decline, and then another 2.5% drop from the fourth quarter of 2011 to 2012.

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

Few takers for flooded Jersey homes

Posted on October 23, 2011 by grim

From the Record:

After the floods, sellers face lower prices

Even before you open the door, you smell the mildew inside the white-brick house in Lincoln Park, a block from the Pompton River. Two feet of water sloshed into the first floor after Hurricane Irene hit, coating the furniture with dried river mud and destroying the floors and walls.
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Before the flood, the house was for sale, with an asking price of $269,000, down from $309,000. Now it’s off the market, and its future is unclear.

“It’s really not salable at this point,” says listing agent Tina Dobsa of Re/Max Legends in Wayne.

The house is a stark illustration of the plight of many homeowners in North Jersey flood zones who want to sell. The problem for them is that buyers may prove just as unwilling to face the thought of flooding. When a few years pass between floods, buyers are more willing to accept the risk in exchange for a price that’s typically 10 percent to 25 percent below that of similar homes on dry ground.

But after repeated floods over the past two years, “there’s not enough time to forget,” says Pat Lowe, a Coldwell Banker agent in Wayne. As a result, values in flood zones have plummeted in a housing market that’s already weak.

“People are really going to take a hit on this,” says Jennifer Barone, an agent with LeConte Realty in Hasbrouck Heights.

“Nobody’s going to buy a house in a flood zone,” Dobsa says. “What kind of value would you put on it?”

“The only thing sellers can do is lower the price,” says Dan Weixeldorfer, broker at Re/Max Legends in Mahwah. “You can’t move the house and you can’t erase the stigma. There’s a value for everything; if the price is low enough, people are willing to take the risk.”
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Sal Poliandro, a Re/Max agent in Saddle River, says the only calls he’s gotten on flood properties in Passaic County are from investors, often offering less than $100,000.

And since the hurricane, buyers are on the alert for any hint of flood problems, real estate agents say.

“The first question everyone asks is if the owners got water,” says Angele Ekert, a Coldwell Banker agent in Ridgewood. “I showed a home where the sellers had recently painted and paneled the basement. The agent assured us there was no water during the hurricane, but my buyer is certain they are hiding something.”
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Appraiser Michael Keough of Pompton Lakes says homes in the area sold for more than $300,000 at the market peak.

What properties in the flood zone will actually sell for — and how long it will take — is still a question, Keough says.

He says some homeowners are so devastated and disgusted by the repeated floods that they are simply walking away, allowing the lenders to take the properties.

Kathy Brown, who lives on Lincoln Avenue next to the house that exploded, also says several of her neighbors say they won’t return to their flood-damaged homes.
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Elizabeth Briseno says that when she and her boyfriend bought their Pompton Lakes home in December 2008, they were told they needed flood insurance but that there hadn’t been a claim in decades. But they’ve been flooded twice this year — in March and after Hurricane Irene. More than $20,000 worth of their belongings were destroyed, Briseno says.

Making matters worse, both are out of work and unable to pay the mortgage.

They are attempting to sell the house as a short sale, asking $150,000 — less than half of what they paid three years ago. Even at $150,000, they’ve gotten no offers, says Poliandro, their agent.

“The flooding has changed the real estate market,” Briseno says. “There’s no one buying here now.”

Posted in Economics, New Jersey Real Estate | 40 Comments

Housing “…not as bad as some might try to make us believe.”

Posted on October 21, 2011 by grim

From HousingWire:

Barclays: Housing may not be as bad as some believe

It is unlikely home prices will drop as much as 17%, but analysts with Barclays Capital evaluated that possibility during a recent analysis of future home prices.

However, the firm noted such a decline is unlikely because the shadow inventory of 4 million to 7 million homes is still not as severe as some expect. The analysts generally use a 7% drop in prices nationwide as the base for their test scenario. BarCap said the market absorbs about 1.5 million homes through distressed liquidations annually.

“Given that most borrowers evicted in a foreclosure process have to go and live somewhere, it makes more sense to look at total excess supply of homes including owner and rental units,” the analysts wrote in a recent report. “Our estimate is that versus the historical norms, there are only a couple of million homes in excess housing inventory that need to be absorbed. Do not get us wrong — we are not presenting a bullish case for housing — all we are saying is that things are bad but not as bad as some might try to make us believe.”

