Paycheck to Paycheck

Posted on April 28, 2023 by grim

From the Record:

Report: 37% of working families in NJ struggled to make ends meet during COVID pandemic

A new report shows that 37% of New Jersey households — 1.3 million families — were not able to afford basic necessities in the communities where they lived in 2021, during the pandemic.

The report was released Wednesday by United Way of Northern New Jersey. It said 11% of New Jersey households, or 368,639 families, were at the federal poverty level in 2021, but an additional 26% — 923,791 households — were asset limited, income constrained, employed, or ALICE. 

Those ALICE households, while earning above the federal poverty level, still could not afford basic household necessities. They encompass low-paying “essential” jobs like child care workers, home health aides and cashiers. 

Between 2019 and 2021, the number of financially insecure households in the state rose by 14%, the report found.

The report said rising wages and pandemic aid helped offset COVID-19 job disruptions, as well as inflation. 

United Way of Northern New Jersey CEO Kiran Handa Gaudioso said the numbers weren’t “worse” because of the level of COVID-19 relief available at the time.
…
All told, the number of households living paycheck to paycheck grew by 157,000 in the first two years of the COVID-19 pandemic, the report reads. 

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 65 Comments

It’s that kind of market?

Posted on April 27, 2023 by grim

From, uh, does it matter?

Tips To Win a Bidding War

In a seller’s market, when demand is high and inventory is low, buyers often have to go above and beyond to make sure their offer stands out from the competition. That, unfortunately, is increasingly becoming the case as of late. According to a Redfin survey in January, over 56% of buyers are facing bidding wars in their offers. And over two-thirds of offers written by Redfin agents in March faced multiple offers, according a separate survey released in April.

While there’s no science behind winning a bidding war on a house, there are things that you can do to increase your chances. Here’s what you can do as a buyer in a seller’s market.

  1.  Work with an experienced real estate agent
  2. Be prepared and fully pre-approved
  3. Explore a fully underwritten pre-approval
  4. Raise your offer
  5. Understand your options around contingencies
  6. Button up your dates
  7. DON’T write a personal letter
  8. Finally, know when to say no
Posted in Housing Bubble, New Jersey Real Estate | 88 Comments

Tick tick tick

Posted on April 24, 2023 by grim

From DSNews:

Q1 Foreclosure Activity Trends Upward

ATTOM’s Q1 2023 U.S. Foreclosure Market Reporthas found that a total of 95,712 U.S. properties had foreclosure filings during Q1 of 2023, up 6% from Q4 of 2022, and up 22% year-over-year. The report also shows a total of 36,617 U.S. properties with foreclosure filings in March 2023 alone, up 20% from February 2023’s totals, and up 10% from a year ago—the 23rd consecutive month with a year-over-year increase in U.S. foreclosure activity.

“Despite efforts made by government agencies and policymakers to try and reduce foreclosure rates, we are seeing an upward trend in foreclosure activity,” said Rob Barber, CEO at ATTOM. “This unfortunate trend can be attributed to a variety of factors, such as rising unemployment rates, foreclosure filings making their way through the pipeline after two years of government intervention, and other ongoing economic challenges. However, with many homeowners still having significant home equity, that may help in keeping increased levels of foreclosure activity at bay.”

A total of 65,346 U.S. properties started the foreclosure process in the first quarter of 2023, up 3% from the previous quarter, and up 29% from a year ago. States that had the greatest number of foreclosures starts in Q1 2023 included:

  • California (6,867 foreclosure starts)
  • Texas (6,764 foreclosure starts)
  • Florida (5,724 foreclosure starts)
  • New York (4,345 foreclosure starts)
  • Illinois (4,006 foreclosure starts)

Those major metros with a population of 200,000 or more that had the greatest number of foreclosures starts in Q1 2023 included:

  • New York, New York (4,674 foreclosure starts)
  • Chicago, Illinois (3,549 foreclosure starts)
  • Los Angeles, California (2,210 foreclosure starts)
  • Houston, Texas (2,120 foreclosure starts)
  • Philadelphia, Pennsylvania (1,985 foreclosure starts)

Nationwide, one in every 1,459 housing units had a foreclosure filing in the first quarter of 2023. States with the highest foreclosure rates included:

  • Illinois (one in every 762 housing units with a foreclosure filing)
  • Delaware (one in every 812 housing units)
  • New Jersey (one in every 824 housing units)
  • Maryland (one in every 897 housing units)
  • Nevada (one in every 947 housing units)
Posted in Foreclosures, National Real Estate | 180 Comments

NJ losing jobs

Posted on April 22, 2023 by grim

From the APP:

NJ jobs shrinking? Employers still hiring? Making sense out of economic crystal ball

New Jersey lost 2,600 jobs in March and its unemployment rate remained steady at 3.5%, the state Department of Labor and Workforce Development said Thursday, in a sign that the Garden State’s torrid job growth could be slowing down.

