New Jersey Real Estate Report

Foreclosures up 30% in February

Posted on March 12, 2009 by grim

From Bloomberg:

Foreclosure Filings in U.S. Jump 30%, Thwart Prevention Effort

Foreclosure filings in the U.S. climbed 30 percent in February from a year earlier as the worsening economy thwarted efforts by the government and lenders to prevent homeowners from losing property, RealtyTrac Inc. said.

A total of 290,631 homes received a default or auction notice or were seized by the lender, the Irvine, California-based seller of default data said in a statement today. It was the third-highest monthly total in RealtyTrac records dating to 2005. February filings increased 6 percent from January.

“More people have lost their incomes or are underwater on their mortgages, so a new housing plan won’t change those facts by itself,” Barry Eichengreen, professor of economics at the University of California, Berkeley, said in an interview.
…
Some of the top U.S. lenders own as many as 700,000 foreclosed homes they have yet to offer for sale, said Rick Sharga, executive vice president for marketing for RealtyTrac.

The banks may be waiting to see how U.S. government plans develop before selling the properties, Sharga said. The lenders and government-owned Fannie Mae and Freddie Mac, the two biggest U.S. mortgage financing companies, have already extended temporary foreclosure moratoriums.

The combined percentage of loans in foreclosure or at least one payment past due in the fourth quarter was 11.18 percent, the highest on record, according to the Mortgage Bankers Association in Washington. The percentage of loans 60 days past due and 90 days or more late also were at record levels.

“Many elements are lined up to suggest we’ll have more foreclosure activity in the future, maybe an all-time high,” Sharga said.
…
Arizona ranked third in filings with 18,119, up 88 percent from February 2008.

New York had the 35th highest rate and 4,301 filings. New Jersey ranked 29th and had 3,279 filings. Connecticut was 14th with 2,220 filings, RealtyTrac said.

Las Vegas had the highest foreclosure rate among metropolitan areas with populations of 200,000 or more. One in 60 housing units there received a filing, more than seven times the national average.

Posted in Foreclosures, Housing Bubble, National Real Estate | 331 Comments

Taxzine contemplates eliminating property tax deductions

Posted on March 11, 2009 by grim

From the Record:

Budget could deal middle-class homeowners a painful double whammy

The budget Governor Corzine unveiled Tuesday calls for eliminating property tax deductions on state income taxes next year, raising about $420 million to help balance a painful spending plan. But for middle-class New Jerseyans who would also lose their property tax rebates, the missing deduction could pack an extra punch.

Although many budget details had leaked in advance, the lost tax write-off caught many off guard. Corzine would remove the property tax deduction on income taxes for all but senior citizens, and eliminate property tax rebates for non-senior households making more than $75,000 a year. Non-senior households earning $50,000 to $75,000 would see their rebate check from last year slashed by a third. Last year’s program offered staggered rebates for households making up to $150,000.

That could translate into a double whammy for non-senior homeowners earning $75,000 to $150,000. They lose their rebate and hundreds of dollars from the deduction.

A homeowner earning $95,000, for example, would not only lose a $1,000-plus rebate. Scrapping the property tax deduction would take away another $350 or so, according to state figures.

“The loss of the deduction would make homeownership even harder for New Jersey residents who are struggling to make ends meet during this recession,” said Senate Minority Leader Tom Kean Jr., R-Union.

Posted in New Jersey Real Estate, Politics, Property Taxes | 302 Comments

American Nightmare?

Posted on March 10, 2009 by grim

From MetLife:

The 2009 MetLife Study of the American Dream

…The results show an American dream that has been revised, not reversed. Americans are resetting their priorities, and the dream is now buoyed by pragmatism rather than consumerism. While Americans are anxious about their finances and the national economy, most are still optimistic that they can achieve the dream—a redefined American dream with a greater focus on family, marriage, and financial security.

Other key findings of the study are:

While many Americans are flying without a safety net, more recognize its importance and are saving more, spending less, and thinking more about their life goals.