Barclays bolstered its belief that home prices will not experience an extreme decline by saying “contrary to what many believe, the administration can and likely will do things to control a significant downward spiral in housing in the near term.”

If that does occur, Barclays said the move will lead to slower home price growth, while preventing another dip over the next two years.

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 127 Comments

September home sales disappoint, but post year-over-year gains

Posted on October 20, 2011 by grim

(New York-Northern New Jersey-Long Island MSA showing some stabilization with prices down only 0.5% year over year in September, and sales up 0.4%)

From the WSJ:

US Sep Existing-Home Sales Dip Slightly

Sales of previously occupied homes in the U.S. dipped slightly last month, a sign of continuing weakness in a depressed part of the economy.

Existing-home sales decreased by 3.0% in September from a month earlier to a seasonally adjusted annual rate of 4.91 million, the National Association of Realtors said Thursday. August’s sales pace was revised upward to 5.06 million per year.

Economists surveyed by Dow Jones Newswires had expected home sales to fall by 2.6% to an annual rate of 4.90 million.

The market is “in a holding pattern. It’s not breaking out,” said Lawrence Yun, the trade group’s chief economist.

Sales were up 11.3% from the same month a year earlier. The median sales price was $165,400, down 3.5% from $171,400 a year earlier.

The inventory of previously owned homes listed for sale, meanwhile, fell at the end of September to 3.48 million. That represented an 8.5-month supply at the current sales pace, compared with a healthy level of about six months. Foreclosures and other distressed properties represented about 30% of sales, the Realtors group said.

More than five years after the housing bubble started to burst,the housing market remains a heavy burden on the economy.

A massive supply of foreclosed properties and a shortage of buyers who are able to purchase a home amid tight lending standards are holding down prices in much of the country.

Meanwhile, consumers remain uncertain about whether the market will take another turn for the worse and are hesitant about making a big purchase. Mortgage lending for home purchases was at the lowest point in nearly 15 years last week, despite mortgage rates that have been hovering above record lows, the Mortgage Bankers Association said Wednesday.

From Bloomberg:

Sales of Existing U.S. Homes Fell as Forecast in September

Sales of existing homes fell in September, extending a pattern of declines and gains that show the industry continues to be buffeted by consumer pessimism and unemployment above 9 percent.

Purchases dropped 3 percent to a 4.91 million annual rate, matching the median forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. The median price dropped 3.5 percent from a year ago and about one in five real-estate agents polled said contracts had been canceled, the group said.
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Sales of existing single-family homes decreased 3.6 percent to an annual rate of 4.33 million. Purchases of multifamily properties, including condominiums and townhouses, climbed 1.8 percent to a 580,000 pace.

Purchases dropped in three of four regions, led by an 8.8 percent decrease in the West. The West is probably the area most affected by the recent reduction in conforming loan limits, Yun said. Sales in the Northeast gained 2.6 percent, perhaps reflecting a rebound from Hurricane Irene, he said.

Posted in Economics, National Real Estate, New Jersey Real Estate | 56 Comments

Word of the day: Moribund

Posted on October 20, 2011 by grim

From the Federal Reserve:

Beige Book – October 19, 2011

Second District–New York

Economic growth in the Second District has remained modest since the last report, though there have been some signs of improvement in the labor market. Manufacturers report some further deterioration in their assessment of overall business conditions but note that orders, shipments and employment levels have been stable. Consumer spending, on the other hand, has been comparatively robust, despite low levels of consumer confidence: auto dealers report brisk business in August and September, non-auto retail contacts report that sales have been on or ahead of plan, and tourism activity has remained strong. Commercial real estate markets have been mixed but, on balance, slightly stronger since the last report. Home sales have been mixed, with scattered signs of a pickup, while the rental market has continued to strengthen. New home construction remains stalled, aside from rental apartments. There has been substantial new hotel development in Manhattan. Conditions in New York City’s key securities industry have weakened noticeably. Finally, bankers report a pickup in demand for residential mortgage loans (largely refinancing), a slight increase in demand for non-residential mortgages, some easing in credit standards for business loans, and little change in delinquency rates.
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Construction and Real Estate