Even as some employers put on the brakes, however, others continue to expand in the state, showing that the picture of a post-pandemic economy remains mixed.

“We’re super bullish,” said Jeff Van Wie, general manager of Slalom, a Seattle-based consulting company that opened an office in New Brunswick on Wednesday with 200 employees. “The amount of opportunity we see with the clients that are here, we feel — for us — the business is going to keep growing.”

The monthly jobs report is from a survey of New Jersey employers that measures the number of jobs and a survey of households that measures the unemployment rate. It is a preliminary look that will be revised next month and again next year.

The March report was a snapshot from a month that saw two regional banks failand the Federal Reserve Board raise interest rates for the ninth time in a year. The Fed is trying to slow down the economy and rein in inflation.

In March, the leisure and hospitality industry continued its comeback from the pandemic by adding 2,100 jobs. Trade, transportation and utilities, and the information sector added 400 jobs each.

Professional and business services, which includes technology jobs, lost 3,500 jobs last month.

From NJBIZ:

Mixed March labor report shows jobs count dip, participation rate rise 

The state Department of Labor and Workforce Development released its March jobs report April 20, showing a mix of some positive and lackluster figures.

On the positive side, New Jersey’s labor force participation rate increased to 64.8%, its highest level since July 2013. The unemployment rate remained unchanged at 3.5%, which matches the national rate.

“The numbers on the state’s labor force, employment of residents, and unemployment were good,” said Charles Steindel, former chief economist of the State of New Jersey, who analyzed the report for the Garden State Initiative (GSI). “The state’s labor force rose 18,300 in March, marking the third straight month with an increase of more than 10,000. The 64.8% labor force participation rate was higher than the pre-pandemic cyclical peak of 64.5%. Resident employment rose 16,500; over the last year it has increased by more than 130,000.”

On the flipside, there was a 2,600 jobs decline in March. And, revised February figures showed a drop of 3,100 jobs instead of the previously estimated 4,600 jobs gained.

Posted in Economics, New Jersey Real Estate | 30 Comments

Do we go negative now?

Posted on April 20, 2023 by grim

From Redfin:

Home Prices Fell 3% in March—Biggest Annual Drop in Over a Decade

The median U.S. home sale price fell 3.3% in March to $400,528, the largest year-over-year drop since 2012. That follows February’s 1.2% dip, which was the first annual decrease since 2012.

Pandemic boomtowns and pricey Bay Area markets led the price declines in March. In Boise, ID, prices fell 15.4% from a year earlier, more than any other U.S. metro area Redfin analyzed. Next came Austin, TX (-13.7%), Sacramento, CA (-11.9%), San Jose, CA (-10.5%) and Oakland, CA (-9.7%). Boise also saw the largest drop in pending home sales, with a 78.8% year-over-year decline. Nationwide, pending sales fell 26.6% on a seasonally-adjusted basis to the lowest level since the onset of the pandemic (April 2020). 

The dip in pending sales is a major contributor to the dip in home prices; fewer buyers mean sellers need to list their homes for less money to attract the house hunters who remain.

Posted in Housing Bubble, Mortgages, National Real Estate | 139 Comments

Locked in is the new priced out

Posted on April 19, 2023 by grim

From DS News:

Fannie Mae: ‘Lock-in Effect’ Amplifying Housing Shortages

While the annual rate of increase in home prices slowed dramatically as a result of inflated interest rates, single-family home prices increased at a non-seasonally adjusted annual rate of 4.7% from Q1 2022 to Q1 2023, down from the previous quarter’s revised annual growth rate of 8.6%, according to Fannie Mae’s latest Home Price Index (FNM-HPI) reading, a national, repeat-transaction home price index measuring the average, quarterly price change for all single-family properties in the United States — excluding condos.

On a quarterly basis, home prices rose a seasonally adjusted 1% in Q1 2023, above the 0.0% growth seen in the prior quarter. On a non-seasonally adjusted basis, home prices also increased by 1% in Q1 2023.