Work is the linchpin holding the dream together. Half of Americans surveyed report they could survive only one month financially after a job loss.

There is a newfound appreciation for workplace benefits. Employees value the role of employers in helping to build their personal financial safety nets.

Americans are placing a premium on trust, with greater demand for predictable returns and guarantees.

From HousingWire:

Most Americans Hanging on By a Financial Thread: Study

Want a stunning figure? Half of Americans now say they are only one month or less away from not being able to meet their financial obligations if they were to lose their job — just two paychecks or less. And of these, more than half — 28 percent of all Americans — say they could not survive financially for more than two weeks without their current job.

This disturbing data comes courtesy of the 2009 MetLife Study of the American Dream, released Monday, which looks at how the financial crisis has affected the American Dream and consumer perceptions. It’s all the more disturbing considering that unemployment in the U.S. has already surged to 8.1 percent, with 651,000 jobs lost last month alone.
…
The survey data underscores that the mortgage industry would do well to remain focused on economic fundamentals: following a job loss, 59 percent of survey respondents said they’d be somewhat or very concerned about having to file for bankruptcy, and 64 percent would be concerned about losing their home.

And evidence of the spending binge most Americans are still recovering from is evident in even the broadest sense, not just limited to those with more limited financial means. Even the “mass affluent” — those making $100,000+ in income per year, according to the MetLife study — haven’t been saving enough, with more than one-quarter (29 percent) saying that they couldn’t meet their financial obligations for more than one month following a job loss.

That’s the sort of information that should give every lender, investor and servicer pause as we think about managing a growing number of bad loans.

“The American dream is on pause. The majority of Americans still believe they can still achieve the dream in their lifetimes but, for the next year, it’s all about shoring up the foundation of their personal safety nets,” said Beth Hirschhorn, senior vice president for global brand and marketing services at MetLife. “For the one-third of Americans who believe they have already achieved the dream, being able to sustain the dream — without backsliding — is becoming as important as achieving it in the first place.”

Posted in Economics, Housing Bubble, National Real Estate | 42 Comments

Will he cut or will he borrow?

Posted on March 9, 2009 by grim

From the Record:

Where will governor find $4B in cuts?

Governor Corzine is preparing a new state budget that will reduce spending to below $30 billion for the first time since 2006.

The budget, which Corzine will present Tuesday to a joint session of the state Legislature in Trenton, will be about $4 billion smaller than the current spending plan.

Why the big reduction: Corzine, a former Wall Street executive, is working within the confines of a steep and widespread decline in state revenues caused in large part by the poor economy. Nearly every state revenue source, including sales and income taxes, is down compared with this time last year. Some sources, such as the realty transfer tax, have been hit extraordinarily hard by the recession. Economists don’t expect things to improve much, if at all, in fiscal 2010. The New Jersey Constitution requires a balanced budget, so Corzine is slashing spending in response.

How it got this bad: Corzine and legislators increased spending from around $28 billion when he took office in 2006 to $33 billion approved in June. They’ve spent more money on education, employee pension liabilities and property tax rebates than prior years and also faced rising debt payments tied to the state’s record $32 billion debt. But few programs were cut to compensate for the increases. Now, with revenue dropping by more than 10 percent, the balanced budget requirement is bringing dramatic cuts and few places to make them.

Posted in New Jersey Real Estate, Politics, Property Taxes | 286 Comments

2009 Spring Market a Bust

Posted on March 6, 2009 by grim

Little early, but I’m making the call.

The North Jersey 2009 Spring Market is a complete bust

There has been absolutely no sign of increased sales, heck there isn’t even a sign of a bottom. Sorry folks, but this downturn has much longer to go.

While we usually discuss home sales on a closed basis here (looking backwards by 2-3 months) it is often helpful to gauge home sales by looking at contract sales (signed contracts to buy). This measure is very similar (if not exactly the same) as the National Association of Realtors (NAR) pending home sales index. While contract sales are a more recent indicator than closed sales, it is a noisier measure. A percentage of contract sales don’t make it to closing, and that percentage does tend to vary. Closed sales tend to see a less significant revision, which are typically due to data entry mistakes or not logging a closed sale in a timely manner.

