November Existing Home Sales

Posted on December 22, 2010 by grim

From Portfolio:

Housing Sales Improving? Humbug

The housing market just keeps dragging down the economy, with small businesses likely to be among the hardest hit if the sector does not rebound.

This morning, the National Association of Realtors reported that sales of existing homes rose 5.6 percent in November from October. Good news, right? Well, not really. If you compare those figures to November 2009, when there was a tax credit in place for first-time homebuyers as part of the stimulus package, sales were down 27.9 percent.

And the 4.68 million homes sold amounted to fewer than the 4.75 million home sales that economists had forecast.

While National Association of Realtors Chief Economist Lawrence Yun saw the glass as half-full, others aren’t so sure.
…
Mark Vitner, an economist with Wells Fargo, gave his blunt reaction to Bloomberg: “Housing is going to remain dead in the water through the middle of 2011. As foreclosures come back on the market, that will put downward pressure on prices.”

From the NY Times:

U.S. Home Sales Rose in November but Missed Forecasts

Sales of existing homes climbed in November, but sustained growth in the job market and access to credit were needed before home purchases reach a level that signals a recovery, analysts said on Wednesday.

In the latest report to reflect an improving economy, the National Association of Realtors said on Wednesday that sales of homes rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November, from about 4.43 million homes in October.

Still. the rate was nearly 28 percent below the 6.49 million of November 2009, and it fell below the pace of 4.75 million units that economists surveyed by Bloomberg had expected.

“We are underperforming, given the size of the population,” Walter Molony, a spokesman for the Realtors association, said. “Homes sales this year are sub-par. We should be over 5 million on a sustainable level.”

The November figure, a sharp reversal of the 26 percent plunge in existing home sales in October, refers to completed transactions for single-family townhomes, condominiums and co-ops.

From Bloomberg:

Sales of U.S. Existing Homes Rise Less Than Forecast to 4.68 Million Rate

Sales of existing homes rose less than forecast in November as the industry that triggered the worst U.S. recession in seven decades struggled to recover after a government tax credit lapsed.

Purchases increased 5.6 percent from the prior month to a 4.68 million annual rate, the National Association of Realtors said in Washington. Economists projected sales would rise to a 4.75 million pace, according to the median forecast in a Bloomberg News survey. The median price rose 0.4 percent from a year earlier.

Previous decreases in prices and mortgage rates have made houses more affordable, which may keep supporting demand after the end of a government tax credit caused the industry to slump. At the same time, unemployment hovering near 10 percent is a reminder it will take years for housing to regain pre-recession levels.
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Distressed sales, which include foreclosures and short- sales in which the bank allows a home to sell for less than the full amount of the mortgage, accounted for 33 percent of total sales, about the same as in prior months.

Posted in Economics, National Real Estate | 130 Comments

Burglary or Good Business?

Posted on December 22, 2010 by grim

From the NY Times:

In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks

When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.

When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.

The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.

In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.

“Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.

Identifying the number of homeowners who were locked out illegally is difficult. But banks and their representatives insist that situations like Ms. Ash’s represent just a tiny percentage of foreclosures.

Many of the incidents that have become public appear to have been caused by confusion over whether a house is abandoned, in which case a bank may have the right to break in and make sure the property is secure.

Some of the cases appear to be mistakes involving homeowners who were up to date on their mortgage — or had paid off their home — but who still became targets of a bank.

Posted in Foreclosures, National Real Estate | 84 Comments

Just when you thought it was over…

Posted on December 21, 2010 by grim

From the Star Ledger:

N.J. Supreme Court intervenes in mortgage foreclosures by six lenders

New Jersey’s highest court has stepped in to monitor the filing of real estate foreclosures in the state.

Supreme Court Chief Justice Stuart Rabner today announced that six lenders suspected of irregularities will have to present a case in court next month or face having their foreclosure actions suspended.

Rabner writes that the court “has become increasingly concerned about the accuracy and reliability of documents submitted to the Office of Foreclosure.”

