Welcome to Spring!

Posted on March 20, 2010 by grim

From the NY Times:

In New Jersey, the For-Sale Signs Are in Bloom

“GET ready for the block party! Great neighborhood!” That is how an agent named Heather Gilheany verbally baits the hook in her listing for 156 Oakland Road, a three-bedroom one-bath colonial built in 1925.

“Selling the neighborhood,” explained Ms. Gilheany of Coldwell Banker. “That is what we always do — sell not just the house, but the neighborhood.”

But it so happens that on this particular block of Oakland Road, and in the immediately surrounding three or four blocks, for-sale signs abound. While the agents are busy “selling the neighborhood,” someone just driving by might be forgiven for wondering whether the entire neighborhood was for sale — lock, stock and barrel.

Last week there was a for-sale sign in front of No. 157, and one at No. 160 on the opposite side of the street.

There was another at 66 Burnett Terrace around the corner, two on the same block of nearby Highland Avenue, two on contiguous blocks of Plymouth Avenue, and so on. In all, there were a dozen signs within a roughly four-block area, although in some cases, houses were already under contract and the signs were being kept up during the attorney-review process.
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In Maplewood over all, there are 126 active listings, out of 5,541 owner-occupied homes, according to Patricia Ross, a Coldwell Banker agent, who says she has lived in town all her life and sold real estate there since 1984. She found the number high but not unusually so. And she noted that many residents moved from one house to another within Maplewood over the course of their lives.
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Focusing more tightly, though, real estate agents in northern New Jersey said a concentration of for-sale signs was often the result of sociological change, rather than change of season or economy.

“I think what happens is a natural progression,” said Perri K. Feldman, an agent based in the Keller-Williams office in Summit. “People move into a neighborhood when their children are young, and then when everyone is older, and their children have stopped boomeranging back home, one decides to put their house on the market.

Posted in New Jersey Real Estate | 589 Comments

Shared Sacrifice

Posted on March 19, 2010 by grim

From the Record:

Property tax rebates may vanish this year

Property tax bills in New Jersey have gone up 56 percent since 2001. But the rebate checks that once offset those bills by as much 20 percent may vanish this year.

New Jersey households could also be paying even more for schools, trash removal, road maintenance and other local government services – whose costs have grown nearly 70 percent since 2001 – if Governor Christie’s proposed budget clears the state Legislature unchanged.

Christie, who won the November election largely by pledging to lower the state’s property tax burden, wants to trim a combined $2 billion from the state programs that either soften property tax bills through rebates or help local governments cover spending needs with state aid.

In the past two days, Christie’s administration has announced proposed cuts of $123.2 million in aid to Bergen County towns and $80.4 million in aid to Passaic County towns.

The rebate checks would be cut this year even as property tax bills have risen to a record $7,281 statewide. The rebate checks averaged $1,000 in 2007, but they have been reduced several times since — and so have the number of households that qualify for them.

The rebates once were funded with $2 billion, but Christie has proposed cutting the rebates altogether in his budget to save $848 million. Instead he would create a tax credit funded with $270 million.

“We will send you property tax relief, after a break to reform the system, as a direct credit on your property tax bill,” Christie said during his budget address Tuesday.

“The first credits will appear in May 2011, in recognition of the shared sacrifice we all must make,” he said.

Posted in New Jersey Real Estate, Politics, Property Taxes | 502 Comments

If schools suffer, are NJ homes worth the price and taxes?

Posted on March 18, 2010 by grim

From the Star Ledger:

N.J. school district officials say Gov. Chris Christie budget cuts will force program, staff cuts

Gov. Chris Christie sent suburban and urban school districts reeling today with the release of district-by-district state aid figures that cut 40-, 50- or even 100 percent of their state aid allotments for the coming year.

The cuts, included in a proposed state budget that would spend $820 million less on public schools next year, were designed to spread the pain around. Each of the state’s nearly 600 districts saw reductions of aid equal to about 5 percent of their current budgets.