There are no bright spots in the February 2009 contract data. Warren did see a bit of a year over year increase in February, but at these depressed levels it is tough to know whether this is market improvement or just noise as we skid further downhill. The biggest improvement in Warren County was in Phillipsburg, where contracts went from 9 last year to 13 in 2009. This is likely due to the severe price declines seen in Phillipsburg. Median contract price was down more than 50% year over year, with average prices falling 34% over that same period. This is similar to what we saw in January, with severely depressed areas seeing the most improvement in terms of sales.

Given the deterioration over the first two months of the year, it is clear that 2009 will not be the year real estate bottoms in New Jersey. The spring market tends to set the pace for the year that follows, and if January and Febuary are any indication, we’re in for further deterioration.

Febuary North Jersey Contract Sales

Bergen
(NJMLS)
February 2007 – 762
February 2008 – 520
February 2009 – 441 (Down 15.2% YOY, Down 42.1% 2xYOY)

Essex
(GSMLS)
February 2007 – 423
February 2008 – 325
February 2009 – 248 (Down 23.7% YOY, Down 41.4% 2xYOY)

Hunterdon
(GSMLS)
February 2007 – 94
February 2008 – 102
February 2009 – 58 (Down 43.1% YOY, Down 38.3% 2xYOY)

Morris
(GSMLS)
February 2007 – 449
February 2008 – 355
February 2009 – 270 (Down 23.9% YOY, Down 39.9% 2xYOY)

Passaic
(GSMLS)
February 2007 – 263
February 2008 – 187
February 2009 – 177 (Down 5.3% YOY, Down 32.7% 2xYOY)

Somerset
(GSMLS)
February 2007 – 323
February 2008 – 252
February 2009 – 172 (Down 31.7% YOY, Down 46.7% 2xYOY)

Sussex
(GSMLS)
February 2007 – 171
February 2008 – 122
February 2009 – 118 (Down 3.3% YOY, Down 31.0% 2xYOY)

Union
(GSMLS)
February 2007 – 349
February 2008 – 261
February 2009 – 212 (Down 18.8% YOY, Down 39.3% 2xYOY)

Warren
(GSMLS)
February 2007 – 103
February 2008 – 60
February 2009 – 67 (Up 11.7% YOY, Down 35.0% 2xYOY)

Year-to-Date North Jersey Contract Sales

Bergen
(NJMLS)
2007 – 1444
2008 – 996
2009 – 804 (Down 19.3% YOY, Down 44.3% 2xYOY)

Essex
(GSMLS)
2007 – 787
2008 – 547
2009 – 474 (Down 13.3% YOY, Down 39.8% 2xYOY)

Hunterdon
(GSMLS)
2007 – 199
2008 – 196
2009 – 114 (Down 41.8% YOY, Down 42.7% 2xYOY)

Morris
(GSMLS)
2007 – 859
2008 – 636
2009 – 484 (Down 23.9% YOY, Down 43.7% 2xYOY)

Passaic
(GSMLS)
2007 – 673
2008 – 468
2009 – 361 (Down 22.9% YOY, Down 46.4% 2xYOY)

Somerset
(GSMLS)
2007 – 635
2008 – 447
2009 – 322 (Down 28.0% YOY, Down 49.3% 2xYOY)

Sussex
(GSMLS)
2007 – 305
2008 – 223
2009 – 205 (Down 8.1% YOY, Down 32.8% 2xYOY)

Union
(GSMLS)
2007 – 651
2008 – 449
2009 – 426 (Down 5.1% YOY, Down 34.6% 2xYOY)

Warren
(GSMLS)
2007 – 206
2008 – 129
2009 – 119 (Down 7.8% YOY, Down 42.2% 2xYOY)

Posted in Economics, Housing Bubble, New Jersey Real Estate | 398 Comments

NJ Homeowners Falling Behind

Posted on March 5, 2009 by grim

From the Record:

Home foreclosures and late payments reach new record highs

Home loan delinquencies and foreclosures again reached record highs in the latest quarter as lingering defaults on loans made even to more credit-worthy borrowers rose sharply in many states, including New Jersey.

