New Jersey Real Estate Report

From the WSJ:

Full-Time Residents Flock to Jersey Shore 

Nearly a decade after superstorm Sandy ravaged the Jersey Shore, economic development is thriving as the Covid-19 pandemic led to a wave of people moving to coastal communities full time.

On a recent afternoon, Seaside Heights, one of several towns that dot the New Jersey shoreline, was bustling with construction activity, as new condos and single-family homes go up. Along the boardwalk, new restaurants are opening up ahead of the busy summer season. A new luxury pool and cabana club is being built. On Boulevard, one of the main thoroughfares, a number of lots are under development or in the planning stages that will feature condos and ground-level retail shops, said Mayor Anthony Vaz.

Ocean County, N.J., where Seaside Heights is located, is one of many counties across the U.S. that has benefited from a surge of migration during the Covid-19 pandemic, as people relocated from crowded urban locations to less densely populated regions, according to a Wall Street Journal analysis of U.S. Postal Service permanent change-of-address data through 2020. Ocean County had a net gain of 7,000 households in 2020, mainly from people relocating from New York City and northern New Jersey, a 40% increase from the prior year, according to the data.

The Jersey Shore has been known as a vacation destination that swells during the summer with tourists and people visiting their second homes. But now more people are taking advantage of remote work options and are making the region their full-time residence, said Gary Quinn, director of the Ocean County Board of Commissioners.

That population growth supercharged the county’s economic development, raising the tax base by $3.3 billion to $110 billion in 2020, its highest mark since Sandy wiped out swaths of the community in 2012, said Mr. Quinn.

From ROI-NJ:

N.J. is reopening. We must now work together to rebuild the economy

For months, the New Jersey Chamber of Commerce and the state’s business community have been urging Gov. Phil Murphy to reopen the state, where justified by the medical metrics, and let the flow of commerce help rebuild our economy.

Now that we are on the verge of a full reopening, we should remember there are still significant issues to address before this race is won.

If the business community walks in partnership with state government and we move together in a timely fashion, we can effectively address these remaining issues, and New Jersey can look forward to a robust and vigorous recovery.

The first thing that the state and business community must work together on is to instill confidence in workers and customers that it is safe to once again visit stores, offices, restaurants and other places of commerce.

It is incumbent on businesses to do their part by reminding employees what the medical data clearly show — that the COVID-19 vaccine is safe and effective. Businesses must vigorously encourage employees to get vaccinated and, whenever possible, allow their employees the time they need to get themselves and their families vaccinated.

The faster we approach community protection (aka herd immunity), the sooner our economy shifts into high gear. The business community can and must play a significant role in getting our economy back to where it needs to be.

We now know that New Jersey’s revenue picture is considerably brighter than originally anticipated. One reason for that is higher-than-anticipated tax revenue. Another is an infusion of financial support from the federal government.

State Treasurer Elizabeth Maher Muoio revealed Thursday that the feds deposited more than $6 billion — New Jersey’s share of the American Rescue Plan funds — into our coffers last week.

While revealing this news, the treasurer said one disconcerting thing: The federal government sent preliminary guidance about how the money should be spent and gave New Jersey officials 60 days to review and respond to these guidelines.

That will not work!

From the Star Ledger:

Live in N.J.? You’ll pay more in taxes over a lifetime than anywhere else, study says

Live in New Jersey? It will cost you.

New Jerseyans will pay an average of $931,698 in taxes over their lifetimes, more than residents of any other state, according to a study by Self, a financial technology company. That’s almost half of a taxpayer’s lifetime earnings of $1.9 million.

Much of that is due to New Jersey’s property taxes, which at an average of more than $9,000 are the highest in the country. New Jersey ranked third in taxes on earnings, 18th in sales taxes and 43rd in levies on motor vehicles.

West Virginians shouldered the country’s smallest tax burden, $321,023. or one-quarter of their average income of $1.3 million.

The high taxes in New Jersey and elsewhere illustrate why those states were hardest hit by the Republican tax law’s $10,000 cap on deducting state and local taxes, known as SALT.

From CNBC:

April existing home sales drop, marking three straight months of declines

Sales of existing homes dropped 2.7% in April from March to a seasonally adjusted annualized rate of 5.85 million units, according to the National Association of Realtors.

It was the third straight month of declines, the group said.

Sales were 33.9% higher than April 2020, but that comparison is an anomaly because the housing market and economy shut down at the start of the pandemic. Housing then rebounded strongly last summer. Sales were still 11% stronger than April 2019.

“I would say it is hot, that is the one word description even with the sales decline,” said Lawrence Yun, chief economist for the Realtors. For every listing there are 5.1 offers. Half of the homes are being sold above list price.”

The supply of homes for sale at the end of April was down 20%. There were 1.16 million homes for sale, representing a 2.4-month supply at the current sales pace.