Residential construction remains moribund, particularly for single-family homes. Home sales have picked up a bit in parts of the District but remain weak overall, while the rental market has continued to strengthen. The housing market in northern New Jersey remains sluggish: with a dearth of new home construction, aside from some development of rental projects, the inventory of distressed properties has declined slightly but remains large; sales volume remains sluggish, and home prices have held steady and appear to have bottomed out. After a strong July and August, sales of Manhattan apartments tapered off in September; while co-op sales have been relatively sluggish, condominium sales have been buoyed by foreign buyers. The inventory of available newly-constructed condos has declined considerably in recent months but remains elevated. The lowering of the jumbo mortgage threshold from $730,000 to $625,500 on October 1st appears to have had little effect on the market. Overall, co-op and condo prices remain essentially flat. New York City’s rental market continues to strengthen. Net effective rents (which take into account landlord concessions that were prevalent a year ago but are now rare) are up roughly 5 percent from a year ago, with steeper increases at the high end of the market. Realtors in western New York State note that market conditions have improved slightly, with sales picking up and prices up slightly from a year ago.

Commercial real estate markets have been mixed since the last report. In New York City and metropolitan Buffalo, office vacancy rates declined in the third quarter, while rents moved up. However, vacancy rates rose in Westchester and Fairfield counties and were little changed across other parts of the District, while asking rents were generally down modestly. The market for industrial and warehouse space has not changed noticeably, except in metropolitan Albany and northern New Jersey, where asking rents are down moderately from a year ago. New office construction and development remains sluggish, but a number of major hotel development projects have been announced recently or are already underway in New York City.

Posted in Economics, New Jersey Real Estate | 80 Comments

Buck up campers, home prices will stabilize and begin to rise again

Posted on October 19, 2011 by grim

(Now a return to bubbly peak prices? That’ll take a while)

From the NY Times:

Gloom Grips Consumers, and It May Be Home Prices

Ernest Markey lost his stone-cutting business in 2009. He then sold his home for half a million dollars less than its value at the peak of the housing bubble and moved with his wife, Marie, to a smaller home in a less affluent suburb. They gave up two new cars and bought one. Used.

The Markeys have since patched together a semblance of their old life, opening a new stone-cutting shop. But they do not expect that they will ever recover financially from the loss of equity in their old home.

“For two years I kept thinking that things would get better,” Mr. Markey, 51, said as he stood in his empty store on a recent weekday. “Now I think the future doesn’t look so good.”

The United States has a confidence problem: a nation long defined by irrational exuberance has turned gloomy about tomorrow. Consumers are holding back, businesses are suffering and the economy is barely growing.

There are good reasons for gloom — incomes have declined, many people cannot find jobs, few trust the government to make things better — but as Federal Reserve chairman, Ben S. Bernanke, noted earlier this year, those problems are not sufficient to explain the depth of the funk.

That has led a growing number of economists to argue that the collapse of housing prices, a defining feature of this downturn, is also a critical and underappreciated impediment to recovery. Americans have lost a vast amount of wealth, and they have lost faith in housing as an investment. They lack money, and they lack the confidence that they will have more money tomorrow.

Many say they believe that the bust has permanently changed their financial trajectory.

“People don’t expect their home to regain value, and that’s really led to a change in consumer attitudes about the economy that we’ve just never seen before,” said Richard Curtin, a professor of economics at the University of Michigan who directs its Survey of Consumers. The latest data from the survey, released Friday by Thomson Reuters, shows that expectations for economic growth have fallen to the lowest level since May 1980.
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Economists have only recently devoted serious study to how a decline in housing prices affects consumer spending, not least because this is the first decline in the average price of an American home since the Great Depression. A 2007 review of existing research by the Congressional Budget Office reported that people reduce spending by $20 to $70 a year for every $1,000 decline in the value of their home.

This “wealth effect” is significantly larger for changes in home equity than in the value of other investments, such as stocks, apparently because people regard changes in housing prices as more likely to endure.