A special master could be appointed to review the foreclosure practices of companies including Wells Fargo, JP Morgan Chase and Citibank.

From the WSJ:

N.J. Threatens to Block Foreclosures

New Jersey courts are threatening to block six major lenders from foreclosing on most homeowners unless they can prove their process is sound.

In response to errors blamed on so-called “robo-signers” and other potential shortcuts, judges on Monday ordered six lenders to defend their foreclosure practices and 24 others to produce reports on their process.

“It’s important that the judiciary ensures that judges are not rubber-stamping questionable documents that may not be reliable,” Supreme Court Chief Justice Stuart Rabner said. “The steps we’ve taken today are designed to ensure the integrity of that judicial process.”

New Jersey will also require banks’ attorneys to certify they spoke with a bank employee who reviewed the foreclosure documents, a practice similar to one enacted in October by New York. For now, foreclosures will continue, but Mr. Rabner said he didn’t expect a rush to push cases through in the meantime. The orders pertains to uncontested cases, or 94% of foreclosures in New Jersey.

The six banks—Ally Financial, Bank of America, Citibank, JP Morgan Chase, OneWest Bank FSB and Wells Fargo—were involved in 29,000 of the 65,000 foreclosure filings in New Jersey in 2010, Mr. Rabner said.

From the NY Times:

New Jersey Court May Order Foreclosure Freeze

Six lenders that together have filed nearly 30,000 foreclosure actions in New Jersey this year face the possible suspension of such operations next month. The possible suspension came under a court order announced on Monday by the chief justice of the state Supreme Court, Stuart J. Rabner.

The action follows a report submitted to the Supreme Court that, citing depositions and court filings in other states, paints a picture of systemic abuses in the filing of foreclosures that include so-called robo-signing, in which employees signed hundreds of documents without checking them for accuracy.

Posted in Foreclosures, Housing Bubble, Mortgages, National Real Estate | 129 Comments

Time to go?

Posted on December 19, 2010 by grim

From the Baltimore Sun:

Mortgage deduction: A sacred cow whose time is up?

Fifteen years ago, Carol Nietmann and her husband bought a spacious house in Calvert County near the Chesapeake Bay. And thanks to the time-honored tax deduction for mortgage interest, she says, their new place was a little bigger and a little nicer than they otherwise would have been able to afford.

Perhaps the most sacred of all the sacred cows in the tax code, the home mortgage deduction has long been seen as critical to a major element in the American dream — owning your own home. It’s also a boon to home builders, construction workers, the financial services industry and local governments that benefited from fatter real estate tax revenue.

But after nearly a century, the mortgage deduction may face a day of reckoning. Though out of the spotlight for the moment while the lame-duck Congress thrashes to an end, the mortgage deduction issue is likely to resurface next year when new representatives — including a lot more deficit-hawk Republicans — take their seats.

In part, the hoary deduction has a target on its back as a result of policymakers’ rethinking the whole issue of home ownership. After the havoc that followed the bursting of the housing bubble — a calamity that still shadows the U.S. economy and will for years — it’s no longer clear that near-universal home ownership should be a paramount goal.

More important, despite the deduction’s grip on the public and politicians, changing it as part of a package of other revisions offers Washington a chance to do something meaningful about the surging federal deficit — generating billions of dollars more in federal revenues that could be used to cut the deficit while inflicting surprisingly little pain on most middle-class homeowners.

However, the National Association of Realtors is already running ads warning that tampering with the deduction would hurt “hard-working American families.” The ads point out that 65 percent of the taxpayers who took the deduction made less than $100,000.

What the group doesn’t say is that about 75 percent of the entire $85.5 billion that people saved in taxes from the mortgage interest deduction in 2008 went to individuals or couples making $100,000 or more, according to an analysis by the congressional Joint Committee on Taxation of the latest data available.

