Cue bailout attempt #74

Posted on September 7, 2011 by grim

From HousingWire:

NY Fed economists urge coordinated mortgage, unemployment aid

Two economists at the Federal Reserve Bank of New York said states can design successful programs to help unemployed borrowers with monthly mortgage payments only if they are tailored to specific state needs.

The New York Fed economists James Orr and Joseph Tracy highlighted Pennsylvania Homeowner’s Emergency Mortgage Assistance Program, which began in 1983. At the time roughly 4% of the state’s labor force spent more than 26 weeks without a job, twice the national average. Delinquencies and foreclosures began to spike.

Through July 2011, the state received more than 183,000 HEMAP applications for bridge loans, designed specifically to provide up to two years of mortgage assistance at a total cap of $60,000. The success of the program, Orr and Tracy found is that program administrators carefully sifted through who should get funding.

Slightly more than 43,000 applicants received a loan. To date, 80% of them were able to stay in the homes and repay the loan in full.

“Lending to a carefully screened group of unemployed borrowers could be a successful strategy for states to assist distressed homeowners, reduce economically inefficient foreclosures, and help stabilize house prices for the benefit of the public at large. This approach avoids the complexity of working with servicers to change mortgage terms,” Orr and Tracy said in a note about their research Tuesday.
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“The program design would have to balance the expected benefits to the homeowner, and the wider community, of providing assistance against the expected costs to taxpayers from default on the loan,” Orr and Tracy said.
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“The logic here is simple: If the problem is the mortgage, fix the mortgage; but if the problem is temporary unemployment, fix the cash flow. Of course, if the problem is both, then tackle each in a coordinated manner,” Orr and Tracy said.

Posted in Economics, Foreclosures, Mortgages, National Real Estate | 109 Comments

Will retiring boomers drive the vacation home market?

Posted on September 6, 2011 by grim

From MarketWatch:

Low prices lure vacation-home buyers

Last year, Kelley and Jeff Barton bought their first vacation home in Mammoth Lakes, Calif., a ski-resort area about 350 miles from where they live in Seal Beach, Calif.

At $200,000, the condo unit was a bargain considering it had been priced at more than $400,000 in the past, said Barton, 52. Plus, since the couple rent out the home when the family isn’t using it, they’re able to cover their mortgage payments and all their expenses — and make a profit.

Lately, more people are wondering if the market is ripe for turning the dream of owning a vacation retreat into a reality.

Prices on vacation homes have fallen even more sharply than on primary homes. Last year alone, the median price of a vacation home fell 11%, while the price of a typical primary residence fell 5%, according to the National Association of Realtors’ annual Investment and Vacation Home Buyers Survey, which includes information from about 1,900 buyers.

In some cases, people are scooping up cabins in the woods for less than $100,000, said Charlie Young, president and chief executive of ERA Real Estate, a residential real-estate brokerage franchiser. Even some individuals who rent their primary residences are looking to buy a vacation property in a more affordable market, Young said.

But unlike a primary residence, a vacation home is a discretionary purchase, and in times of financial uncertainty, people are reluctant to shell out unnecessary funds.

It’s wise to think about a vacation-home purchase carefully, looking at the financial and tax implications, and monthly maintenance costs, said Michael Kay, president of Financial Focus, an investment advisory firm in Livingston, N.J. Potential buyers also should consider the opportunity cost of making the purchase, or the benefits of investing the money elsewhere, he said.
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Dan White, president of Daniel A. White & Associates, a wealth-management firm in the Philadelphia area, said prospective vacation-home buyers need to be cautious before acquiring more debt, carefully considering the stability of their employment before committing to another mortgage. White said he has worked with many people in their 50s who suddenly find themselves out of work. And if they have a second mortgage on a vacation home, that becomes a big problem.

Before buying, you also need to come to terms with how much you really will use the home and how you will maintain it, said Troy Thiel, a real-estate agent with First Weber Group in Madison, Wis.

An important factor for many people is how long it takes them to get to the vacation home: A two-hour drive from their primary residence is often more palatable than a four- to five-hour trip.
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Some baby boomers are seizing an opportunity to get a deal on a vacation home they can enjoy now but that’s also a home that eventually will become their primary residence when they retire, Thiel said.

“That’s one of the primary drivers in the market: people selling their big house and buying a smaller home or condo in their current market and using the equity to purchase the second home,” he said.

According to the National Association of Realtors’ survey, 34% of people who purchased a vacation home in 2010 plan on using that property as a primary residence at some point in the future.