A Mortgage Bankers Association survey showed 5.4 million American homeowners with mortgages, or nearly 12 percent, were at least one month late on their payments or in foreclosure at the end of last year, up from 10 percent at the end of the third quarter. Among those with subprime adjustable rate loans, nearly half are behind. Loans in foreclosure around the country climbed to a record 3.3 percent.

At the same time, the causes of rising delinquencies are shifting from poor underwriting, mortgage fraud and spikes in monthly payments — particularly on adjustable-rate subprime loans — to rising unemployment, according to Jay Brinkman, the trade group’s chief economist. “Subprime ARMS are still a problem but that problem may be diminishing,” he said a conference call.

Prime borrowers increasingly are falling behind, he said.

The survey found that prime loans in New Jersey on which payments are 90 days late or more shot up to 1.36 percent of the total in the fourth quarter from 0.92 percent in the third quarter and 0.53 percent in the fourth quarter of 2007. Meanwhile, the rate of seriously delinquent subprime loans rose to 8.73 percent, up from 6.33 percent in the third quarter and from 5.18 percent a year earlier.

The quarterly delinquency report released today provides further evidence that the housing market continues to deteriorate. Standard & Poor’s Case-Shiller index reported last month that home prices in the New York metropolitan area, which includes Bergen and Passaic counties, slid a record 9.2 percent last year while home prices in an index of 20 large cities plummeted 18.5 percent, also a record drop.

More than 8.3 million U.S. mortgage holders are “under water,” that is, they owed more on their loans in the fourth quarter than their property was worth, according to Santa Ana, Calif.-based First American CoreLogic. An additional 2.2 million borrowers will be underwater if home prices decline another 5 percent, the data firm said.

California-based foreclosure listing service RealtyTrac recently said about 62,500 properties in New Jersey faced foreclosure filings in 2008 — twice the number in 2007. Foreclosures rose about 180 percent in Bergen and Passaic counties. Nationally, 2.3 million properties were in some state of the foreclosure process in 2008, an 81 percent increase from 2007.

Posted in Foreclosures, Housing Bubble, New Jersey Real Estate | 372 Comments

Federal Reserve: Real Estate Conditions in the Second District

Posted on March 5, 2009 by grim

From the Federal Reserve:

(Read that line again, from the Federal Reserve, not the Realtors, not the NJ Association of Realtors, not from the Builders, and not from the Mortgage Bankers. This is coming to us from Ben Bernanke’s FED.)

Summary of Commentary on Current Economic Conditions (Beige Book) – Second District–New York

Construction and Real Estate

Housing markets in the District have been mixed but generally weak since the last report. Manhattan’s residential rental market continued to soften in January, with asking rents reported to be down 3 to 9 percent from a year earlier; in addition, a growing number of landlords are offering one or more months of free rent and are paying any rental fees. Perhaps as a result, rental vacancy rates, which had been rising steadily in the second half of 2008, edged down in January. A major appraisal firm reports that Manhattan co-op and condo prices have continued to decline since the beginning of the year and are down by an estimated 20 to 25 percent from last summer; the number of transactions thus far in 2009 has been running 60 to 65 percent lower than a year ago. A contact reports seeing very few transactions at the high end of the market in Manhattan, and that most of them seem to be all-cash deals. Inventories are rising seasonally from an already-high level and that backlog is said to be accompanied by a large and growing amount of “shadow” inventory in new developments.

The market for single-family homes in and around New York City has also weakened, though market conditions were reported to be more stable in upstate New York. Contacts in northern New Jersey report little or no discretionary activity in the resale market–almost all transactions are either foreclosed properties or distress sales by owners that need to move. In this environment, market prices are difficult to gauge, but an industry expert estimates that they are down 15 to 20 percent from the 2007 peak, with steeper declines at the high end. Separately, a real estate industry contact notes a rising number of “short sales,” for which the mortgage holder agrees to accept less than the full principal balance upon the sale.