Based on the committee’s numbers, taxpayers who took the mortgage deduction on average saved $2,330 in 2008. But for those reporting incomes of $200,000 and over, the average savings were nearly triple that amount.

In fact, only about one-half of all homeowners in the United States — and just one-quarter of all taxpayers — benefit from the mortgage interest deduction at all. That’s because most people don’t have home loans or don’t pay enough in mortgage interest to take advantage of the benefit.

Also left out are many homeowners in cheaper housing markets, though people with pricier homes and larger mortgages — many of them affluent younger Americans in cities on the East Coast and in California — reap a disproportionately large share of the tax savings.

Posted in Economics, Mortgages, National Real Estate | 141 Comments

October home prices dip

Posted on December 17, 2010 by grim

From First American CoreLogic:

From Inman News:

Home prices decline for 3 months in a row

October home prices fell for the third straight month, according to an index maintained by mortgage data aggregator CoreLogic.

The 3.93 percent year-over-year decline in the CoreLogic Home Price Index was significantly greater than the 2.43 percent slip registered in September, and left home prices down 30.2 percent from their April 2006 peak.

Excluding distressed sales, national home prices were down 1.5 percent in October 2010 compared to a year ago, with a 20.9 percent decline from peak.

From HousingWire:

Home prices down for third straight month: CoreLogic

Home prices declined 3.93% in October from the previous three months, the third straight report of declines as any hope for a recovery in early 2011 begins to fade, according to data from CoreLogic.

Prices slipped 2.8% in September and 1.1% in August. CoreLogic’s Chief Economist Mark Fleming said without the artificial support of the government, the housing market continues to show signs of weakness.

“When you combine these factors with high shadow and visible inventories, the prospect for a housing recovery in early 2011 is fading,” Fleming said.

Posted in Economics, Housing Bubble, National Real Estate | 235 Comments

New Jersey unemployment holds at 9.2%

Posted on December 16, 2010 by grim

From the WSJ:

New Jersey Sees Private Sector Job Growth

New Jersey’s unemployment rate held steady at 9.2% in November and the state gained 10,000 jobs, largely in the private sector, the state labor department said Wednesday.

“It’s a very encouraging report,” said Joseph Seneca, a public policy and economics professor at Rutgers University. “One swallow does not a summer make, and one good employment month does not an economic recovery make. But it’s encouraging and the gains were broad-based across most of the private business sectors.”

The 9,300 private sector jobs added in November marked the largest monthly gain all year. Seneca said the data show New Jersey catching up with the national trend of private sector growth, though there is still a long way to go to fill in the hole left by the recession.

New Jersey lost 245,000 jobs from January 2008 to December 2009, Seneca said.

Patrick O’Keefe, a former deputy assistant labor secretary in the Reagan administration, said the bump in jobs is “not even statistically significant.”

“We have yet to achieve traction in New Jersey,” said O’Keefe, now director of economic research at J. H. Cohn in Roseland, N.J. “We simply do not see the type of increase in number of jobs or in hours that would suggest that there is an expansion going on in New Jersey’s economy.”

The number of people working or looking for work in New Jersey fell by 4,100, helping to keep the unemployment rate at 9.2%. Nationally, the unemployment rate rose to 9.8% as more people entered the workforce, Seneca said.

New Jersey’s unemployment rate could increase in coming months as people restart their job search and rejoin the workforce on which the figure is based. That would signal a recovering job market, Seneca said.

From New Jersey Newsroom:

New Jersey unemployment unchanged

New Jersey’s struggling economy is showing little recovery.

In November, 16,800 New Jerseyans found work — much of it temporary — but another 15,600 lost their jobs, according to figures released Wednesday by the state Department of Labor and Workforce Development. More than 321,000 New Jerseyans remain out of work.

Even as retailers prepared for the holiday shopping season, they laid-off 3,600 people. In the construction industry, 4,500 people found work, but another 4,500 were laid off.