“As expected, the annual rate of increase in home prices has slowed dramatically in response to the rapid and significant increase in interest rates,” said Doug Duncan, Fannie Mae Senior VP and Chief Economist. “Still, the fact that prices rose slightly in the first quarter is evidence of significant pent-up mortgage demand, despite ongoing affordability constraints. Even though mortgage rates remain elevated compared to the previous few years, the acute lack of housing supply remains supportive of home prices. Of course, the shortage of homes for sale is currently being exacerbated by the so-called ‘lock-in effect,’ which continues to disincentivize huge numbers of households with low mortgage rates from listing their homes.”

Posted in Demographics, Mortgages, National Real Estate | 73 Comments

Let the borrowing begin!

Posted on April 18, 2023 by grim

From the Star Ledger:

N.J. credit rating gets two more upgrades from Wall Street as state coffers overflow 

New Jersey’s credit rating has won two more upgrades from Wall Street’s major rating agencies, bringing the number of upgrades to three in just the past week and six since March 2022.

Moody’s Investor Service lifted the state’s rating one notch on April 6, and that was followed by upgrades from Fitch on Tuesday and S&P Global a day later. In statements announcing the upgrades, the three agencies cited full pension payments over the past two years, as well as record surpluses and efforts to pay down debt and avoid new borrowing.

All three announcements closely followed Gov. Phil Murphy’s $53.1 billion state budget proposal for the fiscal year that begins July 1, which he unveiled on February 28 to kick off four months of budget hearings and negotiations in the state Legislature.

From Patch:

NJ Gets 3 More Credit Rating Upgrades From Fitch, Moody’s, S&P

New Jersey has received three credit rating upgrades in the past week, as ratings services note the state’s “resilient” fiscal position following years of downgrades which hampered the state’s borrowing power. 

The most recent upgrade was from S&P Global Ratings, who upgraded its rating on New Jersey’s general obligation bonds from “A-” to “A” on Wednesday. 

Fitch Ratings upgraded NJ’s Issuer Default Rating (IDR) to “A+” on Monday, and Moody’s Investor Services upgraded the state’s rating from “A2” to “A1” last week. These ratings measure the health of a state’s economy, as well as a state’s ability to pay its debts.

“The upgrades reflect better pension funding levels and improved structural balance, largely the result of an anticipated third consecutive year of full actuarial pension contributions in fiscal 2024,” said S&P Global Ratings credit analyst David Hitchcock in a news release.

The upgrades come as the state is preparing to issue more than $1 billion in bonds for school facilities construction projects, which Fitch assigned an “A” rating to. Also, this week, New Jersey state legislators began their review of Gov. Phil Murphy’s proposed $53.1 billion budget for the next fiscal year — which starts this July.

Posted in Economics, New Jersey Real Estate, Politics | 73 Comments

Fastest selling markets in NJ (Feb edition)

Posted on April 15, 2023 by grim

From Redfin:

New Jersey Towns Where Homes are Still Selling Fast

According to RedFin‘s February 2023 data, it takes 61 days to sell a home in New Jersey, which is an 11 day increase from 2022.

We’ve compiled a list of 42 cities and towns in New Jersey where homes are selling fast, with Woodbury, NJ, Moorestown-Lenola, NJ, and Lavalette, NJ taking the number one spot at just 12 days to sell a house.
…
New Jersey Towns Where Homes are Selling Fast (Feb 2023 data)