But the financial blow fell harder on some districts than others. Many — mostly wealthier suburban districts such as Chatham or Bridgewater-Raritan — saw more than half their state aid disappear. Another 59 districts, including Livingston, Millburn and Berkeley Heights, had all of their aid eliminated.

Urban districts suffered slightly less, as a percentage, but the dollar amounts taken from their budgets, which depend more heavily on state aid, were bigger. Elizabeth lost $14 million; Newark $42.6 million; and Perth Amboy, $7.9 million.
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The cuts came in what’s known as formula aid, money used for general education expenses. That aid is doled out based on enrollment, with additional money for students who are poor, have special needs or limited English skills.

The cuts, the biggest to hit schools in years, came in the $29.3 billion budget Christie proposed Tuesday, a spending plan he said made “incredibly difficult choices” to close a $10.7 billion deficit, but one the governor said is designed to be “the first step on the path to a brighter future.”
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Many school officials said the aid reduction was larger than they had anticipated and they had not yet determined how they would cope with it. But they predicted programs and staff could be cut.

“It will certainly touch teaching positions, office staffing, administrative positions. Teaching positions are 80 percent of budgets, generally speaking,” said Lynne Strickland, executive director of the Garden State Coalition of Schools, which represents 100 suburban districts.

Posted in New Jersey Real Estate, Politics, Property Taxes | 597 Comments

Huh? Christie? Kicking the can already?

Posted on March 17, 2010 by grim

From Bloomberg:

Christie Seeks to Suspend N.J. Tax Rebate, Skip Pension Payment

New Jersey Governor Chris Christie proposed a $29.3 billion budget that would suspend property-tax rebates, skip the state’s $3 billion pension contribution and fire 1,300 workers next year.

The plan would reduce aid to schools by $820 million, towns by $446 million and higher education by $173 million. Christie, a Republican who took office Jan. 19, also called for a constitutional amendment that would limit annual growth in the state’s highest-in-the-nation property taxes to 2.5 percent.

“Today, we stop sweeping problems under the rug,” Christie, 47, said during his first budget address to a joint session of the Democrat-led Legislature in Trenton. “We will not hide our problems until another day. And we are certainly not increasing the tax burden we place upon our people.”

Christie pledged not to raise income, sales or corporate taxes to close a record $10.7 billion deficit in the budget for the fiscal year that begins July 1. His plan, which includes $28.3 billion in state spending and $1 billion in federal aid, is 9 percent lower than the budget for the current fiscal year, which ends June 30.
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Bagger said the state would save $848 million by suspending the property tax rebate program this year and then giving homeowners direct credits on their bills beginning in May 2011.

Another $50 million would come from an unspecified plan to have some government functions run by private companies. Christie last week said he may privatize some state jobs in 2011 amid rising costs for employee salaries and benefits.

New Jersey would skip its full $3 billion pension payment, under Christie’s plan. The system was underfunded by $46 billion as of 2009 because of investment declines and a failure to make full contributions, according to annual financial reports.

“Our pension system must be reformed before we can or should fund a broken, out-of-control system,” Christie said.

Posted in New Jersey Real Estate, Property Taxes | 467 Comments

REO the problem? Or the solution?

Posted on March 16, 2010 by grim

From HousingWire:

Housing Recovery is Spelled R-E-O

Short sales are a hot topic right now—especially with a much-ballyhooed government program focused on short sales, the Home Affordable Foreclosure Alternatives program, about to come online. But in the end, the real key to resolving the problems that yet remain in housing is likely to come back to an old standby: REO property sales.

Yes, really. But to understand why, you’ve got to first really understand the scope of the mortgage default problem we’ve now got.

According to data from Lender Processing Services, a whopping 7.4m loans are now non-current, compared to just 4.1m on average between January and June of 2008.
…
Ponder those numbers for just a second. On average, severely delinquent borrowers have gone more than 9 months without making a mortgage payment—and yet foreclosure has not yet started for them. For those borrowers who are in the foreclosure process, it’s been an average of 13.6 months—more than one full year—since they last made any payment on their mortgage.