The gain of 1,200 jobs had no affect on the state’s unemployment rate of 9.2 percent but Labor Department officials point out the unemployment rate was 10 percent last December.
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The majority of the 16,800 new jobs were recorded at private sector businesses which added 9,300 jobs over the month. Seven of ten industry sectors posted job gains. New Jersey’s private sector employers have now added jobs in five of the past six months and have increased employment by 10,700 so far in 2010. Comparatively, 115,600 private sector jobs were lost over the first eleven months of 2009

Based on more complete reporting from employers, previously released October estimates were revised higher by 1,400 jobs, resulting in an over-the-month (September-October) gain of 2,600 jobs.

In November, industries with significant job gains included construction, up 4,500 jobs, professional and business services, up 3,900, education and health services, 2,800, other services 2,200, and financial activities, 2,000. The gain in professional and business services was due to hiring in the administrative support/waste management/remediation segment, 6,300, which saw increased employment at temporary help agencies. Smaller increases were recorded in manufacturing, 900, and information, 500.

Industries that experienced job loses were leisure and hospitality, down 4,500, trade, transportation and utilities, 2,900, and mining and logging, 100. In leisure and hospitality job losses were recorded in the arts, entertainment, and recreation, 2,600, and accommodation and in the food services, 1,900.

Government employment increased by 700 as local governments hired 1,100 people. But the federal government laid off 100 people and the state government cut 500 jobs.

Posted in Economics, Employment, New Jersey Real Estate | 141 Comments

Did you shop around for a mortgage?

Posted on December 15, 2010 by grim

From CNBC:

Mortgage Shopping 101

Consumers will research on average 3 different models of computers before purchasing one. Why does the real estate correspondent care about computers? I don’t. I’m just throwing out some important background information to make my point, like that 96 percent of American consumers compare prices when shopping for anything.

Here’s my point: 40 percent of us get just one quote when shopping for a home loan.

“I think it reflects that consumers are still very confused,” notes Doug Lebda, CEO of LendingTree, which did the survey. Yes, I know, LendingTree is an online service that helps you shop for loans, but they did it through Harris Interactive, which surveyed over 1,300 homeowners.

“When you’re shopping for a mortgage, there are lots of rates and terms and points and programs being thrown at you,” explains Lebda. “You might be almost upside down on your mortgage, you’ve just gone through two years of great confusion in your financial lives, and so you feel maybe just happy to be getting a deal and to be saving a little money and to be actually qualifying.”

Now here’s the really ridiculous part: Only 28 percent of the people surveyed said they were confident they got the best deal.

Posted in Economics, National Real Estate | 109 Comments

HAMP FAIL

Posted on December 14, 2010 by grim

From Bloomberg:

U.S. Foreclosure Prevention Program to Fall Short, Watchdog Panel Finds

A U.S. Treasury program aimed at preventing 3 million foreclosures is likely to fulfill less than a third of its goal, a congressional watchdog reported.

The Treasury’s homeowner aid effort is “ineffective” and has failed to hold mortgage companies accountable, the Congressional Oversight Panel for the Troubled Asset Relief Program said in a report released today.

“The program has turned out to be a lot smaller and have a lot less impact on the housing market than we expected,” said former U.S. Senator Ted Kaufman, the chairman of the panel.

The Home Affordable Modification Program, or HAMP, pays lenders and servicers to rewrite loan terms for borrowers who can’t make their current mortgage payments. Since its 2008 creation, HAMP’s goal of preventing 3 million to 4 million foreclosures “has been repeatedly redefined and watered down,” the panel said.

“If current trends hold, HAMP will prevent only 700,000 to 800,000 foreclosures,” a small portion of the 8 million to 13 million foreclosures expected by 2012, said Kaufman, a Democrat from Delaware.

The Treasury will spend only about a fourth of the $50 billion it allocated for the program in 2009, according to the Congressional Budget Office.