Posted in Economics, Housing Recovery, National Real Estate | 146 Comments

Buyers reminded of what “flood” really means

Posted on September 5, 2011 by grim

From the Star Ledger:

Post Irene, houses for sale in flood zones now give buyers pause

That house for sale on River Road might be viewed a little differently now by prospective homebuyers.

Add to that the storm damages some listed properties suffered in Hurricane Irene and the autumn real estate market in some parts of the state is looking a little shaky.

“Right now, this is fresh in (the buyers’) mind,” said Joanne Liscovitz, a real estate agent with Coldwell Banker in Hillsborough. “This is going to take a while for it to go away — that feeling of, ‘Well, I don’t want to put myself in that situation.’”

Earlier this week, Liscovitz took one property — a three-bedroom house in Manville that was up for a short sale — off the market so its owner could fix flood damage. After Hurricane Floyd in 1999, the owner redid the kitchen and floors, but with Irene, water was up through the basement and into the living areas once again.

It was most recently listed for $189,000, but as soon as buyers see its proximity to a bridge, they tend to waver.

“You can only ask so much money for a house in a flood zone versus not in a flood zone, and there’s a lot of work involved and a lot of inconvenience when you’re the owner,” Liscovitz said.

“Buyers are scared as it is,” she added.

The housing market may be affected more in towns that were affected most by Irene, like like Manville, Fairfield, Wayne, Paterson and Bound Brook.

“Since we’ve had all these floods this year, the flood zone properties have been (hit) very, very hard,” said Joe Palermo, owner of Re/Max Tri-County Realty in Wayne. “There are very few of them actually selling.”
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The storm will have other ramifactions as well. Owners will take their damaged houses off the market for repairs and it could be a while before the properties are ready to show. New kitchens or floors will be one perk for new buyers, but the fact remains — the house is in a flood zone. With Irene fresh on their minds, few buyers are willing to gamble on these kinds of houses, no matter the price.

“Trying to sell a home that’s in a flood plain is challenging at any time,” said Gary Large, branch manager of Prudential New Jersey Properties in Morristown and president-elect of the New Jersey Association of Realtors. “But when you’re coming off a storm (like Irene), obviously buyers are going to be gun-shy.”

Posted in New Jersey Real Estate | 107 Comments

July Contracts Fall Short

Posted on September 2, 2011 by grim

From the Otteau Group

Home Purchase Contracts Losing Steam

Although home purchase contracts in July exceeded the year ago level for the 3rd consecutive month, they appear to be losing strength along with the rest of the economy. During July, the rate at which home buyers signed contracts to purchase existing and new homes was 4% higher than one year ago which follows a 12% increase in June and 13% increase in July. Considering that these recent gains follow 12 straight months of declining purchase activity should be good news for the housing market. But the declining strength of the increases coupled with slowing job growth, recent stock market losses and the debt ceiling crisis suggest that the housing stabilization may be crumbling.

Posted in Economics, Housing Bubble, Housing Recovery, New Jersey Real Estate | 200 Comments

Hidden costs of stockpiling foreclosure inventory

Posted on September 1, 2011 by grim

From the Star Ledger:

Even empty N.J. homes need repair post-Hurricane Irene

Once a house has gone through foreclosure — and is therefore likely unoccupied — who watches out for it during storms like Hurricane Irene?

Even before the properties suffered storm damage, the bank-owned houses already had a negative reputation that they are not properly maintained. Linda Fisher, a law professor at Seton Hall, studies low-income neighborhoods where this “foreclosure contagion” effect is particularly common.

“Given that owners of vacant properties tend not to maintain them well, particularly in declining markets, further property deterioration as a result of a natural disaster is going to exacerbate the problem,” Fisher said.

Since February alone, banks have repossessed more than 1,600 houses, according to RealtyTrac.

After weather events like Irene, the task of checking in on these properties often falls to real estate brokers and agents like Bill Flagg who market and sell the houses the banks own. Flagg and his team at ERA Queen City Realty in Scotch Plains have spent all day, every day this week checking in on some 100 houses he oversees throughout the state.

There are downed trees to consider, crushed fences to repair, flooded basements to drain and shattered shards of glass to sweep, as well as concerns over whether the electricity is keeping the pumps going. In one case, the wind blew siding off a property. Flagg couldn’t even get to another house in Lincoln Park because of the flooded roads.