1. Lavallette, NJ

Median Days on Market: 12

Median Sale Price: $875K

Homes Sold: 5

2. Moorestown-Lenola, NJ

Median Days on Market: 12

Median Sale Price: $650K

Homes Sold: 9

3. Woodbury, NJ

Median Days on Market: 12

Median Sale Price: $238K

Homes Sold: 11

4. Sprindale, NJ

Median Days on Market: 13

Median Sale Price: $485K

Homes Sold: 7

5. Collingswood, NJ

Median Days on Market: 13

Median Sale Price: $325K

Homes Sold: 9

6. Preakness, NJ

Median Days on Market: 14

Median Sale Price: $445K

Homes Sold: 5

7. Bradley Gardens, NJ

Median Days on Market: 15

Median Sale Price: $380K

Homes Sold: 7

8. Bound Brook, NJ

Median Days on Market: 16

Median Sale Price: $430K

Homes Sold: 6

9. Gloucester City, NJ

Median Days on Market: 17

Median Sale Price: $195K

Homes Sold: 7

10. Haddon Heights, NJ

Median Days on Market: 17

Median Sale Price: $365K

Homes Sold: 8

11. Berlin, NJ

Median Days on Market: 18

Median Sale Price: $319K

Homes Sold: 9

12. Westmont, NJ

Median Days on Market: 19

Median Sale Price: $470K

Homes Sold: 5

13. Wanaque, NJ

Median Days on Market: 19

Median Sale Price: $415K

Homes Sold: 9

14. South Plainfield, NJ

Median Days on Market: 19

Median Sale Price: $443K

Homes Sold: 14

15. Lincoln Park, NJ

Median Days on Market: 19

Median Sale Price: $368K

Homes Sold: 17

16. Somerset, NJ

Median Days on Market: 19

Median Sale Price: $430K

Homes Sold: 21

17. Bridgewater, NJ

Median Days on Market: 20

Median Sale Price: $455K

Homes Sold: 15

18. Upper Montclair, NJ

Median Days on Market: 21

Median Sale Price: $705K

Homes Sold: 7

19. Rossmoor, NJ

Median Days on Market: 21

Median Sale Price: $202K

Homes Sold: 10

20. Cherry Hill, NJ

Median Days on Market: 21

Median Sale Price: $370K

Homes Sold: 36

Posted in Demographics, Economics, Housing Bubble, New Jersey Real Estate | 53 Comments

Back in the pool!

Posted on April 12, 2023 by grim

From CNBC:

Homebuyer mortgage demand jumps after interest rates drop to two-month low

Today’s housing market is so pricey that homebuyers are highly sensitive to any distinct moves in mortgage rates. And that’s what happened last week. Rates dropped, and buyers dove in.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) decreased to 6.30% from 6.40%, with points decreasing to 0.55 from 0.59, including the origination fee, for loans with a 20% down payment, according to the Mortgage Bankers Association. That was a weekly average decline, but a sharper, one-day drop smack in the middle of the week was likely the impetus for demand.

“Incoming data last week showed that the job market is beginning to slow, which led to the 30-year fixed rate decreasing to 6.30% — the lowest level in two months,” said Mike Fratantoni, MBA’s SVP and chief economist.

Mortgage applications to purchase a home rose 8% last week, compared with the previous week. They were, however, 31% lower than the same week one year ago, when interest rates were significantly lower. Buyers have been up against not only higher rates and higher home prices, but very limited supply.

Applications to refinance a home loan were less reactive, basically flat week to week and 57% lower than the same week a year ago. At today’s interest rates, there are very few borrowers who can benefit from a refinance. For those looking to tap their home equity, they are largely opting for second loans rather than cash-out refinances.

Posted in Demographics, Economics, Housing Bubble, Mortgages | 122 Comments

Who can afford all this?

Posted on April 11, 2023 by grim

From Stacker:

The 50 cities in New Jersey where home prices are rising the fastest

Posted in Demographics, Economics, Housing Bubble, New Jersey Real Estate | 19 Comments

Welcome to the party

Posted on April 10, 2023 by grim

From Axios:

Millennial homeowners outnumber renters for the first time

Millennial homeowners outnumbered millennial renters for the first time last year, despite creeping interest rates and a tight real estate market.

Driving the news: Nearly 52% of the first generation to grow up in the Internet age ​​— people born from 1981 to 1996 — were homeowners in 2022, making the largest ownership gains of any generation in the last five years, according to a new RentCafe report.

By the numbers: The number of millennial homeowners increased by 7.1 million between 2017 and 2022 to 18.2 million, a 64% increase.

  • There are still 17.2 million millennial renters, which is still considered the dominant renter generation, RentCafe found.
  • The average millennial bought their first home at 34, slightly older than the average age of past generations, when boomers took the keys at 33 and Gen X at 32.

Yes, but: Older generations still own more homes than millennials.

  • Baby boomers, who were born 1946 to 1964, own about 32.1 million homes as of 2022, but lost 354,000 homeowners in the last five years.
  • Gen X, born from 1965 to 1980, own 24.4 million homes, an increase of 1.9 million.

Posted in Demographics, Economics, National Real Estate | 38 Comments

Don’t worry about commercial real estate…

Posted on April 9, 2023 by grim

From Insider:

Most of Wall Street is panicking about commercial real estate – but Goldman Sachs says there’s little chance it triggers a financial crisis

It seems like there are three words on the lips of every investor now that panic around the US’s regional banking sector is starting to die down: commercial real estate.

Big names ranging from Bill Ackman and Elon Musk to Bank of America and JPMorgan have predicted that the troubled sector will be where the next cracks appear in the US financial system – but Goldman Sachs bucked that trend this week.