“For this reason, Treasury’s reluctance to acknowledge HAMP’s shortcomings has had real consequences,” the TARP panel found. “Absent a dramatic and unexpected increase in HAMP enrollment, many billions of dollars set aside for foreclosure mitigation may well be left unused. As a result, an untold number of borrowers may go without help.”
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Homeowners are dropping out of the program at a faster rate than they’re joining it, the Treasury reported last month. The number of borrowers aided by HAMP grew to nearly 520,000 in October, up 23,750 from a month earlier, while 36,300 dropped out after failing to make their modified payments.

Posted in Foreclosures, Housing Bubble, National Real Estate, Risky Lending | 142 Comments

In foreclosure? No worries, you’ve got time.

Posted on December 13, 2010 by grim

From the Wall Street Journal:

Banks Struggle To Seize Homes

It takes longer to foreclose on homes in New York than any other state—and it’s getting longer every month.

Two years ago, the state began requiring that banks and borrowers attend settlement conferences before a foreclosure takes place.

While the conferences are popular with borrowers and have succeeded in helping some families keep their homes, banks have been reluctant to participate. That, and recent revelations that some lenders have improperly submitted foreclosure documents, has prompted judges to take a harsher stance with lenders.

The foreclosure process typically begins after a borrower misses three consecutive monthly payments and ends once the lender repossesses the home or the borrower brings the loan current. Nationwide, there were 2.1 million mortgages in some stage of foreclosure as of October, according to research firm LPS Applied Analytics.

The average loan in foreclosure had been in default for 492 days as of October, up from 289 days at the end of 2005, according to LPS.

In New York and New Jersey—another state with consumer friendly laws—the waits are longer. The average loan in foreclosure had been in default for 604 days in New York and 544 days in New Jersey as of October.

“We try and help as many people as we can,” says New York Supreme Court Judge Michael Ajello. “We set up a conference and I try and persuade and cajole the banks to reduce the payments,” he says. But the banks, he adds, “are not very cooperative.”

Posted in Foreclosures, Housing Bubble | 150 Comments

A shadow looms over New Jersey

Posted on December 11, 2010 by grim

From the New York Times:

A ‘Shadow Inventory’ Dampens Winter Market

NEW statistics provide a glum holiday-time snapshot of the real estate market: shrunken sales pace, bloated inventory and a “shadow inventory” of foreclosed homes looming menacingly in the background.

Right now, according to one report, New Jersey has the largest shadow inventory in the country: 41 months’ worth of homes to sell — and they aren’t even on the market yet.

The foreclosure process is complete on these nearly 98,000 homes; a National Association of Realtors committee made the state-by-state count. But the banks or other lenders have not yet released them for sale.

“Some are occupied, and in the eviction process,” said Bill Flagg of ERA Queen City Realty, a foreclosure sale specialist whose clients include Fannie Mae and Freddie Mac, the government-backed federal lenders. During the foreclosure process, he said, “the former owners were not pushed toward eviction while they were attempting a loan modification through a government program.” (One result is that some former homeowners have lived free of monthly payments for two years or more.)
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Jeffrey G. Otteau, the market analyst who heads the Otteau Valuation Group in East Brunswick, also foresees a gusher of foreclosed properties, possibly even a “royal market mess” that may not dissipate for years. Mr. Otteau’s company issues monthly reports and sponsors seminars to brief real estate professionals on trends — at this time “mostly pretty brutal” trends, he said.

According to his most recent report, 67,800 houses on the market in October had remained unsold for a month or longer. That was 10 percent more than in October 2009; concurrently, there were 9 percent fewer sales than in 2009.

Mr. Otteau tied the downward motion directly to the loss of jobs in the state — an average 3,900 per month this year, while the country over all was adding 87,000 jobs monthly.

He performed his own calculation aimed at estimating the size of the foreclosure inventory that shadows the market’s future:

“In the first 10 months of 2010,” he said, “there were 9,318 completed foreclosures, which is only 0.41 percent of all homeowner households in the state.

