New Jersey Real Estate Report

From Bloomberg:

New Jersey’s Unemployment Rate Increases for the First Time Since December

New Jersey’s unemployment rate rose to 9.7 percent in July, the first monthly increase since December as municipalities cut payrolls to balance budgets.

Employers shed 21,200 positions last month, pushing the jobless rate up 0.1 percentage point, the state labor department said today in a statement. Unemployment was 9.6 percent in June, down from a recession-high 10 percent in December, while the national figure was 9.5 percent last month.

New Jersey’s unemployment rate climbed amid the longest U.S. recession since the Great Depression. Federal offices, local governments and school districts reported a loss of 18,100 jobs last month in the state, while commercial employment dropped by 3,100 positions, the labor department said.

From the NJ Department of Labor and Workforce Development:

Employment Drops in July; Unemployment Rate at 9.7 Percent

Employment in New Jersey fell in July and the state’s unemployment rate edged slightly higher. The loss was mainly due to a decline in public sector payrolls at the federal and local government levels. The state’s unemployment rate rose slightly to 9.7 percent, up by 0.1 percentage point in July, the first monthly increase since reaching a recessionary high of 10.0 percent in December 2009.

According to preliminary estimates, total nonfarm wage and salary employment in New Jersey was lower by 21,200 jobs in July to 3,841,900. The vast majority of the employment loss occurred in the public sector, which was down by 18,100 jobs over the month. Private sector jobholding was lower as well, falling by 3,100.
Based on more complete reporting, previously released June estimates show a downward revision of 3,700 in nonfarm employment to a total of 3,863,100, an over-the-month (May-June) loss of 5,600 jobs. Preliminary estimates indicated an over-the-month loss of 1,900.

In July, five of ten private sector industry supersectors recorded job losses while four registered gains; one was unchanged. Declines occurred in professional and business services (-2,300), construction (-1,700), and leisure and hospitality (-1,300). The decrease in professional and business services was driven by contraction in the administrative support, waste management/remediation (-3,600) component which overshadowed gains in professional, scientific and technical services (+1,100). Construction employment was lower for the third time in the last four months due to weakness in the residential construction segment. In leisure and hospitality, job advances in the arts, entertainment and recreation component (+4,100) did not offset losses in accommodation and food services (-5,400). Smaller losses were seen in manufacturing (-900) and trade, transportation and utilities (-500).

The only industry supersector with a sizeable job gain was other services which added 2,500 jobs. This supersector includes businesses such as automotive repair services, personal care services and business/professional organizations. Lesser gains were recorded in education and health services (+700), financial activities (+200) and information (+200).

(grim’s note: While the Altos numbers are a welcome addition, realize that they are month over month numbers, which tend to exhibit strong seasonality with regards to price and inventory. These numbers are hard to use (and potentially confusing/misleading) without seasonal context.)

From Altos Research:

August 2010: REAL-TIME HOUSING MARKET UPDATE

This month’s housing data confirms what we’ve been saying for some time: the mini-“boom” of this spring was created by seasonal demand, with some extra help from pressure to meet deadlines for capitalizing on tax credits. Now that those are gone, buyer activity has all but come to a standstill.

Rapidly rising inventory, pricing weakness in the Altos 10-City Composite signal continued home price pressures in August and into the fall of 2010. This month, the Altos 10- City Composite price decreased 0.63%.

(click to enlarge)

Inventory

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From the Record:

State housing stimulus merely reshuffles dwinding stack of cash

IMAGINE YOUR boss suddenly announced that the company would be giving $5 to the next 20 employees who took their lunch breaks, and that the money would be coming out of everyone else’s paychecks.

It would certainly benefit the few who were first into the cafeteria, and it might encourage some workers to take a break that they otherwise would not. However, everyone who had already eaten or might have been stuck on conference calls would see this as an arbitrary and pointless policy.

Unless the people affected were Trenton lobbyists — then they would call it stimulus.

Governor Christie recently vetoed a bill that would have given New Jerseyans of all incomes up to $15,000 if they purchased a home during a tax credit program, which would have existed until $100 million was spent over three years. Legislators are now considering a vote to override the governor’s veto. The policy may be well-intentioned, but it would do little to help put New Jerseyans back to work.

Despite being wrapped in the moniker of a tax credit, the $100 million is actually an expenditure and a partial subsidy for home ownership. It has the same impact on the state’s budget as any other subsidy in that all taxpayers contribute to the general fund and then a small segment of New Jerseyans get to take from the pool. Whether the government issues a check or deprives itself of the revenue in the first place is inconsequential.

The state and federal government already give benefits to homeowners through the tax code, such as the mortgage interest deduction. At worst, further subsidies of the real estate market distort consumer choice and partially reinflate the housing bubble by creating artificial demand.

Even in a best-case scenario, this subsidy would minimally affect New Jersey’s economy. The non-partisan Office of Legislative Services estimates that the portion of the credit dedicated to existing home sales evaporates with less than 2,000 transactions per year. That represents less than 2 percent of all existing home sales in New Jersey, even in a down economy.

However, most of these 2,000 sales would not represent new activity. The legislation simply doles out money on a first-come, first-served basis, meaning the overwhelming majority of those transactions would have occurred regardless of Trenton’s action. This is especially true with this tax credit because it would come on the heels of a recently expired and similar federal program. In fact, much of the decline in home sales is because the federal program altered the timing of home sales, but not overall activity. There is no reason not to expect a similar outcome in New Jersey.

From Newsroom New Jersey:

New Jerseyans more positive about state, but not like in the ’90s

It’s official! Garden State dwellers are feeling a little more optimistic about the state according to a Fairleigh Dickinson/Public Mind poll released Wednesday.

The poll, conducted by telephone, of 801 registered New Jersey voters was taken July 27-Aug. 2 and has a sampling error margin of plus or minus 3.5 percentage points.

The poll reflected the opinions of 42 percent of the population that say they feel the state is on the right track, up 7 percent from May. The cynic-count is down 7 percent from May with 48 percent saying they still feel the state is still on the wrong path.

Sixty percent of the respondents said they would prefer less government spending to higher taxes, even if it took cutting programs to reach that goal. Approval numbers for Governor Chris Christie, who took office in January, and his job performance came in just below half with 47 percent saying they approved while 36 percent gave a collective thumbs down.

A Rutgers-Eagleton poll released in November 2009 showed that only 35 percent of New Jerseyans believed things would improve over the next 10 years, while 41 percent believed conditions would remain the same and 19 percent felt things would get worse, according to The Star-Ledger article.