“We check the properties, fill out incident reports, and when there’s damage, we send people out,” Flagg said yesterday as he drove from one house to another on a whirlwind day of site visits. “This stuff takes time because there’s a lot of properties. You can only do so many in a day.”

Posted in Economics, New Jersey Real Estate | 40 Comments

June Home Prices – Signs of Recovery or Crap?

Posted on August 31, 2011 by grim

From Bloomberg:

Home Prices in U.S. Showed Signs of Stabilizing

Residential real estate prices in the U.S. decreased in the year ended in June at a slower pace than in the prior month, a sign the market may be stabilizing.

The S&P/Case-Shiller index of property values in 20 cities fell 4.5 percent from June 2010, after a 4.6 percent drop in the 12 months ended May that was the biggest since 2009, the group said today in New York. The median forecast of 31 economists surveyed by Bloomberg News projected a 4.6 percent decline.

Values fell by 0.1 percent in June from the prior month after adjusted for seasonal changes, matching the decrease in May, indicating the deterioration is slowing. Nonetheless, any recovery in home values is probably years away as foreclosures dump more properties onto to the market, while a jobless rate hovering around 9 percent and strict lending rules hurt sales.

“Prices aren’t going to rebound back rapidly,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “Most people think that when the downturn ends the recovery will be pretty good, but that’s not going to be the case at all.”

From the NY Times:

Home Prices In June Tally Showed Gain

Spring buying pushed home prices up for a third consecutive month in most major American cities in June, a private report showed. But the housing market remained shaky, and further price declines were expected this year.

The Standard & Poor’s/Case-Shiller home price index said prices increased in June from May in 19 of the 20 cities tracked. Prices rose 3.6 percent in the April-June quarter from the previous quarter. Neither of those numbers is adjusted for seasonal factors. Over the last 12 months, home prices have declined in all 20 cities.

Chicago, Minneapolis, Washington and Boston posted the biggest monthly increases. Metro areas hit hardest by the housing crisis, including Las Vegas and Phoenix, reported small increases.
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Analysts say home prices have stabilized in coastal cities over the last six months. Seasonally adjusted prices have fallen a modest 1 percent in the last six months, according to the index. That is less than a third of the decline from the previous six months.

Home prices are certain to fall further once banks resume foreclosures, millions of which have been delayed because of a government investigation into mortgage lending practices. If the American economy slips back into another recession, prices could drop even further.

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 89 Comments

July pendings fall from June, but up from last year

Posted on August 30, 2011 by grim

From Bloomberg:

Pending Sales of Previously Owned U.S. Homes Fell in July

The number of contracts to purchase previously owned U.S. homes fell in July for the first time in three months, a sign that lower prices and borrowing costs aren’t luring in buyers.

The 1.3 percent decrease in the index of pending home sales followed a 2.4 percent gain the previous month, the National Association of Realtors said today in Washington. Economists forecast a 1 percent drop, according to the median of 40 estimates in a Bloomberg News survey.

Unemployment at 9.1 percent and the prospect of more foreclosures in the pipeline mean it may take years to clear the oversupply of houses, a sign the market is struggling to stabilize. The prospect of contract cancellations due to stricter underwriting standards and low appraisals means some signings may not translate into closings.

“Housing is still on the ropes,” Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in a note to clients. Shepherdson said he was concerned that “the chaos in the stock markets might have persuaded a greater proportion of buyers to walk away after signing contracts,” leaving sales short of the level implied by the pending data.

From MarketWatch:

Pending Home Sales Slip in July but Up Strongly From One Year Ago

Pending home sales declined in July but remain well above year-ago levels, according to the National Association of Realtors(R). All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.

The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.

Posted in Economics, Housing Recovery, National Real Estate | 74 Comments

“Feeling the pains of an old-fashioned recession”

Posted on August 29, 2011 by grim

From the Record:

Bad loans continue to rise for NJ banks

Toxic loans held by New Jersey-based banks continued to climb in the second quarter even as bad loans at U.S. banks declined, according to new government data.

The Federal Deposit Insurance Corp. said Tuesday in its quarterly industry profile that loans more than 90 days past due or no longer accruing interest at New Jersey’s 117 banks and thrifts rose to 3.61 percent of total loans as of June 30, up from 2.91 percent a year earlier. Those banks’ combined seriously delinquent debt climbed in each of the past four quarters.

Meanwhile, the combined bad loans at the nation’s 7,513 banks fell to about 4.4 percent of the total, down from 5.2 percent a year earlier, the fifth straight quarter of declines.