A recent paper by Karl E. Case, an economics professor at Wellesley College, and two co-authors estimated the decline in home prices from 2005 to 2009 caused consumer spending to be $240 billion lower in 2010 than it otherwise would have been. That figure is equal to about 1.7 percent of annual economic activity, enough to be the difference between the mediocre recent growth and healthy growth. And it does not include all the other effects of the housing crash, including the low level of new home construction, that are also weighing on the economy.

Posted in Economics, Employment, Housing Recovery | 135 Comments

Where have all the houses gone?

Posted on October 18, 2011 by grim

From the WSJ:

Slim Pickings Are Latest Headache for Home Sales

The housing market, which has struggled with an oversupply of homes for years, is facing a new problem: a lack of attractive inventory.

There were more than 2.19 million homes listed for sale at the end of September, down 20% from a year earlier, according to a new report from the real-estate website Realtor.com. That is the lowest level since the company began its count in 2007.

The report is the latest sign of how the U.S. housing market can’t seem to catch a break. While falling inventories are typically a sign of health, because reduced competition can boost prices, that isn’t the case right now.

Instead, real-estate agents say, people are pulling their homes off the market rather than try to sell them at today’s discounted prices. At the same time, banks have been more slowly moving to take back properties through foreclosure ever since processing irregularities surfaced last fall, temporarily reducing the supply of foreclosed properties. The shrinking supply isn’t driving up prices because demand is soft.
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The decline in inventory also suggests that there are fewer opportunities for buyers and sellers to strike deals. That can further chill sales, as buyers become afraid to overpay while sellers are similarly cautious about underpricing their homes.

“The inventory is low, so it’s hard for buyers to find their dream home,” said Joan Downing, a real-estate agent in Bloomfield Hills, Mich., a suburb of Detroit. “That’s been our challenge more than anything: finding the inventory for the clients. Nobody’s complaining about the pricing or the interest rates.”
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“As weak as demand is, inventory has been weaker,” said Glenn Kelman, chief executive of Redfin Corp., a Seattle real-estate brokerage firm that does business in 13 states. “Right now, the absence of inventory is the limiting factor on sales volume.”

Posted in Economics, Housing Recovery, National Real Estate | 112 Comments

No big price drops at the shore?

Posted on October 17, 2011 by grim

From the Philly Inquirer:

At the Shore, many homes retained value after a wild ride

If you have the money – and that means cash – you can buy your dream house at the Jersey Shore. If you don’t, as a prospective vacation-home owner you’re being squeezed even harder by the same financial institutions that tightened credit for purchases of primary residences.

The higher the price, “the greater the likelihood the buyer is paying cash for the property,” said Paul Leiser of Avalon Realty. “A $7 million sale is far more likely to be a cash deal than a $1 million sale.”

Like many places these days, Avalon, long a seaside favorite of the well-to-do, isn’t seeing a lot of home sales, period. But those that have occurred have been high enough in value to push the median price up 321 percent since 2005, an Econsult Corp. analysis of transactions in 13 Shore zip codes in Atlantic and Cape May Counties from April 1, 2005, through June 30, 2011, shows.

In comparison, the median price in high-end Stone Harbor is up a modest 87 percent, according to the analysis, conducted by Econsult vice president Kevin Gillen along with a broad examination of home prices in the eight-county Philadelphia region based on 376,257 sales in that period.
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any Shore points that are traditional vacation destinations for Philadelphia-area residents did not fare all that badly in the housing downturn, the analysis showed, with one caveat:

Though almost all the communities retained the value they had in 2005, Stone Harbor alone consistently held onto median-price gains – from 2005 through 2007, when the U.S. housing bubble burst, then through to June 30 of this year.

Avalon’s median price rose 437 percent between 2005 and 2007, for example, then ebbed 22 percent by June 30.

Longport’s median price rose 16 percent from 2005 to 2007, then fell 21 percent from 2007 to second-quarter 2011, for a loss of 9 percent over the full analysis period.

A lot of developers and marginal buyers had banked on price appreciation in Wildwood zip code 08260, which also includes North Wildwood and Wildwood Crest. But the median price there rose just 2 percent from 2005 to 2007 – from $330,000 to $334,975 – then fell 34 percent from 2007 to second-quarter 2011, ending up at $222,375.