So, can short sales ride in to save the day for these 7.4m troubled borrowers? What about for the many millions more who are current on their loans, but are underwater on property value and unable to sell? For some, short sales will be an important solution—but don’t kid yourself: the hype currently surrounding short sales and the HAFA program will prove to be short-lived, and REO expertise will be prove to be the key to recovery, as it has been in prior cycles.
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Thanks to effective intervention from the government, we won’t see REO volumes soar to peak levels anytime soon—but we will see elevated inflows at least through the mid-2012, out of necessity. And those inflows should be seen as the road to recovery by anyone watching real estate. JPM forecasts, for example, that by Q4 2012, 22-28% of home sales in the Los Angeles region of California will still be REO; in Phoenix, that number is projected to be 39-50%.

These projections underscore a message I’ve shared privately with many industry colleagues recently: recovery in housing is spelled R-E-O. Anything else is wasting time until we get there.

Posted in Economics, Foreclosures, National Real Estate | 798 Comments

Controlling Out Of Countrol Property Taxes

Posted on March 15, 2010 by grim

From the Philly Inquirer:

Christie to propose cap on property-tax hikes

Gov. Christie will propose a constitutional amendment to cap property-tax increases at 2.5 percent per year in his budget speech tomorrow, hoping to hold down the levies that have been a long-standing source of frustration across the state.

He also plans to revive a controversial tax plan to raise money for hospitals; cut aid to towns, schools, and colleges; and reshape the state’s property-tax rebate program as credits on homeowners’ bills – instead of checks in the mail – according to three officials briefed yesterday by the Christie administration. The credits would not be applied until April, May, or June 2011.

That means homeowners would not receive checks in 2010, though they still would get tax relief in the coming fiscal year. The rebates are typically mailed in the summer and fall to help offset the state’s high property taxes, which average $7,300.

Delaying the payments until the fiscal year’s fourth quarter would give Christie time to convert the checks into credits and also buy some time while the state’s financial picture became more clear. Under the governor’s plan, the credits would not be paid until after nearly a full year of tax collections and after he has proposed his next budget.

Those who received rebate checks last year – senior citizens earning less than $150,000 and other homeowners making $75,000 or less – still would be eligible to get a credit at the same level, according to the officials, who spoke on the condition of anonymity because their briefing was meant to be confidential.
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The 2.5 percent property-tax cap would replace the existing 4 percent limit. Christie also will call for eliminating several exceptions that let schools and municipalities often exceed the 4 percent maximum.

According to two sources, Christie has considered imposing a similar 2.5 percent cap on increases in state operations.

The tougher property-tax limit would put more pressure on mayors and school boards to keep local spending in check even as they lost state aid. Christie has argued for weeks that local leaders need to do their part to make the state more affordable, and he has pledged to offer “tools,” such as changes to the rules governing labor negotiations, to give them more power to control costs.

“All levels of government have to impose that discipline. Government cannot continue to be made larger and more expensive,” Christie said at a news conference last week.

Posted in New Jersey Real Estate, Property Taxes | 513 Comments

A great time to pay a commission!

Posted on March 14, 2010 by grim

From the NY Times:

Great Time to Buy (Famous Last Words)

“IT’S a great time to buy a home.”

Real estate agents were saying that in 2001, as home prices were rising. They also said it when home prices peaked in 2005 — in fact, David Lereah, former chief economist of the National Association of Realtors, published a book that year titled “Are You Missing the Real Estate Boom?”

And many real estate agents said it was time to buy as prices began to drop — and continued to say it over the past several years as prices fell by an average of 33 percent in America’s 20 largest cities.

Mr. Lereah would acknowledge that he had gotten it wrong. But from the perspective of many real estate agents, it is always a good time to buy.

“What they are really saying is that it is a good time to be involved in a transaction that generates a commission,” says Barry Ritholtz, C.E.O. and director of equity research at FusionIQ, a quantitative research firm. He’s also author of “The Big Picture,” an irreverent blog on markets.