Paramus-based Hudson City Savings Bank, the largest thrift based in New Jersey and a high-end residential mortgage lender, had 123 foreclosed properties on its books at the end of June, up from 52 a year earlier.

A weak economy, persistent high unemployment and a slow foreclosure process have all contributed to the recent rise in bad loans throughout the state, said Bill Brewer, partner at the Livingston office of Crowe Horwath LLP, a community bank auditor. “Banks have had a hard time moving this stuff off the books,” he said. “The banks have the capital to withstand this, but it is a continuing problem.”

Increased delinquencies have been across the board with weakness in residential mortgages, commercial real estate loans and other types of business and consumer loans, Brewer said.

Kevin Cummings, chief executive officer of Short Hills-based Investors Savings Bank, said New Jersey is “feeling the pains of an old-fashioned recession.”

Posted in Economics, New Jersey Real Estate, Risky Lending | 116 Comments

Hurricane Irene Open Discussion

Posted on August 26, 2011 by grim

From the Record: Hurricane warning issued for NJ; Irene weakens slightly to Category 2

From the Star Ledger: N.J. braces for Hurricane Irene’s wrath as officials warn of high winds, heavy flooding and possible power outages

From the APP: Shore’s long run of missing direct hits could end this time

From the Star Ledger: Hurricane Irene could be ‘most devastating storm to ever hit’ N.J., climatologist says

From NPR: ‘Nightmare’ Scenario: Hurricane Menaces East Coast

From the Philly Inquirer: As N.J. shore braces for Irene, some wrestle urge to ride it out

From Bloomberg: New York Buildings Face Storm Damage as Property Managers Plan for Irene

From the NY Times: Alert Extends Up the East Coast as Hurricane Irene Closes In

From the ABC: NJ shore visitors flee Irene amid major evacuation

From CNN: Hurricane Irene weakens, stalks U.S. coast

Posted in General | 341 Comments

Distressed homes are the market

Posted on August 25, 2011 by grim

From the Record:

A third of homes sold in second quarter were in foreclosure

Almost one in three homes sold in the U.S. in the second quarter were owned by banks or in some stage of foreclosure, RealtyTrac reported today. In New Jersey, where foreclosure activity has been stalled for most of this year, about one in seven homes sold was either owned by a bank or in the foreclosure process.

Because these properties sell for deep discounts, they offer opportunities for bargain hunters, said RealtyTrac’s CEO, James J. Saccacio.

“This report is clearly good news for well-positioned buyers and investors looking for bargain real estate that will build them wealth in the long term and often cash flow as rental real estate in the short term,” Saccacio said. RealtyTrac follows the foreclosure market nationwide.

Distressed sales were most common in the troubled real estate markets of Nevada, Arizona and California, RealtyTrac said. In Nevada, for example, foreclosure-related sales accounted for 65 percent of all sales.

The average sale price of a home in foreclosure or owned by a bank was 32 percent lower than the average sale price of homes not in foreclosure. In New Jersey, the discounts were even bigger, ranging from about 31 percent for homes sold as short sales — when a bank allows a home to be sold for less than the amount owed on the mortgage — up to 53 percent for bank-owned homes.

RealtyTrac also found that short sales took on average 245 days in the second quarter, down from 256 in the first quarter. Sacaccio called that a sign that the housing market is “starting to focus on more efficiently clearing distressed inventory, at least in some areas.”

Real estate agents and prospective buyers have complained that lenders have been slow to approve short sales, often leading buyers to give up in frustration.

Posted in Employment, Housing Bubble, New Jersey Real Estate | 198 Comments

Pleas to “hit the number” largely ignored

Posted on August 24, 2011 by grim

From Reuters:

U.S. housing faces extra drag – low appraisals

When Sean McGowan signed a contract to buy a New Jersey home in November, he didn’t expect he’d still be living with his parents nearly a year later.

The deal fell through after two appraisals came in tens of thousands of dollars below the contract price, part of a wider trend of differences over property valuations that is compounding the U.S. housing crisis.

“It was very frustrating. We really wanted to move in,” said McGowan, a 31-year-old real estate lawyer.

Many housing experts say low appraisals are yet another headwind for a housing market already suffering from a plunge in prices, high unemployment and tight credit.

Lenders are forced to cap their mortgage loans at the value set by appraisers and buyers and sellers often can’t agree on how to make up the difference with an original deal price.