Many Wildwood developers were forced to abandon projects. Others brought in auction companies to try to reset the market and sell enough condos to stay ahead of foreclosure actions.

Sea Isle City’s median home price rose 27 percent from 2005 to 2007, on the other hand, then fall 9 percent from 2007 to second-quarter 2011. But at $571,250, it was still 15 percent higher than in 2005.

In Atlantic City, heavily dependent on the now-flagging casino industry, the median price began a precipitous decline in 2005, as prices just about everywhere else were performing spectacularly.

By second-quarter 2011, the median price had lost 53 percent of its 2005 value, plummeting from $269,000 to $125,250.
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Although conditions vary substantially, the U.S. second-home market “is at bottom,” said Mark Zandi, chief economist at Moody’s Analytics Inc., of West Chester.

“I don’t expect second-home sales and prices to improve much in the next year – the market will remain at bottom – but I do expect the second-home market to be a strong market over the next five to 10 years,” Zandi said. “There is a strong demographic tailwind behind the market, given the aging of the large baby-boom generation into their 50s and 60s, when second-home buying is strongest.”
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Yet two Atlantic City bedroom communities – Brigantine and Margate – did not take as big a hit as might have been expected, even though the casinos shed thousands of employees who lived in those towns as the tanking economy and competition from other states took a toll.

Brigantine’s second-quarter 2011 median price, $292,250, is just 1 percent below what it was in 2005, though those who bought at the height of the market – when prices were 36 percent higher than in 2005 – saw values tumble 28 percent.

Margate’s median as of June 30, $393,150, was 12 percent lower than 2005 and 20 percent – more than $100,000 – below the 2007 median price of $491,250.

Bottom line: Longtime Shore homeowners came through the housing bust better than those who bought during the boom.

Posted in Shore Real Estate, South Jersey Real Estate | 118 Comments

Come out, come out, wherever you are

Posted on October 15, 2011 by grim

From the NY Times:

Many Foreclosures, Few Listings

PRICES are down across the board so far this year in urban, suburban, rural and shore areas, in both northern and southern New Jersey — everywhere except areas close to Manhattan commuter train service, and in all price categories except, surprisingly, the uppermost.

What is perhaps scarier, market analysts say, is that mass foreclosure actions, which could further hurt home values, have yet to make their presence felt.

“The floodgates have been opened” on foreclosures, said Bill Flagg, a foreclosure specialist with ERA Queen City Realty in Scotch Plains. “Still, we are seeing just a trickle of listings.”

In August, after an investigation into lending practices at five big banks, a state Supreme Court judge removed what had been a de facto moratorium on judicial approvals of foreclosures.

In some other states, banks are still in the process of “recertifying” their lending practices, after evidence of “robo-signing” and careless processing of loans came to light. In New Jersey, however, that is officially done and over. “We don’t know for sure why the banks continue to hold back” on foreclosure listings, Mr. Flagg said.

New Jersey has almost 30,000 homes stuck at different points in the foreclosure “pipeline,” according to court records. Their owners are months to years delinquent on mortgage payments, and lenders have gone to court, at least to begin proceedings to seize their properties, as is required in this state.

On average, the process was taking 708 days, or nearly two years, while the moratorium was in effect in New Jersey. After it lifted in August, new foreclosure filings did increase: there were 1,190, up from 859 in July. But that was a small rise when seen in context, said Jeffrey G. Otteau, the president of the Otteau Valuation Group in New Brunswick.

As of the end of August, there had been 68 percent fewer foreclosure filings than in the same period of 2010, with just 0.05 percent of homeowner households receiving a first-time notice of default. That equates to five foreclosure filing notices for every 1,000 homeowners.

So when will the foreclosure wave finally show up? “This situation,” Mr. Otteau wrote in an e-mail, “reminds me of the recent BP Gulf oil spill, where we were all waiting for the oil to hit the beaches,” and the quantities that did arrive were smaller than expected. “I’m still wondering where it went — probably sitting on the ocean floor in enormous pools of coagulation, much like the shadow inventory in the foreclosure markets.”