“The risk of a vicious circle of large leveraged losses and undercapitalized balance sheets that would pose a threat to financial stability is still limited,” strategists Lotfi Karoui and Vinay Viswanathan said in a research note published Monday.

Goldman Sachs’ view clashes with analysts such as Bank of America’s Michael Hartnett, who said in a research note last week that commercial real estate would likely be the “next shoe to drop as lending standards… tighten further.”

Hartnett believes that a wave of upcoming refinancings of commercial real estate loans at much higher interest rates than in the past could spark a credit crunch in the sector, sending stocks spiraling and the economy into a recession.
…
While Karoui and Viswanathan are anticipating massive issues in the office sector – an area that other strategists have expressed concern about as well – they believe that apartments, manufacturing plants, warehouses, and other types of commercial real estate are better-capitalized and won’t suffer a huge crash.

“We expect office loan delinquencies to materially increase, but think this is unlikely to lead to systemic risk given healthier fundamentals in other commercial real estate subsectors,” the Goldman Sachs strategists said.

The turmoil will likely be contained to office loan delinquencies “given healthier fundamentals in other commercial real estate sub-sectors such as apartment and industrial properties, as well as in other parts of credit markets,” Karoui and Viswanathan added.

Posted in Economics, Mortgages, National Real Estate, Risky Lending | 24 Comments

Reinstate Pearson and Jones

Posted on April 8, 2023 by grim

From CSPAN:

Posted in Politics | 50 Comments

Heating up!

Posted on April 7, 2023 by grim

From CNN:

Mortgage rates fall for the fourth week in a row

Homebuyers benefited from another week of falling mortgage rates, with the average rate dropping for the fourth week in a row, according to data from Freddie Mac released Thursday.

The 30-year fixed-rate mortgage averaged 6.28% in the week ending April 6, down from 6.32% the week before. A year ago, the 30-year fixed-rate was 4.72%.

“Mortgage rates continue to trend down entering the traditional spring homebuying season,” said Sam Khater, Freddie Mac’s chief economist. “Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers.”

The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

After hitting a 2022 high of 7.08% in November, rates started 2023 trending down. However, they climbed again in February, after robust economic data suggested the Federal Reserve was not done in its battle to cool the US economy and would likely continue hiking its benchmark lending rate.

The Fed raised interest rates by a quarter point at its most recent policymaking meeting, in an effort to continue to fight stubbornly high inflation while taking into account the risks to financial stability brought about by recent turmoil in the banking sector.

Posted in Economics, Mortgages, National Real Estate | 59 Comments

Jersey shore is underwater, but you still can’t get a good deal

Posted on April 6, 2023 by grim

From CNBC:

A hidden time bomb? A ‘Big Short’ investor sees financial disaster brewing in housing markets

More than a decade after a U.S. mortgage meltdown threatened to destroy the international financial system, a “Big Short” investor once again sees financial disaster brewing in the real estate market.

Dave Burt, CEO of investment research firm DeltaTerra Capital which aims to help clients manage climate risk, was one of the few skeptics who recognized the housing market was on the brink of collapse in 2007.

He helped two of the protagonists of Michael Lewis’ best-selling book “The Big Short” bet against the mortgage market in the lead-up to the 2008 global financial crash. As it turned out, they were right and made billions.

Now, Burt believes an overlooked climate risk could see history repeating itself.

“I’m always on the lookout for these big systemic issues and there’s a few of reasons for that,” Burt told CNBC via videoconference.

“Professionally, if something is mispriced, then as an investor, which has been my job for most of my career, your main opportunity to add value is to identify something that is either too cheap to purchase for your clients or something that it is too expensive to sell for your client,” he said.

“From a personal perspective, and this is partly based on that professional perspective, I’ve seen when that goes wrong, how impactful that can be on economies and society and our most vulnerable. And I’m really thinking through the post-global financial crisis period here in the U.S. from 2008 to 2012 where there was a huge amount of human suffering.”

Burt said DeltaTerra Capital’s research suggests that 20% of U.S. homes have “meaningful exposure” to a mispricing issue because of flood risk. If realized, he warned the fallout could resemble the extraordinary correction seen during the global financial crisis.

“We think of this repricing issue as maybe a quarter of the size and magnitude of the [global financial crisis] in aggregate, but of course very, very damaging within those exposed communities,” Burt said.

Posted in Crisis, National Real Estate, Risky Lending | 104 Comments