“It’s hard to talk about any recovery of the housing market and home prices until the appraisal issue is squared away, and that is a broad issue,” said Guy Cecala, publisher of Inside Mortgage Finance, a Maryland-based trade publication.

Sixteen percent of Realtors reported contract cancellations in July, matching June’s level, which was the highest since March 2010, when the National Association of Realtors began collecting data.

Nine percent reported contract delays due to low appraisals, and 13 percent reported a contract was renegotiated to a lower price because an appraisal came in below the original price in the last three months, the NAR said.

Posted in Economics, National Real Estate, New Jersey Real Estate, Risky Lending | 115 Comments

Bye bye PMI

Posted on August 23, 2011 by grim

From HousingWire:

PMI Group units forced to stop writing new insurance

The PMI Group’s market share “is going to be eaten up by competitors” in the aftermath of Arizona regulators placing the mortgage insurer under state supervision and curtailing the writing of new business, according to Rob Haines, insurance analyst with CreditSights.

The Arizona Department of Insurance, the primary regulator for PMI, instructed The PMI Group to cease issuing new mortgage insurance commitments in any state. The move was largely expected with the insurer warning investors earlier this month in filings with the Securities and Exchange Commission.

Based on the state’s supervisory order, PMI can issue new mortgage insurance through pending commitments until Sept. 16, but must stop making interest payments on $285 million of surplus notes the company issued.

The company also cannot enter any new contracts, mergers, and acquisitions nor withdraw from any bank accounts. Arizona regulators said executives must submit a plan for rebuilding The PMI Group’s financial condition within 60 days.

The next step, Haines said, is a potential regulatory seizure of the insurer.

“The regulatory seizure might not happen, but that depends on the company’s success trying to execute some type of recapitalization,” Haines said.

The company warned if Arizona appoints a receiver and begins liquidating the insurer, roughly $735 million of outstanding debt would become due. PMI said it doesn’t have enough capital to meet those obligations. The company hired Willis Capital Markets & Advisory and Evercore Partners as advisers to help find options.

The PMI Group is still facing a difficult situation with other mortgage insurers not facing the same restrictions on new business — a key tool in any type of recapitalization plan.

“They are all facing the same headwinds, but they went into this storm in different conditions,” Haines said when discussing all private mortgage insurers. He said the problem for The PMI Group is the firm does not “have the same capital resources that these other companies had” heading into the volatile period.

Posted in Housing Bubble, National Real Estate, Risky Lending | 121 Comments

“Buyers are beginning to think that if they wait, they’re going to get a better deal in a few months.”

Posted on August 22, 2011 by grim

From Bloomberg:

Homebuyers Hunker Down as Real Estate’s Drag on U.S. Economy May Worsen

Sanjay Jain called his real estate broker four days ago to cancel a deal to buy a three-bedroom home in Folsom, California, unnerved by another plunge in the most volatile equities market on record.

“Seeing what’s happening on the stock market made me think that it’s not a good time to be buying a home,” Jain said. “I’m going to wait and see.”

As the U.S. economy shows signs of sputtering, instability on Wall Street is sapping the confidence of would-be property buyers, said Karl Case, co-founder of the S&P/Case-Shiller home- price index. That means housing, which aided every recovery except one before the most recent recession, may deepen its five-year drag on growth.

“There’s a dramatic effect on an economy when a major sector is flat out,” said Case, professor emeritus of economics at Wellesley College in Massachusetts. “If housing takes another leg down, it’s an accelerator. It’s going to make a recession happen faster and deeper.”
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“A lot of people have seen their down payments for a home disappear in the stock market,” said Keith Gumbinger, vice president of HSH Associates, a loan-data firm in Pompton Plains, New Jersey. “It served as a reinforcement to the hunker-down mentality that a lot of homebuyers already had.”
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“The typical homebuyer gets rattled when confronted with economic turmoil,” said Stan Humphries, chief economist of Zillow.com, an online real estate information service in Seattle. “The type of fear we’re seeing could substantially worsen the housing market.”
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“Low mortgage rates are only helpful to homebuyers who aren’t paralyzed with fear after watching their 401(k) disappear,” said Mark Goldman, a lecturer at the Corky McMillin Center for Real Estate at San Diego State University. “For now, people see the stock market as a casino table.”
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Jim Hamilton, Jain’s agent at Lyon Real Estate in Folsom, said he is seeing more buyers hold back on purchases because they expect home prices to fall.