(Emphasis added)

Posted in Economics, Housing Bubble, New Jersey Real Estate | 387 Comments

NJ Unemployment Continues To Skyrocket

Posted on March 4, 2009 by grim

From the NJ Department of Labor and Workforce Development:

New Jersey’s January 2009 Unemployment Rate at 7.3

(Click to Enlarge)

The New Jersey unemployment rate for January 2009 was 7.3 percent compared to the national rate of 7.6 percent for the month. In addition, the results of the annual adjustment process — conducted each year at this time by every state — showed that the previously announced seasonally adjusted job loss from December 2007 to December 2008 of 63,000 was revised to 85,700. Labor force estimates also were revised for 2008 and the state’s revised 2008 unemployment rate averaged 5.5 percent fluctuating in a wide range of 4.6 to 6.8 percent.

“While New Jersey continued to follow the national trend in employment losses, our unemployment rate has consistently remained below the national average,” said Labor Commissioner David J. Socolow. “Revised employment figures for 2008 indicate that the negative effects of the national recession on New Jersey’s economy were greater than initial estimates showed. Based on newly benchmarked data, New Jersey employment declined by 85,700 jobs from December 2007 to December 2008.”

Most sectors of the New Jersey economy lost jobs over the December 2007 to December 2008 period except for education and health services, which added 15,500 jobs, and leisure and hospitality, which added 2,100. The largest losses were recorded in the trade, transportation and utilities (-31,000), professional and business services (-23,100), and manufacturing (-20,000) supersectors.

All of the over-the-year losses were attributable to the deteriorating U.S. economy as the national recession deepened in the second half of the year. The drop in trade, transportation and utilities was driven by the loss of over 20,000 jobs in the retail trade segment as merchants trimmed staff in response to slow consumer spending. The loss in manufacturing continued a long-term downward trend for factory jobholding in New Jersey.

The contraction in professional and business services was mainly due to job losses in the administrative support/waste management/remediation segment, resulting from steep declines in hiring at temporary employment and staffing agencies. These jobs are typically the most at risk during economic downturns as companies shed nonessential contract workers as business slows or in an effort to reduce costs. Other sectors that experienced substantial job losses included construction (-14,600) and financial activities (-13,100), reflective of the continuing crises in the banking, mortgage and housing markets.

Posted in Economics, New Jersey Real Estate | 153 Comments

Want lower property taxes? Leave.

Posted on March 4, 2009 by grim

An opinion piece from the Hammonton News:

2006 property tax relief was only a mirage

The state is between a rock and a hard place.

On one hand, tax revenues are way down, and the state faces a $6 billion deficit next year because of the recession. On the other, there’s a gigantic state government and hundreds of local governments, school districts and other public entities in this state that take tens of billions of dollars to operate.

Facing dire economic times, it should surprise no one Gov. Jon S. Corzine is looking at doing away with property tax rebates most New Jersey homeowners receive. The rebates cost about $1.7 billion, and the state faces a $6 billion budget deficit for 2010.

But just because the recession is so profound, lawmakers shouldn’t be let off the hook for their failure.

If they had done tax reform the right way — by reforming government spending — the deficit might not be as large. Lawmakers might not have to increase property taxes, which is what taking away the rebates effectively would mean.

When they approved rebates in 2006, state lawmakers said they had a permanent solution to our highest-in-the-nation property taxes, which now average $6,800 annually for every homeowner.

The lawmakers instituted rebates — 20 percent back for households that earn less than $100,000; 15 percent back for households earning between $100,000 and $150,000, and 10 percent back for those earning between $150,000 and $250,000.

From the moment lawmakers approved rebates, we had doubts. How could rebates that could be taken away at any time, such as during an economic downturn, constitute permanent property tax relief? Only lowering property tax rates, so people actually pay less, would constitute permanent relief.