“But there were a total of 51,119 mortgage delinquencies — the start of the foreclosure process. The difference between the two figures is 41,801 homes, which works out to be 1.83 percent of all owned homes.” Mr. Otteau said that not all of those houses would come on the market at one time. He also said the gap, as a percentage, was more than twice as big in California as in New Jersey. But California has a more dynamic economy, creating new jobs that will ultimately lead to more home purchases.

“In New Jersey,” he said, “if something does not happen to change the job situation, it is going to take a lot longer to burn off inventory backlog.”

Posted in Economics, Foreclosures, Housing Bubble, New Jersey Real Estate | 199 Comments

Time to fix Farmland Assessment

Posted on December 10, 2010 by grim

From the Courier Post:

‘Fake farmers’ avoid paying $82M in taxes

Spotty enforcement and an outdated state law allow thousands of landowners to pay pennies on the dollar in property taxes.

The Farmland Assessment Act of 1964, intended to preserve agriculture in New Jersey, is being used by millionaires, developers and anyone with at least 5 acres of land to slash their farmland tax bills by 98 percent.

A Gannett New Jersey investigation into farmland assessment records found that hundreds of landowners deemed “fake farmers” by those calling for reform are producing little more than the bare minimum — $500 — in goods to qualify for the tax breaks.

One landowner tried to declare weeds as a farm product and another forged a signature on a government document in attempts for the tax break, the investigation found.

“It was never the intent of the law that fake farmers would benefit,” said state Sen. Jennifer Beck, R-Monmouth, who has proposed changes to the law. “If it’s not fulfilling the intent of the law, it is a violation of the public trust.”

The so-called fake farmers are likely costing local governments at least $82 million a year in lost property tax revenues, according to the analysis of 3 million property and tax records.
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“Farmland assessment was intended for farmers to get a tax break, but what’s happened is the homeowner wants a tax break so he pretends he’s a farmer,” Motyka said. “If you have 300 people get farmland assessment (in a town), that means everyone else, including the farmers, has to pay taxes on their land to make up for that.”
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A lack of inspections. Only 10 percent of the required inspections of farm-assessed woodlands were done this year by the state Department of Environmental Protection. DEP foresters are required to inspect such woodland properties every three years. DEP officials say they can’t ensure that owners of uninspected properties are meeting the requirements for a tax break.
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Developer Hovsons Inc., for example, owns 10.5 acres of rolling pasture and woods along the scenic Navesink River in Middletown, one of the most exclusive areas in the state. Yet the Tinton Falls-based company will pay $30.52 in property taxes this year on that parcel. That’s a six-figure savings.

How did Hovsons do it?

The company set up nearly two dozen beehives and sells at least $545 worth of honey each year to qualify for a 98 percent tax reduction.

Posted in New Jersey Real Estate, Politics, Property Taxes | 250 Comments

Property Tax Triptych

Posted on December 9, 2010 by grim

From the Daily Record:

When home prices fall, why don’t taxes?

A sharp and continued decline in the value of taxable property in Morris County has sent municipal official scrambling to push back the growing number of tax appeals that have chewed holes in their budgets.

Seventeen Morris County towns have conducted property reassessments or revaluations in the past two years or plan to in 2011 to narrow the gap in assessed values and sale prices. In the last year, 66 of 566 towns in New Jersey have conducted property revaluations, reassessments or re-equalization to balance the tax rolls.
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At $1.3 billion, the countywide loss of property values this year was nearly as large as the total of all the taxable property in Morris County in 1961 — $1.6 billion.

From the Daily Journal:

N.J. Tax Crush: Rising property taxes hit seniors hard

Ask Richard F. Potts about property taxes and he will tell you that the Jersey Shore is becoming unaffordable for the middle class.

Potts, 74, lives in Glen Cove, a blue-collar bastion of lagoon and bayfront homes in this Ocean County community that was hit especially hard by the township’s revaluation this year.

“I’ve been toying with the idea of moving out of this state,” said Potts, who saw his taxes rise $1,978 in one year, to $4,457. “It just doesn’t pay to stay here anymore.”