High demand and rock-bottom supply continued to push prices higher. The median price of an existing home sold in April was $341,600, an increase of 19.1% from April 2020. That is both the highest median price on record and the largest annual increase on record.

Much of that large increase in the median price is due to the mix of homes that are selling. There is far more activity on the higher end of the market, where supply is more plentiful, and very little activity on the low end, where the shortage is most severe.

From CNBC:

Homebuyers are applying for ever bigger mortgages as home prices soar

Sky-high home prices mean demand for ever bigger mortgages, but those prices may also be causing a pullback in homebuying overall.

Mortgage applications to purchase a home fell 4% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was just 2% higher than the same week one year ago, when the housing market was just starting to come back after the pandemic shut it down.

“A decline in purchase applications was seen for both conventional and government loans,” said Joel Kan, an MBA economist. “There continues to be strong demand for buying a home, but persistent supply shortages are constraining purchase activity, and building material shortages and higher costs are making it more difficult to increase supply.”

The extreme shortage has prices continuing to climb at the fastest pace in over 15 years, and as a result, average purchase loan balances are climbing in tandem. Last week, that average hit $411,400 — the highest since February.

From the Star Ledger:

What happens if the appraisal is lower than your offer? Here’s what N.J. real estate agents say.

More homes are under-appraising in this quick-changing market for two reasons, he said. “The first being there are no comparable sales to support the purchase price. Secondly, there are a ton of homes under contract that have not closed yet therefore the increase in some home prices are not accurately reflected until the comps actually close.”

…

James Hughes, a broker-salesman with Compass in Montclair, said his clients are typically offering to bridge the appraisal gap to a set point – $10,000, $20,000 or even $50,000.

Updated Vaccination by Age Range for NJ:
5/8 vs 5/13

At Least 1 Dose
Total Pop: 9.2m
Total 1st Doses: 4.5m – 49% of total pop (Up from 48%) – Bloomberg reporting 55%

16-17 – 240k population – 45k dosed – 19% 1 Dose (Up from 18%)
18-29 – 1.5m population – 495k dosed – 33% 1 Dose (Up from 32%)
30-49 – 2.4m population – 1.2m dosed – 50% 1 Dose (Flat from 50%)
50-64 – 2m population – 1.3m dosed – 65% 1 Dose (Flat from 65%)
65-79 – 1.1m population – 1.1m dosed – 100% 1 Dose (Flat from 100%) 
80+ – 415k population – 360k dosed – 87% 1 Dose (Up from 85%)

From Property Shark:

COVID-19 was a complete game-changer in many areas, including the real estate market. Many New Yorkers sought alternatives to city life and, although prices for homes in New York City remained steady, the number of transactions dropped by 28% in NYC between March 2020 and February 2021. 

Residents found the things that made city life unique and exciting were mostly shut down temporarily, and as companies switched to remote work, time spent commuting was no longer a factor. As a result, areas outside the city soared in popularity with homebuyers.

To see which areas won out in the dash for the suburbs, we analyzed and ranked NYC’s suburbs based on the increase in home sales in 2020 compared to 2019.

Updated Vaccination by Age Range for NJ:
4/30 vs 5/8

At Least 1 Dose
Total Pop: 9.2m (UPDATED FOR NEW CENSUS)
Total 1st Doses: 4.4m – 48% of total pop (Up from 46%) – Bloomberg reporting 54%

16-17 – 240k population – 44k dosed – 18% 1 Dose (Flat from 18%)
18-29 – 1.5m population – 484k dosed – 32% 1 Dose (Flat from 32%)
30-49 – 2.4m population – 1.2m dosed – 50% 1 Dose (Flat from 50%)
50-64 – 2m population – 1.3m dosed – 65% 1 Dose (Up from 63%)
65-79 – 1.1m population – 1.1m dosed – 100% 1 Dose (Up from 91%)
80+ – 415k population – 352k dosed – 85% 1 Dose (Up from 83%)

34 NJ breweries now offering free beer for COVID vaccines

Another 21 breweries in the state are offering free beer to anyone over the age of 21 who gets their first COVID-19 vaccine in May, according to Gov. Phil Murphy, bringing the total list of participants to 34 breweries.

“Many more craft breweries up and down the state have asked to be part of our ‘Shot and a Beer’ program,” the governor said during his daily COVID-19 press briefing on May 5.

There were an initial 13 participants announced on Monday, in what became a national headline: Get a vaccine and win a free beer.

It’s part of an aggressive marketing effort under “Operation Jersey Summer” to fully vaccinate 4.7 million New Jersey adults by June 30. As of May 5, the state fully vaccinated 3.2 million adults who live, work or study in the state.