If agents are always motivated to make a deal, buyers are often asking an impossible question: “Will the price of this house go up?”

Although the National Association of Realtors said for many years that home prices historically don’t fall, actually they do, and sometimes quite sharply. The housing market is complicated, and the future unknowable. Still, for clues to the overall direction of prices, Mr. Ritholtz advises buyers to look at three metrics: the ratio of median income to median home prices, which suggests whether people can afford a house; the cost of ownership versus renting; and the value of the national housing stock as a percentage of gross domestic product.

All those measures were aberrationally inflated during the housing bubble. And they still aren’t back to historical norms. We can get back to the norm in either of two ways, Mr. Ritholtz says: home prices can either drop an additional 15 percent or go sideways for seven years or so, while G.D.P. and income presumably grow.
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Then there are property taxes.

In California, taxes alone can be $5,000 a year on that $300,000 house. In New Jersey, where property taxes are the highest in the nation, the extra cost can be even more. (The Star-Ledger of Newark calculated that, on average, residents in the town of Lodi pay 10 percent of their income in property taxes.) But who would have guessed that property taxes in that state would keep climbing, doubling over the course of seven years in some cases, even as home values stopped appreciating?

Mr. LLosa thinks that many people — including him — would be better off renting. People ought to buy a house for what he calls “warm and fuzzy feelings,” but they shouldn’t try to predict home prices. Nor should real estate agents, who aren’t much wiser.

“I don’t think real estate professionals should be in the business of telling people when it is a great time to buy,” he said.

Posted in Economics, National Real Estate, New Jersey Real Estate | 193 Comments

NJ foreclosures slow, but still hit a painful 14% YOY increase

Posted on March 12, 2010 by grim

From the Star Ledger:

N.J. foreclosure rate drops for second month in a row

The number of New Jersey homeowners in various stages of the foreclosure process dropped for the second consecutive month in February, displaying a housing picture that is improving, but still behind the previous year’s estimates.

Lenders sent foreclosure fillings to 3,750 N.J. properties in February, down almost 39 percent from January, according to RealtyTrac, an Irvine, Calif.-based firm that tracks real estate trends. That number, however, is still about 14 percent higher than the number of filings sent in the same period last year.

Nationwide, more than 308,524 properties received notices in February, according to RealtyTrac. That’s about a 2 percent decrease in total properties from the previous month, but a 6 percent rise from the same period a year ago.

Posted in Foreclosures, New Jersey Real Estate | 522 Comments

“As bad as (we thought) the recession was, the final numbers indicate that it was worse”

Posted on March 11, 2010 by grim

From the APP:

N.J. job losses hit 228,300; worst since ’90s

New Jersey’s economy lost 114,100 jobs in 2009 and another 9,100 jobs in January 2010, the state reported Wednesday, offering evidence that the recession has been the most severe since the early 1990s.

It has forced thousands of workers to reinvent themselves, brush up on their skills and prepare for new careers — even as they fall behind on their bills and try to keep their families together.

“Every bill is at least a month late,” Laura Novotny, 45, of Long Branch, said Wednesday after leaving a class at Brookdale Community College in Middletown, where she is studying respiratory therapy. “If somebody stole my identity, they would give it back to me.”

The latest report from the New Jersey Department of Labor and Workforce Development was notable in that it included a full account of the labor market last year.

It found the state lost 228,300 jobs from the time the U.S. recession began in December 2007 through 2009, fast approaching the 258,600 jobs lost during the recession from 1989 to 1992. It also said the state’s unemployment rate in January dipped to 9.9 percent from 10 percent, even though the job losses continued.
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“As bad as (we thought) the recession was, the final numbers indicate that it was worse,” Rutgers University economist Joseph J. Seneca said. “The long road back to recover the lost jobs of the recession is even longer than what we originally thought.”
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The Labor Department’s report showed the private sector lost 121,100 jobs in 2009; the public sector added 7,000 jobs. In the private sector, only the education and health services sector and the leisure and hospitality sector added jobs.