Eventually those failed loans will have to “rise to the surface,” Mr. Otteau said. He predicts that when foreclosures do start coming fast and furious, the impact will be highly uneven around the state — just as the pain is unevenly dispersed now.

Posted in Foreclosures, New Jersey Real Estate | 134 Comments

Reserve too high to sell largest horse farm in Jersey

Posted on October 14, 2011 by grim

Same story, different property. Seller purchased at the height of the market and current bids don’t even come close to their (in all probability) unrealistic asking price.

From the Star Ledger:

Perretti Farms property for auction in Burlington County does not sell

A 310-acre farm of preserved land in the heart of New Jersey’s horse country did not sell at auction yesterday because the highest bid — $1.5 million — was not as much as the owners had anticipated.

Eight bidders showed up to the site in North Hanover, which is owned by the state’s largest and most prestigious standardbred breeder and racing stable, Perretti Farms. The company purchased the farm for $2.5 million five years ago, but is winding down operations in the next two years because of the shaky horseracing industry in New Jersey.

Similarly situated properties have sold for $10,000 an acre, said Max Spann, president of the Max Spann Auction and Real Estate, which organized the sale.

The highest bidders “have indicated they’re still interested,” Spann said. In the coming days, the prospective buyer and Perretti Farms will try and work out a deal.

Posted in Lowball, New Jersey Real Estate | 100 Comments

Q3 foreclosures fall, but indicators point to a jump on the horizon

Posted on October 13, 2011 by grim

From CNN:

Foreclosures continue to plague housing market

Foreclosures continued to plague the U.S. housing market last quarter, while a a growing backlog has caused the length of the foreclosure process to drag on and on.

Nationwide, foreclosure filings totaled 610,337 in the third quarter, an increase of less than 1% from the previous quarter, said RealtyTrac, an online marketplace for foreclosed properties.

Even though the increase was small, it is significant since it broke the trend of three consecutive quarterly decreases, said RealtyTrac Chief Executive James Saccacio.

“This marginal increase in overall foreclosure activity was fueled by a 14% jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures,” he said.

Month-over-month, there were fewer foreclosures. Nationwide filings totaled 214,855 in September, a decrease of 6% from August and a 38% decrease from September, 2010.

“While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up,” said Saccacio.

From the Record:

Foreclosures in N.J. take an average 974 days

Foreclosures in New Jersey take an average of 974 days, or more than 2 1/2 years, RealtyTrac Inc. reported Wednesday. That’s the second-longest process in the nation, just behind New York at 986 days.

RealtyTrac also reported that foreclosure activity remained low in the state in the third quarter, down 78 percent from the third quarter of last year, as lenders dealt with accusations of sloppy documentation and legal improprieties in the foreclosure process.

Nationally, foreclosure activity was down 34 percent in the third quarter, compared with the same period in 2010.

“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork,” said James Saccacio, chief executive officer of Irvine, Calif.-based RealtyTrac, which tracks the foreclosure market nationwide.
…
One sign the process may be ramping up in New Jersey was a 29 percent increase in the number of default notices from the third quarter of 2010 to the third quarter of 2011. Default notices are the first step in the process.

Nationally, homes foreclosed in the third quarter took an average of 336 days to go through the system. New Jersey’s process is slower than some states’ because its foreclosures must go through the courts, which is not the case in about half the states.

The process was also slowed dramatically this year after state Chief Justice Stuart Rabner ordered six large lenders to show that they were following the rules and not filing unverified documents in foreclosures. The six lenders — GMAC Mortgage, Bank of America, Citibank, JPMorgan Chase Bank, OneWest and Wells Fargo — were cleared to begin foreclosure activity again in August and September.

In New Jersey, one in every 969 households received a foreclosure filing during the third quarter, compared with one in every 213 nationwide. Foreclosure activity in the third quarter remained highest in Nevada, California and Arizona, states that were hit hardest by the housing bust.

Posted in Foreclosures, National Real Estate, New Jersey Real Estate | 154 Comments

Any questions?