The rebates already are pared down for those in the $100,000 to $150,000 range, and they’re gone completely for households that earn more than $150,000. That happened after they were just a year old. Now, the rebates could be gone for everyone by next year.

If that happens, it will be as if our lawmakers did nothing after all their big talk in 2005 and 2006 about lasting tax relief. They didn’t fundamentally change our government and make it smaller and less costly, and they didn’t give us permanent property tax relief. They will have failed us.

Posted in New Jersey Real Estate, Politics, Property Taxes | 225 Comments

South Jersey Pending Home Sales

Posted on March 3, 2009 by grim

From Prudential Fox & Roach (no link):

January Pending Home Sales Index© Shows 28 Percent Drop from Last Year’s Greater Philadelphia Region Real Estate Activity

DEVON, PA – February 3, 2009 – The Greater Philadelphia region* saw an 14.8 percent decrease in January real estate activity moving to an index of 65 from the December index of 76.3, according to the Prudential Fox & Roach, REALTORS® HomExpert Pending Home Sales Index©. January’s decrease in the region’s activity follows a 9.4 percent increase in the December index, but is 27.8 percent lower than January 2008 when the index stood at 89.9.

Compared to findings reported by the National Association of Realtors® (NAR) Pending Home Sales Index, real estate activity in the Greater Philadelphia region fell faster than both the Northeast and the National indices. The NAR index showed a 12.7 percent decrease in pending sales in the Northeast and a 7.7 percent decrease across the nation. In December, the NAR index indicated a 1.7 percent decrease in pending sales in the Northeast and a 6.3 percent increase nationwide.

Based on the forward-looking indicator, real estate activity in the five-county Southeastern Pennsylvania area decreased 16.8 percent from an upwardly revised index of 81.5 in December to 67.8 in January. The November index stood at 74.6. Each county in Southeastern Pennsylvania saw decreased activity. Chester County saw the largest decrease, falling 21.7 percent to an index of 53.2, which is the lowest index report since October 2007 when it stood at 47.4. Philadelphia County saw a 16.9 percent decrease in January activity, falling to an index of 86.8. Last month, the county increased to 104.5.

For the fourth straight month, Center City pending home sales activity rose. In January, the index reports a 19 percent increase to an index of 96.8. Meanwhile, the Main Line area decreased 26.6 percent, falling from an upwardly revised index of 87.8 in December to 64.5 in January.

Southern New Jersey pending home sales decreased 16 percent in January. The index dropped to 58.9, from the upwardly revised December index of 70.1. The October index stood at 47.3. Each southern New Jersey county reported decreased activity, however Camden and Salem counties remained about even falling 0.1 percent and 0.2 percent, respectively. Burlington County saw the largest decrease in the 12-county region, falling 30.3 percent to an index of 51.3 in January. This drop comes a month after the county recorded its highest index number since the January 2008 index.

Delaware real estate activity remained about even moving 0.6 percent higher in January to 66.2 from an upwardly revised index of 65.7 in December. Following a large decrease in December, Kent County saw a 11.6 percent increase in pending home sales. Kent County is the only county in the 12-county region to see an increase in activity. New Castle County activity decreased 1.8 percent to an index of 67.8 in January.
…
While the January pending homes sales index for the Greater Philadelphia region decreased 14.8 percent, it is 27.8 percent below the January 2008 index, moving from an index of 89.99 in 2008 to 65 in 2009. The Southeastern Pennsylvania index is 31.9 percent below a year ago, Southern New Jersey is down 19.5 percent and the Delaware area fell 21.3 percent below last year’s January index.

Posted in Economics, South Jersey Real Estate | 195 Comments

“Prices have to drop…They have to, have to, have to–and they have.”

Posted on March 3, 2009 by grim

From Bloomberg:

Manhattan Apartment Sellers Cut Prices Most in 5 Years in 2008

Manhattan apartment sellers cut prices by the most in five years last year and unsold inventory rose to the highest since 1999 as the economy retreated.

The average listing discount rose to 4.1 percent, the highest since 2003, as buyers negotiated for reductions off the asking price. The number of condominiums and co-ops for sale jumped 41 percent last year to 9,081 even as the median price reached a record $995,000, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today.