It is a common angst felt across New Jersey each year by thousands of homeowners as their towns update the tax rolls.
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Potts’ neighbor Jerry Bollettieri, a part-time engineer and veteran of the Marines and Navy, said he and his wife, Cathy, can afford to pay the tax increase for now. But he’s concerned about the many seniors in Glen Cove who have no income besides their Social Security payments.

“They are forcing us out,” said Bollettieri, 73, whose property taxes jumped from $5,524 to $8,319 because of the town’s first revaluation in two decades.

From the Daily Record:

Poll: Property taxes greatest cause of financial woes for NJ residents

Property tax bills that pump $25 billion into the coffers of school districts and local government create an economic hardship for two of every three New Jersey residents, a recent poll found.

The only household expense pegged as harder to pay than property taxes (66 percent) was saving for retirement (70 percent), according to the Monmouth University/Gannett New Jersey Press Media poll.

“Saving for retirement is probably considered discretionary when trying to meet your household budget, so it’s not surprising that most New Jerseyans say this is difficult to keep up with,” said Patrick Murray, director of the Monmouth University Polling Institute, West Long Branch. “Among the bills which must be paid every month, though, nothing comes close to property taxes for inflicting financial hardship.”

Posted in New Jersey Real Estate, Property Taxes | 208 Comments

No recovery until 2014/2015

Posted on December 8, 2010 by grim

From Reuters (hat tip Juice):

At least 3 more years of housing troubles seen

The housing market will remain depressed, with record high foreclosure levels, rising mortgage rates and a glut of distressed properties dampening the market for years to come, industry experts predicted on Tuesday.

“We don’t see a full market recovery until 2014,” said Rick Sharga of RealtyTrac, a foreclosure marketplace and tracking service. He said that he expected more than 3 million homeowners to receive foreclosure notices in 2010, with more than 1 million homes being seized by banks before the end of the year.

Both of those numbers are records and expected to go even higher, as $300 billion in adjustable rate loans reset and foreclosures that had been held up by the robo-signing scandal work through the process. That should make the first quarter of 2011 even uglier than the fourth quarter of 2010, he said.
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Mortgage rates will start to rise in 2011, further dampening demand and limiting affordability, said Pete Flint, chief executive of Trulia.com, a real estate search and research website. “Nationally, prices will decline between 5 percent and 7 percent, with most of the decline occurring in the first half of next year,” he said.
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The two firms released a survey showing a marked deterioration in consumers’ views of the housing market, too. Almost half — 48 percent — said they’d consider walking away from their homes and their mortgages if they were underwater on their loans. That’s up almost 20 percent from when the same question was asked in May. “If that continues it would be an epidemic of strategic defaults,” said Flint.

Roughly 1 in 5 consumers said they expect it to be 2015 before there is a recovery in housing, according to the survey, conducted in November by Harris Interactive. Most respondents said they think recovery will come in 2012 or 2013. Would-be buyers suggested they wouldn’t really get serious about purchasing a home for another two years.

Sharga sees a big glut in distressed properties hitting the market. There are about 5 million loans that are at least 60 days overdue, he said. In the next 12 to 15 months, another $300 billion in adjustable rate loans will reset, and “they will default at pretty high levels.”

Posted in Economics, Housing Bubble, National Real Estate | 162 Comments

Can they bring the jobs back?

Posted on December 7, 2010 by grim

From Bloomberg:

New Jersey lawmakers focusing on jobs, economy

New Jersey lawmakers will soon focus their attention on legislation aimed at creating jobs and keeping businesses from leaving the state.

Budget committees in both the Senate and the Assembly will meet five times this month to discuss various measures. The first sessions are scheduled for Wednesday, followed by sessions Dec. 14-16 and Dec. 22.