Posted on October 12, 2011 by grim

From the Record:

Wall Street job cuts may affect New Jersey’s economy

New York State Comptroller Thomas P. DiNapoli said on Tuesday that he expects Wall Street to cut nearly 10,000 more jobs by the end of the year and pay less in bonuses, a blow to the tax coffers of New York City and State. Securities-related activities accounted for 14 percent of New York State’s tax revenue last year.

The industry contributes less to New Jersey’s tax base, however, and the jobs and pay cuts are “not a major risk factor” for tax revenue, said Charles Steindel, the state Treasury Department’s chief economist.

“The wages and salaries paid by the financial industry in New Jersey are about 8 percent or 8.5 percent, and that’s pretty close to the national norm,” he said. “It’s not as critical an industry to the state of New Jersey as it is to New York. ”

Still, economists said on Tuesday that bad news for Wall Street is usually bad news for New Jersey, which is home to many stock and bond brokers, accountants and financial analysts who commute to New York from towns like Ridgewood and Franklin Lakes.

“Bergen and Morris counties have significant commutation of people to Wall Street,” said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers. He did not have exact figures, but he suspects there are enough commuters to Wall Street to have an impact on the local economy.

If they lose their jobs or get smaller bonuses, “the retailers in northeastern New Jersey are going to feel that.” Hughes said. “There will be less activity in the housing market, as well.”
…
After adding 9,900 jobs from January 2010 to April 2011, the securities industry has lost 4,100 jobs through August 2011.

If, as DiNapoli predicts, the securities industry loses nearly 10,000 more jobs by the end of 2012, that would bring total industry job losses to 32,000 since January 2008.
…
Patrick J. O’Keefe, director of economic research at the accounting firm of J.H. Cohn in Roseland, said the downturn on Wall Street is “an across-the-board negative for the regional economy, and that’s a negative for New Jersey.”

On the other hand, in the past, cost-cutting by financial firms led to relocation of jobs from Manhattan to New Jersey, where real estate prices are lower, and the current downturn may prompt more of that, he said.

“There is no system that tracks the pingpong of jobs back and forth across the Hudson,” O’Keefe said, “but on net I think New Jersey was a beneficiary of job relocation in the past decade. To the extent it’s going to occur, we’d rather have those jobs come to New Jersey than go to Timbuktu.”

Posted in Economics, Employment, New Jersey Real Estate | 105 Comments

Anti Wallstreeters set sights on the mortgage biz

Posted on October 11, 2011 by grim

From HousingWire:

Protesters descend on MBA

Roughly 150 protesters gathered at the Hyatt Regency in Chicago Monday afternoon, protesting the Mortgage Bankers Association as some of the the trade group’s members looked on and snapped photos.

Thousands more from various groups organized around the city, including Daley Plaza and Federal Plaza. A pastor from a nearby suburb who identified himself as Russell, arrived at the Hyatt and picked up a sign from the Southsiders Organized for Unity and Liberation. It was a cardboard cutout of JPMorgan Chase CEO Jamie Dimon that read: “Wall Street Bank Robber.”

The likenesses of Bank of America’s Brian Moynihan, Countrywide’s Angelo Mozilo and others were also seen bouncing above the chants and a marching band.
…
One mortgage banker, who wouldn’t give her name, shook her head. “This is the wrong place to do this. We’re trying to figure out how to help them.”

Others were more critical. Another banker pointed out to his colleague different union members he thought he saw in the crowd. Another scolded some protesters for bringing their children to the rally.

One technology vendor, who wouldn’t be identified, said he was sympathetic and that some previous members of this very trade group “got away scot-free.”

“There’s just no jobs,” he said. “What would you do?”

Another banker, who also wouldn’t give his name, said the recent wave of protests was even routine. Coming out of crises and recessions, there is always a wave of descent before the eventual recovery.

The MBA itself put out a statement Monday morning in advance of the protest, highlighting the 3,000 members who assembled in Chicago to revamp the U.S. housing system.

“We all recognize that our industry faces a trust deficit with policymakers and the public and that people in our industry contributed to the events that led to the financial crisis,” the MBA said. “The mortgage professionals who have gathered in Chicago this week are about sustainable homeownership and ensuring access to affordable mortgage credit for qualified borrowers.”

Posted in Economics, Unrest | 100 Comments