New York City is bracing for a drop in property values after three of the five largest investment banks collapsed. In the Hamptons, on the eastern end of Long Island, prices are already falling. Banks and securities firms have cut more than 180,000 jobs in the past year, according to Bloomberg data, as the recession entered its second year and the global credit crisis forced writedowns and mortgage-related losses of $1.18 trillion.

“There clearly was long-running irrational exuberance out here in real estate,” said Diane Saatchi, senior vice president for broker Corcoran Group Inc. in East Hampton. “It’s gone full circle from people who would pay any price because they had to have the house, to people who pick a price and take any house at that price as long as they think it’s discounted.”

The median price in the Hamptons, New York’s summer playground for the rich and famous, fell almost 13 percent last year to $850,000, the first decline since 2000. Discounts on Hamptons homes rose to 11.1 percent in 2008, according to Miller Samuel-Prudential data.
…
Wall Street firms are expected to lose $47.2 billion in 2008 and further shortfalls are expected in 2009, Mayor Michael Bloomberg said last week. Budget officials assume the city will lose 294,000 jobs from mid-2008 through 2010, including 46,000 in financial industries. The mayor is founder and majority owner of Bloomberg News parent Bloomberg LP.

The firings mirror the national recession that has driven unemployment in January to the highest since 1992 and pushed home prices down the most since the Great Depression, The securities industry accounted for 51 percent of the growth in wages in Manhattan’s private sector from 2003 to 2007, according to the U.S. Bureau of Labor Statistics

“Prices have to drop,” Dottie Herman, chief executive officer of Prudential Douglas Elliman Real Estate, said in an interview. “They have to, have to, have to–and they have.”

In Manhattan, the number of sales declined 23 percent last year from 2007, Miller Samuel and Prudential said. Falling sales and rising inventory preceded lower home prices nationwide. The increase in inventory in Manhattan was largely driven by a slowdown in transactions in the second half, said Jonathan Miller president of Miller Samuel.
…
The reported available inventory tally does not include new developments where units have yet to go on sale, Miller said.

“That is definitely an undercount,” he said. ‘There’s a lot of shadow inventory in the background.”

The trend is likely to continue, said Damon Liss, an interior designer who is now trying to sell a 3-bedroom cottage in East Hampton with a swimming pool for more than $1 million.

“There’s a big disconnect between buyers and sellers,” Liss said. “Buyers want 50 percent discounts and sellers don’t want to reduce the price at all. That’s why transactions are down. Both buyers and sellers are being equally unrealistic.”
Posted in Economics, Housing Bubble, National Real Estate | 294 Comments

Changed your vacation plans yet?

Posted on March 2, 2009 by grim

From the AP:

Troubled times could be boon for Shore tourism

Surging gasoline prices forced many New Jerseyans to rethink their vacation plans last summer, and stay closer to home.

This year, a tank of gas is far cheaper. But the slumping economy and soaring unemployment rate seems to be having the same effect as expensive fuel, with New Jerseyans continuing to opt for a family- and wallet-friendly vacation at the Jersey Shore.

Tourism officials and real estate agents say the troubling times are a boon for the Garden State’s tourism industry, noting that about 30 million people live within 300 miles of the Shore area.

“Many people won’t be on cruises or taking cross-country trips this year — they’re looking for places they can go on a tank of gas,” said Diane Wieland, tourism director for Cape May County.
…
Real estate agents say prices for many summer rentals remain around the same levels as last year, and they’re confident that interest will grow as summer draws closer and the season gets going.

But they have noticed that many visitors who in the past would stay for a week or longer are now considering shorter trips — three or four days — as they deal with financial uncertainty.
…
“It’s still early in the season, but we were right on target at the end of January with leases, and we were inundated with calls in February, so we’re looking good at this time,” said Jeff Gamble, president of the Ocean County Board of Real Estate Agents. “We feel confident that we’re going to be ahead come April.”