“Let’s keep our eye on the finish line. This is a marathon, and we have now passed … the 20-mile mark. But it’s always that last 6.2 … that is the biggest test, and the hardest,” Murphy said.

From the Star Ledger:

The average price of an N.J. home is $100K more than what it was last year

The average price of a single family home in New Jersey has increased almost $100,000 in the past year, according to data from New Jersey Realtors.

The average home price for the first quarter of 2021 was $500,628 or 24% more than the $403,785 for the first quarter of 2020, the data shows.

“It has jumped dramatically,” said Robert White, President-elect of NJR and Managing broker at Coldwell Banker Realty in Spring Lake.

The price increase is being driven by low inventory and eager buyers.

“With the current inventory situation and the buying frenzy, you’re seeing … many homes selling over asking price in today’s market and that is forcing values to increase because appraisers are coming out and appraising at those higher numbers,” he said.

Updated Vaccination by Age Range for NJ:
4/27 vs 4/30

At Least 1 Dose
Total Pop: 9.2m (UPDATED FOR NEW CENSUS)
Total 1st Doses: 4.3m – 46% of total pop (Flat from 46%) – Bloomberg reporting 52%

16-17 – 240k population – 43k dosed – 18% 1 dose (Flat from 18%)
18-29 – 1.5m population – 473k dosed – 32% 1 Dose (Flat from 32%)
30-49 – 2.4m population – 1.2m dosed – 50% 1 Dose (Up from 48%)
50-64 – 2m population – 1.2m dosed – 60% 1 Dose (Down from 63%)
65-79 – 1.1m population – 1.0m dosed – 91% 1 Dose (Flat from 91%)
80+ – 415k population – 344k dosed – 83% 1 Dose (Up from 82%)

From the Star Ledger:

N.J. will see ‘accelerating opening up of the state’ with announcements soon, Murphy says

Gov. Phil Murphy said Wednesday he’ll have “more news on Monday” about further lifting New Jersey’s coronavirusrestrictions after news that neighboring New York is taking big steps to get rid of some rules for dining at bars and restaurants.

Murphy reacted to New York Gov. Andrew Cuomo announcing people can get served at bars in New York City beginning Monday and that outdoor and indoor curfews for bars and restaurants in the city will both be lifted by the end of May.

“You’re going to see us accelerating opening up of the state,” Murphy said during his latest COVID-19 briefing in Trenton. “There’s just no other way to put it. We’ll have more news on that on Monday.”

Murphy cited the likelihood of people traveling to New York or Pennsylvania restaurants or bars if restrictions in those states differ greatly from New Jersey.

”We don’t want that and New York doesn’t want that,” he said.

Updated Vaccination by Age Range for NJ:
Morning of 4/22 vs Morning of 4/27

At Least 1 Dose
Total Pop: 8.9m (Not adjusted for new census data)
Total 1st Doses: 4.1m – 46% of total pop (Up from 44%) – Bloomberg reporting 49%

16-17 – 230k population – 41k dosed – 18% 1 dose (Up from 17%)
18-29 – 1.4m population – 451k dosed – 32% 1 Dose (Up from 28%)
30-49 – 2.3m population – 1.1m dosed – 48% 1 Dose (Up from 46%)
50-64 – 1.9m population – 1.2m dosed – 63% 1 Dose (Up from 60%)
65-79 – 1.1m population – 1.0m dosed – 91% 1 Dose (Up from 89%)
80+ – 400k population – 328k dosed – 82% 1 Dose (Up from 78%)

From HousingWire:

Home prices soared in March amid record demand

This is getting to be a problem. Home prices in the U.S. soared 18% year-over-year in March 2021 to a median of $356,000, according to a report Redfin released Friday that provided stark evidence of a housing market where demand greatly exceeds supply.

Homes sold in March were on the market for 21 days, per the report, the shortest period between listing and sale since 2012. Forty-six percent of homes sold within a week after the hitting the market.

At first, such high demand was leading to record home sales. A National Association of Realtors’report from 2020’s end found the highest volume of home sales since 2006. But the NAR reported this week that home sales in March fell for the second month in a row as inventory plunged and home prices climbed to record levels.

Where matters are becoming problematic is that high demand is now a direct cause for the low inventory.

For months there was a question in the market “about whether fear of coronavirus infection was keeping homeowners from selling,” stated Daryl Fairweather, chief economist at Redfin.

But with a third of U.S. adults now vaccinated, Fairweather explained, it’s increasingly clear that people don’t fear contact with strangers as much as not having a new home to move into.

Another reason for low inventory – active listings were down 47% in March compared to March 2019, per the report – are low mortgage interest rates. Freddie Mac reported Thursday that interest on an average fixed-rate mortgage is now less than 3%. Instead of looking for a new home, Fairweather found, homeowners are just refinancing the mortgage payment on their current one.