“People are watching the stock market as a major indicator of what’s going on in the economy,” he said. “Buyers are beginning to think that if they wait, they’re going to get a better deal in a few months.”

Posted in Employment, Housing Bubble, National Real Estate | 92 Comments

Ease doesn’t mean easy, the majority of short sales are a waste of time

Posted on August 20, 2011 by grim

From the NY Times:

Banks Ease Stance on Short Sales

STANDING by while her mother was evicted from her home in Tinton Falls for the few thousand dollars she owed in mortgage payments in the 1990s had a big influence on Kim Hale and her career choices. A new nursing school graduate at the time, Ms. Hale said she had had no idea how to help her mother, who was “too embarrassed to reach out to anyone.”

“If I knew then what I know now, she would have fought, and she’d probably still be in that house,” said Ms. Hale, 45, who is now a real estate agent with Exit Realty in West Long Branch, specializing in short sales. She says she focuses on short sales — they are about 70 percent of her work — because she wants to offer distressed homeowners the best possible outcome.

Ms. Hale is one of many brokers who have positioned themselves as short-sale experts. Which makes sense, as nearly 4.3 million American homeowners are delinquent on their mortgage payments, 124,910 of them in New Jersey, according to data released last month from LPS Applied Analytics. An additional 121,258 New Jersey homes are in foreclosure, which makes New Jersey the state with the fourth-highest percentage of delinquent loans.
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These days it is even starting to dawn on long-reluctant banks that there is value in short sales, which promise higher returns than foreclosures (not to mention the benefit of keeping a house from abandonment). In fact, in states like New Jersey and New York — where the foreclosure process has halted in the 11 months since a court order forced banks to restructure their mortgage procedures — the short sale has for the time being become practically the only alternative.

As a result, it is now banks themselves that, in growing numbers, are indirectly providing brokers with leads on potential short sales.

“The banks are definitely becoming friendlier to deal with, especially as they realize there’s so much shadow inventory out there that hasn’t even reached the market yet,” said Bill Flagg, a broker with ERA Queen City in Scotch Plains, referring to the very institutions that once made the process difficult. Today, half his office’s business is in short sales or foreclosures, he said.

J. K. Huey, who heads up Wells Fargo Bank’s short-sale and foreclosure division, affirmed the recent thaw between the real estate and banking communities on short sales, noting that “most agree that foreclosure is not the best alternative for anyone.”
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Brokers are also becoming more personally proactive, advertising their short-sale expertise or, in the case of Susanne Rhame of the Woodward Realty Group in Middletown, blogging and tweeting about short selling. But when all else fails, eavesdropping can sometimes prove helpful in turning up clients. Ms. Hale described a recent shopping expedition on which she heard another customer talking about a neighbor who had been forced to leave her home.

“I’m not shy,” she said. Upon reaching the homeowner, “I say, ‘Look, could you use $3,000? That’s what they might pay you to not just walk away from your home.’ With a short sale, you can control the way you leave.”

Posted in Housing Bubble, New Jersey Real Estate | 74 Comments

NY Fed to Jersey: No jobs, no housing recovery

Posted on August 19, 2011 by grim

From HousingWire:

One in 10 NJ homeowners stuggle with mortgage payments: NY Fed

The workforce in New Jersey is one of the nation’s most educated, but residents remain entangled in a web of financial troubles with the state’s delinquent mortgage rate sitting at 10% percent.

Federal Reserve Bank of New York president William Dudley made that assessment while speaking to a New Jersey crowd Thursday. By Fed estimates, the unemployment rate in Jersey stands at 9.5%, while the number of mortgages 90 days or more past due or in foreclosure hit 10% back in March.

During the Great Recession, the state lost 250,000 jobs. The population of New Jersey is 8.8 million and 40% of its citizens are college graduates.

Dudley calls the jobs recovery in New Jersey “sluggish,” with the private sector experiencing only “moderate gains.” When you add state budget cuts and a reduction in state government jobs, the employment situation continues to look grim.

“Because the jobs recovery has been weak, there has been little progress in reducing unemployment,” Dudley said.

The median household income in New Jersey sits at about $68,000, with 9% of the state’s residents living below the federal poverty line.

While home prices have firmed in the past few months, borrowers are still carrying substantial debt levels. The average debt per person in New Jersey stands at $60,400, the Fed said.

Dudley said without job growth, the state’s housing and debt situation is unlikely to experience significant improvement.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 90 Comments