The biggest losses: Trade, transportation and utilities lost 29,000 jobs; professional and business services lost 28,700 jobs; manufacturing lost 28,200 jobs; and construction lost 23,400 jobs.

Unemployed workers have been jobless on average for seven months, the longest stretch since researchers began tracking that figure in 1948. And it has worn them down, said Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University.

Posted in Economics, New Jersey Real Estate | 380 Comments

Exquisite Handcuffs

Posted on March 10, 2010 by grim

From Bloomberg:

N.J.’s Christie Says Layoffs Out for Cutting Budget

New Jersey Governor Chris Christie said he’s unable to lay off or furlough unionized state workers to help close an $11 billion budget gap.

Christie, speaking at a town hall meeting in Haddon Heights, said job cuts would trigger more than $300 million in contractually obligated raises for remaining state workers under a 2009 wage freeze agreement secured by former Governor Jon Corzine.

“I cannot lay off one state worker, I cannot furlough one state worker,” Christie, 47, said. “It’s an exquisite set of handcuffs.”

New Jersey’s budget was thrown off-balance as the biggest economic recession since the 1930s depressed tax collections and drove state unemployment to a 33-year high of 10.1 percent in December. The state workforce numbers more than 70,000, according to the state Treasury.

From the Star Ledger:

N.J. Gov. Chris Christie says he’s stuck with bill for state worker 7 percent pay hike

Calling it an “exquisite pair of handcuffs” as he tries to plug a huge budget gap, Gov. Chris Christie today said he must follow a controversial deal former Gov. Jon Corzine gave unionized state workers last year that calls for a 7 percent pay raise in the upcoming fiscal year and bars him from ordering layoffs before January.

Christie said he was “wrong” in previously claiming he would not be “bound by” the contract struck between unions and Corzine last June. Under the deal, a pay raise costing the state millions would kick in if Christie orders layoffs.

“My lawyers have now told me that I am bound by that deal,” the governor said after meeting local officials in Haddon Heights. “If I could stop it, I would, except the previous governor tied my hands. I cannot lay off one state worker, I cannot furlough a state worker until January of 2011. That was a great election-year deal he made for us. It is an exquisite pair of handcuffs he put on his successor, but I guess he didn’t think he was going to have a successor.”

Christie, who will unveil his proposed budget next week, has called for cuts to all levels of government — including the public employee pension system, drawing the ire of worker unions.

Soon after he was elected, Christie said he was considering invoking emergency powers to break the deal. Today, he left open the door to “the exercise of executive authority” to address the deal but did not say exactly how that could happen. “I’m going to have to come up with some other ingenious ways to try to accomplish what I need to accomplish,” he said. “We’re going to do what we need to do as best we can, but I cannot just disregard the law, either.”

Posted in Economics, New Jersey Real Estate, Property Taxes | 515 Comments

State Tax Caps Not Effective

Posted on March 9, 2010 by grim

From the Star Ledger:

N.J. municipalities raise taxes despite state cap

When New Jersey announced that property taxes went up by an average of 3.3. percent last year — the smallest increase in a decade of rapid growth — some hailed it as evidence that a 3-year-old law capping annual increases at 4 percent had finally taken hold.

But a closer look shows the law is hardly a fire wall.

Nearly a third of the state’s 566 municipalities raised property taxes above the cap with the state’s permission last year, many because they were able to show they were facing virtual civic dysfunction, a Star-Ledger review shows. Through hundreds of pages of applications asking to exceed the cap, school and town officials spared no adjectives when describing what would happen without relief: The police force would be cut. Special education aides would be fired. Fire hydrants would not be installed.

“Impossible” one town said of the budget it would produce under the cap. “Catastrophic” disruptions to basic services, warns another.

Still others envisioned Armageddon scenarios:

Carlstadt, where property taxes rose 10 percent, claimed it would “have no alternative but to shut down all operations in the borough.” Lake Como, where taxes jumped nearly 9 percent, said denying a waiver to spend more “would jeopardize the public health and safety.”