Senate President Steve Sweeney and Assembly Speaker Sheila Oliver announced their “Back to Work NJ” legislation package last month, after Gov. Chris Christie again lambasted the Legislature for failing to approve key property tax stabilization measures that he proposed.
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The package of roughly 30 bills includes measures to revise business tax codes, expand a business retention grant program and allow unemployed people to train with a potential new employer without jeopardizing their benefits. Another bill would create a loan forgiveness program for students who pursue jobs in fields with marked labor shortage.

The measures will likely be debated and voted on through January.

From New Jersey Newsroom:

New Jersey’s business climate: Still not good

New Jersey’s business climate is horrible, thanks to onerous regulations. But it’s getting ever-so-slightly better. In one recent poll indicating how business-friendly the various states are, New Jersey climbed from 50th to 48th

That was the message of several panelists at the 2011 Business and Financial Roundtable on Nov. 30 at Ramapo College.

Panelist John Galandak (pictured), president of the Commerce and Industry Association of New Jersey, said that he was “cautiously optimistic” about the economy, even though widespread uncertainty has kept employers from hiring.

“New Jersey has a history of being business-unfriendly,” he went on. “It’s a high-cost state.”

Still, Galandak said, the new administration in Trenton seems to be trying to “undo the costly regulations.”
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Deborah Howlett, president of New Jersey Policy Perspective and former director of communications for Gov. Jon S. Corzine, said that the economy’s recovery will probably be gradual: “Everyone’s looking for a sign” of recovery before committing.

As for or the disappearance of manufacturing jobs here, she said it meant that the state was shifting to more white-collar jobs.

She expressed skepticism toward business subsidies, arguing that “There are more efficient ways to create jobs.”

Posted in Economics, New Jersey Real Estate | 127 Comments

‘Tis the season for vultures?

Posted on December 5, 2010 by grim

From the NY Times:

For Home Buyers, a Season for Deep Discounts

LOOKING for a deal in a down market? As winter sets in, the fruits of desperation — foreclosure sales, short sales, auction sales and deep discounts — are appearing in bountiful number, if anyone out there is hungry for a bargain.

Consider one example, a spacious six-bedroom colonial at 203 Highwood Avenue in Leonia, now on the market for $390,000.

The 90-year-old house, which has two and a half baths, has the obvious drawbacks of normal wear and tear, and an annual tax bill over $11,000. But it is in a community known for fine schools; last year it was on the market for $535,000. A potential buyer’s offer of $490,000 was rejected as too low, according to Reetesh Sood of Exit Platinum Realty, who is now handling the bank sale of the house.

Last summer, before foreclosure, the house became available as a short sale, in which a lender allows the owner to sell the house for less than the amount owed on the mortgage. The asking price then was $460,000. In September, after the bank took over and the owners departed, Mr. Sood listed the property at $420,000; last month he reduced the price twice more.

Mr. Sood said he was still getting calls. One was from the buyer who last offered $490,000; another was from a neighbor down the street, who actually made an offer the bank accepted, but then withdrew it out of “guilt” over taking advantage of a former friend’s misfortune.

The house on Highwood is one of 61 bank-owned properties for sale for less than $500,000 in Bergen County, according to multiple listing figures cited by Sharon Gill of Prudential New Jersey Properties. There are also 11 listed for more than $500,000.

“True, true bargains are available at every price level,” said Ms. Gill, who is based in Montclair, and is marketing several bank-owned properties in Essex County. One is 3 Brentwood Drive in North Caldwell, a custom-built five-bedroom six-bath French provincial listed at $949,000. (It was sold for $1.9 million in August 2006.) The backyard has a free-form pool with its own island.
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In Essex County, for example, there are 603 homes under $500,000 identified as short sales, according to Ms. Gill. In Union County there are 625 — “phenomenal” numbers, in her view.

Last month the Mortgage Bankers Association reported that a record number of New Jersey homeowners were in trouble with their loans. Slightly more than 15 percent of mortgage holders are in foreclosure proceedings, or are delinquent on payments, the bank association said.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 87 Comments