But real estate agents and others concede that how the season ultimately turns out — and whether would-be renters and travelers actually make the trek to the Shore — will rest mostly on the state of the economy.

David Weinstein, a spokesman for AAA Mid-Atlantic, says many of their members are not booking trips as far out as they did in the past and are more likely to leave only a deposit, rather that paying in full for a trip up front.

“This tells us that they’re waiting for good deals and that they’re trying to get as close to the departure date as possible, to alleviate any of the uncertainty that might exist if you book six months to a year out,” he said. “Many travelers just don’t know these days what their job or economic situation could be a half-year from now.”

Posted in Shore Real Estate | 403 Comments

January North Jersey Contract Sales

Posted on March 1, 2009 by grim

While we usually discuss home sales on a closed basis here (looking backwards by 2-3 months) it is often helpful to gauge home sales by looking at contract sales (signed contracts to buy). This measure is very similar (if not exactly the same) as the National Association of Realtors (NAR) pending home sales index. While contract sales are a more recent indicator than closed sales, it is a noisier measure. A percentage of contract sales don’t make it to closing, and that percentage does tend to vary. For example, Union County contract sales in January 2008 were originally reported at 209, that number was revised down by 10% to 188 over the year. Those 21 contracts never made it to closing. Closed sales tend to see a less significant revision, which are typically due to data entry mistakes or not logging a closed sale in a timely manner.

Despite the gloomy contracts picture, there were two bright spots on a year over year basis, Union and Essex. However, on a year over year over year basis (whew!), we’re still trending down with the pack. I’d be very careful of using this as any kind of bottom indicator. We saw a brief increase in contract sales during the first quarter of 2007. This trend completely reversed itself by the second quarter and contract sales plunged throughout the rest of the year.

February data should be out any day now (GSMLS), but I do have preliminary data from NJMLS for Bergen that might be worth sharing to give you all a glimpse of the most current month. Contract sales in February 2009 were 439, down from 520 in 2008 and 762 in 2007 (Down 15.6% YOY, 42.4% 2xYOY).

Bergen
(NJMLS)
January 2007 – 682
January 2008 – 476
January 2009 – 363 (Down 23.7% YOY, 46.8% 2xYOY)

Essex
(GSMLS)
January 2007 – 364
January 2008 – 222
January 2009 – 226 (Up 1.0%, Down 37.9% 2xYOY)

Hunterdon
(GSMLS)
January 2007 – 105
January 2008 – 94
January 2009 – 56 (Down 40.4%, Down 46.7% 2xYOY)

Morris
(GSMLS)
January 2007 – 410
January 2008 – 281
January 2009 – 214 (Down 23.8%, Down 47.8% 2xYOY)

Passaic
(GSMLS)
January 2007 – 410
January 2008 – 281
January 2009 – 184 (Down 34.5%, Down 55.1% 2xYOY)

Somerset
(GSMLS)
January 2007 – 312
January 2008 – 195
January 2009 – 150 (Down 23.1%, 51.9% 2xYOY)

Sussex
(GSMLS)
January 2007 – 134
January 2008 – 101
January 2009 – 87 (Down 13.9%, Down 35.1% 2xYOY)

Union
(GSMLS)
January 2007 – 302
January 2008 – 188
January 2009 – 214 (Up 13.8%, Down 29.1% 2xYOY)

Warren
(GSMLS)
January 2007 – 103
January 2008 – 69
January 2009 – 50 (Down 27.5%, Down 51.4% 2xYOY)

Posted in Economics, New Jersey Real Estate | 254 Comments

Weekend Open Discussion

Posted on February 27, 2009 by grim

This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.

Posted in General | 568 Comments

North Jersey January Home Sales

Posted on February 25, 2009 by grim

Preliminary January sales and inventory data for Northern New Jersey (GSMLS) is in. Please note that this data is subject to revision.

The first graph plots the unadjusted sales data (closed sales) for the counties listed. Please note the lower bound of the graph, it is set to 500, not to zero. I do this to emphasize the seasonal nature of the Northern NJ market.