Of 76 towns that asked to exceed the cap last year, 62 were approved, according to state records. Of 33 school districts, 25 were approved — though many at a far smaller dollar amount than they asked for. The state granted $12.3 million of the requested $35.4 million in waivers for schools — down from $33.2 million of a requested $58.6 million in 2008. Towns that were approved asked for more than $47 million in exceptions.

Other local governments did not need state permission because the costs driving their tax hikes — such as health care or rising school enrollments were not subject to the cap.

Posted in New Jersey Real Estate, Property Taxes | 485 Comments

More on the (still misguided, and even less affordable) NJ Homebuyer Credit

Posted on March 8, 2010 by grim

From the Record:

Bill would create N.J. homebuyer tax credit

In an effort to boost the state’s housing market, New Jersey legislators have introduced a bill that would give home buyers an income tax credit of up to $15,000, spread over three years.

“The housing industry is at an all-time low,” said Sen. Paul Sarlo, a Wood-Ridge Democrat and a co-sponsor of the bill. “The economic output that will be generated from these homes being built will be quite significant and will really help to stimulate the economy.”

The home-building industry has been slammed by the housing downturn. In New Jersey, fewer than 12,000 new housing units were built in 2009 — the lowest number since World War II. As a result, unemployment has soared among construction workers.

The bill would target new construction, with 75 percent of the tax credits going to buyers of newly built homes and 25 percent going to buyers of existing homes. Existing home sales make up the large majority of home sales.

If passed, the tax credit would cost the state Treasury $100 million over three years, at a time when New Jersey is in dire financial straits. But Sarlo said the economic stimulus would more than make up for those lost revenues.
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Because the tax credit’s cost is capped at $100 million, a total of 6,667 buyers would be able to claim the credit — 5,000 of them new-home buyers. The credits would be available on a first come, first served basis.

Posted in Economics, New Jersey Real Estate | 477 Comments

NJ Home Buyer Credit? Misguided legislation we just can’t afford.

Posted on March 5, 2010 by grim

From the Star Ledger:

N.J. legislation could create home buyer tax credit

A state association of real estate agents is backing legislation that would create a New Jersey tax credit for home buyers, according to a release.

The bill, which has yet to make it out of committee, would establish a tax credit much like the federal incentive that is set to expire after the first half of this year, the New Jersey Association of Realtors said.

Real estate brokers, home builders and appraisers have been touting the national first-time home buyer’s tax credit as an integral part to the recent stabilization in home prices.

Some comments on the credit: (Courtesy of Calculated Risk):

The Very Expensive Home Buyer Tax Credit

It’s terrible policy,” says Mark Calabria of the libertarian Cato Institute.

“It’s awful policy,” says Andrew Jakabovics, associate director for housing and economics at the liberal Center for American Progress. “It’s incredibly expensive. It’s not well targeted.”
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“We paid $8,000 to at least 1.5 million people to do something they were going to do anyway,” Jakabovics says.
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“A heck of a lot of people would have bought the house anyway,” says Ted Gayer, an economist at the Brookings Institution.
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The tax break, due to expire at the end of November, is on track to cost $15 billion, twice what Congress had planned. In other words, it will cost $43,000 for every new homebuyer who would not have bought a house without the tax break.

Posted in New Jersey Real Estate, Property Taxes | 693 Comments

Fed: Housing markets appear to have softened in early 2010

Posted on March 4, 2010 by grim

From the Federal Reserve:

The Beige Book – Second District — New York

The Second District’s economy has shown some further signs of strengthening since the last report, despite some apparent slowing in the housing market; input price increases have become more widespread. In general, business contacts report ongoing improvement in overall conditions and some pickup in hiring activity.
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Commercial real estate markets have been steady to softer since the last report, while the sales/investment market remains exceptionally weak. Residential real estate markets were mixed to weaker in early 2010. Finally, bankers report weakening in loan demand in all categories, rising delinquency rates–mainly in the household sector–but some leveling off in credit standards on consumer loans and residential mortgages.
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Housing markets appear to have softened in early 2010, after hints of a pickup in late 2009. New York City’s sales and rental markets both showed signs of slackening since the last report. Rental activity, which had stabilized in December, has reportedly weakened more recently, while asking rents were relatively stable but lower than a year earlier. Co-op and condo transactions, which had picked up in the latter part of 2009, are said to have slipped across the board thus far in 2010, while prices have reportedly continued to drift down. Similarly, northern New Jersey’s single-family housing market has reportedly lost momentum in early 2010–particularly for new homes–after showing scattered signs of a pickup in late 2009. However, this may partly reflect unusually harsh winter weather this year in much of the state. Construction of both single- and multi-family homes is moribund, as developers are reportedly holding off on any new development. Still, a real estate agent in a relatively upscale area notes that short sales are not all that common and that most transactions are still above the remaining mortgage balance; however, she notes that prices continue to drift down–especially at the high end, where affordability remains a major factor. The homebuyer tax credit is not much of a factor because it represents a small portion of the typical house price. Buffalo-area Realtors indicate that sales were sluggish in both late 2009 and early 2010, though here, the recent extension of the homebuyer tax credit is expected to spur increased activity in the months ahead.

Commercial real estate markets across most of the District softened since the last report. Vacancy rates in Manhattan continued to climb, while asking rents continued to fall and were down more than 20 percent from a year ago. Vacancy rates also rose noticeably in Westchester and Fairfield counties, while asking rents were down by 6 percent. In most other areas around the District, however, vacancies and rents were relatively stable. Commercial real estate sales remained exceptionally weak across the board.
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Bankers report decreased demand for all types of loans, particularly in the residential mortgage category, where more than half of those surveyed report weakening demand, compared with just 11 percent reporting a pickup. Bankers also reported decreased demand for refinancing. Respondents indicate further tightening in credit standards in the commercial mortgage and commercial and industrial loan categories but some leveling off in standards on consumer loans and residential mortgages. Still, no banker reported an easing of credit standards in any of the categories.
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Finally, respondents report continuing increases in delinquency rates for all categories except the commercial and industrial loan category, where rates are reported to have leveled off.

(Emphasis Added)

Posted in Economics, New Jersey Real Estate | 434 Comments

Recession not so bad?

Posted on March 3, 2010 by grim

From NJBIZ:

Experts: N.J. less hard-hit by recession, but projected for slower growth

The Garden State has withstood the economic downturn better than other parts of the country, with less dramatic increases in unemployment and availability rates in commercial real estate space, according to two local experts. But New Jersey’s relative stability has more to do with the state’s lack of growth than having a more robust economy than other states, they said.

In New Jersey, “we lost employment faster than in the prior two recessions,” said Rae Rosen, senior economist and assistant vice president of the Federal Reserve Bank of New York, speaking at the Newark Regional Business Partnership’s annual Real Estate Market Forecast in the Brick City Tuesday morning. The job loss isn’t as severe as it was in the 1989 downturn, which had close to an 8 percent decline, compared a current decline of about 6 percent.

But “the unemployment rate rose dramatically,” to 10.1 percent statewide in December 2009; the rate was even higher in the Ocean City and Atlantic City-Hammonton metropolitan areas and Hudson County, she said. “These aren’t typical of these areas.”

Private-sector job growth in the state declined 2.7 percent year-over-year in December, compared to 3.5 percent nationally, Rosen said. But breaking down job growth by sector, she noted that the state lost a large portion of its manufacturing jobs in the last two decades, so “the rate of loss wasn’t as bad.”
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Overall in New Jersey, “the rate of loss wasn’t as bad as the nation, but going forward, it may not get a rapid pickup, either,” Rosen said.
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While the United States and New York saw a big dip in office availability during the boom years between 2005 and 2007, the Garden State’s availability rate had “a slow but steady increase” during that time, and “a lot of that is because of the lack of private-sector job growth in the state.”

Posted in Economics, New Jersey Real Estate | 377 Comments